Sitting of 6 August 1947

Preamble
The House met at Half past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS

  LONDON COUNTY COUNCIL (IMPROVEMENTS) BILL
  So much of the Lords Message [5th August] as relates thereto to be considered forthwith.—[The Chairman of Ways and Means.]
  So much of Lords Message considered accordingly.
  Ordered,
  "That the Promoters of the London County Council (Improvements) Bill shall have leave to suspend any further proceeding thereon in order to proceed with the same Bill in the next Session of Parliament provided that notice of their intention to do so be given in the Private Bill Office not later than Five o'clock on the day prior to the close of the present Session and that all Fees due on the Bill up to that period be paid."
  Ordered,
  "That not later than Five o'clock on the third day on which the House shall sit after the next meeting of Parliament the Bill shall be deposited in the Private Bill Office with a Declaration signed by the Agent annexed thereto stating that the Bill is the same, in every respect, as the Bill at the last stage of its proceeding in this House in the present Session."
  Ordered,
  "That as soon thereafter as conveniently may be the Bill shall be presented by being laid by one of the Clerks in the Private Bill Office upon the Table of the House."
  Ordered,
  "That the Bill so laid upon the Table shall be deemed to have been read the first, second and third time and passed, and shall be recorded in the Votes as having been so read and passed."
  Ordered,
  "That no new Fees be charged in respect of any stage of the Bill upon which Fees have already been incurred during the present Session."
  Ordered,
  "That the said Orders be Standing Orders of the House."—[The Chairman of Ways and Means.]
  Message to the Lords to acquaint them therewith.

ORAL ANSWERS TO QUESTIONS

  BRITISH GUIANA (FINANCE)
  Commander Nobleasked the Secretary of State for the Colonies what is the reason for the heavy drop in the revenue and expenditure of British Guiana from 1941 onwards when compared with previous years as shown in appendix 6 of the Blue Book on the Colonial Empire 1939–47, Cmd. 7167.
  The Secretary of State for the Colonies (Mr. Creech Jones): I am obliged to the hon. and gallant Gentleman. I regret that incorrect figures of revenue and expenditure for the years 1941 to 1946 in British Guiana and also in British Honduras were shown in Appendix 6 to the Command Paper. A correction slip has been published, and I have arranged for a copy to be sent to the hon. and gallant Member.

  COLONIAL EMPIRE

    Medical Research Committee (Joint Secretaryship)
    Commander Nobleasked the Secretary of State for the Colonies whether the sum of £15,000 provided under Item 131 in the Colonial Research Reports for 1946–47, for the appointment of a joint secretary of the Colonial Medical Research Committee, is to be expended in salary alone, or whether it covers any other expenses.
    Mr. Creech Jones: The figure of £15,000 has been provided to cover the salary of the officer in question for three years, and to enable him to travel extensively during that time in the Colonial Empire. Such travel will be a very important part of his functions and £6,000 has been included to cover this. The figure also includes provision for the salaries of a senior temporary assistant and of a shorthand typist, and for contingencies.

    Cadets, University Courses
    Mr. Teelingasked the Secretary of State for the Colonies why no tutors were provided, except for Colonial History, during the recent two half-terms course held for colonial students at Oxford; how many students came from the Colonies; what proportion from Africa; and were there other subjects taught.
    Mr. Creech Jones: I assume that the hon. Member refers to the two-and-a-half term general section of the 15 months' pre-Service course, designed, not for students from the Colonies, but for cadets entering the Colonial Administrative Service. The course recommenced in October, 1946, in parallel at Oxford and Cambridge and is being continued at London. Considerable facilities already existed in Oxford for the teaching of all the subjects; and the faculties concerned were strengthened by additional appointments in Colonial History, Colonial Geography, Modern Islam, Anthropology and Colonial Economics. Further appointments, in Colonial Native Agriculture and Co-operation, are proposed for the next academic year. With the co-operation of the University and College authorities, as much as possible was done to provide the tutorial assistance required, partly through the normal machinery of college tutorials, partly by the holders of the new appointments, and partly by arrangement with other persons of Colonial experience within the University. There was no special appointment of a tutor in Colonial History. Of the 59 cadets who took the general section at Oxford seven came from the Colonies, including four from an African territory.
    Mr. Teeling: Does the right hon. Gentleman realise that although this was meant for cadets in actual fact there were Chinese students from Hong Kong and others from Fiji and other parts of the Empire; and does he not think that they should have been allowed to spend more time studying the subjects that interest their country instead of African anthropology, especially since no Africans were present at all?
    Mr. Creech Jones: I would ask the hon. Gentleman to study the Devonshire Report which sets out the range of subjects at which the cadets and others are asked to work during these courses.
    Mr. Teeling: Is the right hon. Gentleman suggesting that students from Fiji and China, and Hong Kong and so on have to study African anthropology?
    Mr. Creech Jones: In this course of studies there were optional subjects and, as I understand it, African anthropology is not a compulsory subject for a person from Fiji.

  SARAWAK (MR. ANTHONY BROOKE)
  Mr. William Teelingasked the Secretary of State for the Colonies whether he is yet in a position to state when Mr. Anthony Brooke will be allowed to land in Sarawak.
  Mr. Creech Jones: No, Sir. The Government of Sarawak have recently stated that the entry of Mr. Anthony Brooke into Sarawak is still prohibited.
  Mr. Teeling: Does the right hon. Gentleman remember that in the December Debate on the subject he said that six months was the period which they would wait and that if things were then going well in Sarawak there would be no reason why Mr. Brooke should not enter the country; and are we to understand either that things are not satisfactory in Sarawak or that Mr. Brooke has been doing something which we should disapprove? Is he not, after all, a perfectly ordinary British subject who should have the right of entry?
  Mr. Creech Jones: I am not aware that I gave any such promise of a six months' period, but if Mr. Anthony Brooke wishes to go to Sarawak, surely, he should make application to the Government there?
  Mr. Teeling: Is it not true that the right hon. Gentleman has said that the Government have stated that he would not be allowed to go?
  Mr. Creech Jones: I said that the Government of Sarawak had recently stated that Mr. Brooke was still prohibited from entering the country. Surely, it is still open for him to make application?
  Mr. Skeffington-Lodge: Since it is true that Mrs. Anthony Brooke has recently made application and has in fact been allowed to enter Sarawak does it not seem extraordinary that her husband cannot accompany her?
  Mr. Creech Jones: But surely the wife is not the husband?

  AFRICAN COLONIES

    Pyrethrum Crop
    Mr. Dodds-Parkerasked the Secretary of State for the Colonies whether he will make a statement on the present position and future prospects of the pyrethrum crop in Kenya and Tanganyika.
    Mr. Creech Jones: The present position is that the Board of Trade's wartime contract with pyrethrum producers in East Africa expires at the end of this year. Thereafter the producers (who are already organised in a statutory marketing board) will be free to dispose of their crop on the open market.
    Mr. Baldwin: In view of the importance of this matter to the economy of these two Colonies would the right hon. Gentleman see to it that when this contract is filed they will be given a certain amount of protection?
    Mr. Creech Jones: As I understand the position the industry is very well organised and there is a statutory marketing board for them.

    Tsetse-Infested Areas, East Africa
    Mr. Dodds-Parkerasked the Secretary of State for the Colonies to what extent work in reclamation of tsetse-infested areas in East Africa will be affected by clearing of bush under the groundnut scheme and whether, as a result of that scheme, the provision under Item 126 in Colonial Research Reports 1946–7 can be reduced.
    Mr. Creech Jones: The tsetse-infested areas which the Tanganyika Government has in view for purposes of reclamation are not, so far as I am aware, affected by reclamation under the groundnut scheme and such reclamation measures are, in any case, financed from territorial resources. The provision under Item 126 in Colonial Research Reports 1946–7 is for tsetse and trypanoecmiasis research and experimental reclamation and the answer to the second part of the Question is, therefore, in the negative.

    Suitable Literature (Distribution)
    Squadron-Leader Donnerasked the Secretary of State for the Colonies what measures he proposes to take, following
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    the introduction of the technique of mass education in Africa, to provide religious and other suitable literature to the new literates in adequate quantities; and what measures are contemplated to safeguard the new literates, as well as Africans generally, from the influence of immoral and seditious journals and news-sheets.
    Mr. Creech Jones: As the answer is long and factual, I will, with the hon. Member's permission, circulate it in the OFFICIAL REPORT.
    Following is the reply
    Arrangements to secure adequate supplies of suitable literature for Africans are well in train, and the subject has the continuous attention of the Mass Education Sub-Committee of my Advisory Committee on Education. Under the Nigerian Development Plan a public corporation called the Gaskiya Corporation has been established in Northern Nigeria with the objects, among other things, of increasing the supply of general vernacular literature for post-school reading, particularly in connection with the spread of mass literacy, and of establishing a vernacular newspaper for the Northern Province. The Corporation is producing the paper "Gaskiya," the circulation of which is 22,000 fortnightly. In Sierra Leone for the past three years mission authorities, with assistance from public funds, have been carrying on a campaign for the extension of literacy within one of the language areas of the Protectorate, and this scheme provides for the printing and publication of suitable literature. The British Council has established libraries in West Africa and attention is being given to their further development.
    As regards East and Central Africa, a scheme has just been received from the East African Governments recommending the setting up of a Literature Bureau, financed from colonial development and welfare funds, with headquarters in Nairobi, for the purpose of stimulating the production of books and other publications for Africans. A literature adviser for Africans in East Africa has already been appointed and has begun to work out plans for the Bureau. The Northern Rhodesia Development Plan provides for the establishment of a Publications Bureau and the scheme is being put in hand immediately. Similar measures are

    1437
    proposed for Nyasaland, and the establishment of a Joint Publications Bureau for the two Territories is under consideration. Northern Rhodesia already has a Government published African newspaper, "Mutende." This paper was first published in 1935 and has been published weekly for several years now.
    Much attention is being devoted at the present time to the problem of encouraging the improvement of the standard of the newspapers produced by the colonial peoples themselves. An experimental scholarship scheme, under which training will be given to three colonial journalists, has been provided under British Council auspices. Consultation with organisations representing both proprietors of newspapers and journalists in this country show that there is sympathy with the ends in view, and it is hoped that further facilities will be arranged. It is also hoped to be able to arrange for the visits to this country from time to time of parties of colonial journalists. Colonial public relations officers give what assistance they can to newspaper editors and provide not only "hand-outs" about Government activities, but also, in certain instances, photographic and block-making facilities. In addition there is supplied from London, through the Public Relations Office, services of news commentaries, feature articles, photographs and blocks. The control of seditious and other literature is governed by laws which are much the same as those in the United Kingdom. The aim is to avoid restrictive controls and to do all that is possible by positive action to develop better quality alternatives.

    Building Research Station, West Africa
    Mr. Dodds-Parkerasked the Secretary of State for the Colonies what is the objective of the Building Research Station in West Africa, to be set up under Item 133 of Colonial Research Reports, 1946–47; and whether the results of this research station will be available to governments outside West Africa.
    Mr. Creech Jones: The objective is to set up a Building Research Station which will enable co-operation to be achieved between the four West African Governments in such matters as the durability and other technical characteristics and the most efficient use of building materials
    1438
    (especially local materials) under prevailing climatic conditions. The answer to the second part of the Question is, "Yes."

    Gold Coast (Book Prohibition)
    Mr. Skinnardasked the Secretary of State for the Colonies in what circumstances, and for what reasons, 200 copies of the book "How Russia transformed her Colonial Empire" were seized in the Gold Coast under the Customs ordinance; whether he is aware that this book is in circulation in Nigeria; and whether he will take steps to allow it free circulation in the Gold Coast.
    Mr. Creech Jones: I am making inquiries into this matter and will write to my hon. Friend as soon as full information is available.
    Mr. Skinnard: Will the Secretary of State arrange that a more complete answer as to the reason for the prohibition is given to the persons who wish to import the book, since the actual prohibition notice merely quotes Chapter 132 of the Customs Order.?
    Mr. Creech Jones: I am myself very much in the dark at the moment about this.
    Vice-Admiral Taylor: Can the Minister inform the House of what the Russian Colonial Empire consists? May I have an answer?
    Mr. Leslie Hale: Since this book was written by a distinguished British coloured subject of great authority and knowledge who, curiously enough, is certainly by no means pro-Russian, and in view of the fact that I myself communicated with the right hon. Gentleman about it a fortnight ago, would he see that the answer is printed in the OFFICIAL REPORT?
    Mr. Creech Jones: I am not in possession of the full facts, otherwise I would have attempted to answer today, but if there is any way of communicating the reply to Members of the House I certainly will.
    Major Legge-Bourke: Is the right hon. Gentleman aware that Commander Stalin when speaking to students at Sverdlov University in 1924, asked, "Where does one strike at Imperialism?" and answered the question by saying, "Where the chain

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    is weakest," and would he do his best to encourage hon. Members on his own side of the House to strengthen the chain rather than to weaken it?

    Linguistic Research
    Mr. Baldwinasked the Secretary of State for the Colonies if he is satisfied that the provision under Items 117, 122 and 146 of Colonial Research Reports, 1946–47, for linguistic research are beneficial, in view of the increasing tendency to teach English in African schools.
    Mr. Creech Jones: Yes, Sir. My aim is to enable Africans to become proficient in their own languages as well as learning English and the study of the languages for which the grants in question have been made will materially assist this object. I am also anxious that British officials employed in African territories should be given every facility for studying the languages of the peoples amongst whom they work.
    Mr. Baldwin: Does the Minister consider that in view of the serious economic state of this country that kind of expense, which was over £3,000 is justified?
    Mr. Creech Jones: This is really economic expenditure, and in any case it has been authorised by the House.
    Mr. Godfrey Nicholson: Will the right hon. Gentleman assure the House that in so far as his Department is concerned the School of Oriental and African Studies will have support?
    Mr. Creech Jones: Most emphatically. It is doing a most useful work.

    Independent Churches (Book)
    Mr. Baldwinasked the Secretary of State for the Colonies what benefit is likely to result, and to what parties, from Item 141 in Colonial Research Reports, 1946–47, which is the grant to assist in the completion of the manuscript of a book on African separatist churches.
    Mr. Creech Jones: This book is likely to be of assistance to Colonial administrative officers and others in appreciating the political and religious problems arising out of the large number of independent African sects and churches, which are inadequately covered by existing literature.

    Cameroons Development Corporation (Appointment)
    Mr. Rankinasked the Secretary of State for the Colonies if he will consider appointing an African to the Cameroons Development Corporation.
    Mr. Creech Jones: Under Nigerian legislation creating the Corporation, the power to appoint members to it resides not in me but in the Governor of Nigeria. As indicated to my hon. Friend the Member for East Harrow (Mr. Skinnard) on 23rd of April, the Governor has already appointed an African to the Corporation. He is Mr. Manga Williams, who is the member of the Legislative Council for the Cameroons.

  MALAYA AND SINGAPORE

    Industrial Conciliation
    Mr. Rees-Williamsasked the Secretary of State for the Colonies whether he will appoint an officer from the United Kingdom, with experience of industrial conciliation, to the Labour Department in Singapore.
    Mr. Creech Jones: Steps are being taken for the selection of a suitable candidate from the United Kingdom with trade union experience and experience of industrial conciliation to fill a vacancy which has recently arisen in Singapore.
    Mr. Rees-Williamsasked the Secretary of State for the Colonies whether he will make arrangements for suitable trade union officials in the Malayan Federation and Singapore to visit the United Kingdom, in order to study trade union and conciliation machinery.
    Mr. Creech Jones: I hope that such a visit will prove possible and discussion regarding arrangements is taking place.
    Mr. Rees-Williamsasked the Secretary of State for the Colonies how many working days have been lost in the Malayan Federation and Singapore, respectively, owing to industrial disputes since the resumption of civil government; and whether he will appoint a committee to inquire into this matter.
    Mr. Creech Jones: As the reply to the first part of the Question contains a number of figures and is rather long, I will, with my hon. Friend's permission, cir-

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    culate it in the OFFICIAL REPORT. The figures record a considerable improvement in both territories during recent months. As regards the second part of the Question, I do not consider that the circumstances call for a committee of inquiry. I am, however, in communication with the two Governors with a view to arranging for two or three experienced trade unionists from this country to visit Malaya to study local labour conditions.
    Following is the reply:

    Working time lost in consequence of industrial disputes.

    Malayan Union.

    Month.

    Man-days lost.

    August, 1946

    …

    …

    271,740

    September, 1946

    …

    …

    44,329

    October, 1946

    …

    …

    20,368

    November, 1946

    …

    …

    5,592

    December, 1946

    …

    …

    35,056

    January, 1947

    …

    …

    55,651

    February, 1947

    …

    …

    95,725

    March, 1947

    …

    …

    85,401

    April, 1947

    …

    …

    30,278

    May, 1947

    …

    …

    38,001

    June, 1947

    …

    …

    14,565

    The term "man-days lost," rather than "working days lost," is used because of variations in the incidence of rest days. The figures quoted are based upon a seven day week and are accordingly inflated to an approximate extent of one-seventh. Well over 40 per cent. of the man-days lost were due to strikes on two large rubber estates in Kedah during August, 1946, the Malayan colliery strike early in 1947 and the Perak Hydro Electric Company strike in April of the same year. It is regretted that no figures are available for the period prior to August, 1946.

    Singapore.

    Month.

    Working days lost.

    April to December, 1946

    …

    852,000

    January, 1947

    …

    79,000

    February, 1947

    …

    193,000

    March, 1947

    …

    53,000

    April, 1947

    …

    38,000

    May, 1947

    …

    12,000

    June, 1947

    …

    3,000

    July, 1947

    …

    9,000

    Rice Ration
    Mr. Harold Daviesasked the Secretary of State for the Colonies how Malaya's daily rice ration compares with other countries in Asia; and whether the International Emergency Food Council will be asked to review its allocation to rice-eating populations.
    Mr. Creech Jones: The present basic rice ration of 4½ oz. daily in Malaya is the same as in Ceylon and in North Borneo but slightly less than the present ration in Hong Kong. I regret that I have not got the material for a comparison with present ration scales in other countries in Asia. I understand that the International Emergency Food Council will be meeting next month to consider the rice allocations for 1948.

  MAURITIUS (MILK SUPPLIES)
  Mr. Skinnardasked the Secretary of State for the Colonies whether he is aware that milk supplied to the public in Mauritius is expensive and frequently adulterated; what steps are being taken by the local government to establish effective control over milk offered for sale; and what plans are there for the reorganisation of the distribution of milk, so that the public may be assured of adequate supplies at reasonable prices.
  Mr. Creech Jones: I have received a report from the Governor of Mauritius. As it is rather long I will, with my hon. Friend's permission, circulate it in the OFFICIAL REPORT.
  Mr. Skinnard: As there is only one part-time food inspector dealing with all the 400 sellers of milk will the Secretary of State represent to the Government of Mauritius the urgency of establishing pasteurisation depots?
  Mr. Creech Jones: Yes, Sir, the matter has been receiving very close attention from the local Government, a report has been received with a number of recommendations and definite steps are being taken.
  Following is the reply:
  It is true that milk supplied to the public is expensive, mostly of inferior quality and frequently adulterated. The present production is totally inadequate. This position has been aggravated by unsound animal husbandry methods and by illegal slaughter of milch cows during the war. The control which was previously established over the retail price could not be enforced owing to the unwillingness of consumers to report offending milk-sellers and has recently had to be lifted. Tests of the quality of milk offered for

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  sale are regularly made and offenders are prosecuted, but it is realised that such measures are only pallatives.
  The problem has been under close study for some time and plans have now been prepared to put the industry on a sound basis and to increase production by concerted attack on the following lines:

  (a) Improvement of local herds by importation of pure-bred bulls and by experiments in artificial insemination.

  (b) Grassland development involving eradication of "herbe condé," improvement of local grasses and introduction of new species.

  (c) Production of fodder from cane tops, acacia meal and hay.

  (d) Grouping of uneconomic units into co-operatives.

  (e) Introduction of hygienic byres.

  (f) Education of cow owners and milk distributors by propaganda in the field.

  (g) Creation of a Veterinary Research Station.

  (h) The Government dairy is to be retained as a demonstration and research station, the milk produced by the dairy being reserved for hospitals and child welfare institutions.

  Much preliminary work has already been done, but the nature of the problem is such that improvement will inevitably be slow. It is expected, however, that when the Animal Husbandry Officer, for whom provision has been made, assumes duty, better progress will be made.

  ROYAL NAVY

    Surplus Foodstuffs, Singapore (Sale)
    Mr. Stanley Prescottasked the Parliamentary Secretary to the Admiralty what quantity and kind of Royal Navy surplus foodstuffs are being offered for sale to civilians in Singapore since 1st July.
    The Parliamentary and Financial Secretary to the Admiralty (Mr. John Dugdale): Approximately 163 tons of miscellaneous foodstuffs, surplus to Naval requirements, were on offer for sale to civilians in Singapore on 1st July. They were offered for sale locally on the advice of the Ministry of Food. The items comprised tinned milk, dried and tinned fruits, tinned salmon, tinned meat and vegetables, pulses, cereals, pickles and fruit juice.

    Armaments Supply Department (Scientific Staff)
    Colonel Wheatleyasked the Parliamentary Secretary to the Admiralty if, in view of the shortage of scientific staff in Government service, he will consider permitting members of the scientific staff of the Armament Supply Department of the Admiralty, established or not, who are qualified for inclusion in the Scientific Civil Service, to transfer to other scientific departments should they so desire.
    The Civil Lord of the Admiralty (Mr. Walter Edwards): In considering applications by employees to transfer to other departments, it is necessary to have regard to the requirements of the duties on which they are engaged at the time. A number of employees of the Armament Supply Department have already been released for employment in Scientific services elsewhere, and the point has been reached where further releases may be detrimental to the efficiency of the department. While, therefore, no unqualified undertaking to release further applicants can be given, any application for release by an officer whose services would be useful in a scientific capacity to another department will, none the less, receive full consideration in the light of the relevant circumstances.
    Colonel Wheatleyasked the Parliamentary Secretary to the Admiralty if he is yet able to say when the promised decision will be announced regarding the revised salary scales of scientific officers on production duties in the Armament Supply branch of his Department.
    Mr. W. Edwards: I regret that I am at the moment unable to add to the answer given to the hon. and gallant Member on this subject on 23rd April. Consideration is proceeding with every desire to reach an early conclusion but this is a complicated and difficult matter.
    Colonel Wheatley: Does not the Civil Lord think 10 months a long time to give consideration to this question? Does he not realise how disappointed people are in this Department at the long delay in getting what they feel is their due?
    Mr. Edwards: As I told the hon. and gallant Gentleman on a previous occasion when he asked a question, it is my desire to get the matter speeded up at the earliest opportunity, but the matter concerns more

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    than one Department. I am trying to do what I can. It may please the hon. and gallant Member to know that whatever decision is reached will be made retrospective.

    Regular Engagements (Transfers)
    Mr. Mallalieuasked the Parliamentary Secretary to the Admiralty whether he will make a statement about the opportunities provided for release from the Royal Navy for those men who signed on for a Regular engagement in the early stages of the war because recruiting on a hostilities only engagement in the branch of their choice was not open in the Royal Navy and Royal Marines.
    Mr. Dugdale: Yes, Sir. My noble Friend is now prepared to give very sympathetic consideration to applications for transfer from a continuous service engagement of 12 years to a special service engagement of seven years with the Fleet and five years in the Reserve, or its equivalent in the Royal Marines, in cases where the following conditions are satisfied. The man entered between 1st September, 1939, and the date on which recruiting on hostilities only engagements was opened for his branch and is serving on a 12 years' continuous service engagement because he was unable to enter the Navy by any other method; he has served at least seven years; is willing to enrol in the Royal Fleet Reserve to complete 12 years' man's service and there are compassionate circumstances. Men entered as seaman boys or communication boys, artificer apprentices, band boys and boy buglers, are excluded. The hon. and gallant Member will recognise that the necessary formalities to establish that an application satisfies these conditions will take some time and it is unlikely that the earliest releases under the scheme can be expected much before the end of the year.
    Commander Noble: Could the Minister say whether there are any other arrangements for the boys who, he said, were excluded?
    Mr. Dugdale: Not at present.
    Mr. Joynson-Hicks: Will not the men who take advantage of this transfer suffer some disadvantage at the present time?
    Mr. Dugdale: No, Sir, they will be in exactly the same position as men who took advantage of this transfer early in 1946.

    Dockyard, Chatham and Sheerness (Bricklayers)
    Mr. Percy Wellsasked the Parliamentary Secretary to the Admiralty how many bricklayers are employed in His Majesty's dockyards at Chatham and Sheerness, respectively.
    Mr. W. Edwards: The numbers of bricklayers employed at Chatham and Sheerness are 76 and 18, respectively.
    Vice-Admiral Taylor: What is the rate of bricklaying per hour?
    Mr. Speaker: The Question on the Paper asks how many bricklayers, and not the rate of bricklaying.

    Commissions (Lower Deck)
    Lieut.-Colonel Sir Thomas Mooreasked the Parliamentary Secretary to the Admiralty how many commissions from the lower deck have been granted in the various sections of the Royal Navy during the six months ended 30th June; and how this figure compares with the same period in 1939.
    Mr. Dugdale: The following direct commissions from the lower deck were granted during the six months ended 30th Tune, 1947:

    Executive Branch

    2

    Air Branch

    3

    Supply and Secretariat Branch

    3

    Engineering Branch

    8

    In the executive branch an upper yardmen's course was begun in the autumn of 1938 and 24 ratings were promoted on the 1st September, 1939, or an average of 12 during the six-monthly period. In the engineering branch six ratings were promoted to commissioned rank during the first six months of 1939. Promotions from the lower deck to commissioned rank in the Air and Supply and Secretariat Branches did not begin until 1941 and 1942 respectively.
    Sir T. Moore: Is the hon. Gentleman satisfied with this rate of progress backwards under the Socialist Government?
    Mr. Dugdale: We are naturally not satisfied that there should be so few who have succeeded in passing this examina-

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    tion. I hope that the number will be increased. It may interest the hon. and gallant Gentleman to know that 47 sat. I hope that we shall have a better result in future. We must keep the standard up.
    Commander Maitland: How many have been promoted to commissioned rank from warrant rank in the period in question?
    Mr. Dugdale: That is another question.

    Current Affairs (Instruction)
    Mr. Dribergasked the Parliamentary Secretary to the Admiralty if he will make a statement on instruction in current affairs in the Royal Navy.
    Mr. J. Dugdale: Yes, Sir. The present orders provide that, so far as possible, one hour a week during working hours shall be devoted to training in current affairs in His Majesty's ships and establishments but this aim has seldom been achieved. While it is impossible owing to pressure of work to alter these orders so far as ships at sea are concerned, my noble Friend has decided to make a change in all shore establishments and ships of the Reserve Fleet. In future, in these establishments and ships, one hour each week will be set aside within working hours for education in current affairs. This education will take the form of lectures and discussions and will, it is hoped, be of value both to the individual sailor and to the Royal Navy as a whole.
    Commander Noble: Could the Minister say whether he has yet read No. 24 Map Review? It was only too apparent last week that he had not.
    Mr. Dugdale: Certainly, I have read it before most carefully and I am prepared to discuss it at any time that I have permission from Mr. Speaker to do so.
    Mr. Quintin Hogg: Is not the best instruction in current affairs afforded to the Royal Navy, as to the rest of us, by the abject failure of the Government's economic policy?
    Mr. Lennox-Boyd: Will the hon. Gentleman take steps to protect his colleagues on the Front Bench from the experience of one of them in the last war who, when attending to lecture to sailors on the subject of current affairs, was himself thrown into the sea?

    Release Dates (Notice)
    Commander Nobleasked the Parliamentary Secretary to the Admiralty what notice is given of the actual date of their release to men due for demobilisation.
    Mr. Dugdale: Forecasts of probable dispersal dates for specified age and service groups are given to the Fleet about three months before the dispersal period for these groups begins. This period extends over approximately two months. The forecasts are confirmed about ten days before the dispersal begins. The actual date upon which a man in the groups due" for release is dispersed depends upon the drafting situation and upon local conditions.
    Commander Noble: Can the Minister give an assurance that every possible attempt is made to warn a man of his release?
    Mr. Dugdale: Yes, Sir, most certainly.

  TELEPHONE SERVICE

    Exchange, Romford (Delays)
    Mr. Thomas Macphersonasked the Postmaster-General if he is aware of the long delays at present being experienced by Romford subscribers in securing response from the Romford telephone exchange; and what steps he proposes to take to remedy this unsatisfactory position.
    The Postmaster-General (Mr. Wilfred Paling): I regret that the quality of service at the Romford telephone exchange is not as good as I should like. This is due to shortage of trained operating staff and to the need for additional equipment. Vigorous steps are being taken to overcome both these difficulties and I hope that the service will shortly begin to show a steady improvement.
    Mr. Macpherson: Is my right hon. Friend aware that the number of subscribers have taken a note of the time it takes to answer the bell, and have found that it is five minutes or more? Does he not agree that that is unfair to the subscribers and results not only in waste of time, but in some cases in serious loss? Will he press the exchange to give a better service?
    Mr. Paling: I shall be glad if the hon. Member will let me have the facts.

    Charges (Automatic Register)
    Mr. Peter Freemanasked the Postmaster-General whether he will arrange for an automatic register of charges to be attached to telephones, where desired, as is already in operation in Switzerland.
    Mr. Wilfred Paling: The use of a device of this kind is being considered in connection with the problem of extending subscribers' dialling beyond the present range of local calls.
    Mr. Freeman: Will the Minister consider installing a few experimental ones in this country before he makes a decision on the matter?
    Mr. Paling: I say that we are considering the matter.

    Exchange, Wainfleet (Extension)
    Commander Maitlandasked the Postmaster-General by what date the arrangements to extend the telephone exchange at Wainfleet, Lincolnshire, will be completed.
    Mr. Wilfred Paling: Equipment for the extension of Wainfleet exchange is now available and installation should be completed in about three months' time. I much regret the unforeseen delay.

    New Cable, Birstall
    Mr. Granville Sharpasked the Postmaster-General whether he will hasten the laying of the new cable required to give a telephone service to the many residents of Birstall, near Leeds, who have been waiting for years for the installation of telephones; and when he estimates that this service will be provided.
    Mr. Wilfred Paling: Provision of this cable is being pressed forward as rapidly as possible, but, in view of the serious shortage of materials and of the many similar jobs to be undertaken in other areas in and near Leeds, I regret that I cannot quote a date for completion of the work.

    Operator's Duties, Tiree
    Major McCallumasked the Postmaster-General if he has approved the arrangement whereby the manager of the
    1450
    local branch of the S.C.W.S. on the Island of Tiree takes turns of duty with his wife who is the official exchange operator at the island telephone exchange; and if he is satisfied with an arrangement whereby the local manager for this organisation has access to the telephone conversations of his business competitors.
    Mr. Wilfred Paling: It is not uncommon in rural districts for the telephone exchange to be operated by a local tradesman, and after fully considering the facts as regards the exchange on the Island of Tiree, I see no grounds for changing the present arrangements.
    Major McCallum: In view of the general dissatisfaction with the telephone service, may I ask whether there is any truth in the report that it is to be handed over to the Co-operative Society?

  RADIO RECEPTION (ELECTRICAL INTERFERENCE)
  Mr. Collinsasked the Postmaster-General if he will now give further information with regard to proposed legislative action to provide for the compulsory suppression of electrical interference with radio reception in accordance with the recommendations of the Council of the Institution of Electrical Engineers.
  Mr. Paling: I regret I am not in a position to add to the information given by the Assistant Postmaster-General when replying to my hon. Friend on 19th March.

  POST OFFICE

    Establishment (Numbers)
    Sir T. Mooreasked the Postmaster-General what was the numerical deficiency in the Post Office establishment on 30th June; and what is the effect of such deficiency in the general postal services.
    Mr. Wilfred Paling: I assume that the hon. and gallant Member has in mind the postal establishment. There is no general shortage of staff on the postal side of the Post Office. At a few places postal delivery and collection services have been adversely affected by difficulties of recruitment, and there are some staffing problems on the counter side in London. We are doing our best to overcome these difficulties.
    Sir T. Moore: What is the cause of the dislike towards service with the General Post Office? Is it that conditions of labour and wages are too poor, or what?
    Mr. Paling: I am afraid that is an answer I cannot give. It is too long.

    Staff, Glasgow
    Mr. J. S. C. Reidasked the Postmaster-General how many persons without previous post-office experience have been engaged for work in Glasgow during this year; and how many of these are wholly or partly engaged on work of a type formerly performed by temporary postmen who have been dismissed.
    Mr. Wilfred Paling: The answer to the first part of the Question is 330 men on the postal side, of whom 40 subsequently resigned; and, to the second part, all the remaining 290.
    Mr. Reid: Does that not show that the last answer given by the Minister, namely, that these dismissed postmen were redundant, was wrong, and that the Minister's first answer on 2nd July was right, that they were dismissed in order to drive them into other employment? As the men are now unemployed, will the Minister reconsider the whole matter?
    Mr. Paling: That is not so. The right hon. and learned Gentleman has got it wrong. This recruitment applies from 1st January, and the redundancy did not arise until 1st May.
    Mr. Reid: Can the right hon. Gentleman say how many of these men or women have been engaged since the beginning of May?
    Mr. Paling: I think the answer is round about 30.
    Mr. Reid: To that extent is not my complaint justified?
    Mr. Paling: These men have been set on as postmen according to the rules and regulations, and one of those rules and regulations laid down by this House is that 50 per cent. of the people set on must come from ex-Servicemen.
    Mr. Reid: In view of the unsatisfactory and confused nature of the reply, I beg to give notice that I shall raise this matter again on the first possible occasion.
    Mr. J. S. C. Reidasked the Postmaster-General how many hours overtime have been worked by Post Office servants in Glasgow during June and July.
    Mr. Wilfred Paling: As the answer contains a number of figures, I will, with permission, circulate it in the OFFICIAL REPORT.
    Following is the answer:
    GLASGOW POST OFFICE.—Number of hours overtime worked during June and July, 1947.
    (The statement covers only the main postal and telegraph grades.)

    Grade.

    Number on Grade.

    Total Hours of Overtime

    Average Hours of Overtime per head per week.

    Postal and Telegraph Officers.

    613

    1,991

    0·4

    Postmen, Higher Grade.

    572

    15,896

    3·2

    Postmen

    2,211

    51,340

    2·7

    Telegraphists

    326

    640

    0·2

    Cable, Scarp Island
    Mr. Malcolm MacMillanasked the Postmaster-General if he will now state when it is intended to begin the work of laying the cable and providing Scarp Island with telephone and telegraph services.
    Mr. Wilfred Paling: It is hoped to lay the cable to Scarp this month, and to provide telephone and telegraph service on the island by the end of September.
    Mr. MacMillan: Is the Minister aware that everybody in that area, including the S.C.W.S. manager, will be very gratified?

    Curtailed Deliveries (Manpower)
    Mr. Osborneasked the Postmaster-General if he is aware that there is much dissatisfaction at the curtailment of postal deliveries and with the increasing delay with deliveries, both internally and from abroad; to what extent this is due to a shorter working week; and if he will publish his correspondence with the trade unions on the subject.
    Mr. Wilfred Paling: I am aware that curtailment of postal deliveries has given rise to some dissatisfaction; and that the

    1453
    revised services have not yet regained their prewar standard of efficiency. There has been no alteration in the length of the working week of the postal staff. The modifications in services were dictated solely by the need to conserve manpower.
    Mr. Osborne: Is the right hon. Gentleman aware that the curtailment of the afternoon deliveries is felt by the business community all over the country to be holding up business, and could he not have it restored?
    Mr. Paling: If there is one section of the community which is less prone to grumble about this than any other, it is probably the business section.
    Brigadier Rayner: Is the right hon. Gentleman aware that today the Post Office is giving the poorest service to the community in the living memory of man?

  R.A.F. (SERVICE, MAURITIUS)
  Mr. Niall Macphersonasked the Secretary of State for Air whether Trans port Command are still running a service to Mauritius; and whether non-official civilians are permitted to use the service.
  The Secretary of State for Air (Mr. Philip Noel-Baker): The R.A.F. withdrew from Mauritius in July, 1946, and since then have had no service to the Island.

  CIVIL AVIATION

    Service, London—Cornwall
    Mr. Douglas Marshallasked the Parliamentary Secretary to the Ministry of Civil Aviation which airports will be used between London and Cornwall when the air service is started.
    The Parliamentary Secretary to the Ministry of Civil Aviation (Mr. Lindgren): A service between London and Cornwall is not planned for the current year 1947–48, and the airports to be used when the service is introduced have not yet been decided.
    Mr. Marshall: May I ask the Minister when he is going to start this service?
    Mr. Lindgren: That depends upon the availability of aircraft and other factors.
    Mr. Lennox-Boyd: Will the hon. Gentleman explain why it was possible before nationalisation to have a regular service between London and Cornwall? If the Government cannot do it now officially, why do they not give it on charter to private operators to run?
    Mr. Lindgren: With great respect, that statement is inaccurate. There was no regular service between London and Cornwall prewar.

    Croydon—Le Bourget
    Mr. Berryasked the Parliamentary Secretary to the Ministry of Civil Aviation what is the average flying time from Croydon to Le Bourget; what are the respective times for the transport of passengers from London to Croydon and from Le Bourget to Paris; and what steps he proposes to take to reduce the time of road transport from London to Croydon.
    Mr. Lindgren: The average flying time from Croydon to Le Bourget is about 90 minutes, but there are no regular scheduled services now operating from Croydon. I have no detailed information about the transportation of the passengers to Croydon and from Le Bourget to Paris for which each operator is responsible.
    Mr. Berry: Will my hon. Friend look into the question of a helicopter service between the airports and the cities in order to improve the overall time, which is out of all ratio to the flying time?
    Mr. Lindgren: The general question of the transportation of passengers from a city centre to an airport is receiving constant attention.
    Mr. Teeling: Does not the hon. Gentleman think that what the hon. Member is probably trying to get at is to hurry up the period of non-flying time? Would it not be far better to hurry up the time taken up through the Customs, the inspection of visas and so on? That sort of thing takes about an hour.
    Mr. Lindgren: In so far as the latter part is concerned, everything possible is being done, but I am certain that this House would require that the Customs, health and immigration officials should, do their work thoroughly for the protection of the general public.
    Mr. Berry: Is my hon. Friend aware that I do not require any assistance from the other side in regard to my questions.

    International Air Radio, Ltd. (Board)
    Mr. Geoffrey Cooperasked the Parliamentary Secretary to the Ministry of Civil Aviation who are the members of the Board of International Air Radio, Limited; to whom it is answerable; and to what extent does he take steps to ensure that it is organised in such a way as to ensure its most rapid development and successful operation.
    Mr. Lindgren: The members of the Board of International Aeradio, Ltd. are as follow:

    Sir Victor Tait, K.B.E., C.B —Chairman,

    Major J. R. McCrindle, O.B.E., M.C.,

    Mr. Whitney Straight, C.B.E. M.C., D.F.C.,

    nominated by the British Overseas Airways Corporation;

    Group-Captain Patrick Saward, O.B.E.,

    Commander Vladimir Wolfson,

    Group-Captain Patrick de Laszlo,

    nominated by the British European Airways Corporation;

    Captain Gordon Store,

    nominated by the British South American Airways Corporation, and

    Air-Commodore C. S. Cadell,

    appointed by other members of the Board.
    The members of the Board are answerable to the shareholders. The three British Airways Corporations hold 75 per cent. of the shares. The formation structure and objects of the Company were approved by my noble Friend, but its development and operation are primarily matters for the Board.
    Mr. Cooper: Is my hon. Friend satisfied with the progress which has been made by this Board since it was set up, since the reports coming to me indicate that the progress to date is far from satisfactory?
    Mr. Lindgren: No, Sir. In the first instance, the Secretary to the Board was a serving officer of the Royal Air Force. We had some difficulty in securing his
    1456
    release. Since his release, and the general establishment of the organisation, satisfactory progress has been made, but as this Corporation has to undertake negotiations with Dominion and foreign Governments, then, of course, matters are protracted.

    Africa—Mauritius
    Mr. N. Macphersonasked the Parliamentary Secretary to the Ministry of Civil Aviation whether B.O.A.C. or any of its associated companies have yet established a service between the African mainland and Mauritius; what is the nature and frequency of the service; and when he expects a British service will be established.
    Mr. Lindgren: Neither the British Overseas Airways Corporation nor any of their associated companies is operating a service between the African mainland and Mauritius. As to the last part of the Question, the possibility of the introduction of a service to Mauritius by the East African Airways Corporation is under examination.
    Mr. Macpherson: Will the hon. Gentleman urge the African associates to give the most favourable consideration to the linking of this most important outpost of Empire by British airlines to the main arterial system?
    Mr. Lindgren: Yes, but one of the considerations which has to be taken into account is that of traffic potential and that, in conjunction with other matters, is under discussion through the Colonial Office.

  ARMED FORCES

    Strengths
    Mr. Sharpasked the Minister of Defence whether, in view of the decision to accelerate releases from the Army during the first quarter of 1948, he will now give his estimate of the numbers of men and women who will be serving in the forces on 31st March, 1948.
    The Minister of Defence (Mr. Alexander): I would ask my hon. Friend to await the statement to be made this afternoon by my right hon. Friend the Prime Minister, in the Debate on the state of the nation.
    Mr. Sharp: In view of the fact that confidence in similar replies to other Questions has often proved to be misplaced, can my right hon. Friend give a guarantee that the information asked for in the Question will be given by the Prime Minister?
    Mr. Alexander: The hon. Gentleman had better await the speech.

    British Forces, India
    Mr. Binnsasked the Minister of Defence what will be the role of the British Forces who remain in India after 15th August during the next few months before they are finally withdrawn.
    Mr. Alexander: After 15th August, the Governments of India and Pakistan will be responsible for the maintenance of law and order in their respective territories. British troops will not be available to intervene in case of internal disorder, and will in fact have no operational responsibility.

    Free Travel Warrants
    Mr. Dribergasked the Minister of Defence if he will now make a statement on the issue of free travel warrants to Service men.
    Mr. Alexander: This matter is still under consideration.
    Mr. Driberg: How soon does my right hon. Friend expect it will be possible to make a statement?
    Mr. Alexander: I could not say today, but I will let my hon. Friend know as soon as possible.

  FOOD SUPPLIES

    Bread Rationing
    Mr. Sparksasked the Minister of Food if he will make a statement about the future of the bread-rationing scheme.
    The Minister of Food (Mr. Strachey): Not until after the harvest.
    Mr. Sparks: Can my right hon. Friend say at what date the harvest will be over?
    Mr. Strachey: No longer being connected with the meteorological service, I cannot satisfy my hon. Friend.

    Fish Sales (Levy)
    Mr. D. Marshallasked the Minister of Food what was the total sum collected
    1458
    by the levy on the first sale of fish, excluding herring, in the United Kingdom during 1946; and, what was the total sum expended in transport of fish in the United Kingdom, excluding herring, during 1946.
    Mr. Strachey: I am sorry that I cannot give the hon. Member the exact information for which he asks, but for the financial year 1st April, 1946, to 31st March, 1947, the levy collected on fish, excluding herring, amounted to £4,881,000 and the cost of transport to £4,331,000.

    Milk Foods (Infant Welfare Centres)
    Brigadier Petoasked the Minister of Food why he has found it necessary to cut down the quota of tinned milk foods supplied to infant welfare centres; and at what date he expects to be able to restore the previous allowance.
    Mr. Strachey: My Department does not control the distribution of proprietary brands of milk-based baby foods. Owing to the reduced production of milk in the first four months of the year—because of the great frost—there was a reduction in the output of milk powder and as a result manufacturers have had to restrict their sales of these proprietary foods. I cannot say when it will be possible fully to restore the old rate of sales.
    Brigadier Peto: Is the right hon. Gentleman aware that I have here a letter saying that a restriction was imposed by the Ministry of Food? It is signed by one of the managers of a firm distributing tinned milk food.
    Mr. Strachey: I take it that the writer of the letter, for which I am not of course responsible, is referring to the restrictions on the production of milk powder which had to be imposed for the reasons I have just given.
    Mr. Vane: Would not the right hon. Gentleman agree that the main cause of the restriction on production was not the frost but the Government's failure to acquire adequate feedingstuffs.

    Consumption Statistics
    Mr. Peter Freemanasked the Minister of Food what was the total weight and value of all principal foods consumed in this country in 1946; and the corresponding details for foods sup-

    1459
    plied to restaurants and canteens, separately.
    Mr. Strachey: As the reply includes a large number of figures, I shall, with permission, circulate it in, the OFFICIAL REPORT.

    QUANTITY AND VALUE OF PRINCIPAL FOODSTUFFS CONSUMED IN THE UNITED KINGDOM IN 1946.

    TOTAL FOOD.

    CATERING ESTABLISHMENTS.

    ——

    Quantity. '000 tons.

    Value (a) £'000.

    Quantity (b) '000 tons.

    Value (c) £'000.

    Bread

    …

    4,415

    101,638

    503

    10,941

    Flour

    …

    1,753

    33,887

    89

    1,946

    Cakes and Biscuits

    …

    1,113

    150,104

    107

    13,201

    Meat and Offal (d)

    …

    1,814

    211,347

    182

    21,140

    Canned Meat

    …

    172

    32,229

    15

    2,667

    Bacon and Ham (e)

    …

    306

    57,255

    21

    3,416

    Fresh fish

    …

    1,072

    81,591

    —

    —

    Butter

    …

    229

    40,957

    20

    3,337

    Margarine, lard and cooking fat

    …

    504

    39,877

    58

    4,292

    Fresh milk (e)

    …

    6,700

    207,798

    989

    28,799

    Canned milk

    …

    166

    14,026

    17

    1,337

    Dried milk

    …

    42

    8,205

    3

    224

    Cheese

    …

    218

    25,983

    20

    2,118

    Eggs in shell (e)

    …

    201

    27,054

    —

    —

    Dried egg

    …

    37

    17,719

    5

    2,274

    Tea

    …

    191

    63,328

    32

    10,129

    Sugar

    …

    1,254

    49,506

    92

    3,155

    Jam and Marmalade

    …

    283

    33,591

    28

    2,801

    Chocolate and sugar confectionery

    …

    232

    49,529

    24

    4,136

    Potatoes

    …

    5,502

    60 225

    —

    —

    Vegetables

    …

    2,265

    11,6844

    —

    —

    Canned and dried vegetables

    …

    349

    25,660

    —

    —

    Fresh fruit

    …

    985

    95,518

    —

    —

    All other foodstuffs

    …

    —

    178,875

    —

    69,582

    1,722,746

    185,495

    (a) These values are the totals of the estimated expenditure in the following five categories:

    (i) Domestic purchases of food by households at retail prices, together with the value at farm prices of produce consumed on farms, and the value at the cost to the consumer of welfare foods provided under the National Milk, Milk-in-schools, and vitamin schemes.

    (ii) Purchases by Category A catering establishments (restaurants, hotels and all residential establishments, together with institutions such as services hospitals, orphanages, hostels, etc., and school canteens and feeding centres, war-time nurseries, and public and private day schools) valued at the prices paid by these establishments.

    (iii) Purchases by Category B catering establishments (voluntary service canteens, fire and police canteens, Industrial "A" and "B" canteens, Youth Service centres, workers' recreational clubs, and all other Cadet clubs, etc.) valued at the prices paid by these establishments.

    (iv) Purchases by the Services of food for the Armed Forces in the U.K. valued at the prices paid by the Services.

    (v) The quantities of ingredients used for the production of manufactured foods and their value at the prices paid by manufacturers are included against the ingredients where these are given separately in the above table. The value of other ingredients and the added value resulting from manufacture are shown against "All other foodstuffs."

    (b) The quantities of unrationed foods consumed in catering establishments are unknown. An estimate of their value is included in the total.

    (c) These values represent the totals of groups (ii) and (iii) noted in (a) above.

    (d) Including canned corned meat and pork self-suppliers.

    (e) Including self-suppliers.

    Mr. Freeman: Can my right hon. Friend say how these figures compare with those during and before the war?
    Mr. Strachey: Not without notice.
    Following is the statement:

    Milk Distribution (Report)
    Mr. Sharpasked the Minister of Food whether he has now received the Report of the Committee on Milk Distribution; when this will be made available; and what action he proposes taking to implement the recommendations.
    Mr. Strachey: I do not expect to receive the Report until the autumn.

    Extra Sugar Ration, Oxford
    Mr. Quintin Hoggasked the Minister of Food, whether his attention has been drawn to complaints by Oxford traders of the difficulties in which they have been put in honouring the extra sugar ration by the failure of his Department to secure the supply of sufficient stocks in time; and what action he is taking to meet their difficulties.
    Mr. Strachey: No Oxford traders have complained to my Department about sugar deliveries, but it is true that the two recent bonus issues and the increase in the ration have placed a strain on transport. My Department has dealt with such difficulties as promptly as possible, and I feel certain that housewives would rather have their extra sugar a few days late, if this is unavoidable, rather than be deprived of it.
    Mr. Hogg: When the right hon. Gentleman says that no Oxford traders have complained to his Department, can it be that he has not received the letter of complaint which I myself sent on to him from an Oxford trader?
    Mr. Strachey: I suppose the answer is intended to imply, other than the complaints on which this Question is based.
    Mr. Drayson: Can the Minister say whether the bonus issue is subject to a tax?

    Cattle Purchases, Eire
    Mr. Skeffington-Lodgeasked the Minister of Food whether it has been brought to his notice that British cattle buyers are being forced out of the Southern Irish meat market by Continental agents making direct purchases off the land; and whether, in the light of this fact, he will investigate the position and, if necessary, revise the prices paid by this country for fat and store cattle from Eire.
    Mr. Strachey: I know that substantial numbers of cattle have been bought in Eire by Continental countries recently. His Majesty's Government are at present considering what can be done to increase supplies of agricultural produce, including cattle, from Eire to this country; it is hoped to open discussions shortly with the Government of Eire on this and other subjects of mutual interest.
    Mr. Skeffington-Lodge: Is not my right hon. Friend aware of the fact that this matter is extremely urgent, and that unless very rapid action is taken about it, he may find eventually that he can get no meat whatever from the South of Ireland?
    Mr. Strachey: Action has begun on the subject already. I agree as to its urgency.

    Venison (Controlled Prices)
    Mr. Skeffington-Lodgeasked the Minister of Food whether he will so revise the shippers' and retailers' controlled prices of 9d. and Is. per lb., respectively, for venison, as to encourage its importation from Eire and other sources of supply.
    Mr. Strachey: The maximum prices for venison are in line with those for similar types of meat and I see no reason for increasing them.

    Tomato Order (Restrictions)
    Mr. Channonasked the Minister of Food for what reasons it was decided to announce over the wireless that, owing to the large influx of Dutch tomatoes, licensed wholesalers selling in the London area were released from the obligations imposed by the Tomato Order, 1947; whether he is aware that this announcement has caused great inconvenience to the trade; and whether arrangements will be made under similar circumstances in future to deal with matters of this kind through the appropriate trade channels.
    Mr. Strachey: During the week which began on 20th July very heavy arrivals of Dutch tomatoes coincided with peak marketings of the home grown crop. By Friday, the 25th, the depots through which these tomatoes are distributed in the London area were overloaded and arrangements were therefore made to relax the restrictions imposed by the Tomato Order in order to avoid delay in distribution and

    1463
    consequent wastage. I think that far greater inconvenience would have been caused by failure to take prompt action.
    Mr. Joynson-Hicks: Cannot the right hon. Gentleman appreciate the confusion that was also caused to the growers, and is he not aware that the growers in this country forsaw this glut coming, and why did his Department not foresee it and take earlier action than was done by the wireless broadcast?
    Mr. Strachey: It the hon. Gentleman feels that a supply of tomatoes which allows distribution under the controlled price is a glut, I cannot altogether agree with him—or that it is the kind of glut which we welcome very much in this Department.
    Mr. Collins: Is my right hon. Friend aware that this made practically no difference at all to the growers, that the implications in the Question are grossly inaccurate, and that if the action had not been taken, it would have resulted in far greater inconvenience to traders and a huge loss of food?

    Cheese Ration (Building Workers, Maldon)
    Mr. Dribergasked the Minister of Food if he will modify his definition of rural building-trade workers in order to overcome some of the anomalies which have attended his recent concession of an extra cheese ration; and, in particular, if he will authorise the issue of such a ration to employees of Messrs. S. Hardy-King, 35, Market Hill, Maldon, Essex, who are to be engaged for several months in building work at a site slightly less than two miles from the town of Maldon, but on an island.
    Mr. Strachey: I am afraid I cannot agree to modify the regulations to meet this case. The test must be whether the workers are regularly employed under the qualifying conditions.
    Mr. Driberg: Is my right hon. Friend aware that various food offices interpret his regulations in various ways, and interpret the definition of a town quite differently? Some seem to apply the word "town" to quite a small place which has no canteen or meals facilities of any kind?
    Mr. Strachey: We always knew that this concession would land us into difficult questions of demarcation, and that is why we were rather reluctant to make it, but we shall have to work out these qualifying conditions as carefully as possible.

    African Groundnut Scheme
    Mr. Rankinasked the Minister of Food how many Africans are now employed in the groundnut scheme; and in what capacities.
    Mr. Strachey: At the end of July about 2,500 Africans were employed in the groundnuts scheme, of these about 1,600 were engaged in relatively unskilled work as field labourers, camp attendants and hospital attendants. The rest were employed as motor drivers, tractor drivers, clerks and artisans or were being trained for these more highly skilled jobs.
    Mr. Rankin: Will my right hon. Friend see that, when this scheme is in full working operation, the minor specialised categories will be staffed solely by African labour?
    Mr. Strachey: I could not give my hon. Friend a guarantee, but the whole object of the scheme is to train Africans to the most skilled jobs possible.

    Surplus Mackerel (Processing)
    Mr. Boothbyasked the Minister of Food whether he is aware that a consider able number of mackerel have recently been dumped into the sea at Peterhead; and what steps he has taken to find a market for mackerel which are surplus to the requirements of a particular port, or, alternatively, to process them into oil.
    Mr. Strachey: We are seeing whether we can arrange to use mackerel for processing into oil and meal.
    Mr. Boothby: Will the right hon. Gentleman bear in mind that he had better see to it fairly quickly, or the mackerel will have gone away?
    Mr. Strachey: Unfortunately, at present the factories say there are technical difficulties about using mackerel for this purpose.

    Kippers (Export Licences)
    Mr. Boothbyasked the Minister of Food whether he is aware that many

    1465
    kipperers have found it necessary to close down, or work short time, owing to lack of home demand; and, in view of the growing demand for kippers from foreign markets, particularly Australia and South Africa, whether he will increase the export licences to those who are willing and able to meet this demand.
    Mr. Strachey: I am aware that many kipperers have not been working to capacity. At the start of the season I authorised exports up to 2,000 tons, about the same quantity as the total 1938 export, and I recently increased the quota by 500 tons. But I am now considering whether we cannot dispense with this whole export licensing system at any rate during the flush herring season.
    Mr. Edward Evans: Is the Minister aware that the home market will decline further unless he does something to stop the dyeing of kippers, instead of curing them by the proper process?
    Mr. Strachey: I will look into that.
    Mr. Hector Hughes: Will the Minister consult with the Minister of Transport with a view to transporting fish more rapidly from Aberdeen fishing ports to the inland consuming centres where the food is badly needed?
    Mr. Strachey: I think the transport of fish this year has been considerably better than it was, and we have provided a lot of dry ice and other refrigerating facilities for that purpose. One of the difficulties this year is that the herring have been of low quality.

  GERMANY

    Food Situation
    Mr. Peter Freemanasked the Secretary of State for Foreign Affairs whether he has considered the report recently sent to him on the food situation in Germany and the effects of an increased supply that could be obtained locally by allowing a greater production of nitrogen fertilisers; and whether he will take effective action accordingly as a means of avoiding the present gradual starvation of the population.
    The Secretary of State for Foreign Affairs (Mr. Ernest Bevin): I am grateful to my hon. Friend for this report, which is now being studied. Every effort is
    1466
    being made to increase production of nitrogen fertilisers in the Combined zones, and as much as possible is imported from overseas under allocations made by the International Emergency Food Council.
    Mr. Stokesasked the Secretary of State for Foreign Affairs what food from local production in the British zone of Germany is being taken for consumption by members of the Control Commission for Germany or Armed Forces; and whether he will confirm that none whatsoever has been, or is being, exported from Germany to England.
    Mr. Bevin: Members of the Control Commission for Germany, and of the British Armed Forces are strictly forbidden to take any food from local German production for their own consumption; no German foodstuff has been, or is being, exported from Germany to this country.
    Mr. Stokes: Is my right hon. Friend aware that rumour has been rife in Germany that food has been exported? Will he take special steps to see that this answer is widely publicised in Germany?
    Mr. Bevin: I will Jake steps to publicise it widely, but I must deprecate the constant attempt to make suggestions about our staff in Germany. I would ask hon. Members to give us precise details, rather than throwing innuendoes.

    Control Commission (British Personnel)
    Mr. Stokesasked the Secretary of State for Foreign Affairs whether he will now state his intention with respect to the progressive reduction of the number of British personnel employed by the Control Commission for Germany.
    Mr. Bevin: The strength of the British element of the Control Commission will be progressively reduced as fast as the tasks to be carried out allow.
    Mr. Stokes: Is my right hon. Friend aware that the target for reduction of plant of the former Chancellor of the Duchy of Lancaster has not yet been achieved, although it was promised for February this year? Can he promise greater progress?
    Mr. Bevin: I am progressively reducing it, but at the same time I am constantly urged to take on other duties in the re-

    1467
    organisation of Germany, and, therefore, I have to balance the claims made on me against the reduction.

    Reparations (Capital Goods)
    Mr. Stokesasked the Secretary of State for Foreign Affairs what date has now been fixed by which capital goods for reparations from Germany must be specified, in place of 15th February, 1946, fixed at Potsdam.
    Mr. Bevin: None, Sir.
    Mr. Stokes: Is my right hon. Friend aware that the Potsdam Declaration made it quite clear that goods for capital reparation should be fixed by 15th February, 1946, and now more than a year has passed and there is no definition yet? When is a decision going to be taken?
    Mr. Bevin: I have made it clear, and if my hon. Friend had been in his place during the Debate on Monday, he would have heard the whole of the facts in relation to this, but I am afraid I cannot give another detailed answer today.
    Mr. Harold Macmillan: Is it true that this taking away of capital goods for reparations is still going on? That question was not answered.
    Mr. Bevin: I made it perfectly clear on Monday that capital goods were being dismantled and removed from Germany by June, 1948, but, owing to the new level of industry, Categories 2, 3 and 4 were being revised.
    Mr. Macmillan: The goods I am referring to were goods which were not being destroyed because they were war potential, but capital goods sent away for reparations?
    Mr. Bevin: I made it clear that there were two categories. One was war potential, and the second was reparations under Categories 2, 3 and 4, surplus to the requirements of Germany, and if the right hon. Member for Bromley (Mr. H. Macmillan) will read the speech in HANSARD he will see that I was perfectly clear.

  GREECE (ARREST)
  Mr. Doddsasked the Secretary of State for Foreign Affairs if he has any
  1468
  further information from the inquiries he is making into the arrest of Pandelis Gousides.
  Mr. Bevin: I regret that the local British authorities have not yet been able to furnish me with fully authenticated information on the specific points put to me by my hon. Friend.
  Mr. Dodds: Is my right hon. Friend aware that I have reliable information that this gentleman has now been executed? If so, will he protest to the Greek Government at the execution of a man who did such excellent work for the Allied Forces during the war, in view of the farcical trial, the details of which I have supplied to my right hon. Friend?
  Mr. Bevin: I really cannot enter into the details of every one of these cases. There are charges against this man, whether true or not, of taking part in a revolt against the Government, and working with bandits and so on. I pronounce no opinion, but I do not intend to take up every one of these cases

  RUSSIAN-BORN WIVES
  Commander Maitlandasked the, Secretary of State for Foreign Affairs whether, if he is unable to procure the release of British wives from the U.S.S.R., he will offer to pay on their behalf the Soviet tax levied on them for childlessness.
  Mr. Bevin: No, Sir. While His Majesty's Government have every sympathy with the wives, if indeed they are called on to pay this tax, they could not undertake to pay it on their behalf.
  Commander Maitland: Can the right hon. Gentleman take the opportunity to assure the House that he is still pressing for the release of these wives?
  Mr. Bevin: I must make a frank statement. I do not think there is a hope of getting them out.

  PALESTINE (U.N.O. DECISION)
  Mr. Teelingasked the Secretary of State for Foreign Affairs whether he will assure the House that the decision of U.N.O. as regards Palestine will be neither accepted nor rejected until it has been debated in Parliament; and that no action

  1469
  on the decision will be taken until after this House has reassembled after the Summer Adjournment.
  Mr. Bevin: I cannot at this stage commit His Majesty's Government to any restriction upon their freedom to take such decisions as may be necessary during the forthcoming Assembly debates, but the importance of associating Parliament with the policy of His Majesty's Government in Palestine will, of course, be borne in mind.
  Mr. Teeling: Can the right hon. Gentle-man give us any idea when an announcement is likely to be made? Will it be much before Parliament reassembles? Has he any idea?
  Mr. Bevin: I cannot.

  INDONESIA (SECURITY COUNCIL RESOLUTION)
  Mr. Youngerasked the Secretary of State for Foreign Affairs upon what grounds the United Kingdom's representative in the Security Council abstained-from voting in support of the resolution which called upon the parties to the fighting in Indonesia to cease hostilities and to settle their dispute by arbitration or other peaceful means.
  Mr. Bevin: I would refer my hon. Friend to the statement made in the Debate on the Adjournment on 4th August by my hon. Friend the Under-Secretary in reply to a similar question raised by the hon. Member for Reading (Mr. Mikardo) in the course of the Debate.
  Mr. Younger: Can my right hon. Friend say how he reconciles the attitude of the United Kingdom representative on the legal question of the Security Council's right to intervene, with the statement of the Under-Secretary of State that our aims are to get effective Security Council action to stop hostilities immediately? Will he, in any event, assure us that the Government welcome the resolution?
  Mr. Bevin: Certainly, when matters are referred to the Security Council I am anxious that the Security Council will adopt a judicial view of what comes within their power, and what does not come with their power. Although it may be unpopular to take a difficult line, in view of our responsibilities to so many
  1470
  territories in the world, I feel I must take precautions to see that in a slipshod manner the Security Council shall not go outside its proper jurisdiction.

  AUXILIARY AIR FORCE ALLOWANCES (INCOME TAX)
  Wing-Commander Hulbertasked the Financial Secretary to the Treasury if he can now state whether Auxiliary Air Force training allowances and bounties will no longer be subject to Income, Tax; and from what date this concession will apply.
  The Financial Secretary to the Treasury (Mr. Glenvil Hall): Yes, Sir. These payments are exempted from tax, as from 6th April, 1947, by Section 27 of the Finance Act, 1947.

  ROCK DRIFTER DRILLS, SCOTLAND
  Mr. Boothbyasked the Secretary of State for Scotland why the order for 200 rock drifter drills in the U.S.A. was not placed with a company which, from its Scottish factories, could have provided servicing spares estimated at 10s. per drill per day and thus saved further dollar expenditure.
  The Joint Under-Secretary of State for Scotland (Mr. Buchanan): I would refer the hon. Member to the reply given to the hon. and gallant Member for Camborne (Commander Agnew) on 29th July, 1947.

  FURNITURE STORES (AERODROMES)
  Mr. Osborneasked the Minister of Works if he is aware that large quantities of beds, blankets, tables and chairs are stored on aerodromes throughout the country; and why they are not being released for civilian use where they are urgently required, as indicated by the correspondence sent to him.
  The Parliamentary Secretary to the Ministry of Works (Mr. Durbin): I have nothing to add to the answer given to the hon. Member on 4th August.
  Mr. Osborne: Is the hon. Gentleman aware that only on Monday I went to this aerodrome in Lincolnshire where thousands of beds and tables were left out unguarded to rot? These things are required by the general public, and will not the hon. Gentleman make an appeal?
  Mr. Durbin: The hon. Member has already had an answer to that question on a previous occasion.
  Mr. Osborne: It was unsatisfactory.
  Mr. York: Will the hon. Gentleman at least take steps to see that these goods are not wantonly broken up?
  Mr. Durbin: Again the answer to that supplementary question, was contained in the answer to the original Question.
  Major Legge-Burke: Will the hon. Gentleman bear in mind that so long as these stores are left unguarded, they are a perpetual temptation to those people who are short of such things? Is he further aware that from time to time cases are heard in the courts of people who have pilfered such stores, and will he take early action to avoid temptations of this kind being put before the people?
  Mr. Durbin: The answer is that we are looking into the question.
  Mr. Osborne: In view of the most unsatisfactory nature of the answer, I beg to give notice that I will raise the matter again.

BILL PRESENTED
  Agriculture (Scotland) Bill
  "to amend the enactments relating to agricultural holdings in Scotland, and to make further provision for the improvement and development of agriculture and the use of agricultural land in Scotland, and for purposes connected therewith," presented by Mr. Westwood; supported by the Lord Advocate, Mr. Glenvil Hall, Mr. Buchanan and Mr. Thomas Fraser; to be read a Second time upon Friday, and to be printed. [Bill 115.]
ORDER OF THE DAY
  CONSOLIDATED FUND (APPROPRIATION) BILL
  Read a Second time, and committed to a Committee of the whole House for Tomorrow.

  STATE OF THE NATION
  Motion made, and Question proposed, "That this House do now adjourn."— [Mr. Whiteley.]
  Mr. Quintin Hogg: On a point of Order. I see there is a Notice of Motion to suspend the Rule, in the name of the Prime Minister——
  Hon. Members: It is not being moved.
  Mr. Speaker: I did not call it.
  Mr. Hogg: May we have some indication from the Leader of the House or the Prime Minister of the course they propose to take today? I understand there are a great number of hon. Members who desire to take part in this Debate. May we have some indication from the Leader of the House?
  Mr. Speaker: The Motion to which the hon. Member refers would not have affected the business now before the House because the Adjournment is not Government Business. The question is, "That this House do now adjourn," and I would remind hon. Members that on the Adjournment matters affecting legislation are out of Order. That may be somewhat difficult in this Debate but that is the Rule and it is my business, as far as I can to uphold it.
  3.30 p.m.
  Mr. Oliver Stanley: I am sure that this opportunity to debate for two days the grave economic state of the nation will be welcomed on all sides of the House. It would, indeed, have been quite impossible for us to adjourn, whether for a short or a long time, without such a Debate taking place. I am sure that this opportunity is welcomed by none more warmly than it is by the Prime Minister, who will have this chance of letting the country into the secrets which, as rumour at any rate has it, hon. Members opposite have already enjoyed—[HON. MEMBERS: "No."] Then it will be an equal treat for all of us. It is unfortunate that in accordance with the rules of Order, of which you, Mr. Speaker, have just reminded us, it will be impossible for the Prime Minister to give any account of the Bill that was presented yesterday, and for the same reason, of course,
  1474
  it would not be possible for me to discuss it. We shall, then, have to wait until the Second Reading of that Bill to hear the Government's reasons for its introduction, their intentions for its use, and any limitations which they propose upon powers which, at all events at first glance, appear to be absolutely without limit. Only then will it be possible for my hon. Friends to come to any final decision as to their attitude to that Bill.
  It is only three weeks ago that we had the last economic Debate, but a great deal has happened since then. Therefore, I make no apology for putting again today the two questions which I then put to the Chancellor of the Exchequer. The first question was: What is the actual position? To that question three weeks ago, the Chancellor of the Exchequer gave a definite reply. That reply was bad enough. He showed that we were drawing on our American, and I think, too, our Canadian credit, at the then rate of £800 million a year. Since then it would appear, from statements that have been made, that the position must have got worse. We should like to know how much worse, and why. In particular, we feel it essential that if the Prime Minister is unable to do so, the Chancellor of the Exchequer should, later in the Debate, give us some clearer information than we have now as to the actual reasons why this drain is continuing. All of us appreciate clearly the reasons for that part of the drain which is accounted for by our deficit on the material, the visible, export and import account. What we are not able to appreciate are the exact reasons which account for the large gap of some £350 million between that material deficit and the total drain of £800 million. There is, in all quarters, great uncertainty as to the reasons for it.
  Quite frankly, that uncertainty has been increased by an answer by the Chancellor of the Exchequer on 29th July. In reply to a Question by an hon. Friend of mine, as to the extent of the drain on our dollar reserves since 15th July, he gave this answer:
  "There has been no substantial change in the drain during the fortnight since 15th July compared with the immediately preceding period."—[OFFICIAL REPORT, 29th July, 1947; Vol. 441, c. 257.]
  Yet on the very day he gave that answer we drew on our credit to the extent of £75 million, a bigger withdrawal than we

  1475
  have had at any other time during the currency of the loan. The right hon. Gentleman could not have been ignorant, when he gave that answer, that that withdrawal had either been made, or was to be made within a few hours. He could not have wished to mislead the House simply on the ground that there might have been a few hours' delay between the time of the answer and the actual time of the withdrawal. We are, therefore, driven to the conclusion that, for some reason or other, the right hon. Gentleman was not prepared to class this withdrawal as being a drain upon our dollar reserves.
  It is essential, in view of the rumours which are not only current in this country but are becoming current in America, that we should, during this Debate, have a precise statement as to the amount of our dollar losses attributable to all the various causes, whether it be the process of convertibility, whether it is some other capital leakage which had not been foreseen, and, finally, whether some of it is accounted for merely by a transfer from the dollar credit to the dollar reserve holding in the Bank of England, and is, therefore, something which leaves our net position untouched. We do not believe that it is possible, intelligibly and intelligently, to discuss the remedies unless we can be supplied with that information.
  The second question which I asked the Chancellor of the Exchequer three weeks ago is, What are the Government going to do about it? The answer he gave then on behalf of the Government was quite plain. They meant, at that time, to do nothing about it at all. With the exception of a few irritating but, in view of the magnitude of the crisis, derisory cuts, they were going to be content to sit and wait for help from America, as one might have sat and waited in the old days for manna from Heaven. This decision filled many of us with feelings of despair and humiliation. In saying that, I think it applies to Members in all parts of the House. In the first place, we did not feel that we were in a position to depend for our salvation entirely upon help from America. Secondly, many of us thought that, even if we were in a position to depend upon that American help, we ought not to be content to depend upon that and upon that alone, to restore the
  1476
  prosperity of this country. Nothing I have seen convinces me that we have any right to be as certain as the Government appeared to be in the Debate three weeks ago of future American help. In asking for it, we are asking for a great deal.
  We have to drop—at least I hope we shall drop—any pretence that a further loan can be on a commercial basis, or that it would be within the capacity of this country, or within the capacity of other European countries, to repay such a loan on a commercial basis, within any reasonable period of time. It is easy to say that it is to America's advantage to lend us the money, that their future security and their future prosperity depend upon preventing Europe and preventing us from relapsing into chaos. That may well be true, but these truths, which appear very simple and self-evident from the receiving end, do not appear anything like so obvious from the point of view of those who are called upon to give. In fact, if the American people are prepared, in the future, to give us and others this help, with no expectation of commercial return, and with none of the stimulus of war, then indeed that will go down to history as one of the greatest acts of statesmanship and generosity possible.
  In other words, American help is something for which we can dare to hope but it is not something on which we can afford to rely. To regard it as as a great act of generosity which may come to our help is, I think, both more fair and more wise than to treat it as it has been treated sometimes in recent speeches by certain people who appear to have adopted in place of the old adage the new and, I think, unsatisfactory one that rudeness is a lively sense of favours to come. But, even if we were today absolutely certain that we could depend upon getting from America all the help that we wanted and all that we needed, we should only be entitled to regard that help, in the famous words of my right hon. Friend the Member for Woodford (Mr. Churchill), as a springboard and not a sofa. It is inconceivable that this great country could calmly settle down to be the permanent pensioners of the United States, content to live for ever on her dole and her memories That is something which the vast mass of the people of this country would reject immediately.

  1477
  As I say, this feeling in regard to the Government's answer three weeks ago was not only held and expressed by my hon. Friends on this side of the House but, I believe, it was held by supporters of the Government as well. We are delighted to learn that it appears at least to have impressed the Government. If I were permitted to use a racing metaphor, with which I am not entirely unfamiliar, I should say that in this race it has been: "The Opposition, first; the Government back benchers, second; the Government, third—won easily; a bad third." We are assured, then, that we are going to get today a different answer from that which we got three weeks ago; but we must point out to the Government now that whatever the Prime Minister says this afternoon it will be right for us to do in the national interest, would have been equally right three weeks ago—[An HON. MEMBER: "Two years ago."] It would have been equally right six months ago when we discussed the White Paper. It would have been equally right at least a year ago when the present crisis was not only foreseen but was foretold by so many hon. Members on this side of the House.
  I do not intend in my speech to go back over the past except in so far as it is necessary to look at the past in order to decide what we are going to do in the future. There will be other places and other opportunities for allocating the blame for the grave situation which we have to meet today, but, at any rate, we must make it clear that there has been the usual rush in the last few weeks among Members of the Front Bench opposite to find an alibi. I am afraid that this time some of their old friends have failed them. The weather—I am afraid that old and tried friend of the Minister of Fuel and Power will be no good to them this time. The bankers' ramp—in view of the self-congratulatory statements of the Chancellor of the Exchequer, they cannot use that. Even the Tory legacy is getting a little thin. [Laughter.] I am glad that hon. Members opposite appreciate that. They appreciate, as I do, that it gets a little thin when the most prominent Members of their Front Bench have been clamped to that bench for the last seven years. It appears, finally, that they have decided to go down together on this one alibi: the rise in world prices. That is a specious one because there is some truth in it. There is some truth, but it is neither
  1478
  the whole truth nor even half of it. It is just about a quarter true.
  Just look at the figures. When we discussed the American loan nearly two years ago the original estimate was that that loan and the Canadian credit combined would last for about five years. Since that date the rise in commodity prices has been in the order of 28 per cent., although against that we must put a smaller rise in the value of our own exports. Therefore, on this reduced value of the loan, it is fair to bring that five years estimated period down by one-quarter. The loan, therefore, should have been expected, on the original estimate, to have lasted for just under four years. As a matter of fact, here we are today just over a year after that loan came into effect, already contemplating its almost immediate exhaustion. When we look for the reason for that gap, we believe that it lies in causes which, in the main, were within the control of the Government and could have been arrested by them. The importance of that lies in the fact that if what we believe to be the bad practices of the past are allowed to go on, they will result in wrecking any new plan in the same way as they have wrecked the old.
  In this connection, I must say one word about the Chancellor of the Exchequer. I pick him out because I consider him to have been the worst offender over these two years. They used to be called the "guilty men." We regard the sins which he has committed as being sins not of omission, like those of many of his colleagues, but of deliberate commission. We believe that he has actively encouraged the inflationary proceedings over the last two years; that that inflation has resulted in the distortion of our economy, and that to that we owe many of our shortfalls in production, and lack of buoyancy in exports. The most blatant mistake that he has made during that period has been the obstinate pursuit of an artificial cheap money policy. It has often been pointed out to him. We have often said, with regard to the methods that he has adopted, that any budgetary advantage that he might get from them would be more than outweighed by the resulting capital inflation; and that has taken place. Purely as a result of what he has done, Stock Exchange values

  1479
  have been forced up to a wholly unreasonable level. He gratuitously created an immense mass of new purchasing power and he widened quite needlessly the inflationary gap which already was dangerous enough.
  I remember that only a year or so ago the right hon. Gentleman, in an ecstasy of self-praise, said to the House of Commons:
  "The previous all time 'high' for old Consols before this Government came in and improved the national credit was 94 in 1935. Where are they now?"—[OFFICIAL REPORT, 16th May, 1946; Vol. 422, c. 2250.]
  I can tell him. They are at 84, almost exactly the figure at which they stood when my right hon. Friend left the Exchequer and the right hon. Gentleman opposite came into office. All this trumpeting and artifice resulted, at the end of two years, in the Government's credit basis being exactly what it was when they started, but what damage has been done in the meantime? It is not only the injury which will be imposed upon individuals and, let me remind the House, probably on those individuals who have reposed, perhaps foolishly, the most trust in the statements of the right hon. Gentleman; it is not an injury to speculators, or those who hoped for capital gain; it is an injury to those who tried to find a wholly safe investment for their own funds and who are now faced with having, in the course of a few weeks, lost one-sixth of their holdings, a loss which, for gravity and rapidity, has never been equalled in peace time before. Indeed, Shakespeare may well have had the right hon. Gentleman in mind when he spoke of
  "Folly, doctor-like, controlling skill."
  We are told in all the papers that the Prime Minister talked last week and will talk again today on proposed cuts. Of course, for reasons of which I need not remind the House, we are not entitled to treat these reports as having the same authority as they had previously. We can regard them only as intelligent anticipation, but, when they coin-side upon this one matter, there is probably something behind them, and I will tell the right hon. Gentleman why. If he, in fact, is going to make some announcement this afternoon-we on this side of the House are prepared to consider on their merits any cuts that he is going to propose to
  1480
  this country. In the situation to which this country has been brought, we recognise that there may be no way out at all except the hard way, but what we are not prepared for is cuts by themselves. We are not prepared for a continuance of that policy which, up to now has meant pills for earthquakes, even though there may be bigger pills for very much bigger earthquakes. Cuts can only be accepted today if they are just one part of a general plan which is adaptable and effective in dealing with the whole field of our present economy. Therefore, while we shall listen with interest to any proposals for the cutting of imports which the right hon. Gentleman has to make, we shall attach greater interest and greater importance to what he has to say upon the general plan as a whole. It is to some of those points with which any plan must deal, that I now want to address myself.
  The first thing I want to raise is what we might call the strings to the loan. I mean by that these provisions for convertibility which today are resulting in a drain on our dollar resources, and which are not represented by any import surplus, and which, therefore, bring no direct benefit, no material benefit, to the people of this country in return for the exhaustion of the loan; and to the provisions as to non-discrimination, which prevent us taking what may be suitable, and indeed the only, measures to correct the grave visible adverse balance in dollars. I do not want to shirk any share of the responsibility which attaches in varying degree to all those who did not oppose the American Loan and the conditions attached to it. At the time when we agreed to its passage, we were all aware of these dangers, and indeed, they were pointed out in Debate, but we took the attitude that there was an even greater and more immediate danger in having no loan at all, and we hoped that two years of world recovery might make these arduous conditions at least practicable when the time came.
  Events have proved us over-optimistic. Two years have not seen recovery; they have seen nothing but deterioration in the European economy, and, therefore, all the grounds on which we hoped that these provisions would become capable of performance have been entirely destroyed. Indeed, under present conditions, I regard these obligations not only as dis-

  1481
  astrous to us, but, I must say, as of no advantage to anyone else. I could quite understand the Americans attaching a great deal of importance to the nondiscrimination provisions if the situation was that these provisions ensured that, if we wanted to buy from somebody else, we, at the same time, had to buy from them, but that is not the effect at all now. All that it means now is that we cannot afford to buy from anybody at all, and there is no advantage to America and a great loss to ourselves. Similarly, convertibility might have been, for them, a very valuable safeguard, if conditions had arisen in which there would have been a chance of our building up on the basis of frozen sterling, the great sterling block which would have been inaccessible to goods from the United States, but it appears to have no meaning at a time like this, when the whole world is clamouring for American goods in quantities and qualities which America is still unable to supply.
  Therefore, we do ask the right hon. Gentleman with the utmost seriousness, what are the proposals of the Government for relieving us of these obligations. We fully realise the difficulties with the agreements into which we have entered, but we say that it is quite impossible to sit still and allow the country to drift to ruin because of an arrangement which was entered into two years ago in wholly different circumstances and with wholly different anticipations from those which have been realised. To do so would be national suicide, and we believe that the Government have the responsibility of taking definite steps to see that we are relieved of obligations which have become undesirable for the world as a whole and wholly impracticable for us.
  I want next to deal with the question of inflation. I remember that we raised this point in the economic Debate some time last March. In that Debate the Minister of Defence took part, and his only reply was in language which, I think, he fondly believed was the language of the quarterdeck, for he described the whole thing as "piffle and poppycock." We gather that the right hon. Gentleman is not to take part in this Debate. The Government have apparently learned that, though they cannot make him strong, at least they can keep him silent. We hope, therefore, that this time we shall get a serious answer to what we, on this side
  1482
  of the House and many others in the country, believe to be a serious question. It is quite true that, on the one hand, that of capital inflation, the recent collapse of the Stock Exchange market has to some extent decreased the danger. But that, in any case, was only an extra, a voluntary. It was outside the situation—grave enough—presented by the economic White Paper. It was in addition to the inflationary gap of £1,000 million which that economic White Paper presented to us. We believe this inflation, as represented by that gap, to be one of the most potent causes of the economic disequilibrium in which we are today. It is quite true that by the exercise of rigid controls it is possible to keep it in check with regard to certain ranges of commodities; but the only result is that it bursts out with redoubled vigour in other places. To that inflationary pressure, we have to attribute much of that loss of labour and materials which have been drawn from the primary functions into the secondary channels.
  Any proposal which the right hon. Gentleman is going to make this afternoon for cutting down imports or for increasing exports, are, by themselves, only going to add to the inflationary danger; they are only going to decrease the amount of goods available in this country, and, by that means, merely increase the inflationary gap. Unless proposals are going to be made, as part of this plan, for dealing with the other half of the problem—the amount of money available—then the danger, after any new proposals, will be not less, but greater. We want, therefore, as part of the plan, the decision of the Government upon the inflationary pressures, which the Chancellor of, the Exchequer himself admitted last spring, and which are now becoming rapidly intolerable. At the same time, we should be glad of an answer to the question which my hon. Friends and I myself have already put on several occasions to the Chancellor, and which, hitherto, he has always avoided answering. Can we avoid, or even control, inflation so long as something round 30 per cent. of the national income continues to be taken by the Chancellor in taxation?
  Now I should like to say one word upon agriculture. It would appear to the ordinary person that in our home agriculture lies one of the best and readiest

  1483
  methods of reducing our dependence upon foreign imports. Can anyone say that, for the last few months, since this crisis first became apparent in all its severity, full use has been made of that agriculture, or that any real proposals have been put forward to reduce by that means the flow of dollars? It is said, and seriously, of our present crisis that, since the end of the war, home agricultural production has fallen by something like £100 million in value. Most of that, in order to maintain the standard of life of the people of this country, has had to be made up by increased imports. That figure alone shows how profitable this field could be for a cut.
  I know that agriculture today suffers from all kinds of difficulties, difficulties which will be dealt with in much more detail by some of my hon. Friends behind me. Lack of labour, lack of houses with which to attract labour, lack of machinery, lack of spare parts for the machinery which exists, all those things make it difficult for the increased production to be attained. It is just as serious a problem as that of coal, even if we have seen in regard to it none of the publicised, if ineffective, energy which the Government have been showing with regard to the coalmining industry. But, above all, if we are to have any real, sound increase in agricultural production, we must have a bigger supply of feeding stuffs. I know from the answers of the Minister of Food that he finds himself unable to procure them for this country. And yet, in the last food Debate, the right hon. Gentleman gave to the House and the country a long list of countries from which, in the near future, he expected to get largely increased supplies of pig and poultry products—Poland, Denmark, Holland; indeed, the list extended far beyond that. How far were those countries going to be in a position to supply us with those extra products, except on the basis of imported feeding stuffs? How far, for instance, were Denmark and Holland self-supporting in feeding stuffs?
  The real answer is that we have been outsmarted, or rather that the Minister has been outsmarted, and that we have got to pay for it. Surely, the time has come, in this grave crisis, for maximum agricultural production. If that is decided upon, it requires three things—maximum drive
  1484
  from the centre, maximum incentive on the farm, and maximum assistance from other Government Departments. Continual pleas have been made from this side of the House for those things to be done. Continual tributes have been paid to the importance of agriculture, but, so far, words, although kind, have not been followed by deeds. We hope today that, at least, some definite proposals are going to be made for the increase of our agricultural production.
  Finally, I want to refer to the planning of capital expenditure. We believe that the failure to adapt the amount of planned capital expenditure to our actual resources has been one of the greatest causes of inflation, and one of the things most wasteful in men and material. We have seen instances all over the place of complete failure to relate capital projects to the grim realities of capital possibilities. All kinds of schemes have been planned, and, indeed, started. Labour, time, and materials have been used on them, but only a small proportion can, or, indeed, should be finished in the immediate future. In the last few days we have had a glaring example of this, and it comes from the part of the world which I represent. It is the question of the Severn Bridge. I have no doubt that it is an admirable scheme, and that when it is possible to complete it, it will add greatly to the convenience of people. If it were introduced in a period of deflation, it would provide valuable employment. But can anyone say that this is the moment to choose to announce an intention to proceed on a scheme which will use a great deal of steel and employ a great deal of labour? Is there anyone who does not think that within the next vital, critical year or two, that steel can be used to much quicker and greater advantage than for the very indirect and long-term benefits which are all we can hope for from a scheme of this kind?
  I am appalled at the naivety of the Minister of Transport that he should have chosen the last few days in which to make this final announcement about the project, although it is true, and that is a good example—that, in fact, expenditure on this project has been going on at this rate for a considerable length of time. In the old days, before we had any planning, we used, on a matter of this kind of Government capital expenditure, at

  1485
  any rate, to have a plan. It was a plan enforced by the Chancellor ot the Exchequer of the day, who made Ministers stand in a queue at his door, and who, on a rough and ready estimate of what he thought we could afford, permitted or refused their requests.
  Of course, today all that control has gone. Over the last two years Ministers have been not only allowed, but encouraged to branch off on all kinds of schemes which add much to the prestige of their Ministerial offices. Grandiose schemes have been announced. Time has been spent on them which has no relation to present capacity, and, as far as one can see, the chief aim of the Chancellor of the Exchequer has not been to curb these extravagances but to make sure that he gets some share of the credit for them. We therefore insist that, as part of any plan, there should be announced to the country definite machinery which will, first of all, reduce to real proportions present plans for capital expenditure, and ensure in future that nothing is done which it is not within the power of this country to complete within a reasonable period.
  As I say, there are many other points which I hope will be dealt with. I want to say one final word. Recent speeches by right hon. Members on the Front Bench opposite—by the Lord President of the Council, by the Foreign Secretary and, it is rumoured, even by the Prime Minister—have all referred to a Coalition. Like President Coolidge and sin, they appear to be against it. But these constant reiterations give the impression that they have been under continuous pressure from other parties who have been annoying them with their solicitations. It conjures up entrancing visions of my right hon. Friend the Member for Woodford spending his days amorously camped on the steps of No. 10, or my right hon. Friend the Member for Warwick and Leamington (Mr. Eden) spending his evenings in Carlton House Terrace seductively serenading an all too solid Juliet on the balcony. We do not complain. We believe that similar illusions are not uncommon with elderly ladies. It does little harm to others, and it is reputed to afford them considerable satisfaction. But the fundamental gulf which exists today between hon. Members opposite and hon.
  1486
  Members on this side of the House makes any such suggestions impracticable and undesirable. That does not mean that we on this side of the House desire to, or will, go to the other extreme. If we reject any such idea, we also reject any idea of opposition, for purely party reasons, to whatever the Government have to propose.
  Whoever got us into this crisis, the fact is that we are now all in it together, and it is the desire of all of us to get out of it. Therefore, we shall support whatever measures the Government propose, which we are convinced are necessary for the salvation of this country, provided always that they are part of a general plan effected to meet all our difficulties, that they are suggested by reason and not by panic, and that they are designed to meet the facts of the crisis and not the desires of a political ideology. We on this side of the House are prepared to do nothing at all to save Socialism, but we are prepared to do anything to save this country.
  4.15 p.m.
  The Prime Minister (Mr. Attlee): The right hon. Gentleman the Member for West Bristol (Mr. Stanley) has made a speech couched in very reasonable terms, illuminated by flashes of humour, in relation to a subject of immense importance. I do not intend to make a purely party speech this afternoon. It has been suggested that I ought to reply to a rather exuberant speech made by the Leader of the Opposition on Bank Holiday at Blenheim, but I do not think it would be useful at this time. The right hon. Gentleman is entitled to make speeches on those occasions. He hit around him very vigorously. Sometimes he hit at us, sometimes he hit at some of his friends opposite, and sometimes the ball rebounded on to his own head. But it would be wrong for me to follow that sort of speech today. I would say only one thing in that respect. I think there were some unfortunate remarks which will have repercussions elsewhere where it might do harm, which I am sure the right hon. Gentleman would not wish, to this country. I would allude to one in particular, in which the suggestion was made that we had frittered away the American Loan. [HON. MEMBERS: "Hear, hear."] Well, I shall proceed to show that that is not true.

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  The right hon. Gentleman the Member for West Bristol has made a number of points. I hope he will excuse me if I do not follow him point by point. I have noted them, and almost all of them are already covered by what I propose to say. Any other specific points will be answered by the Chancellor of the Exchequer or the President of the Board of Trade in the course of the Debate. I want today to give the House and the country as full and fair a description of our position as I can. I want to trace briefly the course of events, because it is always tempting to "job" backwards. I thought even the right hon. Gentleman did so, to some extent, in assuming that the position in which we find ourselves today could necessarily have been foreseen some time ago. [HON. MEMBERS: "It was."] Well, perhaps I might proceed to describe our difficulties.
  Let us for a moment glance at the position of this country. It is familiar to all of us here. We want to put it on record that in this country of 45 million people we have had quite an exceptional economy built up over the years by our own home resources and other resources, and our skill and power to add value to raw materials from all over the world. We had quite an artificial position before the first world war. We all know we had to import food and raw materials and pay for them with goods and services, and with interest on investments abroad. We also know that in the first world war that economy received a serious shock. We had to pay for the war with an immense proportion of our foreign investments. Increased industrialisation abroad pressed heavily on us, and we found, instead of having a large export surplus after the first world war, that our balance of payments was only achieved with great difficulty.
  The second world war has been more costly, and let us remember that for a whole year we stood alone. The greater part of our foreign investments had been sold; great debts accumulated; our export trade was reduced to less than one-third; we had great shipping losses; physical damage from air bombardment; and we had had to change the whole organisation of our industry for war. We got through the world war, we all know, with the help of Lend-Lease which was rightly described by the
  1488
  right hon. Gentleman the Leader of the Opposition as "the most unsordid act in history," but which left us in a most vulnerable condition. We had a vast task of reconstruction, involving the redeployment of our whole economy, and what we required essentially was time, in order to effect that change over.
  The United States and Canadian loans were essentially measures to buy time—time for ourselves, time which was also needed for the rest of the Old World to recover. We know the amount of those loans—£937,500,000 from the United States, £300 million from Canada. We were deeply grateful to the United States and Canada for this assistance. The loans were acts of statesmanship beneficial not only to ourselves but to the whole world. But they were essentially designed and accepted in order to enable us to stand on our own feet. I entirely agree with the right hon. Gentleman opposite that it would be utterly wrong for this country to become dependent permanently on another, however friendly our relations. But these were steps taken on the road towards recreating the world of multilateral trade and convertibility of currencies. We and our friends across the Atlantic were both working to this end, and we think it to be the most advantageous system for the world, and especially for a country in our position.
  We should have liked, we all know, a larger amount. We doubted then whether this loan would buy sufficient time. We had hoped the loan would last us not, I think, five years, as the right hon. Gentleman said: we hoped it would last us well into 1949, possibly into 1950, by which time there was a reasonable chance we should have redeployed our economy and been in sight of equilibrium. As things have turned out, it is now certain that the loan will be exhausted before the end of this year. This essential difficulty of our position has never been absent—indeed, it could not be absent—from the mind of this Government. It could not have been absent from the mind of any other Government. I recall that in my speech on the Address on 16th August, 1945, I said:
  "Sooner or later, we have to face the fact that we can only buy abroad, if we can pay I for imports in goods and services. Therefore, we must set ourselves resolutely to the task of increasing our exports."—[OFFICIAL REPORT, 16th August, 1945; Vol. 413, c. 109.]

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  And this is what we did, and not without success. By the end of 1946 our exports had reached a level of over in per cent. of the 1938 volume. I think it is well to bear in mind the very great efforts which have been made by the people of this country. I am sure that no one, whatever his political colour, whatever his desire to attack the Government, will wish to underrate or to run down in the very least what has been done by this country—there is always the danger of denigration—whose people sustained the brunt of the war longer than any other. An immense amount of internal reconstruction has been done. An unparalleled redeployment of labour has been accomplished with very little friction. There has been a great effort to try to increase and to build up our production and our exports.
  But there have been difficulties and disappointments. First of all, the output of coal has been less than that required to meet our own needs, much less than to enable us to help Europe as well. The run-down of the equipment of the mines has been far greater than we had supposed. The recovery of the industry has been far too slow. I am not going into the history of that: we all know the position of the coalmines. Second, though I think most people in the country have responded very well, there have been some sections that have not, perhaps. Undoubtedly, it has been difficult to get rid of all the practices we ought to get rid of. But we do not quickly get rid of bitter memories of past unemployment. Third, I would agree that it might have been better if we had had a greater concentration of effort. It may be we have tried to do too much in a short time. It may well be that we have relaxed controls too soon. But I would remind hon. Members opposite of their vociferous demands for every kind of thing to be done, and for a great many relaxations of controls. Fourth—I am trying to put this frankly before the House—there has been, undoubtedly, some failure on the part of some workers to realise that shorter hours and higher wages must be matched with higher effort. But I say, despite these things, that the record of the people of this country in these two years is one of which any country could be proud.
  Then there came—I am putting it in proportion, because it is important to get
  1490
  these things in proportion, and I think that some of the right hon. Gentleman's points were a little out of proportion to other matters—then there came the unprecedented severity of the winter. The fuel crisis of February and March caused great damage to our agriculture and to our industry. I am putting that in its historical setting.
  In these two years we have always had to give adequate weight to two conflicting considerations in this matter of our balance of payments—the need for maintaining our external financial position, and the need for maintaining the strength and the morale of our people at home. Our people were very tired by the end of the war, and the immediate imposition of very heavy sacrifices by forgoing loans might well have resulted in failure to reconstruct. Time was needed after the rigours of the winter before we could impose some of the things we had to impose. I am saying frankly we had pressure put on us to give our people more—more food, more of everything—and I do not think that it is unwise to hold a balance in these matters. Despite the cost, we had to get the food and the raw materials necessary. To have foregone that would have been shortsighted folly. We cannot get production without consumption.
  I have said that there were adverse factors preventing our build-up, but there were severe adverse factors which were developing entirely outside our control. As I have said, we were trying to buy time, not only for the recovery of this country, but for the recovery of the world, particularly the recovery of Europe; and that recovery has been much slower than was anticipated. The economic disruption had been far greater than had been realised. The political position of both Europe and Asia has taken a very long time to settle down—if it has settled down yet. For reasons which the Foreign Secretary has often explained, our foreign commitments have proved heavier, and their continuance more prolonged, than we had hoped. There were bad harvests in many parts of the world which increased the too great dependence of the rest of the world on the Western Hemisphere for food and raw materials.
  That is a factor which we ought to bear in mind very clearly, because this was already showing itself even before the

  1491
  war. The disequilibrium between the continents has resulted in a steep rise in prices. I must again correct the right hon. Member for West Bristol on the price levels. The facts as given to me are that the price of our imports has risen, on the average, by more than 40 per cent. since the loan was negotiated, and by more than 20 per cent. since we began drawing on it. We are compelled to buy largely from the Western hemisphere in dollars at high prices. But we were not the only people in that position. The rest of the world is suffering from the same difficulties. The failure of their production, owing to the damage of the war, means that they, too, were compelled to buy a large part of their essential supplies of food and fuel from the Western hemisphere, and they have to pay dollars. So there is a world shortage of dollars.
  I think it fair to say that that world dollar shortage would have arisen earlier had it not been for U.N.R.R.A. and for loans provided by the United States of America to other countries. That temporarily enabled production and the flow of dollars outside America to have its effect on exchanges. U.N.R.R.A. was a great undertaking, but all these efforts have been,. to some extent, disappointing. Those efforts prevented starvation and enabled consumption goods to be distributed in Europe; but they have not had the effect which was expected—of enabling the balance of production between the Western world and the Old World to be restored. The consequence is that the exports we sell to other countries are paid for in currency which we cannot use to cover our deficit with the Western hemisphere, and the countries which receive sterling in payment for what they export to us immediately convert that sterling into dollars so as to cover their deficit in dollars. Now it has been particularly in the last few months that the effects of those adverse factors have shown themselves, with ever-increasing severity. The over-all adverse balance, which was £400 million in 1946, has risen to an annual rate of something over £700 million in the first half of this year. That is the over-all. But the salient feature of recent developments is the increase in the dollar deficit, and I now
  1492
  want to say something about that dollar deficit.
  For the year 1946 our total dollar deficit was under £350 million, even if we include the Canadian dollar output. That was partly due to the shortage of supplies. For the first six months of 1947 our United States dollar deficit was £405 million, which represents an annual rate of £810 million. Of this figure of £405 million, £176 million represented our own trading deficit wth the United States of America. In addition, we spent in dollars £29 million in purchases from the U.S.A. for Germany. We had to provide £118 million in United States dollars as part of the payment for our own purchases from the rest of the Western hemisphere. We had also to provide in United States dollars £58 million for purchases in the United States by the sterling area countries, £10 million for purchases by the sterling area countries in the rest of the Western hemisphere, and £14 million for similar purchases by European countries.
  The most serious aspect of the situation has been the acceleration in this dollar drain during recent months. That has been reflected, as was pointed out, in dollar drawings. Of that total credit of £937,500,000 we have, to date, drawn £687,500,000. By the end of 1946, on the contrary, we had drawn only £150 million. From the beginning of January to the end of March we drew £125 million, but in April and May we drew £162,500,000. In June we drew £75 million. In July there were exceptionally heavy drawings, which we should not take as an indication of the trend, and the drawings were up to £175 million.
  Mr. Eden: Can the right hon. Gentleman give any indication why there were those very heavy drawings in July?
  The Prime Minister: I will give all the figures. My right hon. Friend the Chancellor of the Exchequer will give any further details. There are certain seasonal factors. I will give the figures, and the Chancellor will explain them further when he speaks. I am trying to give the House the facts as fully as I can. I am stressing the gravity of the situation, but I do not want to paint too alarmist a picture. There is a difference between gravity and panic. It is a matter of gravity. There is

  1493
  reason to believe that that very heavy drain in July was exceptional. We have still the £250 million outstanding in the United States, there is the £125 million of Canadian credit, and we have ultimate reserves of nearly £600 million.
  Mr. Eden: Is that gold reserves?
  Mr. Brendan Bracken: Including foreign securities?
  The Prime Minister: Perhaps the right hon. Member will leave that point till later. I do not want to be too long. It must be remembered, however, that there is a point below which these ultimate reserves, which represent the reserves of the sterling areas as well as our own, cannot be allowed to fall. It is clear, therefore, that the drain cannot be allowed to go on at this rate. It is sometimes assumed that all our difficulties have arisen because of the Loan Agreement with the United States, and in particular because of the provisions concerning convertibility and non-discrimination. I should like to explain how we view these matters. Convertibility is not merely, or perhaps not primarily, a matter of our Loan Agreement with the United States of America. It is a necessity of many of our commercial deals with other countries. These countries, due to the world shortage of dollars, are, as sellers, demanding either convertible sterling or dollars. In a sellers' market the buyers cannot be choosers, and so we have been driven to pay dollars or convertible sterling to suppliers. The problem of convertibility is really a problem of the world shortage of dollars rather than one arising particularly from the Loan Agreement. The Loan Agreement has its place in the general picture.
  Before the war, sterling could be transferred in London to any currency for ordinary current use anywhere. That is the function of an international currency. A return to this position has always been an objective of the Government. The American loan was designed to help us to return to this position at an early date, and on this policy— whether in our own selfish interests or in the wider interests of world economy—we have no intention of turning our backs. But it is clear that in the world shortage of dollars the formal obligation under the Loan Agreement puts an increasing strain upon us.
  1494
  With regard to non-discrimination, the provisions of the Loan Agreement have hardly been operative at all. It is because of low production in other countries that we have been driven to buy so largely from the Western hemisphere. But the position is now changing, and with the cuts I shall be proposing in imports, the question of discriminating purchases becomes of much more importance. It will be a very real factor in our future purchases of food and raw materials. We approached the problem of the postwar world with a view to establishing speedily multilateral trade and convertible currencies. They are not yet in sight. It is clear that, unless the multilateral system can be made to work, and is supported by adequate finance, it will become incumbent upon us to seek ways out of our present difficulties along other lines.
  As for the steps that have been taken, there has been constant consultation between His Majesty's Government and the United States on these matters. There was a way open to us: to give notice under Clause 12 of the Loan Agreement, but this would not cover the whole field, and we proceeded, therefore, to seek a further consultation on the whole of the implications of the Loan Agreement and the other difficulties with which we are faced, against the background of the present facts of our position, its developments and the world situation. We suggested to the United States Government that, as a first step, there should be official discussions on these matters, and I am glad to be able to tell the House that Mr. Marshall immediately replied agreeing to these discussions. I should make it clear that these discussions will not cut across the proceedings of the Paris Conference.
  I must emphasise the point that the world dollar shortage is fundamentally a problem of under-productivity outside the Western hemisphere, and that the only, permanent remedy is a restoration of the balance between production in the Old World and production in the New. We intend therefore to play our full part in the efforts started at the Paris Conference, to see how the countries of Europe can best help themselves and each other, and turn to the best advantage of Europe and the world the suggestions made in the speech of Mr. Marshall. Meanwhile, it is incumbent upon us to spare no effort,

  1495
  both to remedy our own immediate position, and to make sure that we are in a position to make the fullest contribution we can to our own recovery and that of the world.
  I now turn to the measures we propose to take to this end. These measures must be both positive and negative, and I turn to the positive measures first, as being the most important. First, we shall apply ourselves to the further re-deployment of our resources at home. We must concentrate as much of those resources as we can on the reconstruction and development of our basic industries and services on which the whole of our economy depends; on production of goods for export, and on the production of all those things which save us imports. This will mean cutting out unessentials, and making sure that our objectives are in proper relation to our resources. Second, we must increase our total output so that we can stand on our own legs as soon as possible. Third, we will press ahead with our plans for the expansion of production in the Colonial Empire.
  These are positive objectives. However great the effort, they will take time to achieve and time to develop in sufficient measure, and that time is lacking. It may be that the chain of events started by Secretary Marshall's speech will lead to further American help towards the recovery of the Old World, and that we shall share in this help. But we cannot and will not base our plans on that assumption. It is in this light that we have reviewed all our commitments and requirements which involve us in expenditure of foreign exchange, particularly in hard currencies. This is the negative side of our proposals.
  On the positive side, let me first take our basic industries and services. There we are setting ourselves definite targets. First of all, let us take coal. The House is well aware how vital to the industrial recovery of this country, and also how vital a matter for Europe, is the production of coal. We must get enough for our own industries and domestic needs. Coal once made a great contribution to our balance of payments, and it can make it again, and to the recovery of Europe. With some of my colleagues, I have been in consultation with the leaders of the National Union of Miners and with
  1496
  the Coal Board. They are, I know, wholeheartedly with us in our desire to raise output. Since the beginning of the year, the number of wage earners on the colliery books has shown a substantial net increase—27,000. There is every prospect that we shall reach the target of 730,000 by the end of the year, particularly if the Poles, who are willing and available, are accepted in the industry.
  We have put forward to the mine-workers' leaders a proposal that, while preserving the five-day week and the general regulations of the hours of labour, there should be, as an emergency measure, for a limited period an extra half-hours' work per day. We considered various alternatives, including Saturday work, but came to the conclusion that this was the best. I know, too, that earnest efforts are being made to try to bring down absenteeism to the lowest possible level. There are also local matters which need to be dealt with; particularly we need increased "stints," which were contemplated as part of the five-day week agreement. These have not been settled with the local miners, and we want them settled as soon as possible. Our aim is an average weekly output from, 1st September, 1947, to 30th April, 1948, of at least four million tons of deep-mined coal, and in addition we want as much opencast coal as we can get. That is for the seven months, but we have to go on from there and over the years develop more and more greater output as rapidly as we can.
  Second, and second only in importance to coal, is steel. During the winter months production should be running at an annual rate of 13½ million ingot tons, and for 1947 as a whole production should reach 12½ million ingot tons. That is about the amount forecast in the Economic Survey. But this is not enough. Certain types of steel are particularly in short supply, and have been acting increasingly as a brake on production in the manufacturing industries. Our target for 1948 is 14 million ingot tons. We believe that this is within, although only just within, the capacity of the industry. It will mean a special effort on the part of all concerned, and that effort will be forthcoming.
  Third, transport. Increased production will throw an additional strain on our transport system, and that has been

  1497
  heavily handicapped by depleted rolling stock, lack of repairs and maintenance during the war years. In applying general measures, the Government have in the forefront of their mind the need to provide the transport industry with the resources needed to enable it to overtake arrears and meet this additional strain. We must not fail to move all the coal which the miners can produce.
  Inevitably, this will involve some cutting of the movement of other freight traffic. It will involve cuts in passenger traffic. We are closely examining the question of what traffic should have priority at all times, and what traffic should be next in order of acceptance. So long as there is this shortage of wagons, some restrictions on movements are necessary. We are concentrating our efforts, and we have been. I do not want it to be thought that all these plans have suddenly been thought of last week. I am indicating plans which have been at work, have been developed, and have actually been enforced. I want to bring the whole picture together to show the kind of task facing the nation. We want to supply more engines and more wagons for the railways. We shall see that the materials are delivered and the labour is found to speed up the construction and repair of transport equipment. I would say here that traders and industrial firms must play their part in reducing the turn-round time of wagons at the terminals. Transport is the conveyor belt of industry; it must keep pace with production. I make an appeal here to all transport workers to justify the pride they rightly have in their calling, and to repeat now their achievements in the war by making sure that transport does not fail the nation in its need.
  I now turn to agriculture. The right hon. Gentleman the Member for West Bristol rightly stressed the importance of agriculture. It is a great potential dollar saver. We must produce a great deal more of our food at home to replace imports which we can no longer afford to buy, especially expensive dollar imports. I cannot accept the right hon. Gentleman's statement that we have been neglecting agriculture. The Government are setting a high target before agriculture—nothing less than an extra
  1498
  £100 million worth of food by 1951–52, an increase of 20 per cent. on present output. I realise that that is a tremendous task. It will involve an immense effort, on the part not only of the agricultural community, but of the Government itself, who will have to see that the industry is provided with the tools for the job. Much more labour will be needed on the land, and houses and hostels and the supply of agricultural machinery must be speeded up. Do not let us forget that agriculture is a highly mechanised industry. The maximum supply of feeding stuffs must be obtained. I do not accept the point about bad buying. We have been doing our utmost to get feedingstuffs. Our buyers are skilled businessmen. There are skilled expert buyers at the Ministry of Food, and they probably know better than the right hon. Gentleman the Member for West Bristol. We must get our production of beef, bacon and eggs expanded rapidly.
  We must remove all hindrances to production, and we must have sufficient manpower. We are depending far too much today on prisoner-of-war labour. We have suspended the call-up of young men for agriculture, but we shall need 100,000 workers. We shall need a big capital outlay and heavy commitments on the part of agricultural producers. The Government will take account of that, and the Ministry of Agriculture will announce this month the new scales of prices for future production. This will give farmers confidence to embark on expanding production, and provide them with the additional resources required. The county and district agricultural committees will be asked to take the lead. I appeal with confidence to the organisations of farmers and workers, and all sections of British agriculture, to renew the spirit, enterprise and effort that earned it the admiration of us all during the war.
  I am appealing to workers on the land. There must be many thousands of young men and women with the inclination, and often with the upbringing, to fit them for life on the land. We must get the prospects right. We are providing more houses in the rural areas than under any previous programme; hostels, technical education facilities, with chances to improve position; smallholdings policy for those suitable and anxious to take up this work. There are big opportunities. We

  1499
  are appealing to women as well, either through direct employment or the Women's Land Army. We are appealing to men either directly or through the agricultural executive committees. In our new drive for greater production first things must come first. Food is the basic and, therefore, we must make this appeal to all in agriculture.
  I have spoken of these four basic industries, but what we are asking for is a national effort. We want this effort to run through all industries. Time does not allow me to mention more than a few, but two vital ones are the engineering and textile industries. Anyone who enters the textile industry, which is particularly short of labour, may be sure that he is doing a fine thing for his country, not only for our home supplies of textiles, but for exports.
  That brings me to the question of exports. Throughout the years we have been seeking to expand our exports while, at the same time, seeking to increase the availability of goods for home consumption. We have sometimes been accused of too great a devotion to exports. I have heard many taunts hurled at my right hon. and learned Friend the President of the Board of Trade about his addiction to austerity. Was my right hon. and learned Friend wrong to insist on the importance of exports? At times, we have been accused of not being active enough in the export drive. It is obvious that we must lean still further to the side of exports. I am well aware that this will mean hardship to many people, especially to housewives, who have endured, with very great patience, many shortages. But I am sure that if everybody will tell them that these things are not the wanton act of the Government, but are necessary for the country they will take heart. In the Economic Survey the export target was put at 140 per cent. in volume of 1938 by the end of 1947. Owing to the fuel and weather crisis at the beginning of the year that target cannot be reached, but the measures for the general increase of production, and for the re-deployment of our forces, will have, as one of its principal objects, to get as near that target as possible.
  For 1948 we must raise our sights. Our target will be 140 per cent. of 1938 by the end of the first half, and 160 per cent. by
  1500
  the end of the year. I do not disguise from the House that this will be a very difficult target to reach. But we must strive to get it. Our great difficulty will be the concentration of our exports into those markets which will most assist our balance of payments. My right hon. and learned Friend the President of the Board of Trade will be speaking later in the Debate, and because I do not say any more now I do not want anyone to think that this is anything other than an absolutely vital matter.
  If we want to do these things, we must ensure that fuel, raw materials, labour, and industrial capacity are made available where they are required. For this we require two things—first, an increase in productivity; second, the direction of effort into channels where it will be most fruitful. This will involve an effort by all those engaged in industry, and some sacrifices of individual liberty, although as little as possible. It will involve some sacrifices by both employers and workers. We shall have to ask or, if necessary, issue directions to firms, to ensure that their capacity is used to produce not those goods which will produce the highest profit, but those which are needed in the interests of the national economy. We shall have to take some measure of control over the employment of labour. During the war, we had to use full powers of direction of labour. It has been the desire of the Government and the country to move as quickly as possible towards restoration of freedom of the individual to undertake the kind of work he prefers. As things have turned out, it may be that we have moved too far and too fast in this direction.
  We propose to re-impose the control over the engagement of labour which was almost universal during the war, but has since been removed from all industries except coalmining, building and agriculture. This will enable all workers, leaving one job and entering another to be guided into that class of work in which they can best assist towards overcoming our economic difficulties. Control of engagement only controls the movement of those falling out of employment. To find necessary manpower for essential employment, it may be necessary to take steps to limit employment on less essential work. In addition, in order to avoid workers remaining unemployed or taking unessential work in-

  1501
  stead of accepting essential employment for which they submitted under the Control of Engagement scheme, it will be necessary to resume to a limited extent the use of powers of direction. This is not a resumption of the general powers of direction, but an essential supporting measure to enable the control of engagement to be effectively exercised.
  My right hon. Friend the Minister of Labour is at this moment discussing the details of the measures to be adopted with the National Joint Advisory Council. We need a better balance of production, and we need more production. We must have it quickly, particularly in the most essential industries, even before re-deployment of labour and resources can show their full effects. We have decided, therefore that, as an emergency measure, we must ask for longer hours of work wherever longer hours of work contribute to increased production. What is needed, first of all, is the lengthening of the hours of work in those industries which have an adequate supply of raw materials and whose output provides exports or saving in imports or is essential to the expansion of other industries. As I have already said, I have put to the coalmining industry the proposal that an extra half-hour a day should be worked for a specific period, and we are making similar proposals to other industries in this category. Once the desired increase have been obtained in these basic industries, the Government will seek a similar contribution from other manufacturing industries which depend on them for materials and power.
  The increase in production will also require some increase of hours in transport to enable the additional production to be moved and to prevent wagons from being left loaded at the week-ends. My right hon. Friend the Minister of Labour is discussing the issues involved in these proposals with the National Joint Advisory Council. I would like to make it clear to the House that there is no intention of interfering with the negotiating machinery of the industries concerned, and also that we regard these proposals as emergency proposals to be operated only until such time as we can begin to see our way clear on the economic front. Management, too, must play its part. In general—and I say this in all sincerity—management is out to cooperate with the Government in over-
  1502
  coming our economic difficulties. But such cases as there may be of avoidable inefficiency or lack of will to serve the nation's best interest must be dealt with. The Government will not hesitate to take firm action just as was done in the war.
  Mr. Osborne: On both sides?
  The Prime Minister: I have indicated that, I think, at great length.
  Perhaps most important of all is something which lies right outside the field of government; all we can do is to encourage it. That is good feeling between management and men and a determination to stand together as fellow-workers to give of their best. An instrument that can be of the very greatest importance is the Joint Production Committee. The number of these committees has diminished since the end of the war, and my right hon. Friend the Minister of Labour, after consultation with the National Joint Advisory Council, is taking steps to stimulate their establishment, especially in essential industries where they do not at present exist.
  I have stressed the need for increasing our production here at home. We have also to look overseas. The House, I think, has heard with approval the far-reaching plans which the Colonial Secretary has initiated for making available to the world the potential wealth of our African Colonies; but those schemes must take time to mature. The measures that I have outlined for increasing our production cannot be expected to bear their full fruit immediately. Though not long range, they are at least middle range plans. I have stressed these positive proposals because in the long run it is to them that we must look for our economic salvation. They will not be enough to overcome our present difficulties.
  Therefore, I must now turn to the proposals which we are making for the reduction of expenditure. There is, first of all, the very large sums which we are expending in Germany for the feeding of our late enemies. My right hon. Friend the Foreign Secretary stated on Monday very clearly that what we cannot do when this present scheme runs out is to spend any more dollars for this particular purpose. Therefore, it does involve discussions and a review, in order to devise other plans. I do not think that I need add anything to that statement.

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  I come next to our defence Forces. We can help here in two ways—by reducing numbers and, therefore, expenditure overseas; and by reducing the total size of our Forces at home and overseas, thereby increasing our labour force at home. At present, we have something like 500,000 men and women in the Forces overseas. A substantial proportion of this manpower has been needed to meet obligations under International agreement and in clearing up the position left by the war. That is to say, it is a transitional requirement. The Defence White Paper which we presented in February of this year was based on the assumption that during 1947–48 it would be possible to make substantial reductions in the level of our Forces overseas. It emphasised, too, that the review of our commitments and of the numbers required to sustain those commitments is a continuing process. We hope for successive decreases in the numbers of men required. We now expect to withdraw some 133,000 men from overseas by the end of December, 1947, and to raise the total withdrawals from overseas stations to over 200,000 men by the end of March, 1948.
  In addition, we are now planning to return to their homes before the end of this year some 34,000 non-United Kingdom troops whose cost is being borne by the British Exchequer, and that yields a further saving. These very large-scale movements will require careful planning of shipping and other matters. I have been looking into this on the information given to me, and I believe that it can be done. I must emphasise that despite this acceleration in the rate of withdrawal from overseas stations, and although certain calculated risks are being taken, there is no change in our foreign policy or in the defence policy which underlies our foreign policy.
  Let me turn now to the second point—the total strength of our Armed Forces. In the Defence White Paper it was estimated that between January, 1947, and 31st March, 1948, the numbers in the Forces would be reduced from 1,427,000 to 1,087,000. This estimate was based on certain assumptions about withdrawals from overseas and assumed the fulfilment of a large part of that programme which I have just announced. After the careful review which we have now made, in
  1504
  addition to the constant review we are making all the time, we believe that we can bring that down to 1,007,000 by that date. This means that during the 15 months down to March, 1948, the numbers in the Forces will have been reduced by some 420,000. These are net figures. The actual releases will be as high as 830,000. In short, the three Services will lose 60 per cent. of those who were in the Forces at the beginning of 1947. That is a colossal rate of turnover. It involves the loss of trained men and their replacement by raw recruits; and if the efficiency of the fighting Services is to be maintained, great effort must be put into reorganisation and training. I do not pretend that the Government can contemplate with equanimity the retention in the Armed Forces of so large a proportion of our manpower.
  It will I am sure be recognised that we are in a transitional period when we are not yet free from obligations incurred during the war and as a direct result of the war. This is a period when it is not yet possible clearly to discern the shape of things to come, and a period in which owing to the large numbers due for demobilisation at one time, it is peculiarly difficult to achieve a balance between trained men and trainees. We have planned for the gradual run-down of these Armed Forces. It is very difficult without creating chaos to accelerate this run-down more than within a limited amount at one time.
  The Minister of Defence and I are fully conscious of the imperative need to relate our Defence policy and the requirements of the Armed Forces to the hard facts of finance and economics as they are, and as they are likely to be in the years which lie immediately before us. The House has already been informed that an exhaustive inquiry has been instituted into the whole future of our Defence policy, and of the shape and size of the Armed Forces required to implement that policy. The results of this inquiry are receiving the most careful consideration from the Government as soon as they are received, and meanwhile we shall not relax our efforts to find any further means of reducing the numbers in the Armed Forces during the current financial year. I cannot give further figures on that matter.
  I must now come to the import programme. The House was informed by

  1505
  the Chancellor of the Exchequer on 3rd July of the provisional import programme for the year mid-1947 to mid-1948, amounting in all to £1,700 million. This programme took account of certain cuts which the Government, in view of the balance of payments prospects at that time, had felt obliged to make in the programme as it would otherwise have wished to approve it. These cuts included some £2 million to £3 million through the restriction on the import of newsprint, and some £20 million from the reduction in the consumption of tobacco and the reduction of stocks to match the new consumption level. The Chancellor also made it clear that we should not be able to afford all the imports of foodstuffs for which we had hoped, and the cut which we actually made in our original programme under this head amounted to some £50 million. Both the Chancellor and the Lord President in his speech on 8th July made it clear to the House that this import programme was provisional and that further cuts might have to be made. The right hon. Gentlemen opposite make a great mistake in thinking that we sat down and did nothing. As I have already pointed out, this was provisional.
  The Government have decided that the following further cuts must be made. The House recently gave powers to levy an import on films. The Government propose to limit remittances on foreign films to not more than 25 per cent. of the earnings of these films. In his statement on 30th June, the Chancellor said we would reduce our imports of petrol. A reduction of 500,000 tons would save approximately £4 million. We intend to effect at least this saving. This will necessitate a reduction of the basic allowance for private motorists by one-third and a reduction of 10 per cent. in supplementary allowances. We are anxious not to impede the movement of merchandise by road, but some reduction in issues of petrol for the use of commercial vehicles will be necessary if only as one method of ensuring that the coupons issued for this purpose are really used for the purpose for which they are intended. Issues for commercial vehicles will, therefore, be cut by 10 per cent. All these cuts will come into operation on 1st October next. Maximum economies will have to be made in the use of petrol by the Fighting Services.
  1506
  The Chancellor proposes, as from 1st October next, to reduce the foreign travel allowance from £75 for 12 months to £35 for 14 months, with a corresponding reduction in the allowance for children to £20. Allowances for business men travelling abroad will also be more strictly limited. There will be a reduction amounting in value to £5 million in imports of miscellaneous consumer goods of the kind which is generally called the luxury type. It will be necessary to apportion this cut with very great care, so as to avoid the risk of damaging the economies of other countries and their power to take our exports and to give us increased supplies of essential goods. The field for saving in raw materials is very small if damage is not to be done to our productive effort and indeed to our whole economy. Some saving, however, must be made. We propose to cut the imports of timber by £10 million. The House will realise that this represents a cut not on the very low level of supplies we were able to import until recently, but on the considerably higher level which we had been hoping to reach. We hope we may make some saving by postponing part of our cotton purchases.
  Finally, there is the programme of the Ministry of Food. From what I have already said about home food production, the House will realise that there will be no cuts in the imports of feedingstuffs, which must rather be expanded as increased supplies become available. We have decided that we must make an immediate and substantial reduction in our purchases of food from hard currency countries. We have, therefore, given instructions to make a reduction in the rate of purchases of the order of £12 million a month. Such a reduced rate of buying from hard currency sources of essential foodstuffs will mean that we shall confine our buying from those sources to essential foodstuffs. Our bulk long-term contracts for staple foodstuffs from these areas will not be interfered with, but for the present we must largely confine ourselves to such purchases as far as hard currency sources are concerned.
  The House will wish to know what effect this decision will be likely to have on our level of distribution of foodstuffs in the coming months. That depends on a number of factors. It depends on the degree to which we are able to buy our foodstuffs from soft currency sources. So far as

  1507
  these soft currency sources are more favourable from the commercial point of view, the question of discrimination under Article 9 of the Loan Agreement will not arise. Where such purchases cannot be justified under the terms of the Loan Agreement, we shall be exploring the situation immediately with the United States Government to see what steps may be taken to enable us to obtain supplies from soft currency areas. The second factor which will determine the effect of the Government's decision on our rations is naturally that of how long this policy will have to be maintained.
  It will be necessary at once to increase the points value of some of the non-basic foods, for they are largely distributed under the points scheme. As to basic rations we shall do everything in our power to maintain them and we shall not take risks with our stocks. If rations have to be reduced as a result of the policy outlined then the Government will introduce a differential rationing scheme designed to give preference to heavy manual workers. Preparations will be made forthwith against this contingency. Restrictions on consumption in restaurants and hotels will in any case be imposed forthwith.
  I come now to the point on which the right hon. Gentleman opposite spent a great deal of time, namely, anti-inflation. I wish to say something on that, but I propose to leave the bulk of it to the Chancellor of the Exchequer. It is quite obvious that some of the measures I have outlined will restrict the amount of goods and services available for home consumption without any corresponding reduction in purchasing power, thus increasing inflationary pressure. We shall have to take such action as may prove necessary to prevent the unstaple purchasing power from creating an unbalanced situation. First, there must be a tighter control over both public and private capital investment; that is to say, we must concentrate on projects which will give quick returns in additional imports or in strengthening our industrial structure. Projects in themselves desirable will have to be postponed, while such investments as the re-equipment of our agriculture, power, supply and mines must take precedence. The right hon. Gentleman mentioned a bridge across the Severn. I understand
  1508
  that the work on that is merely taking soundings and borings in order to see what can be done on that as a future project. He was wrong in thinking that that would be put in hand at the present moment.
  There will have to be a re-deployment and retiming, including some postponement, of our general building programme. This must be done so as to give first place to the building of homes for miners, agricultural workers and other key workers. I appeal to workers in all industries and employments not to press at this time for increases of wages or changes in conditions which would have a similar effect, especially where these increases are put forward on the basis of maintaining differentials between various categories of workers on the basis of former practice. Equally, I would appeal to employers not to seek to tempt workers away from essential work by offering higher inducements to work in less essential industries, thus creating a vicious spiral. I appeal to all those in control of industry and commerce to refrain from declaring high dividends.
  It must be understood by all that if we wish to maintain our position in the export markets of the world, we must keep prices at a reasonable level. Finally, I would appeal to everybody to support to the utmost the savings movement which has been such a vital element in preserving an equilibrium between purchasing power and available commodities. In all these matters public opinion can do a very great deal. I am reminded that there is said to be a section of the public which renders no useful purpose and whose members contrive to make money in all kinds of dubious ways. We shall take all action open to us against these "spivs"—as I think they are called—and other drones, but I would say that public opinion can be a very powerful weapon here. We must also try to regain the habit of avoiding unnecessary waste and of collecting salvage which we developed so much during the war. Here I would, appeal to local authorities to redouble their efforts in this respect.
  I have endeavoured this afternoon to set out, as fully and fairly as I can, the position in which the nation is today. I have not tried to conceal anything or to gloss over the dangerous features of the situation. I have stated the causes which

  1509
  have brought us to this position. The main cause of our present position is the fact that when the rest of the world was either defeated or standing aside from the contest, we of the British Commonwealth of Nations stood alone in defence of freedom and civilisation. I have stated the more immediate causes of our critical position in respect of our balance of payments and no one, unless he were blinded by partisanship, would deny that the major causes are outside the control of the people of this country and of any Government of this country. Whether the Government had been Conservative or Labour it would have been faced with this difficulty. No doubt this Government, like all Governments, have made some mistakes, and I am sure a Conservative Government would have made others, but if neither Government had made mistakes, we should still have been in this difficult position. If we had followed the various proposals put forward from time to time by the Opposition our state would have been worse, not better.
  I have laid before the House the steps which the Government have taken and which they propose to take. I shall welcome any constructive suggestions, from whatever quarter of the House they come. I shall certainly not resent any reasonable criticisms, but I am not disposed for a moment to accept the proposition that had we not fulfilled our Election programme, but followed a Conservative instead of a Labour policy, we should now have been free from these anxieties. Nor do I admit for one moment the proposition that to unite the nation we must now follow a Conservative policy, whatever that policy may be—and I am not quite sure what it is. The policy of this Government is not based on ideological prejudice but on principles which I and my colleagues believe to be right and sound, and we shall continue to pursue them.
  I was glad to note that the right hon. Gentleman, despite the strictures that he passed on us, said that the Opposition would support the efforts which the nation must now make. That is in line with our position. I agree that no question of Coalition arises. That has not been sponsored from either the Labour side or the Conservative side, but by some busy matchmakers in the Press. When,
  1510
  during the war, the Labour Party decided to support a Conservative Government, it did not demand as the price of its assistance that certain industries should be forthwith nationalised. Equally, I am sure that Conservatives would not expect as the price of their support that we should adopt capitalist principles. I am making my appeal to all sections of the nation, wage-earners, managers and technicians in industry, employers and workers in agriculture, mining and transport, to women as well as men, and to consumers as well as producers. I say to one and all, "This is your fight." We are a proud nation with a great achievement through the centuries. We have made a unique contribution to the world, and that contribution is not yet ended. Circumstances have placed us in a position of peril and anxiety. We must fight to regain our economic freedom just as we fought to preserve our political freedom.
  In this uphill struggle we do not stand alone. Quite apart from the sympathetic interest which the United States Administration has evinced, we have kept our great partners in the British Commonwealth fully informed of our position and of the lines of action on which we shall be operating. As in the war, the free peoples of the Commonwealth countries have shown signal evidence of their wish to help us. I refer once again to the large-hearted effort, the heavy effort, which Canada made when in April of last year, she granted us a Canadian credit of £300 million in addition to the immense financial help which she had previously given us. The House is aware of the recent decisions of the Governments of Australia and New Zeal and to make a special contribution to our recovery by cancelling part of the sterling balances which had accumulated under war conditions. South Africa is also searching for ways of coming to our help. We are asking our Colonies to help us by restricting to essentials their claims on our foreign exchange resources, which are of course also theirs.
  But I am speaking first of all today to our own people. I am appealing to all the people of this country to co-operate whole heartedly with the Government just as they did in the war. To win through we require the same qualities displayed during those long years—[HON. MEMBERS:

  1511
  "And leadership."] There will be hardship and a demand for hard work and self-sacrifice which will, I am certain, be forthcoming. We shall seek in this struggle to deal as fairly as we can with all sections of the community. We shall seek equality of sacrifice, and we shall seek, as in war, to protect the weak and the children. I cannot tell the nation how long it will be before complete victory will be acheived, but I am certain of victory. This is an economic Debate, but I should do a grave disservice to the country did I not stress the fact that we need more than an economic impulse behind this effort.
  I am a profound believer in the British way of life, in our combination of order and liberty, in our respect for justice and for moral values. These are the things that unite us, though we may differ in the ways in which we seek to maintain them. We have, today, to get into the hearts of all our people the sense of urgency, so that they may do whatever tasks fall to them and may endure what hardships have come to them with a consciousness of the great issue at stake. The other day in Westminster Abbey, by a most moving service, we dedicated the young men who fell in the Battle of Britain. In 1940 we were delivered from mortal peril by the courage, skill and self-sacrifice of a few. Today, we are engaged in another battle of Britain. This battle cannot be won by the few. It demands a united effort by the whole nation. I am confident that this united effort will be forthcoming and that we shall again conquer.
  5.30 p.m.
  Mr. Baldwin: Despite the great gravity of our economic situation, the one thing which, more than anything else, affords us some slight satisfaction is that the Government have at last realised that agriculture is capable of making probably a greater contribution to our recovery than can any other industry. The Chancellor of the Exchequer made a statement a few days ago that the farming industry was the greatest dollar saver. Very seldom do I agree with anything that the Chancellor of the Exchequer has said, but on that occasion I entirely agreed. Unfortunately, his actions sometimes belie his words.
  One charge which I wish to make against the Government is that they do not play as a team. The Minister of
  1512
  Agriculture has been endeavouring to place agriculture in the forefront in this country, but while he has been doing that, Ministers who should have been helping him have been acting in quite a contrary way. A few months ago, the Chancellor of the Exchequer, when concluding the Danish Agreement, told the Danish Government that he would do all in his power to assist them in the purchase of feeding stuffs. The Minister of Food has said he is going to buy in the cheapest markets in the world. The President of the Board of Trade thinks of nothing but the export trade, and is exporting agricultural machinery, spare parts and steel which are required for the agricultural industry. The Minister of Health, in spite of his protestations a few days ago, has done nothing towards providing cottages for farm workers.
  What a team! Each of them is playing his own hand. They do not co-operate as a team. In all sincerity I suggest to the Prime Minister that he should call his Ministers together and that he should tell each individual one of them that if he refuses to play with the team, he will be sacked. In order to increase agricultural output two things are essential, confidence and labour. Until Ministers cooperate, there can be no confidence in them that they intend to see that we get on to full production. The Minister of Agriculture has just explained that the Agriculture Bill is a farmers' charter. It is nothing of the sort. It is machinery which is of no use until there is the right spirit with which to run it. It stands or falls by the annual price review. The farming industry has not been inspired by the prices which have been negotiated so far, because those prices have been niggardly and cheeseparing. The result of them has been that we have not got increased output from agriculture today. Our output has been steadily going down in the last two years, and it looks as though it will go down still further, unless we can get some encouragement.
  For instance, taking the price of wheat, a commodity in which we are very short and of which the world has been short, the prices negotiated with the farmers of this country have been almost on the basis of a packet of cigarettes. We have been compelled to sell to the Ministry of Food our wheat at £10 to £15 a ton less than the Ministry is paying to other countries.

  1513
  That is not the way to get full production I want to make it clear that, in my opinion, this country can be very largely self-supporting. Let us remember that until 1873 we were self-supporting. We supported a population of 26 million people. It is my opinion that with the improved technical knowledge and machinery which we have available today, we can go a long way towards providing for the extra 20 million population.
  It should be remembered that we can produce all the bacon, poultry, eggs, and vegetables that are required in this country—the whole lot, 100 per cent. We can provide a large proportion of the fruit and beef. What we want the Government to provide is the animal feeding-stuffs. I quite appreciate that the wheat for bread must be purchased from abroad so that the farmers of this country can consume their own cereals for their animals. For too long we have been mining our land, and going for cash crops and not returning to the land the fertility which it needs. That policy has to be altered, as it can be if the Government will go all out for the purchase of feeding stuffs.
  At the present time, the Ministry of Food is making contracts all over the world to take surplus bacon, eggs and poultry. I suggest that those activities would be better employed if they were devoted to trying to purchase all the feeding stuffs which the world does not want. During the last two years many of us on this side of the House have called attention to the working of the International Emergency Food Council. We have never understood why other countries can produce bacon, poultry and eggs while we have to keep our pig and poultry houses empty. It is all nonsense to say that the feeding stuffs are not available. There is an export surplus of maize in Argentina this year of 6 million tons, although we have received only a few thousand tons from that country. Where has the rest of that maize gone? There is a record crop of maize and wheat in the United States. What has happened to the surplus? Are we leaving it to the International Food Council, or are we going to tell them that it is time they began to allocate some to us?
  1514
  For too long we have been spending currency, either in the sterling area or the dollar area, on pears, pineapples and peaches—millions of pounds. That money would have been better spent on these feeding stuffs. What the housewives want is not pears, pineapples and peaches, but beef, bacon and butter.
  Mr. Shurmer (Birmingham, Sparkbrook): Did they ever get it?
  Mr. Baldwin: They used to. More money should be pumped into the agricultural industry by raising the prices of all farm products. I trust that before the Minister of Agriculture indicates the prices which he will give for agricultural products in the course of this month, he will not have to consult the Chancellor of the Exchequer as to how much he can give. My feeling and the feeling of the agricultural industry is that in all price negotiations, the Chancellor of the Exchequer, in view of the enormous food subsidies he is called upon to pay, has always kept the prices down at bare board level.
  While the output of farm products has been declining in the last two years, farmers' overdrafts have been increasing. I commend to the notice of the Government the National Farmers' Union survey of farm accounts for last year. That will be fairly illuminating to them. That shows that on a great proportion of the farms—I refer to the hill and marginal land which forms 80 per cent. of our agricultural area—the farmers have not been receiving more than a farmworker's wages. They have received nothing for management. They have no reserves, and the result is that they have no confidence to go all out and produce more food. Vast sums of money are to be spent on colonial development. That is a very worthy cause, and I say nothing against it. But why not spend something on home development? If the Government think our agricultural industry is properly developed, I should like to take them for a week-end and show them round some of the country I know where they will see plenty of land producing not 50 per cent. of what it could. Our hill farms are becoming derelict, and if something is not done, those men and women will be walking off the hills and leaving the farms. That applies to a great deal of the marginal land. Unfortunately, when the Minister goes out into the agricultural

  1515
  country, he is always shown some super farm and bases his views on agriculture on what is done on that farm. That is the same as the argument that every man who keeps a bicycle shop, will become a Lord Nuffield.
  I ask the Government not to put too much faith in what they will receive in the way of surpluses from some of the countries which they are at present developing. I refer particularly to the African Continent. There is great scope for development there, but my opinion is that the population in that continent, which is increasing to an extraordinary extent, will absorb all the food produced there. The one problem facing Africa at present is to get the natives to work. The natives look upon two or three hours of work a day as sufficient. If that country is to be developed, the Africans have got to work. The first thing we have to do before the Africans can work is to feed them better. Therefore my opinion is that all the extra food which will be produced by this development will be absorbed by the population of that country and therefore the Government should not place too much faith in what may be produced for export.
  Subsidies are a pernicious system. They were necessary during the war, but they should now be done away with as quickly as possible. Subsidies and controls mean black markets and officials, and it is my firm conviction that we shall never pull ourselves out of this economic mess until we let the economy of supply and demand play its part and allow prices to rise to somewhere near an economic level. The subsidies which are paid do not come from a hidden source of wealth. They have to be collected, at great expense, and paid back again, at more expense, and large numbers of people are kept in non-productive employment and hordes of people in the black market are making money to which they are not entitled. Until we do away with controls and subsidies, we shall always have that.
  I know that on this question of food subsidies I am on a tender subject. My opinion may not be shared by all my hon. Friends. Food subsidies were instituted with the object of stabilising wages. They have done nothing of the sort. Since they were started, wages have risen by £1,500,000,000, and that enormous sum of money has been spent largely on drink,
  1516
  tobacco and gambling. Food prices should be allowed to rise to a more economic level in order to save this vast amount of money which has to be collected and paid back again, and some of the money now spent on these unnecessary luxuries should be spent on food. I realise when I say that that some of the lower range of wage earners and pensioners will feel hardship unless something is done to alleviate their position. The best way to tackle the problem is to give them assistance directly and not by giving it indirectly and keeping food below an economic figure.
  Another problem facing agriculture relates to labour. We are losing our prisoner-of-war labour at a very rapid pace. Not too rapid for me, because I would like to see them all go back to their own country and all our people who are in their country return to work here. We are getting into a very dangerous position. We are losing this sort of labour but we are not getting regular labour in return, nor can we, until we get decent houses near where the men work. The Government should make an all-out drive and not play with the problem as they have done up to the present. It is no good saying that so many thousands of houses have been built in rural areas. They may have been built but they will not be occupied by farm labourers if the rent is 15s. or 16. a week. Houses will have to be provided at a figure the labourers can afford to pay or the wages must be put up to a figure which will enable farm labourers to pay those rents. It must also be remembered that if the wages are raised, the prices of agricultural commodities will also have to be raised.
  The industry relies too much on casual labour. That labour is not responsible and is unskilled, and it is thoroughly unsatisfactory. We want to return to the days when we employed regular men day in and day out on regular work and taught them their job so that they took a pride in it. The casual worker will never learn his job and take an interest in it. We shall never increase output until we return to the old regular system. It is time the farm labourer was looked upon as the most skilled in any industry. It is time that other sections of the community, when they see the farm labourer's wage put up, do not want their own put up. They are the highest class of skilled labour, and they should be paid at that rate.

  1517
  Before passing from the question of building these houses, I suggest we should turn our minds from building new towns, and use those bricks and mortar which would go to building prospective new towns in building houses in the countryside. We have too many towns in this country, but too few houses for people working on the land. I wish to say a word about the importance of agriculture from the defence point of view. During the two disastrous wars we have gone through too much of our time, too many of our men, and too many of our ships have been occupied in bringing food from abroad. If we were producing food in our own country, the ships and men would have been occupied in the jobs for which they were trained and provided and not in bringing food to this country.
  If we are to pull through, we must have a resolute lead. Unpleasant things have to be done, and I can assure the Prime Minister that if he leads with a strong hand we on this side of the House will do all we possibly can to support him. All we ask is that he will take a resolute stand to pull us out of the present crisis. We want to get back to price mechanism and incentives and get away from the ideological dreams of the past two years. Make it worth while for the worker and employer to do a good job of work, and retain some of the results of his work. Increased home production will relieve the necessity for exporting many of the goods we are exporting at present, goods which we want for our own consumption. The housewife is tired and frustrated. She is fed up with queues, and when she sees an article in a shop window marked "For export only" she naturally goes off the deep end. It is time we put into shop windows things which are not for export. At present they are full of rubbish.
  Mr. George Wallace: The hon. Member could not have heard a word of the Prime Minister's speech.
  Mr. Baldwin: Increased exports will not close the gap. What will close the gap is increased home production, namely, agriculture. The Prime Minister said that he planned to increase home production by, I think, £100 million by 1951. We can increase our home production by £200 million by 1951 if there is wise planning and determination. We stand at a time of great crisis. Democracy is on its trial. Unpleasant decisions will have to be
  1518
  made. It will be for the people of this country to decide whether they will stand up to the decision. Let them understand this—we are one of the few democratic countries left in the world. We are on our trial. Let the people realise that the alternative to a democratic Government is a dictatorship of the Right or the Left.
  5.54 p.m.
  Mr. Fairhurst: I think all hon. Members will agree that the speech of the right hon. Gentleman the Member for West Bristol (Mr. Stanley) who opened the Debate, and the speech of my right hon. Friend the Prime Minister, put the Debate on a very high level. I, in my humble way, will not attempt to do much; only to be very moderate. I think all will also agree that when the decision was made to accept the American loan, there were very few happy Members in the House. It was a bitter pill to swallow for this nation, a nation which had grappled with its economy first to hold up, and then to play a major part in destroying, Fascism in Europe. Whether the loan has been spent properly or not, in the light of events now known, is a debatable point. Yet no one can accuse this Government because price levels in America rose very highly immediately the deed was carried out.
  During the war the labour and industrial potential of our country, so far as it applied to the actual production and physical necessities of civil life, was very small indeed. The war machine was hungry, and could not be satisfied. This country was and is a highly industrialised country with an export trade which is vital to our social economy. Almost our whole effort was directed to war purposes, and that had a twofold and profound significance. The more we put into our war effort to combat the immediate dangers of that time, the more we prejudiced our future economic position relative to that of our U.S.A. allies. Our American allies were certainly never mobilised to the extent that her people were reduced to austerity, or to a point where they had to reduce their social economy, or standards of life. One could have assumed that the mutual sufferings both countries had to face and to accept would mean some further national assistance for a longer period to enable countries to rehabilitate themselves. But no, the ideals of war became the hard

  1519
  economic facts of life, and for us the interim period between the ending of the war and our full industrial recovery has cost us 2 per cent. on £1,000 million.
  The loan is almost spent, and we have not as yet, achived our maximum industrial recovery. It is an unpalatable fact and an unpleasant one, but it is the job of the Government and all our people to get down to the task of expanding our industrial effort, and rebuilding our political economy in as ruthless and determined a manner as may be warranted. Agriculture, coal, engineering, cotton, and exportable goods, must have a major place in our priorities Let me remind the House that those industries have in the past been exploited in an almost treasonable manner by those who held control at that time Among those priorities, I include houses and the health services. We, alone, can save ourselves from the economic consequences of the war and a decadent capitalism. It means work as never before, and not work to be exploited by individuals. Let us have no moaning whilst the job is being accomplished. Our people are a strong and resilient people, and, with the emotional urge and knowledge that achievement means our salvation and the attaining of a higher social standard for all, we can still enjoy our sport and recreation, and get on with the job of accomplishing what we have set ourselves to do.
  We are a party Government, and I wish to remind the House once more that we placed our policy before the electors in 1945. We informed the electors that major changes would be made in the superstructure of our set-up if we were successful, and we were successful. The long winter we have experienced has affected our recovery—no one can truthfully deny that—and it caused much suffering and inconvenience to our people. But what a heaven-sent opportunity it was to the Opposition. I took particular notice at that time, and I never witnessed any anxiety on those benches about the condition the country was in then. The point that struck me was that there was a gleeful anticipation that something had happened which gave them a chance to bring down this Government.
  The Economic Survey issued in March this year was, in my opinion, a first-class survey, but I regret that it was negative
  1520
  rather than positive. [An HON. MEMBER: "First-class?"] One can only speak the truth as one feels it. I was glad to hear our Prime Minister tell us, however, that that position will be altered. In that document we were told that there were over 20 million workers constituting the manpower resources of our country, and that goods and services were produced to a value of £8,500 million in one year. However, we had no clear picture of how many of the workers were producers, distributors or administrators. We were also informed at that time that there were 1,500,000 in His Majesty's Forces—a figure that I thought was far too high then, and evidence has since come to hand that others think the same. We were told that the object of planning was to use the national resources in the best interests of the nation as a whole, and only anti-social people will object to the using of our national resources in the most efficient and economical way in the best interests of the nation. I am still convinced that there are many such people.
  If the above is accepted as a basis, then a capitalist economy is discredited. It has been patent for many years that the foundation of our social edifice, built on a capitalist economy, is unstable and cracking, and the root cause, as I see it, of our present industrial crisis lies in the fact that the capitalist economy has broken down, and indeed, had done so before 1938. The policy of "dog eat dog," of privilege and of most powerful positions held by those who by no means were the most efficient and industrious of our people, who in innumerable cases were the most unsocial, ruthless and unscrupulous individuals and groups, has resulted in masses of the people becoming unproductive units, living like parasites on others.
  Mr. Hogg: They did not sell their party secrets for £5 a week anyhow.
  Mr. Driberg: No, but they had to be locked up for treachery during the war.
  Mr. Fairhurst: Useless and unjustifiable business, using much labour that could be used in essential production, has been going on for quite a long time in this country, and when the people who are doing a useful job—[An HON. MEMBER: "Where?"]—see the Government

  1521
  tackling that problem, then I am quite satisfied it will give great satisfaction and stimulus to those people.
  I want to remind the House of one or two isolated points. I say to the Opposition that had it not been for the initiative of the President of the Board of Trade, I am wondering what condition the Lancashire cotton industry would have been in today. No one can accuse the President of the Board of Trade of not doing his level best to try to rehabilitate the Lancashire cotton industry. He has given an inspiring lead which had never been given before. It was left to a Tory Prime Minister in 1926 to tell the textile industry of Lancashire to cut out the dead wood then, and the attempt was never made. It had to wait until a Labour President of the Board of Trade took on the job, and I believe, owing to the exertions and the effort he has put into this job, that Lancashire will show that there is still life and initiative in our textile industry. It is one of our major exporting industries and in 1938 it was at its lowest ebb. That was not the result of a Labour Government. There were thousands of skilled textile workers walking the streets in my constituency and other constituencies in Lancashire with scarcely a shirt to put on their backs who could not get a job in the mills. Whose fault was it? The same thing applied to the coal industry. Our workers have bitter memories, as the Prime Minister said. They have not forgotten, and it is something which we have to wipe out. Today, I feel we can say to our people that the Government's action to increase production does not mean unemployment in the future. That is one of the things of which they were always afraid. Increased production and increased effort mean their salvation in the future, and I believe that when our people realise that, they will leave no stone unturned to do their part of the job.
  What I am concerned about is whether the owners and the managers will play their part. Experience does not give us much hope that they will co-operate. Well, the Opposition say they will do so. Let me inform the Opposition again that, if we fall, very few will escape the deluge, but I do not think we shall fall. I believe that once again, the efforts of our workpeople will be such that we shall prove
  1522
  to the world that this England of ours is far from being down and out. In the last analysis, it depends on the workers and on no others, because there are millions of them and the others are few. If we can make them realise how serious is this situation, how essential it is that we should build up our export trade, that the time has come when we cannot expect to live on other people's good nature or on loans, I believe the people are ready and waiting for a lead. Today they have a lead, and I believe they will respond, but I am uneasy as to the reactions of other people who can play a big part in this job. I cannot say too forcefully that, no matter what may happen, no matter what other people may say, it is the colliers, the textile workers, the engineers, the transport workers, the shipbuilders, who really matter and who have to do the job.
  Sir William Darling: No agriculturists?
  Mr. Fairhurst: I apologise—and agriculturists. Whose fault is it that the agricultural industry of this country is in the position it is?
  Mr. Hogg: The Tories, of course.
  Mr. Fairhurst: There is more hope in the agricultural industry today than ever before because of the efforts of this Labour Government, and the time will come when the agricultural workers will again demonstrate the fact by voting in the right way—make no mistake about that. I make my final appeal, not to the House of Commons, but to the people outside who are listening anxiously and hoping that the necessary inspiration will come from here. I believe the Prime Minister has given them a lead, and I hope that the rest of the Debate will contribute towards it.
  6.10 p.m.
  Mr. Butcher: With what the hon. Member for Oldham (Mr. Fairhurst) has just said I must strongly disagree, namely, that we have had from the right hon. Gentleman this afternoon the lead for which the country is looking and which it is eagerly awaiting at the present time. Indeed, in so far as there was a call from the right hon. Gentleman for national unity, my hon. Friends and I, and I am sure the whole of the country, will be with him to assist him, but the measures which he put for-

  1523
  ward will be regarded as thoroughly inadequate to deal with the situation in which we find ourselves. Those proposals which the right hon. Gentleman put before the House this afternoon are not a call to heroic action by people who are eager, willing and anxious to bring themselves into a position of safety at the earliest possible moment. They are one more turn of the austerity screw, a rejection, a reversal of Government planning of the past, which leads to no amelioration of the lot of the ordinary man or woman either immediately or in the foreseeable future. Is this a blue print of "Socialism in our time" which we have had laid before us this afternoon? Certainly not. It is the honest attempt of the Prime Minister to bridge a 12-foot gap with an eight-foot ladder.
  On two occasions the Prime Minister said, "I do not know how long this will be." Again, he said, "We could not foresee this." But this is a Government of planners. One can plan for the future if one can foresee it, but if one cannot foresee one's future, one might as well not make plans for it at all. In my view this Government could be called a Government of reversers. All their triumphs of the past are reversed within a few months of their achievement. With a great shout, the five-day week was introduced for the miners. Certainly no one who is privileged to spend all his or her working time above ground could begrudge the miners the achievement of the five-day week. But what were the arguments with which the five-day week was urged upon the House at a time when some of us were keenly anxious about coal production?
  The arguments were three-fold. The first was the health of the miner, that he should have this complete rest for two days, in which he could refresh himself in the sunshine. That seems an admirable reason. The second reason put forward was that team work was now so much a feature of the work in the mines that absenteeism on the part of one member of the team was likely to slow down production, and, therefore, by having wholehearted work on five days a week, production would be the same. The third argument was that the mechanical devices in the mines were now of such increased complication that it was necessary to have a five-day week so that two
  1524
  days might be available for servicing the mines. They all struck me as being admirable reasons why a five-day week should be introduced. We shall hope that the Government spokesman, later in today's Debate, will be able to explain why a Government of planners, which accepted those arguments and others so freely only a few months ago, now find themselves able to destroy those arguments, and put others more satisfactory in their place to urge that there shall be longer working hours in the mines.
  Mr. Harrison: It is a five-day week just the same.
  Mr. Butcher: The hon. Member says it is a five-day week, but in the past all the agitation has been for shorter hours in the mines, and quite properly so.
  Let me take another matter. The Chancellor of the Exchequer made a great boast of the manner in which he had been able to reduce the rate of interest payable on money. He said that he had brought the rate down to 2½ per cent. and that it was the unpatriotic citizen who would not lend his money to the Government at that rate. What has happened to the patriotic citizen? Now that the rate has fallen to 3 per cent., the patriotic citizen has been left "in the cart" by the Chancellor, but the unpatriotic speculator has been able to avoid it. The Chancellor has not come to the rescue of his patriotic citizens. One is entitled to ask how much lower is the interest rate to go? The Prime Minister announced direction of labour. Let us be quite clear that we are getting back the direction of labour which the trade unions and the Labour Party urged, in time of war, should be regarded as wartime measures only. Now, two years after the defeat of Germany and the defeat of Japan, those measures are being reimposed upon the working-classes of this country.
  Mrs. Nichol: Because there is still a crisis.
  Mr. Butcher: The hon. Lady says there is still a crisis. I would agree that there will always be a crisis as long as we have the benches opposite occupied by their present occupants. But where did the crisis start? Has it ended since the time the war ended? If the hon. Lady says, "Yes," I would ask what has caused

  1525
  it to come back again. If she says, "No," I must ask her what caused this Government of planners to lift this control so many months ago? This direction of labour, let us be quite clear, is only to be imposed upon the working-classes.
  Mrs. Nichol: Oh, no.
  Mr. Butcher: Oh, yes, as I understood the Prime Minister's statement. I hope sincerely that it is not so. Nevertheless, as I understood the facts announced by the Prime Minister, what was meant was the re-introduction of the Control of Engagement Order. That is, that workers who fall out of one job will be—I think the euphemistic phrase is—assisted or guided into some other work. That means that a young man who has sufficient independence in savings or otherwise to be able to avoid the employment exchange, will not be liable for direction. It will be those who are compelled to earn their daily bread who will bear the brunt of this "guidance." [An HON. MEMBER: "We shall see."]
  I do not believe that the measures which have been announced this afternoon will, by themselves, do anything to bring this country out of the difficulty in which it finds itself. I am sorry that the Prime Minister was not more courageous in his announcement. I believe that his proposals can be only regarded as the little measures of little men. Even then, we would have more hope if they had been accompanied by some efforts, some earnest, on the part of the Government that they were to put new men in control of certain key points. No one can complain of the direction of the general industrial affairs of the country which the President of the Board of Trade has exercised. For months he has been a lone voice crying in the wilderness, and been contradicted at regular intervals by the more irresponsible of his colleagues.
  Mr. George Thomas: And attacked from that side of the House.
  Mr. Butcher: He has been attacked from this side of the House, but the President of the Board of Trade does not mind blows from the front. It is stabs in the back that wound him. Surely, the President of the Board of Trade should hold his place in this new drive that is going forward, but in the absence of the Prime Minister, I ask the President of the Board
  1526
  of Trade, does he really think that the country will have any confidence in any plan for the marshalling of its fuel and power, so long as the present Minister of Fuel and Power holds his position? Could anyone regard the retention of the present holder of that post as an earnest of the new attack upon this difficult problem? It is unfair to say much more against that right hon. Gentleman, because we all know that he is a falling star.
  Mr. Cecil Poole: Would the hon. Member not agree that a cardinal necessity for increased production of coal is the confidence of the miner, and that the present Minister of Fuel and Power enjoys that measure of confidence to the fullest degree?
  Mr. Butcher: The hon. Member for Lichfield (Mr. C. Poole) says that the present Minister has the confidence of the miner. Every man has one friend, even if it is only his dog. I doubt whether the right hon. Gentleman the Minister of Fuel and Power has widespread support amongst any section of the community. There are two other Ministers who ought to go. The Minister of Food ought to go and the Minister responsible for housing ought to go. Nevertheless, I do not wish to be entirely critical—[Interruption.] Hon. Gentlemen opposite are delaying me. I would ask them to read some of the speeches made by two of the Ministers I have mentioned at a time when we were in office, not indeed upon their Tory antagonists but upon the occupants of their own Front Bench, many of whom still bear the marks in their hearts even to this day.
  I welcome the Prime Minister's statement that there is to be a drive for agriculture. Why was it not done three months ago? This is not any new crisis which has come along. Already we see in the country that the harvest is being reaped. As soon as the sheaves are out of the fields, the ploughs must go in. How long will the ordinary farmer have to wait before he gets assistance and guidance about the crops which he must grow? Again, what steps have we taken to conserve the food when we have grown it? I come from that part of England which produces the greatest potato crop in the country. If the subsidy on potatoes was removed, I believe that there would be an enormous saving in consumption. The

  1527
  price of potatoes should be brought into proper level with the cost of production. It does no good to anybody to be able to buy any commodity at below the cost of production.
  I say to the Prime Minister and the Government that so far as the proposed steps will assist the country, they will have our wholehearted support. We shall not flinch from taking our share in the difficult days that lie ahead. On the other hand, we do not regard these measures as sufficient. We believe that instead of being an abrupt, sharp attack which would enable us quickly to overcome our difficulties, it is an approach which will merely depress the country down to a level of austerity and misery, even lower than at present, without any practical results. Nevertheless, we will work hard, both in this House to correct the Government in their errors, and outside in the country to get rid of them.
  6.24 p.m.
  Mr. Blyton: I was pleased to hear, when the Prime Minister made his announcement, that we are not to adopt the remedies which hon. Members operated when they brought into being the Geddes Committee in the 'twenties and the May Committee in the 'thirties. Their solution was to slash at the social services. They gave an unemployment benefit of 18s. a week with the miserable pittance of 2s. a week to keep the child of an unemployed man. I am pleased that the Prime Minister has not adopted that method. I want to speak particularly about coal. I can claim to know something about it, having spent 32 years in the pit and not merely having observed the pitheads from a railway carriage as it flies by on its journey up and down the country. Far too many speeches have been made by Members of all parties lecturing the miner as if he suffered from some kind of malignant disease. The miner is as patriotic as any other member of the community. The sooner this lecturing is stopped, the better it will be. The sooner the miner ceases to be told that he is not pulling his weight, the better will be the output of coal.
  I want to deal with the question of manpower in the mining industry. I do not want to discuss what happened years ago, but to focus the attention of the House
  1528
  on the fact that in 1940, the best men were taken away from the mining industry and the mines were provided with a labour force which was directed. The men directed to the mines under the Bevin scheme hated the very sight of the pits. The result was that those of us who had to handle these men in the pits found that they did not care whether or not they came to work. They used to take Monday and Friday off and sometimes they took other days as well. Absenteeism started to increase. This system of direction caused an increase in absenteeism. I do not say that miners are angels by any means, but absenteeism arose as a result of forced labour in the pits. On the other hand, we miners taught our children a hatred of the pits, and I make no apology for that. We did it because we made up our minds that none of our children would suffer the iniquity and poverty which we experienced in the mining industry in the 'twenties and 'thirties.
  Today we must face the position of poacher turning gamekeeper, and we must ask our people to send their young lads into the pits to take up mining as a career. Since nationalisation there has been an increase in the labour force of 27,000, after allowing for wastage. In the main, that is due to ex-miners returning to their work. It is a non-recurrent recruitment. Unless we can persuade juveniles to come into the pits so that when they grow up they can move to the coal face work, then in the next few years we will again face this terrific manpower problem. I am glad that the Prime Minister referred to the Control of Engagement Order as the limit of his powers in relation to the direction of labour. The direction of labour to the mining industry is no solution. It is no good sending a man or a boy to the pits if he hates the pit before he gets there. He will not make a good workman. Therefore, we are forced to face the only remedy, which is that we must give inducements and ensure security of tenure to those who take up mining as a career.
  There has been much talk in this House about the employment of Poles in pits. It has been said that we ought to do this and that, but, when all is said and done, the National Union of Mineworkers and even the Ministry of Fuel and Power cannot force Poles upon a gang of men if they say that they are not prepared to work with Poles. We would lose more

  1529
  output by men taking a stand against working with Poles, than we would gain by allowing the Poles to work. If I were still working at the coal face on a machine, and my life depended upon the actions of the second and third men following that machine, I would have a voice in the matter. I would want a say in determining who should be my mates working on the coal face machine where my life was at stake. This loose talk about the employment of Poles in pits ought to cease forthwith. We cannot force our men to work with Poles'. It is their lives, and not ours, which are at stake.
  There is one problem of manpower which I would like to put to the Minister. We are returning ex-soldiers to the pits. Many of these ex-soldiers now coming back, and particularly in my area, are the people I sacked during the war because they were no use to the pits. They were taken on by the Services, and now they are volunteering to come back, and they are coming back to districts where ex-miners are desirous of returning to the pits. These people are being given preference over the ex-miners who are willing to return. I suggest to the Minister that the labour director should be given more elasticity to enable him to determine which of these men he should employ in the pits, rather than bring back these wasters whom we had to sack because they were a nuisance to the trade union officials and the mineowners alike.
  My third point concerns machinery. Unless we can get more machinery, with spare parts for the existing machinery, conveyors, tubs, cables and drills, we cannot expect to achieve such an output as will maintain our industries and give us something for export. What do we find? It takes two years and four months to get a Mecco Moore coal-cutting machine or an overhead bar machine. If a manager is planning a new development, by the time he gets out his plans, and the division has given its sanction, and by the time the machinery is delivered to him, two years have gone before any long wall face can be put into operation. That gap must be shortened as quickly as possible, and there must be a concentration on the provision of mining machinery to ensure that, where a new development of mining is planned, there must be adequate machinery available in time to achieve the increased output.
  1530
  What is the position of an area manager? It may be thought peculiar that I should argue about an area manager, but I think this is a point which the Ministry ought to tackle. The area manager of, say, 16 or 17 collieries has only powers of capital expenditure of £2,500, and, if the development of a long wall face is planned and it involves over £2,500, which is bound to be the case, it takes four months before the division arrives at a decision, and that means that there is a four months' time lag before the machinery is applied for, and it is 14 months before it is delivered, and before it has any effect on the increased output of coal. I suggest that the Minister ought to raise that figure to an amount equivalent to the sum which would buy the full equipment for that long wall face, and that he would then be able to avoid this loss in output and time.
  The most important point I want to emphasise is the shortage of tubs and spare parts. The machinery in the pits in England generally is very old, and, during the war—and no one is to blame for this—spare parts and tubs were very difficult to get, because of the demands of the war. In fact, we could not get replacements of tubs that were destroyed. The result is that, at the end of this year, there is a deficiency in the number of tubs as against the 1938 standard. I want the House to appreciate this problem. Due to the shortage of tubs, we have to pay, under an agreement, 10d. an hour plus a percentage, amounting to 157 per cent., for every hour of waiting because of a shortage of tubs. This actually means hours of coal production lost, and if we had sufficient tubs, we could eliminate this waste of man-hours at the coal face and considerably increase the production with the present machinery.
  Another point which I desire to raise concerns the question of the five-day week. I listened to the hon. Member opposite on this subject, and there is no doubt that, in a mechanised mine, the five-day week is the essential thing. It takes from Friday night to Monday morning to look after the machinery, to get the face prepared and to do some work on the haulage roads that cannot be done during the week when output has to be fully maintained. Therefore, I want to put it to the House that the five-day week, apart from this crisis, is the thing

  1531
  that matters in the pits, and that, as time goes on, all the mines of the country will feel the benefit from it. There is an agreement which was in existence during the war, and of which I would like to remind the Government today, by which the miners, the owners and the Ministry all agreed that the men should stop an extra half-hour to ensure that the coal face was stripped and to ensure the complete cycle of operations for the next day's output.
  I think this point ought to be considered by the Government again today. It does not mean to say that if we put an extra half-hour on the miners every day that we are going to get an extra half-hour's coal production, because the face can only give its specific yardage, and, if it is cleaned up in seven and a half hours, we cannot get one tub of coal more than we are getting now unless the faces are extended. If the Government are to extend hours, instructions ought to be given at every pit that there must be an extension of the length of face to meet that extra half-hour. My proposal to the Government is that mining engineering firms should be given priority for steel, and that they should also be given the raw materials to ensure that the necessary machinery is produced in quick time and delivered into the pits. On the question of spare parts, if the law of patents is standing in the way, it ought to be swept aside, so that other engineering firms can help in making all the spare parts to ensure that there will be a regular inflow of new machinery, as well as spare parts with which to maintain the existing machinery.
  I suggest that inducements should be given to get more labour into the pits, that a greater allowance of capital expenditure should be given to area managers, and that the Government should appoint someone with full powers, like those which Lord Beaverbrook had for aeroplanes during the war, so that everybody concerned in this job can get on with this vital question of producing the necessary machinery. Where there is a shortage of tubs, I suggest that we might ask the union for an extension of the coal winding hours, so as to ensure that all the full tubs are out of the pits at night and that the pit is filled with empty tubs ready to start the next day's production.
  1532
  If sacrifices have to be made for increased production, they should apply to all, and not to the miners alone. If these sacrifices are made, there should be a guarantee that, when this crisis is over, the people concerned shall return to their pre-crisis conditions. I ask that the added hours of labour given by the community shall not be used to make enhanced profits for the employers of labour. I also ask the Minister carefully to consider those suggestions in connection with the coal problem, because, unless something on this scale is done, it is very doubtful whether, in the future, we shall get coal in sufficient quantities to ensure that our industries are in full swing, and give us a surplus for export.
  6.40 p.m.
  Mr. Norman Bower: The hon. Member for Houghton-le-Spring (Mr. Blyton) has made a very considered speech, containing a number of constructive suggestions on how to deal with the coal industry, on which he is, of course, a great expert. I shall have to leave it to other hon. Members on this side who are more conversant with the industry than I am to discuss what he has been saying.
  In his speech this afternoon, the Prime Minister referred, among other things to measures which the Government propose to take to see that labour is guided into the right channels. I am afraid that I was left a little in the dark as to how far the Government proposed to go in this direction, and to what extent it was intended to guide labour and to employ the method of direction. It is generally admitted that one of the greatest problems with which we have to contend is the maldistribution of labour, which is just as important as the actual over-all shortage of manpower. The result of that maldistribution is that we now find discordant voices being raised in trade union circles. Some well-known trade unionists advocate a policy of outright direction which, in my opinion, is utterly repugnant, and which, I think, will always be repugnant to the majority of the British people in time of peace. Others, on the other hand, repudiate the policy of direction, and ask for what they call a "policy of incentives."
  I feel bound to say, in passing—although it is never profitable to go back

  1533
  on the past—that if the Government had listened to the advice tendered to them some 18 months ago or more by quite a number of people, including myself, and had called a national conference of trade unions and employers' associations with a view to hammering out a wages policy on certain agreed principles—after all, a wages policy is one of the main elements in a policy of incentives—I do not think it would have been necessary for Mr. Deakin and others to have put forward such a drastic and panic proposal as the outright direction of labour at this very late stage. Personally, I hope the Government will reject this policy of direction, and will adopt one of incentives. Over and above this question of particular incentives, designed to draw people into certain specified industries, there is, of course, the question of general incentives calculated to make people work their hardest when they get into the right places.
  What I suggest is that the Government should review the whole of the rationing system. I was interested to hear the Prime Minister say that, if it became necessary to reduce rations, the Government were proposing to introduce a system of differential rations by which workers in heavy industries would get more than other people. That, of course, means that a certain specified class of people will get more rations, regardless of whether the individuals within that class work hard or not; in other words, they will get extra rations, whether they do anything to deserve them or not. Under the present system, it is true to say that, with minor exceptions, everybody, more or less, gets the same amount of rationed goods at, again, more or less, controlled prices. Most of the prices of rationed goods are controlled, and therefore, to a large extent, there is really no object for many people to work beyond the point at which they have sufficient money with which to buy the rations to which they are entitled.
  Many people find that there is no incentive to work hard, because it does not particularly interest them to spend their money in the limited number of other ways open to them. That is why I say, as I said at the time of the Budget, that if tobacco imports had to be cut—as, indeed, they had—the Chancellor was absolutely right to put a heavy tax on
  1534
  tobacco instead of rationing it, because the more things which are taken out of the price system and put into the rationing system, the less object there is in earning money. The only things which people want in the end, if everything is taken out of the price system and put into the rationing system, are coupons with which to buy the rations to which they are entitled. There is no object in earning money, and in the end the point is reached where people might as well be paid in coupons instead of money. Of course, the opposite applies whenever anything is taken out of the rationing system and put back into the price system; then, the incentive to earn money is increased.
  As I think hon. Members will realise, I am no great admirer of the Russian ecenomic system, but I think that in one respect—and I hope that in this I shall, at any rate, have the support of the hon. Member for West Fife (Mr. Gallacher)—we could with advantage take a leaf out of their book by trying to make available additional quantities of rationed goods at higher prices. In Russia, there are special shops where people, if they can afford it, can buy rationed goods at much higher prices. It would not be necessary to resort to that particular type of machinery in this country; we could use our existing shops. But the point is that there is already a black market in existence in this country. It may be small. Its extent is unknown, and it is extremely difficult to gauge how big it is; but there is no doubt that people can get additional quantities of rationed goods if they are prepared to pay the price.
  I can assure the right hon. and learned Gentleman the President of the Board of Trade that it is not unduly difficult to get clothes without coupons if one is pre pared to pay an additional price for them. I know for a fact that clothing coupons are being offered for sale within the precincts of the Palace of Westminster at 2s. each. I can also tell the Minister of Food, if he does not already know it, where he can get additional quantities of rationed foodstuffs, if he is prepared to pay the price for them. What I am suggesting is that there ought to be a legally and officially recognised black market in this country. That may seem a con tradiction in terms, but if it were recognised, and if it were legal——

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

  1. Companies Act, 1947.

  2. Agriculture Act, 1947.

  3. Transport Act, 1947.

  4. Isle of Man (Customs) Act, 1947.

  5. Town and Country Planning Act, 1947.

  6. Paisley Corporation Order Confirmation Act, 1947.

  7. National Trust for Scotland Order Confirmation Act, 1947.

  8. Nazeing Wood or Park Act, 1947.

  9. Borough of Croydon (Rating) Act, 1947.

  10. Tynemouth Corporation Act, 1947.

  11. London and North Eastern Railway Act, 1947.

  STATE OF THE NATION
  Question again proposed. "That this House do now adjourn."
  Mr. Speaker: Mr. Bower.
  6.59 p.m.
  Mr. Orbach: On a point of Order, Mr. Speaker. Before the hon. Gentleman proceeds, may I remind you that during the course of his speech he was responsible for making a statement which, I think, casts odium on the Members of this House and on other persons working within the Palace of Westminster. He made a statement to the effect that illicit and illegal transactions took place here in connection with both clothes and food rationing. I think the House is entitled to know whether the disclosures have been made to the Minister concerned, or whether the hon. Member intends to apologise.
  Mr. Speaker: The hon. Member is responsible for what he says. He does not have to apologise because he makes what may seem to be a rash statement.
  Mr. Orbach: Further to that point of Order, Mr. Speaker. Surely, the hon.
  1536
  Member has been responsible for a breach of Privilege, in that he cast odium on Members of this House?
  Mr. Speaker: Not necessarily on Members of this House. After all, there are many other people besides Members who work in the Palace of Westminster, and lots of things go on of which we have no knowledge.
  Mr. Bower: Let me say at once that I was not intending to cast any reflection upon any Members of this House. I did not specify by whom they were sold OI by whom they were bought; and I most definitely do say now that, as a matter of fact, no Members were concerned in the transactions to which I was referring—[An HON. MEMBER: "Did the hon. Member report it?"]. That is a matter about which I prefer not to say more at the moment.
  Mr. Platts-Mills: In view of the very grave charges made against some persons unnamed, will the hon. Member now give the House the benefit of his knowledge as to the sources of his information?
  Mr. Bower: No, I do not propose to give any information regarding the sources of my information at the moment. I merely say that I do know for a fact that such transactions have taken place, and I make myself fully responsible for that statement. If it should be necessary to give any further information, or if it is desirable to do so, I shall be prepared to do so on another occasion. I do not choose to do so at the moment. As I was saying, a legally and officially recognised black market, is a contradiction in terms, because if it were officially recognised it would not be any longer a black market. But I ask the Government seriously to consider this expedient, if they really want people to work hard. It may sound outrageous to people in this country, and it may not even be possible, but I am convinced that this passion for equality, whether people work hard or whether they do not, and for what is wrongly called fair shares for all, will, if it is persisted in, ultimately bring this country to ruin and complete stagnation.
  Finally I want to say this, as a back bencher who does not take a particularly active part in the proceedings of this

  1537
  House, but who, nevertheless, watches the situation fairly closely. I think we can detect a certain similarity between the position of this country now and its position in 1938 and 1939. The setting is, of course, different, because in those years the crisis was mainly international in character, whereas today it is mainly domestic; but, nevertheless, we are moving into a crisis in an atmosphere of party warfare and recrimination. Each side is really doing its best to score off the other right up to the very last moment. I lay the blame for that state of affairs on the Government, because, after all, it is their responsibility to create the right atmosphere and to give that leadership which alone could call forth that supreme effort from a united nation without which we shall never succeed in turning the tide.
  Nevertheless, in that position in which we find ourselves, the responsibility rests on all of us. I think that we on this side of the House must refrain from saying anything which would tend to weaken enthusiasm for increased production among those sections of the community who support us—and they are very numerous. At the same time, I ask hon. Members opposite—and this does not apply to a good many—really to search their consciences, and to ask themselves whether they really are justified in continuing to use the same propaganda regarding such things as profits, private enterprise, and so on, which has served them so well in the past. Ought they really to continue to give the impression to their supporters that there is something immoral about profits as such, and that private enterprise is really nothing more than a necessary evil which has to be tolerated at the moment, but which is to be further truncated and curtailed at the earliest possible moment? I do not think they ought to continue to do that sort of thing, because I feel convinced that, unless both sides are prepared to exercise a certain amount of restraint in their propaganda, we shall never get that great, united national effort which alone can pull us out of our present difficulties. It may well be that, ultimately, the sheer force of circumstances will tend to mitigate the asperities of party warfare and pull us a bit closer together, but by then, as has happened in the past, it may be almost too late.
  7.5 p.m.
  Mr. Fernyhough: Hon. and right hon. Members on both sides will understand that I follow a very distinguished Member of this House. She was a woman of great courage and great character. That does not of necessity make my task any easier tonight. We are discussing tonight another lady—old Mother England. In deference to Scotsmen and Welshmen and Irishmen I had better say old Mother Great Britain. The old lady is in great pain internally and she has got a few large external sores. There are those who would pretend that her present deplorable condition is due to Doctor Socialism, but we know that that is not true. We know that the old lady had these pains in 1938, because in 1938 we were failing to balance our export-bill. The pains certainly became more acute once war was declared, and had it not been for the blood transfusion that Doctor America infused into her, in 1941, it is certainly true to say that her crisis in 1941, 1942, 1943, 1944 and 1945 would have been greater than the crisis which the old lady is passing through at this moment. Further relief from the pain was given in the way of a loan, but now that medicine is running out and there is an element of doubt whether Doctor America is to continue to administer to the patient. But in any case the old lady is not ready for boxing up and burying. She feels that she can revitalise herself if her own sons and daughters, on whom she has a right to depend, rally around her as they have done in the past.
  But when it is a question of all her sons and daughters rallying round her, it does mean all and not just a few. I appreciate that in this great battle for life the old lady, to a large extent, has to rely upon what I would call the forgotten sons and daughters, the unimportant sons and daughters; because in essence, if the old lady is to survive it is a question of production, and in the matter of production it is the unimportant people in the main, in society who become important. In other words, the old lady today has to look to the miners and not to the millionaires; she has to look to the builders and not to the bankers; she has to look to the engineers and not to the racketeers; she has to look to the shipbuilders and not to the shareholders; she has to look to the labourers and not to the lawyers; she has to look to the

  1539
  clerks and not to the sharks; in other words, to the men and women who do the hard, essential and the vitally necessary work for society. They are, once again, the men and women who can pull old Mother England through this great trouble with which she is faced.
  If we are to overcome this crisis we must recognise the truth of what the folk of my party have said, right from the time Keir Hardie came here wearing a cloth cap, that there is no wealth except that which comes from work. That entails those who have been unduly critical of the people who do the essential work in our society themselves getting down to the task of rendering more useful service to the community than they do at present. What is needed now is a clarion call such as the right hon. Member for Woodford made to the nation in 1940, when he said he had nothing to offer except blood, toil, tears and sweat. This Government are in a position to say, if they can have that same blood, toil, tears and sweat, not that they have nothing to offer, but that they will have something real and tangible to offer at the end.
  If Mother Great Britain comes through this struggle—as she certainly will if her sons and daughters rally round her in the manner she has a right to expect—when she is once again in a position to distribute favours, it will be her job to see that those favours are distributed to those sons and daughters who stood by her in her hour of need. In other words, we have to appeal again, in the main, to the people from the mean streets and back streets, the people who do the really hard, productive work. They are the backbone of the nation in this crisis, because this is a crisis of production. If we put it to the workers in productive industry that this is a fight against the age-long curse of the workers of this country, the age-long curse of poverty—because this is essentially a fight against poverty—then I am positive they will give their wholehearted support. If we get the response to which we are entitled in these days of difficulty then, without question, not only will old Mother Great Britain get well and strong again, not only will she have reason to be proud of her sons and daughters, but, great as her past has
  1540
  been, an even greater future will he before her because of that magnificent response to her appeal in her hour of need.
  I appreciate that probably I have not followed the honoured custom of this House of not being controversial in a maiden speech. But when a question such as this is being debated, it is difficult not to say something which could be offensive to some Members of the House. If I have transgressed, I am very sorry indeed. But I feel keenly upon this matter, and I think the House would prefer me to be honest and sincere, and to know that I am honest and sincere, even though I may be offensive, rather than that I should make a cuckoo speech which was completely out of keeping, and quite unbefitting the times through which we are passing.
  7.15 p.m.
  Colonel Lancaster: It is my privilege and pleasure to congratulate the hon. Member for Jarrow (Mr. Fernyhough) on an excellent maiden speech. He had two advantages, in that he was speaking for an important industrial and shipbuilding constituency, and was following in the footsteps of a right hon. Lady who had the respect of hon. Members on all sides of the House. I am certain we can look forward with interest to further contributions from the hon. Member.
  I propose to take up the time of the House for only two or three minutes, because there Was one point raised by the Prime Minister with which I felt I must deal. It was referred to also by the hon. Member for Houghton-le-Spring (Mr. Blyton) in his excellent speech, namely, the question of the half-hour extra work in the mining industry. My right hon. Friend the Member for West Bristol (Mr. Stanley) said that we should deal with the proposals of the Prime Minister, on their merits. It is necessary to say straight away that it would be a complete illusion if the country or this House were to imagine that as a result of an extra half-hour in the pits there would be any substantial increase in production. In saying that, I know I shall have the support of hon. Members who are familiar with coalmining. The only men in the pits who can increase production are the coal getters, the face men, and the overwhelming majority of those men work today on machine faces. Those faces have been

  1541
  constructed, laid out and organised on a system which allows of three cycles during the 24 hours, and it is impossible, by means of an extra half-hour, to achieve any additional production off those faces. The only way in which that could occur would be by an extension of those faces, which hon. Members will recognise would require a major physical reorganisation of the pits, and that could not occur overnight. That would be a long-term matter.
  As long ago as last February I asked for a reconsideration of the 11-day fortnight. I ask again now. That is the only practical approach to this problem. An extra half-hour may mean slightly cleaner pits; it may mean a neater operation; but it will not produce the additional coal which we require. It would be a great mistake if hon. Members went away from this Debate with the impression that that extra half-hour will result in additional output. I am sorry to have to adopt this attitude in regard to what I am sure the Prime Minister put forward as a constructive proposal. I would challenge the Government on these two points. First, had this proposal the sanction and agreement of the technical members of the National Coal Board? I doubt it. Secondly, can the Government suggest that it will, in fact, mean any additional production? I doubt that also.
  It is necessary to say these things, because we have come to the consideration of our economic position with a desire to see some solution. No solution lies in this proposition, and once again I ask the Government to reconsider this matter. The 11-day fortnight is a practical proposition, and the Government would be wise to think along those lines. It would be of a temporary nature, and need last only for the duration of this crisis. But that we should buoy ourselves with any false hopes in regard to the proposition of the extra half-hour would be wholly wrong. I do ask the Government to think again.
  7.19 p.m.
  Mr. Jack Jones: I desire to take part in this Debate, not so much because of the critical position in which the country is, but because of the need to give the people of the country the opportunity to learn the real facts. I believe that to spend even half a minute talking about what happened yesterday is but a futile waste of time. We cannot
  1542
  afford to stand in this Chamber today and talk about yesterday. Yesterday has gone. It is tomorrow to which we must look forward. We must find out how we are to get out of this mess. I do not want to start scratching old sores, and I do not want to be among those who would say, "I told you so as long ago as April, when I spoke about production."
  I believe that the hon. Member for Jarrow (Mr. Fernyhough) hit the nail on the head, and as a member of his party I should like to congratulate him on his maiden speech. Mother England is, indeed, really sick. She cannot all the time keep having sicknesses and keep getting better, because the day comes when you meet with your final sickness. This country is beset by many evils. I am not a financier, but the position reminds me of the position which many families get into. I happen to be a justice of the peace, and I hear some terrible stories on the bench. I well remember the case of a couple who came before the court because they had had a quarrel. Like the Labour Party, they started off with all the good intentions in the world, but then they found themselves heading for rather difficult times. They decided to have a debate about the position, just as we have done. The husband said, "You know, Mary, you have been spending more than I have been earning. I have given you all the money I have earned, and in addition I find you have been borrowing. We cannot go on like this." His wife replied, "There is something I have to tell you. We should not be in this position if you had not been having a few odd days off from work."
  It behoves all of us, from the Prime Minster down to the newest Member, to go into the constituencies and put the position fairly and squarely to the people. It is no use putting our head into the sands and thinking things will turn out all right. We cannot expect American good will to last for ever. Germany looks to us, for help. I go to Germany almost weekly, and I say to the German working man, "Look here, lad, you have to prove to Britain that you have done everything possible to help yourself, and to that extent we shall try to help you." We have to do the same to America, and show her that we are doing everything humanly possible to help ourselves. This is a job for the trade union

  1543
  leaders. It calls for real statesmanship and true leadership. I am dismayed at some of the stories I hear when I go about the country. I know for a fact that one of my colleagues has twitted me with being an enemy of the miners. That hurts me, because I was born among the miners and raised among them. I am no enemy of the working man. I am one of those working fellows who is prepared to tell the truth about what we have to blame ourselves for, which is rather different.
  I am glad that the Prime Minister mentioned the question of steel. Our boys in every steel plant in the country are doing all they possibly can and work is being carried on continuously for 168 hours a week. But I would utter this word of warning: I hope and trust that the Government will not think of slashing their rations. Even today they are not getting the food they deserve. It is hot, heavy and sweating work, and these men deserve a break. We have caused very little trouble, but I warn the Government that if they attempt to cut their already insufficient rations, they are heading for trouble. We have to face up to these things and tell the truth. I believe that the honest-to-God working miner is now beginning to find that the country needs his help, and I am certain that the miners will give it. I am certain of that, but I wish that we had asked them for their help earlier. We hear a lot of talk about clarion calls, but these are not the sort of things which inspire. What we want is a sustained effort and a week-by-week production in our factories until we get out of this mess.
  I noticed last week it was stated we had some 696 Poles in this country, receiving £4 5s. a week for not doing a hand's turn of work. On the other hand, we have lodges who are refusing to work with the Poles. I always understood that Socialism was international. I always thought that we raised no barrier against any man, whatever his creed, colour or religion, when it comes to helping the country in which he lives. Any man resident in Britain, who is living within our Constitution, has a right, if called Upon to do so, to make his contribution towards helping us to recover. I hear that we have engineers who have refused to work, or are asking that certain Polish engineers engaged on vital work of
  1544
  creating coal-cutting machinery should be dismissed. These are things we have to face up to. We should have the guts and courage to talk about some of our failures, and to make an effort to put things right.
  Our steel industry wants to do more, but again more coal is necessary. I pointed out at one of our recent meetings that the works in which I have had the privilege to work for 32 years closed down for a fortnight, the first time they had closed down since the General Strike of 1926. They closed down three weeks ago because they had used up their allocation of coal and had to put the rest of their coal to stock, with the result that 16,000 tons of ingot steel was lost. These are the things we have to put right. In Bolton, which is the finest textile town in the world, boilers are being fired with sawn-up rubber, and joiners' shops are being turned into sawmills to provide the power to keep our people going. They are putting to stock slurry and everything else which is not coal. I hope that the Prime Minister's call will be heeded, not as a call to an individual section, but as a call to the whole mass of honest-to-God working people in the country. I get around a good deal, and I say to the House, with all the sincerity and conviction I can command, that individually we are still the finest working people in the world, deserving the finest standard of life. Unfortunately, because of wars and economies, we find ourselves in this perilous position today. I appeal to all our trade union leaders, irrespective of their politics, whether they are Communist leaders, Socialist leaders, or those who have no politics at all, that the day is past when the political colour of a man matters; it is Britain first on this occasion in all things.
  I could speak about the evils perpetuated by hon. Members opposite, but I would say only this: To change the Government now would only worsen the position. A Tory Government would lead only to the scratching of old sores. The Tories cannot put the position right. The only thing that can is the courage, skill, energy, drive and good will of the working masses. They are the people to whom we must appeal, and if we make the appeal to them I know that they will respond, and that we shall get through this mess. We can, and we must by our own efforts, build in our country the standard of life

  1545
  that Almighty God intended all decent Britishers should have.
  7.30 p.m.
  Colonel J. R. H. Hutchison: It is indeed a pleasure to hear the diagnoses of our troubles which have been given by Members from the benches opposite this evening. There appears at last to be a realisation of the depth of the difficulties into which we have drifted. It would have been gratifying and inspiring if this call for work had been made at any time during these past two years. Our national poet in Scotland once wrote,
  "Oh wad some Pow'r the giftie gie us To see oursels as others see us!"
  It is desirable and revealing occasionally to turn the limelight on ourselves and be able to see just how we look in foreign eyes. Under the Marshall Plan, which demands that this be done, 16 nations have come together, each with their eyes fixed on one another, and all eyes fixed on us, while the United States of America has her eyes fixed on all 16 of us. Let us see what exactly it is we look like to those who are scrutinising us so carefully. Members have heard foreigners use the expression "Mad dogs and Englishmen," and, consequently, foreigners expect to find paradoxes when they come to look at us. But surely they did not expect to find the absurdities and follies to which they have been treated during the past few years.
  The first thing they saw was a great leader, who had led the country out of what they thought to be an impossible position to victory, cast out into the wilderness in favour of a party which certainly did not contribute to this country being ready to meet the great test through which it came. I have heard Frenchmen, who regard my right hon. Friend the Member for Woodford (Mr. Churchill) as the greatest of all war leaders, quote by the yard his wartime speeches, although unable to speak more than a few words of English. Foreigners have noticed the promises of impossibly better things, made at the time of the Election, fail one after the other. They will notice tomorrow, as the result of the Prime Minister's speech, that the target of 175 per cent. increase in volume of exports which we set ourselves not long ago, and which was cut down to 140 per cent. in the Economic Survey, is now to be cut still further.
  1546
  How with this reduced figure are we going to bridge the gap? It is always difficult to lead a whole nation into logical thought, and particularly difficult after a war, when minds have become distorted by war ideas and the impact of war, when all values of life and property have been written down to nothing, and sane finance and economy have been thrown overboard. It is the duty of any party aspiring to power to try to lead that thought back to true lines. That is what should have been done at the time of the Election, and should constantly have been done up till now. But there is a glimmering coming from the party opposite which now shows that they realise, at last, that great obligation.
  A Government which believed—as I accuse this Government of teaching—that after all the waste of war any nation could enjoy a higher standard of living and a greater degree of leisure was flying in the face of inexorable economic facts which will bring down, and are certainly fringing down, this country to its knees. The eyes which are turned on us see an administration clogged by a mass of nationalisation which, at best, can only claim to bring advantages in the far-distant future, and which, in our view, will not even do that. They see legislation passing at jet-propelled speed through this House, and which is surely putting the "mock" in democracy. They watch a country which has recently been described as being an island of coal spending all its energies to bring foreign coal to Newcastle. They watch Ministers blowing hot and cold between complacency and anxiety. They hear the Minister of Fuel and Power, in one of his more optimistic speeches, saying, "There will be no fuel crisis." They hear the Minister of Food saying, "There is no need whatever for housewives and the people generally to feel that they will find it impossible to obtain at home, or from abroad, the food which they need."
  They listen to the Chancellor of the Exchequer say, without a sign of reluctance or remorse, that the terrific sum of £3,100 million will be expended in the current year. They hear him use the words, "A new Britain has taken the cost of social security proudly in its stride. The money has been found." They ask where has it been found? In the United States of America? When next our

  1547
  emissaries go to negotiate for a further loan, will it be surprising if some there murmur, "Is their journey really necessary?" They may hear the small voice of the hon. Member for South Cardiff (Mr. Callaghan), at the time of the Budget, say, "To suggest that we shall have to go crawling to the United States for another loan, and that we shall be faced with hunger and unemployment, is a wild exaggeration." They rub their eyes, and ask themselves whether they are dreaming. Is not this exactly what is happening?
  They notice that the shorter working week has been introduced into the coal mines, and take note of the fact that one hour's extra work a week on the five days would have produced all the coal which has been sent to Europe by America. They hear the Minister of Fuel and Power say, "If the five-day week does not work out, I shall say so." Has the right hon. Gentleman come to us and said so? All that he treats us to is occasional verbal vitriol, and the foreigners take note of the fact that vitriol is neither fuel, nor power, nor medicine. Is the extra half-hour to be worked as an emergency the answer to the problem? We have heard Members who are specialists in this matter say that it will produce no extra coal, and that in any case the extra half hour should be treated as an emergency matter. That is an utterly wrong attitude of mind. This extra half hour, if we are going to produce coal, would not produce enough in permanency to make ends meet. It is noticed that Ministers complain that the country is suffering from a labour shortage, but that more are in employment than before the war. It is known that there are more miners than in 1941, with more modern machinery, producing less than they did in 1941, and it is said, "Is the problem that there are too few workers, or is it not that there are too few people really working?" It seems to them that the Prime Minister's prospectus, which they will now see, will be inadequate, and will leave a big gap to be covered.
  These foreigners look at the hoard of management, and ask themselves, "How impressive is this?" They have listened to the story of how the weather has affected crops and output, and they are
  1548
  not impressed. A Government that cannot make provision for that sort of thing is not half a government. "I've never 'ad a chance, guv'ner," is a familiar theme. All this reminds them of a film in which the Marx brothers—no relation to the propounder of Left Wing theory—were pummelling a patient who cried, "Hey, I am not the patient," whereupon they replied, "That is all right by us, we are not the doctors either." Is not that exactly what is happening? Here is industry being pummelled, slapped, and exhorted by Ministers, and being threatened with nationalisation and then expected to produce more. The foreigners who look at the benches opposite say, "These are not the doctors for Britain." They have looked for real leadership, and I am glad to have heard that pronounced again by Members on both sides. They note that heroic measures are necessary, but where are the heroes? Instead of direct, determined drive, all they hear is an amorphous mass of discordant thought. They saw a well-thought-out plan of conscription put forward by the Minister of Defence, reversed a few days later under pressure from the back benches. They notice the deference paid in all these matters to Transport House, They realise the Micawber-like attitude of waiting for something to turn up which actuates the Government.
  All that turns up is one crisis after another. They think that the Front Bench belong to the cult of those who believe in economic fairies? Following the theatre in the presentation of Peter Pan, if you, Mr. Speaker, found it in your prerogative, and desired to call on all those who believed in fairies to clap their hands, the burst of applause it would attract from Members opposite would be really surprising. But it would not be the applause for Tinker Bell, or some starry beauty of the pantomime, but applause for Uncle Sam, beard, dollars, and all. This is the economic solution in which they have put too much trust. Let them learn to believe in themselves and really lead, and not look to Transport House, over their shoulder, for approbation or criticism. Then they might have a chance of telling the people of the country, who are waiting for a lead, and wanting a lead, where they should go, and set an example to the people

  1549
  which the country will, in very truth, follow.
  7.41 p.m.
  Mr. Zilliacus: I will endeavour not to waste the time of the House so completely as the hon. Member for Central Glasgow (Colonel J. R. H. Hutchison). I will try to deal with the international aspect of our present discontents. It has been generally admitted that the cause of our present difficulties largely arises outside this country but, hitherto, most of the remedies discussed have been remedies within this country. In point of fact, of course, in order to meet this crisis we need a combination of internal measures and of policies in relation to other countries. The greatest single factor in the international economic situation is the policy of the United States. As the policy of the United States is one of the major factors on which we are relying, and has to be considered in relation to our troubles and how to get out of them, I will dwell for a few minutes on that policy.
  I believe that a good deal of the unnecessary difficulties with which the world is wrestling and the unnecessary delay in the recovery of Europe are due to the fact that the United States after the last war as after the first world war hastened to remove controls and returned to unplanned private capitalism. If any hon. Member is interested in the disastrous results of this policy that ensued after the first world war, I would urge him to read the monograph of the Economic Section of the League of Nations Secretariat on the Recovery of Europe and the measures taken between 1919 and 1921. The spreading consequences of what has happened in the United States are, first of all, the premature and abrupt ending of Lend-Lease and then of U.N.R.R.A.; secondly, the failure to bring down tariffs and the consequent permanent export surplus, and thirdly, the rise in prices, which have deprived us of 50 per cent of the purchasing power of our loan.
  The ways in which we have as a consequence begun to suffer acutely—we and other countries—from a dollar famine, and how the dollar famine and our other difficulties have been aggravated by the convertibility Clause and the nondiscrimination Clause in the Loan Agree-
  1550
  ment are familiar to the House, and I will not enlarge on them. It is, however, important to note that these developments with their repercussions on our present difficulties, show no signs of slackening in the United States. On the contrary, the President has gone through a series of protests and surrenders to forces which he himself described as enemies of the people and irresponsible and selfish. An anti-trade union law has just been passed over his veto and an anti-progressive witch-hunt is going on in the country and, finally, the President has signalised his capitulation by a proclamation——
  Earl Winterton: Is it in Order, Mr. Speaker, to criticise the head of a friendly State? The hon. Gentleman has described an act of President Truman as "capitulation," and I understood that there was a well-known Rule of this House that one cannot criticise the head of a State—a President or King?
  Mr. Speaker: I think, speaking from memory, that one must not use opprobrious epithets. One must not cast reflections on the head of a friendly State.
  Earl Winterton: Am I to understand that "capitulation" is not, in your opinion, Mr. Speaker, an "opprobrious epithet"?
  Mr. Speaker: I think that there must be some accusation of an unworthy motive.
  Mr. Zilliacus: I was describing what had happened. I did not impute any unworthy motive, and these are the terms in which President Truman has described his doctrine. He says:
  "There is one thing that the Americans value more than peace. It is freedom, freedom of worship, freedom of speech and freedom of enterprise."
  He identifies freedom of enterprise with the values of Western civilisation and democracy, and concludes:
  "The pattern of international trade that is most conducive to freedom of enterprise is one in which major decisions are made, not by Governments, but by private buyers and sellers under conditions of active competition and with proper safeguards against the establishment of monopolies and cartels. That pattern of trade that is least conducive to freedom of enterprise is one in which decisions are made by Governments. That was the pattern of former centuries. Unless we act and act decisively it will be the pattern of the next century."
  That is a declaration of diplomatic and

  1551
  economic and secondhand military intervention against Socialism in Europe and the world.
  Mr. Brendan Bracken: Is it in Order to describe a statement made by the President of the United States as a "secondhand military intervention"?
  Mr. Speaker: I was not listening, and I did not hear the actual words which were used.
  Mr. Gallacher: Is it not the case that, time and again, from the other side we get the most appalling references to Stalin, and there is nothing said?
  Mr. Speaker: I did not hear anything said about Mr. Stalin. I think that we must be very careful as to what is said about the head of a friendly State. After all, we should hate it if the Americans said something very unkind about the Prime Minister of this country, no matter what one's politics might be, and naturally the Americans might resent the same kind of remark about their President.
  Mr. Platts-Mills: When the hon. Member speaks of "secondhand military intervention" and what is really meant is firsthand military intervention, is it not better that he should say so?
  Earl Winterton: Further to that point of Order. Although this to hon. Members opposite may be a laughing matter, it will cause a great offence in the United States, and I say that when the hon. Gentleman uses a direct term about the President of the United States and "secondhand military intervention" he should withdraw.
  Mr. Wyatt: Surely, while one may not inquire into the private behaviour of the head of a friendly State, if one describes policies which he enunciates as head of that State in terms which are reasonable, it is not offensive to the head of that State. We must be allowed to comment on policy.
  Mr. Speaker: The policy of the country, of course, is one thing, and to refer to an individual is another. If the hon. Gentleman said that it was a secondhand administration——
  Hon. Members: No.
  Mr. Zilliacus: I am describing the policy of the United States outlined in President Truman's declaration of last March. I describe that policy as virtually a declaration of economic, diplomatic and secondhand military intervention against Socialism and the Left in Europe, and by "secondhand military intervention" I mean precisely and exactly what the United States Administration is now doing in Greece, where it has supplied the Greek Government with arms and munitions to conduct a civil war. That I think is accurately described as "secondhand military intervention." If hon. Members opposite are going to show so much emotion and sensitiveness at this stage I warn them that they will probably find their feelings altogether out of control by the time I have finished with them.
  Earl Winterton: As the hon. Gentleman has referred to me, may I say I have no objection since it appears to be a catfight, but I do not think anybody of his character should attack the President of the United States.
  Mr. Zilliacus: I do not really know whether what the noble Lord the Member for Horsham (Earl Winterton) said was quite in Order, and I would ask your opinion on it, Mr. Speaker, because I think he was passing a reflection on my character.
  Mr. Speaker: I wondered too. The noble Lord said "anybody of his character" but it might be a very good character. [Laughter.]
  Earl Winterton: It is all very funny.
  Mr. Zilliacus: If I am taking up too much of the House's time, it really is not my fault. [Interruption.]
  Mr. Speaker: I think there is too much interruption going on.
  Mr. Zilliacus: The Marshall Plan was originally believed by optimists here to supersede the Truman policy and to be a different policy which stressed ideological faction somewhat less and was more concerned with the economic reconstruction of the whole of Europe. Unfortunately, it became clear after Secretary of State Marshall's second speech to the Conference of Governors of States that the so-called Marshall Plan, in fact, merely

  1553
  applied to Western Europe the policy outlined in the original Truman doctrine. That is a policy of social and ideological intervention in Europe. Moreover, in the United States, whereas the Administration proposes, Congress disposes, and that is more than ever the case in Presidential election year with a Republican majority in Congress pitted against a democratic Administration.
  It is highly important, therefore, in gauging the effects of the Marshall Plan on our prospects, of reconstruction, to study the state of mind of American public opinion and particularly the state of mind of Congress. "The Times" Washington correspondent, who is a first-class authority on American affairs, on 4th August, in a very interesting despatch, described the attitude of American public opinion. The first point he made was that American public opinion very naturally and properly, stresses that United States assistance to European countries should be supplementary, and that European countries should be basically responsible for solving their own problems. That, I think, is a perfectly sound and reasonable point of view. But it places the main responsibility on us to help ourselves by measures of mutual aid and self help, and then let us see what extra help we can get from the United States.
  The other point made by "The Times" Washington correspondent was:
  For the average American the recent history of Britain represents an experiment in Socialism, a system for which he has deep suspicion. … The number in this country who think of and wish well to Britain under a Labour Government is probably small. …At the mere wind of Socialism, the American buttons his coat and turns up his collar. Socialism is for him an advance along the road to Communism."
  That, of course, is the general "run-of-the-road" American opinion. But what about diehard Conservative American opinion? The "New York Herald Tribune" recently quoted a gentleman named General Wood, of the "Sears Roebuck Catalogue" and columnist O'Donnell, who pleasantly referred to the Marshall Plan as "Operation rathole" and said that it means that "the American taxpayer will shell out five billion dollars a year for a bunch of quarrelling bums." The "quarrelling bums" are ourselves and the other European States.
  Earl Winterton: A very good description.
  Mr. Zilliacus: I would not have ventured myself to apply it to the noble Lord, but if he thinks it fits——
  Earl Winterton: That is the best description I have ever heard of the Socialist Party.
  Mr. Zilliacus: Then we come to the attitude of Congress. First there are the leaders of American public opinion, like ex-Governor Harold Stassen, who is the progressive potential candidate of the Republican Party—whether he makes the grade or not is another matter—and is regarded as being most progressive and internationally minded. He has made a number of broadcasts in which he said that the condition for this or any other European country receiving American help should be that they should give up any further advances towards Socialism—any further measures of Socialisation. Senator Joseph Ball, in a broadcast—and he is also a fairly progressive senator, who is for the Marshall Plan and international co-operation—observed:
  "If the real issue in Europe is between Socialism and Communism rather than between Communism and the free society, then it is hopeless and we had better conserve our resources for the inevitable conflict."
  As the House well knows there have been frequent statements in the American Press that the United States are anxious that the Labour Government should give up that part of their Election programme which calls for the nationalisation of the steel industry. And recently Mr. Alastair Forbes, in the "Sunday Dispatch," reporting this statement in the United States, with that peculiar conception of patriotism which attaches to the Party opposite, expressed the fervent hope that the United States would put pressure on our Labour Government to give up the programme which it was returned by the people to carry out, and to abandon the nationalisation of the steel industry. That, of course, is not something that a self-respecting Labour Government is prepared to do or which the Members of the Labour Party would tolerate.
  What about Congress itself? What are our chances of getting this help in the near future from Congress? First, we have the "New York Herald-Tribune" despatch saying that:

  1555
  "So strong is the economic isolationism in Congress that the Truman Administration does not dare call it back into special Session even to consider the Marshall Plan for fear that Congress would disapprove of it."
  The "Washington Post" on 9th July, in a very interesting despatch from its two star correspondents, Joseph and Stewart Alsop, reported that one of the most capable and best informed Senators, himself deeply convinced that the Marshall proposals were our last best chance, said he was very much worried because:
  "The State Department is failing to protect its rear If Bevin and Bidault and the Europeans came up with a first rate plan tomorrow and Marshall asked for the necessary appropriation the day after, he would be turned down flat by an overwhelming majority in Congress."
  So much for the political difficulties and uncertainties in the way of our obtaining anything from the Marshall Plan. In fact, if Congress cannot discuss it this autumn and does not meet until January or February, that is Election year, and then, as an American newspaper, the "New York Herald-Tribune" says, in Presidential election year American politicians behave like bull moose in the rutting season. I take it that that means, without being too indelicate, that they rush about the political backwoods snorting and shaking their antlers and pawing up the earth. In other words, they do not behave rationally.
  Mr. Bracken: How do they behave in Russia?
  Mr. Zilliacus: Better than that anyway. Then we come to the report of the International Economic Policy Sub-Committee of the House of representatives, which first of all—[Interruption.] Hon. Gentlemen opposite do not like what I am saying because there is too much realism for them but they had better take it. I am doing the dishing out. This Committee recommended, first of all, that the condition for receiving any further loans from the United States was to accept supervision of those loans, as had been done in Greece. The second recommendation was that no States in Eastern Europe, the States in which the Communist Party were important, should be allowed to participate in obtaining the benefits of the scheme.
  The third proposal was that the Ruhr should be handed over by us to the United States and incorporated in the American
  1556
  zone on America's own terms. Of course, as regards the non-participation of Eastern Europe and the introduction of American methods and capitalism into the Ruhr, we are seeing a good deal of the programme of this report being realised.
  Mr. Boothby (Aberdeen and Kincardine, Eastern): The hon. Gentleman talks of the non-participation of the countries of Eastern Europe, but I always understood that they were invited to Paris and refused the invitation extended to them.
  Mr. Zilliacus: But in point of fact they were asked only as an afterthought, and the whole thing was rushed through in Paris without any serious intention of bringing them into partnership. If we had meant business we would have referred the whole matter to the European Economic Commission of the United Nations. The fact that we did not do this laid us open to the suspicion that we were yielding to pressure by the Americans, who said that if Russia came in we should not get any credits from Congress. Finally, this report of the House of Representatives talks with approval of the Hoover letter—the programme outlined by ex-President Hoover for dividing up Europe into two blocks and organising and reviving big business in Germany and Japan as outposts of American capitalism against the Soviet Union and the forces of social revolution. That is the spirit of Congress and the lines on which we may be expected to be invited to co-operate. Apart from the political aspect there is the financial side and the question of how much money we are in fact likely to get. The maximum sum mentioned is 3,000 million dollars a year for about five years—that is, some £750 a year.
  Mr. Bracken: How much
  Mr. Zilliacus: I am sorry, I should have said £750 million a year, and that is for the whole of Europe and China as well. Incidentally, we are by no means first in the queue, a position which I believe is held by Greece. Congress, on the other hand, has never gone beyond a maximum of £500 million as the sum they contemplate as the overall sum to be disposed of in all the countries concerned, including China and this country. On top of that there are the economic difficulties and the question of what we can buy with the dollars if we ever get

  1557
  them. The Prime Minister referred- in his statement to the disappointing experience of U.N.R.R.A. and the failure of European countries to obtain rehabilitation goods for reviving their production. I know something about that, and can state that in Yugoslavia although it was possible for U.N.R.R.A. to get trucks from the United States, and a limited amount of spare parts, when they asked for machine tools to manufacture spare parts they found that there was nothing doing, because American manufacturers were not interested in supplying any European States with machine tools that would enable them to become independent of American supplies—even of spare parts. That same experience has been ours in the last two years in trying to obtain heavy machinery from the United States.
  Mr. Bracken: Surely the hon. Gentleman should be aware that the attitude of the United States with regard to Yugoslavia is affected by the fact that they object very much to the murder of a number of their pilots flying over Yugoslav territory.
  Mr. Zilliacus: Unfortunately, the failure to supply the machine tools occurred a long time before that incident and, in any case, it does not explain why we failed to get any heavy machinery from the United States—or, at least, why we have received a good deal less than we needed—unless, of course, the right hon. Gentleman thinks that because we have a Labour Government the United States manufacturers are not very keen on supplying us with these things. Another important factor is that the American railways are in a very bad condition because they were not maintained during the war and have not been restored since. They are in such poor condition that they can barely handle the existing volume of traffic and, because they have gone into private hands again, they prefer to transport light goods paying high freight rates such as radios, refrigerators and motor cars, and it is difficult to get them to handle wheat, let alone heavy goods, which pay low freight rates.
  I think it is doubtful whether the United States would be capable of supplying European countries who have put up a long term plan with the volume and kinds of goods they want, with the priorities
  1558
  they ask, unless American economic life were replanned very much as it was during the war to supply lease-lend goods. I am profoundly sceptical as to the possibility of unplanned American capitalism delivering the goods on a sufficient scale. The conclusion I draw is that United States help, even if we obtain it, will be too late and too little, and there is a serious danger attached of political pressure of an undesirable kind. We must give up the idea that there is a Santa Claus on the other side of the Atlantic ready to come to our assistance, and must realise that we have to concentrate on measures of self-help and mutual aid in Europe and within the Empire and the Commonwealth.
  Mr. Bracken: And Russia.
  Mr. Zilliacus: Certainly, and the U.S.S.R. I am coming to that. Western Europe alone is unsatisfactory because it is too lopsided from an economic point of view, too unstable politically and too divided socially. Among the rather odd assortment of States we have is Turkey, a bankrupt military dictatorship keeping an Army twice as big as it can afford on American dollars. Then there is Greece, whose reconstruction programme, now that British pounds have given out—we spent £132 million on Greece—is American dollars, to subsidise the black market and to feather the nests of corrupt politicians and tax-dodging profiteers. The Austria of Chancellor Fig1 is also kept hovering on the brink of collapse by American dollars, and it has not much of a reconstruction programme. The Italy of de Gasperi and the present régime of France, with the Ramsay MacDonald of France, Prime Minister Ramadier, in charge, are not doing so well either, because the plain truth is that without the participation of the trade unions and the working class in postwar Europe you cannot get very far in reconstruction and self-help. The Scandinavians are standing aloof and are not anxious to be drawn into the political and ideological alignment pursued by the Truman policy. That leaves us with Portugal, Iceland and Benelux.
  The policy of developing the Commonwealth and Empire is a valuable one but it cannot suffice because it is long-term and will require a great deal of capital. There is no escaping the vital necessity of giving priority to establishing good economic as well as political relations

  1559
  with the States of Eastern Europe and the Soviet Union with the planned economies of these countries, which really are helping themselves and helping each other and normally produce a surplus of food and raw materials. Of course, in order to do this—and I come immediately to this point since hon. Gentlemen opposite are asking for it—the first thing for the Labour Party to do is to dissociate itself sharply and completely from the anti-Communist Jihad in which hon. Gentlemen opposite see fit to indulge. After all, the Communists do happen to be a decisively large part of the working class trade union and political leadership of most of Europe, and particularly of those countries' with which it is vitally important that we should trade in order to obtain food and raw materials. While I do not suggest that we should apply the principle that the customer is always right, nevertheless, I do not believe that we will do much business if we use shot guns and rat poison as instruments of negotiation with the powers of Eastern Europe. The Communists are rather' like the islanders whom the indignant explorer who landed on their shores described as "morose and intractable savages, who, when fired upon, do not scruple to retaliate." We can no longer afford the tragicomic spectacle of the Foreign Secretary playing Sancho Panza to the Don Quixote of the Leader of the Opposition, tilting at the windmills of anti-Communist, ideological fanaticism.
  I think it is time that the Labour Government stopped plodding dully in the wake of the old warrior, who is already prancing towards the third world war, brandishing his 1919 ideological tomahawk and ululating his Russian intervention war whoops, with tremolos and variations that he appears to have borrowed from the Central European chiefs whom he slew and scalped so doughtily only yesterday. The Government should no more be intimidated by the Tory blood and thunder foreign policy than they are impressed by their milk and water home policy. If there is anything more manifestly unnecessary and unwanted at this juncture in our affairs and the present state of the world than a milk and water home policy, it is a blood and thunder foreign policy.
  The Tories' idea of defence is to put this country in pawn to Uncle Sam in
  1560
  order to be able to wave a tinny and hollow-sounding mailed fist at Uncle Joe. Fortunately, it is now generally realised that we can no longer afford that kind of foreign policy.
  We are committed to a drastic cut in the Forces. It is nearly a year and a half ago, to wit, on 4th March, 1946, that I urged and begged the Government to cut the Forces drastically and also to cut or share their so-called world peace commitments which, so far as they are not prepared to share them are not genuine world peace commitments but imperialist hangovers. I am glad that at last the Government are proceeding along the line which I begged them to follow a year and a half ago. What I would like us to do as an immediate measure in order to deal with the situation is to offer to the Russians to split the difference on the Anglo-Soviet trade treaty. The million tons of cereals we would get from them this year would be valuable not only in themselves, but would also bring down prices of cereals in the United States and all over the world, as has already happened in other directions. A more long-range measure I would like to see is that we should, frankly and bluntly, say that we can no longer consider ourselves bound by Articles 7, 8 and 9 of the American Loan Agreement. We ought to recover our freedom of action.
  I would like to see us propose to the International Trade Conference at Geneva that they should revise the most-favoured-nation-clause on the lines suggested by the League Economic Committee before the war. That would give us the right to conclude tariff preferences with groups of States, provided that those preferences were open to any outside State willing to make equal cuts in its own tariffs towards the group. Above all, I want us to make a new start in our foreign policy, to recast its mental and moral foundations, and to stop being intimidated by the party opposite in our foreign policy, as long ago we ceased to be impressed by their lack of policy in home affairs. We should take our stand boldly on our Socialist principles, and should get together with the countries of Eastern Europe and with the Soviet Union. That would not mean we should have to part company with America, but we should be in a better bargaining position. The way to Washington on terms that would bring us there as an

  1561
  equal partner and a leader in European reconstruction instead of a bankrupt suppliant, lies through Prague, Warsaw, Belgrade and Moscow.
  8.13 p.m.
  Mr. Quintin Hogg: I congratulate the hon. Member for Gateshead (Mr. Zilliacus) on his ebullient performance after his defeat at the party conference. I had begun to be afraid that his long absence from our debates presaged a change of heart, but I am glad to note that he has come back again entirely his old self—although he did not deliver this speech on the occasion of our Debate on foreign affairs, when perhaps it would have been more appropriate.
  If the House will bear with me, I desire to bring the Debate back to the point at which it was left by the Prime Minister this afternoon. After all, with due respect to the hon. Member for Gateshead, we are primarily concerned in the Debate, not with the shortcomings of America, however many valid criticisms we may find of that great country, but with what we are proposing to do to get out of an extremely menacing crisis. I think hon. Members opposite will agree that that is our main purpose in this discussion.
  The right hon. Gentleman the Prime Minister began his speech by saying that he was not going to make a purely party speech. With respect to him, I think that was a wise decision. There are, of course, many things which must be discussed in a Debate of this kind which divide us deeply, but it was wise to begin by emphasising certain things about which we are united. We are all gravely anxious about the crisis in which our country stands. We are all confident of our country's future despite the difficulties, which appear at times to be overwhelming. We believe in our country and mean to see that it survives, despite any errors of statesmanship which may be committed by its leaders. Furthermore, we may say we are determined about this, that deeply as we differ about matters of importance and principle, we are all determined to pursue our differences according to the laws and mechanism of Parliamentary democracy—no small thing in a country where differences are as deep as they must be at the present time.
  Therefore, I may say at once that, to that extent at any rate, the Prime Minister's appeal for national unity does
  1562
  not fall on deaf ears so far as this side of the House is concerned. I say that despite some rather provocative remarks which are made by hon. Members opposite from time to time. I suggest to them in all seriousness that if the Prime Minister, the leader of their party, is going to call on all sections of the community to unite behind a drive for production, they do not particularly assist that demand when they accuse us, as they have today, and as they have on many occasions past, of being members of a party of parasites, and unscrupulous exploiters of the poor who do not love their country. The senior Member for Oldham (Mr. Fairhurst) used practically that language and the hon. Member for Norwood (Mr. Chamberlain), in a supplementary question yesterday, fresh from his moral rearmament triumphs, used the very word "parasite" to which I object. That is not the way to national unity. I can say to hon. Members opposite that however offensive they may be to hon. Members of this party, we love our country no less than they do, and we will give our country that same devoted service they would expect to give it themselves, whatever they may say about us and however they may traduce our motives or our characters.
  There is a sense in which national unity at the present time is not a possibility. I wish to emphasise the degree to which it has become impossible. The Prime Minister has more than once—today was only one of a series—appealed to us to recapture the spirit of Dunkirk, and when it has been pointed out to him that the spirit of Dunkirk was founded upon a common policy in which all the Members of the then Government agreed, he has replied with the specious argument, in which no doubt he sincerely believes, that because the Labour Party won the Election it was wrong for the occupants of these benches to ask them to desist from their programme of nationalisation and Socialism to which they were committed in their Election manifesto. The Prime Minister has said—I go with him so far—that hon. Members opposite sincerely believe in their policy. But they must also recognise that we on this side, who at the nadir of our fortunes at the last General Election had the support of some nine million of voters, sincerely believe that it is that very policy of Socialism which is largely responsible for our misfortune. They may think it absurd that we should hold this

  1563
  belief, but they must reckon with the fact that we do hold it, and not only do we hold it but it is held also by those who support us in the country—a very large portion of the community—who are entitled to make their voices heard. When, therefore, the right hon. Gentleman asks for national unity, my reply must be the same as it was in March; that no national unity is possible on a political basis unless the Government call a halt to nationalisation.
  Mr. H. D. Hughes: Is it not the case that the Labour Party, and the workers who support the Labour Party, went into the war effort and the Dunkirk spirit under private enterprise with which they disagreed as strongly as the Conservative Party disagree with Socialism?
  Mr. Hogg: The hon. Gentleman has failed to get the point, which is that the whole nation supported the war effort in 1940 because they all believed, whether they were Socialists or Conservatives, that the policy to be pursued was to win the war by all means possible without regard to their private political convictions, but we cannot go into a similar political unity now because we believe that the very policy which is proposed is the actual cause of our miseries. It is for that reason, and not any want of patriotism on our part, which must lead us to reject the proposals which the Prime Minister made this afternoon.
  Mr. Follick Mr. Follick (Loughborough) rose——
  Mr. Hogg: So many hon. Members wish to speak that the amount of concessions I can make in this Debate must be less than usual. I hope the hon. Gentleman will acquit me of discourtesy. The Prime Minister seemed to me to touch the centre of this matter in that part of his speech when he said that it was easy to be wise after the event. I think he used the phrase "jobbing back." But we have not been wise after the event. I can think of none of the factors mentioned by the Prime Minister this afternoon, not one of them, which could not have been foreseen by an averagely intelligent child of 16 in the year 1945. I can think of none of them which was contained in the 1945 Election Manifesto, and hon. Members opposite must really reconcile themselves to the belief that we on this side
  1564
  of the House are going to say up and down the country that they got power by a fraudulent prospectus, that they have proved themselves incompetent to govern, and that they are pursuing political and economic principles which, if pursued indefinitely, will lead us into even worse disaster. It was obvious in 1945 that this country had emerged from the war in such an economic condition that we must necessarily either have to endure what we are now enduring—a sharp drop in our standard of living—or we should have to obtain from abroad a line of credit to tide us over the transition period——
  Mr. Shurmer: And what about the programme of hon. Members opposite?
  Mr. Hogg: It was obvious, therefore, to anybody that our duty, when we obtained the line of credit—which any intelligent child could have seen was insufficient for the purpose—was both to husband that line of credit enough and to take immediate and urgent steps to make us self-supporting as soon as possible. That was the manifest duty of any respectable Government of this country in 1945, and the case of the Opposition is this—not merely that these present austerities would never have occurred under a Conservative Government, but that they ought never to have occurred under a reasonably competent, a reasonably efficient and reasonably patriotic Government of a Socialist persuasion. These things are unnecessary, and they have always been unnecessary. They are the direct result of a want of planning and a want of foresight by a Government which describes itself as an administration of planners.
  Mr. Shurmer: If the hon. Member suggests that this austerity is unnecessary, will he tell me how it is that, in a previous crisis, his party put over 850,000 people on the means test and robbed them of their savings?
  Mr. Hogg: I thought the hon. Gentleman had something useful to contribute to the Debate. The fact is—[HON. MEMBERS: "Answer."] I am talking about our present economic difficulties. The fact is that this Government have been guilty of the same mistake three times over, and each time the mistake has been

  1565
  in a more important matter and has led to consequences each time more severe. The first time was in the early spring of 1946 when the maladministration of our food situation led to the resignation of Sir Ben Smith. The second was the fuel and power crisis in the spring of this year when the maladministration of our coal industry ought to have led to the resignation of the Minister of Fuel and Power. The third occasion is now, when the maladministration of our economic situation should certainly lead first to the resignation of the Chancellor of the Exchequer, and secondly to the dismissal of this Government, and the Dissolution of Parliament.
  In each case the mistake has been the same. In each case the country was faced with a prospective crisis, which could easily have been foreseen, and which ought to have been dealt with in time. In each case it could have been dealt with in time, not so as to avoid all hardship, but so as to incur a hardship far less than that which has in fact been incurred by the policy of putting off the evil day. That was true in the case of food, that has been true in the fuel crisis, and still more has it been true in the dollar crisis which we are discussing today.
  Mr. Richard Adams: In view of what the hon. Member said in his last few sentences, why does he not deal with his own opposition to bread rationing?
  Mr. Hogg: If the hon. Member will look up my speech in HANSARD he will see that what I said on that occasion has been proved abundantly right. I said that the bread rationing scheme as then presented was
  "the ill-thought-out and over-complicated scheme of a cocksure and inexperienced administrator."—[OFFICIAL REPORT, 18th July, 1946; Vol. 425, c. 1466.]
  I was referring to the exchange of points and B.U's——
  Mr. Shurmer: The hon. Member does not want B.U's for points, he wants it all his own way.
  Mr. Hogg: I well remember that on that occasion the hon. Member for North Hen-don (Mrs. Ayrton Gould) reproved me, and said the interchangeability was a brilliant device on which we should congratulate the Minister.
  Mr. Shurmer: The hon. Member for Oxford (Mr. Hogg) was on the playing fields of Eton whilst the unemployed were marching the streets and going hungry.
  Mr. Hogg: The hon. Member for Sparkbrook (Mr. Shurmer) has anticipated me in the remark I was going to make. I have at last learned what the song in the heart of the Chancellor of the Exchequer really is. It is not the "Red Flag," it is "The Eton Boating Song."— "We all swing together"—and swing together the right hon. Gentlemen undoubtedly will, unless the political roundabouts take them away in time. We are living in a world of economic make-believe created by the Front Bench opposite. We are told there is a shortage of coal, a shortage of labour, a shortage of dollars, but for all practical purposes there is just as much coal in the ground as there ever was——
  Mr. Shurmer: Go and get it out.
  Mr. Hogg: —and as we could legitimately hope to win in a life time We are told there is a shortage of labour, but there are available for work in this country far more men and women than there have ever been. We are told there is a shortage of dollars, but there are far more dollars in the world than ever before. There never have been so many dollars in the world. It is only that our great Socialist Government cannot get the dollars—[HON. MEMBERS: "Oh."] No, Sir, the real truth about the matter is this—there is no shortage of labour, there is a maldistribution of labour. There is no shortage of coal; there is a failure to produce it. There is no shortage of dollars; there is a failure to produce those goods which will exchange for dollars. The case for the Opposition is that the Government, by their policy, have directly contributed to, if they have not actually created, all these failures.
  I will deal, first, with the shortage of labour. There has been no wages policy throughout the whole history of this Administration. Yet a wages policy was one of the first things which a planning Government should have produced. Although there has been considerable control of prices there has been no price policy either. Still worse, there has been no planning whatever of the balance between our capital expenditure and our expenditure on current account. These three factors, taken together, are the

  1567
  cause of our present crisis. I am not in the least impressed with the various excuses and alibis put forward by the Front Bench or from the back benches opposite I am not in the least impressed by the talk of this rise in dollar prices. Hon. Members who put forward that argument talk like children. What did they think dollar prices would do? Did they think they would fall? Did they think they would remain stable? Anyone who has the slightest grasp of the most elementary economic principles must have known that dollar prices would rise, and, knowing it, have taken urgent and necessary steps in order to deal with the crisis when it came. Instead of that, we are told that this rise in dollar prices has caught this, Government of planners unprepared. They ought to get out and make room for a Government which can foresee the facts.
  Look at the want of balance between the reward for skilled labour and the reward for unskilled labour. Look at the want of balance between the man who produces much and the man who produces little. Look at the swollen non-essential trades, and the labour-starved trades which produce commodities which every one needs and wants.
  Mr. Shurmer: The fashionable West-End clubs.
  Mr. Hogg: Thank the Labour Government for it, because no one else is responsible. What is the reason we have such a plethora of workers in the football pools, for instance, and so few in textiles? The reason is that right hon. and hon. Gentlemen opposite, in their superior wisdom, have so far controlled the essential trades that they cannot pay wages which compare with those of the non-essential trades, which they did not control. That is the reason. I challenge a single hon. Member opposite to deny it. So paradoxical, so utterly wanting in plan, so utterly wanting in economic knowledge or political sense, have been that Front Bench, that they have permitted this to happen under the flag of planning itself. That is what they have done in two years of power—swollen the non-essential trades and starved the essential ones, and thereby produced the crisis.
  That simply illustrates the general choice which this country will sooner or
  1568
  later have to make. The Minister of Health, the other day, in a speech in which at last appeared some elements of realism said, in sharp contrast to many speeches from the benches opposite, that it really did appear in the last resort that appeals to ideological patriotism were not enough to create production in this or any other country. That, strange as it may seem, is not simply a piece of political cynicism; it is also a moral proposition, because while it is wrong for the individual to exploit the community, it is also wrong for the community to seek to exploit the superior skill or energy of any particular individual.
  There are two incentives which move mankind. There is the incentive of the totalitarian—the incentive of the stick—and the incentive of free enterprise—the incentive of the carrot. No country can avoid the use of both incentives, to a degree. There is no country so free that it does not employ the stick and there is no country so totalitarian that there is not some element of the carrot introduced, at any rate to those higher grades in the managerial state which are so well supported in our more highly developed Socialist labours. But, in the last resort, the Government sooner or later will have to make up their minds upon which of these incentives they are going to place their reliance. I am very much afraid that, little as he may have intended it, the Prime Minister this afternoon announced the first tentative moves of the Government towards the application of the totalitarian incentive of the stick. There are only two ways out of this crisis. One is to compel people to do what is necessary and the other is so to affect the economic laws that they provide an incentive for the people to do what is necessary.
  Mr. Cobb: Has the hon. Gentleman read Corinthians 13?
  Mr. Hogg: The hon. Gentleman was not in the last Parliament or he would have known something about that. [HON. MEMBERS: "Answer."] I am anxious not to take up the time of the House unduly because I know that many other hon. Gentlemen wish to speak. Nevertheless the hon. Gentleman has challenged me and under the taunts that I have not answered him, I will answer

  1569
  now. He asked whether I have read Corinthians 13, the Hymn of Love. Yes, I have and I have sometimes noticed the sad contrast between those who call us parasites in the name of what they claim to be moral rearmament, and the sentiments indicated in that passage. As I see it——
  Mr. Ronald Chamberlain: The hon. Gentleman appears to be looking at me. When I referred to parasites yesterday, I was not referring specifically to him; nor was it in the name of any particular cause.
  Mr. Hogg: The hon. Gentleman does not refer to me as a parasite, but apparently his Christian charity does not extend to other people. According to the doctrine to which the hon. Member for Elland (Mr. Cobb) referred, all men are brothers and there are not some who are parasites and some who are not. I leave the hon. Gentleman there. It is a point which is inconsistent with his profession. I will return to the point on which I was challenged. I suppose by his objection that the hon. Gentleman thinks that Christians must believe that the only motive which ought to animate people in working hard for their country is simply a love of their neighbour without hope of reward. I am afraid that I do not agree that that argument is theologically correct. It is not illegitimate in this world for people to work for their livings, for their wives and their families. Hon. Members opposite, many many times in this House, have appealed, and in my recollection never in vain, to the honourable and dignified position which a worker, whether with head or hand, holds because he really does want for his wife and family some reward in return for the service that he gives.
  Mr. Chamberlain: The stick or the carrot?
  Mr. Hogg: I say most earnestly to hon. Gentlemen opposite that the Minister of Health, when he gave vent to this doctrine in words not dissimilar to my own, was not attacking their idealism but was appealing to their commonsense, which some of them sadly lack.
  I have been led off the path of what I intended to say, but I want to make two more short points in conclusion. In
  1570
  the last resort, the choice which the Government will have to make is ultimately a choice between a totalitarian state, however mitigated by the tolerance and decency which we know exists among hon. Members opposite no less than here, and some return to the price structure. It may be that we shall make different choices, but, at any rate, let us know what the choice is. Their approval of a return, if only temporarily, to the direction of labour is a clear indication of their faltering steps towards totalitarianism. I beg hon. Members to turn back before it is too late. The price structure had many faults, but some, and indeed most, of them can be mitigated.
  I would have liked, and I hope on another occasion to indulge the temptation, to answer the hon. Gentleman specifically upon the problem of unemployment, but I say in all sincerity to him, although perhaps I have not as much right to say it as those who are actually unemployed, that I sincerely believe that even if those who were unemployed for long periods before the war had a choice between a totalitarian system and a free system, even with these faults, which I am sure can be cured, they would be with me in choosing the latter.
  I said in March that the publication of the Economic White Paper marked an end of the mandate of this Government. It marked an end of its mandate, because, when they went to the country with the little pamphlet "Let Us Face The Future," they went to the country with what was intended to be a comprehensive programme. The publication of the White Paper in March rendered it inevitable that this Government should now seek to impose upon, the people austerities and restraints which, however necessary some may be, are still austerities and restraints for which they have not a shadow of a mandate at all. They are governing this country, not by any mandate which they have received from the electorate, even if their policy is wise, but governing it upon the certainty that they can control the votes of over 200 hon. Members opposite.
  That being so, there is only one honourable course for them to take, and that is, at the earliest moment, to advise His Majesty to dissolve this Parliament and go to the people with their new programme. If they win, good luck to them.

  1571
  They will have won according to our Parliamentary democratic methods, but if they do not win, then, at least, we shall have a Parliament more capable of giving rise to that national unity for which the Prime Minister has, I fear, appealed in vain this afternoon. This House of Commons has many virtues. Most of us have made many friendships in this Parliament but, from now onwards, we are going forward in uncharted waters without a vestige of the right to govern in the light of the changed circumstances of the case.
  8.44 p.m.
  Mr. Ronald Mackay: The right hon. Gentleman the Member for West Bristol (Mr. Stanley) said that the argument of the Tory legacy had worn thin, and, having listened for the last half-hour or more to the hon. Member for Oxford (Mr. Hogg), I am beginning to think that the Tory legacy has worn very thin indeed. The hon. Member suggested that the only course open to the Government was to resign and go to the country. I would remind him that there have been by-elections during the last two years, in all of which seats held by this party have been won by Members of this Government and I challenge him to give any case in the last 50 years of a Government which came back from a General Election and survived two years without losing a by-election.
  Mr. Hogg: Then the hon. Gentleman need have no fear about the result of a General Election.
  Mr. Mackay: The hon. Gentleman ought to realise that, in such circumstances, there is no need to put the country and the people to the expense of holding a General Election.
  Mr. Hogg: The hon. Gentleman knows that his party would probably lose 100 seats.
  Mr. Mackay: The hon. Gentleman says that we might lose 100 seats, to which I reply, "Complete rubbish." The events of the last two years show that we have not lost any seats which we held, and that is a perfect answer to the hon. Gentleman's point. I want to turn to the general aspect of his speech. He said that the policy of Socialism was responsible
  1572
  for our misfortunes today. I do not want to weary the House tonight by going through the whole of the things he tried to say—we are used to the effusions to which he gives vent from time to time—and I do not think he will think I am unfair when I say that the essence of his speech is summed up in the words that the policy of Socialism is responsible for our present misfortunes. I thought—and this is where I agreed so much this afternoon, as I often do, with the right hon. Member for West Bristol when he told us about the Tory legacy which we had inherited being very thin—that it came ill from hon. Members opposite to come to this House in 1947 and to talk about the responsibility of this Government for the economic misfortune which, in the main, is the result of their own misgovernment between 1919 and 1939.
  Mr. Hogg: Try something else.
  Mr. Mackay: We expect to have these interruptions from hon. Members opposite when they have things thrown at them which are unpalatable, and, no doubt, as the evening goes on, we shall get more of them.
  I want to look at this whole problem. We are confronted with the question of the balance of payments, and with the fact that this year we are faced with an export deficiency which the Government are finding it difficult to bridge. At a later stage, I want to come to the question of how the Government are going to bridge this gap. We have been told that the deficiency at the present time is due to the policy of Socialism. I remember, back in 1932, the then Conservative Chancellor of the Exchequer trying to justify the tariff policy of the late Mr. Neville Chamberlain by suggesting that we had to have tariffs in order to balance our payments, because we were in a bad position in those days. I suggest to this House that ever since 1913 we have been in a bad position in regard to the balance of payments, and that it is a long-standing problem which has confronted this country for 25 years, and which the Tory Governments in the past would never face. Their policy of tariffs and Imperial Preference provided no lasting solution to the problem.
  Prior to 1913, this country was able to buy whatever it wanted with its exports and its other services, without relying in

  1573
  any way on the interest from its overseas investments. At that time, our overseas investments were always reinvested, and led to more exports. The first world war made it necessary to sell a portion of our overseas investments. I would like to remind the House, in view of what my right hon. Friend the Prime Minister said this afternoon, that we recovered from that position within five years of the 1914–18 war. We had as many overseas investments in 1927 as in 1914. We recovered from that position, but at no time from 1920 to 1939 was this country able to pay for its imports with its exports and services. Each year, we had to draw on the interest from our overseas investments. The House should be reminded, because it seems to be important, that for three years before the 1939 war we had an adverse balance of payments which would have required about a 20 per cent. increase in exports to put it right. We are told by the hon. Member for Oxford that this adverse balance of payments is due to the policy of Socialism. No doubt the hon. Gentleman was referring to the Socialism of the late Mr. Neville Chamberlain and of the Tory Government in the years 1937, 1938 and 1939. Why is it that we had a deficiency in our balance of payments in those years, even taking into account the whole of the interest on our overseas investments? I am afraid the suggestion of the hon. Member for Oxford is just a little too shoddy.
  This is where I wish to say a few words of criticism of the Government. The problem with which we are confronted today would have had to be faced by any Government. We are not in this crisis because of the war, although the Bill with which we shall have to deal in the next few days says that we are. The war merely accentuated the situation. If there had been no war, we would have had a crisis of this kind, though of not such a large dimension. [Interruption.] The hon. Member for Oxford laughs, and one expects him to laugh when he hears a few reasonable arguments with respect to this problem. I wish to detain the House for a few moments to deal with the points which have been put before us by the Prime Minister, and I wish to say how completely disappointed I am with the way in which he has faced the problems, as indeed a lot of us on this side of the House
  1574
  are disappointed. The magnitude of the problem does not appear to be recognised. We are not concerned so much with short-term remedies, necessary though they are—and I appreciate the difficulties of the Chancellor—but we are greatly concerned to see that a long-term policy is formulated based on what is a correct diagnosis of the position. We must get our foundation right. If we felt that the long-term policy was right, we would put up with any sacrifices of a short-term nature.
  So much of the discussion has proceeded on the basis that our balance of payments is out of equilibrium. We are told by the Prime Minister that we are going to try to balance the position between the Old and the New World. That is something which we will never see happen. The world has changed. I wish to direct the attention of the President of the Board of Trade to this problem, in the hope that he will deal with it when he replies. The whole argument which has been put forward in the last two years has been on the basis of multilateral trade, of increasing international trade and getting rid of trade barriers, with all of which we agree in the main. But if one takes one's mind back to the time of the American Loan, one remembers the speech which the late Lord Keynes made in another place when he argued the whole position and said that our policy was one of getting back to multilateral trade. I will not weary the House by quoting the speech, but I would like to refer to two points in it. He said in that speech, and later in an article in an economic journal:
  "Putting one thing together with another, and after pondering all these figures, may not one feel himself justified in concluding that the chances of the dollar becoming dangerously scarce in the course of the next five to ten years are not very high? I found some American authorities thinking it at least as likely that America will lose gold in the early future as that she will gain a significant quantity. Indeed, the contrary view is so widely held, on the basis (I believe) of mere impression, that it would be a surprising thing if it turns out right."
  And later:
  "Perhaps one may be left for the moment to form his own judgment, in the light of the above, of the most probable order of magnitude of the American favourable balance of visible trade in the post-war environment. An average of $2 to $3 billion a year over a period of years beginning in 1947 looks to me fully high on the basis of present expectation."
  Who will argue now we are not short of

  1575
  dollars? And he said that if we assessed the export surplus of America on an average of two or three billion dollars, we would be putting it high—he said "fully high"—on the basis of present expectations. Yet it is obvious that we are going to face an export surplus this year, not of two billion dollars but 12 billion dollars.
  For two years, with obvious sincerity and an enormous amount of energy the President of the Board of Trade has made an attempt to get back to the field of international trade as we knew it in the old days, on the grounds that we are a country whose life blood depends on international trade. If that is so, our life is ebbing slowly to its close. We are living in an entirely changed world. Though international trade has been increasing over the last 30 years, international trade in manfactures, which is what this country is interested in, has been going down. We are confronted today with the request to increase exports by 160 per cent. in the last six months of next year, on the basis of 1938 exports. But of our exports in 1938, 25 per cent. were in certain raw materials, coal and other things of that sort, which, I think, it is common opinion to say, we shall not be able to export this year or next. Therefore, we are going to rely entirely on exports of manufactures, which means that the target of 160 is an export target of 200 per cent. of 1938 in manufactures.
  I do ask the Government to think of this thing, and to realise that that is completely impossible. It is impossible for two reasons, if only for two The first is that the production of manufactures over the world in the last 30 years has gone up 100 per cent.—it has doubled, roughly—but trade in manufactures in the last 30 years has not gone up at all, and, in point of fact, it has gone down and in the last six or seven years, in the main industrial countries of the world, of which this is one, it has gone down 20 per cent. since 1913. If that is the trend, surely we have got to realise that, because of tariffs, because of the industrialisation in other countries, and the increased production of manufacturing industries in different parts of the world, the mutual advantage which comes from international trade in manufactures becomes smaller.
  So we have the position today that while trade in raw materials and in food is
  1576
  going up—and we see that all the time: the production of food and raw materials in the last 30 years has probably gone up about 50 per cent. although the trade in them has gone up by 25 per cent.—in manufactures, on which we depend for an increase in our exports, there has been a trend, towards a reduction, since 1913, particularly since 1930. It is a trend which the Tory Government in 1929 and 1931 tried to put right by tariffs and other things—by the Ottawa Agreement, and other things of that kind—but they did not right it. I am not raising this in any party sense at the moment. I am trying to get down to the fundamental economic problem, which is this. We are faced today by the fact that the development of the 20th century is very different from that of the latter part of the 19th century, that international trade is not today as it was in the 19th century, when we were the workshop of the world. By the end of that century we could afford to buy a lot of imports, process them, and export them; but we are confronted today with the fact that the quantity of the things we ourselves import and export as manufactures will not ever even get back to the level of 1929. I doubt really if world trade in manufactures will get back to the 1929 level—so where is our increase? The whole tendency in world trade of manufactures is downward.
  If this is so—and I ask the Government to take up this argument—but if that is so, we are facing a problem which is a very different one from that raised by the hon. Member for Oxford, which was the problem of Socialism. It is not that at all. We are producing today only a tenth of the world's manufactures as against three-tenths at the end of the last century, and we are exporting today only one fifth of the world's manufactures as against two fifths at the end of the last century. We are in an entirely different position, largely because of the rise of America.
  I do not want to weary the House with details of the enormous extent to which American production has increased. I get very weary of hearing hon. Members talking of soft and hard currency areas. There would be no problem of that kind if America put into the world sufficient dollars. We were never a big exporter to America. We never sent more than 6 per cent. of our production to the United States. But when I hear

  1577
  the right hon. Gentleman the Member for West Bristol say we must be independent of America, I wonder what he looks at and thinks of. Does he not realise that our exports have for the last 20 years always gone exactly the same way as the national income of the United States? Not because we are big exporters to America, but because we sell goods to countries which have already sold goods to the United States and got dollars in that way. Until those dollars are made available in different parts of the world we are not going to get back to the position we were in before the war. Hon. Gentlemen opposite shake their heads, but surely these are the facts? Surely the United States bought rubber and other goods from Malaya and we were able to export to Malaya and get dollars in return? We have never relied on exports to America to buy raw materials elsewhere The convertibility we are worrying about is only a problem because other countries of the world are short of dollars. This is not, as the Prime Minister tried to suggest this afternoon, due to the war, because the countries who are short of dollars and who are controlling their dollars today are countries like the Argentine, Mexico, Canada and Sweden, to mention only a few on the list who have dealt with this problem recently.
  In this fifth decade of the twentieth century we are in a position in which American production, trade and investment is so great that her export surplus today is the best part of 12 billion dollars: Her export surplus is twice her total exports in 1938; her production today is four times what it was in 1938. It is ludicrous to talk of multilateral trade. Russia plays no part in world trade; America dominates three-quarters of world trade, and there are left only a number of small nations who can never stand up to that unless we have Lend Lease, and "that sort of thing again. During the five war years 30 billion dollars were given away to the world, and, therefore, things went on. I put it to the House that since 1929, the year of a great economic crisis, no country in the world, except Germany, has ever recovered from that crisis; no country ever got back to its production or trade in volume or value, apart from Germany, except during the war period.
  Mr. Nigel Birch: And America.
  Mr. Mackay: America did not up to 1939. She did during the war, but she did not in peacetime. And she did it during the period of the war only because of the war and because of Lend-Lease. At the end of the war, we ended Lend-Lease, and we then had U.N.R.R.A., which finished last year. Then we are surprised that there should be a shortage of dollars in the world, when we still have not overcome the problem which caused the crisis in 1929, which is the problem of a dollar shortage all over the world.
  I desire to make two suggestions which I consider ought to be taken into account at the present time. It worries me that the Government—and the Prime Minister in his speech this afternoon—should think only in terms of short-term remedies. The Prime Minister did not realise, or acknowledge the fact, that the crisis we are now facing is an accumulation of 20 years' development; there have been 20 years during which the position has been changing. Obviously, the two wars made the position infinitely worse than it otherwise would have been; they accentuated the problem. We must face the fact that we are now in a world in which we cannot rely upon the export of manufacturers to the extent that we did before. I pay tribute to the President of the Board of Trade for the way in which, for two years, he has done his best to raise the whole level of exports. But I do ask him to bear in mind that before the war the trend was always on the way down, that America has a market of 120 million as against our 45 million, that we are unable to compete with the rising mass production on which America can rely, and to realise that we, therefore, have to look at this problem from an entirely different point of view.
  Today, we have been given a series of short-term remedies which do not add up to a bagatelle. We are to cut timber imports by ten millions as if that will help. Since the conclusion of the war with Japan we have spent more on our overseas commitments than we have received from the whole of the American Loan. This is the crux of the problem and it is not being faced. This afternoon, we have been told that it is intended to cut our Armed Forces. In 1946 we spent £300 million on our Forces overseas. We

  1579
  were told that we would spend £175 million this year; but it must be over £200 million at the moment. These are figures which ought to be tackled. We must face the fact that we cannot afford the luxury, whatever the necessity, of spending the sum which went on our Forces overseas last year. We must withdraw our Forces from Palestine, Germany, and from other parts of the world so that we can cut this expenditure which, in the last resort, comes down to dollar expenditure. But we must face the problem of other cuts as well. Obviously, we can improve agriculture, and at the same time cut films, petrol and similar items, in order to have more for raw materials which go into exports.
  But those are all short-term problems, and I suggest that there are two really serious long-term problems which ought to have the consideration of the Government. The first is that we must rationalise our industry, and apply Socialist methods in the doing of it, in order to see that we obtain ten times greater efficiency in our industry than we have had before. For the last ten years, every Member sitting on the Government Front Bench has been saying that private enterprise is inefficient, and that the Socialist method is the method of approach. Now we are in a crisis, it is time we applied our Socialist ideas. It means nationalisation of steel, of which we heard nothing today, and it means stepping into a lot of inefficient industries.
  If we are to compete with America and other countries of the world, we have to learn the art of mass production. That means that in most industries we have to reduce the number of firms operating to two or four. I have already spoken on the problem of building. There we have the utmost inefficiency There are 40 different types of prefabricated houses out of the 80,000 being built. Since when has that been mass production? We have the same thing happening in the motor car industry. We have to standardise manufacturing of all kinds. The Government have to step in and lay down the conditions under which this standardisation is to be done, and we not only have to reduce the number of firms within an industry, but reduce the number of industries and concentrate on high quality and capital goods. I do not know whether this new Bill is for
  1580
  the purpose of stepping in and reorganising industry.
  For 50 years this country has lived on the fat which has come from its external investments. Today, in Australia, they are producing steel cheaper than in this country. That is in a country with only a few million people, and they are doing it because they have not been living on the fat of investments abroad—I admit they have iron ore and new machinery. They are producing steel at £1 to 30s. a ton cheaper than in this country, and we cannot afford that position to go on. I ask the Government to realise that they have to put their house in order on a long-term basis. For years we have been saying that private enterprise is inefficient, and that a Socialist Government will come in and make industry efficient. That is our job, and that is the way to meet this crisis.
  The second thing is bluntly to face the fact, and why not face it and get rid of this cant and humbug going around the country, that we can still go on living as we did 50 years ago? We are a small country which is not big enough to mass produce, and you cannot survive in the 20th century unless you have a market big enough to mass produce. The only way to do that is to set up in Western Europe a customs union and a common currency. This may need imagination, but let us face the fact that American prosperity today comes not from the fact that the Americans are more intelligent than the Europeans, or that they have greater resources than Europe. If we look at the resources of the 14 countries who came to the Paris Conference a few weeks ago, it be found that they have greater resources in raw materials than the United States.
  If a free trade market of 200 million people is brought about, you will create an area within which there is an ample source of supply for raw materials and which is big enough to give this country and Europe the markets needed for survival. It may not be realised that of the 10 billion dollars of manufactured goods that went into the world trade before the war, 7 billion came from Europe. It may be a bit of a come-down for this country to regard itself as a European State, but that is the way to build up an economic structure for Europe. I ask the Government to think of this much more seriously than they have done. The problem that confronts this country is so

  1581
  great, and so great is the need for long-term policies, that it is necessary to build up such an area in which there can be multilateral trade, and to get rid of our old ideas.
  Let us increase world trade, but we ought to do that in an enlarged area, in which this country and other countries of Europe can trade. If we start doing that we shall build up an area which can provide the raw materials we require, and the manufactured goods which the continent of Europe requires. I apologise for delaying the House so long, but, apart from 1940, there never was a time like this. We are now facing the greatest problem that any country has ever had to face. A hundred years ago Pitt told the country that we could save ourselves by our own exertions, and Europe by our example. We saved ourselves by our exertions in the last war. We must now set the example. This country has a chance of reorganising its industries and putting them on a basis which is really efficient, modifying private enterprise by Socialist ideas and getting rid of its inefficiencies, and getting real order instead of our present inefficiency. We should call the countries of Western Europe together to build up an area in which the peoples can live together and trade. Let us concentrate on long-term remedies, because that is the real problem to face.
  9.12 p.m.
  Mr. John Henderson: I have been in the Chamber for four and a half hours continuously, and I have listened to many interesting speeches. The speech of the hon. Member for Gateshead (Mr. Zilliacus) caused considerable amusement and merriment, but when the public have unfolded to them tomorrow the full story, as told by the Prime Minister, I can assure him that they will find nothing to be merry about. As the hon. Member for North-West Hull (Mr. Mackay) has just said, this nation is faced with a problem of the greatest magnitude.
  When the Prime Minister sat down, after making his speech, I looked at the faces of Members on the Front Bench, and other Members of the party opposite. They portrayed anxiety, fear, and dread. The hon. Member for Bolton (Mr. J. Jones), in a remarkable and forthright speech, asked, "What are we going to do about it?" There has been a lot of talk
  1582
  in the House today, and when I sit down another dozen or so Members will rise to try to catch your eye, Mr. Deputy-Speaker. The whole of tomorrow afternoon and evening will again be spent in Members talking about this crisis. I suggest that what the nation wants is less talk; it wants real action. This House could do a big thing if it would send a message of encouragement to every section of the community. There is not the slightest doubt that additional sacrifices will be demanded from the common people. Working men will be directed, with all the inconvenience that that will cause, and housewives will face further cuts in essential food supplies. Industrialists—everyone from the top to the bottom—are to be asked to carry further sacrifices. A message of encouragement and of our sincerity to the nation would, I think, be a noble thing and help to spur on the men to increase production. If whoever is replying on behalf of His Majesty's Government would bring in the necessary legislation to reduce the salaries of Members of Parliament from £1,000 to £600 this would show our sincerity, and that we are prepared to make some sacrifice when calling upon other sections of the community to do likewise.
  9.15 p.m.
  Mrs. Ridealgh: Listening to the speeches from the other side, I have been wondering whether hon. Members had completely forgotten that we had passed through six years of the most devastating war which the world has ever known—not only destruction of men and materials but devastation of whole countries. When they talked of a change in Government, I was reminded of what happened in the '30's when we had Tory Government—the dire poverty and unemployment in 1939 which resulted in one-third of our population suffering from semi-starvation, and more than one-half of our people not having sufficient of the right kind of food to eat because they had no money to buy goods. I am wondering what would have happened if a Tory Government had been returned after six years of war on top of the problems which they have built up before the war. I was pleased to hear from the hon. Member for Oxford (Mr. Hogg) that hon. Members on that side were prepared to give devoted service to the country. I thought to myself,

  1583
  "ye shall know them by their fruits"
  and I hope that they will give more than lip service to this country in its time of need. I am glad that most of us in this Chamber recognise that strong measures will have to be taken and that planning will have to be carried out, if we are to pull out of our difficulties. We on this side are wholeheartedly with the Government in any action that they may take that will help to avert the greater crisis that we see ahead of us. One of the measures which I particularly welcome is the reduction of the Forces but, like many of my colleagues on this side, I would welcome a still greater reduction. I would like to see our Forces brought back from Greece, Italy and Germany, leaving a minimum of Control Commission personnel in Germany.
  I agree with the decisions that have been put forward to increase the targets in our basic industries and agriculture. Many of the technical details have been dealt with by hon. Members on both sides of the House, and I would like to deal with more simple but very necessary matters if we are to get the full support of our people. I want to deal with the things that affect our people very closely. The Prime Minister asked us to put forward suggestions, and I want to suggest certain actions which, although they may not show any immediate benefit, will at least have a very good psychological effect. If the people of this country believe that real equality of sacrifice is aimed at, then they will have a greater incentive to give of their best. Therefore, I say that, first and foremost, we must deal with high dividends and profits. It is no use asking our people to work harder if, in working harder, they are merely increasing the already high incomes of a few people.
  That is no incentive at all to our people nor is the fact that we still have many idle people in the country and many who are in non-productive work. There are plenty of pleasures for the idle as well. I was glad to hear the Prime Minister's statement on the proposed restrictions on foreign travel, and I hope he will place restrictions on some of the pleasures like Ascot races. Personally, I should like to see all able-bodied persons who are doing non-essential work being placed on essential work. There would be the necessary protection, but we have to do
  1584
  something about all these people doing unnecessary work.
  Sir W. Darling: What is unproductive work? Can the hon. Lady give us an indication?
  Mrs. Ridealgh: Such as pools and work of that kind which we can do without.
  While I am dealing with these points I know that I am expressing the wish of a great many people in this country when I suggest that lavish arrangements should be avoided for the forthcoming wedding of Princess Elizabeth. The general opinion amongst the workers is that it would not be right to spend large sums of money on this wedding when we are asking the workers themselves to economise even in the necessities of life. I know there will be thousands of people who will want to see the wedding, but I am quite sure that an austerity wedding will be much more appreciated throughout the whole of the country.
  We are appealing to those of our people who are producing the necessary goods and services and unless those people are assured that all others are also being made to pull their full weight in working for the benefit of the whole community, then their enthusiasm to do so is going to be considerably damaged. There is one thing I should like to say and that is with regard to our Government factories. The workers in Government factories have a feeling that their production—and I say their production—is carrying too many unnecessary officials and administrative staffs. I hope that full inquiries will take place and comparison will be made in relation to the prewar ratio of established staffs and the actual producers, because the workers in those factories are considerably disturbed at the present state of affairs. I hope the Minister will note the reply given by the Minister of Supply in answer to a Question asked by my hon. Friend the Member for West Woolwich (Mr. Berry) regarding this particular point. The answer is given in Monday's HANSARD.
  Wages, too, are a great incentive to work but when a skilled worker can take a day off his work and it will only cost him 5s—a skilled worker told me that that was what it would cost him if he took a day off—I consider that this state of affairs is an incentive to a worker to take a day off rather than a deterrent.

  1585
  I hope the Chancellor will take special note of that and try to remedy it so as to give a greater incentive to our people and to the men at work. In this austerity period ahead it would be greatly appreciated if the workers in essential industries could be given additional rations. That would please the workers in the countryside and also housewives would not oppose the putting of restrictions on restaurant meals. As to the proposal that coupons should be given up for meals in restaurants, this could be done by a scheme of points rationing and the points could be interchangeable so that if not used for meals, they could be spent by the housewife on points goods, and would at least make her feel that she was not being given such a raw deal. In the circumstances where she has to provide all her family meals from the meagre ration she would feel that she was being given a little extra help.
  I have said before in this House, and I say again, that the splendid job of the housewife is not being fully recognised. I know that the right hon. Gentleman paid a tribute to the housewife today but I hope that in this new austerity period which we are expecting our housewives will be given some priority. We depend too much on their job of keeping their families healthy, content and happy. I hope that the appeal to housewives to enter into full time and part time employment will be successful, but to ensure that, it is necessary that wherever possible, the maximum convenience is created for those with heavy responsibilities, and in particular, for those in industry. One very important way of easing the housewife's burden would be to remove the necessity for her to stand in queues or to travel from shop to shop to find the goods that she needs.
  The shorter the supply of goods the more important is it that there should be fair distribution, and this can be managed much better if the goods that are scarce are allocated to distributors in proportion to their registrations. It would be extremely convenient for the busy housewife if she could obtain her fair share of goods without having to crawl round the shops like her less busy sister who is anxious only to obtain all she can whether she needs it or not. I make the plea to the Minister of Food that he will consider allocating the goods which are scarce, on
  1586
  the basis of the number of registrations. He has already done this in relation to dried fruit, and I am quite sure that he could extend the scheme which would be really helpful to the housewife since she would be able to buy most of her goods in one shop. It will also help the shopkeepers who have catered for the housewife's needs in the past and are still trying to do so.
  In this respect I want to make special reference to the Co-operative movement of which I am a member. No other trading concern has given so much loyalty and support to this Government and to the people of this country during these difficult times. We have made no demands for high profits, we have raised no objections to the reduced retail margins, and at the same time we have consistently supported the Government by increasing our holdings of Government stocks. I know that it is only right that a Co-operative movement should loyally support the Government, but I think that the Government also have a duty not to make things more difficult for that movement and its members, most of whom are ordinary workers. The datum line of distribution compiled on the 1939 figures is based on a period when poverty in industry and in the agricultural areas affected a great many of our workers. They were unable to buy the things which they can now afford, but because they could not afford them in 1939 while other shops in the richer areas obtained them, a larger quantity of goods is now being directed to the areas where the non-workers are to be found. They are still getting the cream. There is no fairness or equality of sacrifice, which we shall have to have if there are to be further cuts in commodities. The Minister admits that the 1939 line had an anti-social effect in canalising foodstuffs to the pleasure areas rather than to the working areas.
  The Co-operative movement caters for most of those who are working. Since 1939 it has increased its membership by three quarters of a million, which represents about two million of the population, yet we are still tied to 1939 quotas. About 25 per cent. of the registrations are going through the Co-operative movement, yet only 16 per cent. of the pointed goods go to the Co-operatives, thereby causing inconvenience for millions of Co-operative housewives. There are approximately 26

  1587
  foodstuffs which are in short supply and most of them are included in the points scheme. The theory that a consumer can buy points goods anywhere is something that does not work, because points goods in short supply are almost invariably refused by retailers to customers who are not registered with them for straight rationed goods. A great deal can be said for allocating those supplies on the basis of rationed goods.
  We have complaints coming in from Co-operative societies regarding difficulties and handicaps due to the datum line distribution. Our membership are constantly complaining that goods are in other shops but they are not to be had in the co-operatives. It is no use saying that the co-operative movement gets it fair share until goods are shared out according to the number of actual and definite customers. The general question of datum line distribution is boiling up again and will be intensely acute in the days ahead. I therefore appeal to the Government to take notice of one or two of the suggestions that I have made, which will ease the troubles of the housewife and will give an incentive to the working class of the country to give their full support to the Government.
  9.34 p.m.
  Mr. Nigel Birch: The hon. Lady for North Ilford (Mrs. Ridealgh) is certainly a believer in equal misery, but when she says that the workers of this country cannot be expected to put forward their best unless the Royal wedding is an austerity one I think she is both wrong and insulting. [HON. MEMBERS: "Why?"]
  Historians, writing in the future, will find it strange and difficult to understand that the Government have delayed so long in taking any steps to deal with the crisis in our balance of payments which is the inevitable result of their policy, and which could so clearly be seen to be coming on. All my hon. and right hon. Friends have been predicting it for the last two years; every foreign nation has been predicting it. The British Press, with the exception of the "Daily Herald" has performed a great national service in pointing out precisely what was going to occur. Everyone has told them. Why has nothing been done?
  1588
  There was a most interesting article last Sunday in "The News of the World" by a very distinguished gentleman called Lord Dukeston. The article was called, "The people must be told the truth." The sentence I want to call to the attention of the House is this:
  "Everyone competent of forming a judgment upon economic matters has been aware of the coming crisis for a considerable period; but with the knowledge of the strain we endured as a nation during the war, we have delayed this crucial problem until such time as the morale of our people enabled them to face it."
  Lord Dukeston is a nobleman of some weight and influence in the party opposite. He is an ex-President of the T.U.C. When he said, "We have delayed …" I presume he means that the Trade Union and Labour movement has done so. Whether he thinks that morale is better than it was after-the Election when we are told that people danced in the streets to celebrate the Socialist victory, I do not know. His view was that it was right to suppress the truth because the people of this country had not got the courage to face it.
  Mr. Follick: What did Baldwin do in 1935?
  Mr. Birch: It is very difficult to reconcile that with what the Prime Minister said today and even more difficult to reconcile it with recent performances by the Chancellor of the Exchequer. It is only three weeks ago that the Chancellor of the Exchequer when winding up the last Debate on our balance of payments said:
  "We shall conceal nothing from the people of this country, and shall continue to tell them the facts, as we have done in the past."—[OFFICIAL REPORT, 8th July, 1947; Vol. 439, c. 2165.]
  One cannot reconcile Lord Dukeston's article with that and still less can one reconcile Lord Dukeston's visit with some of the more exuberant utterances of the Chancellor of the Exchequer. Early this year he said:
  "There will be no financial crisis—our present financial controls are strong enough to prevent that."
  It is difficult——
  The Chancellor of the Exchequer (Mr. Dalton): Read on. Read the rest of it.
  Mr. Birch: I have not got it, but that is what the right hon. Gentleman said.

  1589
  He has said the same sort of thing many times. The explanation is difficult to find. It may be that all hon. Gentlemen opposite suffer from that chronic malady of politicians of the Left described by the great Lord Salisbury as "the essential cowardliness of optimism."
  It was not difficult to tell what was going to happen. The cause was staring us in the face. We have been living a lie for the last two years. As the Prime Minister pointed out, we lost 25 per cent. of our wealth during the war and we were faced with the task of rebuilding our wealth at the end of the war in a world which was politically and economically distracted. In spite of all that we have behaved as if we were far richer than we were before the war. That is the answer to the hon. Member for North West Hull (Mr. R. Mackay). In spite of that we have said that we will have shorter hours and higher wages, put up our exports by 75 per cent., have a larger building industry than before the war, make good the whole of the war damage, make good our arrears of maintenance, and have great schemes of colonial development. The House must reckon that these great schemes of colonial development have to be financed in the short run out of the resources available to the people of this country. We also said that we would have vast capital schemes for the re-equipment of our industries. It is these capital items which are the most important of all. On top of that, entirely wantonly, the Chancellor has imposed his absurd monetary policy. All these things do not add up. How can they possibly add up? What we have seen is a massive refusal to live within our means. That was bound to result in a foreign exchange crisis. There is nothing new in a country living beyond its means. It has often happened before, but it has always resulted in a foreign exchange crisis, and that is a basic fact which I hope the House will bear in mind.
  There are many things with which one can distract attention from this fact. We can talk about everything since the Fall of Man having been the fault of the Tories, we can talk of Eve being the first member of the Housewives' League, and by such means we can distract attention from what is going on. We can do it also by this double attitude towards America. We get the Foreign Secretary calling them moneylenders, and, at the
  1590
  same time, hon. Gentlemen opposite saying that they have a moral duty to support our prewar standard of living. We can go on distracting attention like that. Then, there is Article IX. It will be a heavy burden, it was a hard condition when it was imposed, as my right hon. Friend the Member for Woodford (Mr. Churchill) said, but I, personally, doubt very much if, so far, it has had a great effect either on the sources from which we buy our imports or on the destination to which we send our exports. Whether, in the future, we have special arrangements with the Empire or with the Western bloc or with Eastern Europe, the fact we have to remember is that these countries will have an understandable preference for being paid for the goods they sell, and being paid in goods at the right price and of the right quality. There is no easy way out.
  On convertibility, I would say this. Obviously, it has been responsible for part of the acceleration of our loss of dollars in the last month or so, and it may well be that the Government have shown their usual level of competence in dealing with this problem. The point I would like to make is that, basically, what is going on now is something very old-fashioned and very familiar—a flight from sterling. The world is trying to sell our currency, which they believe to be overvalued and unsound. That is what is going on now. We have to reckon that no system, whether multilateral, regional or bilateral, can work if we are inefficient, high-cost producers and if our trade is so unbalanced as it is now. Hon. Gentlemen opposite have preached on this subject for many years. They have preached the doctrine that "all men are paid for existing, and no man must pay for his sins." That is a Hubris, which is always followed by Nemesis.
  We have tried to hold on to an untenable position, and we are now seeing a series of disorderly retreats to unprepared positions. First, we get the 48 hour retreat on conscription, and now, the Prime Minister gets up at three minutes to 12, only three weeks after the last Debate, and announces another disorderly retreat. I would say that the Prime Minister's speech showed every sign of haste in preparation and disagreement behind the scenes. It was vague; we never got down to any details, and, though the speech contained a cer-

  1591
  tain number of figures, none of the figures were added up so that the people of this country could see where they were. We were told that £144 million worth of food from the hard currency areas per annum would be cut, but we were not told what this was going to mean in rations, which is precisely what the people want to know. Surely, it should be possible to tell us what it is going to mean? Then as far as the actual cuts in imports were concerned again the figures are difficult to add up, because the £144 million cut from hard currency areas may possibly be balanced by imports from soft currency areas. It seemed to me, adding them up in the best way I could, that the conclusion was that the total of these cuts was less than one-quarter of our visible adverse balance. That is not counting invisible imports, and not counting our special difficulties over hard currency. Therefore, the conclusion the country will draw is that we are still leaning very heavily indeed on American support, and if we do not get that support we shall be in a desperate position. On the question of raising targets I would say this: if we cannot hit the target at 100 yards it is not likely that we shall hit it in 200 yards. I think that is a perfectly adequate comment.
  I wish to make comment on that direction of labour. We are told it is to be a limited direction of labour. Possibly I do not carry the whole of my hon. Friends with me, but I am passionately opposed to the direction of labour. I believe it is slavery. How many hon. Members opposite said during the conscription Debate that it would lead to industrial conscription? It is all very well to say that it is only limited direction—that we have slaves in this country, but there are not such a lot of them. That is an argument which goes very ill with the Prime Minister's peroration, when he said that what he was standing for was moral values.
  The Prime Minister made an appeal to trade unions for longer hours and not to press for wage increases. I have a good deal of sympathy with trade union officials on this matter. Trade union officials have a tremendous negative power, but their positive power is not so great. The trade union official is paid to get better conditions for his men, paid to fight for them.
  1592
  If you put all the aces into the hands of the trade union official and say, "You must not play them," a very dangerous position is produced. A senior official may say, "I am all right, because if I succeed I will get my garter and a seat on the gas board and all will be well," but whether he will carry his men with him I am more doubtful. I believe that this is breaking up yet another valuable British institution. On the things that really count, on the Budget and capital expenditure the Prime Minister was vague, and I defy anyone to understand what he meant. I do not think that he understood himself. As for saying that what will be reduced is the number of "spivs," that must be wrong, because there are to be a great many more controls, and the one thing on which "spivs" will thrive is controls.
  What we are seeing is Socialism working out in precisely the way my hon. Friends have always predicted it would work out. There are three stages we have always predicted. First, the honeymoon, then the stage of increasing muddle, frustration, multiplication of controls and increasing poverty, and the third stage is the stage of extra-Parliamentary Government, and the loss of civil liberty. During the honeymoon period you spend your money, and what you can borrow as well. That is what we have done, and that stage is over. Now we are trying to escape the consequences by the second stage, the multiplying of controls and the employing of large numbers of people to prevent other people from making things. We are gradually becoming a coupon State, a ration-book State and a permit and docket State. In addition, we are threatened with differential rationing.
  The real danger of all these things is that they kill the monetary incentive. We have seen in Germany precisely what occurs when that is done, when one's docket, one's ration card is worth more than one's wages. Whatever the damage may be in our zone in Germany, it is still one of the richest parts of Europe. It is prostrate and starving, for the very reason that the monetary incentive has been completely killed. The other day, the Minister of Health said, very rightly, that if one is trying to get someone to work ideology is not enough. The 20 million people in the concentration camps in Siberia, and the timber camps in

  1593
  the Arctic are dying witnesses to that. It is very true. Ideology is not enough, and we are killing the monetary incentive.
  That brings us inevitably to the third stage, the stage of direction of labour and the abolition of civil rights. What I would like to know about this direction of labour is, What sanctions are to be applied to someone who either does not go where he is directed or does not do any work when he gets there? What is to happen, because it is no use having the direction unless there is some sanction? That takes us straight on to the slave State.
  Mr. Pickthorn: Could we have the Chancellor's attention?
  Mr. Birch: I see no basis whatever for a fruitful compromise between our ideas and the ideas of hon. Gentlemen opposite. Whatever they may wish to do, they are being led on to the slave state. Therefore, I rejoice that my right hon. Friend has said that there will be no Coalition. To join up with a party which is morally and intellectually bankrupt would be mad. People like the hon. Member for Cheltenham (Mr. Lipson), who wrote in "The Times" this morning that party warfare should come to an end, are either people who have no foresight, or people who do not believe in absolute values—who have no real convictions. Anyone who can see what is happening, those who believe in absolute values, cannot think it could ever be right to compromise in any way with what is going on now.
  There is no need to abandon the free society. The system works perfectly well. I wish the hon. Member for North-West Hull (Mr. R. Mackay) was in his place. He was one of the indignant virgins of Socialism who wrote "Keep Left." In that they said that after previous slumps the free system recovered and touched new peaks of productive power, but this never happened after the slump of 1929. That is not true. The index of industrial production in America was 119 per cent. in 1929, 113 per cent. in 1937, and was 189 per cent. in the first quarter of this year—two years after the war. In America there is no maldistribution of labour such as we have here. The standard of living is higher than ever before. It is not an accident that the dollar is a hard currency; the Americans are producing things which people want. Here also, in the decade of 1929–39, which
  1594
  included the slump years, the real national income per head, including the unemployed, rose at least as fast as it did during the average of the 19th century, which was the period of the most rapid economic advance in history. I would say to the gentlemen who wrote "Keep Left" that their conclusions and recommendations are on precisely the same level as the facts which they adduced.
  The answer is that the system does work. We can have prosperity and liberty under it, and we can have it under no other system. The return must be gradual. The first thing we have to do, and I wish the Prime Minister had insisted more on this, is to adjust our expenditure, particularly our capital expenditure, to our means, and not treat the situation as the Chancellor of the Exchequer does, as consisting of watertight compartments. He says, "I have a wonderful Budget. We have a terrible balance of payments. I have got a wonderful monetary policy but the terrible thing is that wages are going up." We cannot treat these things in watertight compartments. Clearly we must realise that if in fact we do not adjust our capital expenditure to our savings, fresh loans are only water on the sands. All the economists have said that. The Bank for International Settlements in a most interesting report the other day pointed it out in great detail. There is an admirable article by Mr. Roy Harrod in the "Daily Mail" today putting this forward. Lord Brand in another place made a most weighty speech on the subject. Practically every economist has spoken on the same lines. The Liberals, now crowding the benches there, put forward precisely the same point. It is those people of great weight and intelligence to whom the Chancellor of the Exchequer was referring when in his Budget speech he said their policy was intellectually wrong and morally reprehensible. I am bound to say that I prefer their judgment to that of the right hon. Gentleman, particularly in view of some of his more exuberant statements, such as when he said:
  "Our achievement is already great and our plans open up still more splendid vistas for the future of our native land."
  That was intellectually wrong and morally reprehensible. It out-Shinwells Shinwell. These are the people to whom we are now asked to give dictatorial powers.

  1595
  The Prime Minister has rejected a return to the free society. He says he will go on with Socialism. He is now advancing to the third stage that I have indicated, the stage of the abolition of civil liberty. The people of this country have paid for their seats at this performance and hon. Gentlemen opposite have decided that the doors will not be opened until the third act of the farce is completed. I suppose we may draw some consolation from the fact that they will never ask for tickets again. But there are desperate dangers during this period to our standard of living, to our whole way of life, to our values and to our position in the world. In these anxious days we shall need—anyway those of us who oppose the Government will need—all the faith, strength and energy of which we are capable. I feel that in this country the ship of State is like a vessel which is trying to fight to keep off a lee shore during a storm. It is fighting desperately to keep off the rocks. I would say of the ship, as a poet once said:
  "She moves—with all save purpose lost
  To make her offing from the coast;
  But, till she fetches open sea
  Let no man deem that he is free."
  9.58 p.m.
  Mr. Driberg: I will not attempt to follow the hon. Member for Flint (Mr. Birch) through the fairly wide panorama of gloom that he has attempted, because I have promised to speak very briefly, as I think that most of us on the back benches who are successful in catching your eye, Sir, should attempt to speak on this occasion. I want, therefore, to deal only with one limited but important subject which has not been stressed in this Debate. So far as I can recall, it has been raised only once—by the hon. Member for Leominster (Mr. Baldwin) who spoke first from the back benches opposite. I refer to the subject of agricultural manpower. It seems to me that this is the most urgently critical aspect of the whole manpower situation. With food cuts in prospect I beg my hon. Friends who re present urban constituencies to consider this problem most earnestly. Other industries besides agriculture are under manned, but there is no other industry in the country which was asked, as agriculture was asked this afternoon, for a 20 per cent. increase in output and which has to face——
  It being Ten o'Clock, the Motion for the Adjournment lapsed, without Question put.

  SUNDAY CINEMATOGRAPH ENTERTAINMENTS
  Resolved:
  "That the Order made by the Secretary of State for the Home Department, extending Section 1 of the Sunday Entertainments Act, 1932, to the Borough of Eccles, a copy of which Order was presented on 4th August, be approved."
  "That the Order made by the Secretary of State for the Home Department, extending Section 1 of the Sunday Entertainments Act, 1932, to the County Borough of Reading, a copy of which Order was presented on 4th August, be approved."
  "That the Order made by the Secretary of State for the Home Department, extending Section 1 of the Sunday Entertainments Act, 1932, to the Urban District of Redditch, a copy of which Order was presented on 4th August, be approved."
  "That the Order made by the Secretary of State for the Home Department, extending Section 1 of the Sunday Entertainments Act, 1932, to the City of York, a copy of which Order was presented on 4th August, be approved."
  "That the Order made by the Secretary of State for the Home Department, extending Section 1 of the Sunday Entertainments Act, 1932, to the Borough of Bexhill, a copy of which Order was presented on 4th August, be approved."—[Mr. Oliver.]

  WAR CRIMINALS, GERMANY
  Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Snow.]
  10.2 p.m.
  Lord John Hope: I rise to raise a very important and serious case of what I and all others who know this case believe to be gross maladministration of justice in Germany. Before I go into the details of the case, I wish to make it quite plain that I am not making a general plea for anything in the nature of an amnesty for war criminals, or anything of that kind, but I feel it is right to hold that the more war criminals there may be about in Germany, the more essential is it that justice, and absolute justice, should be done in every case.
  There are several questions I shall ask the Minister and they concern the death in Germany of Oberst Hesselmann,

  1597
  Hesselmann was Commandant of a prisoners-of war camp at Koenigstein. I have good reason to know what sort of man Hesselmann was because, amongst the prisoners of war for whom he was responsible, was my brother. Now this man had under his charge during the war officers of several different nationalities, British, French, Dutch and American, and I would like to read out, before I describe what happened to Hesselmann after the war was over, the sort of thing that was said about him by those officers for whom he was responsible. This is merely one of several typical statements. It is signed by several Dutch officers who, goodness knows, had every, reason to be hostile to the Germans. It was written in March, 1947. They say this about him:
  "We, the undersigned do certify that we were prisoners of war for two years in Offiag IVB Königstein where Colonel Hesselmann was in command.
  This Colonel behaved himself towards us extremely correctly and was, in our opinion, a resolute opponent of the Hitler regime.
  He did all he could to render our captivity more supportable."
  Then there follow a good many signatures.
  Apart from that, Hesselmann certainly saved the lives of my brother and one other officer whom he categorically refused to hand over to the Gestapo towards the end of the war, when ordered to do so, and he even went so far as to show my brother and his friend where they could hide in the event of the Gestapo forcibly breaking into the prison camp. Now we come to the time immediately after the conclusion of hostilities. Hesselmann was engaged in work on one of the refugee committees, and was working on a scheme concerning the spiritual renaissance of the Germans under the famous Pastor Niemoeller, who has himself testified to Hesselmann's fine Christian qualities.
  I would like to read the account by Hesselmann's widow of his arrest. One realises, of course, that, as it must inevitably be, this is, prima facie, a biased account, but investigations have satisfied those of us who have inquired into this case for a good many months that what she says in that account is subtantially correct. She says:
  "On the afternoon of 13th February, at 1.25 p.m., an English captain came to my house and asked for my husband. He said, approximately, 'We must talk to him in
  1598
  Bad Oeynhausen and Minden, perhaps for one or two days He made me drive with him to Stillen Friden where my husband was taking part in a session of the refugee committee of the Evangelical Church, and bring him out. On the way, I asked him for what reason my husband was wanted. The captain replied that he did not know. My husband returned home in five minutes time, in order to take away with him things for the night The British officer again repeated to him that it was only a question of one or two days interrogation in Bad Oeynhausen and Minden Everything else I only know as the result of the few words which my husband spoke during his last days and from the two letters from Minden."
  I should pause at this point to say that, in fact, Hesselmann was arrested—inevitably and quite properly, so far as the actual arrest was concerned—at the request of the French, in connection with the murder of a French general who had been taken out of the prison camp by the Gestapo during the war. Although it is beside the point, those who know most about this affair believe Hesselmann to have been completely innocent of the charge. His wife then goes on to explain how he was treated immediately he was arrested:
  "He was brought into the British military prison in Minden and there his fur coat and scarf were taken away, and, without further explanations, he was put into a cell. The prison was unheated and the cell had, apart from a pasted window-lead, no daylight."
  I will not weary the House with all the details, but, after three days of complaint, and as a result of pressing personal requests he got back his coat and scarf. One knows of course, that the taking away of the coat and scarf is a regular part of the routine to prevent possible suicide. The account goes on:
  Since after seven days I was without news of my husband, I went to the Intelligence Service at Bielefeld where they very politely looked into my husband's papers. They knew nothing about his arrest, and a reference to higher authority there was also without success. In the afternoon of 17th February, I learned from the Charity Organisation of the Evangelical Church of the whereabouts of my husband, and, on the morning of the 18th, I drove in a car belonging to this organisation to Minden, to the prison chaplain, Pastor Puffert.
  "He told me it was impossible to visit my husband, neither could he arrange for an interview with the Commandant of the prison. I gave to Pastor Puffert a certificate signed by Dr. Uebmann that my husband had been under medical attention since the beginning of December."
  That is true. He had duodenal trouble, which is what eventually killed him.

  1599
  "This stated that my husband since the beginning of December had been treated on account of his stomach trouble,"
  and she goes on to describe the details of that trouble.
  "On the 19th of February he wrote to me that he had been transferred to a hospital. About the 21st February two German doctors were with him. My husband wrote in his second and last letter on 23rd February that he hoped to go to a British hospital on the '24th. Instead, on the 24th he went to the French Military Mission at Bad Salzuflen … A letter which he wrote to me there did not reach me, neither was the personal request to the French for a drive through Bielefeld to inform me about his illness granted."
  He was then taken by the French to Wittlich.
  Those are the facts of this case. That officer was arrested by the British at the request of the French, and, as I say, under the terms of the agreement, the British authorities were bound to surrender him to the French for purposes of this interrogation. But up to the time that he was handed over to the French to be taken to their zone, he had never been told why he was arrested. He had never been charged. He died in French hands on 22nd March, a very short time after he left British hands, still with no charge whatever having been brought against him. Those are the plain facts of the case. It has in it all the elements of the most tragic sort of case of this kind. We have the arrest of a man who risked his life to befriend British officers from the Nazis. He was arrested without charge, and his widow was kept in ignorance of his whereabouts and the reason for his arrest, and he died.
  As the result of various inquiries made by myself and others, His Majesty's Government looked into this matter. A rather significant suggestion was made by the French afterwards; they suggested that this man had committed suicide. Of course, I know that is not His Majesty's Government's responsibility, but it is all part of the case. That charge was subsequently withdrawn. That fact should not escape notice. After Hesselmann's death, the assets which he left to his widow were blocked and, as far as I know—and this is one of the points on which I would like an answer from the hon. Gentleman—those assets are still blocked. Frau Hesselmann is without any subsistence at all, because her husband's assets were blocked on the suspicion that
  1600
  he was a war criminal, but he has not been tried because he died. She still has not got any money at all. I want to know whether this is the usual custom, and, if it is, whether it is not about time that justice was observed in these matters. I would also like to know whether Frau Hesselmann will at once be given these assets where are hers by right. That is one question I ask the hon. Gentleman specifically.
  The other question concerns arrest without charge. As a result of inquiries that I made, I was told by His Majesty's Government that it was not usual in these cases to make a specific charge against those who were arrested because so many had to be arrested on grounds of suspicion, that it was inevitable that some time must elapse before the evidence was sifted, and so forth. That, in my submission, is just not good enough. If the organisation in Germany is not capable of observing the rules of justice as we in Britain understand them, it is about time the organisation in Germany was changed. There are the two question which I ask—and had already asked—the hon. Gentleman to be good enough to answer.
  All I wish to say in conclusion is, that I have tried to tell the story of this case without any attempt at the dramatic. I have simply given the facts. I feel very deeply about it all the same. I feel deeply about it, naturally, because, as I have explained to the House, my brother and another owed their lives—not less than their lives—to Hesselmann, who risked his neck by disobeying the instructions of the Gestapo to hand my brother over. I feel deeply about this case because I believe it to be one of conduct absolutely contrary to the essentials of justice as we understand them. When one contrasts the humanity and fairness of the treatment which Hesselmann meted out to those prisoners under his charge with the inhumanity and un-kindness of the treatment he received during the time he was in prison without any charge, and kept in those uncomfortable conditions in the cell, and finally passed on to the French in whose hands, and under whose callous treatment, he died—when one contrasts these two examples of treatment—then I think that one hangs one's head in shame and humiliation. Hesselmann is dead. Nothing more can be done for him in this world.

  1601
  But his widow lives, and all I ask now is that she, at least, should be relieved of the sadness and sense of insecurity under which she is now so unfairly and unreasonably labouring because what is hers by right has been denied her by the clumsy hand of badly administered justice in Germany.
  10.18 p.m.
  The Under-Secretary of State for Foreign Affairs (Mr. Mayhew): I am sure that Members of the House will appreciate the deep feelings of the noble Lord in this matter, especially in view of the wartime experiences of a member of his family; and if it is true, as it well may be, that this man was innocent, and a brave anti-Nazi, then it is indeed sad that he died under arrest on the list of the United Nations war criminals. But, as the noble Lord himself said, the guilt or innocence of this man is not relevant to the conduct of the British authorities in the matter. Whether he was guilty or innocent, it was our duty to arrest this man and hand him over to the French. A great deal of the noble Lord's speech, in which he spoke of the anti-Nazi work of Hesselmann and of his work for the Refugee Committee, was, therefore, irrelevant to the issue we are discussing, and might tend to prejudice the minds of hon. Members against the British authorities in Germany.
  The circumstances of the arrest were as follow. As hon. Members know, the United Nations War Crimes Commission was set up in London on 20th October, 1943, to bring to trial people accused of war crimes. Hesselmann was listed by the War Crimes Commission as a war criminal in connection, as the noble Lord said, with the murder of a French general. The Committee of the War Crimes Commission examines every case brought to it by a member of the Commission, and decides whether a prima facie case can be made out for the arrest of the person concerned. In the case of Hesselmann, the Committee unanimously decided that there was a prima facie case against him. Therefore, through our war crimes liaison officer in Paris we received a request from the French Government to arrest Hesselmann. He was arrested on 13th February at Bielefeld and sent to the War Crimes Holding Centre at Minden.
  The fact of his innocence or guilt—if he is guilty—could have made no differ-
  1602
  ence whatever to our actions in this matter. I want to make that quite clear. Had he been the darkest of war criminals, or the best anti-Nazi in the world, we should have treated him in the same way, and rightly so. Thus, all we can be accused of in this matter is, I think, unnecessary suffering caused to Hesselmann during the period of arrest. I do not object to the testimony of a widow. From what I heard, even though she be a widow, I did not think her statement was a substantial charge against the British authorities. The noble Lord did not give us all the details; perhaps if he had done so he would have conveyed a better impression of what he was charging us with. But the few facts he did mention did not seem to me to constitute a substantial charge, even if they were true.
  Lord John Hope: I thought I had made perfectly clear that the charge I was levelling against His Majesty's Government was that this man was arrested and put in prison without any charge. Surely to goodness that is enough suffering for a man, let alone what he goes through in the cell.
  Mr. Mayhew: I will come later to the charge on which he was arrested. The noble Lord implied that unnecessary suffering was caused to him in prison. If that is not so, I will not bother to state my case. The facts are that he was treated humanely, and with fairness and sympathy. He complained on 16th February of feeling ill and was seen by a German doctor on the same day. The doctor's report says:
  "He can stay where he is for about a week, provided he is kept warm and lying down and given special food. No immediate urgency, and no danger to life."
  The doctor said that he was suffering from an old stomach trouble, for which Hesselmann said he had been treated, on and off, for 10 years, and had refused an operation. Immediately following the doctor's report, Hesselmann was provided with eight blankets instead of four; he was given a specially prepared diet of bread and milk, and was in receipt of American food parcels. His coat and scarf were removed from him, as the noble Lord said, as a routine procedure, and were compensated for by the special arrangements in respect of the blankets. Now, in the twentieth century that is not hard or cruel treatment of a prisoner at

  1603
  all. The truth is, as hon. Members know, that in the treatment of prisoners our military are probably the best, the kindest and the gentlest in the world, and I want to remove from the minds of hon. Members any suggestion that Hesselmann was treated in any way other than humanely and considerately.
  On 25th February, according to our duties and rights, we handed him over to the French, not for conviction but simply for trial. He was taken away in a private car, he sitting in the back. The noble Lord gives no evidence of ill-treatment by the French, and there is no reason to suppose that he was ill-treated by the French.
  Lord John Hope: They only let him die. That is all.
  Mr. Mayhew: The noble Lord did not bring any specific evidence of ill-treatment by the French. If he has no specific evidence to bring I think that these unsubstantiated charges are most unfortunate, and I entirely resist any suggestion that he was ill-treated. If he was not ill-treated by the French, and if the noble Lord has no evidence to bring, he should not make that charge. That is quite clear.
  Mr. R. A. Butler (Saffron Walden): Did the Under-Secretary say that my noble Friend did not bring any charge of ill-treatment by the French?
  Mr. Mayhew: I said so, and the noble Lord then interrupted me to say that they had let him die.
  Mr. Butler: Is it true?
  Mr. Mayhew: "They let him die" implies that they in some way ill-treated him, but no specific evidence has been produced.
  Lord John Hope: I am sorry to interrupt, but the Under-Secretary provokes me to say this. I told him and the House about the first suggestion the French made, namely, that this man had committed suicide—a suggestion which they subsequently withdrew. I am quite content to leave the conduct of the French in the hands of the House on that basis. I do not want to press that because I know it is not the responsibility of the Under-Secretary. It is part of the whole case, that is all.
  Mr. Mayhew: We will leave it then, and come to the question of whether he was told what was the charge. He was told that he was to be arrested and questioned in connection with war crimes. He was not told the specific detailed charge on which he was arrested. Our procedure is, and it is the right and proper procedure, to leave the framing of the specific charge to the Government in whose country the man is to be tried. That must be so. The French Government in this case have the responsibility for charging him, and for investigating his case. Clearly, we cannot take on ourselves the responsibility for making these specific charges, and we have the right not to make a specific charge but to arrest him in connection with war crimes.
  I come now to the only other point of substance, namely, that of the blocked account. The position under Law 52 which is valid in the British zone, is that the accounts of those on the list of war criminals are blocked. The normal procedure is that an account is unblocked after acquittal, but this is the first case of a man dying while being held in custody. The first feeling of most hon. Members will be immediately to unblock his account. I have arranged for urgent inquiries to be made whether that is possible or not. We do not yet know whether the account is in the British zone, but we are finding out, and if it is at all possible, we will immediately unblock it.
  Mr. Niall Macpherson: Surely, until a man is proved guilty he must be presumed innocent, and therefore this account should at once be unblocked?
  Mr. Mayhew: One could equally say not until he is proved innocent, because it might not otherwise be possible to make a claim on his assets. For that reason, I cannot give a firm undertaking that the account will be unblocked.
  Mr. Orr-Ewing: Can we find out exactly which way the junior Minister is speaking? He says, first of all, that the account will be immediately unblocked, and, secondly, that he will make inquiries and if it is all right the account will be unblocked.
  Mr. Mayhew: I carefully did not say that we would unblock it. I would like to say that, but if he were guilty, there would possibly be claimants against his assets. Therefore, I cannot, before making inquiries, unblock the account. Meantime, it is true that the wife can, if she wishes, draw from the account to the extent of 300 Reichsmarks a month. I would end by saying that the evidence the noble Lord has produced about the character of this man is strong, and since we all agree that if he is innocent it is tragic that he should remain on the list of war criminals, I will send the evidence immediately to the United Nations War Crimes Commission, and ask them to reconsider the case.
  Mr. E. L. Gandar Dower: Can the French Government take any action to prevent the unblocking of this account?
  Mr. Orr-Ewing: Do we immediately clear ourselves, under this procedure, of responsibility of seeing how prisoners are
  1606
  dealt with the moment we hand them over?
  Mr. Mayhew: The answer to the first question is that that is one of the things we would have to consider. For example, if the French could not prove innocence, they could, no doubt, in legal theory, make a claim for part of the assets for the damage the guilty man had done. To that extent I imagine there is a case, and that is the kind of thing I shall immediately order an inquiry into. The answer to the second question is that when we have handed over these people the receiving Government is then, under our agreement, responsible for them.
  Mr. Orr-Ewing: Can we ask for no report from the Commission?
  Mr. Mayhew: I should need notice of whether the United Nations Commission could call for a report.
  Question put, and agreed to.
  Adjourned accordingly at Half-past Ten o'Clock.

  KENYA (NATIVE LAND UNITS)
  KENYA (NATIVE LAND UNITS)
  MALAYA (RUBBER SMALLHOLDINGS)
  MALAYA (RUBBER SMALLHOLDINGS)
AFRICAN COLONIES
  Rinderpest, Tanganyika
  Rinderpest, Tanganyika
  Income Tax
  Income Tax
  Uganda (Hydro-Electric Development)
  Uganda (Hydro-Electric Development)
  CYPRUS (ILLEGAL IMMIGRANTS' CAMPS)
  CYPRUS (ILLEGAL IMMIGRANTS' CAMPS)
  ZANZIBAR (CLOVE RESEARCH)
  ZANZIBAR (CLOVE RESEARCH)
  PALESTINE (PRESS MESSAGES)
  PALESTINE (PRESS MESSAGES)
ROYAL NAVY
  Boom Defences, Seaview
  Boom Defences, Seaview
  Bermuda Dockyard (Foreign Service Allowance)
  Bermuda Dockyard (Foreign Service Allowance)
  Malta Dockyard (Ex-Employees)
  Malta Dockyard (Ex-Employees)
CIVIL AVIATION
  Cancelled Bookings (Government Departments)
  Cancelled Bookings (Government Departments)
  Carriage by Air Act, 1932
  Carriage by Air Act, 1932
FOOD SUPPLIES
  Dried Potatoes (Price)
  Dried Potatoes (Price)
  Milk Foods (Infant Welfare Centres)
  Milk Foods (Infant Welfare Centres)
  Tea Imports (Freight Space)
  Tea Imports (Freight Space)
  Airlines (Special Allowance)
  Airlines (Special Allowance)
  New Zealand Gift Parcels
  New Zealand Gift Parcels
  Cattle Purchases (Eire)
  Cattle Purchases (Eire)
  Foods and Beer (Permitted Exports)
  Foods and Beer (Permitted Exports)
  YUGOSLAVS, GERMANY (SCREENING)
  YUGOSLAVS, GERMANY (SCREENING)
  BRITISH COUNCIL (WELSH ADVISORY PANEL)
  BRITISH COUNCIL (WELSH ADVISORY PANEL)
  UKRAINIAN PRISONERS OF WAR
  UKRAINIAN PRISONERS OF WAR
  EX-INTERNEE (ENTRY PERMIT)
  EX-INTERNEE (ENTRY PERMIT)
RAILWAYS
  Wagon Repairs, South Wales
  Wagon Repairs, South Wales
  Locomotives (Repair)
  Locomotives (Repair)
  COMMERCIAL VEHICLES (SPEED LIMIT)
  COMMERCIAL VEHICLES (SPEED LIMIT)
  INDIA (GOVERNMENT EMPLOYEES)
  INDIA (GOVERNMENT EMPLOYEES)
  POST OFFICE (ABSENT ADDRESSEES)
  POST OFFICE (ABSENT ADDRESSEES)
  WATER AND SEWERAGE SCHEMES, SCOTLAND (GRANTS)
  WATER AND SEWERAGE SCHEMES, SCOTLAND (GRANTS)
  WAR PENSIONS
  WAR PENSIONS
  NATIONAL INSURANCE (PERSONAL CASE)
  NATIONAL INSURANCE (PERSONAL CASE)
  REQUISITIONED PROPERTY, KIRKHEATON
  REQUISITIONED PROPERTY, KIRKHEATON
  BUILDING INDUSTRY (MECHANISATION)
  BUILDING INDUSTRY (MECHANISATION)
  NATIONAL REGISTRATION (CHANGE OF ADDRESS)
  NATIONAL REGISTRATION (CHANGE OF ADDRESS)
Preamble
The House met at half past two of the clock, The EARL OF DROGHEDA on the Woolsack.
Prayers.

  GOVERNMENT OF INDIA (GOVERNOR'S ALLOWANCES AND PRIVILEGES) (AMENDMENT) ORDER, 1947. GOVERNMENT OF BURMA (GOVERNOR'S SALARY, ALLOWANCES AND PRIVILEGES) (AMENDMENT) ORDER, 1947. GOVERNMENT OF BURMA (HIGH COURT JUDGES) (AMENDMENT) ORDER, 1947. MESSAGE FROM THE KING.
  THE EARL OF CLARENDON: My Lords, I have the honour to present a message from The King signed with his own hand:
  "I have received your Addresses praying that the Government of India (Governor's Allowances and Privileges) (Amendment) Order, 1947, the Government of Burma (Governor's Salary, Allowances and Privileges) (Amendment) Order, 1947, and the Government of Burma (High Court Judges) (Amendment) Order, 1947, be made in the form of the respective drafts laid before Parliament. I will comply with your request."

ELECTRICITY BILL.
Returned from the Commons with certain of the Amendments agreed to, and certain others disagreed to with Reasons for such disagreement: The said Reasons to be printed.
TOWN AND COUNTRY PLANNING (SCOTLAND) BILL.
Returned from the Commons with certain of the Amendments agreed to, and certain others disagreed to with Reasons for such disagreement: The said Reasons to be printed.

HOUSES FOR AGRICULTURAL WORKERS.
LORD AMHERST OF HACKNEY: My Lords, I beg to ask the first question which stands in the name of my noble friend the Earl of Selborne.
[The question was as follows:
To ask His Majesty's Government whether they can state whether any, and if so how many, of the 7 000 houses which the Chancellor of the Exchequer has announced have been completed in rural areas, have in fact been let to agricultural labourers.]
LORD HENDERSON: My Lords, I think that the figures quoted by the Chancellor of the Exchequer were intended to relate to the number of new permanent houses completed by rural district councils at the end of April, 1947. We have only recently begun to obtain returns of the number of houses let to agricultural workers, but according to the latest returns 1,819 new permanent houses have been so let.

HOPS REORGANIZATION COMMISSION.
LORD AMHERST or HACKNEY: My Lords, I beg to ask the other question which stands in the name of my noble friend the Earl of Selborne.
[The question was as follows:
To ask His Majesty's Government whether they can state when the Report of the Hops Reorganization Commission was received and when it is going to be published.]
THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF AGRICULTURE AND FISHERIES (THE EARL OF HUNTINGDON): My Lords, in answer to this question I would say that the Report of the Hops Reorganization Commission was received in March, 1947, and it is hoped that copies will be available within the next month.
LORD AMHERST OF HACKNEY: Does not the noble Earl consider that five months is rather a long time to wait for the publication of this Report? After all, there are many hop growers who are put to serious inconvenience and possible loss by this delay.
THE EARL OF HUNTINGDON: We do realize the difficulties of delay, but this is due to difficulties of printing. There is a very big hold up in printing, but we are making every effort to get the Report through.
EARL DE LA WARR: Does the noble Earl really say that the only reason for the non-publication of the Report for five months is due to printing?
THE EARL OF HUNTINGDON: Yes.

COAL FOR TEXTILE FACTORIES.
LORD CALVERLEY: My Lords, I beg to ask the question that stands in my name on the Order Paper.
[The question was as follows:
To ask His Majesty's Government, whether in view of the fact that the wool textile industry has ample stocks of raw material and an increasing number of operatives the appropriate department will give a guarantee, that factories creating their own steam power shall have the necessary stocks of coal from now onwards and give the industry the opportunity to expand its export market in the "hard currency" markets.]
LORD CHORLEY: My Lords, coal allocations to the wool textile industry, as indeed to industry generally, during the summer months are based on the actual rate of consumption last year. Special provision has been made for deconcentrated firms and, in addition, limited increases in allocations over and above last summer's consumption have been made in certain cases. As regards additional supplies of coal for an expansion of production by the woollen industry, I would refer my noble friend to the reply I gave on this subject yesterday to the noble Lord, Lord Barnby.
LORD BARNBY: My Lords, arising out of that reply, with the indulgence of the House, may I ask this? The noble Lord stated that the coal allocation is on the basis of 1946 and he is no doubt aware that the wool textile industry was last year on a much lower level of activity than it is at the present moment in response to the urgings of His Majesty's Government. Therefore, such an allocation, apart from the actual deliveries against the allocation,
1024
is grossly insufficient for the existing requirements of the wool textile industry. Secondly, can the noble Lord name any other industry of that size, comparably situated, which is operating entirely on raw material of sterling area origin, with its present activity far above that of previous years but still below orders, where a large part of the production is being directed into export?
LORD CHORLEY: My Lords, with regard to the first of the supplementary questions put to me by the noble Lord, my noble friend is well aware that the wool textile industry, and other industries, would welcome much larger allocations of coal; and, indeed, as my answer made clear, there have in fact been allocations over and above the allocation originally made. They have been rather small, but during the last months some thousands of tons of coal over and above the original allocations have been allocated for the wool textile industry. With regard to the noble Lord's second supplementary question, I am afraid that I am not in a position to answer it without notice, but if he would be so kind as to set it down for me in writing I will see that he gets an answer.
LORD BARNBY: My Lords, since the reply given is not a full reply to the suggestion that allocations are below actual requirements, may I ask the noble Lord if he would be good enough to make representations to the proper quarter on that subject so that it may he dealt with?
LORD CHORLEY: Certainly.
LORD CALVERLEY: My Lords, as the one who asked the original question, I content myself with saying that the reply is Most disappointing, and I hope to have the opportunity of drawing the attention of your Lordships' House to it later.

SUNDAY ENTERTAINMENTS ACT, 1932.
CITY OF YORK ORDER;
COUNTY BOROUGH OF READING ORDER;
BOROUGH OF BEXHILL ORDER;
BOROUGH OF ECCLES ORDER;
URBAN DISTRICT OF REDDITCH ORDER.
LORD WALKDEN: My Lords, I beg to move that these Orders be approved.
Moved, That the Orders made under the Act by the Secretary of State for the Home Department, for extending Section one of the Act to the said areas, be approved.—(Lord Walkden.)
On Question, Motion agreed to.
House adjourned during pleasure, and resumed by The LORD CHANCELLOR.

AGRICULTURE BILL.
2.42 p.m.
Order of the Day read for the consideration of Commons Reasons for disagreeing to certain of the Lords Amendments.
THE EARL OF HUNTINGDON: My Lords, I beg to move that the Commons Reasons be now considered.
Moved, That the Commons Reasons for disagreeing to the said Amendments be now considered.—(The Earl of Huntingdon.)
On Question, Motion agreed to.

LORDS AMENDMENT.
[The references are to Bill No. 75 as first printed in the House of Lords.]
Page 12, line 6, at end insert—
("Provided that no direction shall be given either while a supervision order is in force or otherwise which shall alter the character of a holding from that which existed when the contract or tenancy agreement was made.")
The Commons disagreed to this Amendment for the following Reason:
Because the Amendment would unduly restrict the powers of the Minister to secure good estate management and good husbandry.
THE EARL OF HUNTINGDON: My Lords, this Amendment, which has been disagreed to by the Commons, has been discussed fully in your Lordships' House both in the Committee stage and in the Report stage. In view of that, I beg to move that the House doth not insist upon the Amendment.
Moved, That this House doth not insist upon the said Amendment to which the Commons have disagreed.—(The Earl of Huntingdon.)
On Question, Motion agreed to.

LORDS AMENDMENT.
Page 25, line 22, after ("Minister") insert ("give notice to the landlord that he proposes to")
The Commons disagreed to this Amendment and the following Amendment for the following Reason:
Because the interests of the landlord of a holding are sufficiently protected without the appeal provided by the Amendments.
THE EARL OF HUNTINGDON: My Lords, I beg to move that the House doth not insist upon this Amendment.
Moved, That this House doth not insist upon the said Amendment to which the Commons have disagreed—(The Earl of Huntingdon.)
On Question, Motion agreed to.

LORDS AMENDMENT.
Page 26, line 3, at end insert—
("(3) Any person to whom notice of a proposal is given under paragraph (a) of the last foregoing subsection may require that the proposal shall be referred to the Agricultural Land Tribunal established under Part V of this Act, and the provisions in that behalf of the said Part V shall apply accordingly.")
The Commons disagreed to this Amendment and the preceding Amendment for the following Reason:
Because the interests of the landlord of a holding are sufficiently protected without the appeal provided by the Amendments.
THE EARL OF HUNTINGDON: My Lords, I beg to move that the House doth not insist upon this Amendment.
Moved, That the House doth not insist upon the said Amendment to which the Commons have disagreed.—(The Earl of Huntingdon.)
On Question, Motion agreed to.
2.47 p.m.
EARL DE LA WARR EARL DE LA WARR had given Notice that he would move the following Amendment in lieu of the Amendments at page 25, line 22, and page 26, line 3, not insisted upon:
Page 26, line 3, at end insert—
("(3) The Minister shall not grant his approval under the last foregoing subsection of the carrying out of an improvement consisting of the erection of buildings or the making of roads until lie has given to the landlord notice in writing of the proposal to grant the approval and the landlord to wt ors such a notice of a proposal is given may require that the proposal shall be referred to the Agricultural Land Tribunal established under Part. V of this Act, and the provisions in that behalf of the said Part V shall apply accordingly.")
The noble Earl said: My Lords, I beg to move this Amendment in lieu of the Amendments the omission of which we

1027
have just accepted, but I think it may perhaps be for the convenience of the House if we first heard the noble Earl's comments on the Amendment in lieu rather than make my remarks.
Moved, That this House doth propose the said Amendment in lieu of the Amendments at page 25, line 22, and page 26, line 3, upon which the House doth not insist.—(Earl De La Warr.)
THE EARL OF HUNTINGDON: My Lords, in answer to this Amendment which has been moved by the noble Earl, Lord De La Warr, your Lordships will remember that we debated this very fully in both the Committee and Report stages of the Bill. The question is one of compensation, and as I understand it the intention of the Amendment is to give the landlord the right of appeal to the Land Tribunal in the event of the Minister agreeing to an improvement such as the erection of buildings or the making of a road which the tenant, desires to undertake. I submit that there really is not a great deal of substance in this Amendment.
It can be looked at either from the tenant's point of view or the landlord's point of view. If we look at it from the landlord's point of view we may assume that the tenant wishes to erect some buildings for new cowsheds or whatever else it is he wants to do. The landlord, for his own reasons—perhaps he disagrees with the tenant's ideas or otherwise disapproves—refuses to give consent. Now there is nothing in the Bill nor, so far as I am aware, in the law of the land, to prevent that tenant carrying out the improvements. The question is whether the tenant will have the right to claim compensation. In other words, he can carry out the improvements, but unless he gets the landlord's consent he will not be able when he leaves the farm to get compensation in respect of the various improvements which he has carried out.
Originally the landlord had to give his consent, but now the Minister can step in, which means, in practice, that the local agricultural committee will be empowered to examine the project and if they think it is sensible and workable they can say: "We agree that the tenant should go ahead." The tenant then carries out the project, whatever it may be, and at the
1028
end of his tenancy the tenant—and this is the point I should like to make particularly clear to your Lordships—can claim compensation not for the amount of money which he has spent on the buildings, but solely for the amount by which he has improved the value of the holding to an incoming tenant. That is the criterion on which the compensation is judged, and if there should be a difference of opinion on it, the landlord can go to arbitration on the question as to whether the compensation offered is fair or not. In view of that I earnestly suggest to the noble Earl that there is sufficient protection for the landlord. I do not think many would dispute the rightness of the argument that if the landlord's holding has been improved in value he should pay reasonable compensation; and I think he is protected by the fact that it is based on the increased value of the holding and that in the event of a dispute the matter can be referred to arbitration. I think that there is not a great amount of substance in the Amendment and I hope that the noble Earl will withdraw it.
THE EARL OF RADNOR: My Lords, I should like to draw the attention of the noble Earl to one particular aspect of the question. A tenant may spend considerable sums of money. The landlord is bound to pay to the tenant at the termination of his tenancy whatever in the ultimate issue the arbitrator may say he should pay. The tenant could give notice within a year of building work and it would naturally be a strong assumption in the arbitrator's mind that the work was necessary and that he was improving the holding, because it was done with the consent of the Minister. It is once more proof that consideration for the landlord is very nearly non-existent in this Bill. I do not suppose there is any chance of His Majesty's Government retreating from the position they have taken up over this, but I feel I must register the opinion that in this particular case the Government are once more being very unfair to the owner of land.
EARL DE LA WARR: My Lords, it seems to me that if the landlord were ever let in for what might well be extremely heavy compensation at the end of a lease, it would be an improvement in the Bill if the landlord in such circumstances were given a right of appeal.

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However, we have conducted this Bill with great amity, particularly towards the latter stages, and I think it would be a pity to finish up on an unhappy note. Therefore, whilst in no way withdrawing my opinion that the Bill would be improved if the Government were to give greater justice to the landowner than is given at present, I beg leave to withdraw my Motion.
Motion proposing an Amendment in lieu of Amendments not insisted upon, by leave, withdrawn.

LORDS AMENDMENT.
Page 39, line 37, after ("that") insert ("no such reference shall be made before the expiration of three years from the commencement of the tenancy and")
The Commons disagreed to this Amendment for the following Reason:
Because the Amendment would hinder the carrying out of the objects of the clause.
THE EARL OF HUNTINGDON: My Lords, I beg to move that this House doth not insist on this Amendment.
Moved, That this House doth not insist upon the said Amendment to which the Commons have disagreed.—(The Earl of Huntingdon.)
On Question, Motion agreed to.

TRANSPORT BILL.
2.55 p.m.
Order of the Day read for the consideration of Commons Reasons for disagreeing to certain Amendments last made by the Lords.
THE SECRETARY OF STATE FOR COMMONWEALTH RELATIONS (VISCOUNT ADDISON): My Lords, I beg to move that the Commons Reasons for disagreeing to the said Amendments be now considered.
Moved, That the Commons Reasons for disagreeing to the said Amendments be now considered.—(Viscount Addison.)
On Question, Motion agreed to.

LORDS AMENDMENTS.
[The references are to Bill 65.]
Page 48, line 23, leave out from ("undertaking") to ("in") in line 24;
Page 48, line 27, leave out ("twenty-five") and insert ("forty");
Page 48, line 36, leave out subsection (3).
The Commons disagreed to these Amendments for the following Reason:
Because they would so limit the number of undertakings acquired by the Commission
1030
as to place the Commission in a position where they could not adequately perform the duties laid upon them by the Bill.
VISCOUNT ADDISON: My Lords, these three Amendments follow on one another. Your Lordships will perhaps remember that there were five groups of Amendments wherein we differed from the other place or made Amendments to Amendments made in the other place. The first one has been accepted by them. These are disagreed to. I do not think we need argue further at great length. We have already argued on many occasions, and therefore it would not be right or seemly if I were to detain your Lordships by repeating the arguments now. I hope that your Lordships will agree at this stage that we should not insist upon the Amendments. I beg to move.
Moved, That this House doth not insist on the said Amendments to which the Commons have disagreed.—(Viscount Addison.)
VISCOUNT SWINTON: My Lords, I certainly agree that we need not debate again what has been debated already for fourteen or fifteen days; but I should like to say a few words, and, like the Leader of the House, following the old precedent, deal with the whole of the Amendments together. As always, in any relation of life, differences seem to attract more attention than agreements. It is so in marriage and in other fields. But I think it is remarkable, as the noble Viscount the Leader of the House has said, that in a Bill of such enormous importance and complexity, and so controversial in character, such a vast number of Amendments have been made after full argument and debate by common agreement between us here and accepted in in another place. That fact shows the value of reasonable debate under our Parliamentary system. The Bill has been greatly amended and improved. There is scarcely a clause or a schedule-that has not been changed in some way. Our differences are now reduced to three,. and I would like to say just a word about them.
There is an old issue which we hive debated very much—namely, what is a fair test of long-distance traffic. I must say I regret that we could not hive agreed on the forty miles. The odd thing is that the real reason for the first Amendments being rejected was not any

1031
dispute that forty miles was a reasonable test, but because "they would so limit the number of undertakings acquired by the Commission as to place the Commission in a position where they could not adequately perform the duties laid upon them by the Bill." That is a very different reason from saying what is or what is not long or short distance traffic. I think it is rather unconvincing. The risk of this business is not that it will be too small but that it may easily be too big; and I am very much afraid that the real reason why this Amendment cannot be accepted is the anxiety of the Government to resist a reasonable measure of competition, even where under their own Bill they lay down that competition is to be accepted.
In the same way, when you come to the area in which the permitted operator is to be allowed to operate you cut him down within even more narrow limits than your definition of "long-distance transport" and "short-distance transport." The reason for that is alleged to be this: that it would "unduly hamper the Commission in the performance of the duties laid upon them by the Bill." Why should it "unduly hamper the Commission" if the permitted operator is to be allowed to do the forty miles, which indeed is the test—or one of the tests—when taking over? It would not unduly hamper the Commission. The Commission can have as many vehicles as they please; they can go wherever they like on long haul or short haul, and with return loads; they can do anything they please. I am very much afraid that the people who will suffer and be unduly hampered are the hauliers who are permitted to continue operating and—this I regard as a much more serious matter even than that, though that is a very grave injustice and disservice—the general public who use these services. It is because we have had the interests of the travelling public and the trading public primarily at heart that we have persisted so much in these Amendments.
In the same way, the final Amendment, upon which we shall not divide but which we did ask the other place to consider in another form, is something which greatly affects the public interest. In a sentence, it was simply this: That there should be the same law for the
1032
Commission as for the permitted undertaker. For centuries it has been an elementary principle of British justice that no undertaking and no person, whether it be a State-owned undertaking or a private undertaking, should be outside the law and above the law. Now, unhappily, for the first time and, I hope, for the last time, we allow in an Act of Parliament the principle that one of these new Government undertakings is to be outside and above the law; there is to be a different law for them, and for their competitors. In conclusion I would say that seems to me to be a strange application of the test which the Lord Chancellor very fairly asked us to apply in these matters, that we should give a fair chance to the State undertaking. If we have got to have these State undertakings, we all wish to give them a fair chance, but we do not wish to give them a position of privileged monopoly outside and above the law.
LORD BEVERIDGE: My Lords, This matter has been very fully discussed, and I think even the last discussion in this House showed the House the real difference between us on some of these Amendments. I hope that the House will allow me time to say why, to me, while the line taken on the first set of Amendments on Clause 39 does not seem to be good sense (and I do not think it seems good sense to most of this House), it is good sense as compared with what is proposed for Clause 52, on page 66. The line taken on Clause 39 by the Government, and by the other place, is that if they did not take over compulsorily a large number of lorries, they would not have enough lorries. That is really nonsensical, because they could afterwards always buy as many lorries as they wanted, or they could make them. That is not the permanent evil. It would still leave it open for the private enterprise man to do whatever he could. The real harm is done in respect of Clause 52; and that is quite different. That is not concerned with what lorries are taken over; that is concerned with imposing an additional restriction on the lorries which are left.
Roughly speaking, 30,000 lorries are to be taken over with those A and B licences, and very nearly four times as many, nearly 120,000 lorries, are to be left with private enterprise on the figures given by the Government themselves. The

1033
30,000 lorries are to be allowed to do anything, but the 120,000 lorries are to have additional restrictions which means that they are to be incapable of running more than 25 miles from their home. That is simply diminishing the efficiency of four-fifths of your existing fleet. That is what this proposition does; it diminishes the efficiency of four-fifths of the existing fleet. To this we are asked to assent on a day when, in an hour or two, the Government are going to put before us a Bill urging the necessity of the utmost production with the fullest use of all our resources. I venture to suggest—I do not want to use strong language—that anything other than "criminal lunacy" is not a fair account of that proposition, which is to take a whole lot of lorries which have, in fact, been doing more than 25 miles. The Government say that there is a great deal of traffic between 25 and 50 miles, and that that was their reason for not accepting the 50-mile limit. A great many lorries which were doing this are to be sterilized and made incapable of doing it. Who is to do their work? You will have to have new lorries or you will not do that work; and this at a time when productive efficiency is the thing we most need to have.
When we come to the next debate, that on the crisis, many of us will admit that the main lines of the crisis would have affected any Government. The main lines of the crisis are beyond the control of the Government. The Government, however, will not escape criticism after this if they have aggravated the crisis by sticking to a stupid line in spite of changing circumstances; just as, last February, they insisted upon their foolish line of not controlling effectively tobacco and films and other useless imports; just as, after that, although they had had warning of the crisis, they went on to the five-day week in the mines and gambled on that five-day week. Now, in this same predicament, they are sticking to a wrong line in the face of changing circumstances, being unable to adjust themselves; they are acting on this line for sterilizing four-fifths of our A and B licences.
I will say at once that I am sorry those who are responsible for the general conduct of affairs in this House should feel that we are bound in this House to accept this. So far as I am concerned, I should be perfectly willing to be the one person in the Lobby against it. My reason for
1034
not doing that is that I should be sorry because so many other people would have to go into a different Lobby. Before I sit down I want to register, in the strongest possible terms, my objection to this proposal to destroy the efficiency of a large part of our road haulage equipment at a time when every maximum efficiency is essential in the interests of the community. I am sure this country will have to retrace its step, as I think it will have to retrace other steps introduced by this Government. But I am alone. I am a new member of this house, and all I can do is to take what opportunity I can of protesting in the strongest possible terms against the particular line taken on that particular Amendment.
On Question, Motion agreed to.

LORDS AMENDMENT.
Page 66, line 8, leave out ("twenty-five") and insert ("forty").
The Commons disagreed to this Amendment for the following Reason:
Because it would unduly hamper Commission in the performance of the duties laid upon them by the Bill.
VISCOUNT ADDISON: My Lords, I beg to move that we do not insist on this Amendment.
Moved, That this House doth not insist on the said Amendment to which the Commons have disagreed.—(Viscount Addison.)
On Question, Motion agreed to.

LORDS AMENDMENT.
Page 49, line 27, at end insert—
("(6) In any proceeding under this section before the arbitration tribunal established under Part VIII of this Act the obligation, of giving to the tribunal all information in his power as to the manner in which the undertaking or the relevant part thereof was carried on during the period mentioned in paragraph (a) of subsection one of section thirty-nine shall rest on the person on whom the notice of acquisition has been served and provided that such obligation has been duly performed the burden of proof that the undertaking is such an undertaking as is specified in Section thirty-nine shall be placed upon the person contending that the undertaking is such an undertaking.")
The Commons disagreed to this Amendment for the following Reason:
Because it imposes a procedure which is both inappropriate to the proceedings in question and impracticable.
VISCOUNT ADDISON: My Lords, this is the Amendment to which the noble Viscount, Lord Swinton, referred in his

1035
speech. As he said, we have discussed it at great length and I do not think it is necessary to repeat the arguments. I beg to move that we do not insist.
Moved, That this House cloth not insist upon the said Amendment to which the Commons have disagreed.—(Viscount Addison.)
VISCOUNT SWINTON: It was the last one to which I referred.
On Question, Motion agreed to.

LORDS AMENDMENT.
Page 74, line 4, at end insert—
("(c) If on a complaint made by the holders of an A or B licence to the licensing authority that the Commission, in the exercise of their function of providing transport service for the carriage of goods by road, not being ordinary long-distance carriage, are competing unfairly against the aggrieved licence holders by seeking to provide more than a fair proportion of the facilities required, the licensing authority may, if it thinks fit, refer the matter with its report and recommendations to the Minister, who may make such order as in all the circumstances he may deem to be just, requiring if necessary the Commission to withdraw or alter such facilities.")
The Commons disagreed to this Amendment for the following Reason:
Because it is inconsistent with the general scheme and intention of the Bill.
VISCOUNT ADDISON: My Lords, this is the same except that it was to this Amendment particularly that the noble Viscount referred. At any rate, my remarks do apply here, and I hope that your Lordships will not insist.
Moved, That this House doth not insist upon the said Amendment to which the Commons have disagreed.—{Viscount Addison.)
On Question Motion agreed to.

ISLE OF MAN (CUSTOMS) BILL.
Read 2a (according to Order): Committee negatived.
Then, Standing Order No. XXXIX having been suspended (pursuant to the Resolution of July z8) Bill read 3a, and passed.

ECONOMIC SITUATION.
3.13 p.m.
VISCOUNT SAMUEL VISCOUNT SAMUEL rose to call attention to the economic situation; and to move for Papers. The noble Viscount
1036
said: My Lords, the Motion which I now beg to move has been upon your Lordships' Order Paper for some weeks, awaiting an opportunity for discussion in a crowded programme; and to-day, being a day set down some time ago, happens by coincidence to be the very day on which the other place are debating the same matter, and on which a Government statement of prime importance is to be made in both Houses. I am well aware that your Lordships' expectations are all concentrated upon that statement. So far as I am concerned, I have to speak before it is made, and with no knowledge of its contents. It is with me a case of first come, worst served. The goods are to be kept under the counter until 4.30 p.m., or thereabouts, and when I asked whether it would not be possible, as has been done on some occasions, to see beforehand a White Paper or a summary of the Government's statement, I received the answer, "Sorry; no Papers."
The Bill we have had distributed to us in advance. It confers the widest possible powers, as in war-time, on the Government of the day, and its value depends upon its application. It is not the powers which are to be conferred but how they are to be used which is of importance; and until we have the statement later this afternoon it is impossible to form any opinion on the merits or demerits of this measure. Therefore, I shall not endeavour to discuss it. My Motion has been couched in the widest terms, in order that any of your Lordships who has some special aspect of the economic situation prominently in his mind and who wishes to dwell upon it, should be at liberty to do so. Indeed, this vast subject, which contains a number of different questions, does contain many which are inter-related closely with one another—the balance of imports and exports, production and consumption, taxation and currency. All those things are inseparably inter-connected, and whenever you touch one you touch all the rest, so it is easy for us to lose ourselves in a maze of statistics and technical terms.
Happily, the facts of the case have been fully and frankly stated to this House, in a debate two weeks ago, in a speech given by Lord Brand, which has aroused widespread attention in this and

1037
other countries, together with a speech by the noble and learned Viscount, Lord Simon, who also made clear some of the principal facts of the situation. They are well known, and I shall not endeavour to repeat them; but I would first venture to draw your Lordships' attention to what are the causes of the present situation, for it is only when you arrive at causes that you can find your way to remedies. It is so in these matters, as in all matters, that the first step to remedies is to find the causes.
Here, in their origins, they are well known. The great nations of the world cannot devote half their manpower to destruction instead of construction, cannot devote themselves to destroying ships, bridges, railways, harbours, power plants, factories, houses, to disrupting the lives of the peasantries in the great producing countries of the world, and to robbing them of their essential supplies of fertilizers, feeding stuffs, and so forth, without having to suffer for it. When all this has been continued for six years, the world must expect to suffer. There is a Chinese saying: "In the track of great armies there must follow lean years." It was so after the Napoleonic wars when, in this country, the people lived through a decade of utter misery; it was so after the war of 1914 to 1918 when, subsequent to a few years of fictitious prosperity, the world was plunged into the most widespread and most severe economic depression that it had ever known; and now, two years after the great war, we see similar dangers impending.
It is true that we were able to overcome the immediate consequences of all those destructions to some extent. Your Lordships will remember that when the war was over it was widely expected that with the disorganization of transport over the greater part of Europe, the destruction of cities, the expulsion of masses of the population and millions of people wandering about homeless, in all probability the war would be followed by famine and widespread epidemics sweeping over Europe. Happily, those worst results were avoided, thanks to the energetic and successful action of the Allied Military Administrations, supported afterwards by the United Nations Organization and its organ U.N.R.R.A.
But contrast the conditions in the Eastern hemisphere with those in the Western hemisphere. The United Stases was not in the war for two years and, during that period, took a leap forward in productive capacity arid in prosperity. It suffered no devastation, it had no difficulties with regard to coal, oil, fertilizers, and it has lately enjoyed record harvests. Its people have a high technical capacity that enabled them to take full advantage of all those opportunities, and the result is that the United States now is enjoying a very great abundance both of production and of consumption. Lord Brand mentioned that the industrial output per man-hour in United States industry is sometimes double, sometimes treble,,.hat in our corresponding industries. One might give a comparatively small illustration to show the difference at this moment in conditions in the two countries, if one recalls that the London Times consist; of eight pages, the New York Times consists of forty, while the Sunday edition of the New York Times includes as many pages in a single copy as the whole of the Sunday Press of this country, London and provincial together. Price control having been removed in the United States to a great extent, prices there have lately been soaring.
As a result of all these conditions, international prices of food and materials compared with before the war are higher. Copper has doubled; wheat and lead more than trebled, cotton has risen fourfold, and maize fivefold. In this country, as an example, hardwood timber has doubled in price. Softwood timber, which is our chief requirement, multiplied three times. The noble Lord, Lord McGowan, in a recent address, mentioned that the .peat industry of which he is the head, Imperial Chemical Industries, paid in 1939 for its coal per ton, 195. 8d. It is now paying 42s. 9d., involving an additional cost of production in that firm alone of Dyer £3,500,000 a year. II: is true that we gain higher prices for our exports. For the first quarter of this year export prices stand at III per cent. above pre-war prices. But our import prices have risen by 140 per cent., meaning a much heavier costs on balance on a very much larger figure.
These rising costs have resulted in increased expenditures by Governments everywhere, for all their charges have risen, and in industries as well, for the working people cannot live on the money

1039
wages they received previously in the conditions to which they have been accustomed. As a result, many Governments have been driven to increase their currencies. Currency, as a consequence, has fallen in value and in several countries runaway inflation has resulted—Greece, Hungary, Italy and again in China, where the Chinese dollar was before the war equivalent to a Hong Kong dollar. Now the Hong Kong dollar will purchase 10,000 Chinese dollars. Even in France, that highly organized and progressive country, the franc, which in the memory of your Lordships was valued at 10½d. and regarded as Is., at the present time at the official rate is ½d. and at the unofficial rate one farthing, and a depreciated farthing at that.
These conditions present everywhere a very grave financial danger, because the whole economic system of the nations has been changed by the abandonment of the gold standard. In earlier years imports and exports were made to balance by changes, often fractional changes, in the bank rate which encouraged exports or encouraged imports, or discouraged one or the other. Depending on the fluidity of capital and labour and upon free markets for demand and supply, this automatic system was self-regulating. But it was found to result in an alternation of periods of good trade and bad. It resulted in depressions, bankruptcies, and unemployment on a wide scale, and that was borne by the populations because it was regarded as something inevitable, in the nature of things. They said: "We are having hard times," and waited until in the course of nature they came to an end. But of late, during the last twenty years or so, the peoples have decided on a different course, on what is called a managed economy, and it has been inescapable that we should do so owing to the course of events. And now all these affairs are not connected with any physical reality like gold reserves, which could be measured and seen and published, but the stability of currencies depends only on the policies of Governments and the wisdom of Parliaments. If a managed economy is managed well, all is excellent; but if it is managed badly we may be brought to utter ruin.
One other factor I would mention in relation to the special position of this country. The published figures show a
1040
very striking shift in the position of our imports which are published under the head of food and tobacco, comparing the sterling area and others connected with it with what are called hard currency areas—United States, Canada, Argentina, Cuba. I would invite the attention of your Lordships to this fact, which is very important but to which I have seen little attention directed hitherto. In 1938, the last year before the war, imports of food and tobacco which we had to pay for coming from what is now a sterling area were £207,000,000. Last year that had slightly increased to £227,000,000. That was in soft currency countries, but imports from the hard currency area in the earlier year, 1938, amounted to little more than £126,000,000 and last year amounted to £319,000,000. In the earlier year the amount from the hard currency area was one-third of the whole; now it is about three-fifths of a very much larger figure. There is one of the reasons of dollar shortage and one of the principal causes of the predicament in which we find ourselves.
So, my Lords, there is the series of causes that have brought us to our present situation—war destruction, short supplies, higher prices, rising cost of living, rising prices, expansion of currencies, and the danger of a runaway inflation. What is to be the remedy? One of your Lordships, speaking to me an hour or two ago about the speech I was about to make, said, "I hope you will be able to show us some way out other than hard work." Well, I am afraid that is not possible, but at all events one can indicate some way by which we can make hard work effective and see that it is not wasted by bad direction. The remedy, of course, those having been the causes, is to reverse those causes. If these have brought us to where we are, to do the opposite should bring us out again.
The world has been busily making good the physical destruction of the war. You will find everywhere bridges rebuilt, roads repaired, railways being re-established, factories being rebuilt, machinery being installed, and all that must have its effect. Ships, above all, have been built and they may bring those fertilizers which are so essential for the production of foodstuffs in the Far East, Central Asia, and the Middle East and for the

1041
prosperity of those agricultural countries on the prosperity of which the whole world so largely depends. And these courses should bring about lower world prices for the essential commodities. If that could come about, then the cost of living would fall. If the cost of living fell, then the strain on the currencies would be relieved without any diminution of the standard of life of the peoples. But it is important that that process should not be sudden, should not be catastrophic. In that way it would bring the holders of present stocks into ruin or bankruptcy and produce panics on the stock exchanges, and if the result were a sudden deflation the effect for the time being might be disastrous. If it were a gradual process, that would be the right road to recovery.
Our own position might well be very simply stated and has been simply stated in Parliament, in the Press, and in numerous economic addresses everywhere. We are buying more than we produce and sell, at present prices of imports and exports. The remedy is that we must buy less, or at lower prices, or sell more, or at higher prices, or we must do all those things. To put it briefly, we must cut down consumption, or increase production, or both. The quickest measure is to cut down consumption. That can be done almost instantly, while to increase production takes time. To cut down consumption is the more urgent matter; to increase production is the more important.
In adopting this short-term remedy of cutting down consumption we ought to be most careful not to prejudice and hinder the better long-term measure of increasing production. If you give the people, owing to your cuts in consumption, less food, less variety in their diet, less warmth, worse housing, fewer holidays, and, indeed, inadequate amusements, then the effect of that will be to lessen production also. We are continually hearing of the vicious ascending spiral—the rising prices, rising wages, rising prices again, and so on ad infinitum. But there is another spiral, equally vicious, the descending spiral—less consumption, meaning less energy and less efficiency, resulting in less production, and the less production again resulting in less consumption, and so on ad infinitum. Therefore, I trust the Government in the measures which they are going to pro-
1042
pose (I do not know what they are) will he very careful in any proposal to cut down the essential food supplies of the working classes of this country.
Furthermore, it should be remembered that if you cut down your imports ruthlessly, the matter does not stop time. What are imports to us are exports to some other country. If we cut down the exports of those other countries, they, also, will have to cut down their imports, and their imports are our exports. Consequently, you get the repercussion of cats in imports. in the cuts in exports, and your balance of trade may not, in he end, be improved at all. That kind of thing is happening at this very moment, with some of our suppliers from whom we are stopping purchases having in turn to stop their purchases from us; and, consequently, our export trade, which we are so anxious to increase, is damaged by our own act. If we proceed along that then we shall again be back in the position of the 1930's, when there were barriers and counter barriers erected all over the world against trade (this country, I am sorry to say, taking a leading part in he process), which resulted in the disastrous and prolonged depression of that period. We are told that we are obliged to cm our coat according to our cloth. But the amount of cloth is not something fixed for all time, and the policy we should seek to pursue is not less coat, but more cloth. I hope the Government Bill, which proposes above all to increase production—and agriculture is quite rightly mentioned as a prominent feature in that policy—will try rather to increase the cloth than to cut down the coat.
It will set up new targets, and I should feel more hopeful about the targets flat are to be proposed if our experience of those that have been set up in the last two years had been a happier one. We all know that it is much easier to set up a target than to hit it. But what has. happened to those that were proposed by the Government hitherto? A target was set up for our export trade—many people think lower than the circumstances required—but it has not been reached. A target was set up for coal production—again much lower than our circumstances required; there is a general consensus of opinion that it should not be 200,000,000 tons, but at least 220,000,000 tons—hut that has not been reached. The housing

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target has been abandoned. The savings target is not being attained. The cheap money standard which the Chancellor of the Exchequer set up has also not been reached. The only matter, it seems, in which expectations have been exceeded has been the rise in the birth-rate! It may be that I have omitted some cases where the figures set out to be reached have, in fact, been attained. I do not wish to be unfair, and would, therefore, specifically ask the member of the Government who is to reply later in the debate if he can give some comfort and encouragement to the House and to the country by mentioning any targets hitherto set up which have in fact been attained. This statement to-day is to give us a plan. The Economic Survey for 1947—that White Paper—in the first place, came much too late. It only appeared in February of this year, and it should undoubtedly have appeared in the preceding year. It was a survey, as its name indicates, and not a plan; it was a diagnosis, not a treatment. We will await the statement of to-day in the hope that it may be something much more.
I will make a few observations, very briefly, on specific points that many of us trust will be dealt with. The building of houses and the housing programme. The cost of new houses has gone up to three times, in many cases, what it was pre-war; and the increase in the costs of building has been greater in the last three months than at any time since 1939. We are always accustomed to watch the languid labour in the building trade. It would be interesting to know what inducement is to be given to the building worker to work with more zest. The wartime regulation which prevented bonuses being given in the building industry for better work has, at long last, been repealed. That ought to have been done years ago. The noble Lord, Lord Quibell, in this House, with much knowledge, courage and tenacity, has dwelt on this matter on many occasions. It would have been far better if his advice had been followed long ago. There has been, I believe, an inquiry into building costs. What has happened to that inquiry? When shall we get its Report? I would address a question to the Government on that point.
With regard to coal, we are accustomed to concentrate on the production of coal
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—the tonnage produced per man—and it is, of course, a matter of prime importance. But not less important is the question of the efficiency in coal use—the utilization of coal—a matter to which the Royal Commission, of which I had the honour to be Chairman now some twenty years ago, devoted very close attention. A recent Report of the Parliamentary and Scientific Committee, published a few weeks ago, mentions that 70 per cent. of the potential energy of the coal is being lost; only 30 per cent. is used in our furnaces. If that 30 per cent, could be increased to 33 per cent.—only one-tenth that would be equivalent to the production of 20,000,000 tons more coal, and would in itself go far to solve our immediate problem. That, of course, is a long-term achievement, but it is one which in the general plans of the Government ought not to be lost sight of.
Furthermore, a great loss in coal productivity is due to the great deterioration in the quality of coal during and since the war. The calorific value of the coal that is now sold is far too low. Of the 200,000,000 tons produced, no fewer than 25,000,000 tons is worthless ash, and all this has to be transported about the country and handled by labour, with no advantage to our productive power. The fuel crisis saved 2,000,000 tons of coal in the earlier part of this year, but it is estimated—so the Report of the Parliamentary and Scientific Committee says—that that saving of coal was produced at the cost of the loss of 200,000,000 in our exports.
Take the comparatively minor instance of paper. The Government use of paper has increased from 40,000 tons to 71,000 tons, and the Government now consume 3o per cent. more paper than all the publishers of all the books of every kind throughout the country. I asked a friend of mine who is one of the heads of one of the principal paper manufacturing firms, if he could give me an illustration which would bring home to your Lordships what is the extent of the present consumption of paper by the Government. He said that if the weight of paper now consumed by the Government were to be devoted to Government forms of the standard size of 13 inches by 8 inches, they would stretch end to end round the Equator, and not merely round the Equator but 120 times round the Equator. I

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think there might be some economy in consumption there.
Again, capital expenditure. I am sure that everyone was amazed to read not only that the Severn Bridge project has been approved—which is quite right—but that the work was to be put in hand in the immediate future. If the action to be taken with regard to the Severn Bridge is merely to complete plans and to do the necessary prospecting work and so forth, well and good, but surely this is precisely the kind of work that ought to be kept in reserve for times when it is necessary for State action to be taken to restore or maintain full employment, and not to put a demand upon steel production for an immense tonnage at a time when steel is in such short supply for construction so urgently required. Similar observations will apply to railway electrification and to a considerable part of the programme for new factories. Mr. Roy Harrod, the economist, indicates from Government figures that they now propose to allocate for the construction of new factories no less a sum than £119,000,000.
Are the Government going to do anything to check monopolistic restrictions, whether on the side of capital or of labour, whether from the trade associations or from the trade unions? I would ask, in parenthesis, whether we may hope that next Session we shall have some legislation to check the abuse of monopoly in industry, a matter upon which I think all Parties are now coming to an agreement. Who is to plan all these things? The Government have set up, after long delay, an Economic Planning Board under the chairmanship of Sir Edwin Plowden, but it is doubtful whether that Board is adequate, or could be adequate, to so vast a task.
I wish to ask, not as a subject for debate to-day, for it is far too wide for that but it is closely relevant to the subjects that we are discussing, whether the Government yet realize that the structure of the Cabinet itself is wrong for the present condition of our politics; that the Report of the Haldane Committee of thirty years ago urged that there should be a small Cabinet, perhaps of Ministers not heavily charged with departmental duties, who should be free to think, to explore, and to plan, and that that is one of the urgent needs of our country. We did it in 1916, again in 1931, and again in 1940.
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Whenever there comes a grave crisis w e revert to this plan of a small War Cabinet or Economic Cabinet, or whatever it might be, but afterwards we abandon it, and we have this great Cabinet of sort e twenty-two members who have to deal with an immense burden of departmental and legislative work. I would strongly urge that the country should give its early attention to this matter, for in fact the only adequate planning board is the Cabinet itself.
I come, in conclusion, to two other questions of a more political character. One is the question of taxation, which is a prime factor in all these matters, and the other is our relations with the United States of America. With regal d to taxation, your Lordships will have observed that several economists have been urging that so far from taxation being diminished, it ought to be increased in some form or other in order, as they say, to "mop up" excess purchasing power; that it is a good thing that there should be less money in the pockets of the people so that they should not spend, or should not create a demand for goods which do not exist or are in short supply and thereby raise prices still more. That whole argument appears to me to be misconceived. In the first place, if the increased taxation is to be used for military expenditure, or for an enlarged and excessive administrative machinery, then you are not mopping up purchasing power: you are merely transferring it from one group of people to another group of people, and very often you are transferring it from producers to non-producers.
Also, if the people desire to spend they will spend, because there are enormous is war savings easily available which can be withdrawn at any time by cashing certain securities or by withdrawals from the Post Office. It remains there in colossal masses of millions of pounds, ready to be called upon at any moment if the people wish to buy. So the remedy is not to take away money which belongs to the people, but to persuade them to spend it rightly or not to spend it at all but to put it by and postpone their purchases. The remedy, therefore, is not more taxation but a re-invigorated savings campaign which, if successful, will achieve the same purpose much more

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effectively and with much less heartburning. Furthermore, what right have the Government to maintain, beyond the need, taxation that was imposed and was accepted, without demur, for war purposes? People of all classes agreed readily to make whatever financial sacrifices they might be asked to make in order to save the country from conquest.
The Chancellor of the Exchequer, Dr. Dalton, took pride in the fact that he had reduced the taxation by £500,000,000, but that is a very inadequate sum. He has reduced it by £500,000,000, but he ought to have reduced it by very much more. Indeed, on each occasion that he retains any war taxation, he ought to justify his reasons for doing so. Otherwise, he is merely retaining for one purpose money which was contributed for another purpose, and that might be termed malversation of funds. Meanwhile, the money trickles away in this immensely swollen expenditure by the Treasury. We have a Chancellor of the Exchequer with a "song in his heart" and a hole in his pocket.
A great part of this expenditure is on the Defence Services. No less than 900,000,000 is devoted to the Army, the Navy, and the Air Force and to the occupation services in Europe and elsewhere. The Economic Survey presented this year showed that 11 per cent. of the income of the whole nation is now going on the Defence Services—more than two shillings in every pound on the average—although the German Army, Navy and Air Force are no more and it was because of them that we had to subscribe these enormous funds. The Italian as well have gone; the Japanese, too. If we are concerned with the adequacy of national defence, as we all are, we should remember that our own solvency is a factor in that defence. Our own efficiency and prosperity and political stability are prime elements in strategic power and the best contribution that we can make to the United Nations, and a prior condition to all others, just as an individual man's own health, efficiency and happiness are the first condition of his usefulness to his neighbours. Furthermore, our national security depends upon having some economic reserve in the event of a fresh emergency. With Income Tax at nine shillings in the pound, an immense Surtax and a heavy
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indirect taxation, to a total of £3,000,000,000 this year, there is no reserve in case of any further unforeseen emergency.
All this burden of taxation is indeed a check upon industry and enterprise. I have seen it stated, and I ask the Government whether it is true, that a miner, after he has worked for four days at the present rates, if he works a fifth day, for that day's labour after deduction of increased Income Tax, he will receive only two shillings and three pence or some sum of that kind. Consequently, knowing that if he goes down into the pit for that day, facing its dangers and discomforts and the heavy toil from morning till night, he will come back in the evening only two shillings or thereabouts the richer, he is very much tempted to stay at home and avoid labouring for so meagre a reward. The consequence is that not only do we not get the coal but the Chancellor of the Exchequer does not get the tax, so that we make the sacrifice without any benefit. I ask the Government whether this is true, and if it is true what action they propose to take.
Furthermore, if it is true that there is too much money chasing too few goods, if you impose penal taxation there will be less money; but at the same time if penal taxation discourages production you will have less goods; therefore if you have less money on the one side and less goods on the other your economic situation is the same as it was at the beginning. These violent remedies ought not to be adopted merely to show how courageous we are, how ready we are to make sacrifices if need he, to bear heavy taxation and the rest of it for the sake of the country, or how ready Parliament is to face unpopularity in order to save the people from themselves. All these arguments are beside the mark. Is the policy right or not right? Is it necessary or not necessary? Those are the questions that have to be answered, and all the rest is mere rodomontade. The conclusion is that the policy should not be ruthless taxation to prevent people having more money than in the belief of the Chancellor of the Exchequer is good for them, but a great reduction in this present burden of £3,000,000,000 a year. This is a matter especially for the other place rather than for your Lordships' House to scrutinize. But I confess we may feel great surprise

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that the other place has not appointed a National Expenditure Committee to go into these matters. I had the privilege to be the first chairman of the first Committee that was established in the years 1917 and 1918. I think we did good work. Certainly the Committee in the recent war did excellent work but they have been dissolved, and not reappointed, and it is astonishing that the other place have not yet appointed that Committee.
My last point is the political and economic relations between this country and the United States. The greatest change in world politics since the end of the war in 1919 has undoubtedly been that the United States of America is no longer isolationist. When they were isolationist that was a terrible handicap to the rest of the world. And now that Russia has become isolationist that, as we all agree, is obstructing the advance of mankind. But the United States now participates in the common burdens which rest upon the nations. If she did not participate—though she has done so in her own interest and for the sake of her own economic and strategic position (and it is right that she should do so) as well as from the sense of duty and good will and humanitarianism which is instinctive in the American people—if there had been no lend-lease during the war, no American Armies to come to aid us and our Allies in Europe, no supplies and armaments, no American Navy or Air Force at work, we should all be in a sad state at this hour. She emerged from the war bearing an immense load of taxation and a colossal debt.
In addition, President Truman in his Independence Day address this year, told us that the expenditure of the United States since the war in World Relief and Reconstruction and in the World Bank and Fund was nearly 20,000,000,000 dollars, or £5,000,000,000. If the Loan which is now coming to an end had never been granted the crisis in which we now are would have come in a much more acute form long before. As Mr. Ernest Bevin said on July 4:
"If ever a country merited thanks and not criticism it was the United States."
I for one would whole-heartedly endorse that. We have further, at the present moment, the Marshall offer, and one may hope that some of the restrictions which were imposed as a condition of the
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American Loan may be mitigated. B it whatever America does, it is essential that Europe and this country shall become economically self-dependent. We haze looked to America for a breathing space and we have been given a breathing space. Perhaps we shall have a little further breathing space. But that we should spend our lives lying on our backs in a kind of economic iron lung, with air pumped into our lungs by the Americans, would be a position that would be quite intolerable.
From the standpoint of our domestic politics here the present crisis is, of course, an opportunity which offers a strong temptation to opponents of the Government to upset them since they dislike the Government's general policy. But the Government would have been very foolish if they had assumed that the crisis was nothing more than that. In 1931 the Labour Party was drilling into the people that the whole of the economic crisis of that time was a "Bankers' ramp." It was nothing of the kind. It was the result of irresistible economic forces. As the noble Lord, Lord Pethick-Lawrence, speaking on economic affairs for the Government said, earlier in this year:
"The crisis of 1931 was brought on and aggravated by wild movements of capital between financial centres."
That has been obviated by controls which have since been imposed, but the Government to-day realize the reality of this crisis, that it is not some political machination, and that their whole life, indeed their very existence, depends upon dealing with it.
Those who, like Lord Brand, insist upon the reality of these dangers do not create them; on the contrary, they lessen them, because they save us from the shock of surprise which we should feel if they came upon us unwarned and unprepared. The Government are now asking us as a nation, to rally in their support for the measures, that they are about to take. I am sure-that the nation would he ready to do that, yet I feel in duty hound to point out to the Government that, if they expect that, they must conduct their affairs in general' with that object in view. Here, I would make special reference to declarations that have recently been made, and which caused me very great anxiety, by leading members of the Government, to the effect that they intend in the coming Session of

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Parliament to proceed with the measure of the nationalization of the iron and steel industry. I am convinced that that would be profoundly ill-advised. That industry is different from all the others that have so far been the subject of their nationalization policy.
This is not the occasion, however, on which to go into the differences. At the General Election, the nationalization of iron and steel was mentioned, but it was brought into no prominence; and it cannot be said that there is any specific mandate for a measure of that character. The Government have repeatedly said that they would not persist with nationalization unless the case were established, on the merits, in each instance. That has not been done with the iron and steel industry, and we have no information as the outcome of an impartial inquiry to tell the nation what are the conditions of which the Government complain. It may be thought that this is irrelevant to our present discussion, but it is not because, if the Government proceed with this policy, they will find themselves faced with a far stronger, and more determined and more widespread opposition than any that has attended the previous articles in their programme. They cannot expect to command the unanimous and cordial support of the nation for them and their policy if, at the same time, they divide it from top to bottom on a most important matter of political controversy. I feel bound to say that, and to say it in advance, for it may be the last opportunity before we meet for the King's Speech to be read to Parliament.
The dangers and difficulties that attend us are very great. When we here watch the introduction of some new Peer and welcome him to these Benches, we hear the Writ of Summons read, and in it are the words that he is "Summoned to attend without fail, on account of the difficulty of the said affairs" with which Parliament was asked to deal—"the difficulty of the said affairs and dangers impending." Those words have become common form. They can be traced back to the Writs of 'Summons of members of this House to the time of Edward III. For 600 years in Parliament after Parliament, and century after century, this House and the other Howe have been summoned to deal with the difficulties of the said affairs and the dangers impending. Sometimes those
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difficulties are very acute, and the dangers are very imminent. And it is such a moment to-day. They have been dealt with for 600 years. We shall deal with them again. I beg to move.
4.7 p.m.
THE MARQUESS OF SALISBURY: My Lords, this is, I suppose—indeed I hope—the last important debate in which we shall engage in this House before the House rises for the summer recess. It takes place, as your Lordships know, in what can only be described as somewhat sombre and menacing circumstances. I suppose we are all aware that an economic crisis is approaching with giant strides—a crisis which is likely, as the noble Viscount, Lord Samuel, has already said, to test to the utmost the courage and resolution of this country. This crisis, of course, has not come on us suddenly. I think most of us must have been aware of its steady, inexorable approach for a great many months now. It has been rumbling away in the distance like thunder, but undoubtedly a very large section of the British people, and, I am afraid, certain sections of the Government with their customary optimism, have hoped that it would pass us by. It is only now that we are starkly faced with the fact that the storm is close upon us, and that in a matter of months—or even of weeks—it is likely to break.
Anybody who rises to speak just at the moment that I do in this particular debate is clearly in a certain difficulty. First of all, I am in the difficulty that I am following the noble Viscount, Lord Samuel; and I hope he will allow me to say how admirable and comprehensive was the statement that he has given to the House, and how very effectively he has covered the whole of the ground. Moreover, as I think the noble Viscount himself said, we all know that the Government spokesman sitting opposite is to rise to his feet to make a statement of first importance directly I sit down. I do not know what is in that statement; and that inevitably, to a certain extent, as I am sure your Lordships will understand, if I may use a colloquialism, cramps one's style. At the same time, the essence of the problem which faces us is, of course, already well known, and moreover the discussions which we had on the Second Reading of the Finance Bill and to which the noble Viscount, Lord Samuel, has

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already referred, did, of course, follow much the same lines and cover much the same ground as that which is to be covered to-day.
In the course of that debate, as he himself said, there were two very remarkable speeches, one by the noble Viscount, Lord Simon, and one by the noble Lord, Lord Brand, which certainly deserve further examination by this House. Indeed, the very nature of our problem is, even for someone who is not a trained economist, simple to define, although I am afraid it will be extremely complex arid obstinate to resolve. The noble Viscount, Lord Samuel, has already adverted to this, but I should like, if I may, to reemphasize what he has said. What, after all, in the plainest possible words, is the cause of our present difficulty? As I see it, it is this. We were a very rich country and now, as the result of two disastrous wars, of which. I think we bore the main brunt, we are temporarily a very poor country. That is always an extremely uncomfortable position for anyone to be in. It is very easy for either countries or individuals to increase their expenditure and become more extravagant and luxurious. As I think Dr. Johnson once said—I paraphrase his words—"There is no such thing as a luxurious nation. Every nation is as luxurious as it can afford to be."
While it is the easiest thing in the world to spend more money, it is the hardest thing in the world to spend less. To economize, either for individuals or for nations, is the most unattractive of all policies; and yet that is what we have quite clearly to do. We are in the position, as I see it, as I think has often been pointed out, of a man who has had a serious operation. Through no fault of his own, he has had to undergo this operation, and it was the only alternative before him, apart from death. No doubt it is very satisfactory to him that the operation was successful, and that the mortal peril has been averted. But that operation undoubtedly was both enfeebling and very expensive; and clearly a man could not hope, after such an experience, to be as rich as. or richer than, he was before. On the contrary, he would have expended the savings of years on his medical treatment, and he has to re-create the wealth which has been dissipated before he can live anything like so well as he did before.
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Moreover, as I am afraid is our case, he may have friends from whom he has borrowed, in order to carry him through this great emergency, and who have to be repaid. That seems to me, broadly speaking, exactly our situation; and, as Lord Samuel said in his speech, it has been complicated by the additional circumstances in the international sphere which make our situation—since we are a nation dependent on imports—particularly clangorous. I see not the slightest reason why, in the future, we should not be as prosperous as we have been in the past; or even far more prosperous; but we shall only recover if we are wise and prudent now, if we cut all unnecessary expenditure, if we work harder and save more. If we refuse to face facts, a3 a Government and as a people, if we continue to live above our income, if we attempt to make both ends meet, not by our own labours, but by sponging on our friends, there is nothing before us bet bankruptcy and misery. That is the hard bleak fact which is facing this country at the present time.
If I have a complaint against the Government it is that up to now they have not rammed it home sufficiently to the people of Britain. They have, as they constantly tell us, courageously faced the future, but they have not, until comparatively recently at any rate, even attempted to face the present. I well understand their difficulties. They have for years and years honestly preached Socialism as a cure for our ills, and they came into power at a time ideally fitted to try out their experiment. As I attempted to point out to your Lordships in the debate on the Address, at that time the country was already rigidly regimented for the purposes of a war, and no doubt they had a powerful and perhaps irresistible temptation to take advantage of a situation which might never recur.
But, my Lords, once they had embarked upon this experiment, it had to be made to appear to succeed. I filly recognize the difficulty before them. They could riot risk disillusioning their supporters. By hook or by crook those supporters had to be made to see immediate and concrete results of this new policy which was to be tried on the country. So the Government were driven on to a policy of increasing money wages, if not real wages, of

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shortening hours, of nationalizing industries (with all the dislocation which that involves), and of embarking on great and spectacular schemes, such as the Severn Bridge scheme, with all the risks that that policy involves. I will not now go into whether these things were in themselves desirable or not. I have no doubt that a good case can be put forward from the other side of the House for them, and an equally good case put forward from this side of the House against them. I imagine that on both sides of the House it would be cordially agreed that higher wages, shorter hours and better social services are in themselves excellent. I do not imagine there is any difference of opinion in any Party in this country on that.
Probably there might be more difference of opinion about the virtues of nationalization; but this is not the moment to debate that. The point I would make in this: that many of these things, however desirable they may be in themselves, may well be beyond our powers in the situation with which we are now faced. This is no time for overspending. I would ask the Government to remember the classical dictum of Mr. Micawber, that an annual income of twenty pounds and an annual expenditure of nineteen pounds nineteen and sixpence results in happiness, but that an annual income of twenty pounds, with an annual expenditure of twenty pounds and sixpence results in misery. Mr. Micawber was perfectly right, and this is a fact which is being painfully driven home to us at the present time.
We must first re-create our prosperity which was dissipated by war and then, out of the superfluity of the new wealth which is created, we shall be able to afford all those things which are now beyond our capacity. That is the course which has been adopted, I believe, by the Socialist Party of Belgium, and I suggest that the Socialist Party of this country would have done very much better to follow the same example. What was the purpose of Ministers trumpeting abroad and at home, as they have done, that "all is roses in the garden here," that the working people are better fed, and better off, and richer than they ever were before, when in fact they knew that this was only done by our
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living far above our income, and owing money in almost every part of the world? It only deluded the people here, and bewildered the people of other countries.
The Government were able to maintain this fiction by two devices. The first was the American Loan, to which the noble Viscount, Lord Samuel, has referred. As we all know, that money was lent by the American people to put us on our feet again. The idea was that it should be spent partly on capital goods, on modernizing industry, and so on, and partly on essential raw materials and foodstuffs. That was the purpose for which the Loan was meant. I do not say now, and I did not say at the time, that all the conditions attaching to that Loan were such as we should ourselves have chosen. For instance, I understand that Article 9 of that Loan is now being interpreted by certain sections in the United States as impairing our right to trade with the other nations of the British Commonwealth as and when we wish. That is a limitation which we, on this side of the House, have always disliked intensely. Any limitation of our trade with the sister nations of the Commonwealth is abhorrent to us, and I hope that the Government have made it clear to our friends across the Atlantic how onerously and how unfairly that provision is now working. But, broadly speaking, having got the money, I think it should have been spent for the purposes for which it was intended, instead of which a very great proportion of it was in fact frittered away on a thousand and one objects, the main purpose of which was to make the British people think they were better off than in fact they were.
The second device which was adopted by the Government was to divert the attention of their supporters to the distribution rather than the creation of wealth. Again, my Lords, it is not my purpose today to discuss the ethics of this. I think it is quite possible to argue that some people in the past have been too rich, and that other people have been too poor. But even so it must be remembered that to overload the burden of taxation on any section of the community, whatever it may be, must reduce the incentive they have to create new wealth. Lawyers, doctors and business men, just as miners, will not do the job if their reward is given to them with one hand and taken away with the

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other. That is a fact of human nature which we must all recognize.
But what we should realize in considering our present problem is that the mere redistribution of existing wealth will not in any way increase our capacity to buy in the world markets. That is a fact too often forgotten. If I may use a simple analogy, the national income is like a great cake divided into innumerable slices, some big, some very small. By merely altering the size of the slices, you do not increase the size of the cake. It remains exactly the same size as before. What the Government have done, and to that extent they are blameworthy, is that they have made the working man think that by the very act of redistribution not only he but the country will be better off. That is a very dangerous delusion, because he gets the impression—and many have this impression—that to make the country more prosperous he has only to ask for an increase of wages, whereas in fact unless that increase is accompanied by an increase of production, all that has been achieved is to decrease the buying value of the pound, and neither the country nor the individual working man is any better off. It also has the effect of making him regard his employer—the private employer and not the State—as an enemy, whereas both employer and employee, are in fact limbs of the same body, essential to each other.
Now Nemesis has come. The American Loan is running out and the Government and the country have to face up to realities. As the noble Lord, Lord Brand, has said, there is a gap of £450,000,000 a year between the cost of our imports and the yield of our exports—a gap which has got to be filled by some manner of means. It will be very clear to your Lordships that I am not an economist like the noble Viscount, Lord Samuel. I am what is popularly known nowadays as the common man. But I hope, unlike some common men and perhaps unlike some members of the Government, that I am not too proud to learn, and I have therefore read with very great care the speech of Lord Brand in the debate on the Finance Bill, to which I referred, and I found several things. The first thing that was clear was that there is no quick cure for our ills, no short cut back to prosperity. But there are certain points which were made by him and by other noble
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Lords, and certain courses that they did recommend.
Though they recognized that it may be necessary, as a temporary measure to restrict imports and to cut down consumption, they stressed, as Lord Samuel did to-day, that it is far more important in the long run to increase exports. That means that we must divert all the manpower we can from unproductive occupations, however desirable they may be in themselves, to productive enterprise for foreign consumption and encourage that manpower to produce as much as possible. That seems a simple and platitudinous observation. But it is clearly very much more difficult to put into practice than to enumerate in theory, for in order to encourage the worker to produce, as we are finding out now rather painfully, he must be given an incentive; he will never produce for the mere pleasure of producing. And this means not only giving him wages, but something to spend those wages on. I remember during the war, when I was at the Colonial Office, we had exactly the same trouble in Central Africa in inducing the natives to 'produce essential raw materials. They would not do it unless we gave them cotton piece goods, which were then very difficult to obtain. That was the necessary incentive.
Although we are not natives in Central Africa, the same thing is true of people in this country. In fact, increased purchasing power, about which there is a great deal of talk in the Government White Paper, really must mean, strange though it may appear, ability to purchase more. That means there must be more to buy in the shops, if the term "purchasing power" is not to appear to the ordinary working man to be a mere hollow sham. Personally, I consider that it would have paid us temporarily during the past year or two to release more consumption goods for the home market. I believe that by doing that we should have stimulated the appetite for buying. Then, in order to satisfy that appetite, the working man would have had to speed up his work and the general rate of production would automatically have been increased. There would have been a general starting up of the industrial machine, as we knew it before the war. The present situation, where higher wages means that the working man buys exactly the same am mint

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and pays more for it, provides no incentive but only an increased sense of irritation and frustration.
The second point to be remembered, as I understand from the speeches in the Finance Bill debate, is that we should decrease the number of purely unproductive labourers. We are told in the Press—I do not know if it is true—that the Government are contemplating a reduction in the Armed Forces. I believe that that would be deplorable, if it were in any way possible to avoid it. This is the only matter in which I found myself in strong disagreement with the noble Viscount, Lord Samuel. We must all recognize the force of what the noble Viscount said this afternoon; but our Armed Forces are by no means too large now, and they play an essential part in maintaining our prestige in the world. Unless we have some backing of armed force, the Foreign Secretary will be fatally hampered in the conduct of foreign affairs. In fact, it will be almost impossible for him to have a foreign policy at all. In that sense I do not regard the Armed Forces as unproductively employed. I beg the Government, however great the need—and we are all anxious to help them to put the country on its feet again—not to give way to panic measures in this respect. It is really essential, not merely to release so many bodies and hope that they will be re-absorbed somewhere else, but to see that the men released will be useful for the purposes for which they are needed. Otherwise the only result would be to gain a very small advantage which is not in the least comparable with the injury which will be caused to our authority in the world.
But what about the civil servants and the employees, both of the Central Government and the local authorities? There have been all sorts of intelligent anticipations of what the Government propose to do. I do not know how accurate they are. We shall know in a very few minutes. But one thing I have never seen mentioned is any interference with the great army of civil servants; it is not mentioned in any paper—in the Daily Herald or any other. We were told some months ago that this vast army already amounted at that time in one form or another to about 2,000,000 persons. That is a colossal proportion of our population of about 50,000,000, men, women and children.
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These civil servants, if I may say so respectfully, buzz round the head of ordinary citizens nowadays like a swarm of mosquitoes. In our view, a considerable proportion of them are not producing any valuable results at all, and the numbers are going up every day. I read in the Press only two days ago of the large number that will be needed to operate the Town and Country Planning Bill. That is in addition to those which already exist. There is no mention in any Government pronouncement up to now that there is to be any reduction of these 2,000,000 civil servants, and yet they propose to reduce the Armed Forces. Could they not look at these 2,000,000, first, before they begin to tinker with these soldiers, sailors and airmen who are maintaining our position in every part of the world?
Thirdly, as I understand it, there is one further action which the Government could take, which has already been referred to this afternoon, I think, by the noble Viscount, Lord Samuel. They could scrap ruthlessly any schemes, however good in themselves, which are not calculated to produce an immediate return. I would not include housing in those schemes. First, because the Government have not made much progress in housing up to now; and, secondly because you cannot expect the working man to produce anything like as much as he should if he is not decently housed. But schemes like the Severn Bridge, which has already been referred to, certainly come into the category of "unnecessary." The noble Lord, Lord Pakenham, may have read the letter of Mr. Roy Harrod in The Times; I have no doubt many people drew his attention to it. Mr. Roy Harrod said there, rightly or wrongly, that the steel to be used meant the abandonment of the manufacture of 100,000 cars which might have been sold on the foreign market. If that is accurate—which I feel sure it is, knowing Mr. Harrod's reputation to divert that steel from the export markets in our present situation seems to me almost insane.
There are, no doubt, many other examples of economies which noble Lords could give. The noble Viscount, Lord Samuel, referred to factories. I think, also, that the Government might well reconsider schemes of local authorities for public buildings of various characters, to ensure that if they have to be built at

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the present time they should be built with the utmost economy. My experience has always been that local authorities, if they do build, will build as extravagantly as they are allowed to. One cannot blame them, because they are all proud of their locality, and they want to have better buildings than anyone else, whether they be schools, or public buildings of other character. But, unhappily, we are not in a position where we can have the best of everything. That is the sort of economies which the Government might well examine. And it is incumbent on them to examine them now, if we are to get through our troubles at all.
Finally, I do hope that the Government, instead of slanging and damning the employers as a class, will encourage a more co-operative attitude between them and their workmen. What is needed to-day—and this, I think, is common to all Parties alike; we are all agreed about this—is a new spirit in industry. Your Lordships have heard me refer on numerous occasions to the subject of copartnership. I think my noble relative, Lord Cecil of Chelwood, is going to say a word on this subject to your Lordships later on in this debate, and I do not propose to anticipate him. But that is one method by which a new spirit might be stimulated. I recognize that it is not applicable to all industries, especially in the limited and technical meaning which the word has now acquired. But what does seem to be essential—I am sure noble Lords opposite will agree—is that we should stimulate the spirit of partnership (I use that word in the very widest sense) between the various sections that make up industry.
We must recognize—and I hope the Government will recognize this, and will ram it home to their supporters, some of whom, if I may say so, seem to be lamentably misinformed on the subject—that the capitalist, the manager and the labourer are not essentially hostile elements. They are all members of one body, and are as valuable to each other as the stomach is to the brain, or the hand to the mouth. If the body of industry flourishes, they will all benefit: it the body languishes from lack of co-operation, they will all suffer. If profits increase, there is more to be distributed to everyone; if profits decrease, there is only ruin and unemployment for all concerned. That may seem
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to be crude, simple and puerile; but it is a truth not realized by nine-tenths of the people of this country at the present time, and I think the Government must shoulder a certain responsibility for that. If one reads the speeches of men like Mr. Shin-well and Mr. Bevan, they are full of attacks on the boss, and there are many other members in the other place, on the Labour side, who take the same attitude. Therefore, when I stress this, I beg noble Lords to believe that I am not saying something which does not need saying. It does need saying, and it needs to be said far more by the Government themselves than by me. If we cannot get co-operation, not only will individuals suffer, but the wealth which is the lifeblood of the country will gradually and steadily be drained away.
The great danger of the present Government's policy of discrediting employers is, it seems to me, that it takes away tie relationship which did exist before—whether it was a perfect or imperfect relationship—and replaces it by nothing else. I have been told by people in touch with the coal industry that there is already considerable disillusionment among the miners at the results of nationalization. They expected a new heaven and a new earth, and they find that they have only exchanged one employer for another, yet more remote and unapproachable than the one they had before. By all means, let us encourage joint works councils, and every possible device to humanize industry. Let us bring the employees into closer contact with the management, and make it possible for them to be certain that they are receiving a fair share in the profits. But do not let us fall into the illusion—do not let the Government fall into the illusion, or the workmen or anyone else—that merely to alter the ownership of shares automatically increases the incentive of the workmen. That is not true. The figures of absenteeism in the coal industry show that it is not true.
So far as State ownership has any effect—I may be prejudiced—I think that there is a danger that it creates the illusion in those who work under it that it will be possible to obtain, by political pressure, higher wages for less work. There is that danger, arid noble Lords opposite would be wrong to neglect it; and it is, of course, contrary to the most elementary principles of economics. If that illusion exists, I would say to the Government,

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even if they do not feel that they should abandon a policy to which they quite honestly attach importance, let them go rather slow with it until times improve, when greater risks can be taken. Let them remember the sad fate of little Johnny Head-in-the-Air, who pursued rather the same policy as that adopted by His Majesty's Government. Do let them eschew, during this emergency, anything in the nature of purely doctrinaire schemes; and let them concentrate rather on the practical task of creating a situation where the more a man or woman earns the more he or she is able to buy with those earnings and the better life he or she is able to give to the rest of his family.
I do not know what the Government propose to recommend as the solution of the present crisis—we shall hear in due course—but if the gist of their proposals is only further restrictions, further controls, heavier taxation, and further discouragement to private initiative, I am afraid the result will be disastrous, both to themselves and for the country. They will be discredited at home and abroad. Unless, before it is too late, a truly expansionist policy is firmly established, that rickety scaffolding to which the noble Lord, Lord Brand, referred in his speech, which is at present supporting our economic. structure, will begin to creak and crack and finally collapse, and the fall of this country will be very great.
I cannot say that a first view of the Supplies and Services (Transitional Powers) Bill, which was published yesterday, is very encouraging. It seems to envisage new controls, possibly of an extremely far-reaching character. One can only hope—and this is all I wish to say about it, because we shall have a further opportunity of speaking on it—that the discussions in Parliament will remove that impression. At any rate, I hope that the Government will make every effort to limit these new controls so far as is possible.
My Lords, this is a time for wisdom; it is a time for greatness. If the Government continue to pursue a purely sectional policy they will receive only sectional support, and they can expect to receive no more. That will mean in effect that, in a great crisis in our history, the country will be split from top to bottom. But if they will pursue a national policy, I can assure
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them that they will receive the support—and I am quite certain I speak for all who sit on these Benches—of all of us who hold the future of this country dear.
4.42 p.m.
THE CHANCELLOR OF THE DUCHY OF LANCASTER (LORD PAKENHAM): My Lords, one would have to be very thin-skinned and pusillanimous and unfitted to public life to object to the tone of either of the two speeches to which we have just listened. There were many statements made by the noble Marquess to which I and those of us who sit on these Benches take strong exception, as will appear during this debate. But no one could question his desire to play a most patriotic part and to give the most patriotic lead in the difficult circumstances in which we find ourselves. I hope that he and the noble Viscount, whose speech won such acceptance in all quarters—although there were one or two things he said which I would like to take up with him later—will forgive me if I do not reply to their points this afternoon as closely as would normally be the custom in this House. Statements such as the suggestion that the Loan was frittered away, and the suggestion that all civil servants were unproductive and other statements or implications of that kind, I would like to challenge very forcibly, but I think the House will be looking this afternoon for a clear indication from me of the Government's policy in these difficult times.
I say at once to my noble friends behind me that I have never been more proud than I am this afternoon to be a member of the Labour Party, but I know that they will be the first to express the hope that this policy which it is my duty to unfold will be one which will appeal to the whole nation. The noble Marquess has told us that he found himself in somewhat of a difficulty (which I could well appreciate) owing to the fact that I was to follow him, and that until I had spoken he would not be aware of the measures we were proposing. I should ask the indulgence of the House to make what is in effect another man's speech this afternoon. Not only the whole of this country, but a great part of the world, is listening to hear what the Prime Minister is saying at this moment in another place, and for the purposes of this debate I should imagine that the House would regard it as quite essential that at any rate the main lines of the Prime Minister's speech—that which

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is most substantial and operative in it—should be placed before your Lordships. Therefore I ask your Lordships' indulgence to adhere very closely to the form of speech that the Prime Minister has chosen. I should hasten to say that if I depart from his ideas he must in no way be held responsible, and he should be able to take suitable reprisals himself, but I think I shall best serve the purposes of this debate by following the course I have suggested.
I shall perhaps be excused from travelling over the main course of our economic fortunes since the end of the war in view of the fact that we had such a thorough debate on the economic situation in March. Many points were made on both sides, and I myself thought that everything was most satisfactory about that debate except the Division. That, of course, is the one weakness of the debates in your Lordships' House the discussion is incomparable but it is not always rounded off in quite the same satisfactory way. In that debate your Lordships will recall that the economic life of the nation was very thoroughly studied from all angles, and I would only add to what emerged on that occasion a very short review of events during the first part of this year.
By the end of last year there were already many satisfactory features about our recovery, but certain adverse developments were showing themselves. They sprang from various causes and one of the most striking, and of course one of the nearest home, was the failure of European production in industry and agriculture to recover as we had expected. That caused not only ourselves but Europe, and indeed many other parts of the world, to enter upon a position of dependence upon the Western hemisphere for which there was no previous precedent. This was already beginning to show itself some, months ago, but the tendency has become much more marked since. The result of that was that we in this country—to speak only of ourselves for the moment—have been increasingly compelled to buy from dollar sources, and another result has been that dollar prices have risen very sharply. Prices of our exports have risen, but prices of imports have risen considerably more. At the end of last year—and it is still more obvious now—we had to buy a larger proportion
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of our imports from dollar sources and we have had to pay much higher price, than we anticipated. As a result of these developments, which became 'more and more marked, the balance of payments position deteriorated sharply during the first half of 1947.
At the end of last year we were really doing quite well in respect of our balance of payments, if you think of all the losses we suffered during the war. We were paying for about 80 per cent. of our visible imports out of visible exports; this compared very favourably with the 60 per cent. of our imports for which we were able to pay before the war with our visible exports, when of course we had very large invisible exports which came to our assistance. But during the last few months the position has steadily deteriorated. I will not trouble your Lordships with the over-all position, because what concerns us most this afternoon is the increase in the dollar deficit, and I propose to confine myself to that. I should warn the House that I intend to ask their permission to speak at the end of the debate, just before the noble Viscount, Lord Samuel, exercises his right of reply, so that if I fail to touch upon some aspects of the matter which seem crucial there will be every opportunity of asking me to do so more fully in my reply. I might mention, what I know will be of very special interest to the House, that on all that concerns coal the noble Viscount, Lord Hall, will speak to-morrow with special authority. He will deal with many other points as well.
For the year 1946 our total dollar deficit was under £350,000,000, even if we include the Canadian dollar outgoings. In the first six months of 1947 our U.S. dollar deficit was £405,000,000; that is, it was more for the first six months of this year than for the whole of last year, and represents an annual rate, if it be sustained over the whole year, of £810,000,000. If we take this figure of £405,000,000, which is the dollar, deficit for the first six months of this year, £176,000,000 represents our own trading deficit with the U.S. In addition we spent in dollars £29,000,000 on purchases from the United States for Germany. Those two figures taken together come to rather more than half the total deficit. Further, we had to provide £l18,000,000 in collars

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as part of the payment for our own purchases from the rest of the Western hemisphere, including Canada, Argentina, and Brazil. All these figures are in pounds, but they represent the dollar deficit. I hope that Lord Cherwell will not find it difficult to make the necessary adjustments!
LORD WOOLTON: Was the 350,000,000 first mentioned in pounds or in dollars?
LORD PAKENHAM: All the figures are in pounds. We had also to provide in U.S. dollars £58,000,000 net for purchases by sterling area countries in the United States, £10,000,000 for purchases by sterling area countries in the rest of the Western hemisphere, and £14,000,000 net for similar purchases by European countries. The big items are £176,000,000 for our own trade deficit with America, £29,000,000 for Germany, £118,000,000 as part of the payment for our own purchases from the rest of the Western hemisphere, and £58,000,000 for purchases by sterling area countries in the United States.
The most serious aspect of this situation from the immediate point of view has been the acceleration in this dollar drain during recent months, and of course this is clearly reflected in the rate of our drawings on the United States credit. Of the total credit of £937,500,000 we have to date drawn £687,500,000, leaving £250,000,000 undrawn. By the end of 1946 we had drawn £150,000,000. If the House wishes to have these figures I will give them month by month. From the beginning of January to the end of March we drew £125,000,000; in April and May £162,500,000; in June £75,000,000, but in July we drew no less than £175,000,000. I have no desire whatever to conceal that figure—indeed, it would be most improper to hide it from your Lordships—but it would also be wrong to paint too alarmist a picture. Our view is that this very high rate of the drain upon us in July was exceptional. Further, we should also, in order to fortify ourselves for the discussion, observe that in addition to the £250,000,000 still outstanding of the U.S. credit there remain to us £125,000,000 of Canadian credit and our ultimate reserves of nearly £600,000,000. That makes nearly £1,000,000,000.
LORD WOOLTON: That is a gold reserve?
LORD PAKENHAM: Our ultimate reserve in gold or similar assets. Of course, as the noble Lord will be the first to point out, these ultimate reserves represent the reserves of the sterling area as well as our own, and they cannot be allowed to fall below a certain point. It is quite clear that the drain cannot be allowed to go on, even at the rate at which it was running before July.
I come now to this debated question of convertibility, and here I am taking particular care to choose my words. It is sometimes assumed that all our difficulties have arisen because of the Loan Agreement with the United States and in particular its provisions concerning convertibility and non-discrimination. I should like, therefore, to explain to the House how we view these matters. Convertibility is not merely or perhaps primarily a matter of our Loan Agreement with the United States. It is, in fact, a necessity of many of our commercial deals with other countries, as the noble Lord, Lord Woolton, knows very well. These countries owing to the world shortage of dollars, are as sellers demanding either convertible sterling or dollars. In a seller's market buyers cannot be choosers, and so we have been driven to pay dollars or convertible sterling for supplies from some of our main suppliers.
The problem of convertibility is thus a problem of the world shortage of dollars more than a problem arising out of one particular Loan Agreement with America. It is most important to lay stress on that fact. We should look round the world and realize that the whole world, with the exception of only one or two countries, is suffering from an acute dollar shortage. Before the war sterling in London could be transferred into any other currency for current use anywhere. A return to this position has always been an objective of the Government. The American Loan was designed to help us to return to that position at the earliest possible date, and on this policy, whether in our own selfish interest or in the wider interest of world economy, we have no intention of turning our back. But it is clear that in the world shortage of dollars the formal obligation under the Loan Agreement puts an increasing strain upon us.

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So far as non-discrimination is concerned, the provisions of the Loan Agreement have hardly been operative at all, because we have in fact bought practically all the available supplies from outside the hard currency countries. In other words it is the low production in other countries that has driven us to buy so largely in the Western hemisphere. That position, however, is now changing, and with the cuts in imports now proposed, the question of discriminating purchases becomes of much more importance, and will be a very real factor in our future food and raw material purchases.
The House will wish to know what steps have been taken with regard to the points I have just been discussing. The matter, of course, has been under constant discussion between His Majesty's Government and the United States Government for some time. There was a way open to us to give notice under Clause 12 of the Loan Agreement, but this would not cover the whole field, and therefore we proceeded to seek a further consultation on the whole of the implications of the Loan Agreement and the other difficulties with which we are faced, and against the background of the present facts of our position and its developments. I am sure your Lordships will not underestimate the importance of what I have just said. We suggested to the United States Government that as a first step there should be official discussions on these matters, and I am glad to be able to tell your Lordships that Mr. Marshall immediately replied agreeing to these discussions, which will therefore take place as soon as they can be arranged. I should make it clear that these discussions will not, of course, cut across the proceedings of the Paris Conference, but I would repeat, even while stressing the importance of these discussions, that the ultimate solution of a general recovery of productivity all over the world, and not only as as hitherto been the case, in the Western hemisphere, is to spare no effort to remedy our own immediate position, and to make sure that we can play our part in world recovery.
I now come to what may be called the more concrete measures, and I hope your Lordships will forgive me for approaching them first analytically, in the abstract. I will be concrete enough in a moment. First, we shall apply ourselves to a further
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redevelopment of our resources at home. We must concentrate as much of those resources as can be most effectively used for the reconstruction and development of the basic industries. Secondly, we must increase our total output so that we can stand on our own legs as soon as possible; it is a question of concentration. And thirdly, we shall press on with our pans for the expansion of production in the Colonial Empire. But none of these plans, however rapidly we press on with them, can have an immediate effect; therefore we must turn to what we may call the negative side of the problem, and I hope that the noble Marquess, when. he has studied what I am telling your Lordships to-day, will agree that some negative side is essential—that it would be quite impossible not to introduce anything that he would regard as a new control
THE MARQUESS OF SALISBURY: I did not say that. I said I hoped it would not consist only of that.
LORD PAKENHAM: I am very pleased to give the noble Marquess that assurance. If we take first the details of the positive side of the programme, let us ask what is the position of the basic industries. I make no apology for beginning with coal, and I will unfold the broad outlook of the Government and the immediate proposals, leaving the n able Viscount, Lord Hall, to discuss the whole matter with infinitely greater personal authority. Since the beginning of the year the numbers of wage earners on the colliery books has shown a substantial net increase of 27,000. There is every prospect that we shah reach the target of 730,000 by the end of the year, particularly if the Poles who are willing and available are accepted in the industry. So that, while I cannot inform the noble Marquess that that target has already been reached, I can give him an assurance that there is a target, and perhaps the most important one, which we certainly hope will be reached by the end of the allotted period. It is going very well. I do not feel that the noble Marquess, who is at heart an optimist, though he sometimes conceals it, will quarrel with these figures. We have put before the mineworkers' leaders a proposal that while preserving the five-day week and the general regulation of hours of labour, there should be, as an emergency measure for a limited period, an extra half-hour's work per

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day. I know that the leaders of the miners are doing their utmost to reduce absenteeism to its lowest possible level. The aim is an average weekly output of at least four million tons of deep-mined coal, plus some open-cast coal, from September 1, 1947, to April 30, 1948. But we must push on beyond that to increase our output as rapidly as we can.
Second, and second in importance only to coal, comes steel. During the winter months production should be running at an annual rate of about 13.5 million ingot tons, and production over 1947 as a whole should reach 12.5 million ingot tons—about the amount forecast in the Economic Survey. So there again I can hold out considerable hope to the noble Viscount, Lord Samuel, that the target will be realized. But this is not enough, this 12.5 million tons; and shortage of steel has recently been acting increasingly as a brake both on production in the manufacturing industries and on construction. Our target for 1948 therefore is 14 million ingot tons.
As for transport, increased production will throw an additional strain on our transport system, handicapped as it already is by depleted rolling stock and by lack of repair and maintenance during the war years. In applying the general measures which I have outlined, the Government have in the forefront of their minds the need to provide the transport industry with the resources needed to enable it to overtake arrears and meet this additional strain. Many of these matters will be dealt with more fully by the Prime Minister in his speech.
I turn to agriculture—perhaps the most fundamental of all our industries, and incidentally the greatest potential saver of dollars, which has to produce so much for us in these days. The Government are setting a high target before agriculture: nothing less than an extra £100,000,000 worth of food by 1951 to 1952; that is to say a 20 per cent. increase on present output. This is a stupendous task, and I feel it is one to which the agricultural leaders in your Lordships' House will address themselves with special enthusiasm. I am sure the noble Earl, Lord De La Warr, will agree that nothing less would have been worthy of the occasion. It will involve immense effort, not only on the part of the agricul-
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tural community, but on the part of the Government themselves. More labour will be needed on the land, and in order to obtain labour, many houses and hostels will he needed. The production of special agricultural machinery and other equipment must be speeded up. The maximum supply of feeding stuffs must be obtained so that our production of beef, bacon and eggs can be expanded as rapidly as possible. The whole weight of the Government will be thrown into supplying these necessities and into removing any possible hindrances to production.
To get these results we must have sufficient manpower, and the Government have already suspended the call-up of young men needed in agriculture. We shall need 100,000 more workers. All this will involve substantial capital outlay and heavy commitments on the part of the agricultural producers. The Government will take account of this and the Minister of Agriculture will announce this month new scales of prices for future production. These, I believe, will give the farmers confidence to embark again on expanding production and will provide them with the additional resources which will inevitably be required. Once again, county and district agricultural committees will be asked to take a lead, and I know that I can appeal with complete confidence to all the members of the House, so many of whom command great influence in the countryside, to play their part in this particular enterprise. I could, of course, refer to many other industries, for instance, the engineering and textile industries, but I think I had better pass over them since the House will wish me to pass on to exports—with which, of course, those two industries in particular are very closely connected.
If there were more time and if he would like me to, I should like to take up rather strongly the cudgels with the noble Marquess on this subject of the export trade. I do not want to misrepresent him and I will wait to hear what other speakers on his side of the House say, but I think he thought we had laid too much emphasis on the export trade or had devoted too large a proportion of our resources to export trade since the war; I should strongly disagree with him if that indeed is his view. In the Economic Survey, the export target was put at 140 per cent. in volume of 1938 to be reached

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by the end of 1947. Here I am bound to concede to the noble Viscount, Lord Samuel, that this is a target which will not be reached, owing to the fuel and weather crises at the beginning of the year. That target of 140 per cent. cannot be reached, but various measures which the Government are intending to take for the re-deployment of our resources will have as one of their principal aims to get as near to that target as may be, and certainly we intend to reach and pass it during 1948. Our target will be 140 per cent., using 1938 as a basis, to be reached by the end of the first half of 1948, and it will be 160 per cent, by the end of the year 1948, so that, if we are having a similar debate in rather happier circumstances next year, I hope to be able to assure the noble Viscount that not 140 per cent., but 160 per cent. is well on its way to realization.
This target is, of course, very difficult of achievement but we are determined to concentrate our resources in such a way as to make sure that we do reach it. But how are we going to attain these targets? Looking at the matter once more analytically, there are two points to be borne in mind: first, we must increase productivity and, secondly, we must direct our efforts into the channels where production will be most fruitful. If we may take for the moment this direction of effort into the most fruitful channels, this may, and in fact will, involve some sacrifice of individual liberty, though as little as possible, on the part of the employers and workers. I am anxious to be extremely frank with the House in all this, and I say boldly that some sacrifice of individual liberty, the right to do exactly what one likes in the choice of one's job, is quite inevitable if we are to secure the results which we all have in mind. We shall have to ask or issue directions to firms to ensure that their capacity is not used to produce those goods which will bring in the largest profit, but those goods which are most needed and which are in the interests of national economy. It will be much more agreeable if we can secure that result without exerting forcible pressure; but the power to give directions will have to be there.
On the other side, we shall have to take some measure of control over employment of labour. During the war, as the House will recall, we had to use full powers of direction of labour. It has
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been the desire of the Government and indeed of the whole country, including, I am sure, this House, to move as quickly as possible towards complete freedom of the individual in these respects. I am not sure that we have not moved too fast, as things have turned out, but I do not think anybody of substance or standing in any Party protested at the removal of the controls when this was effected. We propose, therefore, to re-impose control over the engagement of labour, which was almost universal during the war but which has since been removed from all industries except coalmining, building, and agriculture. This will enable all workers leaving one job and seek rig another to be guided into that class of work in which they can best assist the country in overcoming its economic difficulties.
Of course, control of engagement only controls the movements of those falling out of employment. To find the necessary manpower for essential employment it may be necessary to take steps to limit employment in less essential work. I have no precise advice to offer the House with regard to "pools," but I must say that to me "pools" are at the very bottom of the list of non-essential work. That is a personal view, if you like. In addition, in order to avoid workers remaining unemployed or taking up non-essential instead of essential employment, it will be necessary to resume, to a limited extent, the use of powers of direction of labour. This is not a resumption of the general powers of direction, but an essential supporting measure to enable the control of engagement to be effectively exercised. I should like to add this, that my right honourable friend the Minister of Labour is at this moment discussing the details of measures to be adopted with the National Joint Advisory Council, that is to say with the employers and the employed. So much for the attempt to direct our resources into channels where they can be most fruitfully used.
LORD ALTRINCHAM: Would the noble Lord forgive me for interrupting, but is it intended to direct women as well as men?
LORD PAKENHAM: Perhaps the noble Lord, Lord Altrincham, will allow me on this particular matter to confine myself to the rather careful statement made, in view of what I have just told the House

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about the discussions that are going on between the Minister of Labour and the representatives of the employers and the workers.
LORD WOOLTON: I thought the word "labour" did include men and women.
LORD PAKENHAM: The discussions are going on this afternoon.
I will come next to the question of increasing total production. The Government have decided that as an emergency measure we must work for longer hours to contribute to increased production. In order to increase production, we have decided that, as a temporary measure, we must ask for that. What is needed first is a lengthening of the hours of work in those industries which have adequate supplies of raw materials, and whose output provides exports or savings in imports, or is essential to the expansion of other industries. As I have said already, the Prime Minister has put to the coal-mining industry the proposal that an extra half an hour a day should be worked for a specific period, and the Government will have to make similar proposals to other industries in this category. The increase of production will also require some increase of hours in transport to enable the additional production to be moved, and to prevent wagons from being left loaded at weekends. I will only add to this part of my speech the clear proviso that there is no intention of interfering with the negotiating machinery of the industries concerned. I would like to repeat that all these proposals are to be regarded as of an emergency character, to operate only until we can begin to see our way clear on the economic front.
I should just say one word about management. We are most anxious, of course, as will be everyone in your Lordships' House, that management shall play its full part, and shall be given every encouragement. I say that specifically in view of the questions which have been put to me. But, where management shows inefficiency or a lack of will to serve the nation's best interests, steps will have to be taken, just as was done on occasion during the war. I do not want to strike too gloomy a note on that matter, because it will be the last resort. What we all hope for, and I believe will see, is the closest good will and co-
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operation between capital and labour in this very difficult period.
I should say a word about what we intend to do overseas. The House will, I know, have noted with approval recently the far-reaching plans, which the Colonial Secretary has initiated, for making available to the world the potential wealth of our African Colonies. These schemes, however, will take time to mature, and so, of course, will the schemes which I have mentioned for increasing production. We must turn, therefore, to certain measures which can be put into operation more rapidly, or whose effects, shall I say, will show themselves more rapidly. I turn, first of all, to the proposals which we are making for the reduction of our expenditure. There is first of all the very large sum which we are expending in Germany for the feeding of the German people. My right honourable friend the Foreign Secretary stated very clearly in another place on Monday that when the present scheme runs out, we cannot spend any more dollars for this particular purpose. Therefore, discussions and a review must be undertaken, in order to devise other plans. I do not think I will add any more, except to emphasize my own conviction, having a personal responsibility in that field, of the imperative necessity for such a review and such discussions at the earliest possible date.
I come next to our Defence Forces. Here we can find some succour in two ways: by reducing numbers and, therefore, expenditure overseas, or by reducing the total size of the Forces at home and overseas. Of course, by doing that we do, in addition to saving money, provide more labour for work at home. I may say, without subscribing to all the implications which might or might not be drawn from what the noble Marquess said—he did not press the argument very far—that I entirely share the spirit in which he approached this particular subject. As one who was until recently, in a junior Ministerial capacity, responsible for the Army, I certainly should strongly deplore anything which left us unable to defend ourselves in time of emergency.
At present we have some 500,000 men and women in the Forces overseas. The Defence White Paper, prepared in February of this year, was based on the

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assumption that during 1947-48 it would be possible to make substantial reductions in the level of our Forces overseas, but emphasized that it would not be such as to endanger our commitments, and that the numbers required for those commitments would not be affected unduly by these successive decreases. Now we expect to withdraw some 133,000 men from overseas by the end of December, 1947, and to raise the total withdrawal overseas to over 200,000 men by the end of March, 1948. In addition to the 200,000 British troops withdrawn, we are now planning to return to their homes before the end of this year some 34,000 non-United Kingdom troops, the cost of whose work is being borne by the British Exchequer, and this will yield a further saving. I would emphasize this point, that despite this acceleration in the rate of withdrawal from overseas stations, and although calculated risks which have been carefully studied are being accepted thereby, there is no change in our foreign policy, or in the defence policy which underlies or supports that foreign policy. I entirely accept what the noble Marquess said in regard to there being no sound foreign policy without adequate defence.
Now I turn to the second question of the total strength of the Armed Forces. In the Defence White Paper it was estimated that between January 1, 1947, and March 31, 1948, the numbers in the Forces would be reduced from 1,427,000 to 1,087,000. This estimate of the reduction to 1,087,000 by March 31 of next year was based on certain assumptions about withdrawals from overseas, and assumed the fulfilment of a large part but not the whole of the programme. But, after careful review, we now consider that the number of men and women likely to be in the Forces on March 31, 1948, can be reduced to 1,007,000, that is a reduction of 80,000 from the figure of 1,087,000 which was previously planned.
I now come to the import programme. Information was given in another place on July 3 of the provisional import programme for the year mid-1947 to mid-1948, amounting in all to £1,700,000,000. That took account of certain classes of goods which were described in another place, and with which I will not therefore detain the House to-day, but if members of this House will consult the records of another place they will find that both my
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right honourable friend the Chancellor of the Exchequer and the Lord President, in his speech on July 8, made it plain that this import programme was provisional, and that further cuts might well be necessary. The Government have now decided that the following further cuts must be made. My right honourable friend the Chancellor of the Exchequer was recently authorized to levy an import duty on films, and it is now proposed to limit remittances on foreign films to 25 per cent. of the earnings of those films. In the statement of June 30, my right honourable friend the Chancellor of the Exchequer said that we might reduce our imports of petrol. A reduction of 500,000 tons will save approximately £4,000,000. This I am afraid will necessitate the reduction of the basic allowance to private motorists by one-third, and a reduction of 10 per cent. in supplementary allowances. We are most anxious not to impede the movement of merchandise by road, but some reduction in the allowance for the use of commercial vehicles will be necessary, and the issue for commercial road transport will be cut by 10 per cent. All this will come into operation on October 1. The maximum economies will also be made in the use of petrol by the Fighting Services.
My right honourable friend, the Chancellor of the Exchequer, proposes as from October 1 to reduce the foreign travel allowance from £75 for twelve months to £35 for fourteen months, with a corresponding reduction of allowances for children to £20. Allowances for business men travelling abroad will also be more strictly limited. I am afraid our business men must make it quite plain that they are spending all the money for business purposes. That has not been universal. There will be a reduction amounting in value to £5,000,000 in the import of miscellaneous goods of luxury types. It is necessary to apportion this cut with great care so as to avoid the risk of damaging the economies of other countries. The field for saving in imports of raw materials is very small if damage is not to be done to our productive effort, but some saving must be achieved. There will be a cut in the imports of timber amounting to £10,000,000.
A NOBLE LORD: Timber!
LORD PAKENHAM: The House will realize that this represents a cut not in the

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very low level of supplies which we have been able to import recently, but in the considerably higher level we have been hoping to reach. I hope it may be possible to make some saving by postponing part of our cotton purchases.
THE MARQUESS OF SALISBURY: I am not quite clear about timber. Is this a reduction of the target we hope to attain or of what we have obtained?
LORD PAKENHAM: A reduction in the programme of supplies which we hope to bring in.
A NOBLE LORD: Can the noble Lord give us the figures of that target?
LORD PAKENHAM: They will certainly be supplied before the end of the debate, since, with the permission of the House, I shall be speaking again.
Finally we come, as the House has been eagerly expecting, to the programme of the Ministry of Food. From what I have already said about home food production, the House will have realized there will be no cut in the import of feeding stuffs, which will rather have to be expanded as increased supplies become available. We have decided that we must make an immediate and substantial reduction in the purchase of food from hard currency sources. We have no other option in the situation in which we are placed. We have, therefore, given instructions which will bring about a reduction in regard to all these purchases of the order of £12,000,000 a month. The buying of essential foods from these areas will not be interfered with, but we must largely confine ourselves to these purchases.
The House will wish to know what effect this decision is likely to have on our level of distribution of food stuffs in the coming months. That will depend, as the noble Lord who is so uniquely learned in these, matters will be the first to recognize, on a number of factors. It will depend on the degree to which we are able to buy food-stuffs from soft currency sources. In so far as they can be regarded as more favourable from the commercial point of view, the question of discrimination under Article 9 of the Loan Agreement will not arise. So far as we can see, these sources are more favourable from a commercial point of view, but where such purchases cannot be justified
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under the terms of the agreement we shall be exploring the situation with the United States Government to see what steps can be taken to obtain supplies from soft currency areas. The second factor which will determine the effect on our ration-scales of these cuts is how long this policy will be continued. It will be necessary at once to increase the points value of a number of basic foods largely distributed under the points scheme. As to basic rations, we shall do everything in our power to maintain them, and we shall not take risks with our stocks. If rations have to be reduced as a result of the policy I have outlined, the Government will introduce a differential ration scheme designed to give preference to heavy manual workers. Preparations will be made forthwith against this contingency coming to pass. Restrictions on consumption in restaurants and hotels will, in any case, be enforced forthwith.
I am nearing the end, but before 1 close I must say a few words about the measures intended to counter inflation. Obviously some of the measures I have outlined will restrict the amount of goods and services available for home consumption, without any corresponding reduction in purchasing power, and thus inflationary pressure may at first be increased. We shall, therefore, have to take such action as may prove necessary to prevent unstable purchasing power creating an unbalanced situation. I learnt my economics at the feet of Mr. Harrod and I am not going back on the old master now. I cannot claim that the proposals are inspired by his principles, but it seems to me that they are in accord with them. We must concentrate on projects which will give quick returns. Projects in themselves desirable will have to be postponed, and such schemes as the re-equipment of agriculture and mines must take precedence over them. There must be a re-deployment and re-timing, including a postponement of the general building programme, but this must be done to give first place, to building houses for miners, agricultural workers, and other kinds of workers.
I should say, because I think it would be neglectful of my duty if I did not say it in this place, that in this uphill struggle we do not stand alone in this country. Quite apart from the sympathetic interest of the United States, we have kept our great partners in the Commonwealth fully

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informed and, as is well known to your Lordships, every one of them has done, and is doing, all they can to help us. I would humbly recommend to the House that they read the speech which the Prime Minister is delivering elsewhere. He will be ending it with an appeal, whose authority I cannot begin to emulate. I would simply ask that, having heard this statement, your Lordships consider it very carefully. I am sure that everyone here will recognize it as an honest attempt to meet a grave national emergency, honestly presented. Be that as it may, I am quite certain that it will be honestly considered by all your Lordships, and I leave it to the judgment of the House, quite content in the thought that for two days your Lordships will discuss what His Majesty's Government are proposing to do to remedy the present very difficult state of affairs.
LORD AMWELL: Might I ask the noble Lord a question before he sits down? He spoke about the direction of labour. Has he anything to say about the direction of idleness?
LORD PAKENHAM: Yes, I have a lot I could say about the direction of idleness, but I have detained the House for a considerable period. If the noble Lord is thinking of the gentlemen who are nowadays known as "spivs," I would agree that we must wage unceasing war on them.
LORD AMWELL: My definition would be pretty wide, I can assure the noble Lord.
LORD PAKENHAM: I would join with the noble Lord, however wide his definition, in saying that we have no use for slackers at this time. But I do not believe that when this appeal goes out to the country there will be much slackness to be found in Britain.
5.41 p.m.
VISCOUNT PORTAL: My Lords, the noble Marquess who spoke before Lord Pakenham was at a great disadvantage, because he spoke before he heard what the noble Lord had to say. Until I arrived here to-day I thought I was going to speak before the noble Lord, Lord Pakenham, and my comments are comments prepared before he spoke. judging by the notes which were taken of Lord Pakenham's speech by members on the
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Government Front Bench, it would take a man of my mentality some time to get ready to question the noble Lord on the figures and facts which he gave us during his speech. The noble Lord took us rack to a debate on the Government White Paper in which both he and I took part in March of this year. At that time I had the privilege of following the noble Lord, Lord Pethick-Lawrence, who stated in his speech that the Government had made a most courageous effort in producing this great plan. My retort to the noble Lord then was that it was an analysis that was produced, and the plan was to come. The same remark on the White Paper was made by the noble Viscount who opened this debate. Since that time practically five months have elapsed, and to-day we have heard the plan of His Majesty's Government, which has been unfolded by the Prime Minister in another place.
I propose in my speech to deal with a few important aspects with which I have been intimately connected. I spoke at some length in March on the question of coal, on which the noble Viscount, Lord Hall, is going to speak later. Therefore, I will not deal with that at any length to-day. I spoke on the last occasion on the importance of the production of coal in this country as being the one raw material on which the future of the country depends. I think I am right in stating that with approximately 718,000 men employed in the coal industry to-day (whether that figure be right or wrong, it is one for comparison, and makes no difference), based on the pre-war figures of output per man—namely, the figures for 1939—they should produce 208,000,000 tons. One should therefore expect that at least this figure of 208,000,000 tons a year would be reached, without the additional figure for open-cast coal which the noble Lord, Lord Pakenham, mentioned. I think the target for open-cast coal is 10,000,000 tons, but it is difficult to keep to that target because it depends on excavators and things which have to be obtained from America. If you put the figure for open-cast coal at 8,000,000 tons, that would bring the total to 216,000,000 tons a year. The Foreign Secretary himself made an appeal in Durham that we should get back to the 1938 figures of coal production.

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One of the main points of my speech is in regard to the question of the allocations and priorities of raw materials. I want to deal with this question as a whole but I will take steel as an example of one of the raw materials to which the noble Lord alluded. That is a product which affects nearly every industry in this country, and it is one of which, as the noble Lord stated, we are in short supply at the present time. I am sure your Lordships will agree that I am entitled to speak on this question of raw materials allocations and priorities, as during the war I had a lot to do with it for His Majesty's Government, both at the Ministry of Supply and at the Ministry of Production. I want to say, here and now, to be fair to the Government, that I know the difficulties which they are up against. One of the difficulties which they are up against to-day is that during the war there was only one customer—the Government—and now you have thousands of customers. Quite early in the war, before I was responsible for allocations (it was when the noble Lord, Lord Llewellin, and Sir Arnold Plant were going into this question of allocations) a scheme was thought out which prevented priorities from absorbing all the raw materials. The point about that is that if during the war priorities had run riot, there would have been nothing at all left for the civilian population of the country. The noble Viscount, Lord Hall, now that he has become a sailor once again, will know better than I do that if the Admiralty particularly want something, especially during a war, they are not backward in asking for it. That applies to the Army and the Air Force as well.
A NOBLE LORD: Or backward in getting it.
VISCOUNT PORTAL: If that scheme had not been propounded by the people who were there before me, there would have been nothing left for the Board of Trade or the civilian population of the country. To emphasize my point, I would mention that two years after the scheme had been in force in this country the Americans, who had come up against exactly the same difficulty, asked us to send a mission to America, and three experts went out under Sir Arnold Plant to explain our scheme of allocations. I
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think it will be found that the Americans thought it worked very satisfactorily.
I have taken the question of priorities as a whole, before coming to the question of steel itself. After the fuel crisis in the early part of this year the Government laid down six first priorities for the allocation of steel. Those priorities were:

(1) Electricity generating plant required by electrical undertakings.

(2) Machinery and equipment for deep-mined and open-cast coal production.

(3) Plant and equipment required by gas undertakings.

(4) Equipment for coal to oil conversion.

(5) Freight locomotives, railway wagons for transport of coal, and steel rails for the essential maintenance of the permanent way.

(6) Atomic energy projects.

I agree that these are all highly important, four of them being for the Ministry of Fuel. But what I should like to know is, what is the effect of these if you balance up the requirements of steel for the exporting firms of this country, who are going to be asked to step up production? I was discussing this position with the head of one of the largest concerns producing motor cars in this country, a man whose name is a household word, and who employs a very large number of men in the motor car business, and he told me that the motor car industry is at the present time utilizing a bare 60 per cent. of the man hours that its equipment and the demands for its products warrant, both at home and overseas. This state of affairs is almost wholly due to lack of material, and predominantly to the lack of steel.
With substantially less than its present factory capacity and equipment, however, the motor car industry before the war was producing nearly 400,000 cars a year. In 1945 requisitions were made and accepted for material to produce a similar quantity. In actual fact, because the materials were lot forthcoming, the output of 1946 was only 219,000 cars. Towards the end of 1946 the rate of production in the factories did reach something approaching pre-war level. Since then the allocation of steel to the industry has been progressively cut. To people in industry to-day this is difficult to understand, as the output of steel to-day has an annual target of approximately 12,000,000 ingot tons. If I may, I will correct the noble Lord, Lord Pakenham, because I obtained that figure this morning. At the present time

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it is not quite reaching 12,000,000 ingot tons; it is running closer to 11,000,000 than 12,000,000 tons. I wanted it to be 12,000,000 to make my point, and that is why I took infinite trouble to verify it.
The target is 12,000,000 ingot tons per annum, as against 10,000,000 tons in 1939. I am only taking this as an illustration of what we are up against. Before the war, motor manufacturing utilized about 8 per cent. of the total steel production, and to-day the allocation to this great industry represents only 4 per cent. Therefore, the steel that is being produced in Britain is being diverted into other channels. Do these channels represent the high conversion factor of foreign exchange that is represented by a fabricated motor car when it is shipped overseas, and do these channels represent our industries or specialities that can also claim a high conversion factor of foreign exchange? It is from this point of view that one has to look at the six priorities fixed by the Government—and this is the point to which I wish to draw the attention of the Government—to see if the balance is fairly maintained for our export trade.
If we have to step up our production for exports, how can you ask the motor industry to produce more, when at the present time they can utilize only a bare 60 per cent. of their man hours? There is nothing worse, if you understand factory management, than to have your men working at 60 per cent. There are other exporting industries who are in exactly similar plight. One must remember, too, as the President of the Board of Trade has told us, that the sellers' market is on the decline, and the extra cost of working short time in these industries will make it very difficult for us to export in competition with other countries. What we should do—and this is my own view upon it—instead of starting with priorities, is to see, first of all, what we can do without, and having cut out all the non-essential requirements then see what remains to be provided for.
Before I finish on this question of allocations and licences I wish to put one point which I think is most important. I alluded in my speech on the White Paper to the enormous number of forms to be filled up and the time that one has to wait before one can get requirements through. The machinery is, to say the least, overtaxed. Your Lordships have
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heard that point raised again to-day. Not only in the Civil Service, but in every industry to-day, you are losing all the extra labour which has to be taken on to cope with these forms. It is so easy to talk about football pools. I have never taken part in football pools of any sort, but if you got me on other subjects of sport I could not speak so impartially. I am putting forward a suggestion which I think may be accepted. If to-day you go to a main contractor for new pl ant and try to get him a licence, you will find that he has twelve or fourteen subcontractors all trying to get their licences separately; that is to say, you get four-fifths of your job ready and then one of your sub-contractors cannot get a licence for some pipe.
I think a great number of forms would be saved to-day if the main contractor acted as agent for the sub-contractors, and took out an omnibus licence for the lot. I assure your Lordships that I know about this subject, and I think the Ministry of Supply are always ready to listen to one's views. This will mean a lot of extra controls and more officials, so, for goodness sake, where we can, let us see if we can quicken a machine which is getting slower and slower, and get it back to the regulated pace which we knew. It will be necessary to try to get the essential industries working at their maxima m output, and this means that their manpower must be made up to full strength. I asked the noble Lord, Lord Pakenham, when I was speaking on the Government White Paper in March, whether in view of the fuel crisis it would not be more logical to stop building new factories until we were certain that the existing factories had enough fuel, power and materials to run at full time. My reason for suggesting this was that if men could not work full time, either through lack of fuel or other raw materials, the cost of production would work out at such a high figure that when the sellers' market was on the decline it would be difficult to find markets for our goods.
I consider that this question becomes much more urgent in the present crisis. Most of these factories are being built in the designated areas, which were the distressed or special areas before the war. In those days we helped to start up many industries in these areas where large numbers of unemployed, who were not

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wanted for the mines, lived. Now the position is reversed. The first priority for people in the mines to-day should be houses. Many more men are wanted for the mines, and these new factories must draw to them men who are required for work in the mines. The noble Lord knows my views about the diversity of employment. The question of the number of men who are required for production must be looked at, together with the great number who are having to be employed by the Government in administrative jobs, which also adds to the number of men employed in administration in the various industries themselves. Production must come first, and with the various controls that it may be necessary to institute for the time being, the number of men required for production must be carefully watched.
We in this country have fought two great world wars, and the last one, which for a year we had to carry on alone, overstretched our national resources. In both these wars we found ourselves unprepared; and we suffered accordingly. Now we have a very grave economic crisis, and although force of circumstances has brought this upon us we cannot escape responsibility for our part of it. We have, to my mind, been living too much in a world of illusion. We have won our two World Wars because at the last moment we faced up to the situation. I am sure that in the same way we must face up to our present crisis, and in that way we shall pull through once again.
6.0 p.m.
LORD TREFGARNE: My Lords, as this is the first time that I have ventured to speak in this House I ask for that indulgence which your Lordships are so generously inclined to give at such a time. May I begin by saying how much I appreciated the fairness which, it seemed to me, animated the speeches made by the noble Marquess, Lord Salisbury, and the noble Viscount, Lord Samuel, and also that of the noble Viscount who has just sat down. As Viscount Samuel truly said, there was a very great temptation to make use of this momentous occasion in order to launch a political attack on the Government of the day. I am very glad to feel that, in this House at any rate, the temptation was resisted of blaming the
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Government in whose time these maladies have come to the surface rather than of assessing those irresistible events which are the true cause of our trouble.
I want to say a word at once about the tremendous announcement which came to us out of the mouth of the noble Lord (Lord Pakenham), about the measures which the Government are taking. I am not a strong Party man, like a great many members of your Lordships' House, but I felt that Lord Pakenham had good cause to say that he was proud of the measures which this Government have brought forward. Not only did he, as I thought, demonstrate that these troubles had come upon us very largely from circumstances entirely outside our control, but the figures he gave, which I am sure your Lordships will read more attentively in the morning, illustrate that many immense factors which were entirely beyond anything that could possibly have been foreseen have brought about the predicament in which we temporarily find ourselves. I do not know whether your Lordships will think it out of place for me to say a word Of praise, even in the middle of the struggle, but everybody who has had any part in the business of government—I have had only a very small part myself—knows how thankless a task it is. I hope, therefore, that your Lordships will not feel it out of place if I pay a tribute of respectful admiration to members of the Government, particularly those who have, through lean and dangerous years, borne the tremendous fret and fatigue of public affairs. When they are faced, as they are at this momentous crisis, with the bringing in of far-reaching and drastic and courageous measures, it would be a very unfair man indeed who abstained from paying them personally and politically some tribute for what they have done.
If any of us had any doubt before the noble Lord, Lord Pakenham, spoke, that this was primarily a dollar crisis, such doubt must have been removed by what he said. Although those measures which have been announced here and in another place to-day go a very great deal of the way to meet our immediate situation, I am still not entirely satisfied that the long-term causes of the economic disequilibrium between ourselves and the

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United States have been fully faced by this Government or by any of their predecessors. I want, quite plainly, to suggest to the Government that they should address themselves resolutely—I do not know what has happened in the last few weeks—to regaining a greater liberty of action in relation to that fundamental matter known as discriminatory arrangements. The relative agreements which bind us to those arrangements beginning, I believe, with the Mutual Aid Agreement of 1942, are couched in extremely obscure terms. As an ancient English philosopher put it, they are full of patent and latent ambiguities. They have also some very obvious loopholes.
When we read through them—I am beginning with the Unilateral Declaration of 1941, the Mutual Aid Agreement, and the Loan Agreement which your Lordships debated in March of last year—it is obvious in almost every clause that our negotiators have had to build bridges across almost unbridgeable disparities of opinion. I want to suggest that perhaps one of the greatest needs as a foundation for our future economic relationships with the United States is that there should be some dual machinery which will enable us more effectively to explain our difficulties to the United States, and will enable the United States to explain their difficulties to us. We always have the negotiators' reports after these agreements, and your Lordships will recall hearing the late Lord Keynes tell us that he felt, after only two days in Washington, that the distance between us and the United States was wider than the wintry waste of the North Atlantic.
Then again, we hear that in the actual terms of the agreements themselves, they are not only far from satisfactory to the United States but, as we know in this country, far from satisfactory to us. Whenever we attempt to gain some greater measure of agreement with the United States, we are always told that there is either a Presidential election or a Congressional election, or some other political reason why it is impossible for the United States leaders to go further to meet us in the direction that we desire. At the same time as Lord Portal was engaged in the Ministry of Production, I had a very humble Ministerial role there and had something to do with the administration of these arrangements in
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relation to the United States, and I must say I was immensely impressed during those years with the extreme disparity of opinion between us and that great country on questions affecting the Productive capacity and the export trade of the United States.
In The Times of last Monday a statement was made which bears out what I have attempted to say. It was by the very able Washington Correspondent of The Times. He said:
"According to Mallory Browne, of the New York Times, what Mr. Attlee must say concerning Britain's economic situation—
and, of course, what the noble Lord, Lord Pakenham has said to-day—
"'will be the gravest pronouncement since the declaration of war in 1939.' If this should .prove to be measurably true, it is a fair assumption that no more than a few hundreds of Americans will fully understand how such a point of urgency has been reached or comprehend the complexity of causes whereby a loan of 3,750,000,000 dollars, which was theoretically to last until 1951, should in 1947 be near to exhaustion. The part which developments in the United States have played in accelerating the speed at which the crisis has approached will for the average American be secondary. It is upon failings in administration of affairs by the British Government that he will concentrate, and in particular upon their alleged inability to see how less than adequate was their firmness in dealing with conditions within their control. Admittedly this will not he entirely fair. It tales no account of the tact that next to the United States the United Kingdom has made greater progress in peace-time production than any other country."
I should like this suggestion put forward to the Chancellor of the Exchequer and also to Mr. Bevin: that it may be that their long and patient efforts in these fields are not being as efficiently and skilfully backed by our information agencies in the United States as they might be, end that if we are to walk hand in hand together as two nations—as I believe we ire bound to do—we must surely pay some attention to these extraordinary differences that arise between us.
I want to say one word about the question of the discriminatory arrangements, and particularly about the parallel obligation which rests on the United States to reduce tariffs, contemporaneously with the abandonment by ourselves of preferential arrangements. I am hound to say that I have grave doubts whether it is possible for any Government in the United States to make any substantial reduction in the United States tariff at all. We have

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watched the course of events there, how they have firmly resisted any rise, or any adequate rises, in the imports of raw materials and other imports; and how at the same time they have permitted, by the abandonment of price controls, a rise in their own prices amounting to 50 per cent. since the date of the loan to us in the case of those goods which are the subject of our purchases from them. They have invented, or if not invented, at least revived the ingenious protective practice of requiring a percentage of home-produced raw material, rubber, to be included in all manufactured goods. They have established large preferences, I believe, in the case of imports from the Philippine Islands and other dependencies. It was only very narrowly that an entirely new tariff on wool and woollen goods into the United States was avoided, and it may yet be revived.
Therefore, I say it is quite clear that the present policy of the United States, which will be pushed to its uttermost limits, is a policy of high exports and low imports, with tardy and reluctant balancing of the account by overseas loans and investments. I am not putting that forward as any complaint against the attitude of the United States, but I say that our policy must be founded upon an understanding of what is possible for them. Some people say that this policy is due to the attitude of the pressure groups in the United States, but I think that is not entirely a correct appreciation of the position. It is a fundamental part of the national outlook in the United States.
But apart from the national outlook, and the Government machinery as such, the National Advisory Council, which would have to approve any such reductions, is an inter-departmental body in which many voices are heard. Anyone who has had any experience of inter-departmental bodies on which many departments are represented will know what a tremendous task those who form one group on the committee can effectively play in getting through policies to oppose which a large amount of influence can be mustered. And it is not only in the international attitude of the United States but in the inter-State relationships also that this outlook is to be seen. I believe it is correct to say that in ten States there are ports of entry, with all kinds of restrictions. In twenty-eight
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other States there are considerable preferences for the goods and products of those States. Then, in the United States generally, the Press, publicity hoardings, and so on are always lurid with appeals of a. protective character of the "Trade at Home," "Buy Minnesota" type.
I would like to summarize the matter in a short way. Nowhere in the world have restrictive and protective practices been so variously and ingeniously expounded as in the United States. This, of course, is not due to any excessive parochialism in that country. It has a very material and substantial foundation. It is founded upon the enormous, steady acceleration of their productive capacity which has been going on, at a rate which economists know about, for a great many years, and it took a tremendous lurch forward during the war. Though I am not proposing to give your Lordships a great number of figures, I have three figures here which indicate, first the gross national product of the United States in 1939, the gross national product in 1943, and the gross national product today. There are some noble Lords present who like to watch these things and who know the figures already, but perhaps I may be permitted to remind others.
The gross national product in 1939 was 106,000,000,000 dollars; in 1943 it was 187,000,000,000 dollars. That was with 10,000,000 of her best producers absent on military service. That was a rise from 106,000,000,000 dollars to. 187,000,000,000 dollars, and to-day, with the return of her Armed Forces and certain other adjustments which have to be allowed for, the current gross national product is 225,000,000,000 dollars. Therefore, between 1939 and 1947 the gross national product of the United States has more than doubled, a phenomenon in international economics which must be taken account of throughout the world and in particular by Britain in formulating her trade relationships with that country. I think that it is highly probable that there may be some measure of inflated value in that. I have taken these figures from an extremely authoritative source and, as we all know, figures are liable to a certain amount of annotation and explanation in statistics, but I think that is a fair generalization because the figures prove that the gross national product of the United States is to-day double what it was in 1939.

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Therefore, how can they begin to consider admitting large quantities of foreign goods into their markets if they can possibly avoid it? Remember that the penalty ever present in the minds of United States statesmen is the peak unemployment figure which reached twelve millions between the wars, and even in 1939 was eight millions. I am not pretending that they have to find exports for the whole lot, but unless they can find some substantial outlet for this enormously increased productive capacity, they are faced with devastating problems of unemployment. So far as Britain is concerned, we received in the first quarter of this year only 332,000,000 dollars' worth, whereas we exported to the United States exports to the value of 47,000,000 dollars, of which the largest single item was old brass. Therefore, even with that small marginal outlet to Britain of her export trade, there is an enormous adverse balance of trade between ourselves and the United States. So I want to ask the noble Lord, Lord Pakenham, if I am not adding to his many distractions at the moment, what substantial grounds have the Government got to expect that there is possible any material reduction in the United States protective system? I notice that it appears to have been dropped out of the financial agreement of 1945: it was always tagged on to all previous agreements. This time it was not even tagged on, and I think there must be some very frank facing up to this question in our current negotiations with the United States.
It may be asked—and it would be a perfectly fair question—what good purpose is served by emphasizing these differences? I answer that, unless in this country we gain a full understanding of what it is possible for the United States to do in its trade relations with us, and unless they gain an equal understanding of what it is possible for us to do, which they have not yet succeeded in accomplishing, then we can never arrive at a satisfactory common trade policy. I want to say that I regard myself as second to no man in my desire for friendship with the United States. Nothing that I have said must he taken as being critical of the United States. I say with sincerity that in Britain there is a great affection for the United States, and we are bound together by a common ultimate aim and outlook. I think there are greater
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dangers in the world than the American export surplus. We are bound together by so many common factors. I say that people who are bound together in that way might just as well get into the habit of giving each other those ordinary indications of approval or disapproval which will enable them to travel along the same road together, or they are going to have a very uncomfortable time. I do not think that any mealy-mouthed excessive refinement of diplomacy is a very effective method, and no one wants anything in the shape of rudeness. Sometimes I think that the old methods of wrapping it up, if I may use a colloquial expression, have been employed far too much in our commercial negotiations with the United States.
I am certain that your Lordships will feel that the chief duty of any who ask for the ear of your Lordships in this debate is not to recriminate but to make plain what course of action they propose. I have excluded from my remarks Any question of moral incentives. I did not hear anything in the speech of Lord Pakenham on that subject, but I am not proposing to enlarge upon that because I feel that it might come more becomingly from one of longer standing in your Lordships' House. I feel that without that many Of the other steps will Ix in vain.
So that the main proposal which I want to submit—I know others will submit it as well—is that we must regain liberty of action to reconstruct the whole pattern of our trade, and in particular that we should reject the interpretation placed upon Article 9 which prevents us from making discriminating arrangements with our Dominions and Colonic. It is really a monstrous proposition that, if we have the sterling to buy food from our Dominions and Colonies but have not the dollars to buy it from the United States in equal proportions and price, then we must sap our strength and vigour by declining to buy it at all. I cannot understand why, whatever might have been our plight, we have so confused the minds of the American public, who are not too easy to put these things across to, by allowing an interpretation of that to be possible in any Agreement that we might have entered into with them.

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These raw materials and foods form an infinitely larger proportion of our mutual trade than any manufactured goods. I have a figure of the 1947 import programme of £1,450,000,000 of which £1,240,000,000 consisted of food and raw materials. Quite clearly, if we tackle those enormous spheres of imports, we shall do a great deal more than we can possibly do by nibbling at manufacturers and so on, although I do not say that manufacturers should also be excluded. I further say that we ought to be free in certain cases to enter into bilateral trading arrangements. I accept fully—although I do not claim any knowledge; I only listen to the experts themselves, and I have listened to them for a great many years—the proposition that multilateral trade is the grand ultimate aim looked upon as a possibility of achievement over the course of the next twenty or thirty years. I think it is a thing to which we should harness ourselves. But as an aim to be looked upon as a practical proposition in the next five years, I feel it is nothing more nor less than a Utopian international theory. It is true there is some machinery in the International Monetary Fund for making provisions for these emergencies, and I should like to ask what the Government think of those safeguards which make it possible for the International Monetary Fund to declare dollars a scarce currency, and to relieve us from all those obligations. I should have thought that it was pretty plain that the dollar has been a scarce currency for a long time now, and nothing has happened on the part of the International Monetary Fund.
My Lords, I am going to conclude with these words: that I have no doubt whatever that Britain will overcome the present economic embarrassment. It was necessary to get worse, and now we are in a position to say, in the words of the poet whom we share with the United States:
"The worst is not, so long as we can say 'This is the worst'."
Of course, we know that in the United States there is still a considerable amount of misgiving about Britain and the British future, but I think the United States have always been a little prone prematurely to write off the strength and power of Britain, and, at the same time,
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they have not altogether burned the boats of co-operation, just in case. They have still held our hand, and they have proved to be justified in doing so in the past. My Lords, as often before, the world needs the strength and influence of Britain, and I believe, as often before, that Britain will save herself by her exertions and the world by her example.
6.32 p.m.
VISCOUNT BRUCE OF MELBOURNE: My Lords, it is my privilege to offer congratulations to the noble Lord who has just sat down upon his maiden speech in this House. I understand that he is not altogether unfamiliar with a deliberative assembly, but your Lordships' House differs in some respects from any other deliberative assembly in the world. It has the reputation, I believe, of being a most difficult place in which to speak, and I can confirm that from my own experience. But I congratulate the noble Lord upon having so triumphantly overcome those difficulties.
This debate is concerned with the economic position of this country, and I venture to suggest that it is concerned with it not only from the short-term, but also from the long-term view. There has been a tremendous marshalling of facts, and a great deal of information supplied, although by no means all that we ought to have if we are to judge the situation. I think from that it emerges quite clearly that our position is that, at the moment, and for some period ahead as far as can be seen, unless we can take very drastic action we shall be purchasing more than we shall receive from our sales abroad. Unless we can cure that situation this country is running towards bankruptcy, with the destruction of the standard of living which we have built up over generations. That is a situation which is serious beyond words, and to-day we have all waited with great expectation to hear the statement of the Prime Minister as to the action which the Government contemplate taking.
We have heard a summary of that statement in this House. It is somewhat difficult to judge, from a first hearing of so important a statement, as to whether it does meet the circumstances, and whether it is likely to achieve the result we all want to see. But I would say, for my part, that I would be prepared to accept that statement if, on a close examination of it, one found

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that it does not contain any word which implies anything of a sectional nature, that it is the statement of a leader in a national crisis, calling for national unity; and if it is of a character likely to restore that national unity which we had during the war, which is just as essential to-day—a unity which enabled us to accomplish the seemingly impossible in those critical years. That, I think, should be the fundamental feature to such a statement. We do not know whether it has that in it or not, but I pray to God that it has, and that it will rally this nation, because it is vital that we should again become a united people.
On the acid tests of the things that it may contain, it seems to me that it is relatively simple to get down to the fundamentals. As I see it, it is fundamental that at this time we should take whatever steps are necessary to try and bring about an equilibrium between our exports and imports. That means that we must take drastic action internally. We have most certainly at this stage got to ensure that we do get the best utilization of our available materials, and the best use of the labour force that is at our disposal. If we are going to do that, it seems to me we have got to abandon many projects that may be eminently desirable in themselves but which, at this particular moment, we just cannot afford. One has been referred to to-day, the Severn Bridge. It is almost inconceivable that we should go on with that, and employ material and labour upon it at this time. Equally, we have got the question of the electrification of the railway system, and we have got the planning of great new satellite towns. All these things will be desirable at some time, but I cannot believe that any one of them ought to be gone on with to-day. What we have to concentrate on with regard to our imports is that we should only bring in the foodstuffs that are essential for maintaining the standard of living and the morale of our people, and the raw materials which are going to contribute to, and which are necessary for, an increase in our export production. Those tests, I think, have got to be applied to what the Government are doing, and, if they are doing those things, then it seems to me those are the things that are essential.
But again, we have got to have leadership from the Government in this crisis,
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in saying, with regard to the question of its being necessary, as it probably is, ..hat in respect of labour there may have to be some alteration in hours or in conditions and in things for which the Labour movement has fought for years. You can only achieve those things by the Government's determined leadership, by the Government assuming the responsibility, and, if you will, the unpopularity. It seems to me grossly unfair always to be seeing trade union leaders and negotiating with them, because it is inevitable in those circ am-stances that you are forcing the unfortunate trade union leader, more or less, to take the responsibility for the things he is asking his people to do. That is not his responsibility, it is the responsibility of the Government. In that respect it seems to me. we must have real leadership from the Government. Those are some of the things concerned with the short-term policy that we are pursuing, and must pursue if we are going to keep out of trouble. If we find on examination that the Prime Minister's appeal is an appeal to the nation, if it has no sectional flavour in it at all, if we are of the opinion that the action the Government are taking is wise and necessary, then we are all going to respond to it. We must recognize that it is going to mean the imposition of discipline and sacrifice on this country—discipline and sacrifice which the country will have to impose to a great extent on itself, for there is a limit to what the Government can do.
One thing which worries me very much is the statement we have had to-day that there is only £250,000,000 left of the great American Loan, and that the outgoing from that credit in the month of July was £170,000,000—admittedly an inflated figure, as has been pointed out. But £250,000,000 is a very short distance from the absolute crisis, and it is only at this eleventh hour that the Government come forward with definite proposals. In view of the calls on this loan, I suggest that we ought to have foreseen a year or eighteen months ago that this crisis was coming, and taken steps to meet it. I do not accept the explanation that has been given, that the non-recovery of Europe as rapidly as we hoped and the consequent rise in all dollar prices was the cause of the present crisis. If neither of those things had happened, the amount

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at our disposal, in the light of the difficulties we were up against and the task we had to reconstitute our industry and economy, should have caused to be taken months ago such prudent steps as are being taken to-day.
LORD AMMON: My Lords, I am very sorry to interrupt the noble Viscount, but may I point out that there is a Royal Commission at a quarter to seven.
House adjourned during pleasure.
House resumed.

ROYAL COMMISSION.
The following Bills received the Royal Assent:

Companies,

Agriculture,

Transport,

Isle of Man (Customs),

Town and Country Planning.

Paisley Corporation Order Confirmation,

National Trust for Scotland Order Confirmation,

Nazeing Wood or Park,

Borough of Croydon (Rating),

Tynemouth Corporation,

London and North Eastern Railway.

[The Sitting was suspended at seven o'clock, and resumed at half past eight.]

ECONOMIC SITUATION.
Debate resumed.
VISCOUNT BRUCE OF MELBOURNE: My Lords, we must have a definite long-term policy which will enable us progressively to get rid of the restrictions and sacrifices our short-term policy must impose upon us and which will place us in a position to meet our obligations out of our own resources at the earliest possible moment. This involves a wide visioned and statesmanlike policy and a policy which is related to the financial and economic linking which exists in the world to-day. What I want to know, and want to know very much, is whether the Government has any such long-term policy. I do not think I am being unfair
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if I say that there has not been any indication of any such long-term policy that could be detected from the utterances of Ministers or from statements that have been made on behalf of the Government. It is quite imperative that we should have such a policy.
Again, I do not want to be unfair, but I think a criticism can be offered of the short-term policy. There has been an absence of decision, there has been a lack of vision, and there has certainly been an absence of such forceful leadership as would make this country understand what it was up against and definitely point the course that it had to follow. I venture to say, with regard to the long-term policy, that we shall never solve our problems unless we have these things—all these things—and the task rests on the shoulders of the Government.
For a few moments I would like to deal with what must be the basis of that policy. The basis of that policy must be an expansion of our exports. We have to rely on our visible exports as we never have done in the past. The reason for that is that we have sacrificed our overseas investments. We are not getting anything like the same return from our invisible exports as we did in the past. We are driven back upon our visible exports. There has been a great drive for exports. We all encounter posters exhorting the people to work and produce in order to bring about a great expansion of production for the purpose of export. But what I am not so happy about is, have the Government thought this problem right through to its logical conclusion?
Assume for a moment that there is a great response to the Prime Minister's appeal to-day, that we get a new spirit throughout Britain, that we restore the unity of the days of the war, secure increased production, and that that production is sufficient to live up to what the Government are asking of us. It is not enough, however, to produce; you have also to sell what you produce. At the moment, while the world is restocking and re-equipping, and restoring the devastation of the war, we can probably sell during the next year or two whatever we produce, despite the issues that have been raised to-day with regard to the limitation of our exports because we are proceeding to limit imports from the countries concerned.

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Equally, we know the facts are that we cannot physically produce enough so that our exports by themselves can bring about an equilibrium in the balance of payments. If our present plans for increased production succeed beyond anything we have so far had any evidence to support, then possibly in two or three years' time we might be producing enough to bring about that equilibrium through the increase in exports. But by that time the world will have completed its restocking, re-equipment, and restoration of the devastation of war; and then what we have to consider is where are we going to sell those exports? Although the target has recently been considerably reduced, and to-day we have been told we are aiming at only 60 per cent. by the end of next year over our 1938–39 exports, the basis we have all been working on for some time has been that if we were to export to the extent that was necessary to remedy our economic situation and put us in a position to meet out of our own resources our vital and necessary external payments we should have to put up our exports over 1938–39 by from 75 to 100 per cent.
Suppose we reach that position. In a speech I made in your Lordships' House not long ago I pointed to the fact that prior to the war, in the years of the 1930 decade, the markets of the world were not sufficient to absorb the production of the world as it was then. I also pointed out that there had been no great expansion of the world's markets since that date, but that there had been a growing increase in the world's production. The noble Lord who preceded me pointed to that fact and demonstrated the point I made in that speech, that American production has gone up over roc) per cent. over the war years—100 per cent. in that greatest of all industrial and agricultural nations. I pointed out that if America were to avoid catastrophic unemployment she would have to export to the world double in quantity and four times in value what she exported prior to the war.
I suggested that in that situation it seemed very difficult to discover where Britain was going to achieve an additional 75 to 100 per cent. of exports. I suggested that the only possible solution of our long-term problem was that there
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should be a great expansion in the total of the world's wealth by the development, with the aid of modern science and modern technique, of the latent resources of the less advanced countries. I do not propose to bore your Lordships by gong over all the arguments I used on that occasion. All I want to do is to reiterate the view that I then expressed, that if we are to find an outlet for these increased exports that we hope to bring about then there will have to be a considerable expansion in the world's total volume of trade and in the markets that will be available to us. The point I want to stress, or rather the question I want to put to the Government, is: what is the Government's policy to meet flat situation?
I would first suggest, and then I will analyze them, that there are three conceivable policies. There is first the policy to which I have always understood the Government were committed; that is, international co-operation on a full scale through the United Nations; it was contemplated that by that method, through the United Nations organization and its specialized agencies, there should be a great drive to increase the total wealth of the world. The second choice, assuming that full international co-operation were found for some reason or another to be impossible, is that we co-operate with America, rather abandoning the idea of the United Nations and linking ourselves up in some way with America. The third policy, assuming that the situation vis-à-vis America was impossible (for the reasons that were given by the noble Lord who preceded me—namely, that America has certain tariff policies and for political reasons will never accept the idea of receiving the necessary amount of imports to balance her exports and keep anything like an equilibrium) would mean that we should be driven under British leadership to try to form a group of nations with the same objective, but on a more limited scale, of increasing the wealth of the world by developing the resources under their control with our own Colonial Empire, and the co-operation of the Dominions
I do not know which of those three horses the Government are backing. I have always been under the impression that they were backing the first one; that

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is, total United Nations co-operation. If that be so, I would suggest that we must examine the position very carefully because, after all, we are going to stake the whole of Britain's future on whichever of these three horses we back. If it is to be full international co-operation, we want to examine it very carefully, and the Government surely must have satisfied themselves on certain points that I want to put to them. The first point which I would put to them is: Are they absolutely convinced that it will be possible to continue economic and financial co-operation through the United Nations in the future? The second one I want to put to them is: Do they believe that the Economic and Social Council will afford that leadership and direction towards this economic development which we hope to bring about by this means arid which, in fact, the Economic and Social Council under the Charter was designed to afford?
The third question I want to put to them is: Are they quite happy that the tasks of the specialized agencies of the United Nations are sufficiently defined, and that there is adequate co-ordination of their activities and co-operation between them? Finally, I want to put to them: Do they consider that the personnel that is being recruited for the United Nations staff and the staffs of the specialized agencies are of a calibre that can stand up to the tremendous tasks and responsibilities that are going to be imposed upon them? I have had considerable experience of the United Nations and of the specialized agencies, and I cannot believe that the Government is satisfied on those points. But the specific question I want to ask is: If they are not satisfied, what steps are they taking to put these things right, if they are going to stake the whole of our future upon the United Nations and the specialized agencies?
The second alternative that I suggested was that we were rather going to abandon the idea of acting on full international cooperation, and that we were going into the ring in co-operation with the United States. There I want to stress this point, and stress it very strongly: that I believe the United States Administration, even if there is a certain lag in the public opinion in America behind the administration, are perfectly conscious of these problems;
1104
that the Administration want to do the right thing, and that the Administration recognize that it is in the vital interests of America herself that she should afford the maximum of assistance to other nations of the world to try and get the world going economically. But I venture to suggest that it is not a practical basis to have one great creditor nation, even a nation as great as America, as really the sole support of the world's economical position. Politically they will not be able to maintain that position indefinitely. They will never be able to put it over to their own people.
Then there is the reverse angle: that nations are, unhappily, very nation-minded, and there is a sort of grim suspicion about accepting this unlimited aid from one great powerful and potent nation because every nation feels that a country which gets such an economic and financial domination is going to dictate its policy and, in various ways, to interfere with its own internal affairs. I do not believe it is practicable for any individual nation to carry out the task that has to be carried out to-day. Serious as our affairs are to ourselves, they are a relatively minor problem in the scale of the total of world happenings economically at the moment. A question has been raised as to the attitude that America might adopt in connexion with some modification of the provisions in Article q regarding discrimination. I am absolutely confident that there is not a shadow of a doubt what attitude the American Administration will take up. If it is demonstrated to the American Administration that we just cannot buy what we require, whether it is foodstuffs or raw materials, in the hard currency of the dollar, but we can acquire those things to keep ourselves going in the soft currency areas, they would, not in our interests but in their own, say: "All right, go and get it."
Serious as this problem that we are up against may be, I would ask your Lordships to recognize that we are not the only people on earth who have got a problem. The Americans, to my mind, are up against as tough, if not a tougher, problem when they look into the future, than we are. They are up against an incredibly difficult situation. They have advanced their standard of living progressively. They have done one thing after another that makes it vital that they

1105
should keep their volume of employment at the highest point. They have even introduced this idea that there must be parity between primary and secondary industries. The result is that you have wheat in America somewhere up to $2 to $2.20 a bushel, whereas in my own country, Australia, while the farmer would protest to high heaven that it was a great injustice, he would be extraordinarily satisfied with a dollar a bushel for wheat. That is the situation the Americans are up against. Do not always think we are the only people who have troubles. It will not be only American aid that will remake the world. America will not go on indefinitely providing the necessary credits. In any case, what would be the good of providing credits merely to keep people going? You have to provide credits to create new wealth or they will be wasted, as they were after the last war.
I have given two alternatives—complete international co-operation through the United Nations and their specialized agencies, or some special arrangement with America. The third possibility is the question of some sort of grouping of nations with the same objectives but on a more limited scale under the leadership of Britain. We may he forced to that. I hope that we shall not be forced to it; I hope that we shall secure full international co-operation. The picture is somewhat gloomy, but if we get over the short-term problem (and we shall get over it only by great sacrifice), and then plan the future on this basis of a group of nations which are out for these very objectives that we hope to secure internationally, I believe that we have a fairly satisfactory future in front of us.
But we have to decide between these three courses which we can adopt; and we have to decide before the American Loan runs out. If we go bumbling about and not making up our minds, we shall drift on until we come into the most appalling disaster. The third course, of course, would be based on complete cooperation between the group of British nations. On that, being very mindful of an undertaking given to your Lordships when I made an inordinately long maiden speech, I do not want to spread myself, although there is a great deal I would like to say.
1106
I will limit myself to one point on the immediate short-term problem. We are up against a terrific hurdle. We are making a great national effort. Why do we not consult more with the Dominions? The attitude of all British Governments—and, heaven knows, I understand it, because I suffered under it for twenty-rive years—is never to ask the Dominions to face up to anything, frankly to say, "What are you going to do?" The attitude is that: "We must not offend the Dominions; we must be polite to them." Yet they are fearless, outspoken peoples, and they will take care of themselves. They love to be forthright about everything, and for you to say what you want to do.
I venture to suggest. on this short-term problem, that it is a chance to say to the Dominions: "Come on; we are in a jam. What are you going to do? We have saved you many times through history, what are you going to do to save us this time? "Far from resenting it, they will welcome it. We have, perhaps, an opportunity of pursuing that line when, with a perfectly staggering youthful initiative and energy, the noble Viscount who leads this House is going on a great journey across the world by air. There is an opportunity for him to put this whole question of our immediate problem to the Dominions. Perhaps in that connexion I might be permitted to say—and I believe that I am expressing the sentiments of all member of this House—that we wish the noble Viscount every success in this great mission upon which he is embarking. On the other aspect of it, the long term policy, I will observe my pledge not to talk at length, but I hope that I shall have another opportunity to deal with this question.
I appeal to the Government: "Do not get caught again." You may not like an impartial observer saying that you have been caught before, but 1 think you have been. But, for heaven's sake, do not get caught vain. You must have your long-term policy; you must define it quickly; and you must tell the Americans that you are going along that road unless they will join with you m complete international co-operation. There are one or two other observations I want to make before I sit down. One great advantage of becoming relatively ancient, with a certain amount of experience behind you,

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is that you are permitted occasionally to offer advice. If you are not too boring in offering that advice, you are excused for exercising that privilege; and occasionally—I admit rarely—perhaps some notice is taken of the advice offered.
The advice I want to tender is directed to the Government, but before tendering it, I want to make two observations. One is that I have no political affiliations of any sort whatever; the second is that my personal views incline neither towards full-blooded Socialism nor rabid free enterprise. I believe that there are some activities—particularly those connected with vital services—which it is quite appropriate to nationalize. I believe that there are other activities—particularly those concerned with consumer goods—which should never pass under public ownership, but should remain under private control. Above all, I believe that it is imperative that the incentive for individual enterprise and initiative should be maintained. With those preliminary observations, I will offer my advice.
My advice to the Government is: Go slow on your programme of nationalization at this moment. My first reason for saying that is that if you do not you will deprive yourselves as a Government of an opportunity really to think out fundamental problems such as those which we have been discussing to-day—problems which are vital to the whole of the British race. The second reason why I say you should go slow is that if you do not you will crash one of the most efficient and best machines that have been seen, in the world—the British Civil Service. I am not talking now of the hundreds if not thousands, of additional persons who have been taken on in recent years; I am talking of the fundamental British Civil Service. That Service has stood up magnificently to six years of war and two years of continuous and extremely novel legislation. But they are getting very near to the cracking point now. If you impose any further burden upon them, I believe the senior civil servants, who are already showing the strain, will inevitably break under it. I know how serious that would be from an experience of seven years as a Prime Minister, and fourteen years as High Commissioner over here; and particularly during the period of the war, when I was located in the War Cabinet offices. I then had
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a great deal of contact with the Civil Service and I realized the tremendous debt which the Government and the people owed to that Service. My belief is that if you try to go too hard you will break them, and it will be a tragedy if you do.
My third reason why you should go slow on your nationalization policy is that you will divide this nation from top to bottom at an hour when unity is required as much as it was required during the war. My final word is that if you nationalize, or attempt to nationalize, industries that enter into competition in the markets of the world, such as iron and steel whatever the final results of your nationalization may be—and I am not commenting on that one way or another—by introducing confusion and uncertainty into the whole position you will handicap them just at the moment when they are being called upon to make the maximum effort towards producing for export. I apologize for giving my advice, but, as I say, the ancient have certain privileges, and I have exercised them. My final word would be that I believe we can get through all these troubles. The one thing that will defeat us is if we lose faith in ourselves, and there have been signs that we might. We have one asset which is the greatest asset any nation could possess—the character of the British people. It has seen us through innumerable crises during our long and, I venture to say, glorious history, and if we only trust, it will see us through again.
9.3 p.m.
LORD CALVERLEY: My Lords, I take comfort in addressing you because the noble Marquess, the Leader of the Opposition, confessed that he was no economist, and I believe he called himself an ordinary man. Sometimes I think he is an extraordinary man, as I admire his many talents. But that gives me comfort to transgress upon your Lordships' time for a few minutes in putting two local aspects. Here again I am encouraged after listening to the speech of the noble Viscount, Lord Bruce, because he has given us words of wisdom. I can assure him that even if he had been addressing the Parliamentary Labour Party, the Commoners as well as noble Lords would have listened to him with respect, and I believe they would have been prepared to follow much of his advice because it was given not only in a disinterested way but in such a wise way.

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That brings me to the subject of a trade which the noble Viscount, during his period of office as Prime Minister of Australia, did so much to foster. It affects the close relationship between my own county and the whole of what we may call the worsted and woollen textile trade. I confess that I was disappointed at the answer I received from the Government spokesman to-day in regard to the textile trade. The President of the Board of Trade has stated that it is a first priority. It is a first priority because, owing to the energies of our Dominions, we have ample supplies of raw material with which to manufacture beautiful cloth, which is the open door not only to soft currency countries but even to America. If a man has a few dollars in his pocket, he will be ready to invest them in British cloth.
His Majesty's Government has told what is called the textile trade to go forward, and that they can have the fullest allocation of raw materials. On the other hand, we find that the full development of those manufactures is going to be retarded because the Government will give only 65 per cent. of the coal that we need, even in summer; and when we think of the winter, we tremble. I do not want to bore your Lordships with too many figures, but thanks to the Bradford Chamber of Commerce I have the latest figures and some comparative ones. I asked them what we were doing two years after the previous war. I am not going to take the money value because of inflation.
LORD WOOLTON: We have got it now.
LORD CALVERLEY: The noble Lord is certainly correct that we have got far too much inflation; but if he wishes to compare inflations, let him turn to the Government of 1918–22 and examine their record. If he does not then say that as compared with that Government, we really are on the side of the angels, I shall be inclined to sit in sackcloth and ashes.
LORD WOOLTON: I agree that the inflation was greater then.
LORD CALVERLEY: Exactly; and if we do not watch it we are going to have it worse. Here is a chance of not getting it, because we bought that wool, thanks to Australia and other Dominions, on favourable terms. Therefore all we are asking for is more coal, not for any selfish
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reason but to earn more dollars and also to provide ourselves with those necessities which we shall need this winter, owing to this crisis which has come upon us.
LORD PAKENHAM: May I interrupt the noble Lord for one moment. I must have failed in my task if I seemed to disparage the importance of the textile industry.
LORD CALVERLEY: I did not attribute that at all to the noble Lord.
LORD PAKENHAM: I should like to take this opportunity of making it plain that, in the view of the Government, anyone who goes into the textile industry is doing a fine thing for the country.
LORD CALVERLEY: Naturally, with all the preoccupations of the noble Lord, he would not be aware that I put down a question to be answered by Lord Chorley, and his reply was definitely disappointing. In 1920, two years after the end of the previous war, the textile Norsted woollen trade turned out 264,000,000 odd linear yards of cloth. I will not mention its value because it was inflated. As time went on it went down because we had a slump owing 10 that inflation followed by deflation—very much so. In 1938, which was a normal year, we turned out 90,000,000, odd linear yards. In 1946, with fewer operatives—I mention this to show that British industry is not in slow gear altogether—the amount we manufactured was 73,821,000 linear yards.
In the first six months in 1947, it was over 35,317,000 linear yards. But here is the rub. After January of this year (during what one person described as a "heavenly visitation" to punish us British people for our cruelties to them—in other words, the heavy snow, and so forth) the production fell substantially. We are now picking up again, but what I want is to see that the catastrophe which came to Southern Scotland, the West of England, and the West Riding of Yorkshire shall not recur for the sake of 100,000 or 200,000 tons of coal, and that His Majesty's Government shall regard that as a first priority.
We have had one or two speeches decrying the production efforts of the operatives. I listened to the head of one of the greatest motor firms in this country—the Austin Company—making a speech

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which was not a propaganda speech but a factual speech. He acknowledged with pride that in their works, man for man, they were turning out more in the first six months of 1947—except when coal was short—than they did in the pre-war years prior to 1939. Some credit, therefore, is due to the British operative. I wish the figures from 1945 to date, as compared with 1918 to 1920, were available, and then the British people would have nothing to be ashamed of. There is a 12½ percentage of irresponsibles among the miners—and I speak as coming from generations of miners. I tell the absentees what I think of them. Gentlemen who visit the miners talk to the faithful ones who do not absent themselves, not to the offenders. I hope these offenders are going to have a change of heart—because the trouble is largely psychological.
One of the finest Ambassadors we have has been in Australia and New Zealand. He is to return to this country to-morrow, I believe. I refer to Viscount Montgomery. He will have a tale to tell of the spirit of co-operation among the people of our Dominions—a spirit which has been testified to by the noble Viscount, Lord Bruce, himself. We are going to have great news from Viscount Montgomery as to the co-operation of our Dominions, and in particular Australia and New Zealand. In passing, that brings me just to mention what the noble Viscount, Lord Bruce, called his short-term policy. Here I want to apologize to Lord Beaverbrook. I wish he was here. I hope his health is good. He is an ordinary man, but with greater vitality than most of us. I almost wish I had followed his advice when we had the Keynes debate and debated Bretton Woods, because those pure and undefiled economists have led us up the garden path and made promises which have been far from amplified. I do not know whether my noble friend, Lord Woolton, is an economist. I hope not.
LORD WOOLTON: Not after what you have just said!
LORD CALVERLEY: I would rather trust to the ordinary man than to these very learned, pure and undefiled economists, some of whom, like Lord Beveridge, sat at the feet of the mid-Victorian Manchester Liberals. Lord
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Beaverbrook told us what would happen to us if we ratified that clause, Clause 9 of the Keynes agreement. I believe that for the short-term policy it is the duty of His Majesty's Government to say (I believe they have already said it, and I should not be surprised if they told Mr. Clayton when they had the meeting in Paris the other day): "Look here, the Colonies are part of the family; they are grand-children and they are growing up. But our Dominions are our blood brothers, are they are in the family. Loan or no Loan, if we wish to trade with the Dominions, to take their goods, and send them what goods we can, we shall do so." It is the duty of His Majesty's Government to accept that offer.
The Americans are always preaching to us; they are always telling us where to get off. It is about time we told them where to get off—in a kind, Christian way, I agree. One of the principal American papers yesterday said that we were "cry-babies." Well, we are not hard-boiled; we are human. But we certainly are not cry-babies, and we are not going to be cry-babies. So they can put that into their pipes and smoke it! And if they do not want to send us any Virginia tobacco we will do without it. I think that if the Chancellor of the Exchequer, instead of putting that extra tax on tobacco and causing great hardship to our aged, as the coal people have done with coal, had made a straight cut, he would have brought it home to the nation that if they wanted to put their pipes in their mouths they had to suck them and do with less tobacco. Instead of doing that, Mr. Dalton wanted to make the best of two worlds. He wanted also to bank on the bad habits of the people and thus gain extra revenue. I disagree with Mr. Dalton.
The other night—I will not keep your Lordships very long—I dreamed that I had a reincarnation.
EARL DE LA WARR: It must have been a nightmare!
LORD CALVERLEY: It was a nightmare, because I dreamed I had been converted into a Conservative Peer ! I also dreamed that instead of Labour sitting on these Benches it was a Conservative Government—the noble Lord will perhaps admit that that is another nightmare—

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and that the Conservative Government, which had been returned in my dream, were faced with hordes of rabid Labour Peers assailing them for what had befallen them. So I got up and I made a speech. I apologized to the then Chancellor. I said that he had got "a song in his heart," but that I would rather he had a song in his heart than the opposite. I then quoted the President of the Board of Trade from the speech of one of our great statesmen who said something about Sir Stafford Cripps' attitude being one of "strength through misery." This is where I woke up!
Noble Lords opposite tell us that we have not been thinking of this problem and, if my noble friend's "Back Room Boys" will only reflect, they have been preparing this propaganda. We have it in Yorkshire. I will send a few of the poems from our local evening papers, and then my noble friend will admit that it is about time that some of his propaganda merchants piped down. It is a great asset to the Labour Party, because we win votes by it, but that is by the way. But then we have had this thrust down our necks for months. We have had posters, which I do not like, on the walls saying that we have got to work or we want. Then, thinking what I might say if I were a member of the Government, my mind went back to August, 1939, when I was in the capital of the U.S.A., in the Senate house. I was being shepherded by a gentleman of the name of Mr. Truman and one or two of his Republican friends. The House was deserted, and the place was littered with paper. They had been having a paper snowstorm, because they had gone on their holidays before passing "Cash and Carry." They did the same thing with Lease-Lend; they carried it when they were compelled to.
I wish my voice could reach America. In the same way, they deferred passing the Keynes Agreement for, I think it was, nine months. We passed the Agreement pretty slickly and sharply, but if we had known what we know to-day, that they were going to defer agreement for nine months, until after the controls had been taken off in America, and that for every dollar, or every zoo cents., that we had borrowed from the Americans we should receive something in the nature of only about 55 cents.—and that is one of our problems—we would not have been so slick.
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I sometimes wonder what our Allies would have called us if we had lost the war. We have Czechoslovakia sending 4,000,000 Germans into our Zone. The population in our Zone, I believe, in Germany has been increased by 7,000,000. That is where the dollars have gone, because we are having to feed these people. It is a great tribute to the British nation that they come to us, but it is rather inconvenient because, as I Lave vulgarly put it, Britannia has only two breasts in order to suckle the infants, and I should think that we British people have any amount of children palmed upon us. It is the result of the British character and life which makes these refugees trust us. Already $700,000,000 has gone out of the kitty in fourteen days, because our Allies and other so-called friends, owing to the freedom of convertibility which came into operation after July 15, have claimed to be paid out in dollars. That ought to be recognized. I am grateful to The Times for printing a letter from Mr. Nicholas Davenport. We simple people do not understand economics, but he made the matter perfectly plain. If Lord Layton and other great newspaper magnates had taken the opportunity to print that letter in the provincial evening Press, not in the national morning newspapers, I would have given them 11 the newsprint they want, because it did enable plain people to understand the position. I am personally grateful to that gentleman, although I know nothing about him.
I do not pretend to know much about the long-term position, but I do know that one of our greatest assets, as the noble Viscount, Lord Bruce, very properly said, is the integrity of the great majority of the British people. Therefore the Government should not put their money on the United Nations alone. At the present time the danger is that the United Nations are going to be a fiasco and a farce like the League of Nations. The Government should tender to Mr. Ernest Bevin the advice not to enter into negotiations with the U.S.S.R. until Mr. Molotov and Mr. Gromyko have a larger vocabulary than they at present possess. We want the friendship of the Russian people. They think we are down and out. They make a mistake; we are down, but not out. We offer friendship to the Russians on equal terms and no appeasement, and sooner or later

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I hope the Russian people will realize it. That will be another great help to us in solving our difficulties.
EARL DE LA WARR: My Lords, I imagine that most of our minds are in much the same state and we are all looking forward to reading the speeches of the noble Lord, Lord Pakenham, and the Prime Minister to-morrow in order to clarify our views on what has really been said, because, as Lord Pakenham will realize, it is extremely difficult to carry in one's head all the impressions from a long speech of that character. I imagine we are all asking much the same questions as were asked by the noble Viscount, Lord Bruce. Are we quite sure that in every line this declaration by the Government is non-sectional? Are we quite sure it is adequate to the situation? Will it impress our people with the gravity of the situation? To what extent will it balance our adverse trade balance? To what extent—and I think this is a point the noble Lord did not mention, but it has raised a great deal of attention, and rightly, in the debate to-day—are quite unnecessary tasks now being carried out to be stopped?
A great deal of attention has been given already to the project of a Severn Bridge. Only two days ago I was motoring down to Portsmouth and was horrified to find that a fine wide road, along which one could go a great deal too fast as it was, was being doubled. Who wants that double road? Who thinks that this country can afford a road of that character at the present moment? I have no doubt that every one of your Lordships in this House could duplicate that experience.
There are many points on which I would have liked to address your Lordships to-night, but there is one very important statement that has been made by the noble Lord, Lord Pakenham. I think it would perhaps be useful if one of us were to restrict himself to dealing with that particular point. I refer to the noble Lord's statement on agriculture. Even so, I should have liked to widen the field and touch—as, indeed, it is essential to touch—on the contribution which the Commonwealth and Empire can make to our national food policy. I should have liked to follow the noble Viscount, Lord Bruce, on that. However, with the number of speakers there are on this
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debate, it is probably better for each one of us to concentrate on particular points in which we feel we may have some small contribution to make.
I think all of us will have welcomed the words with which the noble Lord, Lord Pakenham, opened his remarks on agriculture. He spoke of "this most fundamental point" and "the greatest potential saver of dollars." I think I am right in saying that never before in the history of this country have phrases such as that been addressed to agriculturists in time of peace. We are used to being wooed in time of war, but it is rather a new experience in time of peace. But I really could not quite follow the noble Lord in presenting this as a great emergency scheme to meet a sudden situation which had arisen. Here, in August, 1947, after two years of allowing the whole of that magnificent machine, built up during the war, gradually to run down—after allowing our production quite steadily to decrease for the last two years—we find that His Majesty's Government suddenly realize that now is the time to increase agricultural production.
In the present position of the country we do not want to look back too much—above all, we are now interested in the, future—but at the same time it is not unusual, in estimating future form, sometimes to give just a little study to past performance. In looking back on the debates of the last two years, I find that the warnings which were being given in this House started in December, 1945. During a discussion on the long-term policy statement then being made by His Majesty's Government, I find that I said:
"we are told that the country needs food, and we want to be allowed to play our part. I can assure the noble Lord that if we are given the tools we are determined to do our best to work and serve the interests of the country."
I then went on to ask for labour and houses, and the various tools that we needed.
Looking forward a little I find that in Tune, 1946, this House made an appeal to His Majesty's Government to give a clear lead to the agricultural industry, in the form of detailed production requirements for a minimum period of four years, based on an estimate of the food needs for the country for that period. I find that in December, 1946, I ventured to move a Motion: "That this House is convinced

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that agricultural production at home, both immediately and for many years to come, is essential for safeguarding the food of our people."
During the debate the noble Earl, Lord Huntingdon, made this rather startling reply:
"The truth, however, is that there is no possibility of a further large expansion unless we extend agriculture on to unsuitable land or make calls on materials and labour … and on fertilizers and machinery which would be out of all proportion to the expected benefits."
In February of this year the noble Lord, Lord Teviot, moved a similar Motion, and only three months later—I think in May, 1947—the noble Lord, Lord Woolton, rose to call attention to the growing danger of the serious shortage of food in this country.
This is a sad and gloomy story. The most sad and most gloomy point about it is that you cannot gear up the agricultural machine at short notice. Therefore, we have to start off this discussion with the knowledge that agriculture can make to the present plight of this country on the assumption that it will be twelve months, at the earliest, from now—and that is assuming that the plans of the Government are very much more advanced than I rather suspect they are—before we can make any effective contribution. Having said that—and I felt that I must say it—let us say now that we are finished with the past; that the essential strength of this country is that in times of difficulty we do rally and we do our best to help the Government through, no matter what that Government may be nor what may be their past misdeeds. Therefore, I would start off by saying to the noble Lord, Lord Pakenham, when he asks the agricultural industry for an increased production of £100,000,000 a year—I think it is by 1951—that that can be done, and that he can count on every member of your Lordships' House—I have not had a chance to consult them, but that is not necessary—who has any power or influence in the agricultural world to do his best to help the Government achieve that production.
I am afraid that there is another "but." I should remind the noble Lord that it is not a very hard task that he has set us and, speaking for myself, I
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wish it were a harder one. am not sure that the noble Lord himself realizes that all he is asking us to do is to go back over the last two years' loss of production. He mentioned a figure of 20 per cent. It is very difficult to get an accurate figure now, but most agriculturists would agree that what we have lost during the last two years is just about 20 per cent. of production. Therefore, by this great effort we shall get back to where we were at the end of the war, and to the point from which Mr. Llewellin and Mr. Hudson planned in 1944 a further increased production in post-war values of something between £140,000,000 and £150,000,000.
Therefore His Majesty's Government are asking the agricultural industry to produce £150,000,000 less than they would have been asked if the Llewellin-Hudson Memorandum had been adopted. I should be much happier if the request were of a larger order. I hope that in asking for £100,000,000 they are virtually saying that the industry must do its best and also that the Government will do their best to help the industry. I hope and believe that they consider the £100,000,000 as a minimum. I, an I think other noble Lords, would be much happier if we could be told this by the Government.
On one very important point I rather think the noble Lord, Lord Pakenham, went a long way to meet what I am now going to say. I am assuming that we are going to have the tools for the industry. The noble Lord said a good deal on this point that we may find to be satisfactory, but it is vitally necessary on all these points to be specific. What does one mean by tools? It is difficult to assess priorities, but in the first place I would put feeding stuffs. The Minister has made a welcome announcement that we are to have increased supplies of feeding stuffs. Speaking for myself, I would not be prepared to embark on a campaign to persuade farmers—particularly the small farmers of this country, who are the men to give us the quickest supply of pigs and poultry, incidentally without any extra labour cost, because the pigs and poultry are largely looked after by the farmer's family—to increase their population of pigs and poultry unless I had a full assurance that they would not be faced once again, having responded to the

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appeal, with the statement that no more feeding stuffs could be obtained. That has happened twice before, and we need a definite assurance from the Government that the supply of feeding stuffs will be sure and certain in the future.
Then there is the question of machinery. A short while ago the agricultural machinery trade was pleased to hear of a large allocation of steel which the Minister of Agriculture had been able to obtain. Unfortunately it was only an allocation, and not a supply. They are not getting the steel, and I would ask the noble Lord to look into that situation and decide what assurance he will give with regard to increased support for the agricultural machinery manufacturer. I have just had a letter handed to me by a noble Lord who yesterday received a communication—I will leave out the name of the firm in question—stating that they had been requested to deliver certain machinery but unfortunately, owing to the steel supply position, they were unable to commence production until the end of this year. Only yesterday I was going through a very long list of machinery that was being purchased by a friend of mine who is starting farming, and on almost every item it was stated that delivery was going to be something from six to twelve months, and on certain items even two years. The noble Lord, Lord Pakenham, will realize, I am sure, that I am not being difficult when I say that there are farmers all over the country who have been wanting to do their best for the last two years to increase production, and have been unable to get the machinery; and many of them have actually had tractors, and other machinery too, standing idle for months in their farms, unable to work for lack of spare parts.
One way in which the Government could make us feel convinced that they mean business in this matter of supplying agriculture with the necessary tools would be to stop this insensate export of agricultural machinery at a time when our land is lying idle for want of it. I have here some figures of agricultural machinery exported during the last five months. I work it out at between 21,000 and 22,000 tons. Only yesterday we were told that 3,200 more tractors had been exported during the second quarter of 1947. Are
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the Government going to stop that or are they not? I ask that very definite question, and I should be grateful if the noble Lord could give me an answer tomorrow. The noble Lord made a very welcome announcement that His Majesty's Government were expecting to find us another 100,000 men to work on the land. That is very welcome. But I do not know how they are going to do it, or by what power. I fully appreciate the difficulty.
LORD PAKENHAM: If I might interrupt the extremely interesting and helpful speech of the noble Earl, I do not think I ever said we were going to do it. We are certainly going to do everything in our power to help the agricultural industry to obtain the men.
EARL DE LA WARR: I think the phrase was "We need 100,000 men." I am not blaming anybody; but where is it going to be possible to find the labour to raise this £100,000,000 worth of food that is going to save exchange? And if the Government do not get the 100,000 men, we can take it that that cannot be done. I will go rather further. I rather question whether the Government are going to be able to find the 100,000 men; but if they do, I wonder if the noble Lord realizes that it will not do anything more than replace the 100,000 Germans—that, I know, is an approximate figure—that we are going to lose by next year. At the very best, if the Government are successful in getting this 100,000 men., we shall be in precisely the same position as regards labour as we are at the present moment. I feel I must seem extremely ungrateful to the noble Lord, Lord Pakenham, who I am sure thinks he has made a very helpful statement; but it is only right and just to the House and to the country that I should point out these matters.
We have been given welcome news of a real priority for agricultural housing. We shall obviously want to hear details of the scheme and how far those houses are really going to be built. I think that during the last eighteen months, or nearly two years, 7,000 houses have been built in rural areas, of which under 2,000 have been allotted to agricultural workers. Even if we had the full 7,000, it would not have gone very far in housing the extra 100,000 men that we

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need. I suggest to the noble Lord that the progress that is made in building houses in rural areas will have to be immensely speeded up if it is going to make a real contribution. I do not want to spend much time speaking about fertilizers, except to say that this Spring I am sure we lost a great deal of production through not being able to get nitrogen at the right time.
I have one last word to say on the subject of prices. I welcome what the noble Lord said on that matter. He said there was going to be a new statement by the Minister during this month or very shortly, giving a general scale of inducement prices—I. am not sure whether I am putting words into his mouth or not—but I hope that in assessing these prices he will keep in mind the fact that the farmer at the present moment is having to face a great deal more than the extra cost of wages. Every single item that he buys for the farm to-day is up in price. In the case of machinery, for instance, the price of £159 was quoted to me the other day for a binder; I would have expected to buy it for £60 before the war. That is the scale as regards everything that has to be bought. Prices have gone up. This is not merely a wages problem.
There is one other point which I feel I must make. A great deal has been said lately by noble Lords on every side of the House about the need to transfer our efforts from arable cropping to livestock production. I quite agree with that in principle. I feel, however, that it is an understatement of the problem. At the present moment the position is so serious and so difficult that we have not got a choice before us. We have got to do both. I would not like to ask farmers to embark on a large scheme of increased livestock production without some assurance that they were going to be safe as regards their foodstuff supplies. I have in mind a very large scheme of anything between 750,000 and 1,000,000 acres to be ploughed up this autumn and next spring, mainly to get feeding stuffs for our increased livestock. Only in that way can we really be safe in increasing to any considerable degree our pig and poultry population. We have had far too many disappointments from overseas as regards those supplies to be able to proceed at any price.
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I would point out that it is already August. If we are to have a big ploughing up of land, there is a great deal of land—providing we have enough rain to enable us to get the plough into it—which ought to be ploughed now. It certainly ought to be ploughed next month, and the noble Lord can take it that every week we lose now there is going to be, to that extent, a smaller effort with which to help feed ourselves after the next harvest. We must be told now what is wanted of us. Is the Government thinking in terms of an extra. amble or tillage area of 750,000 to 1,000,000 acres? If so, what crops are they thinking of? Are they going to give us national targets or are they going to give us county targets as we had during the war? I know that many noble Lords do not like these targets, but from my experience during the last war, even though a target has something to be said against it, it gives people something to work for, and I personally believe that it is necessary. We must have this more definite information for which I have already asked, about the resources, the machinery, the labour and the fertilizers that are going to be at our disposal.
This scheme of getting increased productivity from our land can be made a success only if it is planned and conceived on a long term basis. I am quite sure that the real background reason why we have not had increased production lately is that somewhere or other in the back of the mind, whether it is of the Board of Trade, the Treasury, or some other Department, is the idea that this is a crisis and things are going to be all right in a year or two, and that there will soon be a bumper harvest in the United States and Canada. How many times have we heard that lately, and so have never got going on a real plan for increased food production here! I believe that this word "crisis" is a very dangerous word, if it suggests a problem that is temporary. Certainly, with regard. to the problem that I am discussing, it is merely a crisis in the sense of a permanent change in national economy coming to a head. Nobody put that more clearly flan the noble Viscount, Lord Bruce, when he was speaking of the export future of Haas country. Nobody put it more clearly in pre-war days than the noble Viscount, Lord Addison, when I remember him using the phrase "Free Trade is as dead

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as Queen Anne." I remember him saying it when he was my Chief at the Ministry of Agriculture.
One further point is that, after all, we had a £10,000,000 deficit on our balance of trade the year before the war. This is not just a crisis problem, but is a problem caused by the permanent change of the economic position of this country. I feel it is worth mentioning that point in order to emphasize the fact not only that it is safe policy but that we must, from every point of view, take the decision now that we are going in for a long-term development of this industry. Everything that we can do in agriculture takes time. All the developments that are needed are going to take time to make. It is going to take a long time to get a return on the capital that will be invested in the industry, if we are to bring about this large increase in production.
Therefore, my Lords, I close by saying to His Majesty's Government: "Give us the lead. Give us the targets, the quite definite targets. Give us the tools. Above all, do this now; and give us details of what you want, how you intend to provide the tools, and when." My only regret about this statement is that the intention, apparently, is to return only to the 1944 level of production. But it is a tremendous advance on what we have been enduring during the last two years—the neglect of our industry, the refusal to give us an opportunity to contribute what we felt all the time we could contribute to the country. I assure the noble Lord, once again, that he can rest confident that he will have the wholehearted support not only of this House but of the whole industry.
9.59 p.m.
LORD AILWYN: My Lords, the noble Earl will forgive me if I do not follow him in his most interesting speech. I only wish I knew any subject as thoroughly as he does the subject of agriculture. Neither shall I attempt to follow other noble Lords in discussing those very intricate monetary problems which I feel in no way qualified to discuss. The few remarks which I shall venture to make, with your Lordships' permission, are more in the nature of reflections, the reflections as I believe, of the man in the street, the man not interested in Party politics
1124
or polemics, but concerned only, and mightily concerned, with the revival and resuscitation, and, indeed, the survival of this country.
When the country is in a jam, as it is at present, Party recriminations obviously can only waste time. They are a disservice to the nation in that large numbers of the best brains in the country are preoccupied in ascribing the evils of the present time to the sins of the Party to which they do not belong, instead of being wholly concentrated on finding a solution to these evils. It can be of no practical use, as your Lordships will agree, for the Labour Party to point to the reactionary doings of the Conservative Party in years gone by as being responsible for the present misfortunes. It is equally of no value for the Conservative Party to revile the Labour Party and the present Government for the ruin facing us. The man in the street says, "A plague on both your Houses!" The Socialists are in power, and are likely to remain there for some considerable time, so far as one can see, unless indeed, the Government are prepared to proclaim a state of national emergency and invite members of other Parties to come in and help solve the difficulties which may well be beyond the power of any one Party to resolve.
Many of us may disagree with large numbers of the measures being forced through Parliament. I myself think that the Government are ill-advised in putting through these large measures of nationalization and the social service schemes at the present time. I think they have failed, and are failing, to put first things first. They are more concerned to honour the promises they made to their Party in the past, ignoring the fact that the economic condition of the country at that time was vastly different from what it is now, than they are to find out at all costs the solutions of our problems by the obvious means of harder work and greater production, and get the country on its feet again. I think all this is deplorable, but there is nothing we can do about it. These measures are well on their way, for better or worse, to the Statute Book. We have to find a cure for the fundamental sickness from which the country is suffering, the loss of that will to work and pride of job in which I, for one, used to think the British workman excelled. I say without fear of contradiction that no country can

1125
long survive a malignant disease of that nature in the very core and centre of its being; and ruthless measures, not soft words, are required for its eradication. It is surely on that fundamental problem that the best brains of all Parties should get together and contrive a solution, for, let there be no mistake about it, the country is in dire peril, and there is no time to lose.
One wishes to level no accusations against any particular trade or branch of industry, but, as everyone knows, coal is the very essence of the problem. One sympathizes very much with the coal-miners' lot. I can imagine no more uncongenial occupation. But conditions today, both in matters of wages, hours of work, and equipment, are a vast improvement on what they were, yet the output per man hour is less than it was. Where are the Jack Lawsons of to-day? Any of your Lordships who do not happen to know that gallant little man I would recommend to read his book, A Man's Life, a veritable classic of life in the mines as he lived it forty to fifty years ago. We may well ponder why it is that the mining community to-day appears to be bereft of great hearts like that little friend of mine.
Why is it that the bricklayer, who used to lay his boo, 700, Boo and even 1,000 bricks a clay, is to-day laying his 250 to 350? I am glad that the noble Lord, Lord Quibell, is not in his place to get on my tail, but if he was I would hastily say that I am referring to my own part of the country. But as that is a very fine part of the country indeed, I have no reason for thinking that the conditions are not the same in other parts. A building contractor friend of mine was discussing his difficulties with me the other day, and deploring the fact that protests and entreaties to expedite output were all utterly useless, while any stronger action resulted in men just walking out and going elsewhere. Overtime is in general, as your Lordships know, forbidden by the unions; and, in any case, there is little enthusiasm for it owing to the high rate of wages and to the liability to tax. I have just had two painters carrying out a job of work for me—yes, I had the licence all right—and the leisurely way in which they plied their brushes had to be seen to be believed.
And so it goes on—every job of work costing twice as much as it should, and
1126
taking twice as long to complete as it should. Can it he—and one says this with great reluctance—that only a need of unemployment will once more bring the British workman to his senses, and stimulate him to do a decent day's work? It is certainly a melancholy thought that the country may now be suffering from too much instead of too little security of tenure in employment. What are they teaching in the schools? Is the dignity of labour and the vindication of existence by an honest day's work ever mentioned in the curriculum? Is it heresy to inquire just where all this education is leading us? Is it making for greater happiness and contentment? Watch the faces of Mal and women who pass by, and tell me if you see a greater degree of happiness and contentment on their faces. Does not one rather see depicted there frustration, boredom, indifference and, not infrequently, a kind of sullen discontent? At a time like this, when the ship of State is in danger of foundering, the Government chooses raise the school-leaving age—the most desirable measure when normal times return to us, but surely not now, of all times, when every available pair of hands is urgently required to speed up production.
To me it is plain that if we are ever regain our place in the world, if we are even to survive, there has got to be an immediate revision (I am not forgetting that the noble Lord, Lord Pakenham, has given us some information on this) of the present structure of wages and hours of work. If a ship is badly holed it is no earthly use manning the pumps until you have placed the collision mat over the hole and partially stopped the leak. The leak in this case, in my view, is the high rate of wages and the short hours of work. Until you get clown to this basic ill, and bring in a universal system of payment by results, and an end to all restriction on hours of work, you will get nowhere.
I know the difficulties. One sympathises with the Government very greatly. Immense courage is required to admit any sort of failure and to disappoint expectations. But the country is in danger and, as the Sunday Times said the other day, the nation needs rousing, not soothing.
Moreover, let us not forget that the world is watching us, and in particular. America requires to be satisfied beyond a peradventure that Britain is pulling her

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weight. When we faced the supreme crisis eight years ago a National Government was formed to see the country through that peril. Many of us regretted the break up of that Government. To-day the country is in no less danger, and I venture to say to your Lordships that the case for an all-Party Government to meet this peril which we are facing is, to my mind, an overwhelming and unanswerable one—a Government that will speak for a united people. That is all I have to say. I am well aware that there is nothing profound in any of these observations but they are, I believe, the reflections of the man in the street, or anyway the man living down my street.
10.12 p.m.
VISCOUNT RIDLEY: My Lords I would like to make a few suggestions, not on the international or strictly economic aspects of the troubles which we are discussing, but on the internal machinery to put into effect the kind of things that the Government have stated as their objectives. I was not exactly clear as to what the noble Lord, Lord Pakenham, said in the course of his speech. It was a little difficult to follow in every detail, as I am sure he will appreciate. But he did say, I think, that two of the things which the Government had decided to do were to work for increased production and increased exports. At any rate, that is an extension of the late policy of the Government and a line upon which there seems to be at any rate only one way to proceed. It is not easy to go into much more detail than that when you are considering the actual means which any Government may use for increasing productivity in any range of industries, and for enlarging the percentage of the amounts we actually export. I have for some time noticed a certain amount of the interaction between Government administration and industry itself. During the war and since there has been a Government regional organization in each of the areas. With one of those I have been connected for a long time, so I have had some opportunity of seeing how, at ground level, it works out.
As a background to considering these matters one should remember that over quite a range of productive industry capacity has largely increased since before the war. I do not say present output,
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but productive capacity has increased over a considerable range of the engineering industry which was largely re-equipped and modernized during the war. The potential is higher than it was. In steel making also the potential is higher than it was, and similarly in other basic material production. I exclude coal, as presenting a very special problem, but is it really true to say that when materials and fuel are available the output of industries which produce the basic materials on which we must live is in relation to the capacity, which is universally known? I do not think that is true. I believe that in most of the primary important industries the capacity to produce and the will to produce is still there, but it is not possible to see effective results unless the materials and the fuel can be obtained.
I have never believed in this campaign for higher production. There have been two Government campaigns recently: there was the production drive and there was the export campaign. One has never felt that there was really any sound sense in it when one knew very well that it was a matter of hand to mouth—that it depended on whether certain materials were there or not and whether there was to be heat, power, and electricity. That, to my mind, is the problem. It is a question of providing the material, and then you can go ahead. I am convinced that results will be achieved in that way. I know it is not so easy to find the material straight away, but I do make the point, because I do not believe that, so far as the ordinary working man of this country is concerned, the will to produce is absent. I am quite certain that we shall appreciate that when conditions become more favourable.
But in saying that our productive capacity over quite a wide field has gone up, one must remember also that the demand has gone up very much more. We have got quite a large, or at any rate substantial, export programme of capital equipment, and we get demands for capital goods of all kinds on Government account. There are a very large number of men still in the Services who have to be supplied with arms and equipment for training and for all their various needs. Lately, in the last year or so, the number of men engaged on production for the Armed Services has not been shown separately in the returns published by the

1129
Board of Trade. I do not suppose it is possible to separate them with any sort of accuracy, because many firms are engaged both on this production and also on what used to be called civilian production. But it seems to me quite clear that a good deal of manufacture must still be carried on in that direction. We were told this afternoon, I believe, that the overseas Forces would he reduced by 133,000 men, and as a result the total Armed Forces were to be reduced by 80,000. That means a very slight increase in the number of men who will go into industry and a very small reduction in the amount of the effort required to keep our Armed Services maintained.
LORD PAKENHAM: I ask the noble Viscount to look carefully at what I said on this subject earlier to-day. It is not very easy to explain this matter by question and answer.
VISCOUNT RIDLEY: I do not want to misquote the noble Lord, but I think I shall be right in saying that recent decisions on this point are riot going to mean a great reduction in the number of men who have to he maintained and supplied. I will not, however, put too much emphasis on the figures until the situation has become clearer. Again we have to remember that a large amount of Government building, and local authority building also, has taken place, and various roads, bridges, and tunnels are being constructed. New factories also are being built—factories which we most desperately wanted to be built in what are now called development areas, where we used to have bad unemployment. Noble Lords have referred to the Severn Bridge. That is one example of building by Government expenditure. We also have the Tyne Tunnel. I was one of those who agitated for the Tyne Tunnel for many years; and with great joy we managed to get it approved. But many of us had considerable doubts whether it was right to start it, as it has been started, within the last six or seven months. It is one of those things which one felt had much better be put off for the time being.
All these are necessary things and we want them; but we must remember that they add up to men's time and to materials. And—important materials at that. It became rather the habit in wartime to say it did not matter what a thing
1130
cost, it had to be done; and it was done, arid money was not taken into account. But some people have forgotten that money has, if an indirect, a very clear relationship with the time of men and. women in output, and also with time in. getting and distributing raw materials. I think this should be a lesson to us, and we must in fact choose which things are most urgent. I feel most strongly that we have not lately paid enough attention to the re-equipment of our own productive industry. A large range of our engineering capacity was modernized during the war, but there are a lot of other industries; there are such matters as the expansion of the steel industry. I think this summer's output of 13,500,000 tons is the highest achieved by that industry. It is hoped to raise it higher; hut it will not be possible unless the plant has been ordered in time.
What has delayed the ordering of sonic steelworks' plant? The fact that there has been a reconsideration of the whole programme of the iron and steel industry following on the appointment of the Government Iron and Steel Board. A proposal was prepared by the Federation for the modernization and rebuilding of tie whole industry, prepared by the Federation. The Government said they wish to review all this from the point of view of priorities—.and indeed I do not think one could say they were wrong. The result is that the Government Appointments Board has had to go through the whole thing from the beginning and approve each item. I realize that men appointed to such a position of responsibility could do nothing else but consider it from the beginning, to evaluate its problems and decide an the urgency of each, as well as the general position of each of the parts in the whole plan. But be result is that some time has passed and there are a large number of pressing projects of re-equipment and modernization for which the plant has not yet been ordered.
It is an unfortunate fact that quite a lot of this plant for steel making, and more especially steel rolling, has to come from America. Have we left ourselves in a position where we are not going to save dollars for expansion a few years ahead? I hope not. I fear we may have lost some time in that way. I would have liked to see some hard thinking about the

1131
things which we must buy from abroad with dollars and which we must have to increase our own productive capacity. That, to me, is the most urgent thing alongside the necessities which we must buy in order to keep alive. We shall not be able to build up this capacity for production and export unless we do that.
I consider also that we should look very carefully into all the miscellaneous items of imports. I think that was mentioned by the noble Lord who spoke for the Government, and I have no doubt it will be done. Some things are very difficult to understand. One sees the importation of utility furniture. It is difficult to understand why the equivalent amount of timber could not be imported and processed in this country. One hears of importations of all sorts of minor goods, not in themselves fundamental. That seems to be completely divorced from the main policy of making ourselves economically independent.
I am bound to say I feel some disappointment as regards the policy which was announced to us to-day although one must not be critical without having really been able to see it and study it properly. It is true there was a certain amount of positive policy about it. I would have liked to see more. I would have liked to see an intention by the Government to replan their conception of how they are going to bring about this increased production and exports. I think something is needed to put clearly in front of the people who are managing and working in production, and in more simple ways than those adopted up to now, what is required of them.
We want a new outlook in the administration of the controls of raw materials and allocations and so on. There is too much of the mentality of rationing and of making things go round. We want to get a feeling in everyone's mind that we are going in for an expansionist policy now, and we are going to get something going. I think it is an inherent idea in our Civil Service administration that everything must be fair in regard to certain commodities which enter into the manufacture of one thing and another, and they cannot be used at the rate that they are required because there is not enough. Then what happens? Every man is allocated a quota—a percentage of what was manufactured
1132
in 1939 or a different percentage of what he was allowed to manufacture in 1941; they are all put on the same kind of level and it is fair and right that they should be treated all the same. But the result, as I see it, is that none of them really gets what he wants, and therefore often there is not enough for the process to run properly. Would it not be more economic and more productive to make a new conception of distributing these commodities and to put in more modern and efficient plants to help people and say: "Here is your material, and your target is so much. You shall have the material, and it is not only an allocation: here, is the stuff."
The word "allocation" has become a menace. One hears it so often—"The coal allocation for the summer of 1946 was so much; the actual amount received was something quite different, and so much is going out again in the next month." Those are utterly meaningless figures. What is required for people to plan production is to know what they are going to get and to be certain of getting it. To me it would be far more sensible to try and get certain more modern and efficient units in each industry, to get them going properly and to keep them going. That is quite a new way of looking at these things, but I believe that is the kind of line of thought that the Government ought to study. You may say, "That is very hard on the firms that get left out." But what happened during the war? There was a concentration of industry over a wide, range of manufacturing directions. Firms were closed up altogether; they were just kept ticking over on a part-time basis, doing practically nothing but just retaining their name in the hope of starting up afterwards. It was thought to be worth it because everything was put on war production. I do not think anybody wanted it very much, and a lot of people were disappointed that their undertakings were practically stopped, but there it was, it had to be done. Is not that the sort of thing that we ought to be thinking about now?
That would mean, to me, also a simplification of the approach to all these problems. All your Lordships will be familiar with the kind of correspondence that has to go on to get a licence to manufacture a little more of this, or to be allowed a permit to buy some scarce piece of plant, or something like that. It takes

1133
too long, it is too difficult, and there is too much backwards and forwards correspondence. Would it not be better to do all that kind of thing with fewer but better people in the subordinate Civil Service jobs? Could we not get more people in a position to write back an answer saving "Yes" or "No" with some good reason for it? That would effect a saving in manpower in those employed in working these regulations. I see it also as a saving in manpower of the people who are trying to get on with their business, trying to obtain approval, and so on. I feel strongly about it because I worked at that kind of level in the Civil Service during the war. I saw so much of it, and I got so tired of the endless backwards and forwards complications, the consultations between one Ministry and another, and the committees for this and that. It is, to my mind, absolutely over-organized and over-involved. It really wants redesigning from top to bottom.
I am not, for one moment, saying that there must not be a system for distributing the materials, or for carrying out the Government policy in industry, but I am saying that it wants to be a simpler way, one that people will understand and will believe in, and which will be economical and will waste less time. It should be combined with a plan for exports, determining how much shall be sent to which country, according to which country will bring us the money we want and is likely to be able to pay for the things we have to sell. A policy of that kind would make a practical approach on which some sort of plan could be issued. This is the time which is going to be the test whether what is now called a planned economy can work or not, Up till now I do not think the central planning of our economy has worked. It has been put into operation. I think all of us want to see it work. There are only two alternatives: either to develop a centrally planned economy which does work, or to revert back to the old system of things taking their own place in the light of supply and demand, and so on. But that is not practical politics at the moment. What we want to see is something that does achieve the results that it should.
Are there not a good many examples of things which, up to now, have not worked? There was coal production, which others of your Lordships have
1134
talked about, and will do so. Whatever the rights or wrongs of it may be, it has not achieved the results that were planned for it. What has happened about all the foreign labour which it was planned was to go into our industry? I remember early in 1945 discussions going on about the employment of Italians in foundries. At the time there was a shortage of lab cur in foundries, and Italians who, I believe, were volunteers, were to come to this country and work in the foundries. Ever since that date there has been discussion about getting those Italians to come and work in the foundries. At some stage of the proceedings there was an agreement that they should come, and it was all worked out. There were so many men, and they were interviewed in Italy, and the whole business was settled, but I do not think any of them came. That broke down because in actual fact the men who were to work with them in the foundries would not have them. The Italians did not come. Whatever the rights or wrongs of it, that was planned by the Government machine. It was not Party policy. It was part of the plan to man up industry.
Similarly in the case of the Poles, was planned that they should work in ale mines and factories. That is all in the programme, but they are not there. Again it is not a question of politics. Cannot the machine work out and achieve the things it thinks of? Can it not do what it intends to do? I am taking cases at random. There are thousands me re, but I am giving the things about whit? I happen to know. Take the manufacture and maintenance of locomotives and railway wagons. One thing we need is to be able to shift iron ore and coal about, to take steel from the works and generally to keep industry going. For that we need to get wagons and locomotives repaired—perhaps locomotives less than wagons. For nearly three years there has been a tremendous demand for men and materials to repair railway wagons. It is set down as part of the policy of the various Departments concerned. They all say it is urgent, it is one of the things which must be done, but it has not yet been done. I was glad to hear the noble Lord say it is one of the things that are going to be clone. I hope Government Departments will really think up a m ay of getting it done.

1135
I think all this is the result of trying to do too many things and not concentrating on just that amount which can be related to the resources we have. That is a simple and straightforward method of planning and that is what one wants to see. I would add one word in support of what the noble Earl, Lord De la Warr, said about the prospect of increasing agricultural production. I do not know that it can be achieved quite so easily as was suggested, but I look on the statement made to-day with a great deal of hope. I do so having in mind the discussion we had on the Agriculture Bill. Some of us wanted to insert in the opening clauses defining the objects of the Bill a statement that maximum production was required in the industry. I will not say I am glad this crisis has brought the matter to our attention, but it has justified the feeling many of us had to emphasize in that Bill the demand on and expectation from the agricultural industry.
Like the noble Earl, I know there is going to be plenty of enthusiasm in the agricultural industry for this work, but there are many practical difficulties to be got out of the way—the export of tractors, the difficulty of getting licences to repair farm buildings, and the housing situation. Suppose we lose our German prisoners and get by one means or another the 100,000 men sought for, how are we going to house them? The statement was made this afternoon that rural housing is to be really a priority in housing. I look forward with great interest to see how that is going to work out in practice. We have heard statements made on behalf of the Government from time to time that rural housing is receiving the greatest attention, and the noble Lord, Lord Pakenham, this afternoon referred to houses for colliery and agricultural workers. We have not seen anything to inspire general enthusiasm in agricultural districts so far.
I am afraid we must face up to the fact that if we are to achieve any real progress in the housing of people in the country, it can only be at the expense of building fewer houses in the towns. I can see that it is not an easy thing for the Government to commit themselves to do. They have to be able to explain it to the much greater number of people who live in the towns. But there it is. It must mean that a higher proportion of the effort in building will have to be diverted to building coun-
1136
try cottages, to repairing them, to reconditioning them, and also, before very long, to repairing, extending and modernizing the equipment of the farms themselves. We shall not be able to go on at the increased rate of 20 per cent. to which the noble Lord referred—which is the same as two years ago—unless we can get more in the way of buildings, and more in the way of capital equipment on our farms. I do not believe that the rural district councils will be able to build houses at the prices at which they are needed, and in the places in which they are needed, for the men who are going to work on the farms. I feel convinced—whether or not it fits in with the Government policy, and whether they like it or not—that the only way to get it done is to get the farming industry itself to build the houses; whether it is the owner-occupier, the landlord or the tenant, it must be somebody who has an interest in building the cottages at the farms where they are needed.
I would have liked to say more about the agricultural aspect of this problem, because I feel that the inclusion of agriculture in this very important statement, at this very critical moment really means that we can look forward to working the prosperity and activity of the agricultural industry permanently into the economy of our country, from which so many of us have felt—at least, I have felt it—that it has been excluded far too long. Let us hope that the Government will look far ahead in this matter, and set before the industry a future which will make it possible for it to grow in the way we all want it to grow.
10.43 p.m.
LORD CROFT: My Lords, I should most certainly apologize for speaking at this time of night but for the fact that this debate is so vital to the whole future of our country. I will greatly curtail my remarks, since may noble friend Earl De La Warr made such an admirable speech on the whole agricultural question, and I found myself so much in agreement with what he said. I can eliminate that part of what I was going to say. In this connexion, I would only say that in my sincere belief it is absolutely imperative that we should produce from our own soil, and in our own factories the maximum amount of goods; otherwise, I do not see how we can survive this crisis.
If I may, I want briefly to indicate, first, that finance and economics hang

1137
very closely together in all these considerations. I was one of those who regarded the great campaign of war savings throughout the war as one of the finest contributions lo victory. I beg all my countrymen, and certainly anyone with whom I have any influence whatever, to put every spare penny they have into war savings certificates, into the Savings Banks, and into other loans, to help stabilize the position. During the last war I felt that this was a great achievement, and I can also claim that I did back it fully. I believe that in the five years during which I held a minor post in the last administration, 1 had the honour of speaking more frequently as a Minister, and of addressing larger groups of people, than anyone else during, all those war weapon campaigns. Therefore, I am very anxious to see that the national effort in these directions should continue.
I think it was last year that the Chancellor of the Exchequer called the nation to a great effort to give him all the funds he required in the 2½ per cent. Treasury Bonds. During that time he was making speeches which certainly conveyed to me the impression that he was determined to see that British credit was maintained at that level. I am well aware that world forces may disturb such calculations, but one expects the Chancellor of the Exchequer to have real reason for believing that he could peg the credit at that figure, and that in any great appeal which he made to the nation on that occasion to subscribe large sums of money at par the credit would be maintained. I believed that he must, as Chancellor of the Exchequer, have had real reason for believing that he could maintain British credit at that level; and once more I certainly backed him and persuaded every trust with which I was connected to do the same. But in a space of a few short months the capital value of that great issue has evaporated, so that to-day I believe it has declined by something like 16 per cent. or 17 per cent.
I know that the Chancellor of the Exchequer has stated that he thinks hereditary wealth is an evil thing. He definitely makes war on thrift if it is successful, but I venture to think that this collapse in the value of that great issue is just the way to destroy confidence. And I would suggest, if any means are available—because it is so imperative to maintain confidence—that the Chancellor
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of the Exchequer should do everything in his power to see that when the British public subscribe to back the nation in these measures they should not feel their confidence destroyed. I should have thought he would have been very miserable about it and instead of having a song in his heart, would have had a groan in his stomach. In the forty-one years I have been in public life I have never known anything which equals the failure to fulfil the implied promise which all those speeches conveyed to the general public.
I submit that His Majesty's Government are guilty for the second time in the recent history of. British Socialism, of failure to realize that a great world convulsion, such as these two great wars represented, when thousands of millions of pounds have been blown into the air in what must in the end be wasteful expenditure, cannot be followed by a rosy hour in which you can start every form of new experimental political work. Nor is it possible to engage in far-reaching or—I do not want to use an offensive phrase—what I have previously described as wildcat schemes of an ideological character. I remember that in DO the then Prime Minister, Mr. Lloyd George, who had played a great part in that war, promised us a land fit for heroes to live in; and I recall then that I incurred the wrath of many people, some of them my friends, by declaring that so far from prosperity being just round the corner, we must tighten our belts. The words I used were that we might have to face unemployment on a scale never before contemplated.
Alas, I was correct. I declare now my considered opinion that unless we wage our struggle for survival as a united nation, undisturbed and undistracted by all the uncertainties that are at present afflicting industry, and unless we have a cessation of all class and Party warfare, then unemployment will reach vast proportions and we shall find that our great social machinery which has been built up over the last forty years may well, if we are not able to get together, crash in ruins. Instead of shortening sail His Majesty's Government ought to be preparing to meet the tornado. They must have known what was; coming, probably eighteen months ago or longer; yet Parliament has wasted all its time and energy on vast schemes of nationalizing key industries, including what I unreservedly

1139
declare—having travelled pretty widely—was, up to the time of the war, by far the finest railway system in the whole world.
I hope—although it is contrary to the experience of all other countries which have been trying these things—that these hurried, ill-digested measures may prove to be a success, and that they will not aggravate an already perilous situation. We cannot say; time alone will tell. But what we do know is that during the process of this legislation—during the actual process—there has been an enormous movement for increasing wages and for shortening hours—I presume under political pressure—which appears to me to be deliberately inviting that very inflational spiral against which some of His Majesty's Ministers have warned the country. Recently, as a result of all this, we have seen that coal and all fuels are likely to be very much dearer in the days to come than in the recent past, and the cost of all travel must go up. An increase of 55 per cent. compared with pre-war passenger fares, was mentioned in another place only yesterday, and all freights must also go up.
What is that going to mean to our export trade—our life and death export trade? It can only mean something like an excise duty on all the exports from this country. Since it is now admitted by certainly two Ministers in high places that the "good fun" of soaking the rich at 19s. 6d. in the pound has reached its limit, it follows that in future nearly all these burdens must fall on the workers and the middle class. Surely we must call a halt and abandon this interference, however desirable in quiet times, with the greatest industrial system that the world has ever known, and instead of splitting the nation into two halves—and we have a right to recall that at least half the nation, probably more than half, voted against nationalization at the time of the last Election—let us abandon this division of opinion and let all shoulders be applied to the wheel. After all, you do not win a battle if one of your armies is firing all the time on your own front. If we are going to win the battle of survival we really must get together in a national effort, and not produce policies which create so much heartburning in one part of the country or another.
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I should like to say one word with regard to what was said by the noble Lord, Lord Pakenham with respect to the cutting down of the Fighting Services. I gather that the additional cut in the Fighting Services is to be 80,000 men. I would hazard a guess that that probably means something like 65,000 or 70,000 from the Army. I pray that the Royal Navy is not going to be weakened at this psychological moment, and I imagine that we cannot dispense with many of the Royal Air Force personnel. Your Lordships will recall that only some two months ago there was a reduction in the national service committal of fighting men which really amounted to the fact that in twenty-four hours I think, we reduced our future potential by 33⅓ per cent. However necessary that may have been for Party reasons, it was harmful to Britain's foreign policy and Britain's power to shape policy. If crimes were committed between 1930 and 1937 by the constant demand for the reduction of Britain's Armed Forces, surely to fail now to maintain our strength or to allow the Forces to fall below what is safe is sheer lunacy.
I feel that no good purpose is served by failing to speak frankly; and there is not the smallest doubt that there has recently been, and still is taking place, the greatest and most successful aggression that the world has ever known. We also see, in several directions, an effort actually to thwart the process of arriving at a peaceful solution. I do not think that war is probable; nor do I think that it is inevitable. But of one thing I am certain; and that is that if this awful thing should ever come again it will be due once more to British weakness and lack of power to resist aggression. I was glad to hear the noble Lord, Lord Pakenham, in his solemn statement to-day tell us that our defence policy will not be changed. May I have an assurance from the noble Viscount who is to reply to-morrow that any reduction of troops will be of the ancillary services at present servicing our Forces in various countries abroad and will not affect the composition of the field Forces? In other words, can we have an assurance that the field Forces will remain unchanged? I think we have a right to ask this question, because it is so recently that His Majesty's Government told us the absolutely irreducible minimum at which our defences had been put.

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I should like to ask two questions—and here I am speaking entirely for myself and without consultation with my friends. First of all, when you are asking for this reduction of 80,000 men in the Fighting Services in (to put it mildly) an uneasy world I would ask: How many Poles are there who are still not employed in useful work? If it is something like 80,000—and I believe there are over 100,000 Poles in this country, but some of them are being employed in the textile industry and some in the mines—I hope they will be welcomed in every industry, because no industry can afford to turn its back on any labour at the present moment. If there are 60,000 or 70,000 Poles who are still not usefully employed, it does seem to me a strange fact that you should re-reduce your Fighting Services while you have still that number of people in the country. I am very sorry for the Poles. I would not like to see any Pole driven back to what was his beloved fatherland if he does not want to go, because I think his fate might be a terrible one. These Poles, however, must either make their full contribution for their enjoyment of the hospitality of this country or they should be told to go somewhere else. Therefore, whether they are employed in agriculture or any other industry, why not put them in the scale against a reduction of the Fighting Services?
Secondly, I should like to refer to what the noble Lord, Lord Ailwyn, said earlier on. In my view it is most desirable that we should increase the school leaving age, although I am doubtful whether there are either the buildings or the teachers available to make it effective and other than farcical for the next year or two. If it is a question of getting rid of 80,000 Service men at this day because we are keeping out of industry—I do not know what the number is—100,000, 200,000 or 300,000 young men and women, it does seem to me that we ought to balance these things and consider what is vital in this moment of crisis. I would only say this: When we remember the tragedy of the last war, and the awful moments that some of us, of all Parties, went through, when we remember the time of Dunkirk and we all went to Westminster Abbey, when we remember how close we came to absolute and awful destruction, I would suggest, if it is a question of a short time until you have the schools and the buildings and
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the materials and the teachers, that we might possibly hold up this scheme. We should thereby save a dislocation of our defences, and add greatly to the efficiency of industry.
I am grateful for your Lordships' toleration. I would like to say a final with regard to the economic side of the question. I think that His Majesty's Government, although they had a warning from the Back Benches of their Party this evening in a most eloquent speech from Lord Calverley, will agree that some of us did utter solemn warnings with regard to the conditions of the American Loan when it came before your Lordships' House. I must confess that I was then unduly optimistic about the Loan in thinking that it would last until the end of 1948. I was wrong; I did not think that it was possible that it could have evaporated so soon. It must now be realized that Clause 9 of the Loan Agreement, no doubt so innocently entered into at the time, deprives us of our greatest opportunity of stimulating supplies of essentials in our own sterling area, in the Commonwealth and in the Colonial Empire. To have said that we would not stimulate our own production of such commodities as tobacco, sugar, maize and essential foodstuffs like wheat, instead of depending on the dollar, seems to me to have put a rope round the necks of British consumers in this country, and British Empire producers overseas.
I beg His Majesty's Government no: to play with this question any longer. Instead of drifting with the torrent towards the weir, I beg them to turn their craft into safety. Is not it now clear that if this island stood alone, in our present precarious position we could hardly hope to survive at all, unless we emigrated half of our population; and it is doubtful whether, in a disturbed, distracted and largely ruined world, they could be absorbed. Our one hope, it seems to me, is to spend the next ten years—and this is where I support the noble Earl, Lord De la Warr, who said that this is not a momentary crisis, but a whole change of our economy—in doing everything we possibly can to double our production, to rely on ourselves and, more especially, to develop the production of the Colonial Empire, of the new Indias and, of course, of our brethren in the other self-governing Dominions.

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To consent to a form of economic serfdom for something like fifty years, which prevents us partaking in this particular stimulation which, in turn, will make it possible for us to honour our debts to the United States, seems to me to be just stupid. What we have never yet realized, I suggest, is that this home market of our's is by far the most valuable business counter in the world, by far the greatest market in the world. I think I am right in saying that in the last year, the United States exported one-fifth of its total exports to this country in the form of foodstuffs. I believe their value was something like 600,000,000 dollars. These exports are surely very important to the American economy, and yet we have such a bargaining power. Why do we not realize that we can make most friendly arrangements with all countries who desire to enter this market? The last thing in the world we ought to do is to hamstring ourselves, and to deprive ourselves of freedom in bargaining in the years to come.
I have a most profound conviction, not for the first time not only that a reciprocal Commonwealth Empire can increase our own producing power, but that the depression of the Commonwealth Empire will hurt the United States just as much as it will hurt ourselves. After all, they are business people, and they will be ready to listen to what we have to say in the times of our difficulties. I would beg His Majesty's Government to take the earliest possible step, if they have not already done so, to approach the leaders of the United States, and to tell them that it is really impossible for us to get on a level keel again, much less to be able to repay what they have so generously loaned to us, so long as Article 9 of the conditions of that Loan stands. My own belief is that, when they realize our pre-
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dicament, we shall only have to approach them as honest men telling an honest story, and we shall find them ready to appreciate the difficulty.
I would only say, once more, that I believe we have now to get together as a nation. Nothing must stop us promoting a remarkable unity. It is true, as my noble friend Lord Ailwyn said—and I can personally vouch for this—that the great British people are not putting forward their best efforts. We shall only secure that unity with a really stimulating lead from the top. If that lead comes, I believe that all on these Benches, provided that the proposal is national, not sectional and not political, will give their utmost support and make any sacrifice that will help our dear country in these tragic circumstances.
THE FIRST LORD OF THE ADMIRALTY (VISCOUNT HALL): My Lords, I beg to move that the debate be now adjourned.
Moved, That the debate be now adjourned.—(Viscount Hall.)
On Question, Motion agreed to, and debate adjourned accordingly.

METROPOLITAN NORTHERN AREA (CONSERVATION OF WATER) ORDER, 1947.
Report by the Chairman of Committees of the House of Lords and the Chairman of Ways and Means in the House of Commons under Section 3 of the Statutory Orders (Special Procedure) Act, 1945, that no Petition has been presented against the Order: Laid before the House (pursuant to Act) and ordered to lie on the Table.
House adjourned at tea minutes past eleven o'clock.