Sitting of 23 January 1946

Preamble
The House met at half-past two of the clock, The LORD CHANCELLOR On the Woolsack.
Prayers.
The Earl of Craven—Sat first in Parliament after the death of his father.
The Viscount De Vesci—Took the Oath.
The Lord Mancroft—Took the Oath.

FURNISHED HOUSES (RENT CONTROL) BILL.
Brought from Commons; read 1a; and to be printed.
LOCAL GOVERNMENT (FINANCIAL PROVISIONS) BILL.
Brought from Commons; read 1a; and to be printed.
NATIONAL SERVICE (RELEASE OF CONSCIENTIOUS OBJECTORS) BILL.
Brought from Commons; read 1a; and to be printed.
INDIA (PROCLAMATIONS OF EMERGENCY) BILL. [H.L.]
Returned from Commons, agreed to, with Amendments.

CIVIL AVIATION.
VISCOUNT SWINTON: My Lords, I beg to ask the following question, of which I have given private notice: To ask His Majesty's Government whether they have any statement to make about the Board of the British Overseas Airways Corporation.
THE MINISTER OF CIVIL AVIATION (LORD WINSTER): My Lords, as a war-
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time measure the number of the members of the Board of the British Overseas Airways Corporation was restricted to a maximum of nine. With the end of the war the necessity for this restriction has disappeared and the Order in Council imposing it has been revoked. Up to the date of the revocation of this Order in Council the Board consisted of the following seven members: Lord Knollys (Chairman), Sir Harold Howitt (Deputy Chairman), General Critchley (Director-General), Mr. d'Erlanger, Sir Simon Marks, Mr. Marchbank and Mrs. Fahie. During the last two years the yearly, mileage flown by B.O.A.C. has increased from 12,000,000 to 30,000,000. During the last fourteen months no passenger has met with a fatal accident. This latter fact, and the regularity with which the services have been maintained, reflects great credit on the way in which the Board has discharged its duties, and I take this opportunity of thanking Mrs. Fahie and Sir Simon Marks for the valuable assistance they have rendered during their membership of the Board and to place on record my appreciation of their services.
The new Board will consist of the following members: Lord Knollys, Sir Harold Howitt, Mr. d'Erlanger, Mr. Marchbank, Sir Harold Hartley, Mr. Garro-Jones, Lord Burghley, Major Thornton, Major McCrindle, Mr. Clement Wakefield Jones. Lord Knollys and Sir Harold Howitt have accepted my invitations to continue as whole-time Chairman and Deputy Chairman respectively. General Critchley informed me on the 10th January, in a letter which has been made public, of his wish to be released from his position on the Board. I acceded to his request with effect from 30–6–46, but in view of the public criticism of Government policy which he has since expressed, General Critchley agrees that his reappointment to the Board has become inadvisable. The Board of the B.O.A.C. has accepted his resignation as Director-General as from 31–3–46. I take this opportunity of thanking General Critchley for his services to civil aviation as Director-General of the B.O.A.C. and for the great energy and application which he has continuously displayed during nearly three years during which he has held that office.
Pending the passage of an Air Transport Bill which I shall introduce and the formation thereafter of the European

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Corporation foreshadowed in the White Paper, the Board of B.O.A.C. have arranged that Sir Harold Hartley and Mr. d'Erlanter shall devote themselves to matters concerning the European Services present and projected, and with the civilianization of European Services at present operated by Transport Command. On the formation of the European Corporation, Sir Harold Hartley and Mr. Gerard d'Erlanger will join the Board as Chairman and Chief Executive respectively. For all Boards formed under the Civil Aviation policy I propose to institute a rule of retirement by rotation in accordance with usual commercial practice.
VISCOUNT SWINTON: My Lords, arising out of that reply, may I put the following questions to the Minister? In the first place, General Critchley has retired. Is it imended that there should be in future no Chief Executive of the Corporation? E it is intended that there should be one, who will discharge those functions? Next, will B.O.A.C. run all services pending the creation of these new Corporations? My third question is this: When a European Corporation is formed, Sic Harold Hartley and Mr. d'Erlanger, who are to be Chairman and Chief Executive of that Corporation, remain on the Board of B.O.A.C., or will they be separated from it and conduct the European Corporation as a separate undertaking?
Also time noble Lord, the Minister, has referred to the European Corporation. He has said nothing about the South American Corporation. Could he tell us at -the same time who are going to be Chairman and Chief Executive of that Corporation? I think he will allow me to put my next question, as in his answer he has dealt a good deal in detail with the performances of the B.O.A.C. over the past twelve months. Could he inform the House whether it is correct that B.O.A.C. has, in fact, during the last year, made a profit, as has been stated, of £1,500,000, and if so is that profit calculated on a strictly commercial basis? I apologize to the noble Lord for putting those questions to him but I think he will agree that every one of them arises clearly and simply and straightly out of the answer he has just asked me to give him the opportunity to make.
LORD BALFOUR OF INCHRYE: My Lords, before the noble Lord replies may I ask two further questions? Could he say whether the taking over of the European routes from the Air Transport Command must await the formation of the European Corporation, or will the process go on at once. Furthermore, would he be able to give further details such as those for which the noble Viscount, Lord Swinton, asked, if not to-day at any rate on the occasion of the forthcoming debate on civil aviation in this House, which, I hope, will be in the not too far distant future.
LORD WINSTER: My Lords, as regards the noble Viscount's first question, Lord Knollys, the Chairman of the B.O.A.C., will be submitting to me his proposals for organization of the Corporation following upon these changes. Those will of course be announced at the earliest possible date. Pending the formation of the two new Corporations interim arrangements have to be made and those will be announced to-morrow in detail. As to the third question concerning Sir Harold Hartley and Mr. d'Erlanger, on the formation of the new European Corporation they will leave the board of the B.O.A.C. and will join the board of the new European Corporation as Chairman and Chief Executive officer respectively. As to the fourth question as to how the services of the European Corporation and the South American 'Corporation will be run, details of that will be announced to-morrow. As to the question concerning what profits the B.O.A.C. has made, the accounts of the Corporation will shortly be presented, when those matters will be dealt with. I shall be able to give a full reply to the noble Viscount on that occasion. As to the questions asked by the noble Lord, Lord Balfour of Inchrye—
VISCOUNT SWINTON: What about the Latin-American Corporation?
LORD WINSTER: The arrangements for running those services will be announced to-morrow. Does that meet your point?
VISCOUNT SWINTON: The noble Lord announced the Chairman and Chief Executive of the European Corporation. I was asking whether he could give us the same information about the Latin-American Corporation.
LORD WINSTER: That will be announced to-morrow. As regards taking over the European routes from Transport Command, that will not await the formation of the new Corporation. The process is in hand now and will proceed continuously until the new Corporation is formed. In the forthcoming debate I shall certainly be very happy indeed to reply in the fullest detail to the points which have been raised.
VISCOUNT SWINTON: Will the noble Lord clarify one point? He said the accounts of B.O.A.C. would be published shortly and would show what the position was. A statement has been publicly made that a loss of two-and-a-half millions has been converted into a profit of one-and-a-half millions. Would the noble Lord tell us whether that statement was made on his authority.
LORD WINSTER: No, that statement was not made on my authority.

TRUSTEESHIP.
2.45 p.m.
VISCOUNT SWINTON: My Lords I beg to ask a question of which I have given private notice—namely, whether His Majesty's Government can make a statement about the trusteeship provisions of the United Nations Charter.
THE SECRETARY OF STATE FOR DOMINION AFFAIRS (VISCOUNT ADDISON): My Lords, you will doubtless be aware that my right honourable friend the Secretary of State for Foreign Affairs made a statement on this subject at the General Assembly of the United Nations on January 17. I welcome this opportunity of confirming that statement in this House. In ordinary circumstances a statement of policy on such an important subject would, of course, have been made to Parliament in the first place, but His Majesty's Government felt that it was so desirable to take the initiative, by assuring the United Nations of our earnest desire to see the international trusteeship system brought into operation at the earliest possible date, that they felt they would be rightly interpreting the wishes of this House by making such a statement without waiting for Parliament to reassemble. I am circulating the full text of the statement with the Official Report.
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I have nothing further to say as regards the mandated territories in the Middle East, except that His Highness the Emir Adbullah of Trans-Jordan has accepted an invitation to visit London in the near future, to discuss matters connected with the establishment of Trans-Jordan's independence.
As regards Tanganyika, Togoland and the Cameroons, which are to be placed under the international trusteeship system, the House will like to know that His Majesty's Government, in consultation with the Governors concerned, has already drawn up draft terms of trusteeship based, generally speaking, on the Mandates, but revised to bring them into conformity with the provisions of the United Nations Charter. Without prejudice to the ultimate interpretation of the phrase "States directly concerned," His Majesty's Government felt that there were certain States which, on any interpretation, must be regarded as directly concerned in the African Mandated Territories—namely, France, in respect of Togoland and the Cameroons, Belgium, in respect of Tanganyika, and the Union of South Africa, in respect of all three. The draft terms of trusteeship have accordingly been sent to the Governments of those States for their observations. Copies of the drafts have been sent, for information only, at this stage, to the Governments of China, the Soviet Union, the United States of America, and (in respect of Tanganyika) France. I feel, therefore, that His Majesty's Government have, in this manner, taken all the practicable steps which it is within their power to take at present. As soon as these drafts have been agreed upon by the States regarded as being in any event "directly concerned," and before they are submitted to the United Nations for approval, their terms will be communicated to Parliament and the local Legislative Councils.
Finally, there is one point which I should like to emphasize in regard to the status of the inhabitants of these territories. These territories have, for over twenty-five years, been under British administration, on behalf of the League of Nations, and will continue to be under British administration, on behalf of the United Nations. They are not British Colonies, and the inhabitants are not, therefore, as such, British subjects. They are, however, and will continue to be.

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"British protected persons," of exactly the same status as the inhabitants of any British Protectorate not under Mandate or trusteeship.
The statement referred to by Viscount Addison was as follows:
[Extract from a speech made by the Foreign Secretary, Mr. Bevin, on Thursday, January 17, 1946, to U.N.O.
"Another instrument which we welcome the Trusteeship Council. We made our contribution to its creation at San Francisco and in the Preparatory Commission. At the end of the last war the mandatory system was devised. We have given careful consideration to our own position in connexion with the Mandates for which we are responsible; and I take this opportunity of informing the Assembly of our intentions.
"We have decided to enter forthwith into negotiations for placing. Tanganyika, the Cameroons and Togoland under the trusteeship system. Preliminary negotiations have already started. I must make it clear that our willingness to place these territories under the trusteeship system naturally depends upon our being able to negotiate terms which in our view are generally satisfactory, and which achieve the objectives of the Charter and are in the best interests of the inhabitants of the territories concerned.
" These territories have been administered by us for over twenty-five years. We have fulfilled our obligations under the Covenant of the League and to the best of our ability administered and developed them in the interests of their inhabitants. We intend to continue this policy under the trusteeship system. We are ready to accept the obligation which will rest upon us as the administering authority under this new system. Now, if this is to be achieved, it is most important that the people of the territories themselves and the world at large should be left in no doubt that the continuity of administration will be maintained, until the ultimate objective of the trusteeship system, self-government or independence, as the case may be, is attained.
"Regarding Palestine, the Assembly is aware that an Anglo-American Committee of Enquiry is, at this very moment, examining the question of European Jewry, which is one of the most tragic
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episodes in the whole of history, and also the Palestine problem. We think it necessary to await the Committee's report before putting forward any proposals relating to the future of Palestine.
Regarding the future of Transjordan, it is the intention of His Majesty's Government in the United Kingdom to take steps in the near future for establishing this territory as a sovereign independent State and for recognising its status as such. In these circumstances the question of Transjordan going under trusteeship does not, therefore, arise."

MACHINERY OF GOVERNMENT.
2.49 P.m.
THE EARL OF PERTH THE EARL OF PERTH rose to call attention to the need for the reform of the machinery of government, particularly with regard to the control of foreign affairs; and to move for Papers. The noble Earl said: My Lords, the phrase "machinery of government" which you will find in the Motion I have the honour to submit to your Lordships this afternoon, is, of course, capable of a very wide application. It would cover, for instance, the establishment of regional Parliaments for Scotland, England and Wales to deal with purely Scottish, English and Welsh matters, thereby easing the burden which now falls on the existing Parliament, because the Parliament in Westminster would be left to deal with matters which concerned the three countries together. That is, of course, a question of very great importance and worthy of being discussed in your Lordships' House, but it would not come within the scope of the Motion which I have presented this afternoon. Equally, I do not intend to dwell on the size of the existing Cabinet. It is very large, and I think that serious consideration should be given to the constitution of a smaller Cabinet on the lines of the recent War Cabinet. Departmental Ministers confess that they are very seriously overworked, and that therefore they are bound to have recourse to a system of opportunism and have not really time for much thinking in advance. But that, as I have said, is also outside the scope of my Motion.
What I really want to do to-day is to call attention to the need for the coordination of Ministerial work and the work of the Departments of His Majesty's Government. I first raised this question when dealing with the reform of the

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Foreign Office in a debate which took place as long ago as March 25, 1943. I then put forward certain proposals of my own, and drew attention to other suggestions which had been made in articles in The Times and by Sir Victor Wellesley, who speaks with great authority on this subject. The noble Viscount who now leads the Opposition gave me on that occasion a not unsympathetic reply. He promised that the various considerations which had been urged by many noble Lords during the course of two days' debate would be carefully examined and considered by His Majesty's Government.
At the end of July, 1943, I again raised this question in the debate on the Foreign Service Bill. Then the noble Viscount, replying for the Government, told me that the proposals which had been made could not be considered in isolation, because they entailed building a new wing to the structure of government, which involved a measure of reconstruction or reconditioning of the whole edifice. He said that these proposals had therefore to be referred to a Committee which was examining suggestions relating to the machinery of government. I made one further effort to obtain information, or at least a progress report, on December 13, 1944, but, in spite of valuable support from the present Leader of the House, the then Leader of the House very skilfully avoided giving me any factual information. He acknowledged that the examination of the problem had been proceeding for over two years, but he stated that that did not imply that the time was yet ripe for a final decision. It seemed to me that that was a masterly Departmental defence of procrastination. However that may be, the noble Viscount added one statement of the highest importance—namely, that the fullest information as to the machinery ultimately decided on would be given to Parliament when the time came.
It would not, perhaps, be altogether fair to emphasize unduly what the noble Viscount who now leads the House said on that occasion. I think he may remember that he emphasized—and I was extremely grateful to him for doing so—that questions relating to the most appropriate machinery for dealing with affairs of State are matters which can be discussed openly and frankly, and the more they are discussed the better. He said
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that there could be no question in this connexion of the revelation of Cabinet secrets. I hope that the noble Viscount has in no way changed his views on this point; and so I would ask the Government, and the noble and learned Lord who sits on the Woolsack, and who, I understand, is to reply for the Government, whether it is possible to tell your Lordships the result of the work or the chief points in the Report of the Committee to which I have alluded which has been dealing with the machinery of government.
That Committee was presided over by the last Chancellor of the Exchequer. There were many sub-committees and there was much evidence taken. The inquiry covered a very wide range. For instance, I know that a circular was sent round to many eminent civil servants and to some ex-civil servants to inquire their views as to the continuance of the office of Head of the Civil Service. I quote that as an example to show how wide the scope was. I think that that Report is likely to be of as much value and interest as the Report of the Haldane Committee, and I trust, therefore, that His Majesty's Government will see fit to publish it in full, or at least to agree to publish the chief recommendations. For the reasons that I have given, I do not think that a refusal to publish it or to submit it to Parliament, based on the ground that it was a sub-committee of the Cabinet, can have any validity. I trust, therefore, that your Lordships will give me your support on this point.
So much for the machinery of government generally. I now pass to a special aspect of the question—namely, the control of foreign affairs. I do not think it is an exaggeration to say that every expert on foreign affairs has come to the conclusion that there was something radically wrong with the organization for the control of our foreign policy between the two wars. There was a lack of unity of direction, and our economic, financial and foreign policies were not properly coordinated. This in its turn led to inadequate information reaching the Cabinet, and contributed, I have no doubt, to that state of unpreparedness in which this country found itself when Hitler definitely decided on his policy of aggression.
Questions of organization are not of a character which arouse any public enthusiasm, but it is rather remarkable that

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this need for reform has been urged in succeeding articles in The Times from 1942 onwards, by influential daily journals of the North, by the Sunday Times, by the Observer, by weekly papers such as the Spectator and the New Statesman and Nation, and by writers in various national monthlies. Such a volume and consensus of opinion is really noteworthy. I do not intend to-day to repeat the arguments which I used in the debate on December 13, 1944, when I strongly urged the constitution of a body—I shall refer to its organization in a moment or two— to consider and deal with foreign affairs. The meetings of that body should clearly be presided over by the Secretary of State for Foreign Affairs; and the various Government Departments concerned—and I have in mind particularly the Treasury, the Board of Trade and the Defence Departments—should be represented at the Ministerial level. I regard the inclusion of the Defence Departments as essential. The noble Lord, Lord Chatfield, in a Motion which he brought before your Lordships' House on March 7 of last year, stated that owing to lack of clarity of though I and others had held that foreign policy and defence could not be separated one from the other. I still maintain that foreign policy and defence are, as the noble Viscount, Lord Trenchard, said, interlocked, and that you cannot separate foreign policy from defence policy. The noble and gallant Lord, Lord Chatfield, has not been, in my view; altogether consistent in this matter. In a debate on March 29, 1944, he himself remarked "It is quite true to say that foreign policy and defence go hand in hand." Well, if two people go hand in hand, usually there is a very close link between them. I apologize for this digression from my main theme, but I did think it necessary to try to clarify my position in that respect.
I now turn to the question of what kind of organ is required. I believe that it should be of a character to fulfil three main functions. The first is the proper co-ordination, under the authority of the Secretary of State for Foreign Affairs, of all activities of the various Government Departments which concern foreign countries and, therefore, affect our foreign policy. The second is that it should arrange for the closest consultation with the Dominions. The High Com-
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missioners or personalities specially chosen by the Dominions for that purpose should come automatically to the meetings. I need not stress the importance of this point. I am quite certain that the principle will meet with the strongest approval of the Leader of the House—that is the principle of close consultation with the Dominions. The third is that it should be empowered to invite the Leaders of the Opposition to participate in the discussions when matters of first-class importance in foreign affairs are being considered.
I have before now urged, and I urge again, that foreign policy, and, I would add, defence policy, should be taken out of the realm of Party strife. I have always felt and thought that providing adequate information is available, men of good will are likely to come to the same conclusion when issues of grave concern to this country in foreign policy are involved. Personally, I felt that the treatment of the Greek problem during the period of office of the last Government afforded a most remarkable proof of the validity of the thesis which I have just put forward. Therefore, the machinery ought to be of a character to allow the Government to invite Leaders of the Opposition to take part in the meetings should the Government think it desirable and in the national interest that they should do so.
Bearing in mind these three main functions, what is the best kind of organization by which they can be effected? It might be by an organ similar to that of the Committee of Imperial Defence, with a special Secretariat composed of officials of the Departments mainly concerned. It might be through the Committee of Imperial Defence itself, with its sub-committees. That particular solution is strongly favoured by my noble friend Lord Hankey, who, unfortunately, cannot take part in this debate—as he had intended to do—because he is paying a visit to Egypt. In the last resort, it might be a standing sub-committee of the Cabinet, presided over by the Foreign Secretary. But here I am a little doubtful whether if that were set up it would adequately fulfil the; second and third functions—namely, to promote the closest consultation with the Dominions and to ensure Leaders of the Opposition being invited to join in consultation.
The question of the kind of machinery is not really of such very high importance provided that the machine works well and easily. What is important is that the Secretary of State for Foreign Affairs should be, subject, of course, to Cabinet control, master in his own sphere—the foreign policy of the country. Much, of course, depends on the man, but not all. That very gallant Frenchman, General de Gaulle, stated a profound truth the other day when he said:
"It is through the man rather than through texts that great works arc accomplished, but the machine helps or hinders the work of those engaged on it."
I think therefore, my Lords, that you will agree with me that it is our duty to do all we can to press the Government to make the machine as effective as possible. I beg to move for Papers.
3.7 P.m.
VISCOUNT TEMPLEWOOD: My Lords, I am sure that the whole House is under an obligation to the noble Earl for once again bringing up these very important questions. I say at once that I strongly support his request for further information upon the questions which he has raised time after time, and I hope that when the Lord Chancellor comes to reply he will be able to give us a detailed report as to how these many questions connected with administration machinery really stand. In particular, I hope that he will be able to tell us that in some form he will publish the report of the inquiry, that—according to what one is told—during the last two years has occupied so much of the attention of successive Governments.
I do not propose to follow the noble Earl in detail into some of the big issues which he has raised. I would, however, say that from my own experience in the years between the two wars there certainly were needed many reforms in the field of machinery. But the real source of the weakness of British foreign policy was the absence of adequate defence forces behind it. I do not stop to argue that affirmation this afternoon, but I state it, and I believe that that will be the judgment of historians of the future. I find myself to-day in the unique position of having been upon both sides of the table in the Foreign Office. I have seen these issues from the angle of Whitehall, and I have also been able to study them
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from a post overseas. One of the results of this double experience has been to suggest to me that, however much we may wish it, it is very difficult to keep these questions of foreign affairs and Imperial defence in watertight compartments. I believe that the world to-day is, more and more, moving to a situation in which these overseas questions will be less and less the particular province of a single Department.
I am aware that it has been decided henceforth to have a distinctive Foreign Service with its own methods of recruitment, distinct from the general body of the Civil Service. Only the future will prove whether that decision was a wise one or not. I am, however, quite certain that it will not prove to be a wise one unless there is the closest and most constant contact between the Foreign Office and the Foreign Service and the other overseas Departments and their particular personnel. I will give the House a single instance of what is in my mind. I believe that we shall find that in the years immediately before us the post of High Commissioner in the Dominions will become one of the most important posts in the whole of our overseas services. Indeed, even to-day, it seems to me that the post of High Commissioner in Canada is not unequal to the post of Ambassador in Washington. The first point that I would venture to make is the necessity of strengthening the position of our High Commissioners in the Dominions and of, enhancing their general status. I have the feeling that they ought to have at their disposal a much more comprehensive machinery than is at present the case.
I would ask the Lord Chancellor how, for instance, the office of our High Commissioner in Montreal compares with the office of our Ambassador in Washington. I believe it would be found that we are living in an almost Victorian atmosphere in which we have regarded these posts of Dominion High Commissioners as principally trade posts and not, as they are to-day, the posts of our most important Ambassadors in the whole of the world. I would venture therefore to press upon the Lord Chancellor the need of greatly enhancing the posts of High Commissioners in the Dominions and, I would hope when constitutional changes take place in India, of the High Commissioner in India as well. I believe, further, that with the posts and the machinery greatly

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strengthened, we shall find that in our relations with the Dominions and India we shall be able to depend much more than hitherto has been the case upon the man on the spot. Looking to future developments in the British Commonwealth I think that the more that that takes place the better it will be for everybody concerned.
That brings me to the question of status of the heads of our diplomatic machine abroad as distinct from the Missions of the High Commissioners. There again, I think we should do everything in our power to enhance their status. It seems, to me that what is happening is that with the introduction of better means of communication, particularly of the telephone fifty or sixty years ago, administration has become more and more centralized in Whitehall. That may have been inevitable. I think, however, particularly with the development of aviation, that the time has come to reverse that process, and instead of the Minister; and high officials going from here to make inquiries into special questions on the spot, it is much better to make fuller use of the aeroplane for bringing back our representatives overseas for consultation in London.
The noble Earl who has just spoken said a word or two about what happened in Greece. It may be that what happened in Greece was inevitable in wartime. I believe, however, that in peacetime it would be much better to bring the. Ambassador back here, if need be once or twice in a week—after all, the journey is a very easy one—rather than for Ministers to go to a foreign country in an atmosphere of great expectation in which it is almost essential for them to take hurried decisions, in which it is almost inevitable that what they do becomes compromised with Party politics here, and in which almost inevitably the status of the man on the spot is to a certain extent weakened. I venture there-fare to impress upon the Lord Chancellor the wisdom in peace-time of avoiding—at any rate normally—hurried visits from Ministers in London to posts overseas, and the great advantage of bringing the head of a Mission back here, where he can talk to Ministers on the spot. This would leave him with enhanced status in the country where he is serving, knowing intimately the people with whom he is dealing, and understanding the back-
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ground, and on that account, I believe, much more capable of dealing with those complicated issues which face us now than by a sudden visit of some deus ex machina from London.
That brings me to a further point. With reference to the organization of our Missions abroad, it seems to me that the normal Mission abroad in the future will have to deal with many more expert and technical questions than was the case in the past. I do not believe that it is possible to turn the ordinary Diplomatic Service into omniscient technical experts. They will have a general knowledge of the problems with which they will have to deal, but there will be a need for experts, experts in the field of trade, or in the field of labour, and so on, to he attached to many of our Missions abroad. The danger in an attachment of that kind is that these representatives of different Departments in London arc apt to work in watertight compartments. It is essential that in any overseas post the head of the Mission should be master in his own house. Therefore the technicians who arc attached to his staff should regard him as their local chief, should report to him fully what they are doing, and should ensure that that is in general step with the work of the whole Mission. I insist upon that need, having had some experience of those types of problem both in this war and in the last war. The head of the Mission or the High Commissioner should be in the position of the Prime Minister in this country with the representatives of the different Departments around him. He should he the acknowledged head, knowing fully what is happening and judging how best to deal with the foreign Government to which he is accredited.
If that is true in regard to trade, it is true of other technical activities, and I should like to ask the Lord Chancellor one or two specific questions about some of these other activities. We have heard a great deal about the creation of a News Department at the. Foreign Office. It is of vital importance to keep our Missions fully informed of the policy of the Government here, the state of public opinion, and so on. I should like to know if the Lord Chancellor can give us any information about the kind of organization that is being set up. My own feeling would be that for general news it is much better to leave it to the regular news agencies. The Press telegrams and news-

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papers that arrive at the overseas post will keep the Mission much better in, formed than some formal telegram sent by a Department in London at specific times. I would therefore leave to the existing agencies the dissemination of ordinary news to the Missions.
A difficult problem, however, arises with broadcasts. However much we may say that the B.B.C. is independent of the British Government, nobody in any foreign country will believe us. They are quite convinced that everything that the B.B.C. says is the ipsissima verba of the Prime Minister, the Foreign Secretary and the Cabinet. I believe therefore that the wisest thing would be to accept that fact, and for the News Department of the Foreign Office to take over without any secrecy a certain time upon the radio and to give dispassionate statements upon certain questions of overseas interest. I know it is said it is difficult to arrange these dispassionate statements, but I do not myself see any alternative.
That brings me to the last of the points of organization in our foreign Missions about which I wish to address the House—the relations of the foreign Missions to the British Council. The British Council, originally the conception of Lord Lloyd, who threw into its inauguration his peculiar energy and genius, started upon a very small scale, and its budget, if one takes the budget as a test of the activities of any organization, has now risen from a few thousand pounds a year to I think three-and-a-half million pounds a year. The time has come to define the position of the British Council. It has existed in war-time. No one has paid very much attention to this organization, but it has done a lot of useful work. I would be the last person to say it had not done a great deal of useful work. But the time has now come to decide its relation to the overseas Missions. Is. it to be independent of the overseas Missions or is it to be a part of the ordinary overseas Missions? You can make an argument for either alternative. In theory it would seem to be wiser to keep it distinct from the Embassy. Then you are brought up against the kind of difficulty that I found in Madrid. I was told that unless it was an integral part of the British Embassy, and the head of it was given diplomatic status, it could not operate in Spain. That is the kind of practical difficulty that
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confronts us. My own general view would be to keep it as independent from the official Mission as is possible in the circumstances of the country.
The question then arises, how should it be recruited? The recruitment is one of the very essential conditions of its usefulness. Up to the present its recruitment has almost inevitably been very haphazard. Staff was not available in war-time. It has had to pick up its people wherever it could get them. The time has now come, when we are considering this important question of organization, to have recruitment properly organized. Is it possible, for instance, to bring the British Council into much closer liaison with the universities in this country and to have its staff seconded from the universities? If that is impossible, is it possible to have an educational staff of its own? In either case it is essential that the staff of the British Council should be in the closest possible contact with the educational, and particularly the university, life of this country. I think the time has come when we ought to know more about what is happening with regard to the British Council. A distinguished civil servant, Sir Findlater Stewart, made an inquiry at the invitation of the Government into the operations of the British Council I many months ago. Could we have his report published? If that is impossible, could we hear from the Lord Chancellor what is the policy of the Government in reference to the continuance of the British Council's activities? These detailed questions are of some importance. From my own practical experience, I think their wise settlement will have a great deal to do with the success of our overseas activities.
We find ourselves to-day in a very difficult position. We have emerged from the war with a splendid reputation. We have a great Navy, Air Force and Army. At the same time, we are greatly exhausted by the struggle, and find ourselves in a world where the relations between the great Powers have undergone many changes and in which a mistaken policy or weakness in organization may do us irreparable harm. I want to see the opportunity taken to face these problems of organization and to face them quickly. We have, in our Foreign Services, a splendid body of men, most of them grossly overworked, many of them

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working in conditions that no up-to-date business firm would tolerate. If we are to make the fullest possible use of their services—and never have we needed their help more than to-day—it is essential to put our house in order and enable them to give the country the fullest possible benefit of their great capacities. On that ground, I strongly support the request of the noble Earl for further information, and I hope that when the Lord Chancellor comes to reply he will le able to add some further details upon the points that I have ventured to press upon the attention of the House this afternoon.
3.35 p.m.
LORD CHATFIELD: My Lords, I intervene in the debate on this Motion of my noble friend Lord Perth only because the lead he gave me in bringing out the connexions between foreign policy and defence. I do not think really that he and I, in spirit, differ at all. I agree with all he has said and with his views on what ought to be done to improve, so far as we are able to do, the administration of our foreign policy, from which I have had my personal trials to suffer in the past. What I actually said in the debate a year ago last March, quoting from Hansard, was:
" There is an idea that foreign policy and defence cannot be separated from each other. Whereas foreign policy should be in accordance with your strength, your strength cannot be determined by your foreign policy."
Nevertheless, I said also, as he has quoted, that foreign policy and defence should go hand in hand. That does not mean to say they always do. Indeed, the fact is that in the past, in peace years, they did not do so, and that was the failure. As he has said, you want to have the Foreign Secretary, the Defence Ministers and others intimately concerned closely studying the combined problems of foreign policy and defence. That was not done.
When, after the last war, we determined the Anglo-Japanese Alliance and thereby created a most dangerous enemy thousands of miles away, we ought to have automatically increased our strength in accordance with the new danger that had arisen on our horizon. But we did not do so. There was an example of foreign policy and defence not going hand in hand. Again, in the early 1930's, when Germany was rearming, when we were even weaker than we had been and when our weapons were older, we did not remain content to
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face the danger of Germany's rearming but we also quarrelled with Italy. That may have been perfectly right—I do not say a word against our foreign policy in that respect; it is not my business to do so. We also were confronted with the most dangerous attitude of Japan at that time. In all those cases our foreign policy did not go hand in hand with our defence. That was the danger that brought us to war, and which we were continuously pointing out at the time. I remember being asked, "Cannot you send a fleet out to the Far East to back up the words we are speaking about Japanese aggression in Manchuria? Cannot you send three or four ships? "I said:"If you are going to send anything out to influence the Japanese, who have a great Navy, you must send a force equal to their own; and if you do that you will never get it back again." And so the ships did her go. That request was an example of the misunderstanding of the defence side of foreign policy.
It is a very dangerous misunderstanding, and we have to consider how it exists at the present time, when we have new and most difficult problems in front of us arising from defence and foreign policy. We have tied our foreign policy to the United Nations Organization, so the Prime Minister has told us. I am a great believer in the United Nations Organization. I believe that in it lies the only hope that we can have, not of defending this country, but of keeping the peace of the world, which is not altogether the same thing. The United Nations Organization is only a beginning—the beginning perhaps of a new era; we do not know. It is in its birth pangs, and it seems at the present time to be undergoing some difficulty. Nevertheless, having tied our foreign policy to the United Nations Organization, what I want to point out is that that does not mean that you can also entirely tie your strength to the United Nations Organization. Therefore, in that respect, foreign policy and defence will not be going entirely hand in hand.
Why cannot you tie your strength entirely to U.N.O.? By the new law of nations you have your responsibilities to the Security Council; it is the duty of all nations to provide the necessary forces to support that Council. We shall have to do that and we shall have to satisfy the Security Council that the forces we are

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going to have in the United Kingdom—not in the British Empire but in the United Kingdom—are sufficient to meet that responsibility. That, however, is not the only thing for which our forces will be required. After all, war is not yet banished from the world. If the United Nations Organization is well supported, and if the Assembly is going slowly to improve the condition, moral and economic, of the world, then we may find that war will be a long way off. But it may not be so; it may be that the great Powers will disagree. That is the great danger we have to face. If the great Powers do disagree, then there will be a grouping of nations according to their sentiments, their proximity, and their ideologies. If that grouping comes about, the tendency will be for the smaller Powers to cling to those who can support them and who arc strongest. Therefore we must have a reserve strength in addition to that which we require to carry out our responsibility to the United Nations Organization.
In order to give confidence to those who trust us, that reserve strength must be sufficient. After all, although the Empire is now divided into groups as regards the United Nations Organization, and the Dominions have separate representation, it is still a fact that as far as Imperial defence is concerned the main burden is expected to fall upon the United Kingdom. I believe, therefore, that in considering our foreign policy as a whole we should not allow ourselves, by our responsibility to the Security Council, to be deflected from providing for our proper defence according to our geographical and physical position in the world and to our responsibilities for His Majesty's vast possessions. I believe myself that the ideal of a contented world, an orderly world, perhaps ruled by some international authority such as that of which the Foreign Secretary, Mr. Bevin, has spoken in another place, will come one day, but it will not come yet. We have got to proceed step by step in our foreign policy and in our hopes. We are all idealists in different respects, and some of us are to some extent dangerous because of that. But the idealist is anxious to achieve his highest aims straight away; he is impatient. However, he has to realize that although you may set your aims as high as you like you cannot achieve them immediately,
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and he must not run down what is being done at the time, which is the best that the condition and state of the human race will allow, because it is not equal to his highest ideals.
I feel very strongly that if there is a failure of the present Organization and we ever have another war, if we are not to be swept away we must be able to have our friends, the peacefully-minded nations, with us, because we cannot stand alone; no nation will be able to do that. We shall not do that if we begin, for instance, to run ourselves down in the manner which is so often adopted to-day. People who write and talk say: "We are a small nation; we have not the numerical strength to call ourselves great when our numbers are compared with those of more numerous peoples." That is a great mistake. The first thing we have got to do, if we are to rally our friends to the side of peace and our own moral ideas, is to give them confidence, and if we have no confidence in ourselves they will have no confidence in us.
Quantity is not the only thing in the human race; a far greater thing is quality. The British race has never won its great wars and its great battles by having superiority of numbers; far from it. As the Army showed at Agincourt, as the Navy showed against the Spanish Armada and at Trafalgar, and as the Royal Air Force showed in the Battle of Britain, it is not quantity that matters, but quality. One Englishman can be as good as two foreigners if we take the right steps to make him so. If we are willing to make our young people realize their responsibilities and the difficulties that lie before them, to make them realize the importance of courage and self sacrifice, then we shall have a strength behind our foreign policy which will make the nations who are peacefully minded support us in the council of nations, and if war comes it will give them the courage to stand by us in fighting for what is a right cause. Therefore I would leave your Lordships with the thought—it is only a very humble one—that we must not forget, when we talk about foreign policy, that it is based on our moral and physical strength. We must see that in both those respects we do not fall, as we did, far below the standard in the years of peace.
3.50 p.m.
LORD HUTCHISON OF MONTROSE: My Lords, I am sure that we are all grate-

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ful to the noble Earl, Lord Perth, for raising this question once again, and we hope that the Government Will give us some indication of their approach to the various points which have been made in the last three debates on the Foreign Office. When I refer to the Foreign Office, I have in mind the association between the Foreign Office and. the Defence Forces which has been so well dealt with by the noble Lord, Lord Chatfield. One car only hope to underline some of the points already made in past debates. One thing which has led to confusion, and which I think has been a great disadvantage to our country in the handling of foreign affairs for about half the period between the wars, has been a sort of dual control of foreign affairs. There was the Foreign Office and the Foreign Secretary an the one hand, and on the other there was a sort of additional Foreign Office at 10, Downing Street. I hope that an end is being put to that practice, and that the real responsibility for handling foreign affairs will return to and remain with the Foreign Secretary. I think that the other system, which was introduced by Mr. Lloyd George, was pernicious, and. has lead to a great deal of confusion. It should be done away with.
After this terrible war, there is no doubt that foreign affairs, like home affairs, will be more closely interwoven with economics than ever before. Therefore it is necessary for the remnant of the Ministry of Economic Warfare to be gradually built up into a first-class Department inside the Foreign Office, and to be represented at the major Embassies abroad. It is only by considering the financial and economic aspects of many of the problems which face us that we can hope to reach satisfactory agreement. if we pay attention only to the purely foreign affairs aspect, we shall be led into the same difficulties as those which we met in 1930 and 1931. It is very important that every major Embassy should have a Financial and Economic Attaché, so that the Ambassador can be fully advised as to the implications of anything that is being proposed in the country to which he is accredited.
Referring now to a question which has been very well dealt with by my noble friend Lord Chatfield, I would say that for years past many of us have been trying to co-ordinate the Services and to
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bring in some form of General Staff to deal with all the Services, instead of each being separate under the Prime Minister. It is not reasonable to expect that in future wars we shall have a Prime Minister with a knowledge of war such as was possessed by the late Prime Minister. Perhaps Pitt was another example. A Prime Minister to-day needs to be advised on defence matters not by individual heads of the Defence Service but by a Combined General Staff. I venture to suggest that the Committee of Imperial Defence ought to be reorganized and given a definite head under the Prime Minister and given executive powers. I should like to see the Dominions represented on that Staff. I think that the Committee of Imperial Defence has done very fine work in the past, but it has always been at a disadvantage in being a purely advisory body. I should like to see it have executive power in dealing with strategic problems, the handling of our Forces as a whole and the distribution of these Forces. I think that it would be a good thing for this country if we had such an organization to help us and enable us to see what will be required from year to year. As Lord Chatfield rightly says, no one can say that there will be no more wars, and therefore it behoves us to be in a position to foresee what is going to happen and take suitable steps beforehand, so that we are not at a disadvantage, as we were in 1939.
Another point in relation to this organization for defence is that the Foreign Secretary or his appointed deputy should be a member of that Staff, and brought into the closest touch with it, in order that he may know at first hand, and not just through the Cabinet, what are the possibilities of carrying out any policy which he may have in mind. I am sure that if that were done a good many of the difficulties which have been experienced in the past would be overcome. No one —not even the Foreign Secretary—can take decisions unless fully informed. I think that the information that went to the Foreign Office in the past was not complete. I know of two cases in which the information was positively wrong, and that was as recently as August, 1939. We require a very wide and careful organization of information centred at the Foreign Office and distributed to the major Embassies. It will need money, but the money will be well spent. An Ambas-

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sador can find out what the Government of the country to which he is accredited think, and the Foreign Secretary in London can be given that information. But what we want to know is what the people of the country concerned are thinking and saying, and it is only by a really good information service that we can get that information and make use of it. That is most important, and ought to be organized from the Foreign Office.
My next point, which is also very important, concerns the administrative side of the Foreign Office. I wish to express the hope that the departmental report prepared by Mr. Alwyn Parker, when he was brought in shortly after this war began to deal with the administrative side, will be taken to heart. There is no doubt at all that the administrative side of the Foreign Office was not in good form and was not in a position to deal efficiently with the various troubles that arose. The adverse manner in which communications were affected was especially noticeable. How many times were the staff held up in their dealings with communications by reason of the deplorable accommodation in which they had to work? I think that the administrative side. should have a very strong individual at the head of it, one who is able to recognize what is going on, to advise and to deal with various difficulties as they arise through faulty organization.
The Foreign Secretary cannot do that. He has to depend on his various Under-Secretaries to attend to such matters. But, as I say, you really want a first-class man in command. The question of accommodation is undoubtedly a serious one. Everyone knows that the quarters at present allocated are ill adapted to house the Foreign Office. It has branches all over the place. You want a really good building where the whole of the Foreign Office would be housed under one roof. To get that will take time, for the urgent necessity facing the Government at the, moment is to provide houses for the people. But, in this matter, the Government ought to be looking ahead and making plans for the future.
A further matter I wish to touch upon is this. There is great need for a better system for giving information to Parliament and to the people concerning what is going on in foreign affairs. I have
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often heard it suggested that we ought to have a Foreign Affairs Committee. That has been tried in various countries and it has not proved very successful. I have a feeling that the best plan would be to have the Leaders of the various Opposition Parties brought in occasionally to meetings of a reorganized Committee of Defence—that is if it were given a proper status. They could be told what the position was in foreign affairs and to some extent bound not to divulge what they heard. Then those leaders could subsequently tell their people—in guarded language of course and having full regard to their pledge of secrecy—what was going on in foreign affairs. However it is accomplished, something has to be done to bring what is going on in the Foreign Office to the notice of Parliament and the people.
There you come up against the matter of Press organization. I am not referring to the Press of the country. I mean the ' Press organization in the Foreign Office. This I consider calls for great care in its establishment and management. How often do we see Missions going abroad and becoming, so to speak, absolutely lost when they are up against the Foreign Press. I think something ought to be done in the way of helping these Missions when they go abroad, and of supplying news that can be distributed to the Press. This work can only be done efficiently by a really first-class Pressman with a first-class organization under him in the Foreign Office. I am sure that the Press here would not have any objection to such an individual if he were carefully chosen. At any rate, some means of conveying adequate information to the Press from the Foreign Office is, in my judgment, most necessary. Without it, you are liable to get all sorts of Press crises arising on account of indiscreet publication of matter. You get episodes like that which happened in connexion with the Press and Mr. Lloyd George at Versailles. We do not want anything like that to happen again. Before long there will be meetings in Paris for similar purposes, and I hope that by that time the organization for providing the Press with news will be more efficient and better controlled.
Lastly, I would say this. It is difficult to express clearly, but I would like to see foreign affairs taken out of the arena of Party politics altogether. They should be dealt with on a national basis, and be

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altogether outside the warfare of the purely Party dog fight. I am convinced a great deal should be done, and could be done, in this direction. And may I say, in this connexion, that I think the present Foreign Secretary has shown altogether admirable skill and tact in the way he has handled the various affairs of State which have come under his consideration in his great office? I am sure that the country as a whole would be only too glad to see foreign affairs taken out of the realm of political controversy as far as possible. I venture to express the hope that in the future steps will be taken to approach the Parties with a view to inducing them to give up bickering over foreign affairs and to maintain a. purely national outlook where they are concerned. Foreign affairs should be regarded as entirely a national matter. I hope that the Lord Chancellor will be able to give us some line on the manner in which the Government are approaching these very difficult and essential problems.
4.6 p.m.
VISCOUNT GAGE: My Lords, the Motion upon which this debate has arisen is drawn in very wide terms, and perhaps your Lordships will forgive me if I digress from what has been said by the last two speakers and, in a very humble way, support a point which has been made by my noble friend Viscount Templewood. I would like to ask whether there is any further information that can be given about the future organization of our foreign affairs publicity services. My only qualification to speak on this subject arises from the fact that I was for some time during the war a member of an. organization called the Political Warfare Executive, which, somewhat unexpectedly, became responsible not only for political warfare but also for all publicity services in territories liberated from enemy control both in Europe and in the Far East. That is to say, that in conjunction with the Americans we had to organize news services, newspapers, transmitters, broadcasting and many other forms of publicity, which are normally conducted by commercial agencies in the countries themselves. And if we, or some other military organization, had not done this, these territories would have been completely cut off from any information about the outside world because of the devasta-
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tion and disorganization of communications and life in general.
Naturally, as soon as conditions permitted, all this work was handed back to the liberated peoples. But this did not mean that the ordinary pre-war flow of British newspapers, publications, books, films and so forth could be resumed through normal peace-time channels. We found that there was an immense demand for all these things, particularly in Europe—which was not unexpected—because practically the whole of the Continent had been cut off owing to the war from any but Axis sources of news, and the enemy countries themselves for a much longer period. But difficulties of transport, currency exchange and shortages of paper and materials and manpower made it impossible, even when things became comparatively peaceful, that this demand could be met except by the intervention of some British Government Department. These were the problems with which we were confronted. I suppose that we, as a military body, were not particularly well qualified to deal with them, but I think that any other purely war-time organization would have been equally handicapped because many of the problems were long-term problems which could only be solved over a considerable period of time.
Take the question of getting more books and publications exported into Europe or getting them published in Europe. I think there is a trickle of books going into Europe now. In prevailing conditions I do not think this is an easy task, but equally I do not think it is an insuperable one provided that you have a consistent policy applied over a reasonable period of time. Take another proposal, that the B.B.C. should be relayed to various important parts of the world which are too distant to hear the normal medium wave transmission. I believe there is a great deal to be said for that idea but it will obviously take a great deal of working out. There are all kinds of difficulties, political, organizational, and technical, and I suppose that at least twelve Departments in Whitehall would have observations to make, and probably objections, before the voice of the B.B.C. was widely and effectively heard, for example, in the Far East.
It is clear that a proposition of that kind could make no sort of progress unless some Department was given the definite

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responsibility of seeing it through, backed consistently over some period of time, and clearly we, as a military body whose duties came to an end with the military phase, were not the kind of Department which could handle that. It was unfortunate that the only Department to which we could refer that and other long-term problems was another wartime organization, the Ministry of Information, whose expectation of life was hardly greater than our own, and to the British Council, whose future was also in doubt. Indeed, it seems to me that one of the fundamental troubles about the whole of our foreign publicity is that hitherto all the Departments concerned have been quite in the dark as to their own future.
At the end of last Session a statement was made which I understood to mean that the foreign publicity work of the Ministry of Information was to be taken over by the Foreign Office, and I am sure that that was a very welcome announcement because among other things it presumably means that the Press Attachés and other officials, engaged on foreign publicity will now be established civil servants with some security for their own future. I believe that the Government has lost the services of a number of good and useful people because it has been impossible so far to offer them that security; but no announcement has yet been made about the Departments concerned, the British Council, the foreign service of the B.B.C., and what remains of the Political Warfare Executive. I am wondering whether the Lord Chancellor can say anything about the future of those organizations or at any rate give us some indication of when an announcement will be made. We realize that the work of each of these Departments differs from the others, but it is surely all inter-dependent and I cannot conceive of an effective publicity service being built up until the whole machinery has been established on a permanent basis.
I am far from claiming any special knowledge about foreign affairs and I do not know how important it is that we should have a good Service and have it quickly. It certainly was true that up to a few months ago the Ambassadors and other highly qualified people with whom we were dealing did consider it very important, and my views are, I think, shared by my noble friend Lord Temple
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wood as expressed this afternoon. Nor do I know what are the reasons for this present uncertainty which has been going on since the end of the German war. I often used to wonder what they were and if it did really matter which Department was made responsible so long as one of them was. But I do know the waste of time, money and energy which goes on while prolonged uncertainty exists and that is why I hope it may be possible for the Government to make an announcement at the earliest opportunity. I beg to support the Motion.
4.18 p.m.
LORD SEMPILL: My Lords, we are grateful to the noble Earl for the persistency with which he continues to press this important matter of the reorganization of the machinery for determining foreign policy in Whitehall upon the attention of His Majesty's Government, and we earnestly hope that the Government may now be in a position to present proposals to Parliament for debate. As your Lordships will recollect, these were indicated as likely to be available some two and three-quarter years ago. It is a problem which affects our relations with foreign Powers in every direction, as has been so very clearly stressed by the noble Viscount, Lord Templewood, during the course of the debate. The Times emphasized not long ago that our relations with France were suffering as a result of the inadequate central co-ordination of our foreign policy. Only a few months ago a representative from another place, Mr. Robert Boothby, writing from the United States of America, stated in a letter in the Press that our relations with the United States were suffering as a result of a lack of "foreign" policy.
Let us consider the important question of Austria. Some six weeks ago The Times correspondent in Vienna stated that the Russian example merited attention. He instanced the opening of a new bridge by the Russian Military Command and the great function that was arranged for that purpose to which all the members of the Provisional Government were invited, including the Chancellor. In the matter of the recognition of Austria, effected only a few days ago, we seem again to have been left behind by the Americans. Apparently no message from His Majesty's Government was sent to the new President, Dr. Karl Renner, similar to that addressed to him by the

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President of the United States. Surely this indicates but too clearly justification for the many who contend that the machinery for the reorganization of foreign policy in Whitehall requires pulling together, and that most urgently.
Not only must we be satisfied that strong organized central direction of foreign policy in Whitehall exists, but that the machine throughout is so adjusted as to reflect in action and in attitude in every field, with every Department in Whitehall conforming, decisions of policy taken by the central direction. There is too much evidence to show that the machine is not yet so adjusted and does require the attention of Parliament urged continually in your Lordships' House with such vigour and experience by the noble Earl whose Motion is in debate.
THE LORD CHANCELLOR (LORD JOWITT): My Lords, we have had a series of debates on this topic. The noble Earl who put this Motion down has, to use his own phrase, kept pegging away hoping to ascertain what, if anything, is wrong with our machine in the Foreign Office. I think the main thesis of his speed has been this, that it is quite impossible to formulate or carry out a foreign policy if you try to isolate it and consider it altogether apart from, for instance, strategic questions, economic questions, or financial questions. With that sentiment I entirely agree. Indeed, the only surprising thing to me is that anybody at any time could ever have doubted such a statement. How can you formulate a foreign policy without giving consideration to your defence policy, and to your Armed Forces? Or, in these days, how can you formulate foreign policy without considering economic matters? Believe me, one thing we have to remember is that you cannot consider foreign policy in isolation.
I first became interested in these matters when Mr. Arthur Henderson was Foreign Secretary, and, if I may say so, a very fine Foreign Secretary he was. He always preached this gospel, and although I have no doubt he did at times have some difficulty with his colleague Mr. Philip Snowden, who did, as your Lordships know, sometimes go off at a tangent, yet Mr. Henderson certainly would have been horrified at the idea of trying to put foreign policy in isolation, and with that
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thesis I agree to the fullest possible extent.
Then we have had some other observations. The noble Lord, Lord Hutchison, said it is desirable not to have two Foreign Offices, one in 10, Downing Street, and one in the Foreign Office. That again seems to me self-evident. We have suffered from it I think twice within living memory, but if he knows Mr. Ernest Bevin as well as I do he may be sure that Mr. Bevin would not tolerate anybody else conducting his business. I assure him that whatever may have been the position in the past it is not the position to-day. Then he expressed the need for adequate information, for, as he rightly says, how can you formulate any policy unless you have the information? Of course you cannot, and, therefore, it is fundamental that in order to formulate a foreign policy you must have adequate information. Finally, he told us he wanted foreign policy kept out of Party politics. My Lords, I cordially agree. I am glad to see Mr. Bevin's policy is, I think, being accepted by the Opposition in this country, and so long as they go on accepting Mr. Bevin's policy, so long will foreign policy be kept out of Party politics.
But the noble Earl who raised this matter is obviously not satisfied. I think be has it in his mind that there is some piece of machinery missing, some sort of missing link somewhere. He is probing and trying to find out what is missing and what can be put right. Whatever may have been the position in the past, I believe to-day that the machinery is not faulty and that it is efficient and effective for its purpose. I do not suggest for a moment that it is perfect. It would be a dangerous state of mind to get into to think that any machine was perfect, because you would think you could relax and sit back and not see if the shoe was pinching anywhere. But I believe it to be a thoroughly effective and efficient machine. It would of course be a great matter of convenience if we had one building which was large enough under one roof to house all the necessary people and not to overcrowd it, but that is a matter for which we must wait.
May I then consider what the machine is? Let us look first of all at the Ministers and the Departments. I do beg of your Lordships not to believe that today, with all the experience of the war

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behind us, you can regard the Foreign Secretary and his advisers as merely political, the President of the Board of Trade as merely commercial, and the Chancellor of the Exchequer and his advisers as merely financial. If that were so in the past, I am very sorry to hear it; I do not wonder that we got into trouble; but it is not so to-day. The interchange of ideas is so common, the door is flung so wide open, with interchange of information not only in regard to set problems but with regard to current day-to-day problems as they arise, that there really is no danger now of the business of the country being conducted in watertight compartments.
My experience has already taught me this: You want to begin your co-operation at the bottom, because you want to try to cope with differences of opinion before they crystallize and get set into what I might call Departmental creeds when differences have to be resolved at a higher level. Therefore we have not only coordination at the top, but we also have methods for co-ordination at the bottom. Now may I give this illustration to your Lordships? Let us look at the Foreign Office in relation to economic matters. I will say a word afterwards about strategic matters and about financial matters. In the Foreign Office itself there are now no less than four Departments dealing with economic matters. First of all there is the Economic Relations Department. Secondly, there is the Economic Intelligence Department. Thirdly, the Economic Warfare Department, which originally, was part of the old Ministry of Economic Warfare, and finally there is a Department
THE EARL. OF PERTH: With deference to the noble and learned Lord, I think he will find that the Economic Warfare Department has been absorbed into and has become the Intelligence Department.
THE LORD CHANCELLOR: I think I am right; I have no personal knowledge, but I rely for my information on the Foreign Office, and if the Foreign Office has given me the wrong information the noble Earl must blame not me but the Foreign Office. In this respect perhaps their Intelligence Department has been working badly, but I am telling the noble Earl what I believe to be the fact.
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Finally, there is the Department which is in closest consultation with the other Department which is dealing with our long-term economic policy in regard to ex-enemy countries. That is the set-up of those four Departments on economic matters at the Foreign Office to-day.
Then of course we now have a unified Foreign Service, the members of which receive a many-sided training and serve equally in political and commercial posts, sometimes in the Foreign Office and sometimes in other Departments. Then there are special arrangements embracing all Departments for the collection, study and appraisal of economic information of all kinds, including statistics from overseas. Such information, of course, forms, as I have already said, the foundation of any foreign policy, and I may say from my own experience both that no useful information is ignored and that useful information does sometimes come from quite unlikely quarters. Then it is symptomatic of the new situation that we have been able to abolish the Department of Overseas Trade as a separate entity. I will not deal with that, because the Prime Minister dealt with it in his speech on the 17th December last, but the disappearance of that Department means that the staff, who used to be known as the Commercial Diplomatic Service and used to be administered by the Department, will now be administered by the Foreign Office, now being, of course, members of the unified Foreign Service. I should like here to say that they will be subordinate to the Ambassador or Minister in charge of the Mission to which they are attached, but, in spite of that fact, the work they do will very largely be work done on behalf of the Board of Trade. I emphasize that because the noble Viscount, Lord Templewood, I think it was, stressed the fact that the Ambassador in charge of a Mission must be master in his own house. You should never have divided control. With that sentence of his I entirely agree.
Now see what we have. We have this situation: a staff subordinate to one Minister serving largely the purposes of another Minister. Now that would have been, and indeed was, viewed with horror by an earlier generation; but so close are the relations between the Departments concerned to-day that tow it is hardly even regarded as an anomaly. I have tried to

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show that this old idea of separate Departments with separate outlets and separate interests is really gone, and we are trying to regard all these Departments as component parts of one single machine of Government. But, of course, we must have formal machinery for departmental consultation. There arc Committees of Ministers, there are even Committee; of Parliamentary Secretaries, and there are Committees of officials on the various aspects of foreign economic affairs. I am sorry I cannot give details of these matters. It has long been the tradition that the details of Cabinet Committees should not be given. Incidentally, no one was inure insistent about this than Mr. Winston Churchill during the last Government, and I can well believe that the practice and the precedent which has been handed down is a wise one, because these, after all, are internal matters for the Government of the day, for the Prime Minister, who may move them about and change them very quickly, and alter the personnel of the Committee. Therefore I am not prepared to give your Lordships the names, the set-up, the composition or the terms of reference of these Committees. That has never been done in the past, and I think it would be a bad practice. So much for economic questions.
A word on financial matters. You really do riot need a Committee to ensure adequate consultation between the Foreign Secretary and the Chancellor of the Exchequer. We do not suffer from a lack of Committees and you do not solve your problems merely by setting up a new Committee. But, believe me, there is at the present time the closest possible consultation between the Chancellor of the Exchequer and the Foreign Secretary. Let me give this illustration. Consider, if you will, the policy in regard to German reparations. At the recent international conference where this subject came up, the Foreign Secretary was being advised by Treasury officials. That policy represented the combined views of the two Departments. In previous debates—and it is interesting to observe this after yesterday's debate—this problem has been discussed. It has been said: "What security have you that the Bank of England may not pursue some policy on foreign loans which is inconsistent with the foreign policy of the Government of the day?" Those of your Lordships
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who heard the debate yesterday will realize that that is one of the reasons we are taking the steps we are with regard to the Bank of England.
As to strategy and defence, there is a special Department of the Foreign Office responsible for liaison with the Services and integration of strategy with foreign policy. We are retaining the Organization for joint Planning which was set out in Command Paper 6351, and it is interesting to see that the Chairman of the Joint Intelligence Sub-Committee, of which the three Intelligence Service Chiefs arc members, is himself a Foreign Office official. That was revealed in that paper. And, of course, at the highest level there is a Defence Committee, and your Lordships will probably guess, and guess right, that the Foreign Secretary is a member of that Committee. So there you have, as we see it, a practical, efficient machine which is adapted to meeting the needs we all acknowledge; and although it will be kept under constant review, and although we shall not hesitate to substitute a new piece of machinery if it seems to he necessary, at the present time we believe the machine is working well.
A word about the Machinery of Government Committee. That was set up under the last Government, and it did a very great deal of useful work. Its work is being carried on now under the present Government. It was not at all like the Haldane Committee, who examined the question rather on abstract, a priori grounds as to what the organization of government should be; it was a practical piece of work intended to enable us to reap the fruits of wartime experience, and it tackled particular problems. Its work is still going on. We do not propose to publish the reports of that Committee, but we do propose to go on as we have been doing, availing ourselves of its recommendations and bringing into force, week by week and month by month, the various recommendations which it makes.
I was asked to say something about cooperation with the Dominions. My advice would be to go rather carefully before altering the existing machine. May I remind your Lordships of what a very wise Empire statesman said, speaking in this building not very long ago? I refer to Mr. Mackenzie King. He said:
" From time to time it is suggested that we should seek new methods of communication and consultation. I believe very closely

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in close consultation, close co-operation, and effective co-ordination of policies. What more effective means of co-operation could have been found than those which, despite all the handicaps of war, have worked with such complete success? "
Then I leave out two paragraphs, and he concludes:
"Let us, by all means, seek to improve where we can, but in considering new methods of organization, we cannot be too careful to see that to our own peoples the new methods will not appear as an attempt to limit their freedom of decision, or to people outside the Commonwealth as an attempt to establish a separate bloc. Let us beware lest, in changing the form, we lose the substance, or, for appearance sake, sacrifice reality. I am told that somewhere over the grave of one who did not know when he was well off, there is the following epitaph: 'I was well, I wanted to be better, and here I am'."
We should be very foolish, I think, to disregard the warning of such a statesman as Mr. Mackenzie King, but here I say for the Leader of the House, who is the Dominions Secretary, that of course we want the closest possible co-Operation with the Dominions, we want to have no secrets and no reserves from them at all. We want to bring them in in every way we can, and if we find any way of improving the present relationship we shall not hesitate to adopt it, but we are not going to lose the substance for the form.
Then I was asked, how far are the Leaders of the Opposition consulted? How far are they entitled to be consulted with regard to foreign policy? Do your Lordships suppose that at the present time Mr. Anthony Eden is not given by Mr. Ernest Bevin all the information he wants? Although this sort of consultation is informal and subject to no definite rule, yet there is a wholesome tradition that in practice responsible Leaders of the Opposition are taken by the Ministers of the Government concerned into their confidence. Of course, the information which they get is secret and must remain secret by reason of their oaths as Privy Councillors.
The noble viscount, Lord Templewood, asked three or four questions, to which, I am sorry, I am not able to give him very satisfactory answers, because at the present moment most of those questions are still undecided. He made some observations with regard to the status of High Commissioners. I agree With him; I believe that the High Commissioner does
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fulfil a most important function to-day, and if that function could be, as it were, stressed or underlined by any alteration in status I should be very glad to do it. I raised this question at the Imperial Conference in 1931, and at that time the matter was dropped at the request of the Dominion Prime Ministers. So far as the Government are concerned, we should be very glad to look into that at any time, because we fully realize that these High Commissioners are playing, and have played, a most important part in the happy relationship which fortunately exists to-day between this country and the Dominions.
Then the noble Viscount made some observations in which he said it was undesirable that Ministers should make hurried visits abroad and that it was better that the diplomatic representatives should come home. He is much better able to express an opinion on that than I am, but I think he would agree that there cannot be any definite rule which applies in all circumstances. I quite agree with him that there must be very many cases in which the right course is to get the diplomatic representative home, but equally, I think, he would agree with me that there will probably be some cases in which it is desirable that the Minister or Ministers should themselves go abroad. With that I leave it, telling the noble Viscount that the observations which he has made will be, as his observations always are, carefully noted and considered. He asked me three other specific questions. He asked me about the News Department of the Foreign Office. This Department is being enlarged and improved to cover all publicity, not merely news. This will enable the Foreign Secretary to discharge his responsibility, foreshadowed by the Prime Minister, of seeing that our publicity in foreign countries is good. Press Attaches in foreign countries will be under the Ambassador.
There are two further questions, foreign broadcasting and the British Council. With regard to foreign broadcasting, I am quite sure we should all agree it would be a great pity if that splendid service, which was inaugurated during the war, were lost, but exactly the form in which we shall carry it on has not yet been decided. That and other topics which arise on the demise of the Ministry of Information have not yet been settled. I hope to be able to announce more to your Lordships

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before the estimates of the Departments come in. It will be some little time before the Government are able to make any definite announcement, but they are considering the matter now. The same remark applies to the relationship of the British Council. Here I agree entirely with the noble Viscount. It is plain that this matter is one which calls for a decision. On the other hand, it is a difficult matter. That, too, is a matter which We are considering; we are obtaining reports in order to decide what is the right way in which to bring that organization under better and more adequate control. I forbear to say anything further on it to-day, but I tope that in a comparatively short time His Majesty's Government will be able to announce a decision on what is undoubtedly an important but, your Lordships will agree, at the same time a difficult question.
I have endeavoured in the course of my remarks to deal with this mater and to describe to your Lordships the organization of the Foreign Office. I believe it to be efficient and I believe it is working well. We shall keep it under review and if experience teaches us that any improvement is necessary we shall not hesitate to make it, but as things are to-day I believe I can report to your Lordships that the organization arid the machine is working efficiently and well.
4.48 p.m.
THE EARL OF PERTH: My Lords, I would First of all like to thank those noble Lords who have given their support to this Motion. I am particularly glad that what I was afraid might have been a gulf between Lord Chatfield and myself has been reduced to a small ditch. I entirely agree with him that foreign policy must ultimately be based on strength.
Perhaps I may say one or two words in reply to the noble and learned Lord Chancellor, whose speech gave me very little satisfaction indeed. There was only one point on which he made me a little easier, and that was on the economic setup in the Foreign Office. I would like to ask him two questions. Does he now withdraw the pledge, given to the Leader of the House when the question was discussed before, that the fullest information as to the machine ultimately decided en as a result of this Committee would be given to Parliament when the time came? That was a definite pledge given by the
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then Leader of the House. Does that still hold good or is it withdrawn?
THE LORD CHANCELLOR: That holds good. I have endeavoured to explain to the noble Earl what the organization of the machine is at the Foreign Office. If we alter the machine I will tell how we alter it. He is entitled to know what the machine is, and I will tell him.
THE EARL OF PERTH: On the question of the machinery of government, which the Committee has been considering, there is a most distinct divergence of opinion between the Leader of the House and the Lord Chancellor. The Leader of the House said definitely "I consider that the question of the machinery of government ought to be discussed openly and as often as possible." There is no question of a Cabinet secret being involved. Therefore Parliament is quite entitled to be informed of what that Committee reports.
I understand that because the late Prime Minister was in favour of secrecy this Government hold the same view, arid quote him in support of the non-publication of this Report. I am surprised by this, and a little saddened; I did not expect it. I must accept the assurances given by the noble and learned Lord Chancellor, but he must realize that very much depends on the men. He has referred to Mr. Arthur Henderson, for whom I had the greatest admiration and with whom I worked closely. He had his difficulties, because of machinery. The noble and learned Lord also referred to Mr. Bevin, who I am sure will always hold his own in the field of foreign policy. We have to consider, however, the machine as well as the men. However, I shall not press this Motion to a Division; although I think that if I did so I should obtain a considerable measure of, support. I hope that the Government will reconsider their attitude in regard to this Report, and I ask leave to withdraw my Motion.
Motion for Papers, by leave, withdrawn.

REPORTS ON GERMAN INDUSTRIES.
4.51 p.m.
EARL FORTESCUE: My Lords, in the absence of my noble friend Lord Dudley, who is ill, I beg to ask the question standing in his name.
To ask His Majesty's Government how many reports have been submitted to them by British and Allied Commissions on the present condition of German industries and the technical and other developments which have been revealed by their investigations; and whether, in view of the importance of these documents to the parallel British industries, they will make immediate arrangements for their circulation.]
LORD PAKENHAM: My Lords, by arrangement with the Allied Control Commissions, teams of industrial experts have investigated the main fields of German industry and are continuing to do so. Their reports, as and when they are completed, are printed by the Stationery Office and distributed to the trade associations concerned, universities, professional institutions and the chief public libraries throughout the United Kingdom. Copies are also available at the Stationery Office for others who may be interested. To date, the publication of 121 reports has been announced in the Board of Trade Journal. The current rate of release is about thirty reports weekly, but it is hoped to effect a substantial increase in this rate in the immediate future.

AGRICULTURE.
4.53 p.m.
LORD BEAVERBROOK LORD BEAVERBROOK had given Notice that he would call the attention of His Majesty's Government to the dangers to British agricultural prosperity and production inherent in the "Proposals for Consideration by an International Conference on Trade and Employment" (Cmd. 6709); and move for Papers. The noble Lord said: My Lords by the Motion which I have put down I am seeking the support of the agricultural Peers-Peers who understand agriculture and take a close interest in it. True, the House has wide interests. There are many bankers in the House—fifty of them altogether. Most of them sit in this side of the House, but when it comes to voting on Bretton Woods they vote with the other side of the House. There are many directors of companies on both sides of the House. They are too numerous to count. Primarily, however, the House is
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concerned with agriculture and is the guardian of the agricultural interest.
I want to point out that the estimates of the increase of agriculture production during the war period are quite out of proportion with the real facts. It is probably the case that agricultural production during the war has not had the opportunity of increasing by more than 10 per cent., having in view money prices before the war and money prices now, with due regard to the increase in values. The highest estimate that I have heard from any informed quarter is 20 per cent., but for myself I stick to an increase of 10 per cent. The Minister of Agriculture, speaking a short time ago, declared that before the war agricultural production amounted to £290,000,000.He said that at the present time agriculture production was approaching £600,000,000. Very careful estimates have been made of the rise in prices of agricultural commodities, and the estimate that is generally accepted is 104 per cent. If, therefore, you compare the figure of £290,000,000 with something approaching £600,000,000, and hear in mind the increase in prices of 104 per cent. which is generally acknowledged to have taken place, you get no increase in agricultural output at all. I am bound to say that there arc many persons who declare that there has not been any increase in agricultural output during the war. Some say that there has been a great deal put into machinery and much into fertilization; on the other hand, buildings have been allowed to deteriorate in the most shocking way, so that against the increase in agricultural implements and fertilizers you have the decline in the value of buildings. Relating one to the other, many people believe that agricultural production has not increased.
However, whether agricultural production has increased or remained stationary, there is an absolute necessity for more agricultural production at the moment. We must have more men and women on the land. Statistics relating to the war effort show that 100,000 men have left the land during the war. We must bring those men back, and the first step in that direction must be a readjustment of the wages of agricultural workers. Those wages are not high enough at this time. Wages in the United States of America during the war have increased by 170 per cent., whereas in Great Britain they have increased by only 102.9 per cent. You

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will remember the 104 per cent. increase in agricultural prices to which I referred. It is a fact that agricultural prices have increased more than agricultural wages. We are therefore faced with the need for more agricultural production, for bringing forthwith 100,000 men back to the land, a ad for raising the rate of pay of agricultural workers.
I regret to acknowledge that the new commercial proposals agreed to by the British Govermnent and set out in Cmd. 6709 destroy any prospects of British agriculture in the future. They destroy it utterly. In Chapter III, Section B, paragraph I, provision is made for a "substantial reduction of tariffs." Britain does not send agricultural produce to any foreign country, and therefore Britain is not concerned with the reduction of agricultural tariffs anywhere else in the world. But Britain does import vast quantities of agricultural produce, and, more than that, Britain's agricultural interest is absolutely dependent on those duties for survival. On oats before the war there was a duty of 50 per cent. The oat crops of this country will disappear if that duty goes. On potatoes there was a duty of about 25 per cent. If that duty is removed, the production of potatoes will fall in a most tragic way. Vegetable duties vary' from very little to Too per cent. But all these commodities—oats, potatoes and vegetables—are protected by duties. The Government, under the new commercial proposals, are intending to reduce those duties.
There is, however, something much more serious than duties—the import quotas. We shall hear a great deal about that before long. An import quota is, of course, tile quantitative restriction of an import. It is a system which we have applied to bacon in the past, and the method could be extended to other commodities. The proposals relating to import quotas are to be found in Chapter III, Section C, paragraph I, of this White Paper. But it is stipulated that agricultural quotas shall be imposed in such a way that they do not reduce the proportion of imports from abroad to domestic production. That is stipulated. The basis of import; is fixed by a "previous representative period."
VISCOUNT ADDISON: Where is that? Where are you quoting from?
LORD BEAVERBROOK: I am quoting from Chapter III, Section C. It is on page 6. The relevant words are:
"Import quotas imposed under (a) of this sub-paragraph should not be such as would reduce imports relatively to domestic production as compared with the proportion prevailing in a previous representative period, account being taken in so far as practicable of any special factors which may have affected or which may be affecting the trade in the product concerned."
Have you got the paragraph, Lord Addison?
LORD QUIBELL: Is this a private conference, or have you no objection to some of us joining in this conversation?
LORD BEAVERBROOK: I am not making any objection. I stand for all interruptions. Some people say that I interrupt too much myself, but it is not true.
VISCOUNT ADDISON: I hope the noble Lord will not think me discourteous. I have only been trying to find the passage to which you are referring.
LORD BEAVERBROOK: Of course, I do not. If I have seemed to show any resentment, it was certainly not intended.
LORD QUIBELL: I did not suggest that you were showing resentment. I was only asking if it was a private conference.
LORD BEAVERBROOK: Oh! I am not speaking loud enough. Well, I will try to remedy that. Have you now got the reference, Lord Addison?
VISCOUNT ADDISON: Yes, thank you.
LORD BEAVERBROOK: I am getting a little bit wary, I have all my references with me to-day. Now to continue. This phrase "previous representative period" plainly refers to the pre-war production. There can be no other representative period. There cannot be a representative period during the war. The section means that the import of a commodity into Britain can be reduced only if the home production is reduced by the same proportion. And the home production can be increased over the pre-war figure only if the import from abroad is increased by the same relative amount. In bad times, therefore, we could not deal with unemployment and depression by seeking to enlarge our domestic output of a commodity. For, in such conditions, our total consumption would be stationary—it

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might even be falling. If the import went down, we would be required to cut down the home production. Cut it down! In such conditions! And in good times, with rising consumption, importing countries would be guaranteed their existing proportion of our expanding market. Home production could only advance hand in hand with the import from abroad.
These proposals, if accepted—as they will be, no doubt—would confer upon foreign countries what they have never possessed hitherto—a statutory right to a market in Great Britain. There has been nothing like it since we had a statutory right to a market in China. It is a new, strange, and alarming project. The effect of it on our farm workers will be immense. If a farmer decides to employ one more pig man—that is to say one more pig man for the service of Britain —then overseas farmers must employ three more pig men for the service of Britain. That is the meaning of the proportion—it is three to one. Every time a pig man is engaged in Great Britain, three must be engaged for our service overseas. Then, again, if, in future, you engage a dairymaid, in Great Britain, to make butter, there have got to be ten dairymaids engaged for our account overseas. If you catch a swarm of bees, a British swarm of bees, then three foreign or overseas swarms have got to be caught. When these commercial proposals are carried through, Lord-Keynes's chickens will come home to roost. But not our hens—under the law a hen for a hen, one in Britain and one overseas.
Why do you give this statutory right to the farmer abroad? Why do you give him a statutory right to come into our market and take his proportion of our market? Because you desire to borrow £1,000,000,000 from U.S.A. That is why you give it. The United States unfortunately has such hundreds of thousands of millions of pounds that it is prepared to lend us this £1,000,000,000 at a rate of interest of 1.65 per cent.—quite a trifling sum and quite a reasonable rate of interest. But 'they say: "Sign here now. Sign here for Bretton Woods. Sign there for the commercial proposals." And then becomes apparent the full meaning of this loan from the United States — this borrowing of £1,000,000,000 at 1.65 or 2 per cent. interest. We agree in consideration of the
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loan (1) that duties will be reduced; (2) that Imperial preferences will be wiped out; and (3) that agriculture—that is agriculture? in Britain—shall be limited to a production comparable, in all probability, to the pre-war output or at most to 10 per cent. in excess of the pre-war production.
There is no need for such a loan. There really is not. It is quite wrong to suppose that we need that money. It is not necessary to cripple agriculture now in this way. There is no compulsion upon us to send employment abroad in this vast and startling manner —no necessity at all. You may have your dairymaids and also your pig men. £500,000,000 will buy all that we need from America for the next two years. That is the highest estimate ever put on our needs in America for the next two years. It was stated by Lord Keynes when he spoke in the debate a little while ago. I say that we could provide for such a deficit—a deficit of £500,000,000. Contemplate the strength and resources of Great Britain. We have vast stores of raw materials. Our supplies of rubber I have no doubt are sufficient for one year or more. Wheat, sugar, copper and aluminium we have in such quantities as to provide us with what we need to meet our requirements. We have wool on hand sufficient for thirteen and a-half years, and large stocks of cotton and scrap. The Secretary of State for the Dominions was under the impression that I spoke of scrap and the vast store of scrap we have in Britain as machinery. Scrap is most valuable; it is essential to the manufacturing process of Britain. But these are not the only resources we ' possess. We have got enough solid balances in hand to pay the deficit for the next two years. But it is my purpose to appeal to the agricultural elements. I know the bankers on the other side are convinced and determined that there is something in all this business that may be good for them, but we cannot believe it will be anything but horror and disaster to us.
The Baldwin Mission went to the United States some years ago and brought us back the disaster of the gold standard and unemployment. The Keynes journey has brought us a great deal more. It has brought us the disaster of the gold standard, unemployment, the ruin of any

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prospect of increase in agricultural product I, and the destruction of the economic Empire. Lord Keynes said in this House: "I wish that Lord Woolton had led the Mission." So do I, and so do most other persons. Lord Keynes has inflicted on us the biggest diplomatic muddle we have sustained in a long time. Most of our people think, as a result of Lord Keynes's Mission to the United States, that we are being squeezed, many Americans think that they are being "gyped," and that is the sum total of the Keynes Mission to America. Back he comes to this country, and most of our people are dissatisfied and many o the Americans are dissatisfied too. We may recover from the evil effects of Lord Keynes's diplomatic Mission in time, but horn Lord Keynes's bargain I know no way cut. British agriculture began to prosper when we laid down the very sound principles that our own market here, the producers here, should rely first of all upon the home producer, secondly, upon toe Dominions producer, and, lastly, upon the foreigner. That is all over now.
But I do deplore and regret bitterly the steady deterioration of our Empire economy. Lord Keynes has brought this grief upon all of us. His Mission to the United States in the autumn of 1945 destroys that future prospects of Britain's basic industry, agricultural production, and fastens upon us the outward sign and the final stigma of the liquidation of the British Empire. I beg to move.
5.13 p.m.
VISCOUNT ADDISON: My Lords, I think no member of your Lordships' House would complain of the frankness and sincerity of the noble Lord's speech. The only thing I am quite satisfied with is that he is completely wrong from start to finish. I can assure him that if any one member of this Government thought for a moment that what was being agreed to in Washington, or what may be negotiated under the proposals set out in this Paper, was likely to damage the British Empire in any way whatever, or to damage British agriculture in any way whatever, we should never have consented to it. We are quite clear about that. But I go further and say I think I shall be able to show without much difficulty that the noble Lord has not done us justice by giving the proposals the examination
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which they merit. However, I know he will give us credit for an equal sincerity and enthusiasm for the British Empire which he himself entertains. There is no difference between us on that at all.
I noted that as an aside the noble Lord made animadversions upon Lord Keynes's Mission to United States and on the question of the loan, but to be quite frank in thinking over what I should say I did confine myself to the Motion that is on the Paper. I might perhaps remind the House of it:
"To call the attention of His Majesty's Government to the dangers to British agricultural prosperity and production inherent in the ' Proposals for consideration by an International Conference on Trade and Employment ' … "
I deplore, as much as the noble Lord does, the decline in British agriculture which has characterized the last two generations of our time. No one is more sincere than I am in seeing what ways we can devise to put an end to it and to put agriculture on to a sound basis, and I challenge the noble Lord in this way. The Government policy announced on November 17, has, I believe it is true to say, been received with unanimous relief and with much satisfaction by every section of the agricultural community, and I am quite sure it would not have been so received had the dismal prognostications of the noble Lord had the justification which he suggests. What is it that underlies the policy that the Government have announced? It is that we seek to deal with what has been the essential weakness of British agriculture—namely, uncertainty of prices and certainly uncertainty in regard to prices which would give a competent farmer confidence in planning his cultivation. If you are going to have prosperous agriculture you must be able to rely on decent prices. That I regard as absolutely essential. Our policy has been successfully constructed in order to give effect to that. It is because we want to provide that foundation for British agriculture that our policy has taken the form it has.
I am quite sure that if what the noble Lord had said about the effect of tariffs on certain commodities had had the beneficent result which he anticipated, we should not have been confronted with the dismal condition of agriculture which prevailed in this country before the war. That would have been quite evident. Agriculture would have been remedied,

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but agriculture was not remedied. It got progressively worse and the essential weaknesses of the situation were not dealt with. It is to remove that uncertainty that our policy is designed.
The noble Lord made some statements —and I cannot say I differ from them very much—about the actual increase in agricultural production during the war. It is difficult to ascertain. With regard to liquid milk, although there has been a great consumption of liquid milk, owing to the very proper nutritional programme, the total production of milk has not increased because less milk has gone into processing, less milk has gone into cheese, butter and other things, and more milk has gone down people's throats. The aggregate amount, I agree, has not increased, and it ought to increase. That is what we are aiming at. The same applies to several other products, so that I think there is considerable justification for the misgiving that the total food production of the country did not actually increase as much as some people thought, although the value of it increased in terms of money. The reason for that, of course, is that several of our products such as poultry, the production of poultry, and the production of pigs had to be diminished during the war. They had to give way because we could not get the feeding stuffs, and, therefore, the production of that kind of food diminished. Others, however increased. We increased our cereals because we released more cereals for bread-making and so on. But that is not the point. The point we are aiming at is to develop a system of British agriculture on a sound foundation which will make—not what happened in the war—progressively better use of our land.
Now I want to examine our proposals quite briefly in the light of the Paper to which the noble Lord has referred. Now this Paper contains Proposals for Consideration by an International Conference. The basis of the policy which His Majesty's Government announce is this. We propose to establish a system which will give reliability of price. Those prices, standard prices, will be determined more or less by the arrangements agreed upon in February of each year; they will be determined so long in advance for some commodities, longer in advance for others, because it takes
1080
longer to produce certain commodities than it does to produce others. Therefore, the prospective price period fixed in any particular February adjustment will be longer in the case of some commodities than in others, according to the length of time it takes to produce them, and how they relate to agricultural planning. But we do propose to establish a price, which the farmers will know some considerable time in advance, and to maintain that price by the system which it is proposed should be established. There is nothing in this Paper from start to finish which prevents our giving effect to that policy. Let us he quite clear on that.
I may say I myself was very much concerned with the meeting which dealt at this end with those proposals so far as they affect home production of food, and the one thing which we made a condition from start to finish was that we should be enabled to carry out our scheme of agricultural policy. There is nothing in the Paper to prevent our doing that. Now, on what is that price stabilization mainly dependent? It depends on a combined system, if you like so to describe it, of State trading combined with the fixation of a price which may contain within it, as for instance the present cost of living prices do, something in the nature of a subsidy. Now, if noble Lords will refer to the Paper, they will find at the bottom of page 8 a paragraph dealing with State trading and one dealing with subsidies at the top. It is well known that by the control which the Ministry of Food can exercise over the bulk—the whole—of commodities and the releasing of them on to the market, we can control, and do control, the price. I need not go into the technicalities of the machinery. We propose to continue that system for stable adjustments.
In the case of wheat, under the original Wheat Act all the wheat was, let us say. pooled by the purchasing commission, and the price of flour was prescribed so as to provide for the sale-price of the flour and give a price for the home producer of the wheat. That is how it was arranged, and it has been working quite smoothly for several years. Well, you can do it that way. There are various ways of doing it, either by State purchase or by working—as we often shall, I am quite sure—through trade organizations on an agreed plan. At all events, there is nothing in this Paper either in the para-

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graph dealing with State trading or that dealing with subsidies which prevents our carrying on on that basis.
Take a simple illustration: take State trading. We have been accustomed to buy, and I am sure shall continue to buy, large quantities of New Zealand butter. There is nothing here to prevent our continuing to purchase New Zealand butter in bulk, which we propose to do. That particular illustration, I may tell you, was sent to Washington and tested out in full, on my own particular suggestion that we should have nothing in it which would, for example, prevent our buying in bulk New Zealand butter. There is no doubt at all them is nothing in this document which prevents our continuing to do it, and. we propose to continue to do it. Of course, as your Lordships will see at the top of page 9, you have to be directed by commercial considerations of an ordinary, sensible kind, but, subject to them, we can buy New Zealand butter without any restriction or difficulty. We are old customers. We arc their customers. it is the kind of preference in which I rejoice. I cannot imagine any better kind of preference than our being willing to buy their goods. That is a very effective form of preference. Other things being equal, unless here is something uncommercial in the transaction, I am 'quite sure that this country will prefer to buy Dominion products, and there is no reason why we should not. In this Paper there is nothing to prevent our doing so.
Therefore I can say, without elaborating the details—of which I have many in front of me provided by the Department—that there is nothing in this Paper which prevents our giving effect to the agricultural policy which we have propounded and which, I suggest, will lay the foundation of a prosperous and stable agriculture n this country. And I am not there expressing a Party view. I see that that has been supported by men of all Parties as well as by the leaders of the National Farmers' Union. I can confidently claim that so far as that is concerned, the noble Lord need have no misgiving.
As to increase in production, I agree that we must aim for a greatly increased production. We can produce more, and we ought to do so. The noble Lord drew some fancy picture about there being one dairymaid here and so many in the
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Dominions. Now take the case of milk: what is the Government policy? I do not even claim it as the Government policy —what is the national policy? It is that on health account people should drink more milk. The noble Lord opposite (Lord Llewellin) took a very active part in encouraging people to drink more milk and to get better milk, and all honour to him for it. It is not a Party matter at all; we all agree that it should be done. What does it mean? It means that we should encourage our live stock, our milking herds, and I hope that not only will there be more of them but that they will be of better quality. What is wanted is that we should get more milk per cow per day, and that is what the scheme for the improvement of live-stock production will aim at, so far as that part of the matter is concerned. We want better cows, better treatment, better feeding, and better yields. I say that the day is not foreseeable, not even if we have a very large increase in our milking herds, when we shall produce much more liquid milk than the people ought to drink, and I think that is a moderate statement. People ought to drink very much more than they are doing—children, mothers, and everybody—and it will require an immense increase in our milking herds to produce it.
What does that mean? It means that there will be less milk for butter and cheese. Is that going to diminish our imports from the Dominions? Is it going to damage any Dominion? If our livestock and nutritional policy is persisted in, we shall have to buy more from abroad, because we want our milk to go straight down people's throats, and not so large a proportion of it to be turned into butter. Some day, when the milking herds have sufficiently increased, we shall produce more cheese and more butter; but in the immediate future, if our nutritional policy is to be sound, we want a great increase in milk consumption, and that will mean that a smaller proportion will be available for other milk products. It will also mean that we shall have to continue to import milk, and, for my part, I would rather get it from our Dominions, so far as we can, than from anybody else. We are just as sincere as any noble Lord in that desire. And there is nothing in this policy to prevent us doing it. We propose to do it, and I have no doubt we shall do it.

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So far as other increases in farming are concerned, they are all urgently required 'in many directions, particularly in that of live-stock production and ancillary products. Nothing is more urgent than to increase our production of bacon if we can do so, because the pig produces more food more quickly than any other animal. But we have not the feeding stuffs for them now, and I am afraid that, with the present prospective shortage of wheat, I do not see that we shall have those feeding stuffs in the near future. I wish we could have them. At all events, there is an immense room for expansion without any interference at all.
The only point the noble Lord made in that regard was in connexion with the quantitative regulations mentioned on page 6. If you read the first two lines of the paragraph, you will see that these quotas to which the noble Lord refers relate to "agricultural products imported in any form, necessary to the enforcement of Government measures which operate (a) to restrict," etc. In other wards, the whole machinery of this paragraph relates only to those cases where import quotas are imposed for the purposes there set out. Does anybody imagine that import quotas for that purpose will be imposed on our main agricultural products? It is practically unthinkable. Where any product is dealt with under the State organization and imported freely for feeding the people, that paragraph does not apply at all. I asked this morning for a case where it did apply, and in which it would be likely to apply in the future, and the only illustration thought of was that of raspberries. They said that it was conceivable that we could have a terrific crop of raspberries, and therefore should say, "We are not going to take any more raspberries." We would put a quantitative regulation on raspberries going on to the market because we had a glut. But as to the staple foods of the people, they will not come into this matter at all. They will be dealt with under the price regulation machinery, which will be operated by the Government. This exceptional procedure does not apply to them. With the greatest respect to the noble Lord, he is conjuring up a bogy which remains a bogy and does not apply at all.
I have been through the rest of this Paper, and, frankly, I anticipated quite
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a number of challenges on other points, and I am grateful to the noble Lord for confining his challenge to so narrow a limit. I have dealt with the power to have a concealed subsidy, as we have now, and as I think we must continue to have. Take, for example, the operations of the Ministry of Food. That Ministry has acted on the principle that certain prices will be given to the producer, but the consumer will be charged only so much. That implies a subsidy in fact, because it is done to prevent a rise in the cost of living. The State has spent its money in that way, and let us hope that very substantial reductions will be possible. But that has been a great public end, and I think, on the whole, notwithstanding the great cost it has involved, it has been abundantly justified. It has prevented the starting of that rising spiral of prices which would lead to inflation—at any rate, it has put the brake on. Just imagine, for a moment, what would happen to prices if we were to release all these controls. I am quite sure the prices on the market would be vastly more in many cases than those which have been paid to the producers. They would soar to a very shocking figure, if it were not for those controls. We have paid for the restriction on the rising of the cost of living in this way, and I believe myself that our expenditure is well justified. That. however, is a war expedient; it does not relate to the long-term policy which, I hope, we shall gradually develop.
I would like to say, so far as this commercial conference is concerned, notwithstanding what the noble Lord has said, that it had no relation whatever to the negotiations for the loan. The loan was not agreed to or discussed with this as a condition. That is an entirely truthful, honest statement. This was not a price for the loan; it had no relation to it. As a matter of fact, if one studies this document, what is it? It means that the parties concerned will enter into a conference and they will agree, if they do agree, to reductions in tariffs—or, it may be, preferences—provided they get what is to them a satisfactory equivalent. We ourselves and each individual Dominion will go to this conference with completely free hands. I have said this before; the statement which we prepared with great care and which was issued at the time made it plain. Everybody will go to this conference, with these excellent objectives

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in front of them, with a free hand. If they feel they can make a bargain which it is in their interests to accept, I am sure everybody would rejoice if they succeed in doing so. The main purpose of this conference is to abate artificial barriers to world trade, to do what it can to make food and other commodities flow more freely in the world. Every nation entering into the conference will do so freely and will give no undertakings or enter into no bargains except those which they themselves are satisfied are good bargains. Nothing could be freer than that. I an quite sure there is everything to be gained and nothing to be lost by bringing the nations of the world together to see if they cannot between thorn agree upon a better system.
So far as our own agricultural policy is concerned. I have complete confidence in assuring tine House that there is nothing in this which prevents our giving full effect to the policy for the stabilization of agricultural prices, for the providing a firm foundation for the development of agriculture, which was announced by the Government and which has been welcomed by the farmers and by men of all political Parties.
5.44 P.m.
LORD BEAVERBROOK: My Lords, I am very much obliged to the noble Viscount it for the manner in which he has dealt with my question. I do not accept his interpretation of the clause under discussion at all. There are only three methods by which we can deal with imports—duty, quota and State purchase. State purchase is subject to severe restrictions. In Section E on page 8, it is said:
"Members engaging in State trading in any form should accord equality of treatment to all other members. To this end, members should undertake that the foreign purchases aid sales of their State-trading enterprises shall be influenced solely by commercial considerations, such as price, quality, marketability, transportation and terms of purchase or sale."
That confines State purchase to the market where the goods may be purchased at the lowest price,
VISCOUNT ADDISON: No.
LORD BEAVERBROOK: At the lowest price subject to certain other qualifications; and price is one of the qualifications upon which the purchase say be made. That agreement strictly limits and
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confines State trading, so that State trading comes within the orbit of tariffs and of quotas. That is the intention of it.
I have listened to the noble Viscount, and I have learnt from a long experience of him to depend absolutely on what he says, but unfortunately he is giving an entirely different statement in relation to these commercial proposals from that given by the President of the United States only yesterday. The President of the United States, in sending his message to Congress, associated these commercial proposals with a plea for the loan. The two march together, and in fact everybody knows all three are marching together. I accept absolutely the honesty of the statement of the Secretary of State. I accept the honesty of the statement of Lord Keynes when he says that what we are shortly to embark upon is not the gold standard; while I find the Economist, for instance, saying it is the gold standard. Here we have the case of the Americans saying the commercial proposals are tied to the loan and the Secretary of State saying the commercial proposals are not tied to the loan.
State purchase cannot buy more than a certain quantity of a commodity in relation to the amount of that quantity imported before the war. The noble Lord speaks of milk. Of course we can increase milk output by increasing the output of the beasts. Of course we can increase milk output, and we shall undoubtedly do so as our herds are raised in quantity, but the moment we raise milk output beyond certain levels which have relation to this period preceding the war we must give way in agricultural production in other products to make allowance for the increase in production of milk. It is the desire of myself and of men like me that we should not only produce the milk to the greatest extent but likewise the butter and the cheese. It is, of course, the real meaning of the whole transaction that in future the foreigner and others overseas shall have the statutory right to participate in our market subject only to certain agreed percentages in excess of the prewar production. If the noble Viscount will look deeply enough and closely enough into it he will find that that spirit has animated the whole of the negotiations from the very beginning. It is my inten-

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tion to follow the procedure of this House and to ask leave to withdraw my Motion. It seems a very odd process but none the less I conform to it, with some reluctance. I thank the Secretary of State for all the trouble he has taken to prepare an answer.
Motion for Papers, by leave, withdrawn.

MARCH GAS ORDER, 1946.
Special Order proposed to be made on the application of the March Gas and Coke Company, Limited:
Laid before the House (pursuant to Act) for affirmative Resolution and referred to the Special Orders Committee.
House adjourned at twelve minutes before six o'clock.