Sitting of 17 November 1944

Preamble
The House met at Eleven o'Clock
PRAYERS
[Mr. SPEAKER in the Chair]

OVERSEAS FORCES (HOME LEAVE SCHEME)
The Prime Minister (Mr. Churchill): I have two statements, which, with permission, I should like to make to the House. The first concerns a scheme which we have been working out for a system of short leave for troops overseas.
On many occasions recently, and from all quarters of the House, there has been pressure to effect some reduction in the present period of overseas service in the Army. The Secretary of State for War has explained the many difficulties of operations, of shipping and of man-power which stand in the way of reducing, at this juncture, the overseas tour in the Army. I have myself also pointed out quite recently, in relation to this very question, the over-riding need for doing nothing which will weaken our effort in the fighting theatres at this climax of the war.
The problem is an intractable one, but it has been approached from every angle and with all sympathy for the men who have been separated from their families at home for all too long by the exigencies of the war. The limited reductions in the length of the overseas tour in the Army which restrictions of shipping and manpower admit, have recently been stated in the House by the Secretary of State for War. The same man-power difficulty does not arise where men leave the theatre of war for a relatively short period, and return to their units thereafter; and the recent general improvement in the shipping situation has enabled the time taken on the journey in sending men on leave to be reduced considerably. The War Office have, therefore, proposed to me that the system of repatriation of men with long continuous service overseas should be supplemented by a leave scheme for the
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benefit of those who, while not yet qualified for repatriation, have for a considerable length of time overseas borne the burdens of campaigns fought often in the most adverse climatic conditions. A plan has been worked out to afford a period of leave at home of about four weeks' duration to a number of men who have borne the main burden of battle in the fighting line, after considerable overseas service. Operational and shipping considerations necessarily restrict the benefits of this scheme to a proportion only of those whom we should like to bring within its scope if these considerations permitted.
A total quota of about 6,000 men per month—if you take 13 four-weekly periods in the year, about 80,000 a year—to come home under this scheme, has been allotted to the following overseas theatres: Italy and North Africa, Middle East, Persia-Iraq, India-South East Asia and East Africa. Within that quota at intervals of every three weeks or so Commanders-in-Chief will select the men to come home. This leave plan must be subject to war needs in each theatre, and the Commander-in-Chief has complete discretion in suspending it on that account if need be. Again, it will clearly need review when hostilities with Germany come to an end, at which time the claims upon shipping and man-power of the Government release plans, which, of course, are on a vast scale, would have to claim priority. The application of this scheme to British officers and men in the Indian Army will be the subject of a later announcement. The numbers concerned here are not very great.
Of course the existing arrangements for posting home of men on urgent compassionate grounds will continue unaffected by this leave scheme, as will also the entitlement to repatriation of men who have served continuously overseas for those periods which my right hon. Friend indicated in this House on 26th September as the present objective in the reduction of the overseas tour of service in the Army. This is in addition to, and not a substitution for, anything going on now.
No doubt the shortening of the overseas tour in the Army is much better than a system of short leave at home. No doubt also the working of this leave plan will give rise to inequalities as between man and man. Nevertheless, I commend this plan to the House because I feel that the

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impossibility of achieving some general overall reduction in the Army overseas tour should not preclude all hope of seeing their families for those who cannot be posted home. The Secretary of State for War informs me that a scheme of this nature, although it must for obvious reasons be limited in scope, will be welcomed by the Army overseas as a genuine effort to meet, to some extent, the natural desire for leave of those who have been serving abroad for long periods, and his opinion is confirmed by the strongly expressed views of Commanders-in-Chief. This I can, myself, corroborate, as the result of recent talks with General Wilson and General Alexander.
I hope it may prove possible that a contingent of men from the Mediterranean theatre may benefit from this leave scheme in time to be with their families for Christmas. From the more distant theatres, men will arrive home in the early weeks of the New Year. The problem of the British Armies in North-West Europe is different. It may be that within a reasonable time it will be possible to institute some system of short leave to the United Kingdom on the lines enjoyed by our Armies in France and Belgium in the last war. But such plans must turn on events we can, none of us, foresee. They depend on how the great battles go.
Captain Peter Macdonald: Will the Prime Minister confirm that the reference to the South East Asia Command includes Burma? As regards the European Forces, is it not a fact that troops are given leave in Paris and Brussels and hospitality is arranged for them?
The Prime Minister: Of course, it includes Burma; the South East Asia Command, indeed, is principally concerned at this time with Burma. As far as local leave in theatres of war is concerned, that is a matter for the Commanders-in-Chief, and much is done to give a break and change to the officers and men who are in this heavy fighting. But I am looking forward to a period, which I cannot forecast now, when it will be possible to introduce something like a short leave to England scheme from France and Germany such as we had in the last war.
Mr. Kirby: May I ask the right hon. Gentleman if he would be good enough to keep under constant review the position of officers and men on the Western Front
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so that they do not get into a state of mind in which they think they are "so near and yet so far"?
The Prime Minister: This campaign only opened on 6th June, and though it has been one of great severity, it has not reached the point where we can withdraw anyone from the front, even for a short leave period, least of all now that the battle has become general along the whole front.

PALESTINE (TERRORIST ACTIVITIES)
The Prime Minister: I have now to make a short statement about Palestine. On Thursday last, my right hon. Friend the Foreign Secretary gave the House a full report of the assassination of Lord Moyne. This shameful crime has shocked the world. It has affected none more strongly than those, like myself, who, in the past, have been consistent friends of the Jews and constant architects of their future. If our dreams for Zionism are to end in the smoke of assassins' pistols and our labours for its future to produce only a new set of gangsters worthy of Nazi Germany, many like myself will have to reconsider the position we have maintained so consistently and so long in the past. If there is to be any hope of a peaceful and successful future for Zionism, these wicked activities must cease, and those responsible for them must be destroyed root and branch. The primary responsibility must, of course, rest with the Palestine authorities under His Majesty's Government. These authorities are already engaged in an active and thorough campaign against the Stern Gang and the larger, but hardly less dangerous, Irgun Zvai Leumi. In particular, the Palestine police have been loyally and effectively carrying out their duties in the midst of constant danger. A number of persons suspected of active complicity in terrorist activities have been arrested, and on 19th October, 251 were deported from the country, where their presence, with the possibility of a large-scale attempt at rescue, only led to increased insecurity. Since then, numerous further arrests have been made, including those of some wanted terrorists.
I am satisfied that the Palestine authorities have all the powers necessary to enable them to deal with the situation. They will, with the help of the military

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and the close co-operation of the general officer commanding in chief intensify their activities, but it will be realised that although the primary responsibility is that of the Government, full success depends on the wholehearted co-operation of the entire Jewish community. This, His Majesty's Government is entitled to demand and to receive. I have received a letter from Dr. Weizmann, President of the World Zionist Organisation—a very old friend of mine—who has arrived in Palestine, in which he assures me that Palestine Jewry will go to the utmost limit of its power to cut out this evil from its midst. In Palestine the executive of the Jewish Agency have called upon the Jewish community—and I quote their actual words:
"to cast out the members of this destructive band, deprive them of all refuge and shelter, to resist their threats, and to render all necessary assistance to the authorities in the prevention of terrorist acts, and in the eradication of the terrorist organisation."
These are strong words, but we must wait for these words to be translated into deeds. We must wait to see that, not only the leaders, but every man, woman and child of the Jewish community does his or her best to bring this terrorism to a speedy end.
Mr. Thorne: May I ask whether the two men in question will be tried by a military court or a civil court? My right hon. Friend has, no doubt, read about the Spanish Inquisition. Could he put that into operation?
The Prime Minister: I would not like to answer off-hand. I have seen the statement that they are to be tried and, of course, they are under Egyptian authority. The crime was committed in Egypt, and I have no doubt that the judicial proceedings will be conducted with all despatch and correctness. The question has also arisen of whether they are not deserters from the Palestine Armed Forces, in which case they would pass into the hands of the British military authorities and their trial would be by court-martial.
Mr. Lipson: Is my right hon. Friend aware that every Jew worthy of the name will wholeheartedly and worthily support the statement which he has just made, and will pray that the efforts to eradicate
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speedily and completely this murderous gang and their associates will be successful?
Lieut.-Colonel Sir Thomas Moore: Will my right hon. Friend make it clear that the suggestion which has been made about the Spanish Inquisition does not represent the views of this House?
Mr. Evelyn Walkden: Nor of the Labour Party.
Mr. Thorne: I have no mercy for them.
The Prime Minister: I did not take it as intended to be more tha an encouraging gesture on the part of my hon. Friend.

BRITISH PRISONERS OF WAR, SIAM (CONDITIONS)
The Secretary of State for War (Sir James Grigg): I think the House would wish to hear a brief statement about ex-prisoners of war who have just returned from Siam. As the House was told on 31st October, some 150 survivors from a sunk Japanese transport carrying United Kingdom and Australian prisoners of war from Singapore to Japan were rescued by United States Naval Forces in September. The survivors from the United Kingdom have now reached this country. The result of preliminary examinations of the men gives at last a first-hand account of the way our men were treated in the Southern areas of the Far East; and there is now no longer any doubt about the policy which was pursued by the Japanese military authorities towards prisoners of war in these areas, which include Burma, Siam, Malaya and the East Indies. I should make it clear at once that this information does not relate to Hong Kong, Formosa, Occupied China, Korea or Japan, where we believe present conditions to be relatively tolerable. Nor does it refer to civilian internees.
The great majority of prisoners in Singapore and Java appear to have been moved, early in 1942, to Burma or Siam. The Australians were sent by sea to Burma, crowded into ships' holds which had been horizontally sub-divided so that ceilings were no more than 4 feet high. The prisoners from the United Kingdom were sent by rail to Siam so crowded into trucks that they could not even lie down during the journey. They were then

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marched some 80 miles. This and subsequent movement in Burma or Siam appears to have been on foot, regardless of distance, weather, or the prisoners' state of health. The United Kingdom prisoners were then set to work on the construction of a railway through primitive, disease-infested jungle passing over the mountain range between Siam and Burma to meet the Burmese end of the railway, on the construction of which Australians were engaged in similar country. The conditions under which all these men lived and worked were terrible, even for natives of the country who were also forcibly employed on the same work.
Such accommodation as was provided gave little or no protection against tropical rains or blazing sun; worn out clothing was not replaced; soon many lacked clothing, boots and head covering; the only food provided was a pannikin of rice and about half a pint or less of watery stew three times a day. But the work had to go on without respite, whatever the cost in human suffering or life. The inevitable result was an appalling death-rate, the lowest estimate of deaths being one in five. When the railway was finished about October, 1943, those not needed for maintenance work were moved to camps in Siam out of the jungle, and here conditions are less intolerable. From these camps, the fittest were later sent to Singapore en route to Japan. The rescued men were on a ship, which left Singapore early in September, 1944. There were probably 1,300 United Kingdom and Australian prisoners of war on board. After she was sunk, the Japanese deliberately picked up all Japanese survivors, but left the prisoners to their fate, and I fear the great majority of them were drowned. We have asked the Protecting Power to make the strongest possible protest.
I am sure that I speak for the whole House and for all the British people in expressing admiration for the way in which the United States submarine crews risked their own safety to rescue men from the sea, and our very deep gratitude to those crews and to the United States authorities for the care and attention given to them at every stage. Thanks to them nearly all the rescued men are recovering from their terrible experiences. There is one redeeming feature in the whole story. All the rescued men tell of the
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amazing way in which the morale of the prisoners has remained high, despite the worst the Japanese could do. In particular, tribute is paid to the medical officers who were captured with them and who have achieved little short of miracles in looking after the sick and injured despite lack of essential medicines, instruments, and hospital equipment. All that we have learnt from these men reveals that our prisoners have been true to the highest traditions of our race. To the relatives and friends of all the prisoners concerned, our deepest sympathy goes out. It is a matter of profound regret to me that these disclosures have to be made; but we are convinced that it is necessary that the Japanese should know that we know how they have been behaving, and that we intend to hold them responsible. Here I would add that we are collecting from the survivors every scrap of information they can give about other men, and this information will be passed on to the next-of-kin concerned as quickly as possible.
We are proceeding with the task of collating all the detailed information which has been obtained. This may take some little time but a further statement will be issued as soon as possible. Meantime, I understand that the Commonwealth Government are issuing a statement to-day, and I will arrange for this to be published in this country as soon as the full text has been received.
Sir Geoffrey Shakespeare: May I say that this news will shock the civilised world and cause the deepest distress and I ask the right hon. Gentleman whether any comfort can be given to the relatives of the men by informing us if there is any evidence that medical supplies and food comforts have been reaching these prisoners of war, perhaps through Russian channels?
Sir J. Grigg: Constant efforts are being made to get supplies to our prisoners of war. I think for the most part it has been easier to get supplies to prisoners in the Northern area. I will certainly make a statement later, when the evidence of these men shows whether anything reached the Southern area or not.
Lieut.-Colonel Sir Assheton Pownall: Can my right hon. Friend give any approximate figures with regard to the number of British and Australians who were subjected to these intolerable conditions?
Sir J. Grigg: Perhaps my hon. and gallant Friend will allow me to consider that, in connection with the fuller statement which I shall have to make later.
Captain Gammans: May I ask my right hon. Friend whether, as the result of interrogating the prisoners of war who have come back, he can give any idea of what is happening to civilians in Singapore and other parts of the Malay peninsula?
Sir J. Grigg: Not at present, but I will make inquiries about that in connection with the general interrogation.
Professor Savory: May I ask my right hon. Friend to have a copy of his statement transmitted to Dublin for the benefit of the Japanese consul-general who is residing in that city?

JOINT AIR TRAINING PLAN, CANADA
The Secretary of State for Air (Sir Archibald Sinclair): I have to tell the House that, after careful review of the war situation; and in particular our air crew position, it has been decided that the Joint Air Training Plan in Canada shall not continue after 31st March next. This announcement is being made to-day in Canada by Mr. Power, the Canadian Minister for Air. In the event, however, of the war situation so developing that expansion is again necessary, skeleton training staffs and airfields will be retained.
The original agreement provided for joint training in Canada to continue up to March, 1943, but by a further agreement negotiated in June, 1942, the scale of training in Canada was stepped up and the scheme was extended to 31st March, 1945. It is because of the favourable war situation which I have just mentioned that the present step is now possible. Simultaneously with the winding up of the Joint Air Training Plan in Canada, training in South Africa and Southern Rhodesia is being considerably reduced. Arrangements have, however, been made with the Canadian Government to train a certain number of United Kingdom air crews in R.C.A.F. Schools after the final date of the Plan, namely, 31st March, 1945.
In making this announcement of the finish of what has been a vast joint effort, creating an overwhelming impact of
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superior strength in the air upon the enemy, I must acknowledge the great debt which we and the Allied nations which have also benefited from air training in Canada, owe to the Canadian Government as administrators of the scheme, and to the Royal Canadian Air Force. In innumerable directions we have had close relationships with those concerned in organising and operating the scheme in Canada, and at all times we have found nothing but ready acceptance of any and every suggestion which has been for the furtherance of our common war effort. Thousands of young men of this country have enjoyed the hospitality of Canada when carrying out their training on Canadian soil, and I am sure that there will be results of great and lasting benefit to the British Commonwealth beyond even those concerned with the war.
Mr. Boothby: When the right. hon. Baronet talks of expansion again becoming necessary, may we take it that he is referring to the training of air crews, and not to the construction of aircraft?
Sir A. Sinclair: I only referred to the fact that we are keeping a skeleton of instructors and air crews available, in case it becomes necessary to increase the amount of air crew training.
Mr. Quintin Hogg: Does the right hon. Baronet realise that his statement will come as a severe disappointment to those who desire to see a continuance of some of these Commonwealth arrangements in the days of peace?
Sir Austin Hudson: There seem to be a large number of these young men now training who are surplus, and who for a very long time have really had nothing to do. Will the right hon. Baronet look into that so that, if he finds that there are these young men, they can be transferred to other branches of the Service as soon as possible? I have a relative who for months has had nothing to do and who feels a sense of frustration when he wants to help in the war effort.
Sir A. Sinclair: The hon. Gentleman must be aware that such transfers have already been taking place. Of course, the situation is now constantly under review.

ADJOURNMENT
Resolved:
"That this House, at its rising this day, do adjourn till Tuesday, 28th Novemer."—[The Prime Minister.]

FOOT-AND-MOUTH DISEASE
Motion made, and Question proposed, "That this House do now adjourn.—[Mr. James Stuart.]
11.31 a.m.
Mr. Turton: Much anxiety has been caused in rural districts by the recent outbreaks of foot-and-mouth disease and their effect on the future of the agricultural industry. I asked the Minister of Agriculture a few weeks ago how many outbreaks had taken place this year up to the end of October, and he gave me figures which I should like to recall to the House. No doubt, later on the Parliamentary Secretary will give us up-to-date figures covering the whole period, including November. In the first 10 months of the year, there were 126 outbreaks, and exactly half of that number had occurred in the city and county of York. Of the 126 outbreaks 59, nearly half, had originated in pigs, 15 of these being on the premises of those carrying on the trade of butchers.
I know the House dislikes exaggeration but this discloses a grave situation—grave not because of the losses occurring in the destruction of infected animals, but grave in the dislocation which the outbreaks have caused and are causing in rural areas. Markets have been closed, and in Yorkshire have remained closed during a great part of the Summer and Autumn. It has been impossible to dispose of freshly-calved cows; many breeders of rams have not been able to dispose of their ram lambs. Most serious of all, it has stopped the transfer of sheep from Highland areas and the total loss in pounds, shillings and pence if it were evaluated would be considerable. That being the position, is the House satisfied that every step has been taken to prevent this disease occurring? I believe the whole country is grateful to the Ministry of Agriculture for the success of their efforts to prevent outbreaks spreading, by their orders restricting movement, and the other steps that they have taken. With the exception of two outbreaks, to

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the best of my knowledge, there has not been a large number of secondary cases after the initial outbreak.
What is the origin of this new attack of foot-and-mouth disease? I challenge either the Parliamentary Secretary to the Ministry of Food or the Parliamentary Secretary to the Ministry of Agriculture to deny that the only cause of these outbreaks is the importation of foreign meat into this country. I am ready to give way at once if either of these Ministers or any hon. Member will deny that that is the fact. Let us work on that basis and see, if that is the fact, how we can avoid it. It is clear from the figures that I have given, that 50 per cent. of the outbreaks have occurred in Yorkshire, that a large quantity of imported foreign meat must have been allocated to rural areas in Yorkshire during the 10 months of this year. That is not only an unfortunate occurrence, but one for which the House would like to have reasons given by the responsible Ministers. You do not get one county having 50 per cent. of the outbreaks without large quantities of this dangerous substance having been poured into it. I hope that the Minister will give a reply to that point.
The second point I wish to make is that, of the outbreaks occurring in pigs, 25 per cent.—a very high proportion—have occurred in butchers' pigs. I want to ask the Government why a butcher is allowed to keep pigs on his premises if he is handling, at the same time, this imported foreign meat, which carries the virus of foot-and-mouth disease. I am told that local authorities prior to the war, in many cases prevented butchers who had slaughter houses from keeping pigs on their premises because of the danger of infection. The danger of infection is far greater when foreign imported meat is being handled by the butcher on the premises where he keeps pigs. It is so easy for a man incautiously to throw a little bit of offal or bone to the pigs on his premises, and I invite the Government to prohibit the keeping of pigs by butchers, so long as they are handling imported foreign meat.
Thirdly, I have been told by good authority, my authority being a man who is well known and respected in the veterinary profession, that cases are constantly occurring of vehicles normally used for
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the carriage of livestock carrying carcases of imported foreign meat. I have looked through the orders and regulations issued by the Government, but I can find nothing which prevents that happening. If there is nothing to prevent it happening, it will happen. It is not only a question of livestock being carried. All over the country, vehicles are carrying one day this highly dangerous substance, imported foreign meat, and next day carrying foodstuffs, swill or any requirement for use on the farm. I ask the Government to reconsider the regulations and to treat this imported foreign meat as a virulent danger to agriculture, and to revise the regulations to see that these things do not happen. So long as we have not got the regulations we shall constantly be having these outbreaks.
Let me say a word about swill. I do not want to labour this point, because in my view, the first three items I have mentioned are greater causes of these outbreaks than swill. By the Foot-and-Mouth Disease Order of 1932, all meat, bone, offal or swill must be boiled before it is fed to livestock. I ask the Government whether this order is being observed. In a reply on 19th October, my right hon. Friend the Parliamentary Secretary to the Ministry of Agriculture told me that letters had been sent to all local authorities asking them to enforce the regulations more strictly. I give full credit to him for that action, but I am afraid that we want more than letters in this matter. The fact is that I do not think the country appreciates the danger there is to the community from this imported foreign meat. There is, for some reason, a certain amount of hush and secrecy about this matter. I think it a great pity. Farmers should be told constantly of the danger they run and the danger they are inflicting on their neighbours if they do not boil swill. The Government Departments, especially the War Office, should show the country how they appreciate the danger by securing that all swill from military establishments is processed before it leaves the camp. I am sure that other hon. Members with a greater knowledge of swill will touch on the subject at greater length, but let me not finish without touching on what is a delicate, but, at the same time, a necessary subject to raise.

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I admit at once that, in war, we must take this great risk of importing large quantities of meat from South America, for we cannot get meat from anywhere else. We must take that risk in the interests of maintaining our meat ration. We cannot afford to let the people of this country have less meat, but let us see that the risk is minimised as greatly as possible. What steps are the Government taking to secure that infected animals are not entering the freezing plants of the Argentine and Uruguay? Some years ago we sent out a number of inspectors who prevailed upon the then Argentine Government to such an extent, that foot-and-mouth disease from that source was considerably reduced. We are in a strong position in this matter. It is true that now, in the middle of our war difficulties, we are in the weak position of having to accept meat from the Argentine and Uruguay but after the war we shall no longer have those difficulties, and the Argentine and Uruguay Governments would do well to bear in mind that if they do not help us in this matter to-day, we shall remember that failure in the future, and our attitude after the war towards the importation of Argentine and Uruguayan meat may be definite and severe. I ask the Government to see that a sufficient number of qualified inspectors is sent out immediately to these countries, to stop diseased animals entering the freezing plants and coming to this country.
Let us not be fobbed off by any comparisons of the present outbreaks with previous outbreaks. The position is a grave one, but I do not exaggerate it. There have been occasions in previous years when there have been even more outbreaks. We have been very fortunate up to now. With the difficulties under which the agricultural industry labours, the possibility of these outbreaks spreading seems rather greater now than in the past. We may be told that it is only Yorkshire and the Forest of Dean that are suffering, but that is not an answer. What we are suffering in Yorkshire and the Forest of Dean to-day, any agricultural district may he suffering to-morrow, if they have imported foreign meat as we have. I ask the Government to tell the people the truth about this matter, and and not to be frightened, because of our relations with any foreign countries, into keeping the news out of the papers. I know that is the policy. I have met
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people who have written letters to newspapers on this subject but, for some reason, their letters were not published. There is a certain amount of hush and secrecy about this matter, and because of that policy these outbreaks have occurred. People do not realise that imported foreign meat is a virulent substance, dangerous to the agricultural industry. I ask the Government to take adequate steps to deal with this situation.
11.47 a.m.
Major York: Once again, the agricultural industry, and in particular the industry in Yorkshire, has to thank my hon. Friend the Member for Thirsk and Malton (Mr. Turton) for bringing to the notice of the House and the country a most dangerous and serious situation. I know that what he said about the seriousness of the situation may be taken with a degree of lightness in some quarters. He referred to the fact that the situation had been worse in other years, but an interesting comparison can he made with the outbreaks which took place during the last war. In the period from 1916 until 1920, a comparable period to the present, there were only 170 outbreaks in England. There must have been very nearly that number during the present year. That comparison alone shows that there is a very serious situation.
Mr. R. C. Morrison: Does the figure just given by the hon. and gallant Member refer to primary outbreaks?
Major York: Yes, as far as I am aware. The figure I took from a statement made by the then Vice-President of the Board of Agriculture—I forget his title in those days—in an answer to a Parliamentary Question in 1921. The present necessary restrictions which farmers are having to undergo, come on top of one of the worst seasons in my memory. These conditions interfere considerably with- the normal course of production on the farm, and particularly on those farms which carry out intensive production. If they have to hold up two or three newly-calved cows, or two or three fat bullocks, that upsets the whole economy of the farm.
It appears that the policing of the scheme is the real difficulty. Although the Government's methods are excellent in their way, it appears that a great deal

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can be done outside the regulations, without Government inspectors being able to find out about it. I think it is acknowledged on all sides that the primary outbreak is caused by kitchen waste and swill containing foreign imported meat and bones. It is right that attention should be focussed on this matter, but it is not only those sources of infection which should be watched. I believe it ought to be made absolutely clear to every farmer in the country that, if his wife receives a piece of imported meat in the ration, she should make absolutely certain that the bones and any remaining particles are put straight into the boiling pot, and boiled until there is no longer a chance of the virus being present when the bones or swill are allowed to go out of the kitchen of the farm. It is in those particular cases that the disease can get on to the farm. In this connection it is vitally important that the farm dogs should be considered. We all know that in these days if we have a bone—and we usually keep a dog or so—as soon as we can get the bone ready for the dogs to consume, it is given to the dogs. I feel that we must impress upon everybody concerned that the bone is a potential source of foot-and-mouth disease and access to it should not be allowed until it has been properly boiled.
There is one other point I wish to make, concerning the demand which has come from the branches of the National Farmers' Union in the West Riding and greater publicity should be given to outbreaks of disease. I feel that the B.B.C. could give great assistance if, after the 6 o'clock or 9 o'clock news, they gave prominence to a short announcement, as to where any outbreak of disease had occurred. Farmers, being busy men, do not always have time to read newspapers, but they generally listen to one of the news bulletins. If that point were conveyed by my right hon. Friend to the B.B.C., I feel that they would co-operate. The local Press is absolutely first-rate and I believe that the national Press could help in the present emergency if they gave prominence to outbreaks as and when they occurred. Every outbreak means a loss of production, and a fraction off the meat ration. It means extra shipping space. Anything that this House and the Ministries of Agriculture and
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Food can do to segregate an outbreak and to prevent it spreading must be done.
11.53 a.m.
Mr. Snadden: I support very strongly what has been said on this subject. There is great anxiety throughout the whole country as a result of the widespread outbreaks of this fell disease, and nowhere greater than in Scotland, where we have had a very large number of outbreaks, many of them in my own constituency. I have been inundated with demands for more drastic measures in order to prevent the already serious position from developing into a national menace to our livestock industry. I think it was the day before yesterday that my right hon. Friend drew attention to the four-year plan of guaranteed prices for livestock. Anyone who is interested in these things must have reflected that 80 per cent. in Scotland and 70 per cent. in England of our entire output in agriculture comes from livestock. Foot-and-mouth disease is a dagger pointing at the heart of our post-war agricultural policy.
I do not want to enlarge upon what happens when there is an outbreak of foot-and-mouth disease, other than to say that there is a serious loss in the first place to the owner. He, of course, gets compensation but it is often small and he cannot re-stock his farm until a number of weeks have elapsed. All movement of livestock is stopped for ten days within a 15 miles radius of the infection, with widespread dislocation of all markets in the area. So great was the dislocation in my constituency in the recent outbreak that lambs could not be taken from their ewes in the hills. This is a loss of food and a loss to potential buyers; it also means that many ewes may go geld because they have had their lambs with them too long. There are a large number of factors to take into account. The loss to the buyer is important but worst of all is the danger the incidence of this disease represents to our great No. 1 priority of agriculture, the milk industry. In 1942 one of our best herds of pedigree cattle in Scotland was slaughtered wholesale. In 1924 there was a terrific outbreak in Cheshire when nearly 100,000 animals were slaughtered.
The previous speakers have spoken for England. I can only speak of Scotland. The original outbreak in each locality, I am informed, has been traced to swill. I

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may say here that the present outbreak is spreading in a very disquieting way, not through the usual method of contact but through fresh infections. Hence the danger is greater, and swill feeding is the source of that infection. It is also known that the disease finds its way into swill through imported meat from the Argentine. I recognise that the Minister of Food is in a difficulty here. I do not want to embarrass him in any way with regard to this question, but he will be aware that the new quick-freeze method of that country tends very greatly to aggravate the danger of foot-and-mouth disease, because the virus is not killed in the process. Hence we should tighten up our regulations, not only at home but abroad.
What are the present methods of dealing with the disease, in addition to the slaughtering policy? The Argentine has a gentleman's agreement with us that they will not export any animals affected with foot-and-mouth disease, but it is very doubtful whether that has been enforced. In any case, the Argentine Government cannot tell when an animal is incubating foot-and-mouth disease, and I do not think that agreement is worth the paper it is written on, if it is written on any paper at all. Then there is the question of inspection. My information is that the Minister of Agriculture has only one veterinary expert in the Argentine. If that is so it is an absurd position, because that inspector cannot possibly carry out the inspection of all the meat sent over here. Two things seem obvious. The Government should approach the Argentine with a view to enforcing the gentleman's agreement and we should send over more Ministry officials to make sure that no meat infected with foot-and-mouth disease is coming to this country.
To turn to the home position we have two regulations. There is the Foot-and-Mouth (Boiling of Animal Foodstuffs) Order, 1932, which requires persons using swill to boil it for an hour. But there are many ways in which unboiled swill can come into contact with animals after arriving at the premises. We have also the Packing of Materials Orders of 1925 dealing with the destruction of hay, straw, packing material and so on. But the mere fact that 126 outbreaks have taken place since the year began is itself
2274
sufficient proof that these regulations are quite inadequate. I think we have to consider some tightening up both at home and abroad. The only real solution to this problem is a most unpopular one, and I shall bring down the wrath of many people on my head for it, but we will never remedy the situation in my opinion until there is universal centralised processing of swill. To-day any person who has a boiling plant can get an exemption, and when a local authority considers the provision of a central plant they say that it is not worth while in view of all the exemptions that are being issued. In the case of Aberdeen and Edinburgh I am informed such projects were abandoned, for that reason.
Even if plant were set up at all the important centres, there is still the question of the remaining swill. I know perfectly well that swill is of great value to the small pig producer, and I do not want to see him go under, but there is another factor which has to be taken into account. Is the economic value of the swill that goes to these people greater than the threat to our national milk and livestock industry? If we cannot have centralised processing of all swill, which to me is the proper solution to this problem, I cannot see why, as a temporary alternative, the Ministry cannot serve an Order on the swill producer. It is not much good putting all the responsibility on the pig feeder. That is why we have the trouble. Why cannot there be served on the swill producer an order which would apply to those camps, institutions and so forth or where, in the opinion of an inspector of the Ministry of Agriculture, raw meat was being used in the swill? Household swill as collected by local authorities seldom contains raw meat. The trouble is further afield, in the big camps and such like. I agree with what my hon. Friend has said about butchers and I will not attempt to reinforce his statement.
The argument that compulsory Orders on swill producers will lessen the amount of swill available was put to me by the Minister of Agriculture in reply to a Question which I put on this subject. Here again I would like to draw attention to the fact that the question involved is the balance between the economic value of the swill set against the threat to our national milk industry and pedigree

2275
herds. One must take account of that. It is not much good saying—and I hope my right hon. Friend will not tell us—that the compensation has been very small in terms of cash and that food losses are very light in terms of tonnage, because there is the immeasurable loss which is caused by the dislocation of markets throughout the country. Behind it all there is the perpetual nightmare hanging round the attested herd owner and the tuberculin tested herd owner and all our pedigree livestock industry all the time. Something must be done to improve the present position. The loss to the country cannot be measured in terms of cash at all. We are densely populated, not only as to people but as to animals, and it would be disastrous if our milk supply was endangered because swill has to go to the small pig feeder.
I had intended to say something on another point, but my hon. Friend has gone into it very thoroughly. I hope the Minister will announce that drastic steps are being taken, not only here but in the Argentine; because it is most important to do what we can at the source. That would give us some encouragement. I cannot help feeling that the owners of our great dairy and pedigree herds are living on the edge of a volcano. They would welcome an announcement that something is being done to protect their interests.
12.6 p.m.
Mr. R. C. Morrison: I hope that the speech of the hon. Member for West Perth (Mr. Snadden) will receive the very widest publicity in Scotland. During the time I have been associated with this question, I have found that the task that was set me, of trying to organise the collection of waste food around the industrial centres, was comparatively easy throughout England and Wales, but tremendously difficult in Scotland. When the scheme was first decided upon, between the Ministry of Food, the Ministry of Agriculture, and the Ministry of Supply, the obvious method was to take a large industrial centre, where there were proper sterilisation plants installed, and then to draw a circle around that area, wide enough to embrace a sufficiently large population to keep that plant going to full capacity. In my own district we embraced a population of about 1,000,000,
2276
and we keep a plant going. The same thing applies to 40 or 50 industrial districts throughout the country. I think I am safe in saying that not a single outbreak of foot-and-mouth disease has been even suspected in the areas where the food has been sterilised in this way. Therefore, the remedy would seem to be sterilisation of swill as near the point of collection as possible.
I have found, in my various meanderings about the country in connection with this question, that the biggest danger comes from the farmyards, but I agree with my hon. Friend about the danger that must arise where butchers keep pigs around their premises, and sell imported meat at the same time. It is true that there is an order that the farmer must not feed swill to animals until it has been boiled for a certain time, but that is one of those orders, which this House so often makes, and which it is quite impossible to enforce. It is unthinkable that there should be an inspector on every farm to see that every gallon of swill is properly boiled, particularly when the farmers are so hard-pressed, and often have to leave the job to a boy or an old woman. Sometimes the tank is boiled at one end, while the other end is cold. But more often it is not so much a matter of inadequate boiling, as of the time during which the swill is left lying about at the farm before it is boiled. There is no order to prevent swill, when it is brought to the farm, being dumped down anywhere pending the time when somebody is in a position to boil it; and it is quite impossible to make any such order which could be enforced.
When we started this work we received the most enthusiastic support from many of the local authorities in this country, and the collection of waste food for sterilisation by this means went up by leaps and bounds. At the same time, whenever I went to Scotland to address local authorities on the subject they ridiculed the whole idea. I find that, when one Scotsman speaks to another, there is an increasing habit of using American words; and the word that was used to me in this connection was "hooey." I was told that this was a whole lot of "hooey." I know that my hon. Friend the Member for West Perth is in close touch with the agricultural community in Scotland; I wish he had as much influence with the local authorities in Scotland. We have one of these concentration plants in Scot-

2277
land, and we are still finding difficulty in getting the Scottish local authorities, and particularly the pig-breeders of Scotland, to realise that it is in their own interest to use it.
Mr. Snadden: There is a reason why centralised processing should not be done to a great extent in Scotland. That reason is the number of exemptions for people who have private boiling plants. The local authorities felt that, as a result, it was not worth while getting centralised plants.
Mr. Morrison: I know there are difficulties. One difficulty is that the Ministry of Agriculture, which in the opinion of Scottish people is an English Department, has some powers in this matter; and they do not like taking orders from the English Department of Agriculture. I will only say that I hope that the remarks of the hon. Member for West Perth will be noted in Scottish local government circles, and that we shall have a more helpful attitude from them than we have had so far. I agree that there should be a great deal more publicity, but I cannot see that you could afford to do it at present. We do not want to give too much information to the enemy about the incidence of foot-and-mouth disease in this country. But I hope that as soon as the war is over there will be an entire change of attitude by the Government Departments concerned in regard to this troublesome matter. I welcome this short discussion, and I would only add that I think we are going to get the best results by an extension of the system that we have been applying throughout the war, of collecting the material and sterilising it as near the points of collection as possible, so that only sterilised material will reach the farmyard.
12.14 p.m.
The Joint Parliamentary Secretary to the Ministry of Agriculture (Mr. Tom Williams): Foot-and-mouth disease may not be a very exciting subject, but it is certainly a very important one, from an agricultural point of view. The hon. Member for Thirsk and Malton (Mr. Turton) expressed the concern felt by every Member when there is an outbreak in any part of the country. My hon. Friend also raised several specific questions, to many of which I hope to reply. Foot-and-mouth disease is always a
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matter of concern to the Ministry of Agriculture. If the disease is present, we are concerned to prevent it from spreading and to eradicate it. If we are free from the disease, we are concerned to prevent an outbreak. The Department's activities over a number of years will, I think, bear the closest examation. I might almost say that the veterinary inspectors of the Department have almost solved the problem of perpetual motion in their attempt to prevent the disease from spreading over the farms of Great Britain.
The problem is twofold. First the Department is responsible for controlling imported animals or products which might bring infection from abroad. Steps have been taken, as my hon. Friend the Member for West Perth (Mr. Snadden) said. Hay and straw may not be imported from countries where the disease happen to be endemic; uncooked meat may not be brought from Europe. Second, the Department attempts to prevent the outbreak or the spread of the disease in this country; there is a stringent control over the movement of animals and vehicles from any infected place, and there are rigid controls over the movement of animals over a very wide area surrounding an infected place. There is also control requiring the disinfection of all road and rail vehicles which carry animals from point to point and of loading docks and markets, wherever animals congregate.
At present waste foodstuffs are possibly, as my hon. Friend said, the greatest risk. There is, however, an Order under which any swill taken to a farm should be boiled for a minimum of one hour before it is used, but as has already been said it is almost impossible to enforce rigidly such an Order. Every effort towards doing so has been made by propaganda and education and by the prosecution and fining of offenders. I hope that hon. Members, particularly those representing agricultural areas, will help us in this by impressing upon everyone the need for extreme care if we are to keep this disease within measurable limits. Central processing has done much to reduce the danger. All vehicles carrying swill must be disinfected before carrying other feeding-stuffs. My hon. Friend the Member for Thirsk and Malton said vehicles were performing the dual func-

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tion of conveying livestock and, on the next journey, conveying, perhaps, meat. I have made inquiries and find that the Ministry of War Transport, who are responsible for the transport of livestock and meat, have heard of only one case where the same vehicle has been used for the dual purpose. In such a case it is the duty of the individual to see that that conveyance is sterilised before it is used for a second purpose.
Mr. Turton: Will my right hon. Friend help us by asking the Ministry of Transport to extend their inspections and to take note of the many cases which are occurring up and down the country?
Mr. Williams: My hon. Friend may know of more cases than those that have been brought to the notice of the Ministry of War Transport, and if either he or any other hon. Member knows of a case and will bring it to our notice we will see that the Ministry of War Transport are moved to take action on the right lines. Although there have been large numbers of outbreaks in this country during the past 10 or 11 months, and indeed, for many years, I think I can say that as a result of the action taken by the inspectors of the Ministry the disease has never got completely out of hand.
I will deal one by one with the specific questions put by my hon. Friend the Member for Thirsk and Mahon. He referred to recent outbreaks, and I have no hesitation in saying that those outbreaks have been largely traced to imported South American meat. Neither the Ministry of Food, as far as I can recollect, nor the Ministry of Agriculture have endeavoured to suppress any information that may have come to light as a result of tracing these original outbreaks to their source. To trace the origin one must distinguish between initial outbreaks and the spreading of the disease, but one feature about these recent outbreaks is that in only a small number of cases have there been initial outbreaks following the bringing of large quantities of raw swill to farms. That indicates that reasonable care must have been taken in those cases.
In recent weeks it is the small piggeries which have been chiefly involved. As my hon. Friend said, a good number of outbreaks have been traced to butchers' premises. There is therefore another
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factor besides swill to be taken into account. Cases of pigs being given bones or scraps of meat will probably be known to every Member in this House. It is a very wicked thing for anybody to do that with their eyes wide open if they really understand the dangers arising from it. The same danger arises where pigs have access to unsterilised meat wrappers, because the pigs ought never to be allowed to come within measurable distance of anything with which the meat has come into contact. These various dangers are greater than those arising from swill. The courts have power to inflict severe penalties for feeding unboiled meat, bones, etc., to pigs. Feeding unboiled meat or bones to pigs, or allowing them to come into contact with the pigs, frequently leads to the spread of the disease, and all steps, whether by word of mouth, by leaflets or the use of the B.B.C. ought to be taken to educate farmers and everyone concerned in this matter.
My hon. Friend suggested that we ought to exercise more rigid control over butchers' premises and certain other matters. I am bound to confess that that is infinitely more difficult than it might seem to be. There is nothing to prevent anyone, with the most kindly intentions, throwing a bone to a dog or throwing raw waste to pigs and no Regulation will prevent the dog taking the bone to the pasture. On many occasions such kindly actions have resulted in an initial outbreak of disease. To prohibit pigs being fed on butchers' premises would not be effective, I am afraid, for if the butcher were not allowed to have pigs on his premises he would almost certainly have them not far away, and the same danger would still exist.
Mr. Turton: Surely there would be less danger. If the pigs were further away people could note whether the pieces of meat had been properly boiled before they were given to the pigs. The difficulty arises from pigs and these imported meats being on the same premises, the butchers' premises. If we separate them the danger becomes less.
Mr. Williams: I certainly do not deny that the nearer the pigs are to the butcher's shop the greater is the danger. What I said was that if we prevented a butcher from keeping pigs on his premises that would not necessarily be effective,

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since he could keep the pigs a few score yards away. He would keep pigs all the same, and I am afraid those pigs would be exposed to almost the same risks. I doubt whether the hon. Member would suggest that a butcher should be prohibited from keeping pigs on any premises at all, and without such a prohibition I doubt whether we could prevent contamination in these cases. In any case the butcher would be dealing with imported meat, and if the pigs were kept 250 yards away from his shop there would be the risk of his carrying the disease on his smock or on the rest of his clothing.
A good deal of progress has been made in the treatment of swill, which is another important factor in connection with this disease, and large quantities are passing through concentrator plants, but it is also the case that much swill is being sent raw to the farms. The Order compelling a farmer to undertake the boiling process is one that it is very difficult to enforce—I do not think there are enough inspectors in the land—and in the last resort we have to rely on the good sense of farmers. Even with proper boiling there still remain grave risks, because after the swill has been boiled there is nothing to prevent waste food from the farm household coming into contact with it. In any case we could not enforce an Order that a household should never allow household waste to come into contact with swill that had been boiled. I do not think that either the average farmer or the average policeman who is called upon to enforce these Orders really appreciate all these dangers. Where centrally-treated swill has been obtained and where boiling has been done carefully and thoroughly we have definite proof that the number of outbreaks has been reduced to an absolute minimum. It has been suggested that we ought either to prohibit the use of swill—an order which no one could possibly enforce—or see that all the swill goes through a concentrator plant. I doubt if either of those two suggestions is practicable. There is no point in making an order and creating the impression that it will produce spectacular results only to find in the end that everyone has been disappointed.
I have one further observation with respect to the farmer himself and his personal responsibility not only for his
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own herds but for those of his neighbours. It is a common phrase among veterinary inspectors that "bones are found in every pasture." Those bones may have been brought there by the farmer's own dogs or by neighbours' dogs, but so long as imported meat must be purchased and distributed it is certainly the duty of all to pay more attention to this danger than they give to it at present.
I think the Ministry of Food and the Ministry of Agriculture can minimise the risks but they cannot completely abolish them. There are cases, of course, that finally reach the courts. What are the fines inflicted? During the last two years, the fines have been from shillings to £40, but the average has been round about £10. It is not for me to say that the courts have been too lenient or too harsh, but, in view of the danger of this disease, where an offence is actually found, I think the bench are quite entitled to remind the offender that he is a danger both to himself and to the members of the community.
As to the control of the disease in the Argentine, trials are at present being made with a vaccine produced in this country, and first reports appear to be satisfactory, but, unless regular use of protective vaccines is made at any rate on the large estates from which we draw most of our food, I am afraid it is not going to be as effective as we would like it to be.
Major York: Can the right hon. Gentleman explain what the vaccine is supposed to do?
Mr. Williams: I am not a veterinary surgeon; I understand that the hope is to render cattle immune from foot-and-mouth disease, but that may not perhaps be the scientific reply. With regard to the one inspector in the Argentine, who was referred to by my hon. Friends, it is perfectly obvious that he could not examine all the cattle exported to this country, but he did not go there for that purpose. He has been there 18 months, advising the people there on what methods to adopt, in the hope that they may reduce the incidence of foot-and-mouth disease there and the risk of infection being sent over to this country. I understand that his activities are welcomed and that he is at liberty to make whatever suggestions he can to im-

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prove the existing arrangements. May I also say that, quite recently, the Ministry of Food has been made aware of the fact that the staff in that country exercising control over foot-and-mouth disease have been increased by between 400 and S00 people, and I am sure the House will be pleased to know that the Argentine Ambassador in this country is displaying considerable interest in this problem, and, I am perfectly certain, will render all the assistance he can in helping his own country to help this country to avoid both initial and subsequent outbreaks of the disease.
At the moment, it certainly is not possible to completely dispense with the use of South American meat. Home-produced meat, as every hon. Member knows, has declined during the war, particularly sheep and pigs, because of the shortage of feeding stuffs, and the need for the production of maximum quantities of wheat and potatoes and foods for direct human consumption, which was done, of necessity, at the expense of some of our livestock. Therefore, foreign meat is a necessity if we are going to maintain the modest ration we enjoy to-day. As to the distribution of imported meat in rural areas, I am assured by the Ministry of Food that they exercise all the discretion they can, bearing in mind transport problems, in the distribution of South American meat. I know that there have been large agricultural areas where no imported meat was seen for very many months, because of preparations for D-Day. Road and rail dislocations have caused some rural areas to have more South American meat than they would otherwise have received, but the fact is that, because of transport and other difficulties, a very high proportion of imported meat has reached the urban areas, and, particularly, those areas which have sterilization plants for swill.
Mr. R. C. Morrison: Will the Minister give an assurance that the Ministry of Food intends to continue that policy, now that the dislocation which was caused by D-Day has largely passed, and that they will reinforce that policy?
Mr. Williams: I can assure my hon. Friend and the House that the Ministry of Food is exercising the utmost discretion in the distribution of South American meat. They take very great care where
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our best herds of dairy cattle are, and they avoid those areas for that purpose. They are fully aware of the danger to the nation of the loss of beef. I could, had I the time, give a whole list of towns in agricultural areas which get no imported meat at all, and the hon. and gallant Member for Ripon (Major York) will be delighted to know that no Argentine meat has been going to his area for quite a long time.
With regard to the question of lorries used for meat transport, it is, I repeat, the normal practice to have special lorries for livestock and a special type of lorry for meat, and there has been only one case brought to the notice of the Ministry of War Transport where the same vehicle has been used for the two purposes. I repeat my request to hon. Members that, if they know of any case where the regulations are being infringed and will let the Ministry of War Transport or the Ministry of Agriculture know, we will not hesitate to look into it at once.
Mr. Turton: Is it an offence to carry imported meat in a lorry that is going to be used for livestock, because, if so, nobody knows about it?
Mr. Williams: It is certainly an offence to carry livestock and meat in the same vehicle without having sterilized the vehicle after it has been used for one of the two purposes. Regarding the number of concentrator plants in Great Britain at the moment, there are 173 collecting swill from the areas of 414 urban local authorities, covering approximately 44 per cent. of the population, There are 78 authorities collecting Service swill under special arrangements, not only from their own areas but also from wide areas round their own towns and cities. A large central plant has been established at Aldershot exclusively to deal with Service swill, and there are 11 private firms operating central plants and collecting from a wide area around where the plants are established. These are all designed to help to avoid either initial outbreaks or the spread of the disease. It is not, however, practicable to insist upon all swill from the small military camps being processed on the spot. The Army cannot take soldiers away from military duty to be used for the purpose of boiling swill, and, secondly, some camps are very small, with a constantly changing personnel. On the other hand, you have a case like

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Plymouth, where almost all the naval swill is disposed of by the corporation.
I should like to emphasise that orders and regulations can only lessen the risk of the disease breaking out. The real responsibility in the last analysis, falls upon the farmer and the butcher and all those who are in any way associated in using or distributing the meat, and we have got to rely to a large extent upon education and propaganda, and this Debate cannot fail to have been of some real value in the way of both education and propaganda. The only thing I can say in conclusion is that I do not think the Ministry of Agriculture or the Ministry of Food can be charged with having been lax in this matter. Whatever Regulations or Orders they may produce, they cannot abolish all the risks. The average farm house, the average kindly person who gives a bone to a dog—all are bound to increase the risk of outbreaks. These problems are continually in the minds of the Minister and myself, and our minds are wide open for any new ideas or suggestions that may be made.
Mr. Turton: How many cases have there been?
Mr. Williams: I thought it better not to deal with statistics but rather with the steps taken to try to avoid initial outbreaks and the spreading of the disease when outbreaks have taken place. Any new idea or scheme will be borne in mind by the Minister, and may I say to the hon. and gallant Member for Ripon that the B.B.C. do announce outbreaks after the 6 o'clock news, stating the place and also the area cut off for the movement of cattle. If, however, the B.B.C. can be used to greater advantage than at present, we will be very happy to intervene with them.
Mr. David Eccles: May I ask the right hon. Gentleman a question? I think he will find that some farmers are short of fuel with which to boil their swill. Could the right hon. Gentleman consult with his colleagues to see that coke is delivered to all those who have individual plants, and that there is no shortage of fuel?
Mr. Williams: If any case is brought to the notice of the Ministry of Fuel and Power, or of myself, that problem could very well be solved.

COMPASSIONATE POSTING (BUSINESS GROUNDS)
12.41 p.m.
Sir John Mellor: I am grateful for the opportunity of raising the question of compassionate posting on business grounds. I propose to deal with the matter generally as a question of principle, and to confine what I have to say to cases of men serving in the United Kingdom. As I understand it, the War Office allows, where possible, in special circumstances, compassionate posting on domestic grounds. The War Office also allows, where possible, compassionate release upon business grounds, but the rule of the War Office has never allowed compassionate posting upon business grounds for men who are serving in the United Kingdom, and it is that rule that I want to challenge to-day. In order to avoid complicating my limited objective, I do not propose to refer to the much more difficult class of case, and perhaps even more important class of case, of men who are serving overseas. There is, in their case, of course, some small concession available.
I raised this matter on 1st August at Question Time, when I asked the Secretary of State for War why compassionate posting is never granted on business grounds. My right hon. Friend really gave three answers to that question, but I submit that none of them really met the point. His first answer was this:
"When the soldier is at home, cases of this nature are usually dealt with by the grant of a period of release from the Army in order to enable the soldier to make the necessary arrangements for his business to be carried on."
I think we know from experience what "necessary arrangements" usually involves for the soldier. It involves a long and almost always fruitless search of employment exchanges and elsewhere, trying to find somebody who can look after his business in his absence. Even in cases where he is offered a stranger, who may have, theoretically, the necessary qualifications, it is not unnatural that he should be very reluctant to entrust his business to a stranger. The alternative usually is for him to hand his business over to a competitor. That, naturally, does not often attract him. This form of concentration of a one-man business may have a disastrous effect upon the future of his goodwill.

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The period of release to which my right hon. Friend referred, and which is usually of something like two months' duration, is, although no doubt welcome at the time, from the point of view of its permanent effect in assisting the saving of his business, of relatively little value. It is often a bad economy of man-power compared with what could be achieved through compassionate posting. What is wanted is something much longer in duration not necessarily by way of release, but to give him proximity to his business, so that when he is off duty he can give it some attention. In so many cases a man, rather than entrust his business to a stranger, even if a stranger can be found, prefers to leave it in the hands of his wife or his family, it may be his father or his sister or somebody like that, whom he can trust. If his business is being left like that in the hands of perhaps a couple of his women-folk, it makes the whole difference if he can be within close reach, in order to give them his advice, to help them with special difficulties and problems, to help them to keep the books in order and to complete the appalling number of forms and returns which they are probably required to deliver by the various Ministries.
I have had many letters in this sense urging the value of a compassionate posting, but I must be frank with the House, I did have one letter in the opposite sense from a wife who asked me to arrange that her husband should be posted away from home. She explained that he was carrying on with a young widow, and she hoped that he could be posted away from that temptation. That was a case, of course, in which one could not see one's way to please everybody and was better left alone. But to return to what my right hon. Friend was saying on 1st August. I have noted his first answer. The second answer was:
"If a man is posted near his business no guarantee can be given that he will be able to spend the necessary time away from his military duties."
I am certainly not asking that any guarantee should be given. Obviously, military training, operational considerations and so on must be paramount. My right hon. Friend proceeded to give his third and last answer and, I submit, his worst answer. He said that a man compassionately posted to be near his business might well be tempted to neglect his military
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duties. He said, in answer to my supplementary question:
"If he is posted there, on the spot, it is very likely that he will tend to devote more time to his business than to his Army duties."—[OFFICIAL REPORT, 1St August, 1944: Vol. 402, c. 1151–1152.]
And according to HANSARD hon. Members exclaimed "Oh." I think that that was not surprising. I have always understood that hours of duty are a question for the commanding officer, and commanding officers are not, as a rule, indulgent towards voluntary absenteeism. Those three answers are not good enough, and I hope that my right hon. Friend will to-day either give a better answer or promise to provide a relaxation of this rule. In my view a man who is necessarily stationed in the United Kingdom in a static job is a very much better soldier if he can be stationed near his home than if he is stationed far away from it, and that is especially true if he has serious family or business cares. When he is away from home and he knows that his wife is striving, at the risk of her health, to keep his business alive, he is often sick with worry. He may spend his evenings at telephone call-boxes trying to get through long-distance calls he can ill afford, and it is a very unhappy situation for him trying to keep the necessary touch with his family in order to help them to carry on his business. There are far greater hardships than those I have mentioned, for men serving overseas, for them and for their families; nevertheless I submit that I have made out a claim for some substantial relief in a class of case, which, if my right hon. Friend is helpful, may be relieved to some extent. It is, I admit, very often impossible to comply with requests in this direction. Indeed, it may be difficult to find many cases in which compassionate posting for business purposes is possible at all. I most readily admit that. In a letter which I received from the War Office upon this subject, it was observed:
"There is rarely a unit in the required vicinity suitable to the soldier's rank, trade, training, medical category, etc."
I agree, but it sometimes happens that there is such a unit, and certainly, whenever there is, an attempt should be made to accommodate the soldier. I cannot believe that there are not a large number of cases, say, in which a man whose business is in Birmingham is stationed in

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London, and another man whose business is in London, is stationed in Birmingham, the two of them, on grounds of their various qualifications, medical categories and so on, being easily interchangeable.
The Government always seem to under-rate the importance of a small business in the life of the man who owns it. I do not think that the importance can possibly be over-estimated. It is his pride, his career and, whether he has created it or has inherited it, he probably wishes to pass it on to his children. These small businesses are of immense national value in the aggregate. Where you have a one-man business or a family business, you get a degree of efficiency corresponding to the stake that that family has in the business. It is the only case of which I can think where you get a certain ideal achieved—the ideal of unity, of ownership, management and labour without any conflict of interests whatsoever. There may be a few cases, or there may be many, in which my right hon. Friend might be able to help if the War Office rule is relaxed, but even if there are only a few cases where small businesses can be saved by a relaxation of this rule, then the rule should be relaxed.
12.55 p.m.
Mr. Lipson: I am glad very briefly to be able to support the appeal which my hon. Friend has made because I am satisfied that there is a case for a much more generous approach towards this problem. The preservation of a man's business means a great deal to him and the War Office ought to show greater appreciation of this fact. Can my right hon. Friend say whether the rule against compassionate posting being granted on business grounds is a rigid one, or whether each case is considered on its merits? There are instances where a compassionate posting would make all the difference between saving a business and closing it down. I would also ask whether my right hon. Friend takes into account the question whether a man does not really make a better soldier if, as far as possible, he is freed from the domestic anxieties which must worry him tremendously if he knows that he is right away from his business and that a burden is being placed upon his wife which she is not really able to carry. In these days the lot of married women, with their husbands
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in the Forces, is by no means an easy one, and when, in addition to all the other difficulties, they have to carry on a business under war conditions, it really is, in many instances, asking them to do far more than they can be expected to do.
Can we be assured that my right hon. Friend is prepared, at this stage in the war to allow more flexibility in the handling of applications of this kind, and in particular where these men in business on their own account are engaged in a food business. There are instances sometimes where the local food executive officer realises that the food position is going to be made very much more serious if these one-man businesses are closed down. If that could be taken into account, it would be helpful. We do not ask the impossible. We know that the claims of the war must come first, but we do ask that such concessions as can be made without detriment to the war effort, should be made in favour of these applications. If we could be assured that each case is given sympathetic and full consideration, that there is no hard-and-fast rule, and that if a good case can be made out and military circumstances permit, compassionate-posting will be given on business grounds, the concession would go a long way to cheer the men who, at present, feel that they have a real grievance over this matter.
1.0 p.m.
The Secretary of State for War (Sir James Grigg): Perhaps I might start by saying I am grateful to my hon. Friend who raised this matter for having, on an earlier occasion, when he had drawn a place in the Adjournment ballot, postponed his claim in order to meet my convenience. I am extremely grateful to him for that. My hon. Friend referred to the letters he had on this subject. Oddly enough I have had letters too—in fact, a very large part of my post-bag consists of applications for release from the army on compassionate grounds, and a substantial proportion of these applications come from the owners of one-man businesses which are, of course, in the main, small businesses, and this is a class for which I have great sympathy.
The hon. Member who raised this question assumed that the Government are apt to neglect the owners of small businesses, or one-man businesses. Well, I am not in a position to ignore them because I

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hear a great deal from them and, as I say, I have a great deal of sympathy with that class of person, particularly in relation to his service in the Army. A man who has built up a business is placed in a very difficult position when called up into the Army. He cannot just shut up shop, and then open again when he is released in his due turn, for the essential part of any business is the goodwill, which is built up in the course of years, and which, largely, evaporates if the business is interrupted. That is why the Ministry of Labour regulations provide for a period of deferment in order that the prospective soldier may make arrangements for carrying on a business during his absence. That is why, also, when the Army get applications from soldiers who are in great distress, when they hear from their wives or fathers, or mothers for that matter, that the effort of carrying on is getting beyond them, we grant a period of release, in order to enable the soldier to supplement the arrangements which he made on being called up.
However, these deferments or releases are for definite periods; they are never permanent. The only permanent arrangements permissible are those for indefinite deferments or indefinite release, when it is absolutely essential in the national interest for the business to be carried on, and there is no other person available, or who can be made available, to carry it on. In the case of indefinite release on these grounds, the application has to be sponsored by the Government Department concerned, and approved by the Ministry of Labour as well as the War Office. Quite apart from this class of case, there is no provision for indefinite deferment or indefinite release on business grounds.
I know quite well that my hon. Friend has in mind not a release, but a posting to a locality where the man can continue to supervise his business as well as to discharge fully his military obligation, but what I have said is relevant from this point of view. If it is clear that there are large numbers of cases in which businesses are suffering because of the absence of the proprietor, and if I can be sure that only a very small proportion of these cases can possibly be covered by a compassionate posting—and these not the
2292
most deserving or most poignant—then, I think I have made out a very powerful defence for the practice which both hon. Members are calling in question. I could develop very strongly the argument that no man can serve two masters—or perhaps I should say that no man can serve God and Mammon. But my hon. Friend has already heard that one, and simply brushes it aside. One of his earlier contentions, which I think has been repeated to-day by both hon. Members, was that if a man's mind is at rest by being in a position to look after his business interests constantly, he can more fully serve his country. I, personally, do not believe that, but I am not so foolish as to try to force a particular argument into a mind which has already made it clear that it will not accept it. So I come back to rest the case for the War Office practice on what I may call the inherent equities.
As I understand it, this is the class of case in which it is not a matter of a man's personal supervision being necessary in the national interest. It is merely a question of desirability in his own interest. It thus falls at the start into a lower category of merit than the great majority of cases which come before me. In the second place, I take it—and both hon. Members expressly disavowed any contention to the contrary—that it is not contended that a man's posting to such purpose should interfere with his being employed in the Army, where the military authorities think he can be best employed. For the bulk of the Army this is at present overseas, and quite a very large part of it is in direct contact with the enemy. Furthermore, the great bulk of the Army is organised into units which it is important to train, and keep together, as long as possible. Nobody can be unaware of, or minimise the importance. attached to the regimental spirit nor, I imagine, is it suggested that if a man's unit is sent overseas, or even into another place in this country, he should be pulled out of his unit and posted to another unit or job where he can still carry on his two avocations. That would seem to me to be monstrously unfair, but even if it were suggested, it would only be practicable in a small fragment of the cases for, with the great bulk of the Army overseas, the troops in this country are distributed much more sparsely.

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It may very well be, and will generally, in fact, be impossible to find within easy reach of a man's business a job or unit to which he can be posted, leaving out of account all question of suitability. But even granted that this difficulty could be overcome, is it not clear that to leave a man in a job near his business, whatever the movement of his unit, or the post in which he has been employed, or the formation to which he has been attached for the whole of the war, is most unfair? In most cases it is physically impossible to do what my hon. Friend wants. In most of the cases in which it is physically possible to do what he wants, it is militarily indefensible. The very rare cases in which it is physically possible and militarily defensible are certain to be the least meritorious from the compassionate point of view. If then, we can only do what we are asked to do in very few cases, and then only in the least deserving out of a very large class, surely, the only possible course is to do it in no case? That is why I said—and this is what both hon. Members have complained about my having said—that we never grant compassionate postings on business grounds, and I, personally, think that is a practice and rule which ought to be preserved.
My hon. Friend raised the question of posting on compassionate grounds. Well, some of the arguments apply in this case, but there is no universal rule against it. However, it is an extremely rare practice, and I think, speaking from memory, we have confined compassionate postings—and they are not indefinite—to cases where there is a doctor's certificate that the husband's presence or proximity is absolutely necessary for the woman's health, nearly always in cases where the woman is in hospital, and the husband's presence is necessary to prevent her from worrying about the family at home. I do not think that case affects my main point. In any case, compassionate posting on domestic grounds is in a far higher category of equity than a posting on business grounds. The business ground is very rarely the extreme case, when the business has to be shut down altogether in the absence of the man; it merely is so that he can assist to carry it on rather more efficiently than would otherwise be the case. I am very sorry to be obstinate or immovable on this question, but it seems to me that in all this range of com-
2294
passionate releases, postings, and so on—of which, as I said to the House the other day, we have had 20,000 in the War Office since January, 1943—it is absolutely vital that we should preserve some reality, as well as appearance of equity in the matter. I, personally, think we should be quite wrong to give in in cases which, on the whole, are very far from being the most deserving class of case which comes before us.

LOCAL INDUSTRIES (CAPITAL ISSUES)
1.10 p.m.
Sir William Beveridge: I take the opportunity of this Debate on the Adjournment to raise a point relating to the control of capital issues and the development of local industries. The point which I want to bring before the House arises out of a Question which I put to my right hon. Friend the Chancellor of the Exchequer on 31st October. That Question related to a proposal by certain citizens of Berwick-upon-Tweed for the formation of a Berwick-upon-Tweed Development Company to promote local industry. However, the point I want to make is of quite general interest, affecting certainly not my constituency only but constituencies of many kinds in all parts of the country. When I put that Question, and followed it by a supplementary, I received an answer from my right hon. Friend which a young and rather vulgar friend of mine described as a "raspberry" followed by another "raspberry." I do not wish to use this term for anything done or said by my right hon. Friend the Chancellor of the Exchequer—
The Financial Secretary to the Treasury (Mr. Peake): Hay I interrupt my hon. Friend? I could not quite understand what it was that followed the "raspberry."
Sir W. Beveridge: Another "raspberry" followed the first "raspberry." I found that diet not very satisfying, and therefore, I wish to raise this question again on the Adjournment. Let me, quite briefly, relate the particular circumstances which were dealt with in my Question, as an illustration of what I believe to be a general problem. The town of Berwick-upon-Tweed once had 13,000 inhabitants and now has about 12,000. It is a town

2295
which has been losing industry and population. At one time it had a prosperous fishing industry, both herring and white fish, but that is another question which I, in conjunction with many others who are interested in fishing, hope I shall have a later opportunity of discussing. Here I am concerned rather with the other industries. I should like to read to the House a very short statement of what has happened to the other industries of that town and is, I believe, happening to many industries of other towns. This is a letter from the Town Clerk, who says that in Berwick-upon-Tweed there were at one time:
"several large maltings and two breweries in the town which have closed as a result of amalgamation of breweries with a larger concern in another town. We have also had a firm of boilermakers, and a foundry for small castings, but these were closed by the trend towards bigger industry in the large centres. There are three fertiliser factories and sulphuric acid works established here. Recently, however, they have been purchased by one of the large combines, and there is a little local disquiet that ultimately the local works will be closed down."
There is the story of the industries of a small town being swept away by this constant gravitational force to the large towns and to larger forms of industry. In this particular case it led to severe unemployment—at one time I think something like 30 per cent. of unemployment in that particular town. Of course, there is no unemployment now. But the citizens of that town are naturally extremely anxious as to what will happen after the war, when members of the Forces and men working in industries elsewhere return, and wish to live in their own town. There was a large public meeting in June at which it was decided to form, under the leadership of the mayor and prominent citizens, the Berwick Development Company, a finance company, whose purpose would be to provide capital for men of small means, to enable them to engage in fishing and other local industries. This list of industries was very practical in its relation to the circumstances of the town. They wanted to form this company with a capital of £50,000, of which only 1s in the £ would be called up. The remaining 19s. in the £ was to be called up, after the war, only when the need for it arose through men coming back and wishing to start further industries. Since the amount was £50,000 they had to apply to the Treasury
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for permission to float this company, but on 14th August they received a letter from the Treasury declining to sanction this capital issue on the ground that all issues of raised capital must be confined to those required to finance the production of services essential for war purposes. The Treasury stated that they were unable to consent to issue for post-war purposes even if the shares to begin with were only partly taken up.
That answer produced considerable dissatisfaction. There was another meeting in Berwick-upon-Tweed which developed into an indignant meeting. Since then I have had the honour of being returned for that constituency, and I was asked to take up this matter with the Chancellor of the Exchequer. I put a Question to my right hon. Friend on 31st October, asking him if he would re-consider his decision and I received an answer in the negative. I put a supplementary question to my right hon. Friend as follows:
"If the right hon. Gentleman is not going to allow these citizens to help themselves to provide the money that will be necessary when the war ends has he any plan for doing it himself?"
The reply was:
"The point of my answer was that this project is designed for a post-war purpose and that for the moment we have to concentrate on war purposes."—[OFFICIAL REPORT, 31st October, 1944; Vol. 404, c. 634.]
That answer received a good deal of cheering from the other side of the House, and I must confess that I nearly cheered myself, because I quite agree that we must concentrate upon war purposes and that the war comes first. But the point of that answer was entirely beside the point of my Question, which related to the raising of money not during the war but after the war, when I hope we shall be allowed to have money not for war purposes but for post-war purposes. This company would give any undertaking or accept any condition about. the call up of their capital, because, obviously, they would not call up the capital until the men were there wanting to use it. Therefore, there is no question of diverting any energy from war purposes to post-war purposes. But unless the promoters of this company know they can get the capital they want they cannot make their plans; they do not want to go ahead unless they are assured of sufficient support.
I refer to this particular question relating to Berwick-upon-Tweed only as an

2297
illustration of a perfectly general problem. And I am not asking for anything for Berwick-upon-Tweed which I should not like to see granted to the neighbouring friendly countries of England, Scotland and Wales—
Sir Percy Harris: And Northern Ireland.
Sir W. Beveridge: Yes, and Northern Ireland. I hope that representatives of these friendly countries will support me in the appeal I am making to the Chancellor to reconsider his "raspberry." The question is perfectly general in another and very important sense. It is not merely a question of getting capital for post-war development in localities; there is the general issue of the dispersal of industries, and doing something to stop the drift to the great towns. This has been a general feature all over the country; I want to suggest that a better way of life is in the small town, rather than in the large town. In the small town people can feel themselves to be members of the community; they can live within reach of the country and their work. That is the better way of life which we want to preserve for our people as much as possible. That way of life is being threatened by the continual gravitational drift to the large towns. I hope we shall form a league for the defence of small towns against being swallowed up by large towns, although I realise that we have a hard fight ahead of us, because so many Members in the House represent large towns, which they want to see grow and become still larger, But I hope that we of the small towns will be assisted by the Government in defending ourselves, and will not be stopped from defending ourselves.
Of course, there are advantages in large towns. One of the things I hope we shall take as a moral for all our postwar action is to give to people living in small towns and in country districts the advantages which large towns have in light, power, water, education and many other services. Only in that way shall we be able to stop this fatal drift to the large towns, and be able to pro-serve that valuable local patriotism and initiative which is typified by the particular development company to which I have just referred. Of course, a little thing like this is not anything like
2298
all that is wanted. I hope the Government may have larger plans for the dispersal of industries, and for securing a market for what local industries produce. But, at any rate, this is something which should be done. In asking that my right hon. Friend should reconsider his treatment of capital issues of this kind, I am not, of course, suggesting for a moment that all control of capital issues should be abandoned, That would be entirely contrary to what I think is necessary after the war in dealing with the problem of investment. But I suggest that there should be a revision of the instructions to the Capital Issues Committee, so as to make it possible for others than the Government to get post-war plans ready. This revision cannot be confined to making possible such local schemes as this. The Government will have to take account of the control of capital issues generally, so that all people wanting to plan for capital expenditure after the war shall know that they can plan with some hope of being able to carry out those plans.
The reason that was given for declining this company's request is no reason at all. Of course, there are other reasons that can be given, and I have no doubt that the excellent and ingenious officials who help my right hon. Friend will be full of arguments about the danger of creating precedents. Having been an official, I know it is the business of an official to be continually dreaming nightmares about thin ends of wedges, and slippery slopes, and doors which insist on opening. Sometimes the dreams get a bit confused. I believe that if the Financial Secretary looked into the files of the Treasury he would find somewhere a Minute saying: "This project of the hon. Member must be resisted because it would open the thin end of the wedge of a very serious door." I heard and saw, just now, the Secretary of State for War being regretfully and politely obstinate and immovable. I beg my right hon. Friend the Financial Secretary not to be obstinate and immovable on this matter. I am not suggesting the complete revision or abandonment of control of capital issues—I want to keep control— but I suggest that they make an immediate revision of the instructions to the Capital Issues Committee which will make it possible for local schemes such as

2299
I have described, not only in my own constituency but everywhere, to be developed. The Chancellor of the Exchequer and my right hon. Friend the Financial Secretary are both well-known as people of highly constructive ingenuity. I ask them to use their constructive ingenuity to find ways of getting things done after the war, and not to find reasons for stopping them.
1.28 p.m.
Mr. Clement Davies: As a representative of one of the countries which maintain most friendly relations with Berwick-upon-Tweed, I rise for a few minutes to support the case which has been made so well by my hon. Friend the Member for Berwick-upon-Tweed (Sir W. Beveridge). As he says, this in itself is an interesting scheme, but it is a matter which affects not only Berwick-upon-Tweed but all rural areas and, in particular, the little market towns which are the centres of these rural areas. It may interest my hon. Friend, and possibly the House, to know that a scheme somewhat similar to the one suggested by Berwick-upon-Tweed has been put forward in my ancient borough, where the people are anxious about their future, and especially so about their young men and boys.
For over 100 years there has been a drift from country areas to industrial areas, which have now become congested. It is a sad story, which I have told to the House on more than one occasion, and I have given figures with regard to my own country. Recently, there was a report dealing with the whole matter which showed that, out of a population which has never exceeded 2,500,000, there has been, between the two wars, an exodus from Wales of 400,000 people, in the main young people. We want to stop that type of export. The Government, in refusing the application which was put forward by Berwick-upon-Tweed, are taking up a negative attitude. Indeed, they are encouraging people to leave the rural areas. Their policy at the moment is to say, "We will not assist you where you are, but if you would like to go to a congested area which has suffered so much unemployment between the two wars we will assist you."
We have now been given plainly to understand that the Government's policy
2300
at the moment is to mark out South Wales, Lancashire, West Cumberland and Midlothian for priority in this matter. If perchance, Mr. Deputy-Speaker, you or I wanted to start a new industry and said, "Let us go somewhere where the amenities are good, where the health of our workers will improve instead of deteriorating, and where we can get the best production by means of small units working together"—which is in the country districts—the answer of the Government would be, "We will give you no assistance there at all, but if you like to go to South Wales, Midlothian or Lancashire, we shall give you priority." What is wanted is a reversal of that policy. There is a wonderful opportunity before them now to encourage these people to remain at home. My hon. Friend the Member for Berwick-upon-Tweed has talked about the amenities that are necessary. Housing, which has been so disgraceful throughout all these years; electric light at the same price at which it is obtainable in these other places; transport on equal terms—all those facilities which are now to be found in these industrial congested areas should be given to rural areas.
We want more than that. These people should have not only amenities; they must also have the means to live, and that is what we are anxious about now. Every little borough has been drawing up plans for the future—such as new housing schemes—hoping that their young men who got married during the war will stay there. But they know that the young men will leave unless there is some industry which will enable them to live, and the industries that they are asking for are industries which will fit in with the area. They want something in connection with agriculture. In my county they want new creameries and butter factories, cabinet-making, woodwork of all kinds to keep our young boys at home. There is only one thought in the minds of every soldier to-day, dominating everything else—the desire to go home. My boys will come home to Montgomeryshire. The boys of Berwick-upon-Tweed will go back there. They will receive an amazing welcome. They will be feted for perhaps a few weeks and then will come the question "What are you going to do with them?" and the answer will be returned, "There is nothing for you at

2301
Berwick-upon-Tweed but, if you like to go to Lancashire, they are opening new factories." To my boys they will say, "Go to South Wales and the Government will assist you, but leave Montgomery," one of the finest agricultural counties, with a population less than in 1800. For 150 years we have been steadily denuded of population. What these people are trying to do, is to create employment at home for their boys so as to stop this export from the country districts. May I then add my appeal to that of the hon. Member?
1.34 p.m.
Mr. Boothby: I am very glad that the hon. Member for Berwick-upon-Tweed (Sir W. Beveridge) has raised this extremely important issue, because there are many national issues of vital importance underlying the local problem to which he has directed attention. This question of local development involves issues of principle. The psychological moment for registering such companies is now. The psychological moment for calling up the capital will be immediately after the war, because the capital will be available both nationally and locally. But, if we are to judge from the experience of the years 1920 and 1921, we cannot count upon that capital being available for an indefinite period. We shall have to strike while the iron is hot, if we want to get the capital that has been saved up during the war made available for local development. Capital has a way of dissipating over a period, especially if by any mischance we strike another depression, as we did after the last war. It would therefore be much better to have some capital already safely invested in local development companies for these post-war years. The purpose of the development companies that my hon. Friend has in mind is not to engage in trade on behalf of local authorities as such, but to encourage the development of local industries and private enterprise—particularly by the small man—and to improve the local amenities of these towns.
Speaking as a representative of another friendly neighbouring country—I have for a long time thought and hoped that Berwick was in my country, but I gather from what has been said to-day that it is an alien city, although tied to us in
2302
many ways historically and geographically—but speaking from a friendly neighbouring country to the North, I should like first of all to emphasise that there is really a great opportunity after the war for an expansion of tourist traffic in what is after all one of the most beautiful countries in the world; and that you will never be able to do that unless you get a vast improvement in hotel and boarding house accommodation in these small towns. People will simply not go there, if they are going to be as uncomfortable as they have been obliged to be in many of the rural districts in Scotland for the last 50 years; and, if our tourist traffic is to be revived, improved hotel and boarding house accommodation, and the provision in certain districts of holiday camps, is absolutely essential. It seems to me that that is a purpose for which these development companies might have been particularly designed.
The question of housing in the smaller towns also arises in connection with these development companies. Rural housing has already had consideration by the House; and, of course, housing in our blitzed industrial areas is constantly in our minds; but the housing position in the small country towns particularly in Scotland, will be almost as bad, relatively to numbers, after the war. I take a bleak, almost an alarmist view, of our housing prospects after the war. The shortage everywhere will be terrible—in the small and large towns, and in the countryside. In Scotland alone we want 500,000 houses. I have always believed that, when it comes to the point after the war, we shall require an effort comparable to that made by the Ministry of Aircraft Production in 1940 to get Spitfires in time in order to get houses in time for the boys who are coming back from the war. I see no signs of such an effort. I should like to see Lord Beaverbrook made Minister of Housing to-day, and told to get on with it just as fast as he was told to get on with the production of Spitfires. The problem is of that order. But, as we are going on at present, what is it that we have got? Seven Government Departments directly involved, all engaged, as Government Departments so often are, in hot action against each other. The construction of houses after the war should in my opinion be regarded as the greatest adventure in

2303
supply ever undertaken by this country in peace or war. Speed is essential; costs must also be reduced to the lowest possible level, and this must depend on the provision of raw materials in bulk, and the avoidance of competing claims for labour. I believe that the task is beyond the capacity of 1,000 separate local authorities; but, in the absence of a single Government Department, and of centralised direction and control under a Minister possessed of overriding powers, much will depend on the efforts of the local authorities.
I was very interested at a recent meeting, with members of the town council of Peterhead, which is a town of much the same character as Berwick-upon-Tweed, and much the same size. They put it to me that they were terribly worried and anxious about the housing position when demobilisation began. They said, "We are not in a position to provide housing accommodation for all the people who will be coming back, some of them newly married. We just have not got it." In the neighbourhood there are one or two extremely good granite quarries, and they suggested to me—this was before the hon. Member for Berwick-upon-Tweed told me about his projected company—that it might be possible to form a company locally to exploit these granite quarries, and supply themselves and the neighbouring district with granite for the construction of houses, thus avoiding transport charges and higher costs. They also put it to me that it might become necessary, as a temporary emergency measure, to take over some of the Air Force camps when they are abandoned, which are at least supplied with water, light and other amenities for the temporary accommodation of people coming back. All these things come under this development company idea. In addition, there is in the more outlandish parts of Scotland the whole question of small harbour and marketing and transport facilities which are so vital to the economic development of that area, which again would come within the scope of these development companies. Every step should be taken to encourage local activity and effort and without delay. Not only should local authorities be granted permission to form development companies of the kind envisaged by my hon. Friend, but they should also—and this is an important
2304
point—be allowed to borrow money, not only from Government authorities like the Public Works Loans Board, but from any quarter where they can raise it cheaply.
I am sure my hon. Friend would agree that there must be some permanent control over the total volume and general direction of investment. We do not want to repeat the experience of the 1920's, when we saw millions of pounds being poured into Germany and Central Europe by the City of London, most of which we never saw again. But hampering controls, and unnecessary restrictions on capital issues, which hold up the internal development of the country, ought to go at the earliest possible moment. I was reading half-an-hour ago a most interesting speech delivered the other day in Scotland by Sir Steven Bilsland, and I should like to quote two or three remarks that he made. First of all, he said that the development of light industries is not only essential, but most urgent for the future of Scotland. The impression that Scotland could not develop light industries had given rise to the myth about the drift to the south, which had never been necessary. We must cater for the light industries by providing factories on a lease basis. Last, but not least, Sir Steven said that local authorities should do everything possible to assist new industries in their area.
The root of the problem is dispersal. I can only speak for Scotland; but I know that the immense concentration, first of all upon the heavy industries as against all other types of industry, and secondly, on the industrial belt, particularly Glasgow and Dundee, has over a period been disastrous to the economic structure and balance of Scotland, and to the social welfare of her people. It is essential that we should get a better balance in our population and in our economic structure. This is one of the means by which we can do so, and I hope my right hon. Friend will be able to give us some assurance on the point.
1.44 P.m.
Mr. Moelwyn Hughes: I also am glad that my hon. Friend the Member for Berwick-upon-Tweed (Sir W. Beveridge) has raised this matter. He has established a great many institutions in his time, and he has now suggested the establishment of another—a league for the defence of the small towns. I

2305
am sorry that I cannot join a league with that title. I want to join a league for the development of the small towns. I am a small-town boy myself. There is a great deal about small towns which this country should cherish. It is in the small towns, for instance, that we find the highest sense of civic comradeship. I have sat upon local authorities in large towns. I know the difficulty of arousing at elections for the local authority, the interest of the community in the large towns. I can remember occasions when we could flatter ourselves that we had aroused considerable civic interest when we got a poll of 35 or 40 per cent. of the electorate. In the small town in which I was brought up, there was no need even to try to enthuse the people or rouse interest. It was there, and the number of people who registered their views on local affairs was of the order not of 35 or 40 per cent. but of 80 or 90 per cent. One finds in many other directions in the small towns that development of neighbourliness and civic sense which it is impossible to realise in the larger agglomerations of population. Forty per cent. of the people in these islands live in the "millionaire" towns—agglomerations of population of 1,000,000 or more—and in them it is most difficult to get the population as a whole interested and enthused in the matters which concern them.
These small towns cannot survive as effective entities unless they are encouraged and given help. My hon. Friend the Member for Berwick-upon-Tweed has given the example of a town which was seeking to help itself by getting the power to raise money. I respectfully suggest that that method is not the only one. I want to ask my right hon. Friend the Financial Secretary whether, in regard to these small towns and their development for the future, he is prepared to say that they shall be given facilities themselves to raise money from the Treasury if need be. Not all small towns will be able to finance themselves. They should be given facilities from the centre to raise money and to go forward with development that will bring to them the small industries they want. My hon. and learned Friend the Member for Montgomery (Mr. C. Davies) has mentioned his own constituency, what they are seeking to do there and the type of industry they need to develop. It is a constituency very much like mine—small
2306
towns, Carmarthen, Kidwelly, Llandilo, Llandovery, and other small places like Llanybyther and St. Clears. They are all anxious to have the possibility of developing the kind of small industry that will fit in with the economy of their area. I mention them not because they are peculiar.
The same can be said of every other type of countryside area in this kingdom. Why should the pulp factories for timber and the processing factories for milk products all be concentrated in the middle of large populations? Why cannot they be dispersed up and down the country? We have had declared to us the policy of His Majesty's Government on the allocation of industry. That envisages direction of fresh industries or the maintenance of those that are now in places of large agglomerations of population. Everybody accepts that. We do not want to see South Wales denuded as it has been before. What is being suggested now does not run counter to that policy. The putting up of small industries, employing their tens and twenties, in the countryside does not run counter to the maintaining of the large Royal Ordnance factories and metallic industries in the populous areas of South Wales. In fact, it fits in with it. All we desire is that by the development of small industries in the countryside we will maintain our small towns.
One other thing that I would say, in reinforcement of what has been said by my hon. and learned Friend the Member for Montgomery and my hon. Friend the Member for East Aberdeen (Mr. Boothby), is that the provision of facilities for the loan of money to establish these industries is not enough by itself. The small towns must have the facilities of the big towns. Small towns in my constituency and in similar constituencies up and down the Kingdom are paying 9d., 10d. and 1s. 1d. for a unit of electricity. They are deprived of water supplies and have not sufficient transport facilities. We can get our letters sent for 2½d. Why should we not get our electricity for the same price as it can be supplied in the larger centres? Why cannot we get our transport? Put them on a postage stamp basis. That is the only way to give the small communities their proper place. I would suggest as a motto for the society which I will join if my hon. Friend the

2307
Member for Berwick-upon-Tweed accepts my Amendment, the words "Feed them with factories, supply them with services." Then the small towns of this country will flourish as they ought to do in the national interest.
1.53 p.m.
Mr. David Eccles: It is time that England had a voice in this Debate, and I would like to give an example of what is happening in Wiltshire as a result of the Chancellor's refusal to permit capital to be raised for anything which has a flavour of post-war. There is an approved list of men wanting smallholdings, and the county council feels that it is the right authority to provide them and to see that the men, who start on what is an arduous life and one in which it is difficult to make ends meet, should start in decent circumstances. They, therefore, requested power to borrow some money, because they not only had the applicants for the smallholdings but a good piece of land in mind and they thought the time was opportune to get it for this purpose. They were refused by the Chancellor of the Exchequer on the ground that the acquisition of land for settling these men, some of whom I believe had been released from the Army, was a post-war project. Therefore, the county council was not allowed to borrow any money. What is the result? These men are impatient. They see the price of land tending upwards, and they buy from somebody who sells it at the wrong price. Very often the land has no buildings and proper services, and the men start with practically no hope of ever making a success of being small farmers. The time has come when this ban should be lifted. If the county council knows of men whom it can trust to start in this way, it should be allowed to borrow money to get them going.
I hope that the Financial Secretary will say something about the general economic argument, because I do not follow the Government's policy. The Government have power to control consumption and, therefore, they can without fear permit a certain amount of money to be raised for post-war projects, because they are perfectly capable of holding the price level by the rationing system that is in force. The only argument against allowing some hundreds of thousands of pounds to be raised now must be that the money would
2308
in some way start inflation. I do not believe that is true in view of the amounts involved and given the controls which the Government possess. Already the Government are allowing certain firms and technicians to start on post-war projects and are allowing them materials and machine tools. None of these things are any good unless the firm has money behind it. A big firm which has cash and liquid resources can start on post-war projects, but a small man with no cash is stopped. I do not think that that is fair. Therefore, I hope that the Government will regard the provision of reasonable capital resources, over which they would have the greatest possible control—for no one wants a free market in capital issues—as all of a piece with any reconstruction projects to which they give their blessing. Without the money behind him, a man cannot get started, either in a small industry in a small town, or in a smallholding, or in fact in any new development which may well be the result of experience during the war and was not thought of before.
1.58 p.m.
Mr. W. J. Brown (Rugby): It seems to me that the hon. Member for Berwick-upon-Tweed (Sir W. Beveridge) has not merely raised the case of a small town, but has raised an issue which is of profound long-term importance to the whole country. It is an issue which has occupied my mind increasingly of recent years the more I have seen of the world. I would proffer as a general truth, that one of the biggest liabilities that we have had in this war is the circumstance that 25 per cent. of the entire population of Britain has been concentrated within a radius of 20 miles of Charing Cross. That has been an enormous military liability, quite apart from liabilities in other respects which it has involved. The everlasting drift from the country to the town is not peculiar to this country. When I was in Australia in 1938, I was staggered to find that out of the population of 7,500,000 in a comparatively new country, 4,500,000 were already concentrated within half a dozen cities. When I was in Canada in 1942, I saw a country with a population of roughly 12,000,000, and again with the same phenomenon of more than half the population centred in a number of vast urban growths, with a countryside practically depopulated. It is bad on military grounds, economic

2309
grounds and social grounds, which includes health grounds. Every year we are drawing more and more of the comparatively healthy population of the countryside into the cities where, in two or three generations, they lose their vitality. Then we are confronted with everlastingly increasing standing charges on the health social services, as the direct result of that drift, which could have been foreseen and planned against, if we had had the will to do so.
The Government showed some sense of the existence of this problem in the White Paper on the Location of Industry, but it is no good recognising the problem unless we do something about it. The hon. Member for Berwick-upon-Tweed has made a practical suggestion which would give employment to a certain number of people in his area, and I hope that the case he put up will be conceded by the Financial Secretary to the Treasury. I see no conceivable reason why he should not, and I hope he will. I beg him to relate his reply to the problem, which is of very great importance in Britain, of arresting the drift to the towns, because if we can do that, we shall achieve a very much better balance in Britain than we have at the present time.
2.2 p.m.
The Financial Secretary to the Treasury (Mr. Peake): This Debate is an example of how a Debate on the widest issues of policy can arise out of small beginnings—if the hon. Member for Berwick-upon-Tweed (Sir W. Beveridge) will permit me so to describe the Question which he put to the Chancellor of the Exchequer. I have no quarrel with the statement that he made, so far as the facts are concerned. My hon. Friend has shown himself in the short time that he has been in this House—I say it as a compliment to him—to be an old Parliamentary hand in more senses than one, and he has certainly succeeded in initiating a most interesting Debate upon this subject.
The Debate has ranged over some very important topics. Hon. Members on both sides of the House have deplored the drift from the small market towns to the great cities. Those hon. Members who have enjoyed reading, as I have, Trevelyan's "Social History" are aware that this same drift was being deplored
2310
140 years ago. As one who was brought up in a small market town, I have the greatest sympathy with what my hon. Friend said in that regard. Big questions are raised, of course, such as whether industry should be conducted in large units or in small. Many of us who have lived in small market towns have seen how small local industries have been encircled, enveloped and indeed obliterated, sometimes, by those huge commercial octopi which try to cartelise the various forms of production.
The speech of my hon. Friend also raised the question of the location of industry, a very important issue because it is related to the question of reconstruction priorities, about which I shall have a word to say. The particular application by Berwick-upon-Tweed was a proposal to form a company immediately, with a capital of £50,000, of which only 1s. in the £ on each share should be called up now. My hon. Friend the Member for East Aberdeen (Mr. Boothby) said that the present was the psychological moment for the registration of such companies. There is nothing in the Defence Regulations or in the recommendations of the Capital Issues Committee to prevent the registration of a company of the character my hon. Friend has in mind at the present time. If my hon. Friend will also refer to the Capital Issues (Exemption) Order, 1941, he will find nothing there to prevent such a company calling up capital to the extent of £10,000 in any twelve months. That is to say, anyone can raise up to £10,000 a year at the present time without consent.
Mr. Boothby: Has not the £10,000 to be the total capital of the company? One cannot just call up a proportion, up to £10,000.
Mr. Peake: I quite agree. The nominal capital and the subscribed capital of the company have both to be limited under the regulations to £10,000 in any twelve months. By adopting this procedure, Berwick-upon-Tweed could raise more money at once than they sought to do under the proposal which they placed before the Capital Issues Committee. This proposal was that the company should issue 50,000 shares of £1 each, and should call up £2,500 at the present time, postponing the further call up of £47,500 until after the war.
Sir W. Beveridge: That is just what they do not care about doing. They do not want £10,000, and it is no good not being able to get £50,000 when they do want it.
Mr. Peake: Under the regulations, a call on outstanding instalments of share capital is not subject to control, but to allow the issue of capital now, with a provision that 19s. in the should only be paid up after the war, would mean in effect that we should have committed ourselves to a postwar capital issue.
Mr. Cove: Why not?
Mr. Peake: I am coming to that. My hon. Friend must not be in such haste. The point is that we cannot yet begin to give consents for issues after the war because, among other thing, such issues will normally be subject to the grant of the necessary licences by the Departments concerned with physical controls. My hon. Friend the Member for East Aberdeen made a very important point when he said that permission to raise capital must go hand in hand with permission to spend the capital on physical assets. It is clear that the two things must go together. I have pointed out that there is nothing whatever to prevent a local company of this kind being formed, and up to £10,000 being subscribed at the present time, and as much planning as possible being done for post-war proposals. Speaking on behalf of the Treasury, I should like to give every encouragement to the planning now of proposals for post-war spending of this character.
When we come to the more general issue I must remind the House that my right hon. Friend the Chancellor of the Exchequer was asked a Question a few days ago by the hon. Member for Kirkdale (Sir R. Rankin), who inquired whether the Chancellor would state the future policy of the Capital Issues Committee. My right hon. Friend replied as follows:
"It would be premature at present to anticipate the details of the policy to be adopted by the Government in the administration of the capital issues control after the war. The primary object of that policy, however, will be to ensure that access to the capital market conforms to the accepted priorities; and to measures taken in other fields for the purpose of giving effect to those priorities."[OFFICIAL REPORT, 14th November, 1944; Vol. 404, c. 1805.]
2312
I think that is the point which has been made on both sides of the House, and that it is the general desire that there should not be an ugly scramble in the capital market immediately after the war. There should be some plan and some order in this matter.
In answering the Question in those terms, my right hon. Friend was following a statement in the Government's White Paper on Employment Policy about post-war control of capital issues. The main principle on which the control will be administered after the war—and by "after the war" I mean, of course, after the cessation of organised hostilities in Europe—is that the provision of finance should be allowed in conformity with the physical controls of labour and materials. Capital issues will normally be subject to the grant of the necessary licences for labour and materials, and we cannot go into details on the financial side until the Government's intentions on the physical side have been announced; but the House may rest assured that the whole object of the financial control will be to ensure that those projects which are judged to merit priority for labour and materials shall likewise have prior access to the capital market. The fact that firm promises of consent to capital issues after the war cannot yet be given in individual cases need not delay the planning of industrial development and expansion, which the Government desire, for obvious reasons, to foster in any way they can.
My hon. Friend the Member for Chippenham (Mr. Eccles) spoke of the provision of capital for the purpose of land cultivation. The case to which he referred was a proposed borrowing by a local authority.
Mr. Eccles: By the county council.
Mr. Peake: By the county council. My right hon. Friend the Chancellor of the Exchequer announced in July a scheme whereby loans would be made to local authorities out of the Local Loans Fund. A scheme is at present under discussion with representatives of the local authorities and, of course, when those discussions are completed, a further announcement on the subject will be made.
I hope that what I have said will go some way to meet the view of my hon. Friend on the particular case which he raised. Hon. Members have raised issues of much greater importance than I, at

2313
any rate, am competent to deal with to-day, and I would, in reference to them, only draw my hon. Friend's attention to the very important statement on post-war controls which was made by the Prime Minister yesterday. My hon Friend the Member for East Aberdeen emphasised the necessity for the provision of capital for housing, and I would, therefore, pick out from the Prime Minister's statement this phrase:
"The shortage of houses, both permanent and emergency, must be grappled with as if it were a war-time measure."—[0FFICIAL REPORT, 16th November, 1944; Vol. 404, c. 2113.]
The Prime Minister was only saying in rather different words what my hon. Friend said in his speech to-day. I would, therefore, refer my hon. Friends to this important statement and emphasise that the Government must make financial controls go hand in hand with physical controls. I would add that everything hon. Members have said will be carefully weighed and borne in mind before future announcements on the subject are made.
Mr. Hughes: Before the Minister sits down, may I ask him whether, so far as small towns are concerned, it is the case that all they can expect now is, if they on their own initiative float a £10,000 company, that they can raise that money as and when they like; but if they go beyond £10,000 they are still subject to control and if they cannot raise the money locally no encouragement is given for them to get it from the centre?
Mr. Peake: That is the existing position.

BRITISH OVERSEAS INVESTMENTS
2.14 p.m.
Mr. Molson: May I begin by apologising to the Minister of State if I leave before the conclusion of his speech, but it is because I have a long-standing speaking engagement in the country which I am anxious to keep. There are many projects before the country for the general improvement of our social and economic life. I am as anxious as any optimist in the House that after the war we shall not be worse off than we were before the war, and that our standard of life should not be any lower. But there are some results which are following from the war which will make it necessary, if we intend to regain even the
2314
standard of living we enjoyed in 1938, to increase our exports to a level far above those which were reached in the year 1938. in that year the excess of our imports over our exports was £388,00,000, that is, so far as goods were concerned. Income from the services of our shipping and commissions of various kinds, especially banking and insurance, amounted to £135,000,000, so there was an adverse balance of trade of £250,000,000. The interest upon overseas investments, which we as a nation inherited from past generations, brought us in £200,000,000. In order to make up the remaining gap of £50,000,000, we were already, in 1938, selling our overseas investments at the rate of about £50,000,000 a year. So, before the war, we were living upon capital to the extent of £50,000,000 per annum.
The changes that have been brought about by the war are of a very serious kind. Lord Kindersley estimated that the nominal value of our overseas investments in 1938 was £3,725,000,000, and the White Paper laid before this House at the time the Chancellor of the Exchequer opened his Budget this year showed that what had been liquidated in order to buy the food, the raw materials and armaments required during this war, amounted to £3,128,000,000. So if it be permissible to subtract what capital assets we have liquidated daring the war from the nominal assets we possessed before the war, there now remains to us about £597,000,000. As a matter of fact the position is not really quite as favourable as that, because the estimate for 1938 was based on the nominal value, and a very large proportion of our overseas investments were already not worth as much in the market as their nominal value. The position is probably more unfavourable also, because what we have sold in order to meet our commitments in the United States of America and elsewhere have, on the whole, been the best of the foreign investments we held, so that the estimate of £597,000,000 remaining to us is probably more favourable than the facts really warrant.
In addition to that it has been stated by Lord Keynes in the United States that there have accumulated against us in this country sterling credits owing to other countries, amounting approximately to

2315
£3,000,000,000. Therefore, if it be permissible again to deduct our sterling liabilities from our remaining overseas assets, it would suggest we are in deficit to the extent of £2,403,000,000. This, no doubt, is what the Washington correspondent of the "Wall Street Journal" had in mind when he said, in a message quoted in to-day's "Financial Times," that this country is now "broke." If that be the case, that we have these great liabilities, it is not only a matter of prudence for us to try to conserve such of our overseas investments as remain to us, but it is an obligation of honour upon us in the interests of those to whom we owe very large sums of money.
I have raised this matter to inquire what is the attitude of His Majesty's Government to this whole question. I had at one time thought it was a matter on which the Treasury would have replied, but I am glad to see here my right hon. Friend the Minister of State, who no doubt will be able to reply on their behalf as well as on behalf of the Foreign Office. But the Chancellor of the Exchequer is deeply interested in these overseas investments, and for two reasons. In the first place he is interested for the purpose of balancing his Budget. When we have Income Tax at the standard rate of 10s., he can expect to derive for the support of his Budget 10s. in every from the dividends paid. Therefore, from a purely Budgetary point of view, he is very much interested in the preservation of our overseas investments, and in ensuring that they remain or become revenue producing.
There is another responsibility which the Chancellor of the Exchequer has which makes him still more interested in these overseas investments. He has to see to it that this country as a whole has enough in the way of foreign currencies to buy the food and the raw materials and everything else which we have to import from overseas, and I do not think it is only in time of war that he will have to maintain a control over exchange. At the present time the whole of the income in Canadian dollars which is received by residents in this country is acquired by the Bank of England. The owners of these Canadian securities receive sterling in this country, and the Canadian dollars are available to His
2316
Majesty's Government for the purpose of buying food, munitions and everything else which has to be imported from Canada. Exactly the same applies in the case of all these other investments, and particularly in the case of South America, from where we import so much of our food. Therefore the Chancellor of the Exchequer is interested in this matter, not only from the point of view of his Budget but also from the point of view of the foreign exchange which it makes available for the purchase of our imports.
In spite of these two facts, I must say that down to the present time, I cannot see that His Majesty's Government have taken any Very great interest in the protection of our overseas investments. There exists at the present time the Council of Foreign Bondholders, and within the comparatively narrow scope of its activities it has done all that it can. I am not quite sure how much support it has obtained from the Foreign Office, but the scope of its activities is limited to the bonds that are issued by foreign Governments. It is not concerned with debentures issued by foreign companies, nor is it interested in investments in railways. I am asking this afternoon that the Government should state it to be their policy to give reasonable support and protection to the investments which this country holds in overseas countries.
Although I have indicated the limits of the scope of the Council of Foreign Bondholders, I shall not preclude myself from giving examples which fall within its realm where, as at present advised, I cannot see that His Majesty's Government have given the support which might have been expected. Let me take in the first place the case of the Republic of Costa Rica. The Government of Costa Rica has been in default since 1937. In 1939 the imports of that country were only half the exports, and therefore there must have been ample sterling exchange available to cover the service of that debt. What steps have our Government taken to insist upon the Government of a country which has benefited so much from the market this country provides, paying its debts? The Council of Foreign Bondholders, in its report for 1943, said:
"The Costa Rica Government has shown no inclination to negotiate a settlement."

2317
Has any pressure been brought to bear upon the Costa Rica Government by His Majesty's Government? Similar considerations apply in the case of Brazil and Salvador. A rather different question arises there. A debt has been owing in dollars to the United States of America. These issues were admittedly junior to the debts owing in sterling to this country, and in the negotiations that have taken place, the results of which have been put into effect, the junior dollar issues have been brought in pari passu or even superior to the sterling debt. Again J would ask what the Government have done about that.
I pass from South America now to Spain. There is there a large company called Barcelona Traction. It is a Canadian company, but the debentures are sterling debentures which were raised in this country. There has recently been an increase in trade between Spain and this country, and we are given to understand also that General Franco and his Government are anxious to show their good will towards us. In spite of that fact a junior peseta debenture has received payment of interest upon it, while the sterling debentures which are held in this country have not been paid. I come to the most striking case of all, the Argentine. There is a Government which has always had an extremely good record. In the case of the railways the position is entirely different. Let us for a moment look at their record. This country has made savings and has sent them out to the Argentine in the form of steel rails, rolling stock and locomotives, all manufactured in this country. As a result of the development—
Mr. Cove: What does the hon. Member mean when he says that this country has provided the capital?
Mr. Molson: The country that I had in mind was Great Britain.
Mr. Cove: But is that true? Is it not individuals and private interests in Great Britain who have invested abroad like that?
Mr. Molson: The point I was trying to make is that individuals have saved money in this country, and have lent it in the City of London, and the actual export has taken the form of steel rails from Middlesbrough, and rolling stock and locomotives, which has given employment to our people in the North of England. As a result there
2318
has been a development of virgin parts of the earth, which has been to the advantage of this country as an industrial country, and to the advantage of the Argentine, which has thereby been developed. Food from the Argentine has been made readily available to the markets of this country, and those industrial workers who produced the locomotives and the rolling stock have subsequently been fed by the food from the Argentine. The Argentine has benefited from that investment in the Argentine. The investor in this country was entitled to expect an interest on his savings invested in that way. The Chancellor of the Exchequer benefits from the interest obtained upon those savings.
Mr. Cove: Is it not a fact that this was one of the risks taken by private capital in investments abroad? This is the risk of ordinary capital investment. It was not the Government of Great Britain who invested abroad, it was private individuals. I thought that one of the glories of capitalism was that it was prepared to take these risks, in the interests of progress.
Mr. Molson: The hon. Member has made two points, one of which I thought I had dealt with earlier in my speech, when he may not have been present, and, as to the risks, I am coming to them. Perhaps the hon. Member will then be able to put his point—if there is one left for him to put. The present position is that the present market value of the nominal investment of £250,000,000 in the Argentine, is one-third of that amount, about £85,000,000. I come to the question of why there has been no interest paid upon either the ordinary or the preference shares while all the debentures except one are subject to a moratorium. There are various reasons. I suggest that they are due to a somewhat unreasonable attitude on the part of the Argentine Government. The first is a refusal to allow an increase in rates. In the case of the Buenos Aires transport, the rates which are being charged in 1944 are the same as those which were charged in 1914. I think the hon. Member for Aberavon would agree that it is a little difficult to ask any enterprise, whether privately owned or nationalised, to bear the increased burdens of the last 30 years while allowing it only the same income as it had in 1914
Mr. Shinwell: Would it not have been much better for British industry, and for the industrialists and the investors on whose behalf the hon. Member is making a case, if they had invested their savings in the Empire, which, incidentally, I understand is the policy of the young Tory group?
Mr. Molson: I would not disagree with the hon. Member for Seaham (Mr. Shinwell). I have listened to some of his recent speeches about Empire development with an enthusiasm which has made me anxious that he should cross the Floor. Surely such a stout and resolute supporter of British industry and of national interests would agree that, where this development has taken place in the past, we are entitled to ask that our Government should ask the Argentine Government to accord fair and reasonable treatment to the investments?
I pass from the increase in rates to a case of exchange discrimination. In the Argentine they have introduced differential rates of exchange, which are unpleasantly reminiscent of the technique of Dr. Schacht. Instead of having pounds and pesoes sold against each other at the same rate of exchange, for whatever purposes the currency was required, there was a controlled price of 13·5 pesoes to the pound. If it were desired to obtain pounds sterling in order to buy British coal—I have an idea that very good steam coal comes from the Aberavon constituency—there, the—

ROYAL ASSENT
Message to attend the Lords Commissioners.
The House went; and, having returned—
Mr. SPEAKER reported the Royal Assent to:

1. Matrimonial Causes (War Marriages) Act, 1944.

2. Diplomatic Privileges (Extension) Act, 1944.

3. Prolongation of Parliament Act, 1944.

4. Ministry of National Insurance Act, 1944.

5. Town and Country Planning Act, 1944.

BRITISH OVERSEAS INVESTMENTS
Question again proposed, "That this House do now adjourn."
2.47 p.m.
Mr. Molson: I was just pointing out that, under the present system, there is an elaborate arrangement of exchange discrimination, and I was trying to meet the point put by the hon. Member for Aberavon, who suggested that the depressed state of the Argentine investments was a natural hazard to which all private investment is subject. But, as a matter of fact these railways in the Argentine have been earning quite substantial revenues. I have not the figures completely up-to-date, but quite large profits have been made by the companies, in the Argentine currency. It is the discrimination against the remittance of those profits to this country which is the ground for complaint and it is one in which, I feel, it would be quite proper for the British Government to make representations to the Argentine Government.
Recently, there has been a change, and a change for the better. In the case of purchases of coal, instead of the fixed exchange being 15 pesos to the pound, it has been altered to 14, and, in the case of financial service, it has been altered from 16.15 to 14.15. That is only a temporary adjustment, and it was not intended to give any benefit to the British investor. It was only in order to enable the Argentine railways to bear the burden of an increase in wages which had been, in large measure, brought about by the action of the Argentine Government. I make no complaint; I recognise that, to that extent, the Argentine Government has behaved quite properly. It has recognised that, in imposing an additional burden upon the British-owned railways in the Argentine, it was under an obligation to see that the railways had the resources with which to bear that burden, but that does not indicate that there has been any departure in principle from a system under which the rate of exchange is varied according to the purpose for which the currency is required.
These British-owned railways operating in the Argentine operate under a law passed 37 years ago, which provides that there should not be any taxation levied upon them other than a certain 3 per cent. on the amount of their profits. To introduce a discriminatory exchange is, quite obviously, a breach of that law, under which they have been operating for the last 37 years and which does not

2321
expire until 1947. I, therefore, ask that the British Government shall consider whether they could not make representations to the Argentine Government and urge upon them that, as they have so high a reputation for complete fairness and correctness in the service of the debts which they themselves owe, they will treat the debt of the Argentine railways in the same way. We are very large purchasers of the exports of the Argentine, and we are entitled, I think, to expect, in return, that they will be sympathetic to our investments and to our exports.
I have raised this matter for three reasons. First, in order to emphasise that this is not a matter which merely affects a few wealthy men who hold investments in the Argentine railways. It is a matter of having available to the British Exchequer substantial amounts of foreign exchange which will be used for the purchase of overseas foodstuffs. It is also of great importance to our industries, because these British-owned railways were built of British materials and, so long as they are British run there is very little doubt that British engineering products will enjoy a substantial advantage in that market. If it proves to be the desire of the Argentine to acquire these railways, no one will complain, provided that a fair purchase price is paid, but, from the point of view of the maintenance of our exports, which the Government itself recognises to be of the utmost importance, then the sale of these large British overseas investments will, almost certainly, result in a substantial decline in our exports of locomotives, rolling stock and rails to the Argentine.
In the second place, I have raised this in order to obtain, if possible, from the Government, an undertaking that they will use our economic bargaining power to obtain fair treatment for our overseas investors. I have mentioned the case of Costa Rica, and the case of the Argentine. Bath these countries are very largely dependent for their prosperity on the extremely large purchases which we make, and, if we do that, we are entitled to expect some reciprocity. In the third place, I want to urge the setting up of a council for the protection of our overseas investments—something which would not exclude the Council of Foreign Bondholders, but would be wider in its ambit and be of a more official character. I
2322
suggest that there should be on it representatives of the banks, the insurance companies, investment trusts and of the Stock Exchange, and also that it should contain representatives of the Treasury, the Board of Trade, the Foreign Office and some hon. Members of this House.
Faced as we are at the present time, with the painful transition from being the greatest creditor nation in the world to being perhaps the greatest debtor nation, it is vitally important that we should take all steps that we properly and reasonably can to ensure fair treatment of our interests overseas. I have tried to show that at the present time the British Government are actually part-owners of these overseas investments, that they are vitally and intimately concerned with their welfare, and I hope, therefore, the Government will be prepared to say that they are willing to take the necessary steps to ensure their defence.
2.56 p.m.
Mr. Shinwell: My hon. Friend the Member for The High Peak (Mr. Molson) usually makes interesting speeches to the House and I frequently find myself in agreement with him, but I must confess that this afternoon I find myself completely bewildered. He has just asked the right hon. Gentleman the Minister of State to agree to the creation of a council to protect the interests of bondholders. I am under the impression that such a council is hardly necessary, in view of the fact that the young Tory group have accepted the responsibility. It is a new role for that young Tory group. I would have thought that my hon. Friend would have come to the House this afternoon and prefaced his observations—some long and, no doubt, necessary observations—by the declaration that the worst thing that ever happened for the people of this country and the interests and trade of this country was the indiscriminate investment of British funds in foreign countries. He did nothing of the sort. He made the position even worse by the somewhat infantile suggestion that, if it had not been for our investments in the Argentine, the steel-workers in the North would have been unemployed. Are we to understand from that observation that, in order to find work for the people of this country, we should send our wealth abroad? Of course not. There was no occasion for that at all.
Mr. Molson: I said that the export of capital to this country has, on almost every occasion, taken the form of the export of capital goods manufactured in this country.
Mr. Shinwell: I accept that, of course. If you are exporting, you are exporting goods, naturally, but is it assumed that you cannot find work for the people in this country without exporting your own wealth? Of course you can, and my hon. Friend knows very well—it is an economic axiom, it is a truism, it is elementary—that the reason we export is because we import, and if we do not secure imports from the Argentine or countries associated in a multi-lateral capacity with the Argentine, obviously, we would not require to export goods to the Argentine. The steel-workers of Middlesbrough and the North-East, the miners in my hon. Friend's constituency of Aberavon and the cotton operatives of this country could find plenty of work to do in our awn land, if, instead of sending our wealth abroad, we had organised our wealth, and, moreover, if we had turned our eyes in the more desirable direction—the direction which I understand is always the happy hunting ground of the Tory Party—
Sir Alfred Beit (St. Pancras, South East)rose—
Mr. Shinwell: May I complete the sentence in case there is any misconception-of the Empire and the Colonies.
Sir A. Beit: My hon. Friend the Member for The High Peak (Mr. Molson) was addressing himself to railways and we have, of course, done most of the work in developing the railways in the Empire, and surely the hon. Member is not objecting to our undertaking capital works in the Argentine as well.
Mr. Shinwell: I could suggest glorious and amazing opportunities for the development of the railway system in our own land. On that subject I have ventured to put my thoughts into writing, and perhaps on some occasion I shall express them in this House. Everybody is familiar with our needs in relation to transport and transport facilities. These are infantile arguments. What is my hon. Friend talking about? It is not a war situation but a post war situation. He is not asking the Minister of State to issue a
2324
ukase to the Argentine Government here and now, that existing debts should be paid outright. He is asking for something after the war. Why? Because the only means at the disposal of the Argentine or any other country in the repayment of debt, is to send goods to this country. Therefore, it is a post-war question. Are we prepared to accept goods from the Argentine after the war? That is a matter for future consideration. It depends entirely on the Government's commercial policy. We may require to accept some goods from the Argentine and from some other countries after the war, but I am not at all sure that that squares with the Tory policy on tariffs, on the safeguarding of British industries. We must be mighty careful what we are talking about.
My principal reason for intervening in the Debate—I agree it is a matter which requires very careful consideration and preparation before one does intervene—is to point out that, if we insist upon the repayment of debt, we must be very careful, because it so happens that we in this country owe a lot of money to other countries. I can recall occasions in this House when we had very exciting Debates on the subject of the repayment of the debt to America. I have no doubt that we owe other countries a great deal, and do not let us forget the sterling balances and the issue involved in the holding of sterling credits in this country. All these matters have to be argued out after the war, and they are very serious matters. We might be called upon to embark upon a completely new line of policy after consultation with the various interests.
Mr. Molson: I hope that the hon. Member does not mean to confuse a commercial debt owing by a railway, which is a revenue producing concern, and which is developing the country, with a political debt arising out of the conduct of the war?
Mr. Shinwell: I am going to make a gift to my hon. Friend. I should imagine that a private debt is of as much concern to the State as a national debt. Does not he agree? I observe, to my surprise, that he does not accept that which I should have thought was the traditional Tory view. In any event, as my hon. Friend the Member for West Islington (Mr. Montague) has pointed out to me, it all means exports or imports in the long run. It means bi-lateral and multi-lateral

2325
trade. It cannot mean anything else. Therefore, we have to be extremely careful if there is to be any question of repayment of debt. On dealing with defaulters, we might find ourselves in rather an awkward position. I am very much concerned, as I hope hon. Members opposite are, that we should not make the same mistakes in the future. There has to be direction of investments. It must not be left to the individual to decide where he is going to invest. It is a matter for State policy. It has nothing to do with State ownership or nationalisation. It is not ideological or doctrinaire. It is practical common sense that, before people in this country with surpluses at their disposal are permitted to invest abroad, a sense of responsibility must be considered because any action taken must conform to national policy. That is the essential prerequisite of any kind of trade organisation of a satisfactory character in the post-war years.
That is the first step. The second is this: If we are going to invest—and again I agree it must be under State supervision—consider the possibilities in our Colonial possessions and in the Dominion countries. My hon. Friend has been talking about railways in the Argentine. Recently I have been studying the lack of adequate transport facilities in the African Colonies, and the question of how better transport facilities would assist agricultural expansion and, possibly, industrial expansion, and help to eradicate disease and improve social conditions. I have no doubt my hon. Friends opposite will agree with all I have said under that head. Then, let us see to it in the future that hard-earned money raised in this country, is not exported in the wrong direction. I hope that my hon. Friends will consider it from that angle. Finally, let me put this to my hon. Friend. He said that after all it was not only wealthy investors who sought protection. I wonder what he meant by that. Was he bringing in the widows and orphans?
Mr. Molson: No.
Mr. Shinwell: I am glad of that because we are familiar with the argument that the widows and orphans have to be protected. I suggest to him that, on the whole, it is only a very small section of the community who are affected
2326
—the investors in the Argentine. All right, it is our duty to protect everybody, high or low, wealthy or poor. That is the responsibility of the State, and I do not take exception to that. But let us not embark upon a policy vis-à-vis the Argentine which means that after the war, in order to protect wealthy bondholders in this country, we have to accept goods from the Argentine which compete with our own industry. I am putting the Tory policy to my hon. Friends opposite—because that is what it is—but it may be in line with the kind of policy we may have to accept after the war, in order to foster our trade. That is the only reason why I have intervened. I beg my right hon. Friend the Minister of State not to pander too much to these wealthy bondholders and to these foolish investors, who, in my judgment, have wasted the substance of this country, instead of using it in the country for the country's good. Instead of using it for the Empire's good, they have sent it to other lands and, in consequence, have found in due course default happening and now they are complaining. I beg him to be extremely careful before he embarks on a policy which is calculated to do more harm to this country than has ever been done by the investors themselves.
3.8 p.m.
The Minister of State (Mr. Richard Law): I regret it extremely if, by getting up now, I am in any way curtailing this Debate, but I feel that the subject which has been raised by my hon. Friend the Member for The High Peak (Mr. Molson) is of such great importance that the House is entitled to a fairly full reply from the Government. Indeed, I am glad of the opportunity of making a reasonably full reply on these topics and, in spite of the objurgations of my hon. Friend the Member for Seaham (Mr. Shinwell), I still think that this problem, which has been touched upon so ably by the hon. Member for The High Peak, is of supreme importance to this country at the start. My hon. Friend, who introduced the Debate in that extremely able speech, explained why this problem of indebtedness was no longer—whatever it may have been in the past—a problem which affected just a section of the community but was now a problem which affected the community as a whole. I think the whole House is familiar with the problem of the balance of payments which will face

2327
us after the war. My hon. Friend touched upon that and gave some figures. I would not commit myself as to their accuracy, because I do not believe they were entirely accurate. However, the fact remains that the broad picture he presented is true, that we have this balance of payments to solve, and upon its solution depends a great many other things. Its solution will be materially helped if we are able, in the future, to collect those foreign obligations which are our just due.
I must say that I am always very much interested by the economics of my hon. Friend the Member for Seaham. I do not know where he gets this crude, Continental mercantilism that he is always expounding with great vigour in this House, but I must say, speaking for my own part, that I do not agree with it and I do not hold with his theories.
Mr. Shinwell: Will my right hon. Friend state specifically what it is with which he does not agree?
Mr. Law: Certainly. As I was saying, I do not hold with my hon. Friend's theories. I believe, like any sensible man, that most economists are wrong, but whoever the economists may be from whom my hon. Friend gets his extraordinary theories, I can only say that they are more wrong than most. Let me say a word to my hon. Friend about his theories. He says it is wrong to export wealth. Well, that may be so—
Mr. Shinwell: No, my right hon. Friend has not listened at all. I did not say it was wrong to export wealth. I said the reason why we exported wealth, was because we imported wealth.
Mr. Law: My hon. Friend did say that it was a foolish thing to export wealth, and that we would have done much better not to have exported it but to have used the wealth in this country and in the Empire. That is as may be. That is arguable but, having exported it, surely there is obvious advantage in getting value for what you have already spent?
Mr. Shinwell: What is wrong with my theory?
Mr. Law: The hon. Member said that because in his view it was unwise to export wealth, therefore it was unwise to bother about these foreign investments.
Mr. Shinwell: My right hon. Friend cannot get away with that. If he wants an argument, he will have to stand up to me. He starts off with the wrong premise. He assumes that I said it was wrong to export wealth. I will make it as clear as I can. What I say is that the reason we export wealth is because we require to import wealth, and we return the value of imports by exporting the wealth of this country. If we did not import, we would not require to export. Is that plain enough for my right hon. Friend?
Mr. Law: I should be only too glad to stand up to my hon. Friend if he will give me any opportunity to stand up at all. Having complained, as I am afraid he did—I think he will find it in HANSARD if he reads it to-morrow morning—that we should not worry about this question of foreign indebtedness, because it was something that concerned only a few people and not the community as a whole, and that exported wealth was, on the whole, wasted wealth, he then developed his argument and stated that if you exported wealth—which on the whole it is unwise to do—instead of using the wealth in your own country, you are now proposing to do a still more unwise thing because you are importing wealth which can only be paid for by exports. Whatever his economics are, he cannot have it both ways—he cannot say that the export of wealth is foolish and the import of wealth is foolish because, if the export of wealth is foolish, the import of wealth must be a wise thing.
Mr. Shinwell: May I put a further point?
Hon. Members: Order.
Mr. Speaker: The hon. Member has spoken already at some length.
Mr. Shinwell: I want to make one point perfectly clear. What I said was that if you import wealth in this fashion, it will conflict with the kind of commercial policy you may be required to adopt after the war, and I reminded my hon. Friends opposite of the Tory fiscal policy. What has my right hon. Friend to say about that?
Mr. Law: I might remind my hon. Friend of the fiscal policy of the Labour Party, but that would not get us very far. The fact remains that this question, raised by my hon. Friend the Member for The High Peak, is of great import-

2329
ance, not only to a small class of people, the investors themselves, but to the community as a whole, because to the extent to which we are able to get payment of our debts, we are relieved of our balance of payments problem. This is one of the most important problems that faces us. My hon. Friend asked me a number of questions, and asked me to give a number of undertakings. He suggested that it would be a good idea to set up a wide committee, modelled on the Council of Foreign Bondholders, to cover the whole field, and not the narrow field of Government obligations which the Council of Foreign Bondholders covers. My hon. Friend was good enough to make that suggestion to me some days ago, and it has been most carefully and most sympathetically considered, because the Government are quite as anxious as he is, to do everything in their power to collect any obligations that are due. We have examined it, but we have reached the conclusion that the suggestion, attractive as it is at first sight, would not help us particularly to solve the problem.
May I explain why that is? As my hon. Friend pointed out, foreign investment falls, broadly, into two classifications. It comes, broadly speaking, under two headings. In the first place, there are foreign, Governmental and municipal obligations, and, in the second place, there is ordinary commercial investment in a variety of commercial undertakings overseas. That method of classification is not merely a matter of convenience. It is a classification that goes to the root of the problem, and I would like to examine for a moment or two these two classes and show why it would be impossible to apply the same method to both. Let me take, first, the Governmental and municipal obligations. That, as my hon. Friend pointed out, is looked after by the Council of Foreign Bondholders. What does that Council do? I think I could define their activities most briefly and conveniently by reading to the House something which was said by the then Prime Minister on 14th February, 1938, in reply to a Question:
"The Corporation of Foreign Bondholders is an independent statutory body, which was incorporated in 1873 and reconstituted by Special Act of Parliament in 1898. The Government recognise the Council of the Corporation of Foreign Bondholders as a body entrusted by Parliament with the duty of re-
2330
presenting the interests of the bondholders in all matters arising out of defaults, or threatened defaults, by foreign Governments, States or municipalities. The Corporation has, throughout its life, rendered the most valuable services, and in recent years its activities have been steadily increasing. … The Council has always maintained the closest contact with the Treasury and Foreign Office, and in the last few years this contact has been continuous. …"—[OFFICIAL REPORT, 14th February, 1938; Vol. 331, c. 1517.]
That was the position in 1938, and that is still the position to-day. The Foreign Office and the Treasury maintain the closest interest in the work of the Council of Foreign Bondholders and do, in fact, have the very closest relations with them and regard the Council as being the mouthpiece of the bondholders. I would like to make it clear, because I do not think it was clear to my hon. Friend the Member for The High Peak, that there is no case that I know of, in which political pressure has been put upon the Council of Foreign Bondholders by any Government Department not to take a course of action which the Council wanted to take, or a course of action which they did not want to take. I would like to make that absolutely clear. This should be borne in mind with reference to certain allegations—I think my hon. Friend himself rather implied them, if he did not actually make them—which have been made about the negotiations between the Council and the Brazilian Government.
I recognise that there has been criticism in this country against the relative position allotted in that settlement to certain sterling issues which enjoy specific security. Every assistance was given to the Council to effect a redistribution more in accordance with their views. Unfortunately, neither we nor the Council had a great deal of success, and the terms finally agreed upon were recommended by the Council to the bondholders as the best obtainable, and in the circumstances His Majesty's Government saw no reason to dissent. But the House can rest assured that His Majesty's Government continue to believe in the retention of, and in the recognition of, specific security because although, obviously, it is impossible for bondholders to obtain physical possession of hypothecated revenue, specific security is the only yardstick with which to measure the relative value of external bond issues in a particular country at the time of the debt settlement.
Sir A. Beit: Will there be an opportunity of bringing the matter up again after the war, when we come to effect a final settlement with Brazil?
Mr. Law: I can assure my hon. Friend that we shall do everything we can to get this principle established. We believe in the principle, and His Majesty's Government will do their utmost to convince other creditor countries of the necessity of its retention. I described the mechanism of the Council of Foreign Bondholders which was set up by Parliament. It works in the closest consultation with the Foreign Office and the Treasury which are the Departments mainly concerned, and those Departments give it all the help they possibly can.
Now let me turn for a few moments to the other type of foreign investment—direct investment in commercial undertakings in foreign countries, in railways and other public utilities, oil refineries, oil-fields, general commercial undertakings, and so forth. Why should not we have the same kind of Council or Committee to deal with this problem, just as the Council of Foreign Bondholders deals with Governmental obligations? There are several reasons—I think quite valid reasons—why such machinery is neither desirable, nor even necessary. First, there is a distinction between bondholders and shareholders. In the main bondholders are individuals who are scattered all over the country and who have no kind of organisation behind them. It is very appropriate that they should have some body like the Council of Foreign Bondholders to represent their interests, but shareholders in ordinary commercial undertakings are not in that position at all. They maintain boards of directors, they are organised, their point of view can be put forward and the boards of directors maintain close relations with the Government Departments concerned, if the necessity arises, and with foreign Governments. There is some organised body to put the case of the shareholders.
Secondly, any committee which had to deal with the enormous variety of problems raised by the many commercial undertakings overseas—gas companies, traction companies, telephone companies, and the like—would be, in effect, no committee but a mass meeting. It would be much too cumbrous. Thirdly—I think it
2332
is a conclusive argument—local management of industrial undertakings abroad operates under local laws and is in daily contact with competent authorities of the countries concerned. When difficulties arise, as they constantly do, they have to be overcome in the first instance by negotiation between the companies themselves and the foreign Government concerned. Upon this principle—that it should be left to the company and the foreign Government—all Governments, including our own, are very rightly insistent. Certainly, I do not think we should like it if, in the case of some foreign commercial undertaking operating in this country, the weight and authority of the foreign Government were invoked perpetually on all kinds of matters which could be settled more properly by direct contact between the company itself and the local authorities here. It is only when you can prove conclusively that British investment has been discriminated against, and really harshly and unjustifiably treated, that you can bring the Government in, otherwise it is much wiser to deal with the matter locally by the company with the local Government authority on the spot.
I should not like it to be thought from what I have said that there is not a very great deal of consultation all the time between industry and Government Departments. There is almost continuous consultation with one industry or another on these matters and there is scarcely a Government Department which is not involved at some time or other—sometimes the Treasury or the Foreign Office, sometimes the Board of Trade or it may be the Ministry of Fuel and Power or War Transport. If I have, on reflection, to reject my hon. Friend's proposal it is not because the Government is disinterested in the problem that he has raised. On the contrary, the Government are extremely interested in it and fully recognises its importance. If I reject his particular solution it is simply because I do not think, for the reasons I have given, that it would work very satisfactorily.
May I revert to the position of foreign bondholders? My hon. Friend spoke of economic pressure upon recalcitrant defaulters and asked for an undertaking that we would exercise such pressure. I think it is dear what he means by economic pressure. He means that we should deprive the offender of the advantages of the United Kingdom market. In

2333
principle that may or may not be desirable—it is open to argument—but in fact we are not always at any given moment, for obvious reasons, in a position to make use of that particular weapon. Indeed, if we did make use of it, the offender would probably find other markets and we should be no better off in the long run. But, if you are going to take action of that kind, you have to get your timing absolutely right and action may have to be delayed in any particular case. I think the House might remember, and people outside the House might remember, an aphorism of Rudyard Kipling, who said once that, if the patience of His Majesty's Government is as long as a summer's day, its arm may be as long as a winter's night, and the fact that we may lie down under treatment that we consider unfair, does not mean that when the appropriate time comes we may not take such action as is open to us to put the situation right.
I would ask the House not to make the mistake of regarding all our debtors as defaulters, even when the letter of the contract that has been entered into is not fulfilled. There are, inevitably, cases where investment has turned out badly or circumstances have gone against the debtor. It is our tradition—I think it is a right and proper tradition—in such cases to talk matters over with the debtor and come to the best arrangement possible. Unilateral action is one thing but where, after discussion, the representatives of the creditors are satisfied that the terms offered are the best available it is not for the Government to prevent a settlement on those terms or to insist on payment in full, still less would it be wise or prudent for the Government to attempt to reopen the whole question after the creditors themselves have settled it and try to extract better terms than they have been able to do. In such cases, where you get a settlement—not a full settlement—by agreement between creditor and debtor, it is wholly inappropriate to speak of default and I think the House ought to recognise that and give full credit to an honest debtor when he has made a real effort to meet his obligations even if he has not met the whole of them. I should like to add how happy I am to have the opportunity of expressing the gratification that has been caused to the Government by the recent offer of the
2334
Republic of Guatemala to redeem its external debt at par. I can only hope that debtor Governments in partial or total default will be stimulated by this excellent example.
My hon. Friend made a specific reference to our investments in Argentina, and there are one or two things that I should like to have an opportunity of saying. The decreasing volume of remittances on these investments in recent years—and that from a country which is at present one of the most prosperous in the world—has caused us no little anxiety, for there really seems to be so little excuse for such a state of affairs. I do not propose to dwell on the dilemma created to the British-owned Argentine railways by the decree of 3rd June, which has been replaced by the new arrangement, but even that settlement is limited in extent and in duration and practically does nothing at all to improve the railways' earnings and to meet their fixed charges. The difficulties of the railways date from long before the war and have resulted in recent years in virtually no dividends, and in a progressive deterioration. Some of the difficulties were, of course, common to other railways, indeed to most railways. Others are due to war scarcities. The fact, however, remains that for years the Argentine authorities have contributed nothing whatever in constructive thought to this problem and have shown no disposition to assist the reforms that were as necessary for the convenience of the users of the railways as they were to the restoration of the earning capacity of the lines.
Last year the companies were anxious to explore means of improving the organisation and administration of their properties and to examine the reported Grievances of the travelling public, and they accordingly commissioned three of their directors to examine the position on the spot. They saw me before they left and reported to my hon. Friend the Parliamentary Secretary on their return. They were unable to report that the disposition which they had manifested had been matched by any similar disposition on the part of the Argentine authorities. On the contrary, their request to be allowed to discuss administrative reform has been met by the reply that such questions are reserved for use as a bargaining counter at some later stage and for another

2335
purpose. What the railways require is, first, goodwill and support in their endeavour to give an up-to-date service. They want a larger and assured peso income, not only as a reward for their long suffering shareholders—and they have suffered very long—but for the maintenance and rehabilitation of their capital assets. My hon. Friend spoke of the exchange question in the Argentine, and it is an important point, but I think he made perhaps a little too much of it. I would not like the House to think that I have any fair words to say about the Argentine exchange control, which practises a system of variable rates arbitrarily imposed for a number of different reasons, most of which appear to be concerned with domestic production and sale of produce overseas and which undoubtedly hits these railways very hard. But I would like to say that no amount of concession as to exchange rates will compensate for an inadequate peso income.
I ought not to leave this subject without making reference to the plight of the Anglo-Argentine Tramways Company, whose assets consist almost entirely of shares in the Buenos Aires Tramways Transport Corporation. The shares in that Corporation were distributed to the constituent companies, of which this British company is by far the largest, in amounts established by law and in full accord with State and Municipality. That shareholding has already been reduced once by mutual consent, and it is now threatened with a further and serious reduction arbitrarily imposed. Meanwhile, the authorities continue to withhold their authorisation to an increase in fares. The present fares were fixed some 40 years ago. The result is that, in the sixth year of the operation of the Corporation, the constituent companies are still deprived of the statutory interest on their shares and no provision is being made for the conservation or rehabilitation of capital assets. Meanwhile, the public of Buenos Aires continue to travel, somewhat uncomfortably it is true, at a good deal less than cost. These are big issues which must await the intervention of His Majesty's Government until the time when normal diplomatic relations are resumed.
I hope that I have been able to assure my hon. Friend that this problem is one
2336
which does really engage our serious attention. We do realise that it is an important problem. We realise its importance not only to the shareholders themselves—and as my hon. Friend the Member for the Seaham Division pointed out, any British subject is entitled to justice if he can get it—but its importance to the community as a whole. I can assure the House that the Government are constantly, by every means in their power, seeking ways of solving, as they arise, these problems which are, by their nature, recurrent.

DEFENCE AREAS (REHABILITATION)
3.40 p.m.
Captain Peter Macdonald: We have just listened to an interesting discussion on the question of the rehabilitation of our assets abroad. I wish to discuss the rehabilitation of the defence areas of Britain. I make no apology to the House for raising the question and pressing the Government for a statement. Indeed, I would not be doing justice to my constituents, who have suffered so much in the last five years or more, if I allowed this opportunity to pass without raising the subject again and asking for some solution on the part of the Government. I am glad to see that my right hon. and learned Friend the Minister-Designate of National Insurance is here to reply on behalf of the Government, because he was appointed by the Government at the request of a committee, of which I am a member, to investigate this question, and by personal contact and investigation he is best qualified to reply. I hope that he will be able to make a comprehensive reply and that all the Government Departments involved will have been able to subscribe their quota to his statement.
What are the problems with which we are faced? I will deal with them in the order of urgency. The first is the de-restriction and clearance of beaches. I consider that to be a very necessary and urgent problem which can be dealt with now. I am surprised to hear from my constituents that there are even now portions of beaches in the Isle of Wight that are still restricted by the War Office. Whatever reason there may have been for restricting the beaches five years ago or even five months ago, surely there is no

2337
necessity for continuing these restrictions now. Therefore, I urge upon the Minister to bring pressure on the War Office to de-restrict the beaches and to allow the local authorities, or whoever is responsible for their clearance, to get on with the job. That raises another question as to who is to be responsible for clearing the beaches and the mines surrounding them. Is it to be the local authorities? If it is, where are they to obtain their labour and who is to meet the cost?
The second problem is the de-requisitioning of the properties in these areas and the restoration to their former condition. In some cases de-requisitioning has taken place and properties have been restored to their owners. I submit that it is very unfair to property owners or tenants to have properties thrown back on their hands until provision is made for their restoration to their former condition. I hope that the Government are sympathetic in that matter and that, before throwing properties back on to the owners and tenants, they will take every step they can to see that labour, materials and finance are provided, in order that the properties may be restored to habitable conditions. The third problem is the provision of equipment and furnishings for these properties, after they have been restored.. This is a Board of Trade matter. I would like to ask the Board of Trade what they are proposing to do in the way of providing the necessary equipment, linens, furnishings and so forth, which are essential for the restarting of these businesses. I hope that the Board of Trade are in a position to give assistance. The fourth problem concerns the moratorium on rates. When does the moratorium come to an end? As soon as the European war is over or at the end of hostilities generally; or is it to be continued for a reasonable period after the war? What is to become of the arrears accumulated in these areas? This is a Ministry of Health problem; what steps is the Ministry taking to deal with those accumulated arrears? Obviously, something should be done and a statement should be made now.
Last, but by no means least, is the important problem of finance. It is obvious that people who are carrying on these businesses in the defence areas are mostly small men who, as a result of five years of war, have come to the end of their financial resources. It is necessary that,
2338
by one means or another, new capital is injected into their businesses. It is no use telling them that they can go to the banks. We all know that bankers are not philanthropists. They ask for security as well as interest, and in most cases the security is already pledged. Something must be done by the Government to assist these people to get on their feet again and start their businesses. What are the Government prepared to do? They should put pressure on the banks to be more generous than they have been in the past to people who are endeavouring to get on after the war.
This is a formidable fist of problems. There are others. There is the question of food. I must pay tribute to the Minister of Food. I have had a good deal of trouble, as we have all had in our constituencies, about the grant of licences for the restarting of businesses. As soon as the question was put before the Minister of Food he sent his Parliamentary Secretary down, who dealt with the question and made a comprehensive statement in my constituency dealing with all the defence areas. It gave very great satisfaction to the people concerned. I must also pay tribute to the Ministry of Food for their prompt action, in anticipation of other Government Departments. There is also the question of the amendment of the 1939 War Damage Act. That is absolutely essential.
Mr. Speaker: That is a matter which involves legislation, and it cannot be discussed on the Motion for the Adjournment.
Captain Macdonald: I am sorry, Mr. Speaker, if I have got out of Order. I will not refer to that matter again, although it is one which should be dealt with by the Government at a later date. There is the question of priority for the release of staffs. No hotel, or even lodging-house, is able to get going if it has no staff. I have had requests already from people asking what priorities there are to be in this matter. Their staffs are scattered all over the world, and if they are to get their businesses going they must know what opportunity they will have for getting them back. People in defence areas and holiday resorts are very anxious to restore their premises and their beaches and to improve conditions generally, in order that the people of this country should be able to have a holiday.

2339
The Minister of Labour and other Ministers have paid lip service to the importance of holidays for people who have been overworked for five years and who have borne the burden of the war. They have also stressed the necessity of people in the Forces having a holiday.
There has also been a declaration of Government policy as to holidays with pay. It is no use giving holidays, with or without pay, unless there is somewhere for people to go. People want to go to the seaside; that cannot be doubted. We had evidence of it when the ban was lifted recently from the coastal areas. Before we were prepared to accommodate them, thousands of people crowded in, and we had the spectacle of crowds on the littered beaches, among the barbed wire entanglements and other things, trying to get a holiday by the sea. This is therefore a very urgent problem. It is a national problem, and I hope that Government will deal with it as such. If they do so, I am sure that the people in the holiday resorts will play their part in helping to restore the health of the nation. It is up to the Government to do their share in assisting those people.
3.53 p.m.
The Minister of National Insurance (Sir William Jowitt): I am obliged to the hon. and gallant Member for the Isle of Wight (Captain P. Macdonald) for raising this question again. I was, as he said, charged to go round and learn for myself what the position was. I did so. I was very careful on my visits to abstain from making those rosy promises which would have been very agreeable at the time but which would, I am certain, have led me into trouble afterwards. In what I say to-day, I hope I shall follow the same principle. It is much better to be quite moderate in your statements and to be able to carry them out, rather than to make big promises of what you are going to do, and then fail. I am always going to adopt that course so far as I can, and it is not due to any lack of enthusiasm. I confess that for the topic which my hon. and gallant Friend has raised, I have very considerable enthusiasm.
I might perhaps tell the House the impressions which I gained as I went round. Primarily, I was concerned with the evacuation areas, but I soon saw that anything I recommended for those
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evacuation areas would inevitably have repercussions. After all, you may have an area like that represented by my hon. and gallant Friend the Member for the Isle of Wight, where there has been no evacuation, but where practically the only industry is the entertainment of visitors, and where there has been a ban lasting for many years to prevent visitors from going there, which has done very serious injury to that area. Therefore, I extended my visits rather further afield than the evacuation areas. I have seen, up and down the country, many areas which have been much worse damaged by the enemy than those areas. On the other hand, those areas give one the impression of a kind of economic blight or death. It really was almost the abomination of desolation. One would go round and see places—forecourts which were once gay with flowers and whose beds were overgrown with nettles, windows cracked, neglect and the ravages of moth. The hon. and gallant Member must have very hungry moths in his constituency. It was almost unbelievable. Generally, there was a sort of "Deserted Village" effect. It was a wretched sight. Pleasure grounds and bowling greens and the like occupied with barbed wire, tank traps, etc., are a miserable sight.
Yet, I cannot help feeling that the problem is really a short-term one, because after all the great asset of these seaside resorts is the air, and the sea, and the scenery, and the healthful and invigorating surroundings. All that, of course, remains; not even Hitler can destroy Dr. Brighton—and for Brighton one can read the Isle of Wight, Eastbourne, Hastings and many other places. It is quite true that the Government are absolutely satisfied as to the importance of doing something for these holiday resorts. It is not merely a question of lip service. May I point out to Members in all parts of the House that if you repair a house in most towns you render it habitable and comfortable for some particular person or family? If you repair a house in one of these towns you render it comfortable and habitable, not only for a particular family, but for dozens of visitors who, in the course of the year, may gor there and derive from a holiday the invigoration and health necessary to enable them to tackle all the vicissitudes of business life, which they will most certainly have. It is not merely a question

2341
of lip service. I base my reliance on the fact that if I have been able to do nothing else, I have brought home to the Government this aspect of the matter, the importance of holidays for our people, and, therefore, the importance of getting ready the holiday resorts in order that people may have holidays.
There are two aspects I particularly want to talk about—the question of physical reconstruction and the question of financial assistance. Physical reconstruction falls into two categories, the repair of war damage and the like, and the removal of temporary defence works. With regard to the repair of war damage, I was careful in the course of my visit to tell people that I thought they would have to rely, to a very large extent, on their own labour and their own resources. It is a question of the shortage of labour and the priorities that have to be worked out, and I will not say more than this—that I am afraid they have to take their place in the queue. On the other hand, my right hon. Friend the Minister of Labour is very anxious to give them as good a place in the queue as he possibly can, because he realises the immense national importance of doing something to help them. With regard to the removal of temporary defence works, the position stands in this way. On 10th October, the Secretary of State for War answered a Question by the hon. and gallant Member for Ayr Burghs (Sir T. Moore) with regard to this very matter. He said—and it will be satisfactory to get it on record—that there was no longer any operational objection to the removal of defence works.
Major C. S. Taylor: Anywhere throughout the country?
Sir W. Jowitt: I am reading from the answer by the Secretary of State. It is quite general:
"There is no longer any operational objection to the removal of temporary defence works"—[OFFICIAL REPORT, 10th October, 1944; Vol. 403, c. 1588.]
He went on in the same answer to say that so far as dangerous objects were concerned—such as mines—the military authorities would remove them. It is a dangerous task, which calls for high skill and high courage, and hon. Members will know that that work is in progress. The Secretary of State expressly refrained from promising to provide other labour,
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and pointed out that the Compensation (Defence) Act, 1939, provided a measure of compensation. There have been conversations with the War Office, and in a good many ways I am glad to have observed for myself that the work is going on apace, and my observations led me to think it is pretty satisfactory in many areas, at any rate of the South coast, and I hope the good work will go on. I agree with the hon. Member that the Compensation (Defence) Act does state that there shall be no compensation for deprivation or diminution in relation to objects merely of pleasure and amenity. I agree with him that in the case of coastal towns where, after all, these amenities have their financial value in inducing visitors to come, that is a hardship. I should not be in Order if I were to say more than this—that the matter is receiving the attention of the Government. I do not want hon. Members to press me further than that, but I do not want them to go away to-day unduly pessimistic in that regard.
I come to economic rehabilitation. All the way round, in the course of my visits, I was asked about this. Assistance has been given from the Exchequer, 75 per cent. being an outright grant and 25 per cent. a repayable loan. I was asked to give an assurance, first, that the 75 per cent. grant would not be suddenly brought to an end without warning. Then I was asked whether it was not possible to "wash out" the 25 per cent. loan by making that a grant also. So far as a sudden end is concerned, I can reassure Members that there is no intention on the part of the Treasury to bring to a sudden or sharp end this financial assistance which has been given. With regard to the 25 per cent., it is quite impossible to give any general undertaking. The circumstances of these various towns vary very widely. Some have been hit much harder than others. The Ministry of Health will consider each case on its own merits, and will be prepared to be forthcoming in those cases in which there is real or considerable hardship.
The next question is that of financial aid to private individuals. In that regard, I was asked to say something about the moratorium. That is, of course, a form of financial aid, but a dangerous form to have, because people are too apt to forget that the effect of a moratorium is not to

2343
destroy the debt, but that the debt accumulates and accumulates until at last, when the moratorium goes, the unfortunate person finds himself under a very large and serious liability. It applies to those who went. Some of those who went have not yet been able to return. Some of them may even have been directed to certain tasks by the Minister of Labour. Others may be wives of soldiers serving overseas. An early termination might create hardship for such people; but an undue prolongation will create a corresponding hardship for landlords and creditors, and, in some sense, make the position of these people worse too.
Mr. Tinker: Is it merely a suspension of the debt for the time being, and does it carry the interest while the suspension is on?
Sir W. Jowitt: It is merely a suspension of the debt, and the time comes when it has got to be paid. I would ask hon. Members to impress upon their constituents the desirability of using the Liabilities (War-time Adjustment) Act, as far as possible. That can be used while the moratorium is on, and a clearance can be made between the debtor and his creditors. We must allow the bulk of debtors to have an opportunity of returning, and we must make the determination of the moratorium, to some extent, dependent upon the working of the Act. I hope a large number of people will take advantage of the Act, and have their difficulties adjusted, as I have indicated. I have always recognised that that Act was not a complete solution. It provides for a fair share of what there is, but it does not transfuse any new blood into the system. Something must be done on these lines. I am not announcing anything with regard to the larger people. They will have to rely either on banks or, possibly, on further forms of assistance which may be made available for the re-habilitation of industry. The second reason why I do not refer to them is that they have been taken into consideration by the Catering Wages Commission.
For the smaller people, the Ministry of Health have worked out a scheme. It applies to coastal towns reaching right round from the Humber to Lands End—a very large area. It does not apply automatically. The Minister of Health
2344
has discretion to apply it to what towns he thinks proper, and no town need apply it unless it is so minded. Interest-free loans will be forthcoming from the Government to the local authority, who, in their turn, will be able to lend money—we propose a maximum of £150—to any small people in their area, to enable them to rehabilitate their businesses, or, where a business has stopped, to build it up again.
Mr. Tinker: Will the local authority lend the money free of interest?
Sir W. Jowitt: I should think not. The details have not been worked out, but the local authority will be responsible for repaying this money, and will inevitably incur some bad debts. I should think that they would seek to reimburse themselves by charging some rate of interest—a low rate of interest.
Mr. Guy: What will be the period of the loans?
Sir W. Jowitt: That has not been fixed, but it is not to be a long loan. No money is any good unless with the money you can get the requisite trading licences and all the necessary goods. With regard to trading licences, the Ministry of Food, as the hon. and gallant Member has said, are prepared to grant licences to any retailer desiring to reopen a pre-war business, and, in suitable cases, also they will grant catering licences to existing and returning boarding-house keepers. The Board of Trade will grant licences, under the Location of Retail Businesses Order, to ex-traders who want to resume their former businesses.
Captain Macdonald: In the case of the Ministry of Food, will these people have the right to get a licence, without having to make a fresh application?
Sir W. Jowitt Sir W. Jowitt indicated assent.
Captain Macdonald: Does the same apply to the Board of Trade?
Sir W. Jowitt: I am not sure about that. The Board of Trade simply tell me that they will act on the same lines as the Ministry of Food; and, therefore, I infer that the same thing would apply to them. The Ministry of Works said that they will consider favourably granting licences, where necessary, to recondition premises; but I must add that the great shortage of building resources is bound

2345
to prove a limiting factor there. With regard to household equipment, the position is very difficult. I wish it were not. With crockery, there is no difficulty at all. Furniture is more difficult, and household textiles are the most difficult of all. In regard to furniture, those hotels and boarding houses which have had it requisitioned will be able to buy back the articles from the Government at the price which the Government paid, less depreciation. As for those who have not had it requisitioned the Government will do their best to help. That is all I can say. With regard to textiles, the position there is most difficult. You cannot get more than a pint out of a pint pot, and I cannot promise to distribute more textiles than there are.
We are going to get these holiday resorts back into being as holiday resorts, and the Government want to clear out, so far as they can, from all the various hotels, but we must—and here I agree with my hon. Friend—have due regard to the interests of the proprietors. It would, I think, be unfair to derequisition—if I may use such an unpleasant word—and give a building back to a man, when it is in a condition in which he can do absolutely nothing with it, and simply stop paying the compensation rent. In regard to light industries, the Board of Trade will raise no difficulty in the event of any of these towns wanting to establish light industries, but they will not be able to extend the inducement which they are going to make available for the other areas. That is, as briefly as I can give it, a catalogue which answers most of the questions asked. May I just add this? I believe that the coastal towns have got to play in future a very much larger part in the health and rehabilitation of the people of this country than they have ever played heretofore.
4.14 p.m.
Mr. Hely-Hutchinson: Whatever misgivings might be felt in the defence and evacuation areas at the statement which the Minister has just made, I think everyone will appreciate the great personal attention which he himself has given to this matter. I would like to say to him that his personal visits to certain affected areas gave a great deal of satisfaction, and that there is a great deal of gratitude to him for the care he has given to this matter. As the Minister has
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pointed out, what is proposed is a short-term procedure; but that is all the more reason for acting quickly. The particular point in the Minister's speech which causes most misgiving is the one in which he said that these areas will have to rely, in the process of rehabilitation, largely on their own labour, This is the whole problem. Their labour has been evacuated.
Mr. Loftus: Commandeered for London.
Mr. Hely-Hutchinson: Exactly. I would like to give some figures affecting my own constituency. The local authority there has prepared an estimate of the work required to be done in the borough, including a very substantial amount of deferred maintenance—and, in that connection, let me say that deferred maintenance is required, not merely for bombed and blitzed houses, but for those houses which have stood empty for years, until the accumulation of deferred maintenance is very serious indeed, and very difficult to estimate. It is not until you try to turn on the tap that you find that the cistern is not working.
They calculated that, quite apart from equipment, there is something like £4,000,000 of work to be done. If that work is to be done in one year, it requires a labour force of about 5,800; if it is to be done in two years, it requires about 2,900; and if it is to be done in five years, it will require about 1,450. The normal labour force in peace-time is just under 1,500; so that, even if they had that normal labour force, it would take five years before they got back to normal. But the actual labour force now is about 740. That includes some old-age pensioners, medically unfit, and part-time workers. It includes, the town clerk was telling me the other day, "the lame, the halt, and the nearly blind." That is the essence of their problem. What we are seeking is priority in release of labour and materials—priority in release of labour, particularly in the case of resident labour, which is so much more effective than imported labour. On top of our problems in these areas, we have not only been short of labour, but some of our labour has been taken from us to help in rebuilding the bombed areas of London. That made our problem even more difficult.
I would like to refer to my right hon. and learned Friend's proposals with re-

2347
gard to finance. I do not think that £150 is going to be much help. I should have thought that, even in the case of small and moderate-sized boarding houses, £500 or £600 at least would be needed. The big people are just as much in need of help as the small people. You can do much more practical good for a town by helping one big person, than by helping 50 small people. I am not suggesting that we should leave out the small people, but to exclude the large people is to nibble at the problem. A great deal will depend on the priority of these firms. If a particular boarding house requires £400 or £500 worth of equipment, and can get a loan of £150, which it will have to pay back, it can raise the other £300 which is required by a hire-purchase agreement. If this does not involve placing the £150 in relation to all the property and the goods purchased, it may help; but as the proposition stands, limiting the assistance to any one trader or boarding-house to £150 will, I am afraid, not greatly help the situation.
There is one point on which I would like to thank the Minister. That is the evidence that the Government recognise that in rehabilitating houses in these defence and evacuation areas, it is not merely a question of giving the owner or occupier a place to live in, but also of rehabilitating his means of livelihood, which is supplying living space. That is the important point of the whole thing. The evacuation areas require not merely the rehabilitation of houses to live, but the rehabilitation of houses as a means of livelihood. I hope that this is not the last word we have heard from the Government on the subject, because I think the statement of the Government, while good, as far as it goes, will cause a great deal of disappointment in areas which—and this has been acknowledged by the whole nation—have been in the forefront of the battle and borne the brunt.
4.21 p.m.
Major C. S. Taylor: I look upon to-day as the beginning of the end of a battle. A small group of hon. Members have been fighting this battle for some two years. We have tried to draw the attention of the Government to the indescribable conditions in our constituencies, and I, for one, am glad to-day that the Government have recognised that our areas do require special treatment and
2348
consideration for the things which they have gone through, and through no fault of their own. The principle has been established to-day that the Government will come to our help and to the help of the many people who have been ruined, economically, in these defence areas. I feel that the proposals which the Minister announced to-day need a great deal of thought, and I am not prepared to commit myself to-day whether I consider them all satisfactory or all unsatisfactory, though many of them appear to be extremely satisfactory.
So far as the £150 limit goes, I agree entirely with my hon. Friend who has just spoken, that it is quite inadequate and, when one considers to-day the cost of even a coat of distemper, or a pair of sheets, it is impossible to suggest that £150 will enable the small boarding house in my constituency to rehabilitate itself and reopen for visitors. We have established the principle that the Government are going to help us with finance, but we may have to come back at a later date and ask for that £150 limit to be raised to say £500 or even more.
The next thing that concerns me is the fact that other Government Departments do not seem to be co-operating with my right hon. and learned Friend in rehabilitating our areas. To begin with, there is the Ministry of Labour. I have had considerable correspondence with the Minister of Labour, and I have urged that my constituency and others round the coast should no longer be considered what is known as a "Green Area." In a "Green Area" all the mobile labour is drafted away, and we are not allowed to retain it. That means that all our available mobile labour is sent away somewhere else—perhaps to Birmingham, Manchester or London. While I am on that point, may I say that it is very curious that many of the people evacuated from Eastbourne at the Government's request, who may have been evacuated to Birmingham or Manchester, have now been given permission to return to Eastbourne, and, what is more, being "official evacuees," they have had their fares paid by the Ministry of Health. No sooner have they got back to Eastbourne, which is their home town, having been sent back, or helped back, by the Ministry of Health, than they come under the control of the local Employment Exchange, and, if they are mobile labour, they may be sent back

2349
to Manchester, again at the Government's expense.
That seems to be fantastic. Here we are in these coastal areas, badly hit economically, and by the enemy, urgently requiring labour in order to get going again. Evacuated Eastbourne people come back to Eastbourne and they are sent away again by the Ministry of Labour and their train fares are paid both ways. That matter wants looking into. The Ministry of Labour comes into the problem also from the point of view of the question of staffs for our hotels and boarding houses, which are our main industry. As my hon. and gallant Friend the Member for the Isle of Wight (Captain Macdonald) said, unless we get the staffs with which to open the hotels again what is the good of giving us money? The Board of Trade are probably the biggest "niggers in the wood pile," because they are exporting linens, fabrics and towels, maybe to get foreign exchange, but we at home are wanting to rehabilitate ourselves and to revive an industry which before the war was a very prosperous industry. We cannot do it because we cannot get the linen for our hotels and boarding houses. I suggest that the Board of Trade should, for a week or a fortnight—it would probably not amount to more than that—cease exporting these commodities which we want at home. There must be a balance between the benefits we derive from the export trade and the benefits which we at home and all the people in Britain will get from the re-establishment of our seaside resorts.
There are so many Government Departments concerned in this problem that it is difficult really to know where to start. I come to the Service Departments—the War Office, the Admiralty and the Air Ministry. These three Departments have requisitioned a great many houses and hotels in my constituency. We want to get them de-requisitioned. A great many of them are not at the moment occupied, and it would appear that they are not going to be occupied again. We want them de-requisitioned and put into order by the Service Ministries who requisitioned them, because they did the damage. They should be de-requisitioned, put into order and given back to their owners. No money, whether it is £150 per individual or £500, will be of much use, unless we can get all the help necessary from the
2350
other Government Departments. I hope that the Government will reconsider these matters in the light of this Debate.
I would like to pay a tribute to my right hon. and learned Friend the Minister. If he handles the problems of national insurance as he has handled our problems, if he shows the same sympathetic spirit that he showed when he visited our constituencies, then I can assure the House that the Ministry of National Insurance will be handled in a most sympathetic manner. I should like to pay a tribute also to the hon. Member for Gillingham (Sir R. Gower), who has been chairman of our Defence Areas Committee and a sort of spearhead of the attack that has enabled us to get the principle recognised that the Government should help these devastated areas.
4.30 p.m.
Mr. Loftus: I recognise that there are other subjects to be discussed and I proposed only to take a very few minutes of the time of the House, but it is right that, after tributes and criticisms in the South coast, one representative of the East coast should join in this Debate. On behalf of the East coast towns, I would like to pay my tribute to my right hon. and learned Friend. The frank way he handled these problems, without encouraging undue optimism, and his sympathetic approach, gave great encouragement in all parts of the East coast which he visited. Now he has made an announcement which, I think, gives us more encouragement. As regards finance, I agree that £150 is certainly a very low limit in view of post-war prices. Pre-war prices would have helped considerably: Still we recognise the difficulties and that all help that is given has to be borne in large measure by the general taxpayers, who now consist practically of all citizens, at least to the number of 12,000,000 Income Tax payers. Therefore, I accept it with gratitude, still hoping that the amount may be raised. I would like to refer to one remark of my right hon. and learned Friend to the effect that this loan to the local authorities will be without interest and that they will loan the money to the people whom they feel are deserving. My right hon. and learned Friend said they would, perhaps, charge low rates of interest. I take it, however, that it would be permissible to lend even without interest to these small people?
Sir W. Jowitt: I think that that will be so, but, as I warned the House, the full details have not yet been worked out by the Minister of Health. He wants to convene a conference of local authorities so that he can discuss that very sort of point.
Mr. Loftus: I am very glad to get that statement from my right hon. and learned Friend, because I sometimes look at the modern world and the vast volume of debts and think that the whole system may collapse under the burdens which afflict mankind at the moment. We have the Ministry of Food, the Ministry of Health dealing with finance, and the Board of Trade, and my right hon. and learned Friend said that licences would be given to purchase where it was possible to obtain the goods, which we recognise are in short supply. How will they be given? Will they be issued in the form of coupons, and fairly quickly, because speed is the essence of the whole thing? There is an old proverb:
"Help which is long on the road, is no help at all."
I hope that the Board of Trade will bear that proverb in mind. The Ministry of Works is concerned with the rehabilitation of houses, blitzed or partly blitzed, and houses damaged by requisitioning. Local authorities want their building personnel back as soon as possible as they know their own towns and how to get to work. We recognise that London has demands to make to-day, but we hope that the Ministry of Works will, as soon as possible, see that our building personnel come back to these coastal towns. My right hon. and learned Friend did not mention one very important Ministry—the Ministry of Labour. The matter affecting that Department will be a great obstacle to future holidays unless it is tackled. Two or three times over this summer 25 per cent. only of the bedroom accommodation in seaside towns could be opened owing to lack of personnel.
I hope that the Ministry of Labour will tackle this matter in good time before next spring so as to prevent difficulties in the summer. The war may end soon—we hope it will—but nobody knows. Anything might happen in Germany in the next few months, and nothing might happen. But if, next Sumner, people from the inland towns in hundreds of
2352
thousands flock to the coastal towns for holidays, earned, if ever holidays have been earned, will they arrive and find that there is no accommodation, the boarding houses and hotels not having the personnel? Will even day visitors find the restaurants unable to cater for them through lack of personnel and equipment? Therefore, while I thank my right hon. and learned Friend, and recognise that he has put his heart into this matter; I hope that he will be able to spur on the many Government Departments concerned, and not least the Ministry of Labour, so as to get ready in good time for the holiday, which we all hope will come next summer.

PRISONERS OF WAR (MINISTERIAL RESPONSIBILITY)
4.35 P.m.
Colonel Gluckstein: In July of this year a Motion signed by over 150 Members of all parties, including myself, was put upon the Order Paper reading as follows:
"That this House, being conscious of the disquiet felt by relatives of prisoners of war and believing that the present system of divided ministerial responsibility is unsatisfactory, urges that a senior minister should be designated to co-ordinate and be responsible for all action in connection with prisoners of war and to answer questions."
I am grateful for this opportunity of raising a matter in which many of us are particularly interested. I realise, of course, that in the present state of Government business, a whole day could not be made available for the discussion of such a Motion and I must deal with it in substance in the time available to me.
I want, at the outset, to emphasise that this is not intended as an attack on any individual or Department because, of course, in accordance with their own lights, I think that all Government Departments and individuals concerned are doing what they can, and what they think best, for the prisoners of war. But the numbers involved—of course, there are scores, or even hundreds, of thousands of prisoners of war and, if one includes in the total their relatives and families, it is a very much larger total—coupled with the number of Government Departments concerned in the care and welfare of prisoners of war, make it obvious that there is plenty of room for over-lapping,

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confusion, and even conflict. It is vitally necessary, in my submission, to achieve a closer co-ordination without delay, since we all hope that the end of the German war will come during the next few months, and we know that when that time comes there will be a very substantial repatriation of British officers and men, many thousands of them.
The present system under which these matters are dealt with provides for an Inter-Departmental Committee over which the Secretary of State for War presides. I would refer to the official handbook for the information of relatives and friends of prisoners of war, the first paragraph of which states:
"The War Office has been entrusted with the duty of watching over the general interests and rights of prisoners of war of all three Services, together with the responsibility for policy and administration."
It goes on to recite that other Governments have responsibility in this matter and sets out that the Foreign Office, for example, acts as a channel of communication between His Majesty's Government and the Protecting Power, and it might have added, deals with the question of civilian internees. The General Post Office is concerned with letters and parcels sent by postal service; the Admiralty and Air Ministry have a responsibility for watching over the special interests of individual prisoners of war belonging to the Royal Navy and Royal Air Force, and the Ministry of War Transport for those of merchant seamen. To that list, I would remind the House, we should add the Board of Trade, which deals with matters of clothing coupons and labels for prisoner of war parcels; the Ministry of Labour, which is interested in the question of rehabilitation and re-employment; the Ministry of Pensions, responsible for disabled ex-prisoners of war and, of course, other Departments like the Dominion and Colonial Offices whose nationals are also involved, the Ministry of Health, the Ministry of Food, the Ministry of Agriculture and the Ministry of Education—it would almost sound like a recital of all the Government Departments, with one or two exceptions.
The representatives from those Government Departments on the Inter-Departmental Committee are naturally not Ministers, and therefore they are only
2354
able to report to their Departments what proposals have been made at the Committee and, after that, they obtain instructions from their Ministers and return to the Committee to report the views of their Ministers and finally, I suppose, a binding decision of the Committee can be reached. Of course such a procedure inevitably causes considerable delay, and you may arrive at a situation in which there is an insoluble deadlock on some question of policy. Now that is the reason why so many of my hon. Friends and I regard the present system as unsatisfactory. As I said, the Secretary of State for War presides over this Imperial Prisoners of War Committee but the first question I would ask the House, and my right hon. Friend who is to reply, is: Is the War Office really the Ministry which should be entrusted with the determination of policy and administration in prisoner of war questions?
I am not, and I hope no one will think that I am, making any personal attack on the Secretary of State for War when I say that. As I see it, the War Office are primarily, and rightly, concerned with the training, equipment, administration, and strategical employment of the British Army at a maximum of efficiency. It is, of course, to the War Office an unfortunate accident that men may become casualties or prisoners of war, and naturally their desire is to prevent such accidents if possible and, if not, to restore to health, and to the Army as soon as may be, any soldier who has been wounded or become a prisoner of war. Naturally, of course, during the interval the War Office would be careful of the wellbeing of the soldier who was not available for duty, but can one say that the duty of the Secretary of State is other than to the Army, and that his task as a co-ordinator in these prisoner of war matters is really only an incident and, I imagine, to him a rather vexatious additional task in an already rather overburdened life?
One recognises that there are disciplinary and administrative questions which may arise in prisoner of war camps in Germany and which, of course, affect the War Office but even those, I would remind the House, must be referred by the War Office to the Foreign Office so that they may be transmitted to the Protecting Power by the latter Department.

2355
Is it really for the Secretary of State for War to busy himself about sailors, airmen, Dominion or Colonial troops? The point I want to make is that if there is any disagreement over prisoner of war matters between any of the Services or other Departments—and with some little knowledge of these Departments one knows that such a thing could happen—can the Secretary of State for War give a binding and authoritative ruling on such a dispute? I am afraid we all know how jealously Government Departments seek to preserve their own power and independence, and how unwelcome to them would be any attempt by a Minister of equal status to decide disputes which may have arisen between them. If that is true, and I think the House will probably agree that it is, it does seem that an invidious land almost impossible task has been placed on the shoulders of the Secretary of State for War by the Government.
There is, however, if I may suggest it to my right hon. Friend, an excellent precedent for the resolving of this particular problem in the manner set out in the Motion which I read in the early part of my speech. In the last war, experience of the delays and disagreements which occurred in prisoner of war matters ultimately produced this solution. In those days, I may remind the House, there was also an inter-departmental committee, but then it was dealt with under the Foreign Office and was presided over by Lord Newton as Under-Secretary of State. If, however, two Government Departments in those days who were represented on that inter-departmental committee disagreed, Lord Curzon, as an umpire appointed by the Cabinet, was authorised to over-ride the dissentient Department and force it to come into line with the general view.
The solution, I am informed, has worked extremely well and it is that precedent which I and my hon. Friends invite the Government to follow. The matter is important, because of the many pressing and immediate problems which must be solved in the near future. For instance, what is the policy Of the Government on the question of the provision of prisoners' parcels during the coming months? How far are the reserves built up at Geneva or Lisbon available to reinforce the dwindling stocks in the camps? I know that my right hon. Friend the Secretary of State for War uttered certain warning words on
2356
this question, but how far will those words be followed by action? Without using dramatic language, I can say that it is literally a matter of life and death for the prisoners of war in these camps. How does the matter of the exchange of prisoners who have been in enemy hands for so long now stand? Can anything be done to arrange for their transfer, say, to Switzerland, if they cannot be repatriated to this country? I gather that there may have been some hitch over the repatriation scheme, but cannot an immediate transfer to Switzerland be effected? When do the Government intend to announce their policy of retention in the Army, particularly for service overseas, of prisoners who have been in captivity for many years and who, on repatriation, will still belong to the Armed Forces?
On Wednesday, in the Debate on demobilisation, the Minister of Labour was invited by the hon. Member for Chester-le-Street (Mr. J. J. Lawson) to say what the position of prisoners of war would be under the scheme, and he replied that the period of captivity is counted as service and that prisoners of war would have special priority. But is that really so? I have asked on a number of occasions that these men, who, I must remind the House, will be completely untrained in modern methods of warfare, and quite useless for immediate service against the Japanese, should, if they have been in captivity for three years, be permitted to exercise the option of either remaining in the Armed Forces or of being discharged and that, in any event, they should not be sent overseas unless as volunteers. I can assure the Minister that I get many very anxious letters on this very important matter. I do not believe that the privilege I have suggested would be resented by the rest of the Army, or would be disadvantageous to the Services as a whole. Have the Ministry of Labour a scheme worked out for the re-absorption of ex-prisoners of war into employment? Is it realised that many of these men will require rather more specialised treatment than the ordinary soldier will receive on being discharged from the Forces? Are the Government prepared to grant more generous allowances in respect of clothing and rationed goods to repatriated prisoners?
Finally, could some modification be made of the present scheme under which

2357
information is conveyed only to the official next-of-kin? At present, if a relative, say, a mother, makes an inquiry about a married prisoner whose wife is registered as his next-of-kin she is referred by the War Office to the Red Cross who, I am informed, refuse to give any information to that mother on the ground that it is confidential, and must only be given to the next-of-kin. Many cases have arisen where personal articles for prisoners could not be sent by a relative who was not the next-of-kin because information as to the whereabouts of the prisoner was not divulged, although his next-of-kin, because she was, perhaps, unfaithful, indifferent, or evacuated to Canada was quite unable to help.
These are a few questions which relatives of prisoners of war are anxiously asking, and on which one awaits the Government's answer. There is great sympathy for prisoners of war among our people and I am sure that generous and understanding treatment of these men, on their return, will be expected not only by their relatives but by the general public. One can only point to the tremendous response which the Red Cross appeal has received, and which lays so much stress on the valuable work it is doing in providing parcels for prisoners of war. It is not a question of over-sentimentalising about prisoners of war—an unfortunate phrase, which I regret the Chairman of the British Red Cross saw fit to use in a speech in Birmingham recently. It is a question of doing justice to the men who have served us as best they could, and whose captivity has sometimes been attributed by them to lack of equipment and support rather than any personal failure on their part.
Let it be remembered that the relatives of these men share with the rest of the population the ordinary burdens of wartime life in this country and that, in addition, they have the anxiety and distress inseparable from the absence, in captivity, of those whom they love and about whose welfare they naturally feel deep concern and from whom they can only hear at rare intervals. I hope I have said enough to show that under the present system, and with so many Government Departments involved, there is bound to be divided Ministerial responsibility and that this, in turn, must lead to a divergence of policy, delay, decision, conflict and confusion in statements made
2358
about prisoners of war. The only way we can cure such divergence is to appoint a senior Minister, not in charge of a Prisoners-of-War Ministry, but solely to co-ordinate prisoners of war problems, and act as umpire and director. The Minister should have responsibility for ansfering questions in this House, unlike the present system, under which different Ministers are charged with that duty, and I fear sometimes give conflicting and inconsistent replies to the same sort of question. Many of us believe that by adopting this modification of the present system a more smoothly-working machine will be created which, in the testing time of large scale repatriation to which we are looking forward, will ensure the results we all desire to achieve.
4.54 P.m.
Major Sir Jocelyn Lucas: As one who was for four years in German prisons and hospitals and an internee in a neutral country, and one who is connected with societies for the rehabilitation of returning prisoners and internees, I would like to reinforce the plea which has been so ably put by my hon. and gallant Friend the Member for East Nottingham (Colonel Gluckstein), for a single Minister, and not a Ministry, for prisoners-of-war affairs. I do not propose to go over all the points my hon. and gallant Friend made, but I would like to stress one, and that is the exchange of prisoners who have been in captivity since 1940 to neutral countries. I myself was captured in 1914 and was exchanged in March, 1918, to Holland, and I cannot tell you what it meant to all the prisoners who were exchanged in that way. For the past year or more prisoners have been living on the hope that this would happen again, and I hope the Government or the Foreign Office, which is dealing with the matter, will get on with the job and do something without first waiting for the end of the war.
There is one point which has not been strongly stressed, and that is the question of internees. Unfortunately, great societies like the British Legion and the Soldiers', Sailors' and Airmen's Families' Association, and various military societies, are not able to deal with them. We have had cases of civil servants in the Far East who stayed at their posts at the request of the Government and who were captured. They will get their pay, but of others who stayed at their posts and were

2359
captured, some are getting their pay and some are not—it is possible in some cases that the firm cannot pay the money—and I should like to know who is the responsible Minister to whom we can go. There are many legal problems involved. I think all of us have had these cases brought to our notice To those who help to look after the present interests of internees on their return it would be of the greatest possible help if a single senior Minister, who would be top dog and could give decisions, were appointed.
4.56 p.m.
Lieut.-Colonel Sir Thomas Moore: My hon. and gallant Friend has covered the ground so fully that I have had to scrap most of the remarks that I intended to make. I should like to congratulate him on the restraint that he showed in dealing with a subject which has aroused, I will not say passion but a great deal of emotion. Very significant emphasis has been given to the matter by the horrifying announcement made by the Secretary of State this morning in regard to our prisoners in Japanese hands. I do not think it is fully realised how many families are affected in this matter, not alone the friends and relations of those who are known to be prisoners, but those who have dear friends who are posted as missing, and who get some comfort from thinking that at any rate they may be prisoners. So the question is really a national one and therefore should be given specialised treatment. That, of course, reinforces the suggestion that these cases should be in the hands of one responsible Minister. I do not like committees very much. They are apt to be a method of evading direct personal responsibility. We want one Minister to whom we can put all our questions, on whom we can place real responsibility and to whom we can go for guidance and information.
Where does the Red Cross come in in this Committee? I had a case of a young relative who was repatriated in a serious condition and I wrote to my right hon. Friend at the War Office to ask if a kindly act could be done. It was done promptly and effectively, but it was done through the good offices of the Red Cross. I was delighted that it was done, but it rather perturbed me to know exactly where the responsibility lay. When the
2360
Secretary of State for War is approached, does he pass on his responsibility to the Red Cross? Has he any authority over the Red Cross or is it done by the good offices of the Red Cross, as he put it? The next step is to appeal to the protecting Power. What Minister approaches the Protecting Power, or is it this vague Committee? I will not go into the actual functions of the Protecting Power or its authority, although it seems, in respect of Japan, that it cannot have very much, judging by what we were told this morning. There is a final point, and that is the dual responsibility for dealing with repatriated prisoners, their care and treatment.
It being Five o'Clock, the Motion for the Adjournment of the House lapsed, without Question put.
Motion made, and Question proposed, "That this House do now adjourn."—[Commander Brabner.]
Sir T. Moore: The Ministry of Labour deals with one part, and the Ministry of Pensions deals with another. After the war, many thousands of our young men will be returned to us probably mental and physical wrecks. We want to know that a responsible Minister, provided with an adequate and suitable machine, is charged with the duty of enabling these young men to be brought back and helped to a sufficient state of health and strength to face the arduous and severe battle of existence. My hon. and gallant Friend has made a good case, which has been supported from personal experience by my hon. and gallant Friend the Member for South Portsmouth (Sir J. Lucas), and I hope the Government will give it favourable consideration.
5.1 p.m.
Mr. Tinker: I would like my hon. and gallant Friend the Member for East Nottingham (Colonel Gluckstein) to know that the Labour Party supports his idea. We all feel for the prisoners of war, but we never really know what Minister we have to deal with. Several times I have tried to find out about prisoners of war, but have been able to get no information and have been directed to the Red Cross. That hardly seems the proper way to do it, and there ought to be some responsible Minister to whom we can appeal. The prisoners of war have a special claim on this country. In the

2361
last war the one thing I dreaded was that I might become a prisoner, for I could have put up with almost anything but falling into the hands of the enemy. When men do fall into the hands of the enemy, they look forward to all possible help from this country. If the appeal made by my hon. and gallant Friend leads to a way out of the difficulty, and if the right hon. Gentleman on behalf of the Government can give any hope that something will be done to co-ordinate activities on behalf of the prisoners, it will send a message of hope to these men, who are rather wondering whether they are not being forgotten. It would be unwise for an occasion like this to pass without a voice in support of my hon. and gallant Friend coming from the Labour benches, and I add my plea to the Government to give this work to one Minister, who will be in charge of the prisoners of war and responsible to Parliament. We shall then know to whom we can appeal.
5.3 p.m.
Mr. Geoffrey Hutchinson: The House will be grateful to my hon. and gallant Friend for having raised this topic. He has said that the present arrangements have produced overlapping, confusion and conflict. It is unfortunately the fact that that impression of overlapping between a number of different Government Departments, and to some extent betwen the Government and the Red Cross organisation has been conveyed to the public mind by the present system. My hon. and gallant Friend was right in acknowledging the care with which the different Ministers who are charged with responsibility for this matter have undertaken their duties, and it would be unfortunate if anything that was said in this Debate should aggravate the uneasiness which undoubtedly exists in the mind of the public that in some way the prisoner of war is falling between two stools, and that his needs are being neglected because responsibility for his welfare is divided between a number of different agencies. I do not believe that to be the case. Certainly my own experience, with all the Ministers whom I have approached, has been that my inquiries have been received with care, promptness, and sympathy. But we have to satisfy the relatives and the public that there is some individual Min-
2362
ister who has a special responsibility for the welfare of our prisoners of war. Under the existing arrangements, I am not satisfied that that is the case.
My hon. and gallant Friend referred to the Inter-Departmental Committee which has been set up, to co-ordinate the activities of the different Departments which are responsible. I am not myself a great admirer of Inter-Departmental Committees. Unless there is a chairman—who ought to be a Minister—who possesses not only the power to co-ordinate but the power to give decisions, the work of an Inter-Departmental Committee very often ends in nothing but compromise. What is required is a Minister who has power not only to coordinate but to give the necessary decisions. It is, as my hon. and gallant Friend reminded the House, interesting to look back and see what was done during the last war. Then, as he reminded us, a very similar situation arose. There was an Inter-Departmental Committee. If my recollection is right, Lord Newton assumed the special post of Comptroller of Prisoners of War in 1917. An important feature, I think, of that arrangement was that either Lord Newton or Lord Curzon had power to give a decision, and had power to initiate action for the welfare of prisoners of war. It is because, under the arrangements that have been de in this war, no Minister seems to have power to give decisions, or, what is perhaps even more important, to initiate action for the welfare of prisoners of war that the present arrangements are arousing this feeling of uneasiness in the mind of the public.
I do not desire to press the point too far. I am quite sure that my right hon. Friend appreciates it. But this appears to be one of those occasions on which the machinery of Government is not working very well. We are encountering these occasions very frequently at this stage of the war. Nobody would suggest that the responsibility for certain aspects of this question could be removed from the War Office, for example, or any one of the other Service Departments to which it is at present entrusted. No one would suggest that responsibility for other aspects of the matter should be taken away from the Board of Trade, the Ministry of Pensions, or the Ministry of War Transport, with whom general responsibility for

2363
that particular topic rests. What is required is some machinery for co-ordinating the activities of these Departments, and for enabling a prompt decision to be made when the Departments are not themselves able to reach a conclusion. If this Debate results in my right hon. Friend being able to give the House some assurance that the present arrangements will be modified in such a way that that power of decision and that power to take the initiative in action for the welfare of prisoners of war, will be accorded to some Minister, then I think that my hon. and gallant Friend and the House will not have been wasting their time this afternoon.
May I refer to one aspect of this matter, which I think illustrates very well the need for some co-ordinating machinery on the lines I have been endeavouring to suggest? Take the case of these three year prisoners. I am bound to say it is very difficult to know which particular Department or Minister is responsible for initiating the necessary action to ensure that at the first opportunity these prisoners can be repatriated, either to this country or to a neutral country. I am quite sure that my right hon. Friend the Secretary of State for Foreign Affairs has been most active in the matter; but he has many other duties to perform. This is an outstanding example of a case in which it would have been of very great advantage to the House, and I think would have attracted the confidence of the public outside this House, if there had been a single Minister to put this matter forward at every opportunity, and see that no opportunity was neglected to ensure that at the first possible occasion some relief should be brought to these men, who have been so long in captivity. I wish to make it plain that I am not suggesting that that has not been done; but it is right to say that the public outside this House are not yet satisfied that that is the case. Therefore I hope my right hon. Friend will be able to see his way to accept what has been suggested.
5.13 p.m.
The Lord President of the Council (Mr. Attlee): I should like to assure the House and the country, that His Majesty's Government have the most profound sympathy with the prisoners of war, and the relatives and friends of the prisoners of war, wherever they are. We understand
2364
perfectly well the amount of suffering and anxiety that arise from this, which is one of the great human problems of the war, and nothing should be said by anyone to increase their anxieties and fears, and one should be very careful that one has really diagnosed the trouble aright. Unfortunately, we have seen in our lifetime a great deterioration in world civilisation, and things that would not have been thought of 30 or 40 years ago are now done. The House heard to-day of the difficulties we have in dealing with Japan, and, in dealings with Germany, one must bear that in mind first of all.
The second thing to bear in mind in all these matters is that you have to work through certain channels—through the International Red Cross, which does a magnificent work. It must be remembered that when we are at war, there is not a close interchange with the enemy all the time. One has to think of that. Therefore in looking at these difficulties, and there are bound to be difficulties from time to time, one needs to be very careful that one is not suggesting the impossible in one's anxiety about prisoners of war. One needs to be very careful, too, that one is not suggesting that it is a matter of machinery that is wrong, when it may be merely the situation. I do not share the views of my hon. Friend that there is very grave disquiet, or a justified disquiet, at the way these things are handled by the Government. The indication that I and my colleagues have is that the majority of the families of these men have confidence in the way these matters are being handled by the Government, by the Protecting Power, and the International Red Cross.
I must say I was rather struck by the speech of the hon. and gallant Member for East Nottingham (Colonel Gluckstein) for the reason that he went entirely on hypothetical points. He said: "There are a number of Departments concerned and, therefore, there might be confusion, conflict and overlapping. They might come to an insoluble deadlock." He put a number of questions, and not one of those questions related to the overlapping of Departments. In fact, his whole speech, I noted very carefully, was based entirely upon hypothesis, and no single instance was adduced of where there had been conflict between Departments. He went on to make what I thought was a

2365
very strong case indeed. He said: "There are a number of Departments which, in their different ways, must deal with prisoners of war—Agriculture, Labour and all the rest." Where you have Ministries with those diversities of technique, it is a mistake to suppose that you can roll those together, and put them under one responsible Minister. It is a common illusion. I have noticed rather often lately in the House, I am afraid, this idea that you can take some particular part of a subject, or something relating to one lot of people, pluck it out from the ordinary course of Government, and assign it to a particular Minister. I think it is a complete and utter delusion. It is not the genius of this nation at all.
Colonel Gluekstein: I should like to correct a possible misunderstanding. I thought I made two actual points, which were not hypothetical, of departmental conflict. One concerned the Minister of Labour who said on Wednesday that people should be given special treatment when they returned, but the statement is not borne out by the document in question. The other was conflict between the Red Cross and the Secretary of State for War.
Mr. Attlee: That is not conflict between Departments. The latter is a question between the Red Cross and the Minister, and I shall be glad to look into it. It is not a case of conflict between Departments. The fact is that, in an extended Government such as you have in a modern State to-day, you must have joint working between Ministries in charge of different subjects. It is all very well to sneer at the committee system, but committees work perfectly well, provided there is proper chairmanship and a power of decision. I have had no instance adduced to show that this Committee does not work well. I have no evidence to show that if you put on the top of all these things, some other Minister, unacquainted with all the matters in question, you would get a better result. There is, in the Government now, full provision for dealing with conflict between Ministers. They can come to me as Lord President of the Council and to the Committee over which I preside. If there were this alleged conflict between Departments I am sure that I should have heard of it. There really has not been this conflict.
2366
The second thing I suggest is that hon. Members have not quite realised what the problem is to-day. It is not quite the same as it was at the end of the last war. I have read Lord Newton's very interesting memoirs. I do not think it was a particularly successful idea, and it came on right at the end of the war. The real problem now is not with Departments. I admit that in the last war, very often the Service Departments did not agree. To-day, the real problem has become less an inter-Departmental one; it is an inter-Imperial one. It is a question of taking into account the special circumstances and interests of each and every member of the Commonwealth—United Kingdom, the Dominions, India and the Colonies—and that cannot be done just by one Minister. It is actually done by an inter-Empire body. That body exists and has existed for the last three years. That is the Imperial Prisoners of War Committee, whose function is to co-ordinate the action of all the Empire Governments in regard to matters relating to prisoners of war, both in our hands and those of the enemy. The Secretary of State for, War is the chairman, and there are representatives of the United Kingdom Government and of the Dominions, and routine matters are dealt with by sub-Committees, which also include representatives of the Home Government as they are required.
In regard to the question of dealing with exchanges or anything of that sort, you will not get any further by appointing a special Minister. That is, obviously, the job of the Foreign Office. Believe me, it is not true to say that the Foreign Office are not concerned in this matter and do not take the initiative. It is a matter which is very difficult to deal with, as I pointed out, but we are constantly working on this, and we are, naturally, working with the Dominions and with our Allies. This is not an easy matter, but it is an entire mistake to think that it is relegated, because someone else has got other important matters to attend to. The Foreign Office is the office that deals with our external relations, and they, naturally, have numbers of such questions to deal with, but it is utterly wrong to suppose that they are not intensely interested in this question of our prisoners overseas.
Take the suggestion about the General Post Office. It is no good setting up a special General Post Office to deal with prisoners of war. The Post Office is a

2367
great organisation that must be the instrument of the Government for dealing with the mails of prisoners. For re-settlement, in agriculture or anything else, you do not want a special Re-settlement Committee to deal with prisoners of war. You have the business of re-settlement and the technique of re-settlement, with adaptations to particular cases, such as soldiers who have been prisoners of war, or anything else. Therefore, I suggest that there is a dangerous failure to understand the proper function of government in this attitude, which comes up quite often, in, favour of one super-Minister. In our system of government, the functions depend upon Ministers in charge of different Departments working together as colleagues, under a Cabinet in which, ultimately, all decisions are made and whose job is to co-ordinate their activities and take decisions on main policy. I have not heard in this Debate any instance — I have heard suggestions, but I have not heard an actual instance—where, in dealing with prisoners of war, the trouble has been due to Departmental conduct. If any of my hon. Friends will bring me any instance where harm was done through troubles between Departments, I should be glad to take it up and deal with it at once, but as I say never in this Debate has any such instance been adduced.
I think it is natural that this Committee should be presided over by the Secretary of State for War. Unhappily, he has the larger number of prisoners to be concerned about, and the Secretary of State for War replies to questions dealing with the actual conditions of prisoners, their health, pay or allowances, unlike the Foreign Secretary, who deals with questions having a bearing on negotiations undertaken on our prisoners' behalf with enemy Governments, either through the protecting Power or the International Red Cross Committee. There is constant discussion of these matters inter-departmentally. Departments are not kept apart from each other, and any major matter that requires decision or consideration is brought up to the Cabinet. We have, as a matter of fact, in this war devised a system which I think avoids the pitfalls of too loose an organisation or of over-centralisation. I have yet to hear that it is not working well. I have every sympathy with the anxiety of hon. Mem-
2368
bers, but I would wish to warn them again against the conception that the Government is a thing in which there must always be, or often be, a Minister who is responsible for dealing, in respect of a very large number of functions, with one particular lot of people. I do not think that it is sound from the administrative point of view.
Sir T. Moore: It is considered necessary for national insurance.
Mr. Attlee: Not in the least; that is where my hon. and gallant Friend is wrong. On the contrary, that is an all-in insurance. We are pooling together, under one Minister, a variety of insurances, previously separated, into one system dealing with everybody. If we took the suggestions put forward here, we would have one special insurance system for one special section of people—the soldiers, sailors and airmen—and I suggest that that is wrong. It is really not sound administration to suggest that the right way is to get an ad hoc Minister. The rule is that departmental Ministers, and all Ministers, should work together co-operatively in a team and that is a British system we shall do well to follow.
Mr. Tinker: We are not asking for a separate Minister but for a Minister to have responsibility to the House of Commons in dealing with prisoners of war.
Mr. Attlee: I suggest that is not right either. I do not think that it is good to have one Minister getting up to reply to all Post Office questions relating to prisoners of war instead of the Post Office, or on agricultural settlement instead of the Minister of Agriculture. It would be putting such a Minister into an impossible position because all his replies would be second-hand in regard to the Minister who was administering the duty. The Minister responsible for administration should answer to the House for that administration. It is a mistake to think you could get a kind of super-Minister over all others, who should be answerable for them in this House.
5.28 p.m.
Miss Ward: May I put this one point to my right hon. Friend? He has laid great emphasis on the fact that the Government are perfectly satisfied with the present position. My hon. and

2369
gallant Friend and my hon. Friends and myself know that they have been satisfied ever since the beginning of the war. The fact that a very large number of names appeared as backing this Motion on the Order Paper is an indication that the House felt progressively more strongly that the Government's attitude was not in fact representative of the views of the people and that the anxiety in the country has grown.
I do not want to enter into any personal matters, but speaking for myself I do not feel that the War Office is the correct Department to have an over-ruling authority through the Secretary of State of either the Imperial Committee or the Inter-Departmental Committee. I do not think that the psychological make-up of the War Office really is fitting to enable it to deal with all the problems affecting prisoners of war which arise. With regard
2370
to the point raised by my right hon. Friend in his reply, for myself, if there has been another Minister, and not a Service Minister, responsible for the co-ordination, I would have felt happier.
When I was on my journeys abroad I received from senior officers in the Forces great criticism of the War Office's handling of prisoner-of-war matters. Though one must accept to-day the reply of my right hon. Friend, I am not over impressed by his complacency in this particular matter, and sometimes it would be a good thing if the Government could be guided by people in the House in these matters.
It being Half-past Five O'clock, MR. DEPUTY-SPEAKER adjourned the House, without Question put, Pursuant to the Standing Order, till Tuesday, 28th November, pursuant to the Resolution of the House this day.

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Preamble
The House met at half-past two of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers.

  TOWN AND COUNTRY PLANNING BILL.
  Returned from the Commons, with the Amendments agreed to.
  House adjourned during pleasure.
  House resumed.

ROYAL COMMISSION.
The following Bills received the Royal Assent:

Matrimonial Causes (War Marriages),

Diplomatic Privileges (Extension),

Prolongation of Parliament,

Ministry of National Insurance,

Town and Country Planning.

House adjourned during pleasure.
House resumed.
House adjourned at a quarter before three o'clock.