Sitting of 7 August 1947

Preamble
The House met at Half past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  LONDON COUNTY COUNCIL (GENERAL POWERS) BILL

    LONDON PASSENGER TRANSPORT BOARD BILL
    NEWHAVEN AND SEAFORD SEA DEFENCES BILL
    PRESTON CORPORATION BILL
    Lords Amendments pursuant to Order [31st July], considered, and agreed to.
    "respecting application of Standing Order No. 26 (Closure of Debate) during Session 1946–1947, (1) in the House and in Committee of the whole House, under the following heads:

    1

    2

    3

    4

    5

    6

    Date when Closure moved, and by whom.

    Question before House or Committee when moved.

    Whether in House or Committee

    Whether assent given to Motion or withheld by Speaker or Chairman.

    Assent withheld because, in the opinion of the Chair, a decision would shortly be arrived at without that Motion.

    Result of Motion and, if a Division, Numbers for and against.

    and (2) in the Standing Committees under the following heads:

    1

    2

    3

    4

    3

    Date when Closure moved, and by whom.

    Question before Committee when moved.

    Whether assent given to Motion or withheld by Chairman.

    Assent withheld because in the opinion of the Chair, a decision would shortly be arrived at without that Motion

    Result of Motion and, if a Division, Numbers for and against."

    —[The Deputy-Chairman of Ways and Means].

PRIVATE BILLS AND PRIVATE BUSINESS
Return ordered,
"introduced into the House of Commons and brought from the House of Lords, and of Acts passed in Session 1946–47:
Of all the Private Bills, Hybrid Bills, and Bills for confirming Provisional Orders which in Session 1946–47 have been reported on by Committees on Opposed Private Bills or by Committees nominated partly by the House and partly by the Committee of Selection,

NORTH CUMBERLAND WATER BOARD BILL [Lords]
Read the Third time, and passed, with Amendments.

ADJOURNMENT MOTIONS UNDER STANDING ORDER No. 8
Return ordered,
"of Motions for Adjournment under Standing Order No. 8, showing the date of such Motion, the name of the Member proposing, the definite matter of urgent public importance, and the result of any Division taken thereon, during Session 1946–47."—[The Deputy-Chairman of Ways and Means.]

CLOSURE OF DEBATE (STANDING ORDER No. 26)
Return ordered,
together with the names of the selected Members who served on each Committee; the first and also the last day of sitting of each Committee; the number of days on which each Committee sat; the number of days on which each selected Member has served; the number of days occupied by each Bill in Committee; the Bills the Preambles of which were reported to have been proved; the Bills the Preambles of which were reported to have been not proved; and, in the case of Bills for confirming Provisional Orders, whether the Provisional Orders ought or ought not to be confirmed:
Of all Private Bills and Bills for confirming Provisional Orders which, in Session 1946–47

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have been referred by the Committee of Selection to the Committee on Unopposed Bills together with the names of the Members who served on the Committee; the number of days on which the Committee sat; and the number of days on which each Member was summoned and on which each Member attended:
And, of the number of Private Bills, Hybrid Bills, and Bills for confirming Provisional Orders withdrawn or not proceeded with by the parties, those Bills being specified which have been referred to Committees and dropped during the sittings of the Committee."—[The Deputy-Chairman of Ways and Means.]

PUBLIC BILLS
Return ordered,
"of the number of Public Bills, distinguishing Government from other Bills, introduced into this House, or brought from the House of Lords, during Session 1946–47; showing the number which received the Royal Assent; the number which were passed by this House, but not by the House of Lords; the number passed by the House of Lords, but not by this House; and distinguishing the stages at which such Bills as did not receive the Royal Assent were dropped or postponed and rejected in either House of Parliament."—[The Deputy-Chairman of Ways and Means.]

PUBLIC PETITIONS
Return ordered,
"of the number of Public Petitions presented and printed in Session 1946–47, with the total number of signatures in that Session."—[The Deputy-Chair man of Ways and Means.]

SELECT COMMITTEES
Return ordered,
"of the number of Select Committees appointed in Session 1946–47, the Chairman's Panel and the Court of Referees; the subjects of inquiry; the names of the Members appointed to serve on each, and of the Chairman of each; the number of days each Committee met, and the number of days each Member attended; the total expense of the attendance of witnesses at each Select Committee, and the name of the Member who moved for such Select Committee; also the total number of Members who served on Select Committees."—[The Deputy-Chairman of Ways and Means.]

SITTINGS OF THE HOUSE AND BUSINESS OF SUPPLY
Return ordered,
"of (1) the clays on which the House sat in Session 1946–47, stating for each day the date of the month and day of the week, the hour of the meeting, and the hour of the adjournment; and the total number of hours
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occupied in the Sittings of the House, and the average time; and showing the number of hours on which the House sat each day, and the number of hours after the time appointed for the interruption of Business; and the number of entries in each day's Votes and Proceedings; and (2) the days on which Business of Supply was considered."—[The Deputy-Chairman of Ways and Means.]

STANDING COMMITTEES
Return ordered,
"for Session 1946–47 of (1) the total number and the names of all members (including and distinguishing Chairmen) who have been appointed to serve on one or more of the Standing Committees showing, with regard to each of such Members, the number of sittings to which he was summoned and at which he was present; (2) the number of Bills considered by all and by each of the Standing Committees, the number of days on which each Committee sat, and the names of all Bills considered by a Standing Committee, distinguishing where a Bill was a Government Bill or was brought from the House of Lords, and showing, in the case of each Bill, the particular Standing Committee by whom it was considered, the number of days on which it was considered by the Committee, and the number of Members present on each of those days."—[The Deputy-Chairman of Ways and Means.]

ORAL ANSWERS TO QUESTIONS

  MATRIMONIAL CAUSES (COMMITTEE'S REPORT)
  Mr. Eric Fletcherasked the Secretary of State for the Home Department when he will be able to make a statement about a grant-in-aid to the Marriage Guidance Council as recommended by the Denning Committee.
  Mr. Holmanasked the Secretary of State for the Home Department if it is the Government's intention to implement the Report of the Committee on Procedure in Matrimonial Causes (Cmd. 7024), and especially if financial assistance will be given to matrimonial advisory councils and similar organisations.
  The Secretary of State for the Home Department (Mr. Ede): There are still some points which require investigation before I shall be in a position to make a statement on the Committee's recommendation for financial assistance from public funds to voluntary bodies engaged

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  in marriage guidance work but my hon. Friends can rest assured that there will be no unnecessary delay in reaching a decision. As regards the other recommendations of the Committee I would refer my hon. Friend to the reply given to the hon. Member for Merioneth (Mr. Emrys Roberts) on 19th June.
  Mr. Fletcher: In view of the important work which this body is doing, and the fact that it will be in danger of collapse unless financial help is forthcoming at an early date, will the Home Secretary make the announcement as soon as he possibly can?
  Mr. Ede: Yes, Sir, I hope the decision will not be much longer delayed.

  POLICE

    Meeting, Hackney
    Mr. Piratinasked the Secretary of State for the Home Department what was the estimate of the size of the crowd at the meeting of the British League of Ex-Service men at Ridley Road, Hackney, on 13th July; and why was it necessary to maintain on duty 35 police officers for this meeting.
    Mr. Ede: The police estimate that about 400 people were present at the meeting. The number of police engaged throughout the meeting was 25 and not 35: 10 additional police were needed after some disturbance had occurred. I do not regard the number as excessive.
    Mr. Piratin: Will the Home Secretary answer the second part of the Question, and say what was the necessity for maintaining this number of police? Is he further aware that within a few days of this meeting being held there was another meeting, convened by the Association of Jewish Ex-Service men, held on about the same spot, which was stopped by the police, who said that they feared a breach of privilege would take place? [Laughter.] Hon. Members may laugh but as we have had three reports in one week from the Committee of Privileges, one's head is full of them. May I come back to my question? The police claimed on that occasion that they feared a breach of the peace, and, therefore, they closed down the meet-
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    ing. How is it they can take one action in one case and another action in another case?
    Mr. Ede: I do not regard the number of police engaged at the meeting mentioned in the original Question as being out of proportion to the risks that were being run by the police. It is the duty of the police to prevent, if possible, a breach of the peace and not to act only after it has occurred. With regard to the other meeting, I had no notice from the hon. Gentleman that he was going to raise it, and therefore, I cannot answer the question which he has put to me. The police have to deal with each situation that arises in the light of the circumstances that exist at the particular moment.
    Vice-Admiral Taylor: Was not the second meeting a Communist meeting, and therefore very likely to create a disturbance of the peace?
    Mr. Ede: In moments of public excitement meetings of any political party may lead to a breach of the peace, and it is the duty of the police to see that breaches of the peace are prevented.

    Road Accidents (Witnesses' Statements)
    Mr. William Wellsasked the Secretary of State for the Home Department in what circumstances it is the practice of the police to disclose to parties interested the statements made by eye witnesses of road accidents; and what directions or advice on the matter have been issued by his Department.
    Mr. Ede: While it is the practice of the police to furnish interested parties with certain information, including the names and addresses of witnesses of traffic accidents, a copy of a witness's statement is, normally supplied only to the person who made the statement or to his accredited representative. The decision in any particular case must, however, necessarily be within the discretion of the chief officer of police concerned, in the light of the particular circumstances. The present practice is based on the recommendations of a committee which considered the matter in 1932, and on advice issued by the Home Office at that time.

  LORRY DRIVER (DISQUALIFICATION)
  Mr. Dribergasked the Secretary of State for the Home Department if his attention has been called to the case of a Maldon builder's employee, who has been fined £2 and disqualified from driving for 12 months, because the lorry which he was driving for his employer was not covered by insurance; and if, in view of the hardship caused to this man and the fact that he cannot afford the probable cost of an appeal, he will remit this sentence.
  Mr. Ede: I have no power to interfere with a court's decision on the question whether a person shall or shall not be disqualified from holding a driving licence, but I am causing inquiries to be made about the case.
  Mr. Quintin Hogg: Having regard to certain recent decisions of the Court of Criminal Appeal as to the powers of courts in cases of this kind, would the right hon. Gentleman look into the situation and consider whether these decisions really embody the intentions of this House?
  Mr. Ede: My attention has been drawn to these decisions of the Court of Criminal Appeal. Diverting from my usual practice, I issued a circular to benches of magistrates drawing their attention to the decisions which, in general, coincide with the intention of this House. The particular case to which my hon. Friend the Member for Maldon (Mr. Driberg) drew attention happens to contain exceptional circumstances which justify me in further investigating it.

  CHANNEL ISLANDS (REHABILITATION)
  Mr. Vaneasked the Secretary of State for the Home Department whether he will state the rate at which private persons and industrial undertakings in Jersey and Guernsey were authorised to exchange marks, received during the German occupation in payment for the use of their property, into sterling; and how he proposes to compensate individuals and industrial firms in Alderney in respect of losses and wear and tear to their property and plant, which was requisitioned and worked by the Germans during the same period.
  Mr. Ede: The authorised rate for the exchange of Reichsmarks in circulation in Jersey and Guernsey when the Islands were liberated was 9.36 to £1. In Guernsey, on the capitulation of the German forces but before the arrival of the liberation force, the Island authorities had exchanged Reichsmarks at the rate of 10 to £1 up to a limit of £20 per person. As to the second part of the Question, as I indicated in reply to the Question by the hon. Member on 24th July, considerable assistance has already been given towards the Island's recovery by the provision of stores, goods and services: but this has necessarily been limited to rehabilitation, and the cost of compensation for war losses could not properly be placed on the British taxpayer.
  Mr. Vane: Is the right hon. Gentleman satisfied, in view of the fact that all these Islands were occupied by the enemy during the war that such arrangements as he has made are fair between the different Islands and particularly since Alderney was evacuated upon the recommendation of the then representative of His Majesty's Government?
  Mr. Ede: I could not accept the last phrase used by the hon. Member, but I am going with a committee of the Privy Council to Alderney to hold an inquiry into certain matters during the course of the next month. I understand that the matter raised in the Question will be among matters that will be raised by the islanders in front of the committee. As I shall have to act in a judicial capacity when I hear them, I think it would be unwise of me to say any more at the present moment.
  Major Haughton: In view of the answer which the Home Secretary gave on the day when my hon. Friend put his Question, that these matters did not come under the jurisdiction of the Home Office, may I ask whether they can be settled even though the Minister does go there?
  Mr. Ede: I hope that as a result of the hearing by the committee of the Privy Council we may be able to make certain recommendations. Whether we shall be able to settle the matter, we must await the event to see.

  HOUSING

    Building Licence, Worcester
    Mr. George Wardasked the Minister of Health, why a civil building licence was refused to Mr. E. D. Wigley-Smith, 7, The Avenue, Worcester, on 6th June, 1947, although his plans had been approved by the Worcester City Council, who recommended that a licence be issued in this case.
    The Minister of Health (Mr. Aneurin Bevan): The urgent need for houses to rent in Worcester has made it necessary to restrict the issue of licences for houses for sale.
    Mr. Ward: Are the recommendations of local authorities taken into consideration in these matters?
    Mr. Bevan: The recommendations of local authorities are always considered, and it has been necessary on a number of occasions to restrict the local authority from issuing an unreasonable number of licences.

    Unfurnished Accommodation (Rents)
    Sir Patrick Hannonasked the Minister of Health if he will take immediate measures against rent profiteering, especially in relation to unfurnished premises which are not protected by rent tribunals; and if his attention has been called to recent cases in which exorbitant sums have been demanded for the possession of unfurnished accommodation.
    Mr. Bevan: I am aware of recent cases where premiums have been demanded for possession of unfurnished accommodation, but it is for the courts to decide in each case whether these demands are illegal under the existing law. Any change in the law as it applies to the rents of unfurnished premises would require legislation, and of that there is no early prospect.
    Sir P. Hannon: Surely this is a variety of profiteering which ought to be put down with a strong hand? Will the Minister take such measures as he may have open to him?
    Mr. Bevan: I cannot exceed the powers which have been conferred upon me by the House. The question whether legisla-
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    tion should be introduced, and whether time can be given to it, are matters for my right hon. Friend the Prime Minister and my right hon. Friend the Leader of the House, and not for me.

    Easthampstead
    Major Mott-Radclyffeasked the Minister of Health what additional building labour has been employed on the Easthampstead Rural District Council housing sites at Skimped Hill and Binfield Road, Bracknell, during the last two months.
    Mr. Bevan: The number of men employed on the Binfield Road site rose to 34 on the 31st May and dropped to 25 on 30th June. The labour position at Skimped Hill remains difficult. The number of men employed rose from nine on 31st May to 22 on 30th June; 16 men are now employed.
    Major Mott-Radclyffe: Is the right hon. Gentleman aware that in actual fact, according to the progress report of the rural district council in question, no effective increase has been obtained at all, and that the average number of bricklayers employed on these two sites in particular, in the month of June, was four and three, respectively, in July, two and four and, up to 5th August, one on each site?
    Mr. Bevan: The difficulty in this area is that the labour is subject to attraction into the Metropolitan area and that it is extremely difficult to keep men on the site. That is a difficulty common to all local authorities on the periphery of the Metropolitan area. We shall do our very best in future to see that where houses, especially rural houses, are involved, we keep men on the sites.
    Major Mott-Radclyffe: May I hope that the steps taken in the future will be more successful than those that have been taken in the past?
    Mr. Bevan: The answer is that we shall have to interfere with the free flow of private enterprise more effectively in the future than we have done in the past.

    Egremont
    Mr. Frank Andersonasked the Minister of Health how many men are employed on the housing site at Smith-

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    field, Egremont; and whether he is satisfied that the number of workmen now employed is sufficient to meet the demands made according to the building programme.
    Mr. Bevan: Sixteen men are employed on site preparation. There is no outstanding demand for labour, but I am watching progress to ensure that preparatory work will be sufficiently advanced to allow house building to begin when a contract is let.

    Kingkerswell
    Brigadier Raynerasked the Minister of Health whether the allocation of council houses to the parish of Kingkerswell in the county of Devon will be increased.
    Mr. Bcvan: I understand that the Newton Abbot Rural District Council at present propose to build four houses in this parish. Any question of an increase is a matter in the first instance for the Council.

    Private Enterprise Building
    Mr. Derek Walker-Smithasked the Minister of Health what is the total number of houses so far built by private enterprise builders under their own own specifications for sale to local authorities, in accordance with the provisions of his Department's Circular 92/46; and whether he will separately include such totals in the Housing Returns and the figures for individual local authorities in Appendix B thereof.
    Mr. Bevan: The number is 1,467. I will consider including information on this point in the monthly return.
    Mr. Walker-Smith: Will that include the individual local authorities in Appendix B, which is very important?
    Mr. Bevan: I think it would be an unreasonable amount of work to include each local authority. The monthly housing returns are already very bulky indeed. In these days we ought not to ask for more clerical work to be done on these matters.
    Mr. Walker-Smith: Does not the Minister agree that it is only by including the figures for the individual local authorities in Appendix B that hon. Members will have the opportunity of seeing which, if any, local authorities are not trying to put this scheme into operation?
    Mr. Bevan: I think it is a pertectly proper point, and I will see how much additional work is involved and weigh that against the advantage of the information.

    Building Contracts (Forms)
    Mr. Walker-Smithasked the Minister of Health how many forms of building contract are in use among local authorities; and how many of these forms are peculiar to a single local authority.
    Mr. Bevan: I regret that the information asked for by the hon. Member is not available, but local authorities have been advised to base their contracts upon standard forms produced by the Ministry of Works (CCC/Wks/1) or by the Royal Institute of British Architects.
    Mr. Walker-Smith: Is it not possible to take steps to try to find out this information? Would the Minister not agree that if local authorities are wedded, as in many cases they are, to their own particular forms, it does arrest the progress of house building?
    Mr. Bevan: I would consider it desirable to ask local authorities to make these returns if I were convinced that it postponed house building, but as local authorities have already put 100,000 more houses into contract than the building industry is able to start, that hardly delays the completion of houses.

    Extended Programmes
    Mr. Collinsasked the Minister of Health if he will permit local authorities who have nearly completed current programmes to start more houses now, so that full advantage can be taken of the good building weather and so ensure that additional houses are ready for occupation early in 1948.
    Mr. Bevan: I shall be ready to consider individual cases in relation to the general situation.
    Mr. Collins: Will my right hon. Friend say if he is aware that many urban authorities in mainly county districts are, to an increasing degree, letting new houses to farm workers, and if he will take that matter into consideration when allocating new programmes, as it could provide a valuable contribution to the drive for housing farm workers and would greatly assist the farming industry?
    Mr. Bevan: There are many urban authorities surrounded by very deep rural belts and quite often they provide houses for rural workers there. At the same time we should have to consider using urban building facilities far more widely in the rural belts. I do not know.

    Furnished Houses (Tenancies)
    Mr. Sparksasked the Minister of Health if he will request furnished houses rent control tribunals to make it clear to tenants referring cases to them that they are liable to be dispossessed of their accommodation by their landlords at the end of the three months' period of security afforded by the Act.
    Mr. Bevan: My information is that tribunals already explain to applicants the position as to security of tenure under the Act.
    Mr. Sparksasked the Minister of Health in order to protect tenants of furnished accommodation from the vindictiveness of their landlords, if he will now request local authorities to exercise their powers to refer cases that come within their knowledge to the furnished houses rent tribunals.
    Mr. Bevan: It is for the local authorities to determine in any particular case whether they should exercise their powers of reference to a tribunal. I think, however, that they might with advantage exercise their powers much more freely and I hope that this Question and answer will have the effect of stimulating action by them in suitable cases.

    Cement Supplies, Mirfield
    Mr. Granville Sharpasked the Minister of Health whether he is aware that work on the erection of permanent houses for the Mirfield Urban District Council has been seriously retarded by the shortage of cement; that, in consequence, bricklayers have been dismissed; that the situation was fully explained to a representative of his Department on the site nearly three weeks ago; what is the reason for the delay in delivery; and when adequate supplies will be made available.
    Mr. Bevan: I am making inquiries and will communicate with my hon. Friend.
    Mr. Sharp: Can my right hon. Friend say whether there is an overall shortage of cement throughout the country, or whether the shortage in some particular areas is due to bad distribution?
    Mr. Bevan: There was recently an overall shortage of cement, as hon. Members know. It was due largely to the fact that, owing to the severe winter and the fuel shortage, there was a falling off in production. Now, however, the production of cement has reached a very high level indeed, far exceeding what we produced during the war, but the pipeline was empty and some parts of the country suffered more than others. However, I am hoping that the whole situation will be remedied very shortly.

  PUBLIC HEALTH

    Nurses (Recruitment)
    Mr. Symondsasked the Minister of Health if he has now given consideration to the practical effect on recruitment to the nursing profession, on the Rushcliffe scale of salaries, of recent judgments of magistrates at Clerkenwell and Weald-stone; and what steps he proposes to take to deal with the situation.
    Mr. Bevan: I understand that this matter is being taken to the High Court.

    Water Supplies
    Mr. Berryasked the Minister of Health whether he has considered the statement issued by the British Waterworks Association, a copy of which has been sent to him, indicating the effect of the present shortage of essential materials on the maintenance and extension of supplies to water; and whether he will make a statement with regard to the matters to which reference is made.
    Mr. Bevan: Yes, Sir. In view of present shortages it is impossible to satisfy the full demands of many important services, including water supply. There has been some recent improvement, and I do not anticipate any immediate difficulty in meeting reasonable requirements for materials essential for maintenance, or for new works of water supply that are urgently necessary for housing, industry, or on public health grounds. There can, however, be no widespread extensions until the supply position improves.
    Mr. Berry: Will my right hon. Friend do his best to exorcise the spirit which was about in certain Government Departments during the war, that water would go on no matter what happened, and will he see that water gets a share corresponding fairly to gas and electricity?
    Mr. Bevan: I am doing my very utmost to accomplish this but my hon. Friend knows that there are definite physical limitations on what we can do.
    Mr. Mitchison: Will my right hon. Friend bear in mind the very acute shortage of water in Northamptonshire and the effect that it is having on the housing programme there? Is he satisfied that that programme will not be held up?
    Mr. Bevan: I am not satisfied that any particular scheme will not be held up. All I can ensure is that I get a fair share of available steel for rural water supplies. As my right hon. Friend the Prime Minister said yesterday, rural housing will receive, and has received, very special consideration.
    Sir Ralph Glyn: Is the Minister aware that in various dumps of American material under both the Ministry of Supply and the Air Ministry there are quantities of water pipes awaiting disposal? Could they not be put at the disposal of local authorities?
    Mr. Bevan: I would like to hear about them. If the hon. Member has any in mind, I would be very glad to investigate the facts.
    Mr. E. P. Smithasked the Minister of Health whether he is satisfied that the present methods by which water is supplied to the fishing village of Dungeness, although admittedly temporary, are in fact sufficiently sanitary to satisfy his Department.
    Mr. Bevan: I am not satisfied with any methods other than the best, but there are practical difficulties here, with which the authorities concerned are coping as well as they can and I am keeping in touch with them about the matter.
    Mr. Smith: Does the right hon. Gentleman recollect that, at my request, he very kindly undertook the cleaning out of the open troughs in which this water has been
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    placed? Can he say when he last cleaned them out, and what is their condition today?
    Mr. Bevan: If the hon. Member will put the Question down, I will find out when I last exerted myself.
    Mr. E. P. Smithasked the Minister of Health what steps he is taking to see that the Littlestone Water Company repair the damage caused by War Office action to the wells in the fishing village of Dungeness and provide pure mains water to the inhabitants.
    Mr. Bevan: The company have no responsibility for the repair of damage to private wells. I understand that with financial assistance from the War Office they have laid mains to serve the properties affected.
    Mr. Smith: Can the right hon. Gentleman undertake that he will exert all the pressure he can to protect his right hon. Friend the Secretary of State for War from the masterly inactivity of the Littlestone Water Company?
    Mr. Bevan: There appears to be a private war on between the War Office and a private water company. With my usual intrepidity, I will intervene and see what can be done.

    Maternity and Child Welfare (Film)
    Mr. Geoffrey Cooperasked the Minister of Health if he will consider sponsoring a British film, through the Central Office of Information, for use in senior schools and for the education of the public in childbirth and maternal and child welfare, including the work of ante-natal clinics.
    Mr. Bevan: The Ministry of Health has already produced, through the Central Office of Information, a series of films on the care of young children. Others on various aspects of maternal and child welfare are in production or planned
    Mr. Cooper: May I ask whether the right hon. Gentleman realises the extraordinary amount of human interest taken in an American film which is being shown at the present time at a cinema in Charing Cross Road, which has attracted very great crowds? Does he not think it is important to show the public of this country the British practice as distinct from the American practice?
    Mr. Bevan: We are indeed showing a very large number of English films. I would resist any inclination to believe that the Americans in this matter are more forward than we are.
    Colonel Stoddart-Scott: Will the Minister promise the House that he will not have shown in senior schools any film which shows a detailed, factual and faithful reproduction of the operation of childbirth, which can have only one effect, and that is a deterrent effect, ultimately on the birth rate?
    Mr. Bevan: I am sure that my right hon. Friend the Minister of Education and I will bear in mind any technical advice we have on this subject, but the effect on the psychology of the child seems to be a matter upon which laymen have as much information as specialists.

    Executive Council. Dorset
    Colonel Wheatleyasked the Minister of Health if he will recast the National Health Service Executive Council for Dorset, by including at least one member of the insurance committee who represents insured persons.
    Mr. Bevan: No, Sir. This Executive Council, the Chairman of which is also Chairman of the Insurance Committee, has already been set up. There is no power to vary the membership, even it I wished to do so, until the members' term of office expires or a vacancy occurs.
    Colonel Wheatley: In those circumstances, will the Minister bear this question in mind? These committee men, who have done such good work, feel that they have had an undeserved slight and that the interests of the insured persons will suffer.
    Mr. Bevan: There is always very great difficulty about these things. In making these appointments I have tried to ignore all political considerations. I have been attacked from all parts of the House for not putting the right people in, and in these circumstances that seems an admirable situation for the Minister to be in.
    Colonel Wheatley: Does the Minister realise that I am not asking for any political men to be brought in but that the interests of the insured persons should be safeguarded?
    Mr. Bevan: Yes, Sir, but the interests of the insured persons have been taken into account in the appointment of these councils. Once they have been appointed and have been running for a few years, I hope to receive from them advice as to new appointments which will very much relieve the responsibility of the Minister of Health, whoever he may be at that time.

    Health Service (Voluntary Organisations)
    Major Legge-Bourkeasked the Minister of Health if the intention of paragraph 5 of Circular 118/47 is to indicate that he is intending to rely upon voluntary contributions as well as increased compulsory contributions for the provision under the National Health Service Act, 1946, of services formerly provided by voluntary organisations.
    Mr. Bevan: No, Sir.
    Major Legge-Bourke: Does the Minister realise that the drafting of that paragraph has been considerably misunderstood and that there are some voluntary organisations which have agreed to come into the new scheme under the local authorities provided that they are not responsible for contributions? Can he elucidate this paragraph in a further circular to the authorities concerned?
    Mr. Bevan: I believe that the circular itself is fairly clear, but if there is any ambiguity I will certainly have it cleared up. I believe that the discussions which will take place over the next four or five months will serve to clear up any ambiguities which remain.
    Major Legge-Bourke: Will the Minister bear in mind that the plans of the local authorities for the services formerly provided by voluntary organisations have to be in early this month? The paragraph referred to in the question includes these words:
    "Since there may well be a fall in voluntary contributions."
    which seems to imply that he is putting some reliance upon voluntary contributions for running this service.
    Mr. Bevan: I agree that there is an ambiguity.
    Mr. Ronald Chamberlain: Does not my right hon. Friend agree that there are some spheres where an amalgamation of the voluntary and official elements is very valuable and effective, and that this is probably one of them?
    Mr. Bevan: My hon. Friend will agree that under the health service we are extending the field of voluntary work enormously. What we are doing is to relieve voluntary organisations from the necessity of raising funds.

    Playing Fields, Immingham
    Mr. Osborneasked the Minister of Health what further information he requires from the Grimsby Rural District Council before the playing fields at Immingham will be made available to the public; whether it has been received; and why he has not given his consent to the scheme.
    Mr. Bevan: The information I require is a copy of the council's resolution, plans of the land, and the district valuer's report. The answer to the second part of the Question is "Not yet" and the third part does not, therefore, arise.
    Mr. Osborne: Does not the Minister think it a pity that this scheme has been held up for months now, and the local council alleges that the delay was in his Department originally? Can he not expedite the matter?
    Mr. Bevan: I think if the hon. Member will study my reply, he will see that I am awaiting certain information.

    Infantile Paralysis
    Mr. Peter Freemanasked the Minister of Health what is the age group of the cases of infantile paralysis so far notified this year; how are they distributed geographically; and whether he can state any reasons for the recent increase.
    Mr. Bevan: As the reply to the first two parts of the Question involves a large number of figures, I will, with permission, circulate it in the OFFICIAL REPORT. AS regards the last part, I am advised that
    1626
    much research in many countries has failed to determine why the incidence of the disease increases from time to time.
    Mr. Freeman: As the result of the inquiry, has my right hon. Friend been able to discover any common factor which would in any way indicate the cause?
    Mr. Bevan: I am afraid, as far as I am advised, that the workers in this field, who are extremely skilled and very dedicated persons, have not been able to isolate any common factor whatsoever.
    Mr. E. Fletcher: Would my right hon. Friend say whether any general direction has been given for closing swimming baths in districts where these cases occur or whether it is left to the local authority concerned in each case?
    Mr. Bevan: I am exceedingly anxious not to create an atmosphere of panic. It must be remembered that, sad and calamitous though the consequence of this infection often is, there are very many other epidemics which are very much more serious, and we must keep a sense of proportion. I believe that the psychology of panic would be far worse than the advantage of any directions that I would be able to give.
    Mr. Godfrey Nicholson: While I accept and agree with what the right hon. Gentleman has said, does he not think it would be advisable for his Department to make such statements on the disease in order to allay anxiety and to tell parents how best to try to avoid sources of infection? Surely, a little guidance is needed?
    Mr. Bevan: There is a further Question on the Order Paper, but I have already given guidance and I think hon. Members may have seen in the Press that general information was given from the beginning. I must warn the House against frightening parents unnecessarily.
    Squadron-Leader Fleming: Is it a fact that so far there is no reliable evidence at all of infantile paralysis epidemics being spread by attendances at public swimming baths?
    Following are the figures:

    TABLE I.

    CORRECTED NOTIFICATIONS OF ACUTE POLIOMYELITIS. MARCH QUARTER, 1947.

    1. England and Wales.

    2. Counties and associated County Boroughs.

    Civilians—Age Groups.

    Non-Civilians—Age Groups.

    Total

    0−

    1−

    3−

    5−

    10−

    15−

    25 and over.

    Age unknown

    Total.

    15 or unknown

    25 and over.

    1. ENGLAND AND WALES

    96

    5

    13

    7

    96

    13

    25

    18

    2

    6

    4

    2

    2. COUNTIES.

    Berkshire

    1

    —

    —

    —

    —

    —

    —

    1

    —

    —

    —

    —

    Buckinghamsbire

    2

    —

    —

    —

    —

    —

    —

    1

    1

    —

    —

    —

    Cheshire

    2

    —

    —

    —

    —

    2

    —

    —

    —

    —

    —

    —

    Derbyshire

    2

    —

    —

    —

    1

    1

    —

    —

    —

    —

    —

    —

    Devonshire

    2

    —

    —

    —

    1

    —

    1

    —

    —

    —

    —

    —

    Dorsetshire

    3

    1

    —

    —

    1

    —

    1

    —

    —

    —

    —

    —

    Durham

    1

    —

    —

    —

    —

    1

    —

    —

    —

    —

    —

    —

    Essex

    5

    —

    —

    —

    2

    2

    —

    1

    —

    —

    —

    —

    Gloucestershire

    3

    —

    —

    1

    —

    —

    1

    1

    —

    —

    —

    —

    Herefordshire

    2

    —

    —

    —

    —

    —

    2

    —

    —

    —

    —

    —

    Hertfordshire

    1

    —

    —

    —

    1

    —

    —

    —

    —

    —

    —

    —

    Huntingdonshire

    —

    —

    —

    —

    —

    —

    —

    —

    —

    2

    —

    2

    Kent

    4

    —

    —

    1

    2

    —

    1

    —

    —

    —

    —

    —

    Lancashire

    3

    —

    —

    1

    1

    —

    —

    1

    —

    —

    —

    —

    Lincolnshire (Pts. of Holland)

    1

    1

    —

    —

    —

    —

    —

    —

    —

    —

    —

    —

    London

    15

    1

    3

    —

    3

    1

    5

    2

    —

    —

    —

    —

    Middlesex

    6

    —

    —

    —

    —

    —

    5

    1

    —

    —

    —

    —

    Norfolk

    2

    —

    —

    —

    1

    —

    1

    —

    —

    1

    1

    —

    Northumberland

    1

    —

    —

    1

    —

    —

    —

    —

    —

    —

    —

    —

    Nottinghamshire

    1

    —

    —

    —

    —

    —

    —

    1

    —

    —

    —

    —

    Southampton

    3

    1

    —

    —

    —

    —

    —

    2

    —

    —

    —

    —

    Staffordshire

    3

    —

    1

    —

    —

    1

    1

    —

    —

    —

    —

    —

    Surrey

    1

    —

    —

    —

    —

    1

    2

    1

    —

    —

    —

    —

    Sussex East

    4

    —

    —

    —

    —

    1

    2

    1

    —

    —

    —

    —

    Sussex West

    1

    —

    —

    —

    —

    —

    —

    1

    —

    1

    1

    —

    Warwickshire

    9

    —

    4

    2

    —

    —

    2

    1

    —

    —

    —

    —

    Worcestershire

    1

    —

    —

    —

    —

    1

    —

    —

    —

    —

    —

    —

    Yorkshire—

    North Riding

    —

    —

    —

    —

    —

    —

    —

    —

    —

    1

    1

    —

    West Riding

    11

    —

    3

    —

    —

    2

    2

    4

    —

    —

    —

    —

    Denbighshire

    —

    —

    —

    —

    —1

    —

    —

    —

    —

    1

    1

    —

    Glamorganshire

    1

    1

    —

    —

    —

    —

    —

    —

    —

    —

    —

    —

    Monmouthshire

    3

    —

    1

    —

    —

    —

    —

    —

    —

    —

    —

    —

    Pembrokeshire

    1

    —

    1

    —

    —

    —

    —

    —

    —

    —

    —

    —

    Radnorshire

    1

    —

    —

    —

    —

    —

    —

    —

    1

    —

    —

    —

    TABLE II.

    CORRECTED NOTIFICATIONS OF ACUTE POLIOENCEPHALITIS. MARCH QUARTER. 1947.

    1. England and Wales.

    2. Counties and associated County Boroughs.

    Civilians—Age Groups.

    Total.

    0−

    1−

    3−

    5−

    10−

    15−

    25 and over.

    Age unknown.

    1. ENGLAND AND WALES

    4

    —

    2

    —

    1

    —

    —

    1

    —

    2. COUNTIES:

    Lancashire

    1

    —

    1

    —

    —

    —

    —

    —

    —

    London

    1

    —

    —

    —

    —

    —

    —

    1

    —

    Middlesex

    1

    —

    —

    —

    1

    —

    —

    —

    —

    Yorkshire West Riding

    1

    —

    1

    —

    —

    —

    —

    —

    —

    TABLE III.
    ORIGINAL NOTIFICATIONS OF
    (a) ACUTE POLIOMYELITIS. 30TH MARCH—
    26TH JULY, 1947.
    (b) ACUTE POLIOENCEPHALITIS.

    1. England and Wales.

    2. Counties and associated County Boroughs

    3. Port Health Districts.

    Non-civilians included.

    (a)

    (b)

    1. England and Wales

    …

    911

    106

    2. Counties:

    Bedfordshire

    …

    14

    1

    Berkshire

    …

    6

    —

    Buckinghamshire

    …

    7

    —

    Cheshire

    …

    16

    1

    Cornwall

    …

    2

    —

    Cumberland

    …

    17

    1

    Derbyshire

    …

    13

    2

    Devonshire

    …

    4

    —

    Dorsetshire

    …

    12

    1

    Durham

    …

    55

    3

    Essex

    …

    31

    Gloucestershire

    …

    14

    3

    Herefordshire

    …

    4

    Hertfordshire

    …

    11

    3

    Kent

    …

    33

    2

    Lancashire

    …

    85

    4

    Leicestershire

    …

    7

    Lincolnshire (Holland)

    …

    11

    1

    Lincolnshire (Kesteven)

    …

    2

    —

    Lincolnshire (Lindsey)

    …

    6

    2

    London

    …

    113

    21

    Middlesex

    …

    42

    5

    Norfolk

    …

    2

    Northamptonshire

    …

    1

    1

    Northumberland

    …

    19

    —

    Nottinghamshire

    …

    3

    —

    Oxfordshire

    …

    1

    —

    Somersetshire

    …

    9

    1

    Southampton

    …

    13

    3

    Staffordshire

    …

    17

    1

    Suffolk West

    …

    1

    Surrey

    …

    47

    15

    Sussex East

    …

    11

    —

    Sussex West

    …

    6

    —

    Warwickshire

    …

    55

    3

    Westmorland

    …

    5

    2

    Wight, Isle of

    …

    2

    —

    Wiltshire

    …

    1

    2

    Worcestershire

    …

    13

    1

    Yorkshire (East Hiding)

    …

    9

    Yorkshire (North Riding)

    …

    11

    3

    Yorkshire (West Riding)

    …

    53

    10

    Brecknockshire

    …

    2

    1

    Cardiganshire

    …

    1

    —

    Carmarthenshire

    …

    6

    1

    Glamorganshire

    …

    16

    3

    Monmouthshire

    …

    1

    —

    Pembrokeshire

    …

    —

    2

    3. Port Health Districts:

    …

    Liverpool

    …

    1

    —

    Southampton

    …

    1

    —

    Colonel Stoddart-Scottasked the Minister of Health, if the present rate of infantile paralysis has ever been exceeded since this disease became notifiable; to what he attributes this marked increase in the number of cases; and what are the best means of prevention.
    Mr. Bevan: Not in this country. Medical science does not yet enable us to be sure of the causes of an increase in incidence. The best precautions are personal hygiene, avoidance of close congregrations of young people, and early medical advice if a young contact of a known case shows any mild or indefinite illness.
    Colonel Stoddart-Scott: The Minister has not attempted to answer the first part of the Question, asking about the present rate, and whether it has ever been exceeded.
    Mr. Bevan: I did.
    Colonel Stoddart-Scott: Is the Minister then aware that the largest number of cases per week previous to this year was just half the number we are getting now; in other words, there are double the number of cases happening these last few weeks than previously? Does not the Minister think that people should know the truth, not necessarily to frighten them?
    Mr. Bevan: With all respect, I rather resent the last part of that statement. I have already made known throughout the Press of Great Britain what the incidence is. It has been made known from week to week, and I have already explained that one of the most discouraging features about the existing outbreak is that it reaches a peak point earlier in the year than is normal.
    Colonel Stoddart-Scott: Is the Minister aware that in America there is a school of thought which thinks that malnutrition—[HON. MEMBERS: "Oh."]—or bad nutrition is a contributory cause, and has any research into that being going on in this country?
    Mr. Bevan: I think that has probably not escaped the investigators in this field. There is no evidence whatever of the slightest connection between malnutrition and infantile paralysis, and I have no evidence at present that President Roosevelt suffered from malnutrition.
    Mr. Collins: Can my right hon. Friend say whether there is any evidence of a high incidence of infantile paralysis in towns like Jarrow?
    Mr. Bevan: As a matter of fact, it is very well known that this country was one of the most exempt—and in those areas also—from infantile paralysis, but we

    1631
    ought not to ignore the possibility of isolating any cause whatever, and the fullest investigation will be made because malnutrition in some instances does not necessarily follow the distribution of income, since malnutrition might easily occur in well-to-do people not able to take full advantage of their diet.
    Colonel Stoddart-Scottasked the Minister of Health what steps he has taken under the National Health Services Act to start, stimulate and encourage research into the causes, prevention and treatment of infantile paralysis.
    Mr. Bevan: Research on this, like other virus diseases, is at present a matter for the Medical Research Council and my right hon. Friend, the Lord President of the Council, is answering a Question on this point later today.
    Dr. Segal: Can the Minister give any information to the House whether any research has been carried out into the prevalence of this disease in other European countries, notably in Central Europe, where the conditions of malnutrition are far more serious than they are in this country?
    Mr. Bevan: I have no information at the present time about that, but I certainly will make investigations.
    Colonel Stoddart-Scottasked the Lord President of the Council what public money is being spent on research into the causes, prevention and treatment of infantile paralysis.
    The Lord President of the Council (Mr. Herbert Morrison): Research on virus diseases, of which infantile paralysis is one, forms an important part of the programme of the Medical Research Council, and over £10,000 is being spent upon it in the present year. The proportion of this represented by the salaries of workers devoting most of their time at present to studying infantile paralysis is about £2,000.

  EDUCATION

    Unqualified Teachers, Wales
    Mr. George Thomasasked the Minister of Education, how many unqualified teachers in Wales have been accepted for training this year under the Emergency
    1632
    Training Scheme for Teachers; how many temporary unqualified teachers have been appointed in Wales this year; and how many local education authorities have declined to appoint these temporary unqualified teachers.
    The Minister of Education (Mr. Tomlin-son): The answer to the second part of the Question is that since the beginning of this year, about 19 men and 55 women have been appointed to schools in Wales as temporary teachers. Of these, 17 men and three women are candidates awaiting admission to emergency training colleges. I regret that the information asked for in the first and third parts of the Question cannot readily be made available.
    Mr. Thomas: May I ask my right hon. Friend if he is aware that there is considerable dissatisfaction on the part of the unqualified teachers of Wales, who have rendered very good service through the years and are now being left in the classrooms, when new entrants to the profession are being given the opportunity for training for one year and entering at a salary at least £100 a year, in some cases, above that of the unqualified teachers?
    Mr. Tomlinson: I did not know of that; I will look into it.
    Mrs. Leah Manning: Does my right hon. Friend remember that the unqualified teachers were told that they must wait in the schools until such time as there was a bigger supply of teachers coming into the Scheme so that they could have their chance; and has he not told us that that bigger supply of teachers for the Emergency Training Scheme is coming in, and will he carry out his promise to the unqualified teachers?
    Mr. Tomlinson: Yes, I have been doing it as quickly as I could.

    Inspectorate (Appointments, Monmouthshire)
    Mr. Peter Freemanasked the Minister of Education, how many of His Majesty's Inspectors of Schools have been appointed from teachers in Monmouthshire during the last 25 years; and whether the proportion is not less than that from other counties.
    Mr. Tomlinson: I regret that the information asked for by my hon. Friend could only be obtained by an undue expenditure

    1633
    of time and labour. The part of the country in which candidates for His Majesty's Inspectorate happen to be at work when they apply does not in any way influence their selection.
    Mr. G. Thomas: May I ask my right hon. Friend for an assurance that English-speaking Welshmen—those who are not bilingual—do not suffer in appointments to posts as His Majesty's inspectors, because there is a definite feeling in Wales that unless one is Welsh-speaking, one cannot get this promotion?
    Mr. Tomlinson: I will certainly do my best to see that justice is done, and so help those who are not bilingual.
    Mr. Bowen: Will the right hon. Gentleman bear in mind the fact that knowledge of Welsh is a particularly valuable qualification in this connection?
    Mr. Tomlinson: I realise that it is—in some parts of Wales.

    Accommodation
    Lieut.-Colonel Sir Thomas Mooreasked the Minister of Education how many class-rooms, teachers and text books are deficient to meet the increased school population as a result of the raising of the school leaving age.
    Mr. Tomlinson: So far as class-rooms and teachers are concerned, I would refer the hon. and gallant Member to the statement which I made when introducing my Department's Estimates on 31st July. As for textbooks, I cannot say to what extent the general shortage will affect the extra age group. As the hon. and gallant Member is aware, steps have been taken to improve the supply.
    Sir T. Moore: Can the right hon. Gentleman give any indication of when the shortage will be overcome?
    Mr. Tomlinson: No, it will be overcome when we meet the requirements.

    Women Teachers (Salary Scales)
    Mrs. Leah Manningasked the Minister of Education the number of women teachers employed in all types of State schools; the number on the incremental part of the Burnham scales; and the number who have reached their maximum.
    Mr. Tomlinson: As the answer to the first part of the Question contains a number of figures, I will with my hon. Friend's permission circulate it in the OFFICIAL REPORT. I regret that I have not the information asked for in the remaining parts of the Question
    Mrs. Manning: Does that mean that my right hon. Friend will be unable to give me the information requested in the second part of my Question at any time, or is he only asking for time to get it?
    Mr. Tomlinson: I am asking for time, but rather a long time.
    Following is the information:
    The number of women teachers employed full-time on 1st July, 1947, in maintained and assisted schools and establishments was:

    Nursery schools

    709

    Primary schools (excluding nursery schools)

    95,813

    Secondary schools

    29,531

    Special schools

    1,392

    Establishments for Further Education

    960

    Training Colleges

    688

    129,093

    Mrs. Manningasked the Minister of Education what is would cost the Treasury and the local authorities, respectively, in the financial year 1947–48, to give women teachers on the incremental part of the scale the men's increment and to allow women teachers at their maximum to take the first step towards the men's maximum by men's increments.
    Mr. Tomlinson: I regret that the information at present available on teachers' salaries is not compiled in such a way as to make it possible to estimate the cost of the scheme proposed by my hon. Friend.
    Mrs. Manning: If I give my right hon. Friend a very long time, say, until the crisis is over, does he think he could find out?
    Major Tufton Beamish: Is the hon. Lady the Member for Epping (Mrs. Manning) an example of a woman teacher "at the maximum"?

  HIGH COURT (HOURS OF SITTING)
  Mr. E. Fletcherasked the Attorney-General what are the normal hours of sitting in the divisions of the High Court

  1635
  at the present time; and how do these compare with the prewar hours of sitting.
  The Attorney-General (Sir Hartley Shawcross): The normal hours are 10.30 a.m. to 4 p.m., excluding Saturdays. They were the same before the war.
  Mr. Fletcher: Could my right hon. and learned Friend say whether this applies to all divisions of the High Court at the present time?
  The Attorney-General: Substantially all divisions in London, but the hours on circuit, of course, are very different.
  Mr. Marlowe: Would the right hon. and learned Gentleman agree that His Majesty's High Court judges are the only section of the community who have remained on the same salary since it was fixed against the cost of living in 1832, and does he propose any increase?
  The Attorney-General: That does not appear to arise out of the Question.
  Mr. Leslie Hale: When the Attorney-General addresses an appeal to His Majesty's justices for more productivity, will he make a request for longer hours of sitting, and not for longer sentences?

  TRADE AND COMMERCE

    Imported Matches
    Mr. Orbachasked the President of the Board of Trade whether he will give the totals, to the most convenient date, expressed in British currency, of the amounts expended in importing matches from Sweden and Belgium.
    The President of the Board of Trade (Sir Stafford Cripps): The c.i.f. value of imports of matches in the first six months of 1947 was £161,000 from Sweden and £231,000 from Belgium.
    Mr. Orbach: While I agree that these amounts are comparatively small, may I ask my right hon. and learned Friend if he is aware that if the production capacity of our home industry was fully employed, there would be no necessity for us to import any matches from abroad, in fact we could export matches?
    Sir S. Cripps: That seems to follow from what the hon. Gentleman has said.

    Employment, West Cumberland
    Mr. Frank Andersonasked the President of the Board of Trade, in view of the fact that Messrs. Courtaulds' factory has now been withdrawn from Sellafield, if he will state the policy to be adopted to absorb the unemployed that would have been found employment by Courtaulds Limited; and what is his policy as to the encouragement of new industries in Whitehaven, Ennerdale and Millom districts of the development area.
    The President of the Board of Trade (Sir Stafford Cripps): A number of those who would have been employed on Courtaulds' work will, most probably, be absorbed in the new enterprise which is going ahead at Sellafield. We shall, however, continue to watch the position in the area as a whole and take any measures practicable to maintain a high level of employment.
    Mr. Vane: Does the right hon. and learned Gentleman's reply mean that the general prospects of employment particularly for men, are less good as a result of this Government factory being substituted for Courtaulds Limited?
    Sir S. Cripps: It is impossible to say at the present moment, but they are satisfactory, so far as they go.

    Overseas Visitors (Reception)
    Mr. William Teelingasked the President of the Board of Trade what authority has been given to the Tourist Board to make sure that foreign visitors to this country, both children in groups and single visitors, are given the maximum amount of amenities possible under present conditions, by co-ordinating bodies working in the industry; and whether he will consider giving some kind of official certificate to approved travel associations.
    Sir S. Cripps: I am confident that, given good will on all sides, the British Tourist and Holidays Board will secure the voluntary co-operation of the main organisations concerned and will ensure that overseas visitors to this country are accorded the best possible reception. I am not clear what special authority the hon. Member has in mind. As regards the second part of the Question, I am not satisfied at

    1637
    present that restrictive control, of the kind which the hon. Member suggests, is needed.
    Mr. Teeling: Does the right hon. and learned Gentleman realise that since the original announcement that the Tourist Board was being formed was made, there has been considerable uncertainty about its powers? Does he not consider that such things as the scandal of the World Friendship Association would probably not have occurred if the Tourist Board or the Travel Association and other bodies had had it in their power to control such activities?
    Sir S. Cripps: I do not think it is necessarily the case that if they had had wider powers, they would have been able to stop this particular organisation. The question whether these wider powers may be necessary in the future will be considered, if it arises.

    Tinplate Industry (Cold Strip Mill, Llanelly)
    Mr. David Grenfellasked the President of the Board of Trade whether, in the proposed location of the cold strip mill at Llanelly instead of Swansea, he had received the advice of any local authority or any body representative of the tinplate industry; whether he will publish a report stating the recommendation of the Steel Board; and whether he will give full publicity to the technical and sociological issues which arise from the change of the site.
    Sir S. Cripps: The Government, in reaching their decision on the location of the cold reduction mill, had the benefit of the advice of the promoters, who were informed of the views of the tinplate industry and who were in close consultation with the local authorities, of the Steel Board who examined the promoters' proposals in great detail, and of the regional officers of the Departments concerned. For the answer to the last two parts of the Question, I would refer my hon. Friend to the reply given to the hon. Member for Newport (Mr. Peter Freeman) on 30th June by my right hon. Friend the Minister of Supply.
    Mr. Grenfell: In view of the general dissatisfaction throughout the whole of that area and of the complete ignorance of all responsible people about the lines
    1638
    upon which this investigation was pursued, and the fact that four Parliamentary constituencies with four Members of Parliament are in complete ignorance about this, will the Minister adopt his own precedent of setting up a working party which will make full investigations? In that way the Government and the pub-lice would know the ground upon which this site has been abandoned and a much more expensive, totally prohibitive site has been substituted in its place.
    Sir S. Cripps: No, Sir. I have had the advantage of meeting, I think, three deputations to which the hon. Member was a party, and the whole matter has been thoroughly explored and explained.
    Mr. Grenfell: I can assure you, Mr. Speaker, that the people in the whole of this district want this thing publicly examined. The electors of the area which I represent demand that I should do my duty in this House. Can I get some opportunity of putting this case, Sir, in order that the House may hear this public grievance ventilated in its right dimensions?
    Sir S. Cripps: I do not think that that is a matter for me, Mr. Speaker.
    Mr. Grenfell: Can you advise me today, Mr. Speaker? I do not want to be confined to the Adjournment. Can I get some proper opportunity in the House? Can you, Sir, ask for a sign from the House? Would you ask hon. Members to stand up to see what number will support us in the constitutional demand we are making upon this House?
    Mr. Peter Thorneyeroft: Does the President of the Board of Trade realise, from the questions which have been asked, the kind of pressure which will be brought upon him if ever the steel industry is nationalised?
    Mr. Grenfell: Let me explain to the House that I have tried to bring no political pressure of an unworthy kind upon any Minister. My record in this House ought to defend me in that matter, but I make the assertion that political pressure has been exercised upon the Government.
    Mr. Speaker: I am afraid that we cannot debate this matter now.
    Mr. Grenfell: Will you give us a chance, Sir? Can we not debate this subject? I promise you, Mr. Speaker, that I shall not rest—I have the utmost respect for you, Sir, but I shall not allow a thing like this to pass—until I have exerted every ounce of energy and strength that I have.
    Mr. Speaker: I am afraid that it is not within my province to give time.

  EMPLOYMENT

    Women in Industry (Appeal)
    Mr. Osborneasked the Minister of Labour if he will now make a statement as to the number of women who have entered industry in response to the Government's appeal; how much it cost to make the appeal; and if he is satisfied with the response.
    The Minister of Labour (Mr. Isaacs): This campaign is being conducted in 69 districts in which the shortage of female labour is most pronounced. Since 1st June, when the campaign was launched, until 31st July, 7,533 women have volunteered their services to the local offices of my Department. In addition more than 5,000 women are known to have obtained employment direct, but this figure is incomplete and the real figure is likely to be considerably higher. It is estimated that the cost of the campaign will be about £45,000, of which £20,000 is for Press advertising, £18,000 for poster advertising and £7,000 for miscellaneous district campaign costs. Having regard to the fact that many of the 69 local campaigns are not yet fully in their stride, I consider the results so far achieved are satisfactory and I would like to take this opportunity of expressing the thanks of the Government to those who have volunteered and to those who have remained at work for the help they are giving the nation at this time.
    Mr. Osborne: In view of the fact that the textile industry is short of about 350,000 women workers, and that after two months this appeal has only produced 7,000 volunteers, will the right hon. Gentleman see that no compulsion is put on women until the men are made to do an honest day's work?
    Mr. Isaacs: I think it an unfair implication to suggest that men are not doing a fair day's work. The hon. Member is not right in his figures, not by a long way. I have not the exact figures, but they are much different. Special steps are being taken to get European voluntary workers to come in.
    Mr. Assheton: Will the right hon. Gentleman make quite clear that he is not asking married women with young children to go back to the industry?
    Mr. Isaacs: That was made most clear in the original broadcast, and in answers to Questions, but I am very anxious to repeat it now.
    Sir William Darling: Has the right hon. Gentleman worked out the cost of each of these recruits to the industry? Am I right in saying that it is £70 per head in advertising for one person?
    Mr. Isaacs: My mathematics do not go as far as working that out; I would have to get a ready reckoner. But, in any case, the campaign has just started, and in view of the need the cost may be worth while in the interests of the country.

    Vocational Training Scheme (Building Workers)
    Brigadier Raynerasked the Minister of Labour what answer he has now given to the trade union demand that the Government scheme for training adult workers for building should cease.
    Mr. Isaacs: I have received no trade union demand that the Ministry's vocational training scheme for building should cease.
    Mr. Sparksasked the Minister of Labour if he is aware that some important engineering industries and others are dismissing all their workers over 65 years of age by reintroducing an old prewar rule; and, in view of the urgent manpower needs of the country, what action he will now take to ensure that skilled and experienced craftsmen are retained, if they so desire to be, in industry, and that their knowledge and skill shall not be lost to the nation.
    Mr. Isaacs: I am not aware of the circumstances my hon. Friend mentions. I

    1641
    have already made it clear on several occasions that I deprecate the discharge of efficient workers on grounds of age alone. I should be surprised if many employers in these days discharge such workers on this ground, but if my hon. Friend has any cases in mind perhaps he would let me have particulars.
    Mr. Sparks: Is my right hon. Friend aware that I have already sent him particulars many days ago? Will he have a look at it and see what can be done?
    Mr. Isaacs: I will have a look at it, and see what I can do. But it is quite likely that by this time next week I will have powers which I am unable to use now.
    Major Bruce: Will my right hon. Friend have consultations with the First Lord of the Admiralty in regard to the policy pursued in the Royal dockyards in this matter?
    Mr. Isaacs: I should think that if there is any complaint about my right hon. Friend the First Lord of the Admiralty, it would be as well to put it to him.
    Mr. Berry: Will my right hon. Friend draw the attention of the Civil Service and local authorities to the answer to the Question?
    Mr. Isaacs: We have taken every step to draw the attention of employers to this. Many of these men have rendered excellent and valued services, and in these days it is essential that everyone who can do good work should do so.
    Squadron-Leader Fleming: Is the right hon. Gentleman aware that in the Manchester area, in his own Department of the Ministry of Labour ex-Service men are being dismissed because they are more than 60 years of age?
    Mr. Isaacs: I am not aware of that, but if the hon. and gallant Member will let me have particulars, I will look into them.

    Street Trading (Convicted Man)
    Mr. Anthony Greenwoodasked the Minister of Labour for how long Harry Joseph Stevelman, aged 19 years, fined £80 at Highgate Police Court on 23rd July for street trading offences, served in the coal mines; when he was released and for
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    what reason, and what other national service obligations this man has discharged
    Mr. Isaacs: This young man, who was born in February, 1929, and is aged 18, not 19, failed to register for national service with his age group. The ordinary steps for tracing non-registrants have been in operation, but up to the time when he appeared in court on 23rd July all attempts to get in touch with him had failed. Suitable steps are being taken to ensure that he complies with his obligations under the National Service Acts. He has never been a coalminer, although he was employed from February to August, 1946, by a colliery company as a labourer. He was regarded as an unsatisfactory worker, and when he did not return from a holiday his name was removed from the books.
    Mr. Greenwood: While thanking my right hon. Friend for that reply, and for the action that has been taken, might I ask him if he would tell the House why it was not possible for action to have been taken earlier, in view of the fact that according to the newspapers this man has appeared in court several times during the past 12 months, during which he has been fined £1,000 for trading offences? Will my right hon. Friend emphasise that this country has no use for "spivs," from whatever class they come?
    Mr. Isaacs: I will not express an opinion on the last part of that question. In regard to the first part, we were unaware that the particular individual who was charged under this name was the individual for whom we were looking. As soon as we made contact, and found out who he was, we followed it up. He was due to appear in court in an adjourned case yesterday, but he disappeared, so the police as well as ourselves are now looking for him.

    Exchanges (Instructions)
    Commander Nobleasked the Minister of Labour what instructions have been issued to local employment exchanges in regard to finding posts for those who have been without work for a month.
    Mr. Isaacs: I would refer the hon. and gallant Member to the answer that I gave to him on 29th July. The general principles that I quoted in that answer are

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    applicable both to men and to women and are designed to limit unemployment to the shortest possible period.

    Foreign Workers
    Mr. Osborneasked the Minister of Labour if he is aware that about 1,000 foreign workers engaged on important food production need beds, as correspondence sent to him indicates: and if he will take steps immediately to procure from the, Office of Works some of the thousands of bedsteads now rusting on the Kelstern Aerodrome in Lincolnshire.
    Mr. Isaacs: The hon. Member seems to have been misled by the letter he referred to me. I have no information that the firm in question has sought to employ any foreign workers. The question of the provision of sleeping accommodation for such workers does not therefore arise at present. As regards the disposal of the bedsteads, I understand from my right hon. Friend the Minister of Works that they are already earmarked.
    Mr. Osborne: Since I have sent the correspondence to the Minister I cannot check his statement, but it seemed clear to me that in the letter the firm said that the beds were required for these foreign workers. Would the right hon. Gentleman see that they are supplied from this great dump?
    Mr. Isaacs: I am not blaming the hon. Gentleman for being misled. I think the terms of the letter misled him. This firm said they wanted 1,000 beds for 1,000 workers engaged on producing food. They have not asked for a solitary worker. Any foreign workers in that area who are waiting to go to work have all got beds.

    Coalmining (Poles)
    Mr. John McKayasked the Minister of Labour if he is aware that a number of Poles trained in this country for coalmining, have been refused work; if he will state the number that have not been employed and what the objection is to their employment, seeing that the miners' leaders are anxious that Poles passed through the training centres should be engaged; and if he will state the county districts in which this is taking place.
    The Parliamentary Secretary to the Ministry of Labour (Mr. Ness Edwards): On 1st August, 857 Poles who had com-
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    pleted their training had not been placed. The cause is misunderstanding by local lodges of the provisions of the national agreement, which the national and area officials of the National Union of Mine-workers are assisting to remove. The districts mainly concerned are Scotland, Yorkshire, the East Midlands and South Wales.
    Mr. McKay: Can my right hon. Friend tell us whether miners' agents have visited the branches of the miners' union where there has been a refusal to employ the Poles for the purpose of persuading the unions to agree that the Poles be engaged at the collieries concerned?
    Mr. Ness Edwards: Yes, Sir. A meeting was held yesterday, and an official of the National Union of Mineworkers in each of the coalfields, together with an official of the Coal Board, is being detailed to see each one of these lodges to get this misunderstanding cleared up.
    Mr. Scollan: Would my right hon. Friend tell us if the Government have any plan for employing the 68,000 Poles who are each costing £10 per month for keep alone, and who are doing nothing?
    Mr. Ness Edwards: This is part of the plan to employ them. If our local lodges would remove this resentment, we should get on with it much more quickly.
    Major Guy Lloyd: Would not the Minister agree that this is, in fact, a criterion of the influence of Communists within certain miners' lodges?
    Mr. Ness Edwards: No, Sir. I have gone into this matter very fully, and I have given an undertaking to the hon. and gallant Member more than once that there is no political discrimination in this matter. It is due to local misunderstanding and local resentment about the employment of certain men. We are getting that cleared up and I am satisfied we shall get this matter straightened out very soon. We had another request yesterday to recruit another 2,000.
    Mr. Harrison: Taking into consideration the record of the East Midlands coalfield, will my right hon. Friend show great care in those coalfields, as between the miners and the officers of his Department, with regard to the future employment of Poles?
    Mr. Ness Edwards: The Midland lodges which have taken these men are highly appreciative of the contribution that they have made. The result in the East Midlands is generally very good.
    Viscount Hinchingbrooke: Will the right hon. Gentleman repeat his statement of the other day, which has so far had no effect on the T.U.C., that one of the alternatives to the direction of labour is the employment of foreign workers?
    Mr. Ness Edwards: I do not desire to add anything more to what my right hon. Friend stated yesterday.
    Sir W. Darling: Will the hon. Gentleman consult with his right hon. Friend in regard to placing Poles in a coalmine in which there are no British workers? One at Faldhouse, West Lothian, has been closed. Could it not be handed over entirely to the Poles to see what they can do with it?
    Mr. Ness Edwards: I am afraid that that is technically impossible. Even our technicians would not allow these men to go into a pit unless they went in under the control and superintendence of skilled miners.

  BRITISH OIL INDUSTRY (REVENUE)
  Mr. Errollasked the Chancellor of the Exchequer, what is the total revenue derived from the sale abroad of oil accruing from the world-wide operations of the British oil industry; and what expenditure of foreign currency in the form of concession fees, royalties, foreign equipment, labour and other local services is involved in securing this revenue.
  The Financial Secretary to the Treasury (Mr. Glenvil Hall): In 1946, sales about £100 millions. There are no figures to show what part of the industry's foreign exchange expenditure is related to these sales.

  UNIVERSITY STUDENTS (STATISTICS)
  Mr. Sharpasked the Financial Secretary to the Treasury the approximate numbers of men and women students, respectively, who are attending full-time courses at universities; and the approxi-
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  mate numbers of these who are ex-Service men and women.
  Mr. Glenvil Hall: Forty-six thousand three hundred and ninety-eight men and 18,068 women during the academic year 1946–47. I am collecting information as to the numbers of ex-Service students and will circulate it in the OFFICIAL REPORT.

BUSINESS OF THE HOUSE
Mr. Eden: May I ask the Leader of the House if he would tell us the Business for the remainder of this week and for next week?
Mr. H. Morrison: The Business for the remainder of this week will be as follows:
Today my right hon. Friend the Prime Minister will move the Motion of Thanks to the Civil and Military Services of the Crown in India. Committee and remaining stages of the Consolidated Fund (Appropriation) Bill. Afterwards the Adjournment of the House will be moved and the Debate on the state of the nation resumed. We shall also ask the House to consider the procedure Motion relating to the Supplies and Services (Transitional Powers) Bill.
Friday, 8th August—Second Reading of the Supplies and Services (Transitional Powers) Bill.
The Business for next week will be as follows:
Monday, 11th August—Committee and remaining stages of the Supplies and Services (Transitional Powers) Bill.
Tuesday, 12th August—Consideration of the Special Report from the Committee of Privileges. Debate on Palestine on the Motion for the Adjournment of the House.
Wednesday, 13th August—It is proposed to meet at 11 a.m. and Questions will be taken until 12 noon. Adjournment for the Summer Recess until Monday, 20th October.
Mr. Cocks: Will the Lord President consider as an alternative to sitting on Monday, Tuesday and Wednesday, that we should sit on Saturday, Sunday and Monday? Could he make arrangements so that members of the staff do not suffer by being compelled to stay here when they have made arrangements to go away on Monday?
Mr. Morrison: I do not employ the staff. Presumably when the House is sitting the staff must be here, as, when the House is not sitting, other circumstances are applied to the staff. But with regard to the idea that we should sit over the weekend, it was briefly considered. I thought that on the whole hon. Members would be happier if they had a break at the weekend and then came back relatively fresh—I say only relatively fresh—on Monday to conclude the Business of the Session.
Mr. J. S. C. Reid: Will the Debate on Tuesday be confined to the Special Report of the Committee of Privileges and not raise issues with regard to the two hon. Members who figure in the two Reports?
Mr. Morrison: Yes, Sir, it will be confined to the subject of the Special Report. Whether or not that involves a Debate, I am doubtful, but certainly it will be confined to the Special Report, because I thought it would be better for hon. Members to have an ample opportunity of reading both Reports and dealing with them when we came back.
Earl Winterton: Is it the intention of the right hon. Gentleman to table any Amendment or Motion on the Special Report? What is he going to recommend the House to do?
Mr. Morrison: I shall table a Motion.
Mr. Clement Davies: Does the right hon. Gentleman propose to deal quickly with the second Report, because it seems to me that, whatever conclusions one may have arrived at with regard to the conduct of the hon. Member in question, it is not fair that it should be kept hanging over his head for a period of two months? Would it not be right that we should dispose of that as soon as possible? It is a different case from the first, because the hon. Member there has gone away.
Mr. Morrison: I appreciate the point raised by my right hon. and learned Friend. There is a relationship between the second Report and the item that we are proposing to put down for Tuesday—I admit that. On the other hand, I think there is a very close relationship between the two Reports affecting the two hon. Members, and I think that on the whole it would be tidier if we took
1648
the Reports as affecting the two hon. Members together later on.
Mr. Blackburn: In view of the fact that the Supplies and Services (Transitional Powers) Bill confers on the Executive unprecedented dictatorial powers in time of peace—[HON. MEMBERS: "Hear, hear."]—may I ask the Lord President to ensure that full discussion on the Second Reading and Committee and remaining stages of the Bill is not curtailed?
Mr. Morrison: I agree that it is an important Bill but it is a short Bill. I thought if we had the Second Reading Debate tomorrow, when the principles of the Bill can be debated amply, and then had the Committee stage and the remaining stages on Monday, that is giving an adequate consideration. [HON. MEMBERS: "No."] I am only saying what I think. I may or may not be entitled to an opinion, but I am trying to express it. It is an important Bill, but it is a short Bill and the principle is quite clear. I should have thought that the House could well settle it in that time. Therefore, I hope that my hon. Friend will not get too nervous in the good cause.
Mr. Pickthorn: With apologies for not being quickly enough attentive, may I ask the Leader of the House to repeat what he said about the procedural Motion and exactly when it is to be taken? I refer to the Motion about the suspending of certain Standing Orders, and so on.
Mr. Morrison: It is proposed to take that tonight at the end of the Debate which will start shortly.
Mr. Eden: As I understand it, the Motion on the Paper for suspension of the Rule is for other Business and does not, of course, affect the Debate on the Adjournment which will shortly commence again?
Mr. Morrison: No, Sir. The Debate on the Adjournment will: terminate at 10 p.m.
Mr. Beechman: Can the right hon. Gentleman tell us what arrangements will be made in the event of there being some Amendments from another place to the Bill?
Mr. Morrison: One trouble at a time is enough.
Mr. Wyatt: Reverting to the question of the two Privilege Reports, may I ask my right hon. Friend what objection there is to having both Reports debated next week, as I understand that the second hon. Member concerned has now returned from South Africa? Would it not be better to dispose of both cases at once?
Mr. Morrison: I am a little doubtful whether the hon. Member for Gravesend (Mr. Allighan) has returned from South Africa. Anyway, we can make inquiries through the usual channels whether he has or not. Some of my hon. Friends do not think he has, but, in any case, the first Report was a pretty long Report, taking up a whole volume, and it is not easy for hon. Members, with all the claims upon their time, to master them in the time which has elapsed since it was published. The second Report is not as long, although there is a fair wordage in it, and I think it is desirable that, before the House debates them, it should have time to master these Reports. Therefore, I think it would be better to let it wait.
Colonel Stoddart-Scott: The right hon. Gentleman will remember that on Monday last, we had the First Reading of the Medical Practitioners and Pharmacists Bill. May I ask the right hon. Gentleman if it is the intention of the Government to proceed with a highly controversial Bill such as this is during this Session or next Session?
Mr. Morrison: This Bill was published in order that the House and the country should be aware of its proposals. It is not proposed to proceed with the Bill this Session.
Proceedings on Government Business exempted, at this day's Sitting, from the provisions of the Standing Order (Sittings of the House).—[Mr. Herbert Morrison.]

INDIAN CIVIL AND MILITARY SERVICES (TRIBUTE)
The Prime Minister (Mr. Attlee): I beg to move,
"That this House on the occasion of the transfer to Indian hands of the responsibility for the affairs of India wishes to place upon record its profound appreciation of the ability and devotion with which, during the long period of British rule, the Civil and Military Services of the Crown in India have served India and its peoples "
I think that the House would not wish to see the termination of great historic Services without paying their tribute to the men who, decade after decade, have striven to serve India and its peoples. These Services comprised both Indians and British, and, for many years, they were staffed entirely by men from Britain. They have often been services which have called for devotion from generation to generation in many families. A great work of administration has been done, and a great work also in training the Indian peoples for self-government. The Indian Civil Service, in the widest sense of the term, dates back to the days of the East India Company, the days when, in 1765, that company first issued covenants to its servants. It has a great tradition of devoted, honest and efficient administration.
It would take too much time to enumerate all the varieties of service that have been performed or all the different Services—the Indian Civil Service, which has borne the main weight of administration, the Indian, Police, and the technical Services—the Public Works Department, the Education Department, the Department of Agriculture and the Veterinary Department. The men in these Services have been surprisingly few in number, and only those who have visited India realise that often they were only one man among a population of a million. The work they have done, considering how few they have been and how many they have served and the greatness and variety of the work entrusted to them, has been without parallel in the world. That work has often meant being lonely and working in trying climates, and it has also been dangerous. These men have been responsible for great advances made by the Indian peoples, culminating in their achievement of full self-government. There is the Indian Medical Service, which has its own special place, and it is due to its pioneer work that India

1651
now has 50,000 medical practitioners It has many very distinguished men, and it has made great advances in medical science.
No less important than the Indian Civil Service has been the Indian Army. The Indian Army that is now being divided has achieved, on many battlefields, a high reputation for courage, devotion to duty and efficiency. It is an Army mainly of Indians, but the British element has been the cement which has brought together and kept together men of different languages, races, religions and castes. In the younger Services, the officers of the Indian Navy and Air Force have done a like task, and I think one of the great unifying influences in India has been the Indian fighting Services.
Therefore, I think that today it is right that we should honour the men of these Services, these servants of the Crown, British and Indian alike; and we in this House naturally would wish to pay a special tribute to the British members of those Services who have overseas, year after year, done honour to the land that bore them and set a shining example to the world.
Mr. Eden: We on this side of the House would wish to associate ourselves with the terms of the Motion and with the words which the Prime Minister has just used. None will deny either the devotion or the ability with which members of the Services in India have served her peoples. Great reputations have been made or enhanced in the period of British rule, and the pages of Indian history record the deeds of Viceroys, Governors and Generals whose names will endure for all time in her annals.
But our thoughts turn today, I think, not so much to those in high places, but rather to the humbler servants of the Crown, who gave their best not in the hope of some glittering honour or reward but solely from a desire to do their jobs well. I have in mind the collector and others of his rank, the police, medical and forest officers and the like, and the officers of the Indian Army, who, mingling with those for whose well-being they were responsible, got to know and to love the common peoples of India, listened to their grievances and did their best to redress them. Above all, they won their respect,
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and, in many cases, their abiding affection. To such men service to India was the mainspring of their work. Indeed, with many of them, it had become a tradition which passed from father to son. I am reminded of the opening sentence of Kipling's story, "The Tomb Of His Ancestors":
"Some people will tell you that if there were but a single loaf of bread in all India it would be divided equally between the Plowdens, the Trevors, the Beadons, and the Rivett-Carnacs. That is only one way of saying that certain families serve India generation after generation as dolphins follow in line across the open sea."
What, may we ask, would be the best monument to these men who have served India with such loyalty and devotion? It will be found, I think, not in bricks and mortar, not in administrative reforms nor in vast irrigation schemes, but in the concepts of British justice and fair play which they brought to the peoples of India. To all classes, poor and rich, Hindus and Muslims, they have made available a standard of justice which we can say with pride has no equal in the world, and which, whatever the other changes that may come about, is likely to remain the foundation of all law and order in the new India.
Nor must we forget the Indians themselves who served the Crown in so many capacities from Governor down to the humblest peon. I think it can be said that they, too, were impelled by a sense of mission in their work, and that they showed themselves fully worthy of the great Service to which they belonged. Those, Indians and British alike, who continue under the new regime have a great part to play, and their knowledge and experience will be of the highest value to the Governments of the new Dominions. We are under deep obligation to all who have so served, an obligation we must not fail to honour.
Finally, if there are any in the Services, past or present, who today feel deeply about the severance of our direct connection with India, let them recall that they have helped to build up two new Dominions which will rank equally with other countries in the Commonwealth, and to fit their people to govern themselves. Of all forms of human endeavour, I can think of none which could bring to those who shared in this achievement a greater satisfaction or a livelier sense of work well done.
Mr. Clement Davies: May I be allowed, on behalf of my colleagues and myself, to associate ourselves with the Motion which has just been moved? I do not wish to add—nor could I do so—to the very eloquent words which have been used by the Prime Minister and the right hon. Member for Warwick and Leamington (Mr. Eden). I would only like to express our deep and sincere gratitude to all concerned.
Colonel Gomme-Duncan: I would not wish for one moment to sound any discordant note on this impressive occasion. I have, in a very humble capacity, devoted more than half my military service to the service of India, and all I would like to say to the Prime Minister is, will he please bear in mind that there are still a considerable number of Britons serving in India who are desperately worried and anxious as to their future prospects and compensation. I hope the door has not been finally shut on their appeal to be considered along with those who have been generously treated.
Question put, and agreed to nemine contradicente.
Resolved,
"That this House on the occasion of the transfer to Indian hands of the responsibility for the affairs of India wishes to place upon record its profound appreciation of the ability and devotion with which, during the long period of British rule, the Civil and Military Services of the Crown in India have served India and its peoples."

ORDERS OF THE DAY
  CONSOLIDATED FUND (APPROPRIATION) BILL
  Considered in Committee; reported without Amendment; read the Third time, and passed.

  STATE OF THE NATION
  [Second Day's Debate]
  Motion made, and Question proposed, "That this House do now adjourn."—[Mr. William Whiteley.]
  3.54 p.m.
  The Chancellor of the Exchequer (Mr. Dalton): These are days when history is being written, and when the eyes of the world are upon us in this little island of ours, as we face a very grave national emergency, and as we debate the action to be taken. We here are the elected representatives of the unconquerable British people, and we must not fail in our trust. We have run into a great storm, and this storm has sprung up very swiftly, as I shall indicate. [HON. MEMBERS: "Hear, hear."] I have a good deal to say and some statistics to deploy, and I have already called up all my reserves of patience for any interruptions I may have. This storm, as I shall show with detailed figures, has sprung up very swiftly, and the force of this storm is measured today by the rate of exhaustion of the United States line of credit; that is the measure. It has sprung up very swiftly, but it has been brewing for a long time—long before most hon. Members opposite were elected to this House.
  One of the most notable speeches yesterday was made by my hon. Friend the Member for North-West Hull (Mr. R. Mackay), who showed how, away back in 1932, the late Mr. Neville Chamberlain was also faced with a problem. [Interruption.] What I have to say, I shall say, nor shall I sit down until I have said it. Away back in 1932, Mr. Neville Chamberlain had to face a problem similar in character, though less grave in extent than this, and he called to his aid a general tariff in order to redress an adverse balance of payments. It is an adverse balance of payments which we must redress today. For a very long time past—for at least a generation, if not more—this country has never paid, under any Government, or in any economic situation, whether of boom or of slump, for its necessary imports by its exports alone. That is a task which has never been accomplished under any Government for a generation past. These are platitudes to all who study the subject, though they may surprise those who have not.

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  The change which has come upon us is that, in two world wars, a great part of our overseas sources of means of payment for our imports has been destroyed; that is to say, the foreign investments which we slowly accumulated through the 19th century have been dispersed through the war effort twice undergone by us in two world wars. Therefore, the period of living on our 19th century investments is over, and that chapter in our history has come to an end. This fundamental change in the conditions of our national life has been cloaked in recent years by many factors. During the war, as my right hon. Friend the Prime Minister said yesterday, it was cloaked by Lend-Lease, when we got large quantities of food and supplies without payment at all, and we deliberately dismantled our export trade in order that that might be diverted to the war effort. This fundamental change of which I have been speaking, slowly making itself felt through years of peace between the wars, was cloaked by Lend-Lease during the war, and it has been cloaked in the interval since the war by the United States and the Canadian lines of credit.
  I said that we have run into a great storm, and I will seek to put to the House the immediate causes of it in this simple form. First of all, there is the steep rise in the prices of our imports since the end of the war. I am going to quote a number of figures. I have been asked to do so by hon. Members opposite, and, for that reason, I ask indulgence if, in the course of my next quarter of an hour or so, I give more statistics than I usually inflict upon the House, but they have been asked for and it is right that they should go upon the record. These statistics are all drawn from official sources, and I think I can say that none of them are open to any doubt at all. They can all be readily verified.
  First, with regard to this steep rise in the prices that we have to pay for our imports—prices which have to be paid in dollars. The American index of wholesale prices, which is as good an index as we can get, and which takes 1926 as the base year, or 100, stood at 107.1 in January, 1946. In July, 1946, it had risen to 124.3, and in July, 1947, it had risen to 150.6. That is to say, in broad figures,
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  it had risen by 50 per cent. from January, 1946. If within this total, we take the prices of farm products, which are of great importance to us, this index had risen from 130 in January, 1946, to no less than 182 in July, 1947. Roughly, one may say—I think this is simple arithmetic, which has been worked out by those who study these things—that the cost of the commodities that we are buying from the United States has increased by between 40 per cent. and 50 per cent. since the loan was concluded at the end of 1945, and it has increased by 20 per cent. since 12 months ago. So much for the rise in prices. As I have said before, these are not the same dollars. We borrowed dollars at a certan price level, but, in fact, the value of these dollars has depreciated in the measure which I have indicated. These are not the same dollars that we borrowed, by reason of the depreciation in their purchasing power. That is the first reason why this storm has suddenly risen, and why there has been this steep rise in prices of what we need to buy with dollars.
  In the second place, there has been a setback to our hopes of the export drive, as we felt them last winter. That has already been dealt with. The estimated loss of export income for this calendar year, 1947, by reason of this setback due to fuel and weather difficulties, is £200 million. In the third place—and, in some respects, this is the most fundamental reason of all—throughout the world, touching not only us but many other countries, some of whom I will name, there has been a spreading dollar famine which has been rapidly intensifying in the last few months. I emphasise this, and I will give statistics to prove it. One nation after another has been running out of dollars, using every means it can to acquire more dollars, and using in particular every means of converting any other currency—sterling, francs or what you will—into dollars as speedily as possible; all the nations collectively and each of the nations separately have been importing far more from the United States and from the other countries of Western America than they can pay for. I will give figures to illustrate this in a moment.
  Therefore, in the third place, the cause of the rapid rising of this storm is the speedy growth in dollar starvation all over

  1657
  the world. This has not only embarrassed us, although today we are naturally concerned with our own embarrassments; it has embarrassed many other countries in the world as well. It has gravely embarrassed our good friends in Canada, I shall speak of them in a moment; they are in grave difficulties by reason of the same situation. They are importing far more from the United States than they find themselves in a position to pay for. It has embarrassed the economically strong countries of Latin America such as Argentine, Brazil and the rest, who were not in the war and are not at all war-scarred. It has embarrassed a relatively strong, though small, neutral such as Sweden. All these countries have been conscious of a lack of dollars. The measure of this total dollar famine in the world may be appreciated when I say that the United States exports at this time are running at the rate of 21 billion dollars a year, as against imports into the United States of some 8 billion dollars a year. They are exporting more than twice what they are importing, and this difference between these two figures represents the total adverse balance in the current overseas account of ourselves and all the other countries in the world.
  Why is this? There are many reasons, but the reason which sticks out a mile is that both the continent of Europe, ourselves—this island outpost of Europe—and large parts of the continent of Asia, have been war-wounded, ravaged, bombed, invaded, and occupied by the common enemy whom, with such tremendous effort, we defeated; and their recovery of productivity has been much slower than we and the Americans hoped. [Interruption.] I am not making party points. Perhaps that may be left to a later stage. I am talking straight statistics. I am saying that all these countries in Europe and Asia were war ravaged in a way that the new world was not; neither of the Americas was. Therefore, the unbalance which before the war was already showing itself—in that the productive powers of the Americas were growing, in relation to those of the old continents of Europe and Asia—has been tremendously stimulated by the war and its consequences. I return to the figure which I quoted, before I pass to the next point. The United States have an export surplus this year of 13 billion dollars—goods going out which it is found increas-
  1658
  ingly difficult for all the recipients to pay for; that is, 21 billion dollars as against 8 billion dollars. There is nothing controversial about this.
  So far I have given reasons why this storm in which we are has blown up with such suddenness. The third and the most important of the three points which I have made is the rapidly increasing surplus of United States exports over United States imports. Some of us have said words of warning about this. It is thought by some that this has come upon us overnight. I think it was the hon. Member for Flint (Mr. Birch) who was so kind as to quote last night from some observations I made as long ago as last February on Tyneside at Newcastle. I asked him to read on. He did not do so, and I shall, therefore, quote now what I said then. I said on 2nd February at Newcastle:
  We are only able now to import, more than we export because we are living on tick "—
  I wanted to put the thing so simply that everybody would understand it—
  "which we are getting from the American and Canadian lines of credit."
  I said:
  "When these come to an end we shall have to pay our way without 'tick.' This means that we must either export more or import less or both. If, therefore, we have to reduce our imports it will mean "—
  and then I indicated various reactions that would come upon our standard of life and employment, and so on. I said:
  "In other words, you would in this case have a lower standard of life and less employment. That is the danger we have to defeat."
  It was perfectly clear to all of us at that time that that was the danger. I will quote only one more thing that I myself said, and that was when I was speaking at Margate, where the Labour Party held its recent conference. I devoted some part of my remarks to the same subject on that occasion because I desired to bring home to all those represented what was the big problem confronting us. I said these words:
  "By far the greatest and the gravest of all the immediate economic problems that are now facing us is the question of how quickly we can close the gap between our exports and our imports. We must not count "—
  I used the word very deliberately—
  "We must not count upon raising any further overseas credit. I hope that we shall prefer to take the view that we must strain every nerve and make every effort in order to stand upon our own feet as soon as possible,

  1659
  and to pay with our own exports for the necessary imports that we need for the standard of living and the employment of our people."
  I think that that was perfectly clear. I could not have made it clearer. I added, to give the thing the note of urgency, which I felt to be necessary:
  "Time is pressing very hard. The export drive must be stimulated to the utmost, otherwise, if your exclude the possibility of further overseas credits, there is only one other way of bridging the gap, and that is by heavy cuts in imports, both of food and of materials."
  And I finally said:
  "In importance this question"—
  that is, the adverse balance of trade—
  "blots out all others. It is the greatest test that is going to face this country or this movement, either politically or industrially."
  I quote these things in order to show that I have already spoken clearly to all who will hear me on this subject.
  Mr. James Stuart: But not given the solution.
  Mr. Dalton: I shall deal with that in a moment. I shall tell the former Chief Whip of the Coalition Government, for whom in those days we used to have very kind regard, which has not vanished, everything in due course. If he will contain his soul in patience, nothing shall be withheld. I claim, therefore, that warnings have been given. I have quoted my own statements because for them I am responsible; but similar warnings have been given by others of my colleagues. Thus it is plain, as I have endeavoured to show, that this has not come upon us unawares or overnight.
  I wish to say a word or two on what the general situation would be if we had not taken the American loan in 1945, with all the terms and conditions attaching to it. There are some who think—I think that the hon. Member for East Aberdeen (Mr. Boothby) is of the opinion, and some others share his opinion—that it would have been better to have refused the American loan.
  Mr. Boothby: Hear, hear.
  Mr. Dalton: It is an opinion which can be supported by argument, but argument can be deployed on the other side. I wish to face this question quite frankly,
  1660
  because it was part of my duty to present that Agreement, with all its defects and difficulties, to the House. We got a majority vote in favour of it—not quite a straight party vote, for some hon. Members of the party opposite voted with us, and some of my hon. Friends on this side voted with the other side. It was not a straight party vote, but it was a decisive vote, none the less. I wish now to justify that vote which I advised the House to take. Suppose we had not taken the loan in 1945 on these terms from the United States. We should have run into this same storm in which we are, and we should have run into it more than a year sooner. That is plain fact. We are in this storm now. We delayed this storm by just over a year by taking the loan then. I do not think that that can be disputed. I shall give figures in a moment about our reserves and so on. But it cannot be disputed that this same problem of having a vast surplus of import requirements over export possibilities would have faced us just as it faces us now. We should have come into the storm more than a year earlier. And I submit that more than a year ago we were less strong to face the storm than we are now. I shall give reasons for thinking so.
  I submit that in the period that has passed we have increased our strength to face this emergency. I shall give reasons for this though some hon. Members may prefer not to believe it. We are stronger now than then in many respects. We are thinking now, remember, back to the end of 1945 and the early part of 1946 when this loan was under debate in the House. There was a further period, of course, when the loan was being debated on the American side in Congress; but our decision was taken at the end of 1945. Therefore, what we have to compare is the strength that we had at the end of 1945 with the strength we have now. I say that without doubt we are far stronger now. First of all, in this interval we have carried through the demobilisation of very large numbers of men from the fighting Forces—with a smoothness and sense of equity which is totally new as compared to what happened after the first world war. The considerations of age and length of service and the absence of wicked wangling and wire-pulling have created a quite different state of affairs,

  1661
  and the credit can be shared widely for that, for they proceeded upon plans prepared in the days of the Coalition Government, and nobody need be afraid to claim his share of the credit for that. We have carried through the demobilisation of large numbers of men from the fighting forces and women from the auxiliary forces with a greater smoothness and sense of justice among the people than before, and others can share the credit for it. That was a hurdle which we had to surmount, and that hurdle has been surmounted. The credit for it can be shared widely—I am not seeking to take special credit for this for one section rather than another—that we have achieved the immense physical task of the reconversion of our industry from a war footing to a peace footing. This has been carried through. It had only just been begun at the end of 1945. That has been carried through, and all have played their part in that. These are very important considerations.
  In addition—and this is controversial: hon. Members opposite will disagree with it, but I am sure it will be supported by a majority of this House—I believe we have better prospects now than then of increased productivity because—I expect this will be argued, but I am anxious to keep the thing on a reasonable level of quietude, and the fact that I was not loudly interrupted from that side of the House or applauded loudly over here just now was a good thing, on the whole, for the purposes of the Debate—but now I say that the prospects of increased production of coal are infinitely better now than they were then. The miners are now working for the nation. The miners were not working for the nation when the American loan Debates were taking place. The process of re-equipping the mines—and much re-equipment is, admittedly, necessary—of re-deploying and re-arranging the labour force within the mines, and of recruiting new labour to the mines, is going forward. It has begun under the new regime, under the National Coal Board.
  I speak with complete frankness on this matter. I wish, throughout my speech, to hide nothing. We have still a long, long way to go before our coal output is adequate to our national need and to what Europe urgently needs from us, as part of the general scheme for the building up of productivity on this and on that war
  1662
  stricken plot. We have a long way to go, but we have a far better chance of going that long way now than we had under the previous regime at the end of 1945. We have a much better prospect than we had in previous days of increasing the output of coal in the months ahead. That applies in other respects also. Although I do not at this stage wish to develop the argument in detail, I believe that in agriculture, in consequence of legislation being passed by this House—the great Agriculture Bill, which has not been very controversial, contains many guarantees for the future with regard to prices, and so on—we are in a far better position now to look forward to a rapid increase in production than we would have been without that Bill. I say the prospects are much better now than they were then.
  It has been good that we have had this period in which to strengthen ourselves, both in the present and in relation to future possibilities. When this loan was negotiated both we and the Americans thought—and all the experts thought—that the loan would give us some three years of help towards reaching an equilibrium in our balance of payments. For reasons given by my right hon. Friend the Prime Minister yesterday, we shall, in fact, have not three years, not 36 months, but only some 15 months of breathing space. This shortening of the period has gravely accentuated the difficulties which all of us foresaw, but the character of which has been much intensified by the factors I have been mentioning. It is common ground—here again I think everybody will agree with what I am about to say—that some of the obligations in the Loan Agreement were imposed upon us prematurely. That was the view of the Government; that was the view of our negotiators; and that was also the view of hon. Members opposite, whether, on balance, they supported the loan or opposed it.
  There were features of the Loan Agreement which we disliked, and which I, speaking in support of the agreement, and other right hon. Members on both sides of the House, speaking in that Debate, emphasised at the time. We did not like it. Our negotiators struggled hard against it. They struggled so hard that in the case of Lord Keynes, who rendered such conspicuous service, I am sure that struggle shortened his days upon

  1663
  earth. They struggled hard against it, but, in fact, we were not able to avoid these obligations as necessary conditions to obtaining the dollars. There was nondiscrimination prematurely on 1st January, 1947, and convertibility prematurely on 15th July last. It is common ground that those were highly disagreeable features of the Loan Agreement. What remained to debate between us was whether we could not get it without these conditions, and every effort was made so to get it. Faced with the alternative of loan on these conditions or no loan, which should we choose? The majority of the House chose—in my judgment quite rightly—the loan even with these conditions.
  Over and above these conditions it is further true—and our negotiators fought a hard battle on this, also unsuccessfully—that the amount of the loan was insufficient to leave any margin for any unfavourable further events which might not have been foreseen. Such an unfavourable turn of events has occurred. When all is said, we accepted those conditions at the time we signed our name, and we have punctually kept our word to date; and we are entitled to be proud of it, because that is part of the British way of life, that when we sign a document we keep to it.
  Mr. Brendan Bracken: So do the Americans.
  Mr. Dalton: Certainly. I am speaking of it from our end. I am not making any point against anybody. Speaking from our end, we accepted conditions which we knew to be hard, and which we thought to be prematurely operative; but we accepted them since we could get no better, and we have kept our word.
  I am afraid that at this stage I must deploy some figures, at the request of the other side of the House. No doubt my hon. Friends behind me will also wish to have them. It has been alleged that the loan has been squandered. I do not know whether or not that is believed in this House. I have commented upon the quiet tone of the House, and the lack of cheers, but I thought I might have drawn one there. [An HON. MEMBER: "Speak up."]—[HON. MEMBERS: "Hear, hear."] My hon. Friend has awakened the Opposition to life. I was saying that
  1664
  some people have alleged outside this House that the loan has been squandered, and I was waiting to hear whether that would be picked up by hon. Members opposite. So far it has not. I propose to give details of how the loan has been drawn and how it has been spent. I apologise that there are so many statistics, but I have been asked for them and it is right that we should have them.
  How has the credit been drawn? The total of the United States credit was 3,750 million dollars. In 1946, in the third quarter, we drew 400 million dollars; in the fourth quarter we drew 200 million dollars. We were doing well in 1946. As my right hon. Friend the Prime Minister pointed out yesterday, we had, on the whole, a very encouraging year in 1946, though we have had a set back since. In 1947 the speed of drawing increased. I will give the figures by months. In 1947, in January, we drew 200 million dollars; in February, 100 million dollars; in March, 200 million dollars; in April, 450 million dollars; in May, 200 million dollars; in June, 300 million dollars. That meant a total of drawings, from the beginning of the loan, of 2,050 million dollars out of 3,750 million dollars. Then we come to the very startling figure in July, of 700 million dollars. I shall speak about that later; I shall conceal nothing from the House. It was a very startling figure to all of us, including myself. I was deeply disturbed about it, and I will comment upon it later. That is the figure to date.
  I wish now to speak without any undue attempt at prophecy. The figure for August will not be known till August ends, but I have good reason for hoping that the August figure will be substantially less than the July figure. I emphasise "good reason for hoping," and I choose my words with care; I will not underline or exaggerate. With regard to the July figure I make the following points, which the House and the public should know. In the first place, at the request of the United States' Government we postponed until 1st July a drawing of 150 million dollars which we had desired to make, and which we really needed in June. That 150 million dollars was deliberately transferred from June to July at the request of the United States' Government in connection with their detailed arrangements for appropriation which run, I understand, upon a monthly basis. In the

  1665
  second place, July included one of the large periodic dollar payments on behalf of the Germans, to keep them alive. In July nearly 50 million dollars was drawn to feed the Germans. These payments to feed the Germans come periodically; they do not come month by month, but at intervals.
  Furthermore, in July we began to make payments—and we make prompt payments, of course, in this connection—for the Canadian grain shipments under our four-year contract, which are always concentrated in the few summer months when the River St. Lawrence is open. During these months the Canadian wheat flows at an exceptional pace across the Atlantic. There was an additional payment of 40 million dollars in respect of Canadian grain. American and Canadian dollars are the same. I will speak later of our special relations with Canada. The precise statement is that we had to find 40 million dollars, part American and part Canadian, during these months. These were drawings on the United States dollar credit. I shall explain the relation between the drawings on the United States and Canadian dollar credits in a moment.
  There is a distinction to be drawn between drawings and spendings in any month. All the 700 million dollars that were drawn in July were not spent in July. A number of them are carried forward into August. It is, therefore, the case that if you are looking at. the rate of exhaustion of the credits, it is more useful to have regard to the spendings from month-to-month than to the drawings. The two are connected, but the spendings area closer guide. It will now give the House some figures of the spendings out of the dollar credits. The convenient way to express these to the House is to take the net drain on our total resources of dollars, which means for this purpose the United States credit plus the Canadian credit. The net drain on our total resources of dollars, adding together the United States and Canadian credits, and gold—although in fact we have not drawn down our gold reserves, in spendings—is as follows. I will give the figures in millions of dollars. The Canadian dollar and the United States dollar now stand at parity, and for the purposes of arithmetic no distinction has to be made. The figures for 1946 are, for the third quarter, 210, and for the fourth
  1666
  quarter, 369. I will again give the figures for 1947 in months. They are: January, 137; February, 224; March, 323; April, 307; May, 334, and June, 308. In July, there is an upward leap, the reasons for that I have given, which is not quite so sharp as in the drawings, the figure being 538. I repeat that when we come to August, I hope these figures will show a decline.
  I wish to give some more figures in relation to the suggestions that have been made that these moneys have been ill-dispensed as between different objects. How has the total expenditure been divided? We have, in the first place, direct United Kingdom purchases in the United States. In the 12 months ending 30th June, 1947, we had spent 1,540 million dollars in direct United Kingdom purchases in the United States, as against the earnings in the United States from exports, visible and invisible, of 340 million dollars; that is to say, there is an adverse balance direct with the United States of 1,200 million dollars. How were our spendings on direct purchases in the United States—and this is not the complete story, but only the first item—distributed between different objects? Of our total spendings in the United States direct, 25 per cent. was on food; 27 per cent. on raw materials, including petroleum; 14 per cent. on machinery; 7 per cent. on the purchase of ships—a special case of capital goods acquisition; 12 per cent. on tobacco; 4 per cent. on films, and 11 per cent. on food, etc., for Germany. These add up to 100 per cent. and these are the divisions of the total of 1,540 million dollars divided in percentages over these 12 months. These are direct United Kingdom purchases in the United States, but this, of course, is only the first item in the account.
  There are also United Kingdom purchases for dollars in the rest of the Western Hemisphere—Canada and South America. During this same period we spent 615 million United States dollars. Dividing it into the main items, we spent 220 million dollars, practically all on food, predominantly wheat, in Canada; 260 millions, principally oil and sugar, in Central America, and 135 millions principally on meat, with some cereals, in the Argentine and other South American countries. These are the elements—1 repeat it to try to get it clear—of the

  1667
  total United Kingdom purchases from the Western Hemisphere, other than the United States. We have to pay dollars for them, because neither the Canadian nor Latin-Americans are interested in holding blocked sterling—they want British imports or dollars. This is one of the essential features of the case.
  I think the House understands that the question of convertibility is not principally a question of what is written in the Anglo-American Agreement, but what is written in the realities of life of these countries. All these countries, as I have said before, are running very short of dollars, and are increasingly demanding from us sterling convertible at once into dollars, quite apart from any obligations of the American Agreement. If we did not agree to give them convertible sterling, they would invoice the bills in dollars straight away. That should be clearly understood.
  This brings me back to the central proposition in the whole exposition of this case, which is that our grave difficulties would be almost over if we could export enough of our own goods and services to pay for the imports we need. Our difficulties all arise from our inability as yet to do this. We cannot yet export enough to pay for our imports. Supposing we could supply exports of British goods and services instead of sterling, there would be no difficulty about convertibility. Convertibility only arises in so far as those who receive our money in return for what they send us cannot turn that money into British goods but have to turn it into currencies of other countries. I have given enough facts about the expenditure in broad categories to show that it would be a complete misuse of language to say that this loan had been squandered. The Leader of the Opposition said, at Woodstock, on 4th August:
  "There were other reasons why the loan had been ineffective.",
  I expect this will be cheered from the other side—
  "Owing to the follies and indecision of the Government a great part of the loan had been spent, not on the requirements of industry, nor upon the import of basic foodstuffs. Much had been frittered away in American films and tobacco, and in large quantities of foods and fruits, which were not indispensable to our active recovery."
  We were naturally forced to spend the bulk of the loan on food for our own
  1668
  people and raw materials for our own factories. It was never suggested that we could have gone completely without tobacco, and when I proposed a heavy rise in the Tobacco Duty the Opposition voted against me. There still stands on the Order Paper, unless it has been taken off in the last day or two, a Motion, backed by a considerable number of Conservative Members, asking for the complete abolition of petrol rationing. The Leader of the Opposition has not had very consistent support from his own followers.
  Now I wish to say something about the sterling area, and this, again, is uncontroversial. We have all been rather proud of the sterling area during the war. It has been, speaking in broad terms, a band of brother and sister nations, who pooled their resources and stood together, in fighting the war—with the exception of our Canadian friends, who have a special currency system—Australia, New Zealand, South Africa, our Colonial territories, India, and others. We in this country are the bankers for the sterling area, and we hold their gold reserves, about which I will say something in a moment, as I have been asked to do.
  When I give the figures for the sterling area, it must be remembered that they are not the gold reserves of this little Island; they are the gold reserves of Australia, New Zealand, and all the rest. During the war, the arrangement was that we banked for our comrade nations in the sterling area; they paid to us the golden dollars they acquired in the course of their trading, and we paid to them whatever they reasonably needed for their trading. I will tell the House the figures for the first six months of this current year and the last six months of last year, so that they will see the rapid change for the worse in the sterling area situation. In the first six months of this year, we were asked to find 205 million dollars for the current trading of the sterling area as a whole. We were asked to find 50 million dollars for South Africa, 60 million for Australia, and 235 million for the major part of the area, including all the Colonies, and India. But Malaya earned for us, on the other side of the account, 140 million dollars by the sale of her natural products, and the net result of balancing one item against the other was that in the first six months of this year we had to find 205 million

  1669
  dollars for the sterling area as a whole. That has been an element in the drain on us.
  In the last six months of last year, instead of having to pay out to the rest of the sterling area, the rest of the sterling area paid in to us to the extent, in the aggregate, of 155 million dollars. If we take the two together, they paid in 155 million dollars in the last six months of last year, and we had to pay out 205 million dollars in the first six months of this year. Therefore, taking the area as a whole, our total payment out was 50 million dollars. I quote these figures to show how the situation has rapidly varied, and to give a picture of how the sterling area requirements are to be met.
  Now I wish to say a word or two about the so-called sterling balances. These are nominal figures, and I have expressed my view—and I do not alter it—that these nominal figures cannot be regarded as figures which can finally be granted in commercial and trading transactions. I think everybody agrees with that. The totals of these sterling balances arose in two separate ways. Some arose in the ordinary way of trade, the buying and selling of goods which has taken place since the end of the war, but a number arose in special wartime conditions, and they resemble war debts as we have known them in the past, to which there correspond no tangible physical assets at all, except the great and overwhelming asset of victory in war against the enemy. Therefore, the figures I am giving are the total nominal figures in respect of all of which I have reserved, on behalf of His Majesty's Government, our position. I have asserted our view that there should be some scaling down and readjustment of these totals. I have not failed to make that clear in any of the negotiations which are going on.
  On the other hand, it has been necessary that we should arrive at certain temporary arrangements—and Members who have asked that we should take steps to limit the drain on convertibility will recognise the importance of this—in order, among other things, to get, if we could, an agreed blocking of the major part of these obligations, until such time as the whole matter can be resolved in a rather less critical atmosphere. The nominal figure on which I have reserved His Majesty's Government's view, and
  1670
  which should be substantially scaled down, stood, at the end of June, at £3,559 million. I should explain that this excludes all liabilities in respect of various credits and loans from the United States and Canada. These are sterling balances in the proper sense of the term. These figures include the balances representing the turnover of trade since the end of the war, but by far the largest part of our balances accumulated during the war, about which there is much debate, and on which I have made my views clear.
  I have been seeking to arrive at agreements with various holders of sterling balances, in most cases purely interim agreements, to extend over a further term. We have brought, or are in process of bringing, some £1,700 million of these sterling balances under control by voluntary agreements for blocking. It is a great safeguard against unexpected sterling drains. I am not anxious to conceal anything, and I will answer any reasonable questions which are put to me. Out of £3,559 million we have brought, or are in course of bringing, £1,700 million, that is about a half, under such agreements. The remainder, consisting of £400 million or more, is held by our Dominions, and we have not thought it necessary, in the case of Australia, New Zealand, or South Africa, to enter into the same kind of formal arrangement as is proper in certain other cases. We have agreements with them that are based on good understanding. The sum of £760 million is held by other countries in the sterling area, very largely by our own Colonies, with whom we have our own methods of arrangement. That leaves only some £500 million out of the total of £3,560 million held by all other countries of the world, including some in Europe. I am sure that whatever we may think on the long-term about the equity of a particular figure being fixed for any particular sterling balance, largely accrued as a result of the war, that no one will disagree with my view that it was very important in this critical state of affairs to bring about an interim arrangement, at least as a first stage, to prevent uncontrolled demands for conversion of those large balances into dollars, and it is towards that end I have been directing our efforts.
  Mr. Scollan: Will the right hon. Gentleman explain, with

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  regard to the £400 million that has been blocked, if a final settlement with regard to payment is in suspension?
  Mr. Dalton: When it has been blocked, it means that it cannot be drawn upon. It cannot be drawn upon except with our consent, and I have been explaining that we have been seeking to safeguard the immediate position by blocking in most cases from the end of the calendar year but, in some cases, from 15th July. I can furnish details, but I think that it will complicate the matter if I go into them too much now. The short point is that, when a thing is blocked, it means that it cannot be drawn upon except with our consent, and I have been seeking to create a position whereby these things cannot be drawn upon, except with our consent in clearly limited amounts.
  I wish now to say a few words, with complete frankness, as to what stands behind the United States credit in terms of our final resources when the United States credit has been exhausted. My right hon. Friend the Prime Minister indicated yesterday that it will be before the end of this year, and, in my view, it will probably be in the month of October. I will not be more exact than that, but that is what it looks like, assuming a decline from the abnormal high level of July. On the other hand, the number of measures we shall take, which my right hon. Friend indicated yesterday to the House, will have effects, some of them quite immediately, such as the stoppage of buying quantities of foodstuffs in hard currency areas; others, less immediate, as in regard to cuts in foreign travel allowances, and so on—the effect of these cuts will, I hope, be somewhat to extend the period before the exhaustion of the United States credit. That was one of the immediate purposes, although, equally, there are other purposes as, in the period after the credit has been exhausted, to safeguard in some degree the reserves that stand behind them and to prevent their too rapid depletion.
  Behind the United States credit stand three elements. First, there will be the remains of the Canadian line of credit. At the present time, there is outstanding on the Canadian line of credit 500 million dollars, or £125 million. I wish to put very frankly what the position is about the Canadian credit. Canada has been
  1672
  magnificently generous through the war effort as a whole, and to this country in particular. We owe our Canadian friends an undying debt: They advanced this credit immediately after the United States credit was created. They have run into a heavy storm, the form of which is the same as the storm into which we have run. They are finding great difficulties in paying for their imports from the United States with the export of their own produce and, therefore, our Canadian friends have asked us to go slow in drawing on the credit and, of course, we have accepted. In fact, what has been agreed between the two countries—the Canadian Government and the United Kingdom Government—is that we shall meet our Canadian dollar expenditure—that is, payment for purchases of wheat, in particular, and other things being sent to us—only as to 50 per cent. by drawing on Canadian credit, and as to the other 50 per cent. by drawing on United States credit. That is what they have asked and what we have agreed to do; and what, until we have some new arrangement with them, we shall continue to do. The reason is, having drawn more slowly on the Canadian credit this amount still stands as a further line of reserve of approximately 500 million dollars of credit unexhausted.
  In the second place, there is the possibility of drawing on the International Monetary Fund. This fund was never intended to make long-term loans or to correct anything as fundamental as the world-wide dollar famine from which the world is now suffering. Indeed, the latter was not foreseen when this institution was created. The function of the International Monetary Fund was always judged to be limited to enabling those members, including ourselves, if we had the need for it, to iron out purely temporary fluctuations in the balance of payments.
  The present emergency is more than a temporary difficulty, not only for us but for the great majority of other members of the International Monetary Fund. Our trading rights—I hope that this is completely clear—under the constitution of the Fund are limited to £80 million in dollars a year for four years—£320 million in all. Some people have said, "Why have not the Government already begun drawing on this?" I am not anxious to

  1673
  hurry towards this because advances from the International Monetary Fund, whether to us or others, carry a rate of interest which rises as the period of the advance extends, and it seemed to me better to hold this among the reserves. This seemed to me the right course for us to pursue, and to take up with the other national representatives on the Governing Body of the International Monetary Fund next month, when they are due to hold their regular annual meeting, the question of whether we should not extend and modify, so far as the constitution permits, the purposes for which the Fund may be used. I quote this as one among the items in our reserves with regard to the use of which further discussion on an international basis is clearly necessary.
  In the third place, after the remains of the Canadian credit, and after the drawing powers on the International Monetary Fund, stand our gold and dollar reserves. These now stand at about £600 million. I think that they have varied very little over the past year; they have been practically stationery during that time, and that is a matter that should be understood in the United States. There are some people who apparently think that we have been using the United States credit in order to pile up gold and dollar reserves. Such is not the case. This figure has stood substantially stable with only minor fluctuations, for a little over 12 months. I repeat that these reserves are not the reserves only of the United Kingdom but are the reserves of the whole sterling area, including our friends of the sterling Dominions. We are the sterling area's bankers, and our reserves are their reserves.
  Against this £600 million we have liabilities in the form of sterling balances of which I have spoken, and even if we should succeed in writing down the nominal total of our sterling balances from the figure at which they now stand, some £3,600 million, it would still, I think, be true that, taking account of all the factors in the case, our liabilities, not at short term, but our total liabilities, would be substantially in excess of these gold and dollar reserves. That is one more reason for treating the matter with very great caution and for hesitating long before taking any steps, or avoid taking any steps which would mean rapid dipping into them. We all recognise that reserves are no good unless they are able
  1674
  to be used in some crisis. To have unusable reserves is no better than to have no reserves, but, on the other hand, they are- only to be used at a critical moment when there is some prospect that the throwing in of some part of the reserves will bring us victory in the battle and will not dribble out and delay an inevitable defeat. I hope the House—and I think all sides will agree with me—will say that we should be exceedigly careful before we contemplate any policy which would involve the running down in the near future of these gold and dollar reserves to a level much below that at which they now stand.
  Mr. Bracken: What about our dollar investments? Can the right hon. Gentleman give us some information about that?
  Mr. Dalton: I think that the right hon. Gentleman, on reflection, would agree that it would be most undesirable to begin putting labels on our holdings. Let him think what that does. I am quite friendly about this, and I am anxious to co-operate. I should like, however, to speak a cautionary word on this. [HON. MEMBERS: "Speak up."] I was saying a special cautionary word to the right hon. Gentleman. I was saying that I really think on reflection he will agree that it would not be a good thing to give undue publicity to any such subject in this Debate. That is my considered opinion. Putting labels or ticket values on these things and letting them go-forth would not be very wise. That is all I am going to say. I think the right hon. Gentleman agrees with me. My right hon. Friend the Prime Minister was asked yesterday whether the figure I have given included what the right hon. Gentleman is talking about today, and the answer is "No." I hope I can leave it there now.
  I have endeavoured to display the position statistically, and I apologise for the large number of figures which I have used. But I was asked to produce figures about our drawings and spendings and I have done so. I pass from that, and, in view of the situation I have been describing, I should like briefly to recapitulate the steps which are to be taken in accordance with what the Prime Minister indicated yesterday to the House. Our trouble is this wide, yawning gap between our

  1675
  exports and imports. That is the trouble and nothing else; neither less nor more than that. Therefore, all our measures must be aimed at narrowing the gap at both ends; at operating on both sides of the gap to narrow it. We shall only get straight when we can pay with our current exports, visible and invisible, for our necessary imports. That is the goal at which we must aim, and we must accomplish this in any case, whatever temporary alleviations may be got, whether through the international discussions in Paris with regard to Europe or the international discussions in Washington with regard to the part the United States can play.
  We must close this gap within at the outside a short span of years. All other devices must be no more than bridging devices over a few years. This country will never be in the economic and financial position it ought to be in until we can pay with our current exports for our necessary imports. The gap must be closed right up. That I have constantly said, and I have quoted remarks of mine to that effect. This means we must spend fewer dollars on imports and on overseas expenditure, and we must earn more dollars by our own exports. These are the only three variables in the case. There is nothing else in it—our own exports, our own imports, including the invisibles, and our overseas expenditure. These three totals must be so adjusted that within a few years at the most we can close and do away with the gap.
  Now we are confronted with the size of the gap. As my right hon. Friend the Prime Minister said yesterday, in terms of dollars we are confronted with a gap of £600 million this year so far as the Western Hemisphere as a whole is concerned, including Canada, the Latin American States as well as the United States themselves. With a view to closing that gap we are proposing—and I only summarise briefly what the Prime Minister said yesterday to put it into proper focus and into the picture—to reduce our foreign exchange expenditure with regard to imports of food from hard currency sources at the rate of £12 million a month and with regard to a large number of other items of expenditure which were mentioned yesterday, such as timber, films, consumer goods, foreign travel allowances, and so on, to
  1676
  an order—this is additional to the food saving—of over £50 million a year. The result of this will be, in round figures, that if we are to continue the reduction in food imports by cutting them from hard currency sources, hoping, as was indicated yesterday, to supplement these in considerable measure from soft currency sources, and intending to enter into discussions with the United States forthwith as to means by which this can be accomplished, including the loosening up of those obstacles of non-discrimination and the like——
  Mr. Churchill: Hear, hear.
  Mr. Dalton: Before the right hon. Gentleman came in I gave some figures on that. As I was saying, if we can do these things which will enable us to buy from other members of the sterling area in particular, the net effect, supposing that these other matters can be maintained for a year, and taking into account what can be got conversely from the soft currency countries, will be a total saving of an annual rate of £200 million a year. That is a fair contribution towards the size of the gap.
  In addition to this, there will be the savings in respect of Germany. I have already referred to this heavy payment for keeping the Germans alive. My personal views on this are well known and we have all, including my right hon. Friend the Foreign Secretary, been doing our best to put an end to this inequitable arrangement whereby we have to feed the fallen foe to such a disproportionate extent of the total cost. Over and above the figures I have given, there can be savings which we cannot estimate with precision, but which the Foreign Secretary did indicate on Monday in this House, and I quote his words:
  "What they—"
  that is His Majesty's Government—
  "cannot do, when this present scheme runs out, is to spend any more dollars for this particular purpose."
  That purpose is civil supplies for Germany.
  "Therefore, it does involve discussions and review, in order to devise other plans."—[OFFICIAL REPORT, 4th August, 1947; Vol. 441; c, 1102.]
  I hope and believe we can add considerably to the closing of the gap in this regard. This still leaves a wide gap, and

  1677
  I have already indicated that that can only be narrowed by a rapid expansion of our exports, which was dealt with yesterday by my right hon. Friend the Prime Minister, and which is linked up with the whole problem of increasing the productivity of our industries here. I do not propose to re-traverse this ground which he covered yesterday.
  I want now to come to another matter, and that is the Armed Forces. Yesterday my right hon. Friend the Prime Minister covered an exceedingly wide ground and he had to deploy statistics and arguments over a wide field. I am not quite sure that the House as a whole completely apprehended the importance of the figures that he gave on this subject on the Armed Forces, and, therefore, I propose to recapitulate them and to add a comment. As the Prime Minister said yesterday, we are bringing back to this country between now and the end of December of this year 133,000 British troops from a number of overseas theatres. For obvious reasons we are not going to tell the House the breakdown between the theatres. If anybody asks for that information it will be refused. The total is 133,000 from the overseas theatres as a whole, and this total will be further raised to more than 200,000 men brought back from all overseas theatres taken together by the end of March, 1948.
  Mr. Mikardo Mr. Mikardo (Reading) rose——
  Mr. Dalton: I can get along much better if the hon. Gentleman will keep still. I want to explain the whole picture before I answer any questions. In addition to the 133,000 by the end of this year rising to 200,000 and more by the end of March, 1948, we are bringing back from the overseas garrisons 34,000 non-United Kingdom troops, chiefly Indians, to be returned to their own countries, which will also save the Exchequer something.
  Mr. Wyatt Mr. Wyatt (Birmingham, Aston) rose——
  Mr. Dalton: Before I deal with the total of Armed Forces at home and overseas together I shall be willing to clear up any ambiguity in the statement I make.
  Mr. Wyatt: Would the Chancellor make this quite clear? The Prime Minister said yesterday that we had 500,000 troops overseas. Does that mean that by the end of March next we shall have only 300,000 troops in all stations overseas?
  Mr. Dalton: Yes, it means that and a bit more.
  Mr. Wyatt: And 700,000 at home?
  Mr. Dalton: That is true of British troops, but one has also to take into account the fact that, in addition to what my hon. Friend has said, there are the 34,000 troops, chiefly Indians, who are being taken back to India and other places, and to that extent diminishing the overseas garrison maintained by the British Commonwealth and Empire and making a saving for the Exchequer. With that addition, my hon. Friend is correct.
  Mr. H. D. Hughes: Does that include Germany?
  Mr. Dalton: I am talking of the total Armed Forces—the Army, Navy and Air Force together. I have already said that I shall refuse to answer questions about particular theatres.
  Mr. James Callaghan Mr. James Callaghan (Cardiff, South) rose——
  Mr. Deputy-Speaker (Major Milner): Hon. Members are not entitled to speak unless the right hon. Gentleman gives way.
  Mr. Callaghan Mr. Callaghan rose——
  Mr. Dalton: If my hon. Friend will wait for one minute I make the same offer at the end of the next passage which I am about to place before the House. The total of which I have been speaking is that for all garrisons overseas.
  Mr. H. D. Hughes: Does that include Germany?
  Mr. Dalton: Germany is overseas—and a few other places. I repeat that I refuse to state how many of the 200,000 are being withdrawn from each theatre. If my hon. Friend the Member for South Cardiff (Mr. Callaghan) will give me a little longer I am now going to talk about the total strength of the Forces at home plus those overseas, and it may well be that it is on that he wishes to ask me a question. I will give way when I have said what I am now about to say.
  With regard to the total strength of the Armed Forces, adding together those at home and those overseas, the Prime Minister stated yesterday that plans have already been made to bring the number

  1679
  down to 1,007,000 by the end of next March. This means that six out of every ten men who were in the Forces at the beginning of 1947 will have been released in the 15 months ending 31st March next. The total so released is 830,000 men. This is a large total and the process has been carried out in an orderly fashion and governed, except in a very small minority of cases, by the age and length of service principle for devising which, as I stated earlier on, the Coalition Government was entitled to take credit. It is a very great achievement of which we should hasten to be proud before we go on further to be critical. It is a remarkable achievement to have released 830,000 uniformed personnel of the Forces in this period with no serious disorders or disquiets. My right hon. Friend the Prime Minister said yesterday:
  "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."
  [HON. MEMBERS: "Hear, hear."] My right hon. Friend said that yesterday, and it should have been cheered then.
  Mr. Mikardo: It was.
  Mr. Dalton: All the Prime Minister's colleagues, including the Chancellor of the Exchequer, totally agree with that statement. My right hon. Friend continued in these words:
  "…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."
  I would add, "In a rapidly changing world situation in which no one can give snap answers without going wrong." The Prime Minister went on:
  "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."—[OFFICIAL REPORT, 6th August, 1947; Vol. 441. c. 1510.]
  I add this obvious thought, that such further reductions can be achieved in only one or other of two ways or by combinations of them—either by quicker releases or by a slower call-up. Both these alternatives are being very closely studied at this time and, as the Prime Minister stated yesterday, we are making what we consider a very important contribution to-
  1680
  wards the balancing of our national economy by having decided already to defer the call-up of all persons engaged in agriculture, whether they are working on the land now or whether they respond to the appeal to take up work on the land hereafter. I see that my hon. Friend the Member for South Cardiff is on the jump, but I ask him to wait for a few more figures before I give way.
  I want to separate the three Services because we sometimes go wrong by lumping them together and assuming that only the Army is referred to. At the present rate of rundown the Army will be down to 550,000 men by the end of March, 1948, and to 425,000 by the end of 1948; the Navy will be run down at the present rate to 178,000 by the end of March, 1948, and 166,000 by the end of 1948, and the Air Force will be run down to 279,000 by the end of March, 1948, while the figure for the end of 1948 is still under discussion. I have the authority of my right hon. Friend the Minister of Defence, with whom I have been in close consultation on this matter, to say that whatever further economy can be achieved by the continuance of the most searching investigations into the strength and rates of run down will be at once put into effect. I add, as is not unnatural, that it is my intention as Chancellor of the Exchequer to do my utmost to see that these efforts which are being made to speed up the run-down, without damage to the efficiency of the Forces and the carrying out of the commitments involved in our foreign policy, are crowned with further success.
  In particular, one subject which is being very closely studied is whether economy in manpower overseas in garrison duties cannot be achieved by a greater use of air rather than of ground troops. Many people think that that is possible. I say, in conclusion on this matter, that this figure of 1,007,000 is not to be regarded as a target but as a milestone on the road of reduction which, as I have already said, we are determined to leave behind as rapidly as the conditions which I have been indicating allow.
  Mr. Callaghan: I am very much obliged to my right hon. Friend for giving way, and I apologise for interrupting him. I want to ask him a very simple question. As he knows, for certain purposes Germany is regarded as a home station. I

  1681
  would like to know whether the 700,000 figure includes troops serving in Germany. If the 700,000 troops we have at home do not include troops serving in Germany, what on earth are those 700,000 doing?
  Mr. Dalton: My hon. Friend has asked me a question, the answer to which is "Yes." Now I can pass on. Germany is overseas, and therefore the total of troops serving overseas includes those serving in Germany. I hope that is understood.
  I have so far been speaking in purely financial terms, apart from this last excursion into manpower, regarding the external gap in our balance of payments. As my right hon. Friend the Prime Minister said yesterday, we have now to make a two-fold effort to narrow the gap. He indicated a series of positive and negative measures designed to that end. It is clearly desirable that we should concentrate our efforts, so far as we can, on the positive side of extending production and exports rather than be forced back more than we desire on to the negative side of restricting imports. We must do our utmost in both those directions. I am not going over the wide field of stimulating productivity which my right hon. Friend mentioned yesterday, except to say this: We are very much encouraged by the tone and the substance of the communiqués which have been issued in the Press this morning regarding consultations which have been taking place between certain of my right hon. Friends and the organisations of employers and trade unions in this country. There were discussions yesterday with, I think it was, the National Joint Advisory Council representing the employers and employed, and they issued a statement. A separate statement has been issued on behalf of the General Council of the Trades Union Congress. There is nothing but congratulation to be found in the fact that both these bodies have responded in the way they have to the calls made upon them and the facts placed before them by certain of my colleagues. It has been most encouraging.
  I wish to say a further word about capital equipment. The right hon. Member for West Bristol (Mr. Stanley)—it is natural that he should have to go out for a moment, but I am referring to him because he raised a point—challenged me, or perhaps I ought to say invited me, to
  1682
  say something about one point, and that was on the question of capital programmes. It is clear now that we must concentrate predominantly upon exports and that certain of those capital programmes must be reconsidered and re-phased.
  Mr. Churchill: Re-what?
  Mr. Dalton: Re-phased. Some of them must be. I thought that was a military term which the right hon. Gentleman would know very well. These programmes must be rearranged in their time programme. Some capital developments, most desirable in themselves, on the desirability of which we take back nothing we have said, must none the less be put behind the export drive in terms of priority, which is the most important thing which lies in front of us. Next comes the production of the necessary goods for the home market. Therefore we have to slow down in some respects the capital programmes on which we have been working, and that will be done. We shall give particular priority to any capital developments, building and the like, which may stimulate the export drive on the one hand or stimulate import savings on the other.
  Here I put home agriculture on the list. Home agriculture, is the biggest dollar saver of them all. We have legislated this Session already in support of British agriculture and we shall continue to do all we can to support it. I have sometimes been chided as being too ready in the expenditure of public money. I think that some of those who have so chided me will agree that money spent on the greater productivity of British agriculture could not be better spent in any alternative manner, except on the other priorities such as the production of coal and steel. We must set it high above all rival commitments, and that is what we are going to do. The Government are going to reconsider and rearrange the total scheme of capital expenditure, including all kinds of building, with a view to stimulating agriculture, coal and other fundamental necessities. That will also involve rearrangement and redevelopment of the labour force. The Prime Minister dealt with that yesterday, and I wish to add nothing to what he said.
  I was also chided by the right hon. Member for West Bristol, when he opened

  1683
  the Debate yesterday, on the subject of inflation. I wish to say something about that. It is very clear that what we have to do is to import less and to export more of all the most important things, and that is likely to result in an increase in the inflationary pressure. It is likely to increase the total purchasing power as compared with the total of goods available to be bought in the home market. Therefore we must consider what steps should be taken to prevent this inflationary pressure growing to a point of danger.
  I will say a few words about that now. I have been reading in the papers a number of rumours about an autumn Budget. Papers are very prolific in rumours in these days. I can only say that no decision has been taken either by the Cabinet or, at the Treasury, either in favour of or against an autumn Budget. Surely that is how things should stand. We shall not rule out an autumn Budget if it should be necessary to introduce one, but we shall not be rushed into introducing one merely as a symbol or as a more ineffective method of dealing with a situation better handled by other means. Only a week ago we parted with the Finance Bill, which is now the Finance Act, after discussing it at great length. For my part, although it is my duty to do whatever seems right, I should view with horror the prospect of having to embark again, soon after we have assembled at the end of our short holiday, upon another Finance Bill. If necessary, we shall do it, but we have first to be convinced. We do not rule it out and we do not rule it in. The suggestions which have been made for the autumn Budget are quite fantastic. I will not enumerate them. The papers have run riot.
  Some people have been saying that a lot of taxes ought to be reduced or swept away altogether and others are demanding increases. They are not quite clear what the autumn Budget of their dreams should be—whether it should increase or reduce taxation. I will leave them to think about it before we reassemble. The Budget can be viewed—as we always have viewed it—in two separate aspects, in what I might call the narrower and the wider aspects In the wider aspects, in which we not only raise revenue and arrange expenditure, but in which we use the Budget as an instrument for influencing
  1684
  the national economy as a whole, it might be—I do not put it higher than that at this stage—desirable to have certain fiscal changes in the autumn. We must watch the position and see. Evidently there is no time to pass an autumn Budget before we disperse now.
  In regard to the narrower aspect, I hate to say anything which would seem optimistic, least of all to quote it from the "Economist," but because they are never anxious to praise His Majesty's Government, nonetheless I read in last week's "Economist" these words:
  "Amid the encircling gloom—"
  They will have their gloom. They live on it—
  "one bright shaft of light comes from the Exchequer returns. Week after week, they reveal a robust strength of revenue and successions of surpluses which are almost unseemly at this period of the financial year."
  That is what the "Economist" says. It is quite true—perfectly true. For the financial year to date, up to 2nd August when the last Returns are made out, the total of the revenue was £1,162 million; and the surplus over ordinary expenditure over this period was no less than £265,750,000. That is over the first four months. At the comparable date for the previous year there was an accumulated deficit of £299 million. This is for the record so that we may see how things are and see the picture as a whole. Even if I were to agree—I have given reasons why I would not—to exclude from the revenue all what I may call the debatable items, such as the war stores, the trading services and the miscellaneous revenues, which amount between them to over £244 million of my surplus, I am still left with a surplus of over £21 million in the first four months of the financial year. I apologise for adding this, but this is the first time for a very long time that this can be said. So much for the Budget in the narrower sense.
  The Budget in the wider sense is a different story. I say that there is absolutely no ground in the narrower sense to play about with taxes at all. The taxes are bringing the money in very well and expenditure is falling faster than we were given credit for yesterday. In the wider sense it might be necessary to take some fiscal measures in the autumn to correct any increase of inflationary pressure, but I go on to add that yesterday the right hon. Member for West

  1685
  Bristol seemed to suggest that one element in what he regarded as the inflationary pressure—we all agreed; I have never denied it—was the high level of taxation being levied in the aggregate. He asked whether it was possible to avoid inflation if a certain percentage, which he gave us, was being taken in taxation. In reply to the right hon. Gentleman, I make this submission to the House. The height of the level of taxation in itself does not directly bear on this matter at all. I will deviate for a moment to say that before the right hon. Member for West Bristol came back into the Chamber I had been arguing that an autumn Budget is a matter which should be left in suspense until we see how things move, but many of those who are asking for an autumn Budget are asking for more taxation, and if it be that high taxation is a factor making for increased inflationary pressure, it can hardly be right to ask for an autumn Budget to increase the burden of taxation.
  With great respect, I think that those who hold that view are mistaken. What matters is what one is spending the money on and how one is collecting it. A great deal of this high level of taxation and expenditure has been deliberately undertaken with a view to bringing about certain transfers of wealth and purchasing power in connection with a large number of schemes this House has approved in relation to social services and so on. Merely transferring income from a taxpayer to a beneficiary of public expenditure, whether he owns war stock or whether he is an old age pensioner, has no direct effect whatever on inflationary pressure. I say that in order to make a response to the argument yesterday adduced by the right hon. Gentleman.
  I think we must hold the autumn Budget in suspense, committing ourselves neither one way nor the other. Two things can certainly be done and should be done now, and if pressed forward with great energy, they would have the effect of reducing any inflationary pressure that may develop. The first, as has already been said, is to increase to the utmost the productivity of our own industry so that we shall have a larger total production—on which we shall have to draw for export, but the larger the total production, the more there will be available for our own people. The other is an intensification of the National
  1686
  Savings Campaign. Nothing can be more assured—and this again is completely un-controversial—than the proposition that the best way to lessen the inflationary pressure is to persuade people not to spend all the purchasing power currently coming into their possession. From time to time we have made great efforts to stimulate National Savings. It has been on a non-party basis. Right hon. Gentlemen opposite and I have spoken together on the platform in the Albert Hall. There are some things on which non-party efforts are legitimate and proper on any view of these matters. In the light of the position in which we are now I appeal to all good citizens of whatever party to do their utmost to stimulate the Savings Movement, and give full support to Sir Harold Mackintosh and others who are carrying on with it. I will do my part, and I hope everybody else will join. [Interruption.] I was not getting at the noble Lord the Member for South Dorset (Viscount Hinchingbrooke): I was merely looking that way. This really is a case where the national need must take preference over any minor differences we may have on other matters. The National Savings Movement must now be encouraged and enabled to recreate the spirit which carried it so magnificently through the war and inter-war years.
  Finally—and this has a potential bearing on the autumn Budget—it must be abundantly clear from what my right hon. Friend the Prime Minister said yesterday, that there is to be equality of sacrifice in this crisis by all sections of the community. Those who have sacrificed nothing so far—the "spivs" and the like; I do not know much about them, but they are constantly referred to in Debates and the definition of a "spiv" as one who has sacrificed nothing so far, may be as good as any other—should now be required to make their contribution. All sections should play their part in due order in this affair. That may or may not be reflected in an autumn Budget. I reserve that. But we are deeply conscious, as the Prime Minister stated, that there must be equality of sacrifice for all, and there must be seen to be and understood to be equality of sacrifice for all in the efforts we are now making.
  I must apologise if I am talking a long time, but I want to answer questions, and it would be wrong to dodge the issue of the gilt-edged market. I am desired to

  1687
  say a word or two on that, and I gladly do so. During the past three weeks there has been, as we all know, a setback on the gilt-edged market. I regret that very much, and I hope that everybody else regrets it because it is not a good thing.
  Earl Winterton: There has been a loss of money on it.
  Mr. Dalton: Only for those who have recklessly sold. We must all regret this setback, but we have seen ups and downs on the Stock Exchange before. I am wishing to put the thing objectively and I believe—and this is the language used to me by some of those who give me their views based on experience—it is largely due to sentiment, rather than technical reasons, that a setback has occurred. When I say sentiment, I am not surprised. We have had an accumulation of bad news from everywhere all over the world; not merely on the home front, but all over the world from East and West comes bad news, and it is not at all surprising that there has been this decline.
  Mr. Bracken: And too many Government securities.
  Mr. Dalton: That is another matter, and I want to keep this on the minimum of agreement between us—[HON. MEMBERS: "Maximum agreement."] I remember very rapid ups and downs on the Stock Exchange in the past, and as with regard to an autumn Budget, so with regard to this, we had better watch and see what happens. [An HON. MEMBER: "And pray."] I am making no promises. I merely say that we have seen these ups and downs, and ups again, and I add this final point: it is a fortunate thing from the point of view of the Exchequer that this is a period in which we do not need large borrowings from the market—I have explained that in my Budget statement—other than, of course, the weekly renewals of the floating debt. There the position is completely unchanged. We still are charging the half per cent.—we still pay the half per cent. on Treasury Bills and the five-eights per cent. on T.D.R.'s, and there is no present intention of altering that. It is in respect of these short-term arrangements that the major saving so far has come from the cheap money policy. That is to be maintained without any change, and I add merely this: it may be only a question of time before other
  1688
  prices for medium and longer-term stocks adjust themselves to the persistently-held level of the Treasury Bills and the T.D.R's. That is all I will say on that.
  I do not know whether the Conservative Party will vote—I read in the paper that they will do so—against the Adjournment of the House. I do not know whether they have decided it or not. They are entitled to do whatever they please, of course, and I would not wish to influence them one way or the other. But what I do say is that we, on this side of the House, jointly with them, have gone through a very strenuous Session in which we consider—I do not ask them to agree with this—that we have gathered a great harvest of legislation—[Laughter.] I said they would not all agree with that. My view is that we have carried through a strenuous Session in which we have brought into harbour a large number of exceedingly valuable Bills—some Socialist Measures, some Measures of social reform and social improvement, some Measures such as the Agriculture Bill, which are broadly agreed. We have had a very strenuous Session and many people, no doubt, are a little tired. I hope that some of those who are tired are also tough enough to see it out, even if we have to sit next week.
  However, I am sure the duty of all of us, when we have departed for a short time from this place, is to use our rest and reflection in order to gather new resources for resolution to face this conflict, because conflict and national emergency it is. My right hon. Friend the Prime Minister laid out yesterday a very wide-ranging programme of action, urgent and important, to be taken. When we have secured once more a Vote of Confidence in the Government, if the Opposition challenge it, our business is to gear up with no delay at all the administrative machine to all the tasks necessitated by the various decisions indicated by the Prime Minister yesterday. These must be translated into vigorous action, not only by the various Departments concerned, but by all those industrial groups, trade unionists, employers and others who will be affected by them. We must not mistake words for deeds, and we must not mistake general declarations for detailed and effective action.
  I would add only this: this is the first step, and many further steps may need

  1689
  to be taken It has been said that it is the first step which counts, and very often that is so. I hope this House will boldly take the first step involved in endorsing the very wide-ranging programme set before the House by the Prime Minister yesterday. This will be the first step in the conditions which I have sought to make clear uncontroversially in the earlier part of what I have said today; the first step towards our keeping control of our own national destiny and becoming pawns of no man; our national destiny as an independent people, friendly to all but dependent upon none; and to reshape our economic life to suit new conditions which, again I have sought to portray, are profoundly different from anything which our fathers knew—profoundly different and rapidly changing from the impact of these two world wars. We must not hesitate—and I am sure the majority in this House will not hesitate—to take any necessary measures to implement the principles that have been laid down as they shall from time to time reveal themselves. We shall ride out this storm in which we find ourselves, as we have ridden out other storms in war and in peace, and we shall come through unconquered and unconquerable. And those people whom we are proud to represent in this House, each for his own constituency, will not in this great hour fail.
  5.48 p.m.
  Sir John Anderson: This is a grave occasion and, as the right hon. Gentleman the Chancellor of the Exchequer said at the beginning of his speech, we must all endeavour to be worthy of the trust that rests upon us as the representatives in Parliament of this great nation. I listened with close attention to the speech of the Prime Minister yesterday, and I confess at once that my feeling when he sat down was one of profound disappointment. I thought it was a speech in no way "adequate to the occasion. I listened in vain for any ringing call to action. What did the proposals that were unfolded by the Prime Minister, that have been developed but not materially added to by the Chancellor of the Exchequer, amount to? A few cuts, painful cuts no doubt, but obviously insufficient, obviously only to be regarded as a first instalment; a few vague suggestions for reorganisation in the industrial
  1690
  field, although the Government are supposed to have been planning hard all this time; a half-hearted appeal to people to work harder and not to press for more wages.
  What a note to strike! Unconvinced, and unconvincing, I thought. We had a suggestion for a longer day in the mines, which we are told on good authority is likely to be impracticable. We are told that agriculture is to be brought back to its wartime peak, but not for four years. The Chancellor of the Exchequer said that agriculture was at the top of the list, but four years is a long time to wait. We have been told about the reductions in the Forces. It is not clear to me how far those reductions go, beyond a mere acceleration of a process which would come about anyhow. No doubt all these small steps are steps in the right direction, but surely they are grotesquely inadequate, even as palliatives, if that word can be used in such a situation. Until the latter part of the Chancellor's speech, no serious attempt seemed to be made to deal with what I, at any rate, regard as fundamentals; and, as regards the latter part of his speech, I confess that I prefer the sombre note that characterised the speech as a whole to the note of optimism on which the Chancellor endeavoured to conclude. This is not the moment for recrimination. As my right hon. Friend the Member for West Bristol (Mr. Stanley) said yesterday, we are all of us in this mess togther, and we must join in order to see what we can best do to get out of it.
  I feel that it is necessary for me to look back over a period, in order to see what are the causes that have contributed to our present plight; to see what action has been taken by His Majesty's Government which may have aggravated the situation, and, on the other hand, to see what action has been omitted which might have bettered it. We must look to past experience to see what to do, and what to avoid in the future. His Majesty's Government are in no way responsible for the general situation with which they were confronted at the end of the war. They are in no way responsible for the state of economic and financial exhaustion in which we. emerged after, regardless of consequences, pledging all our resources to the single purpose of achieving victory. Neither are His Majesty's Government responsible for

  1691
  the great inherent difficulty of expanding our exports to the extent necessary to meet our economic situation. Nor are they responsible for the increased prices, upon which the Chancellor laid great stress, of the imports which we have had to purchase from various markets. No doubt also the Government have had some extraordinarily bad luck. They had bad luck in the weather last winter.
  Mr. Shurmer: We arranged that.
  Mr. Osborne: Do not be foolish.
  Sir J. Anderson: They have had bad luck in the still slow recovery of Europe from. the war. Nevertheless, there is a great deal in my judgment for which the Government are responsible. I shall endeavour to show that they have taken measures at home which have aggravated the situation. In my view, they are undoubtedly responsible for failure to realise the developing situation because, as the Chancellor admitted, the clouds began to gather a long time ago, and to apply correctives in time——
  Mr. Shurmer: Not like you did.
  Sir J. Anderson: Perhaps I may be allowed to go on. I think they are also to some degree responsible, although not perhaps to the extent that might have been thought before the Chancellor gave the full figures, for which the House is indebted, for improvidence in the use of dollars. I will develop that point later. But above all, I say the Government are responsible for creating the wrong atmosphere in the period of postwar reconstruction.
  I am going to speak very bluntly. When I have been critical before I have spoken with studied moderation, and, I have been forced to conclude, entirely without effect. When I spoke last February in the Debate on the Economic White Paper, I referred to the necessity for getting rid of certain prevalent fallacies which had been established in people's minds by Socialist declarations and Socialist policy over the last 30 years. What I said—I will not repeat it, it is all on record—was dismissed almost contemptuously by the Prime Minister. He said in the speech with which he wound up the Debate that everything I said was either a truism or a fallacy. He should not have
  1692
  said that. I am more convinced than ever of the paramount importance of bringing about a better understanding throughout the country of the basic facts of the situation in which we find ourselves, and I do not believe that any measures which a Government may propose in detail can be effective against the background created by the past declarations of policy of His Majesty's present Government.
  Nothing could in fact be simpler than the basic facts of our situation. We are-at present consuming as a community to the tune of some £450 million to £700 million a year more than we are producing. That concerns our standard of life, and it is not essentially a dollar problem. Fundamentally it has nothing to do with dollars, and I want to make that point perfectly clear. The conclusion to be drawn from the simple facts of our situation is equally simple, that we have to produce more, or to accept a reduced standard of life. There is no escape from that, and the detailed considerations that so often are brought forward which fog discussion have no bearing at all on those basic facts.
  The Government have known for a long time that this trouble was coming. The House of Commons have known it for a long time. But what have the Government done in anticipation of the development of that situation, which the Chancellor said had come upon us in the end with such startling suddenness, but of which we had long warning, for the clouds have been gathering for a long time? One of the first steps the Government took on coming into office was to bring into operation a system of family allowances, and almost simultaneously greatly to improve the old age pensions of the people of this country. I do not blame them overmuch for that—[An HON. MEMBER: "Overmuch?"]—I think they acted too hastily. My own view has always been that the time for conferring those welcome boons on the people of this country was not in a period of excessive purchasing power and deficient production, but at the moment when the beginnings of a postwar slump were becoming apparent. I always thought that, but I would not criticise the Government unduly for the temptation to do what they did must have been very strong.

  1693
  In view of what has happened, however, it must be recognised that to have done what was then done aggravated the situation which was developing, because it involved heavy additions to purchasing power of an inflationary nature. That would have been perfectly satisfactory if the ship of State had been on an even keel. As things were it was unfortunate.
  Then the Government went on, and they decided to carry out another measure for which they were not primarily responsible, that was, the raising of the school age. I referred to that in the Debate on the Economic White Paper and I was told that what I said was unworthy and mean. The result, if the decision is to be made effective, is that scarce materials and scarce labour have to be diverted to the provision of new school buildings and new equipment, and, at the same time a certain reduction, not perhaps a very large one—this is not a major point—is being made in the labour pool. It is a curious fact that these very measures, the raising of the school leaving age and an improvement in old age pensions, were seriously considered in the last crisis with which a Labour Government were confronted, in 1929–31, in an entirely different situation, in which there was a deficiency of purchasing power and an excess of productive capacity.
  What have the Government been doing about higher wages and shorter hours? They know well enough, they have known all the time, that every increase in wages which is not matched by increased production is inflationary; and that it works a double mischief. It means less production and higher costs. We see today, as clearly as can be, the beginning of a vicious spiral. The railwaymen, and there is no more deserving body of men in the country—I say that frankly—make an application, and the court recommends that that application shall be granted, not indeed in full, for what reason? Because it is of the opinion that the terms of remuneration of railwaymen are inadequate by reference by what is being enjoyed by workers in other walks of life. The truth is that those other workers are, in present circumstances, getting too much.
  Mr. Mikardo: Which workers?
  Sir J. Anderson: We know perfectly well how the thing has been moving from
  1694
  point to point—higher wages for less production——
  Mr. Beswick: More profits.
  Sir J. Anderson: That has nothing whatever to do with this; it is quite irrelevant. The old fallacies keep cropping up. To give higher wages, and to acquiesce in shorter hours of work in the sort of situation that was seen to be developing, was, I say frankly, an offence against the interests of the State. The same thing is true about the extension of holidays with pay. All these things are eminently desirable. No right-minded man would wish to see men made to work longer than is necessary, and have less leisure than they might have or get less remuneration than they might enjoy, if we could afford it.
  Mr. Shurmer: Your class.
  Sir J. Anderson: There is no question of class involved here.
  Mr. Shurmer: The right hon. Gentleman always——
  Mr. Deputy-Speaker (Mr. Hubert Beaumont): The hon. Member must control himself.
  Sir J. Anderson: It is a question of what the community can afford.
  As a result of all this, there has been created up and down the country a wholly fictitious sense of well-being, quite naturally but quite falsely attributed to the presence of a Labour Government. The fact is that we as a community have, since the end of the war, been living on a gigantic dole from the United States, and that cannot go on. Why have these facts not been made clear to the people by His Majesty's Government? Then there were these very ill-considered Measures of nationalisation, which make no contribution whatever to the relief of our present position, but which, on the other hand, excite needless controversy, and involve at best a great diversion of effort.
  I recall that in the earlier Debate on the economic White Paper the Prime Minister used an argument about the Labour Government's nationalisation schemes which he repeated in slightly different terms in his speech yesterday. He said, in effect, that the Opposition had their own way in the war, that Labour had to agree to the

  1695
  continuance of the status quo and to refrain from pressing for changes which they regarded as eminently desirable, and that Labour should have their own way now. Surely the argument is wholly fallacious. Labour gave up nothing by not pressing for those measures during the war, because the future was not being in any way prejudiced. This Government, however, have been pursuing a policy which involves irreversible steps. There is no sort of force in the argument which the Prime Minister used in that connection.
  Then we had what I will continue to call the fiction of a balanced Budget. I say that despite what the Chancellor has just said. No doubt the Budget was balanced as a matter of arithmetic, but it was balanced in such a way that it could not bring to the country the advantages that may naturally and properly be expected from a truly balanced Budget. The Chancellor's attitude of self-congratulation in regard to the Budgetary position and the fate of his cheap money policy seems to me to be singularly out of place today.
  Before I say a word about the remedies which I think ought to be applied in the present situation, I must develop for a moment what I said at the beginning about the possibility that there has been improvidence in the use of our dollar resources. Despite the full explanation which the Chancellor gave, there is still something which requires explanation. I do not intend to quarrel with anything which the Chancellor said about the Loan Agreement, about either clause 9 or the convertibility clause. I supported the Agreement. I thought that the amount of the loan was inadequate; I thought that the convertibility provision was onerous in the extreme and was not such as we would have accepted had we had any alternative; I thought, and I still think, that the arguments advanced against the non-discrimination clause, although there are valid arguments, were being grossly overstated, because we have always recognised convertibility so far as the sterling area is concerned, and we may well have had to accept convertibility as the price of obtaining supplies from countries outside North America from which we have to get them. But I would ask this: Is it perfectly clear that we have not in a number of cases agreed too readily to buy for dollars goods that we might have done without? I do not think it is at all
  1696
  established that that has not been the case. I want to say just a word in the same connection——
  The President of the Board of Trade (Sir Stafford Cripps): Would the right hon. Gentleman say to what sort of goods he was referring?
  Sir J. Anderson: I was thinking of fruits, luxury goods and that sort of thing—things that we could have done without. I put the question: I make no assertion—[Laughter.] Hon. Members must recognise that the Government always have certain advantages over the Opposition. They have information that is not available to the Opposition. If we are to criticise, as we are entitled to criticise, we must sometimes be able to ask questions, even questions with an implication, without making ourselves responsible for any positive assertions.
  Similarly, I want to ask a question about the agreements that have been come to—provisional agreements, as the Chancellor told us—in the matter of sterling balances. I am grateful to the Chancellor for the very full figures he gave to the House. I think it a very good thing that as much as possible of that top hamper of sterling balances should be removed into-some safe pigeon hole. It may be that we were justified in incurring some obligations in return for securing a voluntary agreement as to how we should deal with these balances. I want to ask the Chancellor in that connection whether he could tell us how much dollar exchange we have had to undertake to make available in respect of sterling balances—not in respect of current transactions—as the price of the agreements that he has made so far.
  I would like also to take this opportunity to state my view of how we should deal with the problem of sterling balances. I think we should make it clear, first, that so far as we are concerned there will be no one-sided repudiation. We should make it equally clear, as the Chancellor has done, that we claim the right to draw a sharp distinction between sterling balances arising in the normal course of trade, and balances which represent sterile war expenditure. I think, further, we should make it clear that, while there is to be no repudiation, we recognise no obligation to pay any particular rate of interest, or any rate at all, on those sterling balances,

  1697
  or to repay them by any given date. If those points, with which the Government may find themselves in agreement, are made absolutely clear as the combined, the united, view of this House of Commons, the course of future negotiations may be made a good deal simpler.
  I now want to say something on the basic remedies which ought to be applied in the present situation. First, I think we must aim at a real budgetary balance by pruning expenditure ruthlessly—not by increasing taxation but by pruning expenditure ruthlessly In that connection, it is absolutely essential that the Chancellor should make a determined effort to deal with the running sore of the food subsidies. It is not a thing that can be dealt with simply by a stroke of the pen. There would have to be compensatory adjustments. The situation is as unsound and as debilitating as if, in fact, we were all living on charity. Anything that conceals the true facts of an economic situation must work mischief. This is something which requires close attention. Whether or not the Chancellor of the Exchequer is contemplating a further Budget this year, and I say nothing about that, this is a matter which ought to have very close attention. I think that the second point I have to make is equally fundamental. It has become absolutely clear that in this country we must have some measure of controlled deflation. I do not like that prospect any more than any hon. Member opposite, but it has become absolutely necessary.
  Mr. Mikardo: What about unemployment?
  Sir J. Anderson: There is no immediate danger of unemployment. We must take account of the inflationary pressure that will arise when the great flow of free imports comes to an end. There is no escape from that conclusion. At any rate, there is no escape but one from that conclusion, because this is where the internal economy of our country reacts on our external economy. I strongly deprecate the tendency, which is far too prevalent, to try to draw a sharp distinction between the problems of our internal economy and the problems of our external economy. On that, I say that either the money value of our production must be brought to a
  1698
  lower level or the value of the money that is paid for our production must be reduced. In other words, we must have either deflation or devaluation sooner or later. I think we all ought to think very hard before reconciling ourselves to the second alternative. The second alternative, devaluation, will be inevitable sooner or later if our competitive power in foreign markets is impaired by excessive costs at home. The natural remedy—devaluation is a natural remedy, a logical economic remedy—which may be a cure in the long run may be disastrous in the short run, because the immediate effect of applying it is to put up the cost of all necessary imports, and we shall always be compelled to import and, in that way. to aggravate the situation. There is one further consideration and that is its effect upon the sterling area. It is a very grave question whether the sterling area which means so much—and I agree with the Chancellor entirely in this—could be maintained if we had to face any serious devaluation.
  Therefore, the first thing is to restore our internal economy, to balance the Budget not by increasing taxes but by reducing expenditure. The Chancellor may remember that in the course of his Budget speech he said rather airily that the difference between the Government and the Opposition seemed to be that the Opposition were all in favour of reducing burdens and the Government put redistribution in priority. That, I think, was not a correct statement. The outstanding difference was that the Opposition saw quite clearly that unduly high taxation was uneconomic. The Chancellor may have noticed that Lord Brand, in another place, in a speech which is well worthy of study, referred to the fact that in his view the Government were always inclined to stress distribution rather than production. What I do not think he pointed out, and what I want to emphasise now, is that so far as redistribution is concerned it is no longer, as it was at one time, a question of taking from the rich in order to give benefits to the poorer sections of the community. The kind of redistribution that has been going on during recent years has been a process of taking from people of moderate or small means who are not in a good position to protect themselves, for the benefit of others of similar economic status who have greater power and influence in the community.

  1699
  If that statement is examined impartially, it will be found to be absolutely true, and I hope that we shall hear less in future of the virtues of redistribution. I would say, further, that, in combating the inflationary tendencies that are becoming more and more apparent and in setting in operation the tendency towards controlled deflation, the Government should not be afraid to use the financial instrument. I am very familiar with the criticism that the power of finance has frequently been abused in the past. I think that criticism has been exaggerated, but now that the Government have got the Bank of England safely nationalised, they surely need not be afraid of that any longer, and, inasmuch as inflation is a financial and monetary phenomenon, the financial instrument is the appropriate one to use in that connection. I venture to add that I hope the Chancellor, despite what he said towards the end of his speech, will look again at his cheap money policy. I have said before, and I say it once more, that I think that a good policy and a good instrument has been in danger of being ruined by the Government being too greedy and trying to go too fast.
  I wish to say a word now about the proposals that have been put before us by the Prime Minister and the Chancellor. They have to be looked at from two points of view; first, as palliatives, and secondly, from the point of view of whether they will help to cure the fundamental troubles of our situation. I do not want to develop to any extent what I have already said about the details of the short-term remedies that have been proposed, but I am entirely at a loss to know what long-term remedies the Government really have in their minds. They deserve our sympathy, because, in that matter, their task cannot possibly be an easy one. There is so much to be unsaid, so many declarations and promises that will have to be recalled. I remember that, in one of our recent Debates, an hon. Member opposite, who was quite frankly concerned at the situation, asked how he was to persuade his constituents to wait longer for the benefits they have been promised. He obviously did not realise that the account was already heavily overdrawn. These benefits have been received in excess already.
  1700
  Though the task may be difficult, it is only the Government of the day that can possibly discharge it, and they are entitled to look to us in the Opposition for support for all reasonable measures that they may propose, but they must, of course, expect that we shall scrutinise very closely any new powers that they seek to take and endeavour to elicit from them the fullest explanation of the use to which they intend to put those powers. I believe, however, that, difficult though the task of the Government is bound to be, grave though the situation which confronts us is, the task is nevertheless not an impossible one.
  There is one factor which is outside the control of the Government, to a very large extent. I have referred to it already—the rate of recovery of the other countries of Europe which have been affected by the war. Apart "from that, the adjustment that has to be brought about is only an adjustment which is, arithmetically, about 5 per cent. of the national income. As one of the Sunday newspapers put it, it is an adjustment which represents only, the difference between pounds and guineas and, surely, that is not a big one. I have been listening to the terms of speeches from hon. Members opposite, and notably that of the hon. Member for Bolton (Mr. J. Jones), and I have no doubt that, if' the spirit of the people of this country is reflected by those speeches, and if proper guidance be given by the Government, we shall come safely through this trouble.
  The first step towards a cure is to create the right state of mind throughout the country, and that is the note on which I wish to end. We have all heard of Aristotle, a very wise man, well-intentioned and upright, who, in the democracy in which he lived, had to face two charges. The first was that he had worshipped false gods, and the second was that he had corrupted the youth of the city.
  Mr. Mitchison: To whom is the right hon. Gentleman referring? Was it not Socrates?
  Sir J. Anderson: That only shows the deterioration which results from sitting here and listening to very long speeches from hon. Members opposite. It was Socrates, and the charges were that he worshipped false gods and corrupted the youth of the city. He was condemned to die by poison. Hemlock has gone out of fashion; but the present Government have

  1701
  been guilty of much the same crimes. Will they realise that, unlike Socrates, they have time to expiate their offences before inevitable dissolution carries them away.
  6.28 p.m.
  Mr. Driberg: I am grateful to you, Mr. Deputy-Speaker, for allowing me briefly to complete the remarks that I was making when the Debate was suspended last night. Because I have promised to be very brief, I must resist the temptation of dealing with the speech which we have just heard from the right hon. Gentleman. I can only say that I hope that the Press will give it the widest possible publicity, so that—not so much from its Platonic peroration as from the earlier passages in that speech—the whole nation, and especially the wage-earners, and the old age pensioners, may learn exactly how this situation would have been dealt with by any government of which the right hon. Gentleman would have been a member: dearer food, cut wages, cut social services, workers regarded not as human beings but just as part of a profitable labour pool.
  However, I must return to the less controversial subject with which I was dealing last night—a limited, but, I think, important subject. I was inviting hon. Members, and particularly those who represent urban constituencies, to consider the startlingly and uniquely disadvantageous position of agriculture in respect of manpower. I was glad to hear what the Chancellor had to say this afternoon about agriculture, but, on this particular point of manpower, I would ask the Government to consider very seriously that there is no other industry, in all our under-manned industries, which has been asked, as this one was yesterday, for a 20 per cent. increase in output, but which, simultaneously, has to face the loss of 120,000 of its young, fit workers within the next year. I refer, of course, to the German prisoners. I am one of those who believe that we should send them home as rapidly as possible. I was glad to hear the Prime Minister say that we have relied upon them too much; and I was rather sorry that the Foreign Secretary, who is a humane man, saw fit on Monday to use arguments for their retention which amounted to little more than the old slave-owners' arguments.
  But, although I believe that we are bound, morally and politically, to return
  1702
  them home as quickly as possible, I realise that that leaves a very serious gap indeed in our agricultural manpower. These prisoners are being sent home at the rate of 15,000 a month—perhaps 30,000 a month after the harvest; I hope so—but can my right hon. and learned Friend who is going to reply to this Debate tell us that the gap can really be filled at the present rate of recruitment? Obviously, it is most desirable that it should be filled by our own people—by those demobilised, and by those attracted from less essential industries. The snag there, of course, is accommodation. We cannot possibly hope by next year, when the prisoners will all have gone home, to have built enough houses in the rural areas to accommodate another 100,000 or 150,000 new agricultural workers and their families.
  What is to be done to deal with even this short-term crisis in manpower? Obviously, we must have recourse, temporarily at any rate, to the services of some Poles, and some displaced persons. But, here again, can the Government say whether the Poles, through the Resettlement Corps, or the displaced persons are coming forward in sufficient numbers to replace the 15,000 Germans who are being sent home each month? I do not believe for a moment that they are. Again, the Poles and displaced persons will be free men; they will be civilians; we cannot apply quite the same sort of discipline to them as we can to the prisoners of war—although they are now very humanely treated. They will have to live in camps, I suppose. Will the Government continue to provide transport for them, as it does for the prisoners of war?
  All these problems must be worked out in detail now, and I hope that the Government, either tonight or before the House rises, can tell us how the intake of the newcomers is to be regulated, and increased, to fit in with the departure of the prisoners. That is the short-term, acute problem. Essentially, the re-peopling and revival of the countryside depend, not on Poles or displaced persons, but on its being made so attractive to live and work in that the young people will not drift away from it to the towns.
  Wages, though important, are not everything. It is more important to have something to buy with the wages—for instance, a fairer distribution of consumer

  1703
  goods to small village shops; and the priorities on housing materials, about which the Prime Minister spoke yesterday, should be very steeply graded indeed in favour of mining and agriculture. But, even more important, is the sense of status, the knowledge, which the coal-miners now have that they are the aristocrats of industry and are really contributing something valuable to the life of the community. The right hon. Member for West Bristol (Mr. Stanley) was, I thought, quite wrong yesterday in suggesting that the Government's campaign in regard to coalmining had been, as he put it, "publicised, if ineffective." The answer to that was given by the Prime Minister when he referred to the net increase of 27,000 recruits this year. I believe that a similar dynamic and imaginative appeal to all the people might make them conscious once more of the true nobility of the vocation of those who work on the land. It is that dynamic—and here I speak generally, and conclude with thanks, Mr. Speaker, for your indulgence—which, I am afraid has hitherto been lacking in the leadership which the Government have given to our people.
  I agree very strongly with what was said last night by my hon. Friend for Northwest Hull (Mr. R. Mackay), though I would add to his reference to Western Europe, a reference to the countries of Eastern Europe, whose supplies of timber and food can be so vital to us in the next year or two. I hope most sincerely that this Debate marks the end of the "phoney" peace, and that there will be no mercy for "spivs" of any class, whether the Riviera and Ascot "spivs," or the seedier "spivs" of Soho. The Prime Minister did not make it plain whether he was referring to the "Tatler and Bystander" class of "spivs" as well, but I hope he was. I hope, too, that my right hon. and learned Friend who is to wind up this Debate will say something a little stronger than the Prime Minister's reference to "appealing" to companies not to declare high dividends. You order the workers about: you "appeal" to their bosses. I am sorry that I have over-run my promised time by a minute or two, Mr. Speaker, but I wanted to get that off my chest, and to say that this can be the end of the "phoney" peace if the Government will lead us straight along the Socialist path.
  6.37 p.m.
  Mr. Clement Davies: The Chancellor's speech this afternoon contained two statements with which all of us can agree, namely, that we are in the middle of a very great nationalemergency, and that we must not fail in our trust. He then went on to say that the storm had sprung up very quickly. The right hon. Gentleman has several qualities, which we all recognise, but he lacks one which would stand him in very good stead, and that is a long memory, because, towards the end of his speech, having said earlier that the storm had suddenly burst upon us, he said that it had not come upon us unawares and had not come upon us overnight. With the second part of his statement, I absolutely agree. What are the preparations that were made during the time when it was obvious that the storm was coming, and what are the proposals which the Government are now putting forward to meet our difficulties?
  I only wish that, instead of delivering that speech, the Chancellor had issued yesterday a White Paper containing the figures which he took so long to give us. I do not think that anyone in this House has ever taken so long to say so little. It was only at the very end that we got two suggestions as to what might be required from him as Chancellor, and only a very mild passing reference at that. The Prime Minister said yesterday that he was not going to dilate at length on these financial matters, but that they would be left to the Chancellor to deal with. All that the Chancellor had to say, in dealing with this great question of inflation, was what we all know, first, that we have got to increase production, and, secondly, that we had better also try to drive forward the national savings campaign. I had expected far and away more definite suggestions from the Chancellor than we have had this afternoon.
  In his speech yesterday, the Prime Minister rightly called for a united effort by the whole nation. There can be no doubt whatsoever that that united effort will be forthcoming. Whatever our party and whatever our position—employers, managers or workpeople—we will all cooperate as we did during the war. I am confident also that, in spite of the tremendous difficulties that confront us, we shall pull through triumphantly. Not for the first time has this old country shown its mettle best when the difficulties

  1705
  were greatest. It has fine moral qualities, and there is throughout a high sense of comradeship when we have been tried in the fire, and we then come through not only refined, but stronger and better than we were before.
  I must say, however, that what we all need, especially at a time like this, is leadership. There is plenty of courage and determination, and great ready willingness, but we must know in great detail what is required. Therefore, we want not only guidance but decision. Hitherto, both vision and decision have been sadly lacking. No Government, I think, at any time in the long history of this country—certainly not within recent memory—started their career with greater hopes and opportunities than this Government. [HON. MEMBERS: "And greater difficulties."] They still have a great majority in this House. They have also had, more than any Government at any time, a more ready help, willingness and good will from the working people of the country. The difficulties confronting the Government, especially in the transition from war to peace, as hon. Members who have already interrupted me have suggested, were immense; but may I also point out that the greater the difficulties, the greater the opportunities?
  There has been a lack of vision, a failure to see the coming storms and stresses, and, consequently, there has been a lack of preparation to meet them. At times there has been so much optimism, as displayed in some of the speeches delivered by Members of the Government and even by their supporters, that one would have thought that there were really no difficulties confronting us, but that all was well. They so continued, in spite of all warnings, and they seemed to disregard such warnings as some of us have been endeavouring to give them, not merely during the period of this Parliament but in the last Parliament, when we were looking ahead to see what might happen when the war was over.
  The warning last year was that we had an adverse balance of £450 million, and there then came the need to negotiate this loan with the United States of America and with Canada. In February of this year we were told that it would be unsafe for us to borrow more than £350 million; in other words, that it would be unsafe for us to get into a position where the
  1706
  adverse balance between our export and import trade would amount to more than £350 million. That was just six months ago, and that was the statement made in the document with which we are all so familiar—the Economic Survey for 1947. It would be as well for me to recall paragraphs 77 and 78 of that document. All the arguments either from the Prime Minister or from the Chancellor of the Exchequer have been directed to one point—the dollar shortage, and our difficulties with regard to our position here in the Eastern Hemisphere as against the Western Hemisphere. This was their idea of what would be happening—carefully prepared, and issued to us and to the world:
  "This dollar problem within our total balance of payments can be wholly solved only by the economic recovery of Europe and the Far East and the establishment of equilibrium in all the major trading countries' balances of payments."
  Paragraph 78 stated:
  "The United States and Canadian credits must last us not only until we have ourselves established a stable balance of payments and are exporting as much as we import; they must last until this special dollar problem is also solved. No one can predict how long this will be. But we certainly cannot assume that world recovery will be rapid enough to provide a quick answer to our difficulties."
  What of the suggestion of the storm blowing up over night, in view of that statement in February that the Government estimated that the loan must last us until our exports were equal to our imports? Now, in August, we have to admit that the adverse balance is not only £350 million, which is beyond the danger point, but is amounting to £600 million and £700 million. Then the statement is made that the storm blew up overnight. To my mind, that is the most acid comment that one can make upon the lack of vision of His Majesty's Government in dealing with this situation.
  It is now plain that the estimate of the Government, with all the best material that was available to them, has been hopelessly wrong, that inadequate steps have been taken to meet the situation, and that the country is now face to face with an austerity such as it was not called upon to meet during the war. What is more, in the last month we have been drawing, not at the rate of £350 million, which is the danger point, but at the rate of £2,100 million, which is the rate at which we were drawing in the month of July.

  1707
  If any further comment on this situation were required, it could be provided by the statement made by the Leader of the House in answer to a question which I put to him exactly a fortnight ago. We had all been told that the House would be rising possibly today or, at the latest tomorrow, and that we would not be called back, as again we have been told today, until 20th October—that this House, which is the trustee of the public welfare, would be going away for all these weeks. Therefore, I put this question to the Leader of the House:
  "Before the House adjourns for a comparatively long Recess, do the Government intend to make any further statement on the economic position, especially with regard to the progress which has been made in Paris?"
  Mr. Orbach: The Opposition did not seem to be very interested.
  Mr. Davies: I do not understand what that interruption means. Every one of us, I should have thought, would have been interested I was using the earliest opportunity I could to ask the Leader of the House whether it was possible that the House could debate such matters as we are debating today. May I recall the answer I got? The Leader of the House said:
  "If anything concrete should arise regarding the Paris Conference, no doubt consideration would be given to making a statement, but I did not contemplate, subject to what may arise, that any further Government statement would be made."—[OFFICIAL REPORT. 24th July, 1947: Vol. 440, c. 1617.]
  Mr. Tiffany: Surely, that dealt with the Paris Conference?
  Mr. Davies: The question was addressed to both points. I thought the hon. Member was awake and listening. I asked definitely if any statement would be made on the economic position, and particularly—because that had a bearing on the economic position—if there would be a statement on what was taking place in Paris. I dealt with both matters. It is no good the hon. Member shaking his head. I shall be tempted to say what on one occasion counsel said to a judge "It is no good shaking your head, my Lord: there is nothing in it." The greatest disservice one can render at the present moment is to pretend that all is well, or to make friendly comments on the actions of the Government. I think that praise—or un-
  1708
  deserved praise—would be a disservice not only to the country but to the Government themselves.
  Frankly, I was disappointed with the Prime Minister's speech. I am sure that the country had expected to see a balance sheet presented, a balance sheet not only showing the present position, but showing quite clearly how it was proposed to meet that situation—what were the proposals, what would be the effect of each one of the proposals, and what would be the ultimate result. All we knew, when the Prime Minister sat down, was that there was to be a heavy cut in food, especially from the dollar countries, a cut of £144 million a year; that we were to have less petrol; less money spent on films; less money to be used by travellers abroad. I think that even in that last measure there may be a danger—a danger that we may lose a good deal of trade if we do not send commercial travellers abroad.
  Mr. Austin: That refers to holiday makers.
  Mr. Davies: No reference was made to them. There is to be a tiny cut of only 80,000 in the Forces, which will still remain at over one million. There was a call for longer hours in the mines, greater production in agriculture, and a possible—unnamed—cut in houses. We were left to make our own calculations as best we could as to what the effect of this will be.
  The adverse balance of our trade is somewhere between £600 million and £700 million. The bulk of that adverse balance is in the very high cost and the very large volume of food and raw materials and machinery that we have to buy at the present moment. There are signs that the prices of foodstuffs abroad are breaking. In so far as this decision will be to lay off buying to the extent of £150 million, it may assist in breaking down the prices of foodstuffs abroad. In so far as it accomplishes that object it is good. But it is the only good thing about it. For we must have food, not only to live on, but in order that we may be able to produce the very goods that are needed for the people of this country and to send abroad. We ought not to reduce our foodstuffs. Nor ought we to reduce our raw materials, for we need them in order that we may make goods to send abroad. The decision even to cut timber by £10 million a year was a grave one, and I doubt very much the wisdom of it. I

  1709
  am glad that, apparently, there is to be no cut in machinery. That is quite right, for we must maintain our position so that we may be able to produce goods as cheaply as those other countries which were able to build up during the war.
  But when we add all these cuts together, what do they amount to? There is the cut of £144 million on food. The statement made by the Prime Minister was that those purchases will no longer be made from the dollar countries but from the non-dollar countries. These will have to be paid for in exactly the same way as we are paying for food from the dollar countries. So what the saving will be, I do not know. But what is also rather striking is the question—will the food be obtainable in the non-dollar countries? I understood from the Minister of Food that he had combed the world to try to get cheap food, and if, in fact, he could have obtained it in the non-dollar countries before now, he should have obtained it, and not waited until now. So what the saving will be on that, I do not know. Nor has any figure been given us.
  There will be a saving of £4 million on petrol, a saving of some £5 million on luxuries, and so on. What will they total up to against the enormous bill of £1,700 million which our imports today are costing us? That is the kind of statement we should have liked to have seen in a White Paper. The Government issued two White Papers in February. I am sure it would have been better for us if this week we had had in black and white the figures which were given to us today by the Chancellor of the Exchequer, so that we ourselves could have looked at them, and discussed them and argued them and what the effect of them would be and then we could have seen what the effects would be of what the Government are proposing in trying to close this tremendous gap of £600 million or £700 million. Is the Government's object, in making some of these cuts, a psychological one? If they will tell us plainly that these small cuts are only meant to have a psychological effect, we can understand them. But let the Government be honest, and fair to the public, in telling what the position is.
  Wherein lies the real fault? Last year we received, as we now know, some £450 million worth of goods—food, raw
  1710
  materials and machinery—more than we were able to pay for. Already this year we have had about a similar quantity of goods and materials and machinery, for which we have not yet paid. Some day we shall have to meet the bill, but we have not met it this year. Nevertheless, having had all that come unto us, we are unable to pay our way. We are unable to produce and send out the goods that will pay for these imports. What are we to do? We cannot cut down, and should not cut down, food; we should not cut down raw materials; we should not cut down machinery. Without the food, without the materials and without the machinery, we cannot produce the goods which will enable us to pay our way. That is perfectly clear.
  Therefore, what we have to do is to look around at home and see whether anything has gone wrong here. Therein, I submit, the trouble has really arisen. There has been a misuse of our resources, in both men and materials, inside the country, and a misuse in capital expenditure; these, coupled with inflation and the inflationary pressure, constitute the two really giant evils which have landed us in our present position. These two matters are closely inter-related, for there has been a boosting of capital demand, a boosting of capital expenditure, and a spread of capital expenditure in such a way that not even the full benefit of what we might have been able to achieve has been accomplished.
  I should like again to call the attention of the Chancellor to the very wonderful address that was made by Sir Hubert Henderson, to whom I referred three weeks ago when we were debating this matter, and to the two articles which he has since written in "The Times," showing that the effect of this spread of capital expenditure over too wide an area has been a loss of production about equal to what we were losing owing to failure in production due to unemployment before the war. That is a very serious statement to make, and the situation to which it calls attention is a very serious one. It is on capital expenditure that the cut will have to be made. The Prime Minister referred to it yesterday, and I was hoping that the Chancellor would be referring to it today.
  It is rather unfair to this House that the final statement with regard to plan-

  1711
  ning for capital expenditure cuts will have to be made in the last speech which will be delivered tonight, when we shall not be able to deal with it. I take it that the President of the Board of Trade will be dealing with this, but the House will not be able to debate it, because that will be the last speech made tonight. There will have to be cuts in capital expenditure, and they are bound to hurt. They will affect new buildings, new houses, new roads, electrified railways, new bridges like that over the Severn—all of them needed. There are hon. Members who know that for the 20 years I have been here I have been begging: "Do away with slums and build decent houses. I only wish we could do it overnight, and put these matters right." Unfortunately, we now have to postpone those matters, for we can no longer indulge in non-remunerative expenditure. We must turn our attention to making those things which the people require, and which we can sell. Therein lies our main task.
  That brings me to a matter which has caused me more distress than anything else in the Prime Minister's speech, namely, the hint at the direction of labour. It is an easy way of turning labour into a particular channel to issue an order that men should go to work there. It is just the same as conscription into the Army. It is the easy way of getting the men required. But it is not numbers that will count in production. It will be the enthusiasm, the willingness, the zest, the drive and the energy of the men who go to work willingly. What is more, direction of labour offends against the sacred right of every man; and, in particular, it offends against all trade unionism. The fundamental of the trade unionist was the right not only to sell his labour, but to withhold his labour in the same way. Apparently, that doctrine is now going; apparently it is going into—[Interruption.] It is all very well for hon. Members to interrupt, but once you lose liberty you lose everything else. Take my goods, take everything; I may win them back as long as I have liberty. But when I lose my own personal individual liberty, life is meaningless. It would have been meaningless to so many of those who led the movement which has brought those people on to the Government Front Bench today.
  1712
  I realise that today there is a great deal of misused labour, but I would not direct a single man. I would make it as difficult as possible for anyone to employ people in non-productive labour, by taking away many of the materials which they require in order to give that employment. I would give every encouragement to men to go into productive labour, but I would direct no one.
  I now come to the last question, that of inflation. There is an inflationary pressure, and there was at the time the Chancellor introduced his Budget, of £1,000 million; that is to say, there is £1,000 million more of money income in the pockets of the people than there are services and goods which they can buy with that money. All the time, therefore, there has been this tremendous pressure leading to an increased demand for goods, which do not and cannot exist. That demand has been boosted instead of being pressed down. In some way or other we must make up our minds—and this is where I was hoping to hear from the Chancellor this afternoon, but was so disappointed with his speech—what to do in order to bring that pressure down. I am quite sure it would be wrong to try to reduce that pressure by increased direct txation, for direct taxation is already so high in certain cases that we know that it has the effect of discouraging instead of increasing further work and production. We can give any number of instances of that among working people themselves. If that pressure is to be brought down at all by taxation, I am afraid that the only way in which it could be done would be by indirect taxation. That is bound to hurt. Everything that we are about to do is bound to hurt somebody, and all I ask is—and we could find ways and means of doing it—that certain people should not be unduly or unfairly hurt if that method has to be adopted.
  The Chancellor himself mentioned the need for an increased campaign with regard to national savings. The object of that is to take the money out of the pockets of the people and to bring it back into the hands of the Chancellor. I was hoping that the Chancellor would make some reference to it today. Is it that the Government are not agreed upon this? Is it possible that there is a good deal of disagreement among his colleagues? If that fails, will the Chancellor then turn his attention to what Lord Keynes sug-

  1713
  gested in 1940? He then suggested a compulsory loan out of income. That would not have exactly the same effect as complete taxation, because when the money is taken by taxation a man loses it for ever, but if it is taken merely by a compulsory loan he may get it back some day. Nevertheless, it has not the same tremendous psychologically depressing effect as increased direct taxation. In those ways I would bring down the demand and reduce, as completely as one possibly could, this inflationary pressure, and put an end to the unnecessary unremunerative capital expenditure. Further, I would renew the appeal that has already been made from the other side of the House to the Prime Minister, to reduce our commitments abroad, and in particular all the heavy cost which that entails for us. Every man in the Army is not only a loss to production, but also takes away from those who are producing.
  I am glad that further efforts will be made to increase coal production. I am not going to deal with that aspect, because time and again, over a whole series of years, I have dealt with that point. On the question of expenditure, I wish to ask the Chancellor of the Exchequer to consider, with the Prime Minister, the setting up once again of the Committee of this House on National Expenditure, so that they can go into all these matters and cut ruthlessly, where necessary. There is, for instance, wastage of labour not only in Government offices, but in a great many local government offices. I again beg the Government to reconstruct their Cabinet. I made that proposal first to the Government because I thought that the matters confronting them were so difficult and so immense that it was necessary that they should have a small Cabinet without tremendous executive tasks.
  I beg, therefore, that there should be a new form of Cabinet, a small Cabinet of four or five, with no executive tasks, and having alongside them the finest brains and best information in the country. Such a Cabinet would have been able to settle policy and make the decisions for which we have all been waiting. It is no good leaving these decisions to an outside committee of part-timers, paid by their individual firms. This is a matter of high policy, which can be decided only by the Government themselves. There was
  1714
  a letter written the other day by a Member of the Government to one of the papers which supports the Government, repeating what many of us have been asking for. We are face to face with an economic situation such as we did not face in 1931, and it is a moment which calls for the highest possible decision—quick and informed decision. If the Government will do what the country requires them to do, I am sure the country will respond. The one thing that everyone wants, without distinction of party or sect, is the restoration of this old country to the high position it has always occupied. I was glad that the Prime Minister ended his speech yesterday with a reference to the moral and spiritual qualities of this country; but it is no good merely referring to them; we must have informed decision as well. I listened to the Prime Minister and to the Chancellor of the Exchequer. I hoped that they would have a plan to put before us which we could have understood, a plan which would have shown some hopes of settling these matters, but unfortunately I am still waiting for that plan and for a decision. Under these circumstances, if there is a Division tonight, I must record my disapproval of the Government.
  7.14 p.m.
  Mr. M. F. Titterington: I want to congratulate the Chancellor of the Exchequer on the very fine statement he made, and to take up the points he has suggested to us. I want also to offer some constructive and, if necessary, critical comments upon his observations. While my speech may appear to be special pleading, it is nevertheless stating the case for a cooperative effort from the wool textile industry. The wool textile industry, which covers the whole field of operations from the raw materials, to wool combing, distribution and marketing, is in a position to render a very great contribution towards the export drive. Before the war, we outstripped all our competitors in the export of wool cloth. The quality and style of British cloths made them predominant the world over. I hope that we shall be able to do that again. The volume of exports was limited only by hostile tariffs with which the industry had to contend. At the present time, there is a sellers market unprecedented in the history of the economic development of

  1715
  this country. At the moment there are limiting factors in production, and in the requirements of the home market.
  The wool textile exports now represent about one quarter of the production of the industry. In the other processes of the industry the percentage is rather higher. In 1946, the value of our exports of tops, yarns and fully manufactured goods was two-thirds greater than in 1938. During the first six months of this year, the value has been 85 per cent. greater than in 1938. Of the exports of cloth, which is the largest item, no less than 31 per cent. goes to hard currency countries, and that is a far higher percentage than most other exporting industries. I do not wish to be tedious, and therefore I will endeavour to summarise the statistics which are in front of me in regard to the position of the wool textile industry. I am sure that the President of the Board of Trade is more or less au fait with all these details, but for the purposes of record they should, I think, be mentioned. On our export side, for the six months in 1947, our woollen and worsted, tops, yarns, and manufactures were in the region of £24,750,000, in contradistinction to approximately £13,500,000 in 1938. Of woollen tissues we sent out 24 million square yards in the first six months of 1947, as against 29½ million in the corresponding six months of 1938. Then corresponding figures for worsted tissues are 11⅓ million square yards, and 15¾ million. . The discrepancy there is indicative of the lack of facilities to which I shall refer.
  Now the raw materials of the industry come almost entirely from within the sterling area. Some of its wool supplies come from the stocks held by the United Kingdom-Dominion Wool Disposals Ltd., which is the organisation formed to dispose of wartime accumulations. The British Government have a half interest in the financial proceeds. There is no shortage of raw materials in the wool industry. On the contrary, there is a large surplus from wartime stocks. The Board of Trade could, through the Wool Control and ancillary organisations, intensify the drive for exports, and a programme could be adopted with the object of releasing the maximum possible amount of cloth for shipment abroad, even at the expense of the home market. That programme cannot be carried out unless more coal is available than was the case last
  1716
  winter due to the fuel crisis. The fuel crisis cost the industry from two to four weeks' production despite the fact that it was helped by "windfall" supplies from our local Municipal Sewage Department. There must also be adequate supplies of soap, starch, dyestuffs and bichromates.
  As an example of the interdependence of our industry one might quote the case of soda ash. This is essential to the scouring and combing process, and to the finishing of cloth. As a result of representations, an increase in the total allocations to the industry was obtained a few weeks ago. It was at once rendered abortive by the announcement that the suppliers, Imperial Chemical Industries, could deliver only at the rate of 70 per cent. of the allocations, due to shortage of coal. A four weeks' reprieve has been obtained, but the industry cannot afford to have a repetition.
  The labour force of the industry before the war was 224,000. The Wool Working Party has set a target of 200,000. The present number is just over 181,000, or nearly 20,000 short of the target. Since last September there has been an increase of about 9 per cent., or 1 per cent. per month. Unless there is a positive incentive to go into the industry it is unlikely that the rate will increase. Further, the increase has been augmented by part-time workers. Over the next 12 months it would be over optimistic to expect an average increase in the labour force of more than 5 per cent. Any large increase in export trade, therefore, can be effected only by a transfer from the home market to overseas markets. The wool textile industry works a 45-hour week, which means nine hours per day. The operative, of course, is in the mill, factory, and dye-house for more than nine hours. In the opinion of many people nine hours is too long for the maintenance of efficiency. If an extension of hours takes place obviously it must mean Saturday morning working. That means getting up steam for half a day's work, and would require more than a pro rata increase in coal. It would not mean a corresponding gain in production either, because many of the women must do their shopping under difficulties, and if they work on Saturday morning they will tend to take a half day off during the week for shopping purposes.

  1717
  The Wool Working Party's report made suggestions for an increase in the labour force and efficiency of the industry. In the main, these were for better and more attractive mill, factory, and dye-house conditions, the use of automatic looms, and a scaling up of efficiency to the level of the best firms. These are long-term remedies, and cannot have any appreciable effect during the next 12 crucial months. Staggering of hours may appear essential, but there is the doubt that it would reduce production. Any disturbance tends to cause a loss of workpeople, and more absenteeism. Even the Control of Engagement Order would not prevent some workers, for example, married women, leaving the industry if they had to work at inconvenient times. Moreover, there is a bottle neck shortage of production in worsted spinning, and more worsted looms could be run if more yarn were available.
  A number of employer-spinners mainly running on electricity have set up evening working periods of 3½ to four hours, and by this means have attracted back to the industry some former employees, principally married women. The additional production has been very helpful, but if hours are staggered it must necessarily cut across these evening arrangements and, in most cases, abolish them. The same plant cannot be used efficiently by day, evening, and night. It has been suggested that if firms running by electricity had to stagger their hours firms running on steam should do likewise, otherwise there will be a movement of people from one firm to another. This is bad policy and bad efficiency. The coal users have had to bear the whole of the burden of shortages during and since, the war. If they get a little advantage out of staggering it will not recompense them for the disadvantages of the past. Longer working hours would bring more production, though not to a corresponding proportion, and would not be welcomed because they would mean the abandonment of the five-day working week. In the circumstances may I epitomise?
  The wool textile industry is in a position to render exceptional service in the drive for exports, particularly in hard currency markets, but the sellers' market will not last for ever. Even now we are shipping machinery abroad to enable other countries to make their own tops, yarns,
  1718
  and cloth. Some of us take exception to this. Our competitors, France and Belgium, are going ahead with production at full tilt.
  If the industry is to make a prompt and effective, contribution five things at least are essential: (1) adequate supplies of coal and other requirements; (2) no staggering of hours, or at any rate as little staggering as possible; (3) temporary starving of the home market; (4) longer working hours; (5) assurances regarding profit allocations. As an exporting industry, the wool industry ranked sixth or seventh before the war. Its raw material supplies are plentiful, and obtained from sterling sources. The market for its products abroad is still almost insatiable. Nearly one-third of its exports go to hard currency markets. These are the strongest possible reasons, therefore, why the wool industry should be accorded the highest possible priority for coal supplies and other essentials. Even then, there seems no alternative but to reduce the supplies of coal and clothing available for the home market.
  Yorkshire people like to pay their way, and those in the industry with which I have been long associated will do that to the best of their ability. Argumentatively, I shiver, with other Members, at the prospect of being deprived of further clothing, but I would much prefer that we should deprive ourselves of suitable materials at home and supply foreign markets, rather than that we should go about for the rest of our lives in sackcloth and ashes. I have put these points forward in no carping or critical spirit, in the hope that they will be of some assistance in meeting the problems which we have to face, and as a modest contribution in the form of helpful criticism.
  7.29 p.m.
  Mr. Boothby: I can assure the hon. Member for South Bradford (Mr. Titterington) that I have no sartorial ambitions of any sort or kind. [An HON. MEMBER: "Do not be too long."] All right; but once again I find myself under the necessity of having to deliver, in 12 minutes, a speech which should take 25 minutes, in striking contrast to the Chancellor of the Exchequer, who took 120 minutes to deliver a speech which should also have taken 25 minutes. In his speech the right hon. Gentleman gave

  1719
  us a few flashes of interest, one of which was to quote the late Mr. Neville Chamberlain as having pulled this country out of the economic morass of 1931 by means of a general tariff. I would merely like to remind the right hon. Gentleman and the Government that it was not only a general tariff that enabled Mr. Chamberlain to pull this country out of the economic mess of 1931; it was also because he abandoned the gold standard, multilateral free trade, and free convertibility—all the things which the right hon. Gentleman and his colleagues on the Treasury Bench have been so busy putting us back on during the last 18 months. After that, and last but not least, he went in for a policy of Imperial preference.
  I agree with the leader of the Liberal Party when he said that what depressed him most was that the Government had not yet produced an economic plan. A planned economy without a plan makes nonsense. The Government have made nonsense for the last two years. Have they a plan now for national economic reconstruction? No, only targets The Prime Minister talked a lot yesterday about "raising the sights." The sky is the limit so far as raising sights is concerned. I cannot think why he did not raise them much higher. We should have felt far more comfortable and happier; but it would not have had any more effect upon the actual facts of the situation than the greater part of his speech; nor, for that matter, than the Chancellor of the Exchequer's speech today. All the major decisions have still to be made. The yawning gap, to which the Chancellor of the Exchequer referred, still yawns.
  There was one encouraging feature, and only one. I think, in the Prime Minister's speech yesterday, and that was his reference to the absolute necessity of increased food production in this country. I think that it is a pity that the Government did not think of this a couple of years ago. Food production has steadily fallen over the last two years and hon. Members opposite know it. We shall not increase it now by waving a wand. If hon. Members opposite are really going to increase food production within the next three years, it will need a great deal of capital expenditure on the land for re-equipment and recapturing marginal land;
  1720
  and 100,000 more workers at least. Hon. Members opposite must realise that they are only keeping agriculture going at the moment by means of slave labour. That is how they have kept agriculture going ever since they took office. We have to get 100,000 new workers on the land; and we have to have houses for those workers, and it is not a frightfully good way of getting these houses to stop the reconditioning of all houses in rural areas, as the Government have done. We have heard a lot about feedingstuffs, but we have still to get them. We have not got them yet. All I say is that these are four vital prerequisites of any serious expansion of agricultural production in this country; and they present four very tough problems, to which no one on the other side of the House has really referred.
  Mr. Harold Davies: On a point of Order. That is not correct.
  Mr. Quintin Hogg: That is not a point of Order.
  Mr. Davies: I am addressing Mr. Speaker and not the hon. Member for Oxford (Mr. Hogg).
  Mr. Hogg: Mr. Speaker will give you the same answer.
  Mr. Davies: On a point of Order. I distinctly heard the hon. Member for Maldon (Mr. Driberg) referring to exactly the same problem as the hon. Member opposite.
  Mr. Boothby: I withdraw so far as the hon. Member for Maldon (Mr. Driberg) is concerned. I thought that he made an unusually good speech. That gives me another minute for my own speech. I agree with the right hon. Member for the Scottish Universities (Sir J. Anderson) when he complained of the continuing and enormous subsidies to consumption which the Chancellor of the Exchequer is giving year after year. They are bound to be inflationary; whereas subsidies to production, if the added production or export exceeds the cost of the subsidy, are counter-inflationary. I do not say that these food subsidies can be abolished overnight or in a hurry; but I think that a start should be made because they are definitely inflationary in character, and conceal from the people of this country the truth in that

  1721
  they conceal the real cost of production. This is only one more example of our present situation, which is, that we are consuming far more than we are earning. The pressure of money consumes everything. There is a partly concealed inflation, operating over the whole field, which the Chancellor has so far done little or nothing to stop.
  A purely monetary deflation is not, I think, the answer. It is unfair in its incidence; it must involve contraction; and, in order to function, it requires a free market economy, which is impossible when there is a world-wide shortage of raw materials and also a local shortage of manpower. At the same time, I would suggest to the Government that it is really fantastic to apply to the present situation the remedies which Lord Keynes put forward at a time when the position in which we found ourselves was the precise opposite to that in which we find ourselves today—with a glut of labour, a glut of goods, and a steadily falling price level. There are, as the Chancellor said only two remedies—drastic cuts in unproductive Government expenditure, especially overseas, and on non-essential capital projects; and, secondly, a great expansion of production. One of the things that disturbs me most is that the present proposals of the Government are, in essence, contracticnist. It is an inevitable result of the attempt to restore multilateralism in a hopelessly unbalanced world.
  I want now to say one or two words on the subject of the international disequilibrium, which is the root of the problem which confronts us. It takes two forms. There is the disequilibrium between primary producers and the manufacturers of industrial goods; and the disequilibrium between the United States and the rest of the world. The former is caused by under-production in Europe and Asia arising from the war; and the latter by the enormous industrial development of the United States under the impetus of war; and, at the same time, the industrial collapse of Europe, also arising out of the war. Although I was amazed that the Prime Minister did not mention it, I had thought that the Government at long last meant seriously to attempt the economic reconstruction and integration of Western Europe—a task which they should have undertaken a couple of years
  1722
  ago. I was astonished that the Prime Minister devoted practically no attention to it. The fact remains that they have climbed on to this boat with 16 other nations in Europe, who share our political and economic interests; and, now we are there, we must make the land in that ship or sink.
  There is a second way out, on a long term point of view, and that is Colonial development to increase primary production, and reciprocal trade agreements with our own Dominions. I do not see why at long last we should not put very great faith in our Commonwealth and Empire. It will not be misplaced. They have never failed us in the past. They came to our rescue in the political field at once; and I see in the Press today that offers are pouring in again to help us in the economic field. I am not exonerating my own party in this matter before the war, although the economic situation in respect of commodity production was fundamentally different. But there is now no excuse for not doing everything we possibly can to increase our supplies of primary goods from our own Empire.
  This brings me, in conclusion, to the fundamental issue which confronts us—an issue about which I feel very strongly. I would like the President of the Board of Trade to tell us whether or not we are now going to continue this insane attempt to revert to the international economic system of the 19th century. I think that there is a certain pathos about the belief in this country that we can get back once again to being the greatest manufacturing and trading country in the world. And I hate pathos. It makes me feel uneasy. In the modern world multilateral trade between a multiplicity of separate sovereign states of varying size is a mirage; and the creation of huge export surpluses a disaster. What we want is the mutually advantageous exchange of goods between countries which have complementary requirements; and the way to get it is not multilateralism but regionalism. That involves, in the first phase, bilateral trade agreements; and, therefore, discrimination.
  The Chancellor of the Exchequer referred in his speech to the American Loan Agreement and said that those who were opposed to the loan have proved to be completely wrong. I do not know, but I

  1723
  remember saying myself at the time that within a year we should be plunged into the icy waters of free convertibility and multilateral free trade, and that I did not see how we were going to get out of that icy sea. Here we are in it; and the Government have certainly not shown us how we are to get out of it. I do not think that we were so far out in our prognostications. We could have got far more from purely commercial loans from the United States, without the crippling conditions attached to them which we finally accepted, if we had shown more guts at the time. Furthermore, I think that if we had made a greater effort to stand on our own feet a year ago than in fact we made, it would have been to our great advantage. Nevertheless, that is done, and is in the past. What has been done has been done. The Government have had their hour: and now they face their problem.
  I think that we might now well concentrate on persuading the United States that the best way that they can help us, and help Europe, is not by any more Government loans, but by doing what we did to the United States in the 19th century—by investing money in this country and in Europe. I do not think that it will be difficult to convince them that such investment will only be worth their while if the doctrines of nondiscrimination and free convertibility are abandoned. We are also entitled to remind them that when we poured capital into the United States, built their railways, their steel and their textile industries, we did not impose conditions of any kind; and we never sought to reduce their protective tariffs, although we took all their goods in exchange freely into this country. We did not make any conditions whatever. We put capital in, and we developed their country. Later we reaped the rewards which were our due. I think the United States might fulfil their role much better as the great creditor nation of the world if they took a leaf out of our book, and did not seek to impose conditions which make it difficult for us to recover. They should invest their money in this country, and in Europe. Our only hope of economic survival is to adopt a purposeful economic power policy, which meets our requirements in this 20th century, rather than a policy
  1724
  adopted to the 19th century. For this we require a purposive direction of the national economy as a whole. Nobody knows that better than the President of the Board of Trade; nobody knows better than he, that there is as yet no sign of purposive direction on the part of the Government.
  7.43 p.m.
  Mr. Frederick Lee: Like the hon. Member for East Aberdeen (Mr. Boothby), I propose to murder what undoubtedly would have been a brilliant contribution to this Debate in order that other hon. Gentlemen may have an opportunity to speak in it. I agree with my hon. Friend the Member for Maldon (Mr. Driberg) when he pointed out that unless this Debate signified the end of the "phoney" peace, the House will rise for its Summer Recess with the country still unaware of the real implications of the problems which he before us. I believe that it is the duty of this House to place before the people not only the magnitude of the task, but also a broad flexible plan, capable of bringing us through this trying ordeal. I have got to submit that up to now we have heard no plan sufficient to deal with the tremendous job which faces us.
  The drastic cutting of our imports by the Government, necessary as it is, will accelerate the present tendency to contract the total value of world trade, and against that position I should like the President of the Board of Trade when he replies, to tell us how he believes that by the end of next year we can hope to attain 160 per cent. of our 1938 export level. Yesterday the Prime Minister told us that we must be more careful in the type of thing we buy because of the contraction of world trade. I believe it is even more necessary that we should discriminate very carefully in our selection of the type of thing which we produce. When increasing our volume of exports to the soft currency areas we must decide the type of thing that those countries, in fact, need. The Foreign Secretary has told us on many occasions how important coal would be to him in his negotiations with other Powers if it were available now for export. I would remind the Government that the same thing undoubtedly applies so far as agricultural equipment and capital equipment, et cetera, are concerned for those countries with which we are trying to negotiate for vast wheat

  1725
  supplies to this country. How much more efficient and successful our negotiations would be if, instead of speeding up motorcar production to colossal figures, we could promise at short term delivery, supplies of agricultural implements and things of that kind.
  I should like to ask the President of the Board of Trade how long is it going to take to tool and standardise the motor industry? As an engineer, I believe that cannot possibly be done in two years. By that time the opportunity we have of competing with any effectiveness in a world market which is a sellers' market will, in fact, have long since disappeared. I believe it is most vital that we should realise that we are not merely planning to redress an adverse balance caused by the war but, in fact, we are trying to rectify an economic unbalance from the 1914–18 war which came to a crisis in 1929 and was covered up in the second half of the 30's by the armaments drive.
  The Prime Minister referred to the sacrifices which are undoubtedly necessary. I have heard it said that sacrifices should seem to be fair as well as being fair. I want to impress on the House that the sacrifices must not only seem to be fair but must, in fact, be so, and based on the policy of sacrifice by every class of society. In this respect, I was most grievously disappointed, because I think it is fair to say that the policy as outlined by the Prime Minister was merely to ask the workers in the heavy industries to give more effort, to work harder, providing the supplies are available, in the interests of the country at this critical period but did nothing in regard to those people who tell us that they are only short of shirt tails and that they have everything except that. They can go along to places like Lewis's and give reports to their directors of profits which are higher than ever before existed in the history of these combines. At the same time the workers are expected to make great sacrifices.
  I believe this afternoon the time was opportune for the Chancellor of the Exchequer to have told us that the Government were prepared to accept a profits policy, which would, in fact, have been an inspiration to the whole of the working classes. If my time were not so short I would tell the House precisely what profits tax could, in fact, be put into operation. I know that the right hon. Gentleman the
  1726
  Chancellor of the Exchequer has got a copy of the scheme, and I hope even now he will realise that it is not sufficient to ask one class of people to do the sacrificing and then appeal, especially knowing what type of response he got to his appeal of last year, to other people not to show clearly so much of the profits this year or the boys in industry would get a little disturbed about it.
  I still hope that we may hear a progress report which will show precisely what has been done since March last in manning up those vital industries upon which we are dependent for success in the great ordeal which now lies before us. Before this Debate concludes we should have a picture given to us through the latest information available of the incidence of the build-up of these trades, and whether we are expecting any diminution in the numbers now employed in the luxury industries. On a number of occasions in this House recently I have heard questions and comments on the necessity for importing foreign workers into the country, but I still believe that the major problem of the Government is to redistribute the labour power we have available and not to worry too much about the importantion of foreign labour. When we consider, for instance, the difficulties of language, of housing, and of training these men, we realise immediately that it would be a long time before we could expect to obtain any real return for the expenditure in money and time on that kind of thing. On the other hand, we have a great reservoir of women labour power in the country still effectively debarred from going into industry by the lack of nurseries, créches and so on, and the failure to accept the principle of the rate for the job. I would challenge the Chancellor of the Exchequer on his inflation argument as applied to women who would go into productive industry and replace men. I believe that that would not by any means be inflation, if granted the rate for the job, but would result in a great increase in the wealth and production of the country as a whole.
  In the few minutes I have left I want to refer to workers themselves. I have heard arguments in this House with which I could not agree regarding the relations between employers and work people in industry. It does not do a great deal of good for people who do not, after all,

  1727
  know a great deal about the matter to suggest that these relations are conducted on a cat-and-dog basis from beginning to end. There is a very appreciable degree of negotiating machinery and powers of conciliation at our disposal now in industry, and for every unofficial strike or for every reference which goes outside a factory 99 or even more cases are never heard of because they are settled amicably over the table inside the factory.
  I believe that the time is now appropriate for the Government not merely to ask the Ministry of Labour to try to have works councils established in industry but to give us those works councils by legislation. We know that the progressive type of employer, the man who is willing to negotiate and to establish the best conditions, already has his works council. The type of person against whom we set our faces is precisely the man who has not got his works council and will not have it unless we obtain power to enforce it in his particular industry. I believe, therefore, that we should establish works councils and link them with the regional organisation which the Ministry of Labour is now setting up in order to bring to a speedy end any dispute which may emanate from the factory level. This question of giving responsibility to the workers is most vital. I know that we can impart that feeling that one is part of the effort only if we can give that responsibility. I know from my own experience that when I had people who were over-critical of my administration the first thing I did was to give them a job with a bit of responsibility and thus rid myself of a very disturbing critic.
  May I turn now to one particular industry and speak for the next two or three minutes as an engineer on behalf of engineers? I hear a great deal of talk of engineering unions not accepting Poles, and I read Questions on the Order Paper on this issue, but I feel that it would be very dangerous to pursue that kind of thing in this House. This applies particularly to people who do not know the type of negotiation which is going on and the effort which is being made to bridge the gap. So far as the Amalgamated Engineering Union are concerned, I am extremely proud of the history they can show. Whenever danger has threatened this country from without we have seen the ability of the engineers to take into
  1728
  the industry hundreds of thousands of people who never have a vestige of a chance of going in before, and teaching them every trick of the trade in order that the country might be brought through a great ordeal. From a bad start in 1939 we were able, because we brought these people in and showed them the rudiments of our craft, to attain a position in 1942–43 where we could outmatch in production any other country in the world, friend or foe. It does not do for people in this House to throw any kind of mud at unions and men who can do that kind of thing.
  I hope that it will be realised that so far as engineering is concerned we have a great body of wholesome support for any worthwhile effort, whether it be for war or to bring this country through an economic crisis such as we now have before us. I am convinced that if the Government will in fact plan this thing in such a way as to show that sacrifice is not to be one sided, if they will prove to the people that we can enter this great ordeal which faces us in the same spirit that characterised Dunkirk, and if they can show us that beyond the end of the crisis there is something worth fighting for, then as far as engineers are concerned, and the A.E.U. in particular, I can promise them that 820,000 of its members will play a tremendous part. They will play this part not only so far as their own production is concerned, but they can supply other industries with the basic things which only engineers can produce. If the Government will give us that lead before the end of this Debate tonight, then the country can expect the same ability as was displayed in the terrible days of the war.
  It is not a question of setting up a demagogue to lead a nation—which is the kind of tripe of which one hears so much from hon. Members on the other side. During the war period we knew quite well what it was that the individual was asked by the Government to fight for. We knew that we fought for our very lives and for the betterment of the nation, and if this Government will in fact try to inculcate that spirit in the workers again, in two years from now we shall be able to throw back in the teeth of the pessimists the things they have said today.
  7.58 p.m.
  Brigadier Low: The hon. Gentleman the Member for

  1729
  Hulme (Mr. Lee) has accused the Government of a lack of leadership, a charge which has been made frequently from all sides of the House during the course of this Debate. It occurred to me during the hon. Gentleman's closing remarks that if he and the men in his union, many of whom, although not all, will be supporters of the Government, have no confidence in the Government, he can hardly expect the vast majority of the country to have confidence. It is the spreading of confidence throughout this country which is the Government's main task at this time. At any rate, that is what I mean when I ask them for leadership.
  The Prime Minister's speech was a great disappointment. I never expected to hear, even from right hon. Gentlemen on the other side of the House, such an inadequate plan for dealing with the present crisis. When I heard the right hon. Gentleman the Chancellor of the Exchequer today, all the small good which the Prime Minister's speech might have done in emphasising the direness of the crisis, seemed to me to be about to be undone. It was a tragedy that the Chancellor of the Exchequer should try to persuade us of the robustness of our economy at this time. It is this confusion in Government statements which has contributed so much to the doubt in men's minds today, although many other things have made their contribution. I have tried—as I am sure have many other hon. Members on all sides—to find some reason for the lack of decision on the part of the Prime Minister and the Government at this time. Have they refused to change the policy which the Lord President of the Council put to us on 8th July, when he said that they would not impose cuts on a scale which would require a drastic adjustment of our standard of living unless it was perfectly clear and certain that that was the only course open to the Government? Do they still rely upon support from outside? It has always seemed to me that if they want help from outside the one way in which they are most likely to get it is by showing the world that this country is a very good investment and that we are prepared to help ourselves.
  Let us examine some of the steps which the Prime Minister said he was taking. Let me refer shortly first of all to the Armed Forces cut. It was apparent when the House listened to those cuts
  1730
  that a large number of hon. Gentlemen belonging to the party opposite were dissatisfied with the cuts. It was apparent today, when we heard questions and attempted questions from hon. Members, that they still did not understand the position.
  Mr. Wyatt: We do understand it.
  Brigadier Low: I do not understand one or two things, and I think many hon. Gentlemen opposite will agree with me.
  Mr. Grossman: We do understand it.
  Brigadier Low: Perhaps the hon. Gentleman will have an opportunity of telling us. When the Prime Minister said there were going to be 700,000 members of the Armed Forces in this country, I raised my eyebrows, and I began to remember that we had never been given the details about the Armed Forces which would enable us to decide whether there are too many or too few. That is the position in which the House finds itself at a time when it is responsible for supporting the Government in the field of manpower. I support the Front Bench opposite when they say that they are not prepared to cut commitments, but what are 700,000 or 800,000 men at home doing, in all those numbers? [HON. MEMBERS: "Hear, hear."] I am very glad to get support from the other side. I say to the Government with great seriousness that there is a certain amount of feeling in the country that there is waste. That feeling cannot be good for the health of the country at the present time, and it is time that further facts, explanations and details about this matter were given by the Government. The Prime Minister said that the whole future defence of the country was being gone into. It ought to have been gone into since 1945 when the right hon. Gentleman took over. That cannot be much of a palliative.
  Let us come back to the home problem. The Chancellor of the Exchequer spent a great deal of time today talking about the dollar situation. I was very glad when my right hon. Friend the Member for the Scottish Universities (Sir J. Anderson) pointed out to him that that is the best way of fogging the whole issue at home. What the Chancellor ought to have done today was to tell us how he proposes to avoid inflation in the future.

  1731
  He has stood at that Box and impressed upon us the danger of the inflationary pressure; but the cuts in imports, the increase in exports and the increased wages for increased productivity will increase the inflationary pressure. It is up to the Chancellor to give us and the country some indication of the steps he is going to take to put things right. All he mentioned was an increase in savings. I want further guidance. I want him to use the financial instruments for keeping the value of the £ right and avoiding inflation. It seemed to me that he, and indeed other right hon. Gentlemen opposite, are far too apt to sit back on a couch made of the many difficulties throughout the world over which they say they have no control, or over which they do not have any immediate control. The task of the Government is to tackle those problems over which they have control. This is one of the most serious problems.
  Another way, and possibly the most important way, in which the Government can help the people of the country who are to increase productivity is that the workman and the employer and the many people who try to help them should be assisted by the Government to get clear of the fog which surrounds the present position. The hon. Member for Hulme said that during the war everybody understood the purpose for which they were working so hard; do we understand the full situation now? Do we understand the real necessity for real hard work today? I ask the Government to do all they can to clear away the fog. No doubt there are Members in this House who did not, until very recently, realise the gravity of the situation. No doubt many hon. Members receive letters from their constituents showing that even today they still do not realise the gravity of the situation.
  The fog must be cleared away, and the sooner the better. It can be cleared away only by a positive statement and a plan. It will never be cleared away if the Minister of Defence makes a clear statement of what the Government are going to do and of the gravity of the situation and then, next day, the Minister of Food makes a statement showing how very cheerful and happy the food position and the general position of the country are. Such conflicts of statement must
  1732
  stop. I want to ask the Government to make things clear not only to the working men and the employers in the immediate productive industries, but to all men and women. A great effort is required from every man and woman in the Services, in the distributive services, in Government offices.
  Mr. Follick: And from Members of Parliament.
  Brigadier Low: Yes, from Members of Parliament, too. Members who live in glass houses should not throw stones. It is a misfortune that those who speak late have to cut out much that they would like to say. I should like, however, to mention another point, which is, that the Government's administration must be efficient land economic in expenditure, and framed so that it does not call for extra and unnecessary effort from men and women engaged in productive industries. The danger of this vast machine which right hon. Gentlemen opposite have built up is to be seen in the number of men whom they have drawn from productive industries and also in the number of hours which are wasted by men engaged in productive industries on other work. I ask the Government to remember that. The hon. Member for East Aberdeen (Mr. Boothby) stressed the importance of co-operation with members of the Commonwealth in a Commonwealth economy. Many of us have spoken often about this, but what did we do about it? We have made plans, but do we encourage any of our men and women to contribute to that great purpose? Without the skill, energy and leadership of this country, we shall never really get the development of our Commonwealth economy.
  My last point is to ask the Government to remember that in the long run it is the spirit of the country which will govern the immediate efforts which the country makes. It is the. spirit of the country which has been wounded by the disunity which has come over us since 1945. It is the spirit of the country which has been wounded by the Socialist propaganda of the last 30 years. [HON. MEMBERS: "Oh."] Hon. Members will not like that. It has discouraged skill and good work.
  Mr. Shurmer: Has the hon. and gallant Member forgotten the period between the two wars?
  Brigadier Low: It is the spirit of the country which requires to be mended and it will only be mended while right hon. Gentlemen are in office, if right hon. Gentlemen make some effort to get the confidence of the country.
  Mr. Shurmer: What about the three million unemployed?
  Brigadier Low: They have failed today and they failed yesterday, and I hope they will go back tonight and think out a proper plan and banish the two curses under which they live, the tinker's curse and the curse of fiddling.
  8.12 p.m.
  Mr. Hubbard (Kircaldy): I would be the very last to claim that there is any particular Scottish interest in this Debate. The problem that confronts us today is one that confronts the people as a whole. It is perfectly true that no matter how well phrased speeches may have been in this House yesterday or today, the response of the people outside is the thing which will determine whether or not we shall survive this crisis. However, even at this late hour I appreciate the fact that at any rate one voice from Scotland on this side of the House has entered the Debate. This afternoon we have had speeches from two hon. Members opposite representing Scottish constituencies, the right hon. Gentleman the Member for the Scottish Universities (Sir J. Anderson) and the hon. Member for East Aberdeen (Mr. Boothby). I would be very sorry to think that the people of Scotland would be led to believe by looking at their newspapers tomorrow that the subject matter those two hon. Members placed before the House was representative of the people of Scotland, who by responding to the appeal will help in the survival of this country.
  I was amazed to hear the right hon. Member for the Scottish Universities suggest that it was the wrong time, and that we had made a tremendous mistake, to give the country's producers a better return for the work they put in. I was amazed to hear him say that we had made a blunder so far as time was concerned in giving them holidays with pay, and that we had made a blunder in giving the old people and the very young people concessions less than two years after the war. Does he not realise that the people of whom he speaks in this way are the
  1734
  people to whom he is appealing to take us out of this crisis? Does he think we shall get the good will of the people simply by telling them that they have to wait and wait before they get something to indicate that they will have a future better than the past? Therefore, I regret that a man of the standing of the right hon. Member for the Scottish Universities should at this time insult the people on whom we are depending to bring us out of the crisis by saying that they ought to be content with longer hours and that it is wrong to increase their wages.
  All agree that we depend upon coal to bring us out of this crisis. How can we attract men back to the coal mines under threat of lower wages? In that industry we were losing men to the extent of 40,000 a year up to the time of the war. Would any miners or their sons, or anybody else, be attracted back to the mines unless they had some guarantee that conditions would be better than they were before, and particularly during the time when the present Opposition held office. I, therefore, think that the Opposition have not made much of a contribution.
  It is true that the present Government are on trial. Of course, they are. The Government and those who support them are on trial, but so are the Opposition on trial, and the contribution that they make to the survival of this country has to be something better than merely suggesting that those who are to be responsible for the increased production will only receive the same kind of treatment they have always had. They have always been the first to sacrifice, and they are asked to continue to sacrifice. Therefore, I commend to the Government that, far from making any differentiation, as seemed to me to be suggested, we should appeal to those who make profits, at the same time as we direct those who are the producers. While I am not satisfied with that, at any rate it is something better than those sitting opposite seem prepared to offer.
  Something was said to the effect that people could probably be taken from the non-essential to the more essential industries. First of all, however, I would like to see those who make no contribution at all put into some industry or another. Wth regard to another method of rationing, I would suggest that one way out of this crisis would be to issue ration

  1735
  books only on proved employment of some kind or another—[An HON. MEMBER: "Russia."] If that were done then we would find the "spivs," whether they were at the race courses or dog tracks. It is no use expecting people to tighten their belts while it is made possible for other people, who make no contribution to production, to go from one restaurant to another where they can have 10 lunches if they so wish, or as many more as they are able to tuck away inside their belt. That is completely wrong.
  I agree, however, that if there has to be an alteration in the amount of rations, it is proper that there ought not to be any interference with the existing rations of those engaged in heavy industry, though it would perhaps be difficult to measure just who is in heavy industry and who is not. Indeed, perhaps those in the heaviest industry of all in this country are the housewives, who would appear not to be considered as being in industry at all, yet if those who are in heavy industry have to work longer hours, then they will require more attention than ever. I would suggest, therefore, that if there is to be anything at all in the way of additional rations, or even a differentiation in existing rations, the housewife ought to receive full consideration.
  The suggestion to cut down by £10 million our timber imports has been an extreme disappointment to me. I cannot see how we can reasonably expect people to make a better contribution and, at the same time, tell them that the possibilities of getting a long awaited house are to be less. It is true that certain arrangements have been made in mining and agricultural areas to give them a type of house, but we cannot attract people unless we give them some guarantees. The hon. Member for East Aberdeen spoke about the need to attract people on to the land, but we know something about that. We know that there was mighty little attraction to the land when he was a Member of a Government. We know the attraction there was for land workers at that time—the "attraction" was round about 25s. a week. While I congratulate the Government on, at any rate, making an equal attraction for the agricultural worker with any other industry, the Government must also do something more, because a place in which to live is perhaps the greatest attraction of all.
  1736
  Like others who have been called to speak at the end of this marathon, there is no possibility of my making a speech; I can make a few headline statements only, and I would finish on this note. The end of all this will be determined by the good will of all. It is right and proper that one should try to find out how we got into the mess, but the important thing is to find how we can get out of the mess, and we are not going to get out of it by grand, academic phraseology. We are making an appeal to the good will of the people, and we have to give them some guarantee that at the end of this we are going to give them something which has been promised and withheld from them far too long.
  8.20 p.m.
  Mr. Eden: The hon. Member for Kirkcaldy (Mr. Hubbard) seemed to have two considerable concerns. One was in respect of the cut in the import of timber by 10 per cent. I share his sentiments in that respect, but I would be more concerned if the cut were a real cut in timber. As he will realise, it is only a cut in expectation, and perhaps not so formidable as it otherwise would be. Like other activities of the Government, it is more in anticipation than in fact. The second anxiety, in which I also join with him, is about people who have 10 lunches. That is indeed a formidable catalogue, and I think that he will look neither to the figure of the President of the Board of Trade nor to mine to justify that censure. I would also agree that if there are any who have 10 lunches, it is undesirable that they should continue that practice. Personally, I should have thought that the ordinary course of nature would settle the matter for them, but, if not, steps should be taken. The hon. Member will also agree that the problems with which we have that deal are a good deal wider than that and in reducing those who have 10 lunches to one lunch we are hardly likely to bridge the gap.
  I have listened, as the House have listened, with growing concern to the course of this Debate during the last two days. We have all our party views and party faith in whichever part of the House we sit, but over and above that, there is a concern for the future of our country. I had sincerely hoped, and I say this to the right

  1737
  hon. and learned Gentleman who is to follow me, that as the outcome of this Debate we would have been presented with a comprehensive and coherent plan to lead our country out of the present quagmire on to the firmer ground of solvency and self-respect. That is what I had hoped for. With real reluctance I am bound to say that I cannot consider that the Government have produced any such plan at all. I am indeed disappointed at their proposals, and several of their own supporters have expressed themselves as disappointed during the last two hours. Their proposals seem to me 1o be just a hasty improvisation, ill-considered and incomplete. In many spheres we are called upon to consider not policy, but hopes. "The Times" says this morning:
  "Too much of the Government's programme is still in general terms or provisional."
  The cuts in respect of foodstuffs, for instance, are real enough, but when it comes to proposals for increasing output and increasing exports "The Times" again says:
  "The programme announced yesterday is most vague and unfinished."
  Mr. Gallacher: On a point of Order, I am sorry to interrupt the right hon. Gentleman——
  Mr. Eden: It is all right.
  Mr. Gallacher: —but as a Member of a minority party, I want to lodge a very strong protest against the treatment I had from Mr. Speaker in this Debate.
  Mr. Deputy-Speaker (Mr. Hubert Beaumont): That is a reflection of the conduct of the Chair, and should not be made.
  Mr. Gallacher Mr. Gallacher rose——
  Hon. Members: Withdraw.
  Mr. Deputy-Speaker: I must ask the hon. Member to withdraw that remark.
  Mr. Gallacher: No, I will not withdraw.
  Mr. Deputy-Speaker: I again ask the hon. Member to withdraw that remark.
  Mr. Gallacher: He was very offensive. You can tell him that; I will tell him myself.
  Hon. Members: Order. Name him.
  Mr. Deputy-Speaker: I have to inform the House that I have to instruct the hon.
  1738
  Member for West Fife (Mr. Gallacher) to leave the House, in view of the remarks he made.
  The hon. Member withdrew from the House.
  Mr. Eden: I am sorry that more hon. Members have not been able to speak in the Debate. I do not think it is the fault of the Opposition that that has happened; I am not complaining, I understand the difficulty. Before that unfortunate interlude, I was just about to make a comment upon exports, if I may come to more mundane matters. I was about to say to the right hon. and learned Gentleman who is to reply for the Government that the target which he has set himself for next year for exports does not seem to be one which we can expect to be realised. That is because that target has to be realised in conditions not truly comparable with those of 1938, although the figures are comparable with 1938, for in that year we were not only exporting manufactured goods but raw materials, principally coal. Therefore, if the right hon. and learned Gentleman is to realise his target for next year, he has really to increase our exports of manufactured goods by 100 per cent. That is the increase which he has to produce over 1938. I have no doubt whatever of the sincerity of the intentions of the right hon. and learned Gentleman, but I am bound to say that in the present state of world markets, I do not believe that that can possibly be achieved. It is no more likely to be achieved than the increase which we have failed to realise this year.
  I turn for a moment to the speeches which we have heard today from the Chancellor of the Exchequer and others. I must say that I was disappointed in the speech of the Chancellor of the Exchequer. I have always regarded him as one of our most expert Parliamentarians, but I must tell him that I thought that today he took an incredibly long time to say incredibly little. He spent nearly two hours taking the Prime Minister's mouse, putting it back into its hole again, and then pulling it out again for the benefit of the jury, and, as always happens on these occasions, the mouse only deteriorated in the course of the two hours. I thought that the whole process might have been a little concentrated. Then, he gave us lots of metaphors. He was rich in metaphor. He told us that

  1739
  we had run into a storm that we had known for some time was brewing. I felt that all that the crew had been doing during this interval was to move the furniture from the third-class to the first-class, and that that was the only result which we could show while the storm was brewing. I do not think that the right hon. Gentleman can congratulate himself on this afternoon's Parliamentary performance. I have a sort of feeling that each Member of the Government is trying to rescue the one that went before. The last in the line is the President of the Board of Trade, and I am sure that he will do what he can to redeem the irredeemable.
  The Prime Minister yesterday made a good deal of play with the undoubted fact that any Government in power at this time would have grave difficulties to face. We do not deny that, but what we do say, and what the right hon. Gentleman's speech did much to confirm, is that in facing these difficulties the performance of the present Government has been wholly inadequate. They have stumbled undecided, unprepared and without a plan, into a crisis which they had not foreseen. As far as we can judge from this afternoon they appear to hope to stumble out again in the same way. The Prime Minister's statement was not a coherent or a clear cut plan to overcome an imminent danger. It seemed to me to be a hastily contrived collection of expedients, not designed, because there was no design in them at all, but produced in the hope that they would do something to meet a situation which clearly the Government do not even yet seem fully to understand. Let me remind you, Sir, that there is a remarkable contrast between what the Prime Minister had to say yesterday and what the Lord President of the Council and the Chancellor of the Exchequer had to tell us in the Import Programme Debate as recently as 8th July. I have looked up the Lord President's words. He said this:
  "The only remedy, pending the restoration of European agriculture and industry, lies in devising some means whereby billions of dollars worth of North and South American production can be transferred across the Atlantic without the necessity for immediate payment in the form of an equal and opposite flow of European goods."—[OFFICIAL REPORT, 8th July, 1947; Vol 439. c. 2076.]
  1740
  That is the Lord President on 8th July. Yesterday we had the Prime Minister:
  "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."—[OFFICIAL REPORT, 6th August. 1947: Vol. 441 c. 1501.]
  In other words, the only assumption on which the Lord President on 8th July bases his plan, is repudiated by the Prime Minister less than a month later—[HON. MEMBERS: "No."]—Well, it is true. Let hon. Members themselves confirm the quotation. On 8th July the Chancellor of the Exchequer himself argued against an immediate cut in our import programme. He said that it was not the right thing to do at this moment. Yet, yesterday the Prime Minister announced, and today the right hon. Gentleman endorsed, these extensive cuts in. our food supplies. If they are right today, why were they not right on 8th July, or why were they not right at an earlier date still? The right hon. Gentlemen cannot be surprised, and the Government cannot be surprised. With such conflicting voices from the Treasury Bench—and there is the Attorney-General, the prize conflicter—how can the House or the country have any confidence in the Government's ability to understand the situation or to plan the way out?
  The Prime Minister said how many were the difficulties which the Government had to face. Of course, we admit that. The Prime Minister went on to say that, in all the circumstances, the Government were not unwise to hold a balance. That is precisely what the Government have not done. They have held no balance. On the contrary, week by week, Ministers have made a number of contradictory-statements. What the learned Attorney-General says one week, the President of the Board of Trade contradicts the next. I can give quotations if anyone would like them. The trouble is that the Government mistake a see-saw for a balance That is their policy. What has happened? Let us analyse this matter again. Before the war—and this confirms what the Chancellor said; I agree with him in this respect—we lived to a very considerable extent upon our overseas invest-

  1741
  ments, the result of the thrift of our ancestors, or if hon. Gentlemen like it better——
  Mr. Harrison: Hear, hear.
  Mr. Eden: I thought they might like it better—or the wicked capitalist instincts of our forbears. On that we have lived for a considerable time. We also benefited before the war largely from invisible exports, that is to say from our shipping, our banking and our insurance business. To a considerable extent, these sources of income are now reduced, but, despite this impoverishment, we have behaved as if we are richer than before the war, and this applies particularly to capital expenditure, about which I want to say a word or two. In that respect, I say to the House that we have been trying to do too much, and this is a warning which I have been repeating to the Government for many months past.
  Let me try to put the picture in military terms. Let us suppose that we are back in the darkest days of 1940, with which a parallel has been drawn many times in this Debate. Suppose the War Cabinet of that day, after the collapse of France, decided that they wanted to set on foot, let us say, 100 divisions. When the time came to work out our resources, that War Cabinet would have found that there just simply was not the manpower available to give them that 100 divisions, and so they had to cut their coat accordingly, and decide, perhaps, that they could raise only 50 divisions and a certain number of air squadrons, while maintaining our indispensable naval forces. I say that there has been no similar calculation by the Government in reapect of the period of reconstruction. Has there ever been, I ask the President of the Board of Trade, any budget of our expenditure on capital reconstruction? The truth is that, despite their avowed belief in planning, of which we have heard so much from the Government and their supporters, it is precisely in the broad strategic planning of national resources that the Government have shown their worst failure.
  For a long time, my colleagues and I have been telling the Government and Ministers that they have been trying to do far more at one time than is possible with the nation's resources. Let us look at
  1742
  what they are trying to do. There is the fulfilment of our commitments overseas, on which, although there may be differences among back benchers, the Government and we are agreed must be fulfilled. There are new factories in the development areas, new social services, new hospitals, new schools, all highly desirable in themselves; higher wages, shorter working hours, all these, too, infinitely desirable; the development of great schemes of town planning, of capital investment of all kinds, all to be welcomed in themselves; but what, surely, must have been apparent long since to all but hon. Gentlemen opposite is that to try to attain all these things together now, at one time, might mean failure to attain any single one of them. It is all a question of priority.
  I am stating what I believe to be our national position. Of what use is it, for instance, to build new factories to use steel, if the existing factories working for export have not enough steel for their own use? The right hon. Gentleman knows that there are examples of it. I hope he will tell us of what value it is. Is it not true, for instance, today, that the motor car industry could increase its production for export if its full steel requirements were made available? That is so; it is not disputed. Then, where are we going in our planning, if that be so?
  I turn from that to what was said by the hon. Member for Bolton (Mr. J. Jones) in his speech yesterday. There were not quite so many hon. Members here then, and I would like to quote his remarks on this very issue. He made it perfectly plain, that in his own industry at the present time, full time is not being worked because of the lack of fuel. All these matters have got to be related, and any plan that is of any value relates these factors. I turn to food. The right hon. Gentleman the Prime Minister told us that our food supplies from the hard currency areas are to be cut by £12 million a month. I do not know what are the factors that brought the Government to achieve that particular figure. Why £12 million, or even £10 million or £15 million? I do not know. Perhaps they will tell us. I reckon that this cut means a reduction of at least 40 per cent. in our present food supplies from the so-called hard currency countries. This would, indeed, be a formidable reduction in our standard of

  1743
  life if the supplies cannot be replaced from anywhere else.
  Let the House note this. The Prime Minister did not tell us yesterday that of the food supplies which we at present receive from these hard currency areas, about 55 per cent. are, I think, staple foodstuffs—grain, meat, dairy produce, and sugar. If I understand the Government aright, they propose to replace part of this loss from the soft currency countries. I would ask the President of the Board of Trade to tell us how this is going to be done. I feel certain that the Government cannot have decided on a cut of this kind—so drastic—without having a clearer view of the consequence than was given by the Prime Minister yesterday. How much of this cut do the Government think they can replace from the soft currency areas, and from which of those countries do they expect to obtain the necessary supplies? We really must know that.
  During the past two years, presumably, the Government have been obtaining as much of our foodstuffs as they could from the soft currency countries anyway; they would have been open to grave censure if they had not. How can it be that, all at once, they see the possibility of increasing our supplies from the soft currency areas to anything approaching the very large figure of £12 million a month? I hope that the right hon. and learned Gentleman will enlighten us about that. If they cannot increase their purchases by £12 million a month, or near it, from the soft currency countries, is it not clear that there will have to be drastic cuts in the rations? We really must be given the full facts of this situation tonight so that we can judge. I say, quite frankly, that we on this side, equally with hon. Members opposite, and the country as a whole, will not flinch if told the whole truth, but I think that we have still only been given a part of the picture. The Government must not be surprised if we complain that they have not, in past months, prepared the country for just the state of affairs which the Prime Minister described yesterday.
  I must remind the right hon. and learned Gentleman that it is only a few weeks ago that we had the pleasure of listening to the Minister of Food in this House. He was enthusiastically cheered
  1744
  by his supporters. I do not blame them; but we were all derided for not joining in the cheers. The Minister was telling them that there was no need whatever for the housewives or the people of this country to feel that it would be difficult, or impossible, to obtain, partly from home and partly from abroad, the food they need. How in the world can that be reconciled with a 40 per cent. cut in our food imports from the hard currency areas which has been announced by the Government today? I would like to appoint the right hon. and learned Gentleman the President of the Board of Trade, for whom I have a great respect, to a new office, that for the co-ordination of Ministerial speeches.
  Now I come to the next topic about which we are far from satisfied—agriculture. Is it not true that, in fact, there has been a decline during the last two years in every section of the agricultural industry, except milk production? The cattle population has gone down; the sheep population fell by half a million even before the appalling weather conditions of the early spring of this year. The pig and poultry population declined by about one-fifth in numbers, and the total area under arable crops in this country at this time last summer was half a million acres less than when this Government took office, and, at the moment, it is declining still further. I must say that, in our opinion, the Government's target of £100 million of increased output by 1951–52 is inadequate, and I will tell the Government why I think that. In the first place, that target only gets us back, four years hence, to the value of our output two years ago in 1945. That is not very glorious, in view of the present difficulties. At that time, the House will recall, our production was mainly cereal crops, while the hope is that by 1951 the increase will be mainly livestock. Therefore, we ought to expect it to be much more valuable. So I say that that target is not at all sufficient.
  The industry is woefully short of labour, and simply because of lack of accommodation. If labour is to be attracted or directed, accommodation must be provided. Apart from the question of new houses, would it not have been a help through this period if the Housing and Rural Workers Act had been continued? Would we not have been better off? Two years ago the Minister without Portfolio

  1745
  promised us that some substitute for this Act was going to be produced. We are still waiting, but nothing has yet materialised.
  The next point I wish to raise in connection with agriculture is that, as the right hon. Gentleman knows very well, great strides were made in the mechanisation of the industry, and many of the machines which the industry now possesses, such as tractors and harvesters, are today idle for want of spare parts, and many more new machines are needed. What has been going on? In spite of this shortage at home, and of what the Chancellor calls our first dollar saver—and I agree with him—over £6 million worth of agricultural machinery was exported last year, and over £3,500,000 worth has already gone abroad this year. Can this be justified?
  Mr. Parkin: Groundnuts.
  Mr. Eden: Groundnuts! Is agricultural machinery going to be exported to harvest groundnuts, when there is not yet enough machinery available at home? Is the production of food at home a No. I priority, or is it not? If it is a No. I priority, then the steel required is trivial in comparison with the output of food that would result. I say to the President of the Board of Trade that there ought to be a revision of the steel allocation, so that the agricultural industry can receive its full requirements of new machinery and spare parts; and only after those requirements have been met should consideration be given to the manufacture of agricultural machinery for export. Our home needs must come first in that sphere.
  With regard to livestock production, we have been retarded in that sphere by want of feedingstuffs. The Prime Minister said that the Government had been doing their utmost to get feedingstuffs. No doubt they have, but hon. Members will readily understand that it is not much good doing one's utmost if one comes last in the race. Certainly we have been infinitely less successful than anybody else. [HON. MEMBERS: "No."] If we have not been less successful, will hon. Members please explain to me how it is that countries like Holland, Denmark and other European countries are now in a position to export to us pig and poultry produce? Does not that mean that they
  1746
  have been able to get feedingstuffs over and above the requirements of their own people? [Interruption.] I do not think I quite caught that remark. Did the hon. Gentleman say they are eating groundnuts? It seems to be the universal explanation of all the Government's troubles. I wish to deal seriously with the present position of feedingstuffs, and I would like the right hon. and learned Gentleman to give me some information. They are available to an increasing extent in the world today, and if we are going to cut our supplies of foreign meat to the extent that, apparently, we are to do, judging from the figures given us yesterday and earlier today, it is essential that we should have greatly increased imports of feedingstuffs in order that we may, as far as we can, make good the cut that will otherwise have to be made in our rations.
  I am told that the exportable surplus of Argentine maize this year is estimated at between 5,000,000 and 6,000,000 tons. All we know so far is that the Minister of Food hopes to obtain some 700,000 tons of this, but if, as the right hon. Gentleman says, we are to expand our livestock production, we need, at least, three times that much. I do not know how much more the Government can get. We want three times more than what we are said to be getting now. The feedingstuffs position would be enormously eased for our farmers if they were allowed to retain from this year's harvest up to 20 per cent. of their wheat and barley for stock and poultry rations. If the industry is going to be called on to play its part it must be provided with the means. So I ask the Government what they can do in that respect.
  I turn now to the next subject, and it is a vexatious one—to what the Prime Minister had to tell us about the direction of labour. It seemed to me that the Prime Minister's references to this subject were far from clear. Let me say at once that I hate the direction of labour and all that it implies. Such a restriction is wholly foreign to our national conception of freedom of choice in time of peace. But if anything of the kind is intended let it be clearly defined. How far is this direction of labour to extend? What categories are to be affected? And what penalties are to be imposed and exacted? For instance, are women to be included? These are grim questions, but they are questions to

  1747
  which we must have an answer. I must repeat that the sacrifice of the principle implied in the limited direction of labour—even though it be limited—is as odious to me as the general direction of labour. I am not at all sure that in some respects it is not worse, because if we are all subject to the same restrictions there is a certain rough justice in the event, whereas the subjection of selected groups of workers to this direction seems to me to be dangerously open to abuse. But that is not all. Let us suppose for a moment that the House will be prepared, under the stress of present conditions, to accept that principle. Are we sure, even then, that to apply it in present conditions is going to solve our problems?
  I thought yesterday that the Prime Minister's speech did not face reality, because it did not meet what is our fundamental problem. It is really no use for the Government to appeal to workers in all productive industries for a greater effort unless those workers can be assured of the necessary supplies of raw materials with which to make that effort. I ask the President of the Board of Trade, let him go outside and look at the nearest Government poster, and there he will find written up:
  "We need 11 million tons more coal. What for? In order that industry shall work at full production instead of at two thirds production as it is doing at the present time."
  I say to the right hon. and learned Gentleman that nothing is more exasperating to workers in an industry than to be appealed to for greater efforts when they know they have not got the fuel and materials available with which to work.
  Here I turn to what was said yesterday by the hon. Member for Bolton to which I draw the attention of the President of the Board of Trade. The hon. Member for Bolton said:
  "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."
  I hope the Chancellor will not tell me again that there is no serious industrial crisis, as he told me a while back.
  "They closed down three weeks ago because they had used up their allocation of coal and
  1748
  had to put the rest of their coal to stock, with the result that 16,000 tons of ingot steel was lost."—[OFFICIAL REPORT, 6th August, 1947: Vol. 441, c. 1550.]
  That is the situation confronting the Government, and it is not the slightest use appealing for longer hours or greater effort unless supplies of material are dealt with above all. I ask the Government: Where are we on this issue of coal, which is fundamental to our efforts? Everybody admits disappointment with the output figures so far this year. I confess that, though I do not pretend to be an advocate of nationalisation, I had hoped that when the mines were nationalised we might well see—because I knew it was a step dear to the hearts of the miners themselves—an upsurge of production due to their contentment at the new conditions.
  Mr. Kirkwood: There has been.
  Mr. Eden: The hon. Member cannot call it an upsurge. We have only to compare the figures today—as I have done in this House more than once, unhappily—with the figures for 1941, when the miners were away fighting at the front in, for instance, the 50th Division, which won unrivalled glory. In 1941, with fewer miners and less machinery, we produced 206 million tons of deep-mined coal. Should we not be feeling much more content if we were producing that this year? I ask the President of the Board of Trade to tell us this, which we have not been told yet, and which is fundamental to the whole of our Debate: what is the Government's estimate of the increased production they will get by the extra half-hour a day? We have been told by my hon. and gallant Friend the Member for Fylde (Colonel Lancaster) that the increase will be negligible in the mechanised pits and I have heard no contradiction of that. Indeed, it seemed to me to be quite unanswerable. What, then, is the increase which the Government expect? And if they do not expect an increase, what is the use of doing it? Have they considered the alternative proposed by my hon. and gallant Friend, of an 11-day fortnight?
  In that connection there is another matter to which I can refer but briefly because of the time at my disposal, namely, the remarkable speech of the hon. Member for Houghton-le-Spring (Mr. Blyton) who referred to the limitations placed on the

  1749
  powers of an area manager. This confirms much information which has reached me, to the effect that administration under the Coal Board is far too rigid, and this, in its turn, is affecting output. I hope the Minister will examine that speech, and if the hon. Member's facts are justified take steps to remedy them.
  I now come to what is the most important immediate question in this Debate on the home front: What is the Government's coal budget for this winter? What tonnage do they say will be available for industry? What is the extent of the shortfall? And what do the Government propose to do to deal with the shortfall, if there is one? I repeat: This is the heart of the matter, because unless industry can be assured of the coal, all these appeals which the Prime Minister made, with so much eloquence yesterday, are worse than useless. Hon. Members opposite know that this is true. What has Mr. Horner told us? He told us that we shall not even reach the 200 million tons target, which everybody agrees is not enough. Mr. Horner has placed the figure at 195 million tons. Do the Government agree with that? Do they think Mr. Horner is right, or what is their estimate? If Mr. Horner is right, how do the Government propose to deal with the situation which the shortfall will create? That is the immediate problem of this winter, and not some wholly imaginary export target for next year.
  Now let me turn to the Government. The Government have not presented us with a plan. They have presented us with a series of expedients which are to take the place of a plan, and there are many gaps in the Government's proposals. They speak of a reduction of the Services. As far as I can judge, the run-down of the total in the Services, by the Government's plan, has not really been very greatly accelerated. I am not awfully impressed by it. Indeed, the reduction in total strength by 31st March next is in the order of about 7½ per cent. It ought to be possible to achieve that by the operation of the table, with which my right hon. Friend is very familiar, without any considerable loss of efficiency. But we do not know what is the size of the previously intended repatriation figures, and so what the Government have told us about reductions abroad is impossible to assess. We have never been told the
  1750
  original programme, so it is impossible to judge the significance of the revised programme. I take note of what the Prime Minister told us, that the Government propose to maintain their foreign policy, and to fulfil their defence commitments which result from their foreign policy.
  I must point out that this reduction in the Armed Forces is in most marked contrast to what is happening in the Civil Service. Is there to be no reduction there, or are the swollen figures to continue? I am casting no reflection in any way on the industry of civil servants, and I join in the warmest tribute to the hard work they are doing; but the question is, cannot their tasks be reduced, as the tasks of the military, naval and air forces are to be reduced? I cannot believe that this is beyond the wit of man to devise; yet, there is not the slightest indication that the Government intend anything of the kind.
  I must say a word to the Prime Minister about his appeal in respect of the Dunkirk spirit. I think I understood what moved the Prime Minister to make that appeal, but I must ask hon. Members to be as patient as they can with the reply I have to make to it. It seems to me that the Prime Minister did not understand that his speech of yesterday—and the Chancellor of the Exchequer today did not seem to understand it—with all its insistence upon Socialism, destroys completely the Dunkirk parallel. It is quite true that after Dunkirk this nation made an unprecedented effort, but it made that effort as a united nation.
  We did not attempt, although we were a majority in Parliament at that time, and had an overwhelming majority, to pass any party legislation. [HON. MEMBERS: "Oh."] If any hon. Member can point to a single party measure we introduced after 1940, I should be glad to know of it. [An Hon. Member: "You kept things as they were."] Our supreme crime apparently was to keep things as they were, but we also had another job, which was to keep Hitler out of this land, and we did both. [Interruption.] I am not claiming that I did it personally. The hon. Member need not be so impatient. I never suggested that I kept the Germans out of Britain. What I was pointing out was that the war Coalition leadership made a certain contribution to the defeat

  1751
  of the enemy. [An HON. MEMBER: "Coalition?"] Of course, it was the Coalition Government. That is what I have been saying for the last ten minutes. The whole of my argument is that it was the Coalition Government. I am claiming no particular credit for our party in that respect. Do Members opposite really think that my purpose tonight is to claim credit for my party for the country's victory in the war? Of course not. I know that the war was won by the efforts of a united nation. Do they think that I, as Leader of the House at that time, thought anything else?
  Mr. Messer: Then what is the point in saying that no party legislation was introduced then, when there was a Coalition?
  Mr. Eden: If the hon. Member will have a little patience, I think I can make myself clear. The Prime Minister yesterday appealed for a Dunkirk spirit. I am trying to point out that at the time of Dunkirk, when there was a majority of our party in the Government, we interpreted the Dunkirk spirit in the sense that we brought in no legislation which represented our party point of view. We could easily have done so, with our large majority. It is now impossible for the Government to appeal for a Dunkirk spirit and, at the same time, announce that they intend to bring in the most violent partisan legislation. I will give one example, the iron and steel industry. [HON. MEMBERS: "Ah."] That is precisely the answer I expected. Members opposite know that to all of us on this side—and even after the last Election we had the majority of voters—to proceed with that policy at present is anathema. Whatever the Government Front Bench may wish, Members of the party opposite clearly wish to proceed with that policy, yet, at the same time, are calling for a Dunkirk spirit. The position is utterly unacceptable.
  I will sum up my complaint against the Government's present policy. They have told us that Europe and Asia have taken a long time to settle down. That is true. But when did the Government first discover that? It must have been apparent, even to the least informed observer, a year ago, so why could not
  1752
  some of these proposals have been brought before us then? My main charge against the Government is this: even at this stage of the Debate we have not been given a clear picture. We still have not been told what the continuing rate of exhaustion of our dollar resources, including our reserves, is likely to be. We have not been told what the cumulative effect of the Government's proposals are likely to be. Neither the House nor the country have been given any indication of how long this struggle and the privations are to last.
  I say, as I have said before, that the people of this country will always respond to a clear and definite lead. Tell them clearly what is required of them; show them the size and nature of the task; tell them clearly what has to be endured, and for how long; set a term to their efforts and sacrifices. Then you will get from them the response for which you ask. Up to now they have been presented with nothing but muddle, confusion, conflicting Ministerial statements, and a dreary vista of continuing shortages. More than once we have said plainly that we would support the Government in any constructive effort they might make to meet our present difficulties. That undertaking stands. But we cannot regard this present hotchpotch of certain cuts and uncertain hopes as a serious remedy for our ills. We must, therefore, vote against the Government on the Adjournment tonight.
  We cannot be content to agree that Parliament should adjourn from now until the end of October, a date by which, on the Chancellor's showing today, the American loan may have completely run out, with a mere declaration of the Government's intention, which they themselves admit is unfinished. We hope that the Government will agree that Parliament must return to review this situation at some agreed date in a few weeks' time. We hope that the Government themselves will see the value of this proposal and will agree to it, but if they are not prepared to agree to it, we must tell them that we shall move an Amendment to the Motion for the Adjournment when it is proposed. The Government have a responsibility in this matter. I admit that theirs is the paramount responsibility, but this House has also a responsibility. We cannot feel that the Government have

  1753
  worthily discharged their responsibility. We must, therefore, insist on our right to discharge ours.
  9.12 p.m.
  The President of the Board of Trade (Sir Stafford Cripps): When I first entered the profession of the law, I was taught as an advocate that when one had no case one should attack one's opponent. I think that the speech of the right hon. Gentleman the Member for Warwick and Leamington (Mr. Eden) is an extremely good example of that principle. In the early stages of his speech I recognised some familiar phrases, and for a moment I could not think from where he got them, but it then occurred to me that he might at last have been reading the Economic White Paper, so I sent for a copy, and I found reproduced, almost exactly as regards the capital equipment programme, the arguments which the right hon. Gentleman has put forward. I am delighted that at last he and his friends have woken up to a realisation of the problem which confronts the country. Not unnaturally, as with all new converts, they are very anxious that it should be understood by everybody that they have appreciated the point. If anybody is interested in realising whether that is a fact, they need only look through the records of HANSARD for the last two years to find continued pressure from the opposite side of the House against the policy of increasing exports, which we have pursued. There is hardly an article that we export concerning which it has not been suggested that we should retain more of it for the home market.
  The right hon. Gentleman asked me one or two specific questions to which I would like to reply before coming to my main argument. First, he mentioned foodstuffs and gave the figure of 40 per cent as the cut. I think that he is under a complete misapprehension there. It is about 40 per cent. of the hard currency purchases, but that is less than one-sixth of the total. The question he put was how, with a cut of so much as 40 per cent., we could make up the ration? [Interruption.] I am only making it clear in order that it will not go out wrong. A cut of £12 million a month is one-sixth, or rather less than one-sixth, of the total expenditure upon food, and we have not, of course, suggested that the whole of that can be made up. What we have said is that we will
  1754
  make up what we can from soft currency countries, but large portions of it might have to be cut off, largely points foods, as was said by the Prime Minister yesterday.
  With regard to agriculture, the right hon. Gentleman drew attention to the fall in production over the last two years, but he is conscious of the fact, as I am, that during the last two years feedingstuffs-have been unobtainable in the world. In fact, as everybody knows, the destruction of flocks of poultry, of pigs and of cattle as well has been necessary because of the shortage of feedingstuffs. It is easy to knock the total down in six months or three months, but to build it up, especially breeding stocks of cattle, must take a considerable number of years. As he said himself, the expansion has got to be chiefly on the livestock side.
  The right hon. Gentleman also commented on the export of agricultural machinery. We have had to export something from this country, as he knows, and agricultural machinery is one of the most profitable exports in that it goes largely to soft currency areas, from which we can get food, as, for instance, the Colonies. It does not go, of course, to America and the hard currency areas, and therefore, in the development of the food supplies of the world, this agricultural machinery has played its part. It has also been of compensation to us and has given us exports for which we could get food in return.
  With regard to coal, the right hon. Gentleman asked me a question about the extra half hour. As the Prime Minister said, the position was that we asked for an extra half hour, because in the Reid Report it is suggested there should be a five-day week with an eight-hour day, and the extra half-hour would bring it to that. We thought, therefore, that that would be a convenient way of doing it, and the matter is now being considered by the National Coal Board and the miners, in association with other suggestions, such as the Scottish suggestion for the 11-day fortnight. We hope that they will come to the wise decision which will give the greatest production, and that they will be willing, on behalf of the miners, to do these extra hours of work. How they should fit in and what is the best way in which it can be done, I think must be left to them to decide. As regards winter supplies, plans have been got up for dis-

  1755
  tribution upon the basis that there will be enough for industry in this country. As the right hon. Gentleman knows, the figure given by the Prime Minister was 4 million tons of deep-mined coal and a quarter of a million tons of opencast. If we get that, we shall certainly have enough for our industries and perhaps even a little to spare, and it is upon that basis that we are arranging the allocation, with a stand-by scheme in case we do not get enough, under which we could deal with a situation in which there was a considerable shortage. Therefore, I hope that that is properly planned and being looked at.
  The whole course of this Debate has been an interesting one, and broadly speaking it has given support to the ideas of the Government and has signally failed to show any alternatives at all. It is easy enough to criticise and to say, "This is not drastic enough," but it is no good criticising in that way if, at the same time, you say, "You must not do the things you have proposed"—and that has been the nature of a good deal of the criticism. It seems to me that it would be most helpful if I could try to sum up the conclusions without attempting further to give individual answers to the points raised, although I hope that I shall cover most of them in the course of what I have to say.
  There is one general consideration with which I should like to deal first. It is to emphasise that in the course of this Debate we have been dealing specifically with the short-term, immediate necessities to meet the present critical situation in our balance of payments. That does not mean that because we have not recapitulated in detail our general long-term programme we have, therefore, changed or abandoned that programme. My hon. Friend the Member for North-West Hull (Mr. R. Mackay), in a very remarkable contribution yesterday, seemed to me to realise more than many people both the full difficulties of our present situation and the inter-relation between our short-term and our long-term difficulties. It is this appreciation of the problem with which we are faced that I regard as of such very great importance—not the attaching of blame to one person or another, but the appreciation of what the situation is. I would, therefore, like to say a word or two on that.
  1756
  It is the fact that the economic relationships of the world have vastly changed since before the first world war. As has already been remarked, the Western Hemisphere, which was by that time beginning to emerge as the greatest mass producer of manufactured articles—no longer merely of primary commodities although those were produced as well—has, during the two wars and the intervening years, leapt ahead in its producing power, while the rest of the world, including Great Britain, has been unable to make any such corresponding advance owing to the two world wars, and indeed, in these immediate post-war years, has suffered a considerable recession. This has emphasised the unbalance which was already showing itself markedly in the years between the two wars. In other words, there has been an upheaval in the world economic situation as the result of which the rôles of the Eastern and the Western Hemispheres have been completely changed over. Europe, which was the main source of supply of the world for manufactured articles in exchange for the raw materials and foodstuffs which it imported, now finds itself deficient in both manufactured goods and primary commodities, while the United States has become the great supplier of all these things and so, incomparably, the greatest creditor nation the world has ever known.
  At the same time the spread of certain industries, in particular, has made available, or is making available in most countries throughout the world those manufactured consumer goods, such, particularly, as textiles, of which Europe again was once the main source. This is not a temporary phenomenon. It is an historical tendency in the light of which the older manufacturing countries must adjust their economies. It is the immediate' and excessive acceleration of these tendencies, due to the incidence of the two world wars, that has brought about the present acute crisis.
  We must not allow ourselves to be blinded to long-term developments by the intensity of the short-term difficulties. Nothing that we can do will change this tendency because it is already an accomplished fact in the world, and no praise of our own capabilities or of our determination can reverse that historical development of world economy. We must, therefore, face long-term measures for

  1757
  adjusting the European economy and our economy, if we are ever to free Europe and our own country from a continuing dependence upon the generosity of the Western Hemisphere. As has been pointed out by hon. Members, the effects of this change in world economy have been cloaked first by the Lease-Lend provisions, then by U.N.R.R.A., and by the various credits that were granted by the United States, including, of course, our own credit.
  These have enabled the rest of the world to absorb billions of dollars' worth of American goods without any immediate need to repay. The rest of the world has, of course, benefited enormously by that generosity on the part of the Americans, but it has almost completely obscured the true economic facts of the situation, which are now coming to light. The fact is that, on the present basis of world production and consumption, there is a balance of production in the United States of some 12 to 13 billion dollars a year, which must, however, be transferred somehow to the rest of the world, or else the rest of the world must go without. Nor, it must be remembered, does the U.S.A. require to import 12 billion dollars' worth of goods in exchange, even if, which is an impossibility, the rest of the world were able to supply commodities to that value at the present time.
  These are, therefore, the inescapable facts of the situation. We had hoped, as hon. Members have pointed out, and as most countries had hoped, that somehow or other we should be able to achieve an expansionist world policy, based on multilateral trade. By increasing the volume of world trade it was hoped that we should be able to even up the productivity of the rest of the world so as to obtain at least an approximate balance with that of the Western Hemisphere. It has become quite obvious that such a balance is much further off than we had hoped and that far more fundamental measures than had been anticipated will be required if ever we are to attain that balance.
  A great many small and economically separate nations cannot deal individually with this situation. None of us is large enough in ourselves to command the necessary resources. That is why the suggestion put forward by Mr. Marshall for an integration of European economy is to be welcomed, so that Europe as a whole
  1758
  can tackle this problem of the unbalance of trade and productivity. We have, let us remember, great resources in our Commonwealth, but their mobilisation, unfortunately, has been most sadly neglected in the past. We must now, through their development, place ourselves as a Commonwealth in the position not merely of exchanging manufactured goods for raw materials within the Commonwealth, but also of exchanging both the primary and manufactured commodities of the Commonwealth with the rest of the world, if, that is to say, we are to be in the position to acquire from the Western Hemisphere the goods we shall always need. It is not towards autarcky that we want to move, but towards the development, with other countries, such as those in Europe, for example, of increased exchanges of goods. All this is against a background of continuous and concerted efforts to expand the totality of world trade.
  In the meanwhile, however, this integration of economies will have to be worked out and we have our own problem to deal with of the balance of payments, and the major part of that problem must be the increasing of our own production. The cutting down of imports can, and must, in the emergency make some contribution to easing the present situation, but we must not try to solve our difficulties by a permanent lowering standard of living of the people of this country, which, of course, such a cut implies.
  Let us, however, have it quite clear in our own minds that nothing we can immediately do, either by saving imports or by increasing exports, can in the present world situation bring a permanent solution to our difficulties. So long as there is an unbalance of the order of 12 billion dollars a year between the exports and imports of the United States of America, no individual country which is compelled to purchase largely from that country can hope itself to bring about a balance of overseas payments. We may hope to bring the balance within manageable proportions, but that is the best we can do by short-term expedients, and the rest must be left to the longer-term and more fundamental action along lines such as I have already mentioned.
  Let me turn now to the short-term expedients, especially the question of our productivity and our capacity to export.

  1759
  First, let me deal with exports, assuming for a moment that we can get the necessary production. The right hon. Gentle-man said that, taking our figure of 140 per cent., it would mean, excluding coal, 200 per cent. Figures that have so far been published are over-all over 1938. When we reach a figure of no per cent. it means over-all, including the fact that we used to export coal, but do not do so now. Say it is a figure of 140 per cent. Then we must not multiply that figure up and say it ought to be 200 per cent. or we shall get out of relation with the statistical figures which there are. What we are aiming at is 140 per cent.
  The Prime Minister has already emphasised the difficulty with which we are faced in trying to build up to that figure and afterwards to 160 per cent. In July—the figure has just come to hand—we have reached a figure of rather over 120 per cent., but that is a particularly favourable figure, as the July figure always is just before the holidays, because of clearances; and also the import figure for July is unfortunately a new high record, which makes us worse on our balance of payments for July, despite the fact that we have got 120 per cent. of our 1938 exports. That is no doubt partly due to the exceptional shipments of Canadian wheat which my right hon. Friend has already mentioned, but the rest of the climb from now onwards is bound to be more and more difficult.
  We are already beginning to suffer, as I have constantly warned the country, from the change of the sellers' to a buyers' market. We are already meeting the import blockages from countries which are suffering from just the same difficulty as we are—an acute shortage of foreign exchange. That makes it, of course, more and more difficult to expand our markets. In this state of affairs we may hope possibly to get some temporary help for sterling exports due to the very fact that there is an acute world shortage of dollars, but even then, unless there is some temporary invigoration of world trade by an injection of dollars or dollar goods, we are bound to find the greatest difficulty in expanding our own export trade and, in the long run, it will be impossible to maintain that expanded trade unless we find a long-term cure for this unbalance between the two hemispheres.
  1760
  Do what we will, therefore, our capacity to export must remain subject to world economic forces which we cannot ourselves alone control.
  The working out of the export programme is, of course, a matter for consultation between the Government and industry, and that consultation has long been proceeding through a regular machinery, but it will require further and more intensive development in view of the need for greater exports. Arrangements will have to be made through the machinery for the allocation of materials and labour to see that exports get still further preferential treatment in raw materials and labour, and this will be made possible, we believe, by the reduction in the capital investments programme which will have to be severe, as my right hon. Friend the Prime Minister stated yesterday. However, that capital investments programme must not be done just as a percentage cut; it must be done by a careful examination of every single project to see whether or not it is such as is to be of immediate use to the purposes which we are now pursuing in our economy.
  Now it is hoped that the longer hours which are to be worked in those industries which can be assured of supplies of raw materials, fuel and power—because it is no good having longer hours otherwise—will enable us to increase both exports of capital and consumer goods without an undue diversion from the home market, though there is bound to be some diversion for both the capital goods and the consumer goods. One thing that we must not permit, and which we can control of course, is that we must not allow our export programme to fall down because of our failure to produce. There is no doubt whatsoever that we are capable of producing more than we are doing now, both for own internal consumption and also for exports, and that applies to foodstuffs, raw materials and manufactured goods. I think everybody is agreed upon that proposition, but people are not so well agreed upon how we should proceed to implement the programme for getting that extra production.
  I cannot emphasise too strongly that, however we manipulate our trade or finance, whatever political system we follow, and whatever arrangements we make with other countries, the fundamental fact must always remain that our

  1761
  standard of living as a people will and must depend upon the volume of our own production, and nothing can give us a higher standard than we can support by our own efforts. Do not let us, therefore, in a maze of conflicting policies and theories, ever forget that basic, fundamental truth. How we distribute that production through the mechanisation of individual incomes is a matter we can debate and decide when we have achieved the production; but no amount of increasing incomes or decreasing expenditure will give us more to divide than we actually produce. We are in a period of acute scarcity and of difficulty so far as our production is concerned on the home front, and none of us should attempt to use those circumstances for our own individual benefit, or to advantage our own position whether it be a matter of individual earnings by way of salaries, or wages, or profits, or rents, or in any other way, not excluding the forcing upon the country of our own pet theories—which does not mean not carrying out our political programme.
  In order to get this increased production, we must carry out our planning in an orderly way. We must secure raw materials and sources of power first of all for producing things like coal, steel, transport, agricultural production, and those primary things that are the basis of the whole of our industrial life, and, having secured a sufficiency of those primary things, we can then turn to the semimanufactured goods of importance, and finally to the completely manufactured goods. I am sure there is no need for me to emphasise the stress we have to place upon coal, steel and transport as the fundamentals of our whole industrial production. I have no time to reiterate, nor would it be proper to, the details my right hon. Friend gave yesterday of the various factors we have to take into account, and upon which we must operate, but I would like to say a word or two upon what is perhaps the most important factor of the whole situation.
  How are we to attain that programme of production? How are we to get our people to do that which we know them to be capable of doing, but which at the present moment they are not doing? That raises a number of important questions which can be divided under four main
  1762
  heads—political considerations, deployment of the total labour force, improvement of efficiency, and incentive. I would like to deal shortly with each of those in turn.
  A number of persons, both inside and outside the House, have suggested that to get a united effort by the nation—the right hon. Gentleman suggested it this evening—for the time being we should set aside our political policy. Such an idea is based upon the profound fallacy that this is merely a temporary difficulty of short duration, and that we shall before long be returning once again to what we might refer to as normal circumstances. I hope I have been able to show that that is not the position. At the same time as we are dealing with the short-term aspect of our difficulties, one must deal with the long-term aspect as well. At the last General Election it was largely because of the economic difficulties then looming ahead that the people decided to give the Labour Party a large majority in Parliament, so that it could carry through its announced programme. That programme was, of course, long-term in character. It aimed principally at two things: first, to give the mass of the workers what they regard as their rightful place and influence in the economic life of the country, and, second, to make possible an economy which could be planned in the national interest, rather than for individual profit, by nationalising a limited range of essential industries and services, and by some forms of controls in a planning partnership with the other industries.
  We believe that these are essential aims if we are to increase our standards of production, and so raise or even maintain our standard of living today. We cannot abandon these long-term aims because of the immediate difficulties, and, indeed, the difficulties are a reason for intensifying and not for abandoning what we regard as the only means of securing the maximum production, not of any or all goods but of the things that we as a nation most urgently need today. In times of economic crisis and difficulty it is essential to have a policy, and not to wait for it until we can get the Government servants to help us to make it. The one thing that would be fatal would be for all parties to abandon all their policies today, and so arrive at an amorphous negative attitude which would never get us anywhere.

  1763
  We must have some aim and some policy, and in a democracy that can only be the aim and policy of the majority party. There is, therefore, no question of the Government abandoning these broad, general policies.
  We now come to the second point, the deployment of the total labour force. That involves two things, the utilisation of the total labour force on useful production work, and the full manning up of the more essential industries. The unemployment figure has got down to a low level, except in the development areas. Therefore, we must concentrate on finishing our job in the development areas, to provide the right type of employment to absorb the labour which is there. Secondly, it has been decided to stop, by negative control, further people from going into the less necessary industries. If, at some future date, further and more stringent measures become necessary, we can then consider the question of the direction of labour, but my right hon. Friend the Prime Minister said it was only in a marginal case connected with the negative control that that power might possibly be used under existing circumstances, not as a general proposition. The alternative, of course, is that we should persuade people, wherever possible, as we have been doing, to go into the more essential industries, and we hope that with the negative control, with the needs of the country made clear, we shall get a better and readier response.
  The third point is the improvement of the efficiency of the existing production units. We are not thinking in terms of ultimate improvement by re-mechanisation, but of immediate improvement here and now. That means reconsideration of the allocation of material in the light of the new necessities, an assurance of full supplies of fuel and power and a redeployment of labour, wherever that is shown, as has been shown in the cotton industry, to increase production, together with the highest efficiency of management, in particular in the area of labour relations. To obtain these results from both sides of industry, they must show themselves flexibly minded, and must be prepared to give up theories or practices which are restrictive. That is absolutely essential, and is something which no Government can do, but which can be done by enlightened leadership in industry itself, and
  1764
  through a thorough appreciation of the facts of the situation by workers and managements alike. It means, too, the taking of the workers into the fullest consultation at all levels, and their treatment as responsible and interested citizens and not as mere bodies. Only in that way will their enthusiasm and interest be retained.
  The fourth point is incentive. Here there are many suggestions, most of them on the material side, but we must avoid a competitive raising of wages and conditions in a scarce labour market, which raises prices. Secondly, we must avoid an increase in the general inflationary tendency, which has already been dealt with, where more money is available to purchase less and less goods. Prices, be it remembered, are an essential factor in our export programme. If we allow prices to rise because of internal costs rising, we shall lose and not gain our overseas markets, or at least not be able to gain new ones in the competition. Therefore, incentives must be strictly limited to increased production so that more earnings mean more production. We cannot in any circumstances afford to pay more for the same or less production. We must await the further raising of the levels of earnings until we can provide the goods upon which those earnings can be spent. In the same way, let me point out, that large profits drawn from industry today are just as inimical because they, too, raise the price levels and, furthermore, they offer an immediate temptation for the demand for greater salaries.
  In summing up this Debate, I have attempted to give a broad sketch of the difficulties in short and long term and to show the essential interrelation between the two. I have dealt also with what is to my mind the kernel of the whole problem—how are we to produce more so as to have more to distribute amongst our people? But when we have considered broadly and in detail, as we have during the course of this Debate, the actual steps that we must take, we come back to the most important consideration of all: our failure or success will depend in the last resort upon the spirit of our people. The quality of effort that is needed in the next few years is not such that it can be evoked by mere material considerations or by the intensification of self-interest or competitive self-seeking.

  1765
  Employers, staffs, technicians, and workers alike must be fairly rewarded. We must do our utmost to minimise the difficulties and hardships of the housewives throughout the country. There must be no sense of injustice and no favouritism or privilege except as the reward for an honest contribution to the needs of the nation. The increase of money incentives, especially with a greater shortage of goods, cannot inspire the whole nation to the efforts that are now needed for our salvation. We must bring home to the people the seriousness of the country's present plight and the future problems that we face. We must convince them of their power to overcome all difficulties by common effort. We must draw out from people that courage and determination which have always been the hallmarks of the British character.
  The time for the realisation of our aims and hopes has been set back by the inescapable economic facts of world development. We can offer no immediate prospect of relief. The struggle of production, the battle of the balance of payments, is as tough a proposition as
  any that this country has ever faced, and there is no easy way out. Production, and production alone, can find us relief in our immediate situation. It is no part of the British character to resign ourselves to such difficulties or to fail to take the measures, however hard, to overcome them. It has been truly said that by our faith we can move mountains. It is by our faith in ourselves, in our country, in the free democratic traditions for which the people of this country have for centuries fought and battled, and for which they must fight again as willingly on the economic front as upon the oceans, on the land and in the air, it is by our faith in the deep spiritual values that we acknowledge in our Christian faith, that we shall be enabled and inspired to move the present mountains of our difficulties, and so emerge into that new and fertile plain of prosperity which we shall travel in happiness only as the result of our own efforts and our own vision.
  Question put, "That this House do now adjourn."
  The House divided: Ayes, 170; Noes, 318.

  Division No. 370.]

  AYES.

  [9.57 p.m.

  Agnew, Cmdr. P. G.

  Dodds-Parker, A. D.

  Kingsmill, Lt.-Col. W. H.

  Allen, Lt -Col. Sir W (Armagh)

  Dower, Lt.-Col. A. V. G. (Penrith)

  Lambert, Hon. G.

  Amory, D. Heathcoat

  Dower, E. L. G. (Caithness)

  Lancaster, Col. C. G

  Anderson, Rt. Hn. Sir J. (Soot Univ.)

  Drayson, G. B.

  Langford-Holt, J.

  Assheton, Rt. Hon. R.

  Drewe, C.

  Law, Rt. Hon. R. K.

  Astor, Hon. M.

  Dugdale, Maj. Sir T. (Richmond)

  Legge-Bourke, Maj. E. A. H.

  Baldwin, A. E.

  Duncan, Rt. Hn. Sir A. (City of Lond.)

  Lennox-Boyd, A. T.

  Barlow, Sir J.

  Duthie, W. S.

  Linstead, H. N.

  Baxter, A. B.

  Eden, Rt. Hon. A.

  Lloyd, Maj. Guy (Renfrew, E.)

  Beamish, Maj. T. V. H

  Elliot Rt. Hon Walter

  Low, Brig, A. R. W

  Beechman, N. A.

  Erroll, F. J.

  Lucas, Maj. Sir J,

  Bennett, Sir P.

  Fleming, Sqn.-Ldr. E. L

  Lucas-Tooth, Sir H.

  Birch, Nigel

  Foster, J. G. (Northwich)

  Lyttelton, Rt. Hon. O

  Boles, Lt.-Col. D. C. (Wells)

  Fyfe, Rt Hon. Sir D. P M

  McCallum, Maj. D.

  Boothby, R.

  Galbraith, Cmdr. T. D

  Mackeson, Brig, H. R.

  Bossom, A C

  Gammans, L. D.

  McKie, J H. (Galloway)

  Bowen, R.

  Gates, Maj E. E.

  Maclay, Hon. J. S.

  Bower, N.

  George, Maj. Rt Hn. G. Lloyd (P'ke)

  Macmillan, Rt. Hon. Harold (Bromley)

  Boyd-Carpenter, J. A.

  George, Lady M. Lloyd (Anglesey)

  Macpherson, N. (Dumfries)

  Bracken, Rt. Hon. Brendan

  Glyn, Sir R.

  Maitland, Comdr. J. W.

  Bromley-Davenport, Lt.-Col W

  Gomme-Duncan, Col. A

  Manningham-Buller, R. E

  Butcher, H. W.

  Gridley, Sir A.

  Marlowe, A. A. H

  Butler, Rt. Hon. R. A. (S'flr'n W'Id'n)

  Grimston, R. V.

  Marples, A E.

  Byers, Frank

  Hannon, Sir P. (Moseley)

  Marsden, Capt. A.

  Carson, E.

  Hare, Hon. J. H. (Woodbridge)

  Marshall, D (Bodmin)

  Challen, C.

  Harvey, Air-Comdre. A. V

  Marshall, S. H (Sutton)

  Channon, H.

  Haughton, S. G.

  Maude, J. C.

  Churchill, Rt. Hon. W. S

  Head, Brig. A. H.

  Medlicott, F.

  Clarke Col. R. S.

  Headlam, Lieut.-Col. Rt. Hon Sir C

  Molson, A. H. E.

  Clifton-Brown, Lt.-Col. G

  Hinchingbrooke, Viscount

  Moore, Lt.-Col. Sir T

  Conant, Maj. R. J. E.

  Hogg, Hon. Q

  Morris, Hopkin (Carmarthen)

  Cooper-Key, E M

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

  Morrison, Maj. J. G. (Salisbury)

  Corbett, Lieut.-Col. U. (Ludlow)

  Hulbert, Wing-Cdr N. J

  Morrison, Rt Hon. W. S. (C'nc'ster)

  Crosthwaite-Eyre, Col. O. E.

  Hurd, A

  Motl-Radclyffe, Mai, C E

  Cuthbert, W. N

  Hutchison, Col. J. R. (Glasgow, C.)

  Nicholson, G.

  Darling, Sir W. Y.

  Jarvis, Sir J.

  Nield, B. (Chester)

  Davidson, Viscountess

  Jeffreys, General Sir G.

  Noble, Comdr A. H. P.

  Davies, Clement (Montgomery)

  Jennings, R

  O'Neill, Rt. Hon. Sir H

  De la Bère, R

  Joynson-Hicks, Hon. L. W.

  Orr-Ewing, I. L

  Digby, S. W.

  Kerr, Sir J. Graham

  Osborne, C

  Peake, Rt. Hon. O

  Savory, Prof. D. L.

  Turton, R. H.

  Peto, Brig. C. H. M.

  Scott, Lord W.

  Vane, W. M. F

  Pickthorn, K.

  Shepherd, W. S. (Bucklow)

  Wadsworth, G.

  Ponsonby, Col. C. E.

  Smiles, Lt.-Col. Sir W

  Wakefield, Sir W. W.

  Poole, O. B. S. (Oswestry)

  Smith, E. P. (Ashford)

  Walker-Smith, D

  Prescott, Stanley

  Spearman, A. C. M.

  Ward, Hon. G. R.

  Price-White, Lt.-Col. D,

  Stanley, Rt. Hon. O.

  Webbe, Sir H. (Abbey')

  Prior-Palmer, Brig, O.

  Stoddart-Scott, Col. M

  Wheatley, Colonel M. J

  Raikes, H. V.

  Strauss, H. G. (English Universities)

  White, Sir D. (Fareham)

  Ramsay, Major S.

  Sutcliffe, H.

  White, J. B. (Canterbury)

  Rayner, Brig. R,

  Taylor, C. S. (Eastbourne)

  Williams, C. (Torquay)

  Reed, Sir S. (Aylesbury)

  Taylor, Vice-Adm. E. A. (P'dd't'n, S.)

  Winterton, Rt. Hon. Earl

  Reid, Rt. Hon. J. S. C. (Hillhead)

  Teeling, William

  York, C.

  Roberts, H. (Handsworth)

  Thomas, J. P. L. (Hereford)

  Young, Sir A. S. L. (Partick)

  Roberts, Maj. P. G. (Ecclesall)

  Thorneycroft, G. E. P, (Monmouth)

  Roberts, W. (Cumberland, N.)

  Thornton-Kemsley, C. N.

  TELLERS FOR THE AYES:

  Robertson, Sir D. (Streatham)

  Thorp, LI.-Col. R. A. P.

  Mr. James Stewart and

  Sanderson, Sir F.

  Touche, G. C

  Mr. Buchan-Hepburn.

  NOES.

  Adams, Richard (Balham)

  Davies, Edward (Burslem)

  Herbison, Miss M.

  Adams, W. T. (Hammersmith, South)

  Davies, Ernest (Enfield)

  Hewitson, Captain M.

  Alexander, Rt. Hon. A. V.

  Davies, Harold (Leek)

  Hobson, C. R.

  Allen, A. C. (Bosworth)

  Davies, Haydn (St. Pancras, S. W.)

  Holman, p.

  Allen, Scholefield (Crewe)

  Davies, S. O (Merthyr)

  House, G.

  Alpass, J. H.

  Dear, G.

  Hoy, J.

  Anderson, A. (Motherwell)

  de Freitas, Geoffrey

  Hubbard, T.

  Anderson, F. (Whitehaven)

  Diamond, J.

  Hudson, J. H. (Ealing, W.)

  Attewell, H. C.

  Dobbie, W

  Hughes, Emrys (S. Ayr)

  Attlee, Rt. Hon. C. R.

  Dodds, N. N

  Hughes, Hector (Aberdeen, N.)

  Awbery, S. S.

  Donovan, T.

  Hughes, H. D. (Wolverhampton, W.)

  Ayles, W. H.

  Driberg, T. E. N.

  Hutchinson, H. L. (Rusholme)

  Ayrton Gould, Mrs. B.

  Dugdale, J. (W. Bromwich)

  Hynd, H. (Hackney, C.)

  Barnes, Rt. Hon. A. J.

  Dumpleton, C. W.

  Hynd, J. B. (Attercliffe)

  Barstow, P. G.

  Durbin, E. F. M.

  Irving, W. J.

  Barton, C

  Dye, S.

  Isaacs, Rt. Hon. G. A

  Battley, J. R.

  Ede, Rt. Hon. J. C.

  Jay D. P. T.

  Bechervaise, A. E.

  Edwards, N. (Caerphilly)

  Jeger, G. (Winchester)

  Belcher, J. W.

  Edwards, W. J. (Whitechapel)

  Jeger, Dr. S. W. (St. Pancras, S. E.)

  Bellenger, Rt. Hon. F J.

  Evans, E. (Lowestoft)

  Jones, Rt. Hon. A. C (Shipley)

  Benson, G.

  Evans, John (Ogmore)

  Jones, D. T. (Hartlepools)

  Beswick, F.

  Ewart, R.

  Jones, J H. (Bolton)

  Bevan, Rt. Hon. A. (Ebbw Vale)

  Fairhurst, F.

  Jones, P. Asterley (Hitchin)

  Bevin, Rt. Hon. E. (Wandsworth, C.)

  Farthing, W J.

  Keenan, W.

  Bing, G. H. C.

  Fernyhough, E.

  Kenyon, C.

  Binns, J.

  Field, Captain W. J.

  Key, C. W.

  Blenkinsop, A.

  Fletcher, E. G. M. (Islington, E.)

  King, E. M.

  Blyton, W. R.

  Follick, M.

  Kinghorn, Sqn.-Ldr. E.

  Boardman, H.

  Foot, M. M.

  Kinley, J.

  Bowden, Flg.-Offr. H. W.

  Forman, J. C.

  Kirby, B. V

  Bowles, F. G. (Nuneaton)

  Foster, W. (Wigan)

  Kirkwood, D.

  Braddock, Mrs. E. M. (L'pl, Exoh'ge)

  Fraser, T. (Hamilton)

  Lavers, S.

  Braddock, T. (Mitcham)

  Freeman, Maj. J. (Watford)

  Lee, F. (Hulme)

  Bramall, E. A.

  Freeman, Peter (Newport)

  Lee, Miss J. (Cannock)

  Brook, D. (Halifax)

  Gaitskell, H T. N.

  Leonard, W

  Brooks, T. J. (Rothwell)

  Ganley, Mrs. C. S

  Leslie, J. R.

  Brown, George (Belper)

  Gibbins, J.

  Lever, N. H.

  Bruce, Major D. W. T.

  Gibson, C. W.

  Levy, B. W.

  Burden, T. W

  Gilzean, A.

  Lewis, A. W. J. (Upton)

  Burke, W. A.

  Glanville, J. E, (Consett)

  Lewis, J. (Bolton)

  Callaghan, James

  Goodrich, H. E.

  Lindgren, G. S.

  Carmichael, James

  Gordon,-Walker, P. C.

  Lipton, Lt.-Col. M.

  Chamberlain, R. A

  Greenwood, Rt. Hon. A. (Wakefield)

  Logan, D. G.

  Champion, A. J.

  Greenwood, A. W. J. (Heywood)

  Longden, F.

  Chater, D,

  Grenfell, D. R.

  Lyne, A. W.

  Chetwynd, G. R.

  Grey, C. F.

  McAdam, W.

  Cluse, W. S

  Grierson, E.

  McAllister, G.

  Cobb, F. A.

  Griffiths, D. (Rother Valley)

  McEntee, V. La T.

  Cooks, F. S.

  Griffiths, Rt. Hon. J. (Llanelly)

  McGhee, H. G.

  Collick, P.

  Griffiths, W. D. (Moss Side)

  McKay, J. (Wallsend)

  Collins, V. J.

  Guest, Dr. L. Haden

  Mackay, R. W. G (Hull, N. W.)

  Colman, Miss G. M.

  Guy, W. H.

  Maclean, N. (Govan)

  Cook, T. F

  Haire, John E. (Wycombe)

  McLeavy, F.

  Cooper, Wing-Comdr. G.

  Hale, Leslie

  MacMillan, M. K. (Western Isles)

  Corbet, Mrs. F. K. (Camb'well, N. W)

  Hall, Rt. Hon. Glenvil

  Macpherson, T. (Romford)

  Corlett, Dr. J.

  Hamilton, Lt.-Col. R.

  Mainwaring, W H.

  Corvedale, Viscounl

  Hannan, W. (Maryhill)

  Mallalieu, J. P. W.

  Cove, W. G.

  Hardy, E. A.

  Mann, Mrs. J.

  Crawley, A.

  Harrison, J.

  Manning, C. (Camberwell, N.)

  Cripps, Rt. Hon. Sir S.

  Hastings, Dr. Somerville

  Manning, Mrs. L. (Epping)

  Crossman, R. H. S.

  Haworth, J.

  Ma hers G.

  Daines, P.

  Henderson, A. (Kingswinford)

  Mayhew, C. P.

  Dalton, Rt. Hon H.

  Henderson, Joseph (Ardwick)

  Mellish, R. J.

  1768

  1769

  Messer, F.

  Reid, T. (Swindon)

  Thomas, D. E (Aberdare)

  Middleton, Mrs. L.

  Rhodes, H.

  Thomas, Ivor (Keighley)

  Mikardo, Ian

  Ridealgh, Mrs M.

  Thomas, I. O. (Wrekin)

  Millington, Wing-Comdr. E. R

  Robens, A

  Thomas, George (Cardiff)

  Mitchison, G. R

  Roberts, Goronwy (Caernarvonshire)

  Thomson, Rt. Hn. G. R (Ed'b'gh, E.)

  Monslow, W.

  Robertson, J. J (Berwick)

  Thorneycroft, Harry (Clayton)

  Moody, A. S

  Rogers, G. H. R.

  Thurtle, Ernest

  Morgan, Dr. H. B

  Ross, William (Kilmarnock)

  Tiffany, S

  Morris, P (Swansea, W.)

  Royle, C.

  Titterington, M F.

  Morrison, Rt. Hon. H. (Lewisham, E.)

  Sargood, R.

  Tolley, L.

  Mort, D L.

  Scollan, T.

  Tomlinson, Rt. Hon G

  Moyle, A.

  Segal, Dr. S.

  Vernon, Maj. W F.

  Murray, J. D

  Shackleton, E. A A

  Viant, S. P.

  Naylor, T. E

  Sharp, Granville

  Wallace, G. D (Chislehurst)

  Neal, H. (Claycross)

  Shawcross, C. N. (Widnes)

  Wallace, H. W. (Walthamstow, E.)

  Nichol, Mrs. M E (Bradford, N.)

  Shawcross, Rt. Hon. Sir H. (St Helens)

  Webb, M. (Bradford, C.)

  Nicholls, H R. (Stratford)

  Shinwell Rt Hon E

  Weitzman, D.

  Noel-Baker, Rt. Hon. P. J. (Derby)

  Shurmer, P.

  Wells, P. L. (Faversham)

  Noel-Buxton, Lady

  Silverman, J. (Erdington)

  Wells, W. T. (Walsall)

  O'Brian, T.

  Simmons, C. J.

  West, D. G.

  Oldfield, W. H

  Skeffington, A. M.

  White, H. (Derbyshire, N. E.)

  Oliver, G. H

  Skeffington-Lodge, T. C

  Whiteley, Rt. Hon. W.

  Orbach, M.

  Skinnard, F. W.

  Wigg, Col. G. E.

  Paget, R. T.

  Smith, C. (Colchester)

  Wilcock, Group-Capt C. A. B

  Paling, Rt. Hon. Wilfred (Wentworlh)

  Smith, H. N. (Nottingham, S.)

  Wilkes, L.

  Paling, Will T. (Dewsbury)

  Smith, S. H. (Hull, S. W.)

  Wilkins, W. A.

  Palmer, A. M. F.

  Solley, L. J.

  Willey, F. T. (Sunderland)

  Pargiter, G. A.

  Sorensen, R. W.

  Willey, O. G. (Cleveland)

  Parkin, B. T

  Soskice, Maj. Sir F

  Williams, D. J (Neath)

  Paton, J. (Norwich)

  Sparks, J. A.

  Williams, J. L. (Kelvingrove)

  Pearson, A.

  Steele, T.

  Williams, Rt Hon. T. (Don Valley)

  Peart, Thomas F

  Stephen, C.

  Willis, E.

  Platts-Mills, J. F. F

  Stokes, R. R.

  Wills, Mrs. E. A

  Poole, Cecil (Lichfield)

  Strachey, J

  Wilmot, Rt Hon. J

  Porter, E. (Warrington)

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

  Wilson, J. H

  Porter, G. (Leeds)

  Stross, Dr. B

  Wise, Major F. J.

  Price, M. Philips

  Stubbs, A. E

  Woodburn, A

  Pritt, D. N.

  Summerskill, Dr Edith

  Wyatt, W.

  Proctor, W. T

  Swingler, S.

  Yates, V. F.

  Pryde, D. J.

  Sylvester, G. O.

  Young, Sir R. (Newton)

  Pursey, Cmdr. H

  Symonds, A. L

  Younger, Hon. Kenneth

  Ranger, J.

  Taylor, H. B. (Mansfield)

  Rees-Williams, D. R.

  Taylor, R. J. (Morpeth)

  TELLERS FOR THE NOES:

  Reeves, J.

  Taylor, Dr S (Barnet)

  Mr. Snow and Mr. Popplewell.

  Question put, and agreed to.

  SUPPLIES AND SERVICES (TRANSITIONAL POWERS) BILL (PROCEDURE)
  [King's Recommendation signified.]
  10.8 p.m.
  The Lord President of the Council (Mr. Herbert Morrison): I beg to move,
  "That the following provisions shall have effect with respect to proceedings on the Supplies and Services (Transitional Powers) Bill:
  The requirements of Standing Orders Nos. 63, 64 and 68 and of the practice of the House relating to the imposition of charges upon the people and to charges upon the public revenue shall be deemed to have been complied with in respect of the provisions of the Bill or of any Amendments thereto moved by a Minister of the Crown which authorise expenditure or the imposition of any such charge."
  This Motion concerns procedural matters in relation to the financial Standing Orders that would ordinarily be required in connection with the passage of the Supplies and Services (Transitional Powers) Bill. Originally, the Motion which I am now moving was required to facilitate the- passage of the Bill through all its stages in one day, which was our intention. Without the Motion it would have been necessary, and would remain necessary, to pass a Money Resolution in connection with the Bill, and this could not have been reported on the same day without the general agreement of the House. Hon. Members will find that that is provided for in the modification of Standing Order No. 69 which was passed on 21st November, 1946. We, therefore, decided to follow the precedents which are established in connection with the cases of the Emergency Powers Act, 1939, and the Emergency Powers Act, 1940, and to move a procedural Motion dispensing with the requirements of the Standing Orders relating to the imposition of charges.
  In our judgment this was justified by the urgency of the situation, the approach of the end of the Session, and the fact that the financial aspects of the Bill were really quite subsidiary to the main purpose of the Bill, the Second Reading of which is to be moved tomorrow. It is true that since that time the Government have decided, for the purposes of meeting the views of the Opposition, which were represented to us, not to take all the stages of the Bill on the same day; the
  1772
  Second Reading will be taken tomorrow, and the Committee and other stages on Monday. But I would point out that we have still signified—I have still signified—the King's Recommendation before moving the present Motion, and thus I have preserved the fundamental principle embodied in the Standing Orders, that in matters involving a charge, the initiative comes from the Crown. It seems to us, in these circumstances, that the sensible and convenient course would be to dispense with the need for a Money Resolution in accordance with the Government's original plan. Indeed, on practical grounds we should be in difficulties otherwise, because the Bill would have to be printed to show in italics the provisions that might involve a charge; and in fact there will be no charge under this Bill except for incidental purposes in connection with the enforcement and possible modification of existing Defence Regulations. In the circumstances I trust the House will be good enough to agree to the Motion.
  10.13 p.m.
  Mr. Assheton: It seems to us that this is a very unusual procedure, dispensing as it does with all the controls that a Financial Resolution gives to this House. I was not certain whether the right hon. Gentleman was quite right when he said that, in fact, there would be no expenditure under this Bill. The powers which the Government are seeking to take under this Bill are, presumably, very extensive; and if I read the Bill aright, it gives them powers to spend a great deal of money. It is unusual that the stages of a Financial Resolution should be entirely omitted from a Measure of this sort, and, although I appreciate the circumstances in which we find ourselves today, I think it is necessary to draw attention to the fact that this is a most exceptional procedure
  10.14 p.m.
  Mr. Pickthorn: I do not know if anybody else on the Front Bench is prepared to add a word, but there are one or two things said by the Leader of the House which leave me not quite understanding what is happening. He appealed to the precedents of the Bills in 1939 and 1940. Does he thereby mean to communicate to the House that the urgency is now the same as it was then, and that the proportionate

  1773
  relation of this Bill to the urgency is as great as the proportionate relation of those Bills to that urgency was? [Laughter.] I am not quite sure whether hon. Members opposite understand. If not, I must put the point more fully. The point is this. Then, the urgency was the urgency of a great European and, indeed, world war; and then, the Bill was a Bill to make possible all the things necessary for that purpose, to alter the whole of our constitutional and legislative arrangements so that they could be made to meet that emergency. Therefore, by now appealing to that precedent, if the Leader of the House is informing us that this Bill is of comparable importance now with the importance which that Bill had then—if that is what is meant—then what he is now doing is a matter of extreme importance to the House and to the whole country, and we ought to be quite sure whether that is what he meant; or, if not, how can he explain the fairness of his appeal to that precedent? I hope that now that makes it plain to some hon. Members opposite.
  There is another point which I wish to ask him. He spoke of the principle involved being safeguarded by his indication of the Crown's consent. But is that the only principle involved in the suspension of these three Standing Orders? I have not studied them carefully, but I think we ought to have an assurance from the Treasury Bench that that is the only principle involved. Thirdly, is it not the fact—I do not assert this, and I ask it not by way of argument but in search of information—that without this suspension this Bill would necessarily take three days? I am not arguing whether that would be a good thing or a bad thing. But if so, it should be, in candour, made plain to us. If so, the argument for its taking only two days is very much weakened now. As long as the argument was, "This is a matter of such urgency that it must be taken all in one day," that was one thing. But when it becomes of not such urgency as all that, when it is allowed to take the whole of this week and to slop over into next week, then the argument of the intolerable inconvenience of requiring part of Tuesday as well as the whole of Monday of next week is very much less strong. I think all those points were involved in the right hon. Gentleman's statement.
  1774
  There is a fourth point. The right hon. Gentleman said that the financial implications were not very great because it would merely be a matter of ancillary payments involved in the enforcement of existing regulations. I think I am repeating him fairly; and if not, no doubt he will correct me. Was that true? I do not mean "Was it meant to be true?" but is it exact? Does it not also concern the enforcement of orders under regulations?—and those not all of them necessarily orders already in existence. I am not quite sure about that, but I am quite sure that the speech of the Leader of the House ought not to be acquiesced in quietly without the House being given an answer to that fourth question also.
  10.18 p.m.
  Mr. Boyd-Carpenter: I should be grateful if the Lord President would explain one point. He said that in any event the King's Recommendation would be signified by him on the presentation of the Bill. Now, as I understand it—no doubt there is an explanation——
  Mr. H. Morrison: Perhaps I might correct the hon. Member. I signified the King's Recommendation prior to moving the Motion, which is, I think, the proper procedure.
  Mr. Boyd-Carpenter: I am much obliged. If the Lord President will look at the Standing Orders which he is seeking to suspend, the first of the three, No. 63, is the one which deals with the King's Recommendation. If the normal procedure of recommendation is to be followed, I am afraid I do not quite follow why it is necessary to suspend the order which provides it. Secondly, I did not understand the Lord President to make it at all clear why the normal procedure of a Money Resolution could not be followed. This Bill, to which it relates, is marked as being presented the day before yesterday. Surely, in those circumstances, it would have been possible to have followed the normal procedure of a Money Resolution in connection with Bills of this sort?
  I do think the Lord President brushed aside a trifle lightly the normal procedure of this House in this matter. Nobody wants to obstruct the passing of necessary legislation if there is good reason, but

  1775
  equally, when the Government see fit to seek to suspend the Standing Orders of this House, we are entitled to have good reason, and so far there seems to be no good reason why during this week the ordinary procedure could not have been followed. After all, as I understand it, the object of the Rules of Procedure of this House is to ensure that the House has adequate opportunity to do its duty in discussing legislation. If there has been one Bill in this Session on which it is surely the duty of hon. Members to see that full opportunities for discussion are preserved, it should surely be a Bill which seeks to take from the control of Parliament and hand over to the Executive powers of delegated legislation. I think that we are entitled to say that in following this procedure in this Bill of all Bills the Government have shown a disregard of the normal Rules of Procedure of this House which may well be symptomatic of the mentality behind the Bill.
  10.22 p.m.
  Mr. Churchill: This seems to be a somewhat complicated and obscure matter. I gather that the Government had in mind that they would accelerate our departure for the country by this more compendious procedure, and that they thought that the Measure which they are introducing was one which would be passed without any discussion or after very brief discussion at the tail-end of this part of the Session. For that reason they are quite ready to take very exceptional steps—for instance, to sweep away all the ideas of financial precautions and control by the House of Commons which are the foundation of our existence as a legislative body. The Money Resolution would be left out, and it does seem rather serious to sweep away these long-established customs to which we all owe our rights to be here and which are the milestones of democracy in its path to power as against the security of a despotic Crown in the old days. All that is to be swept away, and we are told by the right hon. Gentleman, as far as I understand it—which seems to be very odd—that the fact that a Minister signified that he had the Royal Assent to sweeping away these financial precautions was sufficient to settle the matter once and for all. The whole of these financial arrangements
  1776
  emerged from quarrels between Parliament and the Crown, and why we should now be told that we are safeguarded because a Minister says that he has the Royal Assent to dispense with these provisions invented for our protection puzzles me exceedingly. I should be delighted to hear any further discussion.
  Mr. H. Morrison: I only want to say that in his last observations the right hon. Gentleman is absolutely and completely wrong.
  Hon. Members: Why?
  Mr. Churchill: It is very easy for the right hon. Gentleman to rise from his place and say that his opponent is absolutely and utterly wrong. As one most anxious to sit at his feet in the matter, might I ask him whether he would vouchsafe any reason for this sweeping contradiction? Why is it utterly and totally wrong? What is the point of bringing the King's Recommendation into this matter when it clearly is a House of Commons insistence upon the financial provisions being observed? Of course, the King's Assent has been required and is invariably required to the proposing of a money charge, but that was simply to prevent everybody getting up in all parts of the House and bidding for popularity by proposing to give away large sums from the Exchequer to their constituents or other people in whom they had an interest. There is no relation at all.
  I do not think the right hon. Gentleman has made out any case for this procedure except that it would have accelerated our proceedings if the Bill had been non-controversial, and would have enabled us to depart from these scenes a day earlier. But, unhappily, we shall have to face the fact that this Bill involves very considerable discussion, and I do not see why we should be stripped of the Money Resolution, deemed essential by our ancestors to protect the rights of this House in matters of finance. What is the argument that there is not much expense to this Bill? I have never heard such a suggestion. Here is a Bill which, so far as I can make out, invests the Government with totalitarian powers. There is nothing they cannot do under the Bill. They can spend all the money they can ever filch from the pockets of hard-working people of this country. Then we are told that

  1777
  it has no financial implication. Surely, that is a matter which should be examined in due course, and at the proper time. I do not feel that I have listened to any argument tonight which would justify me in agreeing, without protest, to the elimination of one of the most historic, traditional, and essential safeguards of the power of Parliament over the expenditure of public money.
  10.27 p.m.
  Mr. Charles Williams: The Lord President of the Council in introducing this Motion informed us that finance was subsidiary to the main purposes of the Bill. We are not allowed to discuss those main purposes tonight, but I should like to suggest that the main purpose is the freedom of our people. We are now being asked to do something which could have been asked for during the last three weeks, without any hindrance to the country. We are being asked to do this at the end of the Session, to throw over safeguards of the people at the behest of the right hon. Gentleman, who likes to closure our Debates and all that kind of thing. This could have been done last Saturday, if only the Government had been awake to the emergency a day or two before. Our Money Resolutions have been built up over many years for the careful protection of the rights of Parliament and of a free people. No Minister, or Government, has any right to come to this House and ask us to abandon those safeguards, unless we are given stronger reasons than we have been given so far. I know that that sort of argument does not appeal to the Socialist Party, and I hope that on such an occasion as this the Liberal and Conservative Parties, and the parties with constitutional principles, will vote against the Government, who are endeavouring to take away the freedom and rights of Parliament, and to fetter us, as they are doing more and more every day, with extreme forms of Socialistic principles.
  10.29 p.m.
  Mr. Henry Strauss: I have no wish to prolong the discussion by a repetition of any point which has been made, but simply to elucidate one fact in order to give some meaning to the Motion which the right hon. Gentleman has moved. The right hon. Gentleman started off by signifying
  1778
  the Royal Recommendation and he then goes on to move, that the requirements of Standing Orders Nos. 63, 64 and 68, shall be deemed to be complied with. But the point is that, if he has signified the King's Recommendation, the requirement of Standing Order No. 63 has in fact been complied with. I really hope that somebody on the Front Bench will explain the point about Standing Order No. 63. Standing Order No. 63 is quite brief and I will, if I may, read it to the House in order that hon. and right hon. Gentlemen opposite may try to take an intelligent interest in the proceedings. It runs as follows:
  This House will receive no petition for any sum relating to public service or proceed upon any motion for a grant or charge upon the public revenue, whether payable out of the Consolidated Fund or out of money to be provided by Parliament, unless recommended from the Crown.
  The right hon. Gentleman starts the whole of his speech by saying that he has the King's Recommendation. What is the point of putting Standing Order No. 63 in this Resolution at all? It seems to me that with the skilled assistance in the box, with such an expert on the Constitution as the Home Secretary, with the Financial Secretary to the Treasury present on the Bench, with probably a Law Officer within reach some sort of reply should be available from the Front Bench. I see a Member for one of the Birmingham constituencies and congratulate him on his appearance on the Treasury Bench. He is no doubt filled with precedents. I could not be more sorry that I have frightened the hon. Member off the Bench. I think I have given the right hon. Gentleman time to obtain the answer to the very simple point I have made and perhaps he or one of his colleagues will now deal with it.
  10.33 p.m.
  Mr. Turton: I hope that by leave of the House the Minister may speak again, and if the right hon. Gentleman desires to reply now, I will give way. If not, I add my appeal to that of my hon. Friend that the Government will reconsider this Motion. The whole country is gravely enough concerned with the financial and economic crisis, without being given, additionally, the idea that this Government are trying to stifle discussion and allowing Parliament to go home without any discussion

  1779
  on a very important Bill. I hope that the right hon. Gentleman will reconsider this matter. I have listened with some care to the argument the Minister used in introducing this Motion, and really, when he had finished his speech he had not put forward one argument to support dispensing with the procedure which had been laid down for the protection of the subject against the Crown. This is a very dangerous precedent. It is a Bill to affect the lives of every man and woman in the country. Yet it is going to be introduced in an abnormal manner without the proper Resolution that has been designed by Parliament. I should have thought that the right hon. Gentleman, as a great Parliamentarian, would have been the last person to ask the House to dispense with this Financial Resolution. Surely, it is not now too late? We could have the Financial Resolution in the proper stages and hon. and right hon. Gentlemen could go home on Wednesday next having done their work.
  We have had in this Parliament a number of precedents in which we have rushed through legislation just before we were going home. I think the people of this country have not forgotten those precedents. For instance, there were the American Loan and Bretton Woods Agreements with which many of us disagreed; but discussion of them was cut down. Many people who voted for the Loan in 1945 would take a very different view today. I hope the right hon. Gentleman, the Leader of the House will get up now and say that, in view of the arguments which have been put to him, he will withdraw this Motion, and proceed in a Parliamentary and constitutional manner.
  10.36 p.m.
  Mr. H. Morrison: I am not quite sure, Mr. Speaker, whether I ought to ask the permission of the House to speak again, but to be on the safe side I will do so. In any case, I think that, as mover of the Motion, I have the right to. speak again. I would not like to be in any doubt, however, and I am much obliged to the Leader of the Opposition for his generous appearance and generous gesture on the subject. The hon. Member for Cambridge University (Mr. Pickthorn) raised the point of whether we were following the precedents of 1939 and 1940 because the difficulties at this time were
  1780
  as great as they were then. I am not quite sure how to answer that point. Judging by some of the campaign, of the Opposition newspapers recently, I am almost inclined to think that they are much worse than the difficulties of 1939 and 1940, at any rate, according to them. But in any case, we have all agreed, in the course of this two-days' Debate, that the situation is serious, and the Government take the view that they must have adequate powers. It seemed to us that the precedents of 1939 and 1940 could legitimately be quoted, though the conditions were somewhat different from those of the present emergency. The hon. Member was right when he said that without this Motion three days might have been required for the Bill instead of two. But the primary purpose is not that.
  Quite frankly, when we brought in the Bill We thought that the Opposition would probably be pleased that we had done so. [HON. MEMBERS: "Oh."] Yes, we did. The Opposition had been saying that there was a terrific crisis facing the nation. We thought that they would jump at the opportunity of giving the Government special emergency powers to deal with this crisis. Therefore, we thought we had better do it quickly. But the present Government are always exceedingly reasonable in dealing with the Opposition, and with representations made by the Opposition Front Bench that they would sooner have more lime. Therefore, we said that we would certainly ask the House to sit a bit longer next week, which shows how reasonable we are in these unexpected circumstances which arise out of the wishes of the Opposition. But having assumed, in the first place, that the House would wish to pass the Bill through its first stages with reasonable rapidity, we did not have it printed in the usual form required for the financial procedure.
  Now, if this Motion is rejected and we have to reprint the Bill, we shall have to start the whole process of presentation and introduction again. We shall have to start afresh—[An HON. MEMBER: "Planning!"]—Certainly; we have been planning. The planning of this Motion is part of the planning. It is hon. Gentlemen opposite who are seeking to dis-plan—if the hon. Member for Cambridge University will forgive the ungrammatical observation—with the result that we would have to begin again, and this would lead to a

  1781
  somewhat chaotic situation. The hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) raised the point as to why the King's Recommendation had been signified. We have followed the precedent of 1939 and 1940. I admit that there is a criss-cross in Standing Order 63, and it is a fair argument which the hon. Member has put up. But, in so far as expenditure might be involved under this Bill, the Government thought it right to maintain the principle of the initiative of the Crown and to see to it that the House knew that financial expenditure was involved, but we did not think it would be material. Again, we have followed the precedent of 1939, when there was a Conservative Government, and 1940, when there was a Government of which the right hon. Gentleman the Leader of the Opposition was the head, and of which I was proud to be a Member. The right hon. Gentleman charges the Government of today with going ahead with more speed than, in fact, we are.
  We thought that it was right the Government should be clothed with adequate powers in these difficult circumstances, but a difference of opinion having arisen as to the speed with which the Bill might be handled, we came to an arrangement whereby the speed could be reduced. But that does not mean that we should start all over again. I do not wish, nor do I claim, by this Motion, to upset all the fundamentals of Parliamentary control over expenditure. I most readily accept the suggestion of the right hon. Gentleman the Leader of the Opposition that this is involved with the beginning of Parliamentary Government against the Crown; that this goes back to the fight by Parliament for control of public expenditure. I pay the highest regard to his remarks, but this is not material expenditure and, even if it were, some special Estimates would have to come along later on. I do not think that the great principles of the control by the House are any more imperilled by this Motion than by the Emergency Powers Act of 1940. When the right hon. Gentleman the Member for Woodford (Mr. Churchill) tries to suggest that this Bill is a great totalitarian device, and is the beginning of Hitlerism in this country, and is the end of liberty and other things of a terrible order, well, what I would say is that I admire his facility of phrase, his
  1782
  eloquence, and his emphasis. I always do; we know the right hon. Gentleman's command of language; but he was somewhat extravagant in his claim. This Bill does not put forward the terrible things suggested by the right hon. Gentleman as he can see.
  Mr. Speaker: We cannot anticipate tomorrow's Debate by discussing the Bill now.
  Mr. Morrison: I apologise, Mr. Speaker. You are absolutely right, and I was quite wrong. It only shows what a dangerous tempter the Leader of the Opposition is; it shows that he has led me right off the rails of proper Parliamentary procedure, and I quite agree that tomorrow is the day for the explanation of these things. The hon. and learned Member for the Combined English Universities (Mr. H. Strauss), who worked himself up into what the old ladies call "a state"—as, indeed, is his custom on these occasions—also referred to Standing Order No. 63, in which he followed the admirable example set by his hon. Friend the Member for Kingston-upon-Thames, who had already raised the point, which I thought I had adequately answered.
  Mr. H. Strauss: What the right hon. Gentleman said in answer to my hon. Friend was the reason why he signified the King's Recommendation. The question which I put, as did my hon. Friend, is why he mentioned Standing Order No. 63 in this Resolution at all.
  Mr. Morrison: With respect, I did answer that question. I admit it is a debatable point, because of the nature of Standing Order No. 63, but I thought it was desirable to signify the King's Recommendation because it is expenditure, and certainly, to maintain the constitutional principle, that expenditure should be on the initiative of the Crown. Secondly, I did not want to put myself in the wrong on the precedent established by the Conservative Government of 1939 and by the Government of the right hon. Gentleman in 1940. I thought, if I followed those eminently respectable precedents, I could not go wrong, and I am surprised that the right hon. Gentleman should try to drag me away from following the excellent precedents of that time. We have had a short but interesting discussion which it is quite

  1783
  right should have taken place but, in all the circumstances, and having regard to the fact that the substance of the Bill will be discussed tomorrow and on Monday, I shall be glad if the House will be so good as to give us the Motion.
  Mr. Pickthorn: I wondered if I might ask the question: Is the right hon. Gentleman's procedure necessary because it is a great, big Bill, or because it is a teeny-weeny Bill?
  Mr. Morrison: The answer is that it is necessary in relation to the circumstances which I have indicated.
  10.46 p.m.
  Mr. Churchill: I also can only speak with the indulgence of the House but I trust that the magnanimity and generosity with which we have been called upon to treat the right hon. Gentleman on this occasion will find its reciprocation. I am bound to say that I think the right hon. Gentleman, the Leader of the House, has handled the matter in a very conciliatory and painstaking manner and one must recognise the fact that it would be inconvenient for the House if the Bill had to be reprinted and certainly could not be taken tomorrow. It would be a complete derangement of our business, and, therefore, one regrets that the procedure was adopted in the first instance, but it was adopted on the false assumption that the Bill would have an uncontested passage because it was comparatively unimportant. We are confronted with the dilemma of spoiling the arrangements for Business which have been set out. We have made very effectively our protest on the broad principle of not ignoring the financial provisions which are an essential part of our procedure, and having done that, and having received from the Leader of the House what I take to be a clear assurance that this is not to be a precedent for general application to our legislation, I think we should not find it necessary to divide the House against the Motion.
  Resolved:
  "That the following provisions shall have effect with respect to proceedings on the Supplies and Services (Transitional Powers) Bill:
  The requirements of Standing Orders Nos. 63, 64 and 68 and of the practice of the House relating to the imposition of charges upon
  1784
  the people and to charges upon the public revenue shall be deemed to have been complied with in respect of the provisions of the Bill or of any Amendments thereto moved by a Minister of the Crown which authorise expenditure or the imposition of any such charge."

  ROYAL NAVY (BOY ENTRANTS)
  Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Snow.]
  10.48 p.m.
  Mr. King: I want to raise the matter of the enlistment of boys into the Royal Navy, which is not one of controversy. I am conscious that for two days we have been engaged in a Debate of vital importance to the standard of life of the people of this country, and if I might make one seemingly irrelevant remark, I would say that we listened tonight to what must rank as one of the historic speeches of this Parliament—one of the best I have ever heard—that of my right hon. and learned Friend the President of the Board of Trade. It might be urged that to come from these great matters to something so small as a matter concerning a limited number of 15-year-old boys is too steep a decline from the sublime. I do not accept that view. I think it redounds to the credit of this House that we are able to draw attention to matters of even the smallest concern which touch the lives and liberties of the individual.
  We had lengthy Debates on the Conscription Bill. I remember some persons, holding conscientious objections, urging that at the age of 18 a boy was too immature to be able to decide for himself whether or not he could engage in Army service. I took the view that it was perfectly reasonable. I think I should take that view in the case of a boy aged 17. But when we are asked to take that view in the case of a boy aged 15, I think it is quite unreasonable. I would make it clear at the outset that I pay tribute to the qualities of the British Navy, and intend no kind of attack on it, or the recruiting of it. My aim rather is to maintain its highest traditions. I would like to read to the House a letter from my hon. Friend the Parliamentary Secretary in which it is said:
  "Boys are entered between the ages of 15½ and 16¼ for training as seamen, and be

  1785
  tween 15 and 16 as artificer apprentices for training for the artificer branches. In both cases, boys are required to enter into an engagement to serve for a period of 12 years from the age of 18 in addition to whatever period may be necessary until they attain that age. They have no claim to discharge before the completion of their engagement, but discharge free or by purchase may be approved by the Admiralty in specific individual cases where most exceptional compassionate circumstances arise."
  What does that mean? It means that a boy—irrespective of his ability, taste, inclination, physical or mental strength—is committed for fifteen years from the age of 15 to give away what may be the best years of his life in a service which, I admit, many will enjoy. We must also admit that a proportion will not enjoy that service. My hon. Friend tells me that they may get away from it by means of purchase. One has only to think a very short time to realise that a boy who entered the Navy at the age of 15 is unlikely to have sufficient funds to take advantage of that. Surely, our personal liberty is freehold? We should not need to purchase it, unless by voluntary act. The engagement—for 12 years from the age of 18, in addition to whatever period may be necessary until they attain that age—is signed by the boys on entry, and no further declaration is necessary when they attain the age of 18. It is said that conditions of entry are carefully explained to all new entries before they sign, and they are required to sign a declaration to this effect. I ask the House what validity has the signature of a boy of 15?
  Colonel Gomme-Duncan: Surely, the same thing applies in the Army?
  Mr. King: Another question I would like to ask is what percentage of the boys, in fact, enter from orphanages? I believe it is fairly substantial. What percentage of these boys go from naval schools controlled by my hon. Friend's Department, partially or wholly, into the Navy? Do any boys enter naval schools at the age of 12 and on condition that on leaving they enter the Navy? If they do, it means that at the age of 11 a boy without parents goes first to a school and then spends 15 years in the service until he has reached the age of 30. I am very conscious of the fact that a good many boys do have parents who consent to their doing so, but even with the parents' consent I suggest that the decision is too big
  1786
  to take for that period of time. I have no objection at all if a boy of 15 enters for a period of three, four or five years, but to enter for 15 years is, I suggest, something quite different.
  I hope my hon. Friend will not quote what is done in the Army and the Royal Air Force. It will not be necessary for him by implication to say that he is standing in good company. I am quite conscious of what they do. When I have finished talking about the Admiralty, perhaps we might turn our attention to them. I simply want to submit to my hon. Friend and to the House that this system is wrong, and something to which we ought to make an end. It may well be that the system has produced very gallant officers; I may here say that it has produced some very gallant Members of this House; but surely the point we have to consider is not the cases where they are successful, but the cases which are unsuccessful; not those who are happy, but perhaps the smaller number who are unhappy. The Lord President, a few moments ago, said the Government were usually reasonable in dealing with the Opposition. I hope that tonight the Government will show themselves reasonable in dealing with their own side. I submit to the House that the Government, unlike Nelson should no longer turn a blind eye to these cases.
  10.57 p.m.
  Commander Noble: I wish to support what has been said with reference to boys who joined the Navy as boys at the beginning of the war. The Parliamentary Secretary, in answer to a Question yesterday by the hon. Member for Huddersfield (Mr. Mallalieu), said there were some new arrangements being made to enable men who had joined the Navy at the beginning of the war as Regulars, because there was no other way of joining the Navy, to serve now a shorter period. I would like to ask him why it is that those who joined as boys do not come under this scheme. I feel that if boys joined the Navy as Regulars for the same reason, that perhaps there was no other way, there is no reason why they should not be brought into the new scheme and now be able, when they see their friends demobilised, to serve a shorter period. I asked the Parliamentary Secretary yesterday whether some other arrangements were being made for boys and his reply was:

  1787
  "Not at present."—[OFFICIAL REPORT, 6th August, 1947; Vol. 441; c. 1451.]
  I would be glad to know whether he has any other ideas for these boys.
  10.59 p.m.
  Mr. Willis: In reinforcing the plea made tonight, I do so as one who joined the Navy at the age of 15½ and subsequently purchased his discharge, because of the fact that he wanted to enter other spheres of life. I would say from my own experience as an artificer apprentice, or a boy artificer, as they are called at the present time, and judging from correspondence I get today, that there is considerable discontent in the Navy with the fact that at the age of 15 one signs away the best years of one's life. Once a man reaches the age of 30, it has become too late to make an entry successfully into civilian life. I appreciate the fact that these boy artificers undergo an expensive training, and I think it is probably correct that the country has the right to expect some service in return for that very expensive training which, if boy artificers were given the right to leave too early, would probably be wasted so far as the country is concerned. At the same time, I cannot help feeling that they should be given a chance of leaving the Service much earlier than at present. Even if the period were reduced to 10 or eight years, or less, after the age of 18, I think it would be a considerable improvement. It would not only help to remove a sense of grievance, but I do not think it would be quite so disastrous as the Admiralty fear.
  My honest opinion is this. If boys are to be taken into the Navy, as in the case of those apprentice artificers, at the age of 15½ then the Navy must be opened up much more than at present. The number of boy artificers who are taken for commissioned ranks should be increased considerably in order to give the boys the incentive and to widen their field. I also ask my hon. Friend to look into the aspect of whether facilities could not be given to boy artificers, or to those adaptable for the purpose, to enter the Naval Scientific Service. I think that is an avenue of approach which has not been looked into by the Admiralty. I feel that there is no reason why it should not be done. I think the Admiralty have to
  1788
  look at it from the boys' point of view, and try to remove this sense of grievance, if they are to get the kind of boys they want, types who are satisfied with their job, proud of their work, proud to be in the Service, and giving of their best.
  11.2 p.m.
  Mr. E. L. Gandar Dower: I rise only to ask the Parliamentary Secretary to make clear to the House this question of release by purchase. It appears to me to be an old-fashioned method and seems reminiscent of the days when commissions were obtained by purchase, which was not a satisfactory arrangement. On what conditions are boy entrants to the Navy released by purchase? Do they have to obtain petty officer rank, or are they dealt with on individual merits?
  11.3 p.m.
  The Parliamentary and Financial Secretary to the Admiralty (Mr. John Dugdale): I would like, first, to deal with the individual points on rather separate lines raised by the hon. and gallant Member for Chelsea (Commander Noble). I quite agree that there would be an extreme case of hardship in the case of boys who joined during the early months of the war as Regular seamen because there was no "hostilities only" entry. That is quite a separate point and deserves special consideration.
  There are, as hon. Members know, three types of boys with whom we are concerned—seamen and communication boys, artificer apprentices, and Royal Marine band boys. The system we are discussing is not a new one, but dates from the Naval Enlistment Act, 1884. Under that Act, any person can be entered for continuous and general service for a period not exceeding 12 years, or, if under 18 years, until 30.
  Mr. King: Will the hon. Gentleman make it clear that it is 12 years from the age of 18?
  Mr. Dugdale: Certainly. I thought I had made it clear. That would be 12 years from the age of 18 if my mathematics are correct. The present regulations provide for entry between 15 years and 16—probably not very far off 15. Where do they come from? They come from a number of places and every walk of life. I can-

  1789
  not inform the hon. Member of the percentage of orphans. I tried to find out, but it was exceedingly difficult. It would have taken a large amount of investigation, and I cannot give an answer to that particular question; but I can say that quite a reasonable proportion of them do come from the Royal Hospital School, and more still from the Mercantile Training Establishment. That does not mean that they have been coerced into going into the Navy. They go, first, of their own volition; secondly, with their parents' consent, and if they have not got parents, with the consent of their guardians who are acting in the place of parents. To that extent they have reasonable safeguards.
  I do not think that the hon. Gentleman who raised this question meant to make out, though he was rather inclined to suggest, that they had been driven into a life of appalling hardship. These boys, in fact, enter quite voluntarily into an admirable career. Let me explain further what I mean when I say that the number of boys who in fact apply is infinitely greater than the number of boys who are accepted. There is no question of our going out into the highways and byways to compel them to come in. In fact, during the seven months of this year, 5,000 boys applied to come in and 3,000 of them were rejected; 64 per cent. were actually rejected. I can say that the number who wish to come in is far greater than the number for which we can find places.
  Those boys who do not find that the life is what they thought it would be, and who are dissatisfied, are able to get out, to get their discharge, either free or by purchase. The hon. Member for Caithness and Sutherland (Mr. Gandar Dower) was troubled about the matter of purchase. This is not a thing which applies particularly to seamen boys, as I think he realises. The question of discharge is something which applies to all three Services and is a recognised method of leaving the Services, the grounds being that in fact the man has had a great deal of training and that by leaving the Service he will cause difficulties and disturbance in the Service, and, therefore, he pays for the difficulty and disturbance he is causing by leaving earlier than he would otherwise be expected to leave.
  Now, the majority of these boys, who do not want to leave, do in fact continue
  1790
  to get, I submit, an admirable training. I have been to some of these training establishments and I have seen the training given them, training such as many boys not going into the Navy would be thankful to get, and whose parents pay large sums of money to give them that training—not only naval training, but general educational training. They get also a very fine career, and I am glad that the hon. Member for North Edinburgh (Mr. Willis) raised the question of their promotion to officer rank. As he knows we have taken steps to see that as soon as possible the number of promotions from the lower deck will be raised up to a figure which, we hope, will reach somewhere about 20 to 25 per cent. I hope that a number of such promotions will come from these boys.
  But I must stress that there is naturally considerable cost to the country in training a sailor. To train an artificer—the boys about whom my hon. Friend the Member for North Edinburgh is particularly interested—costs approximately £600. It is a fairly large sum of money to expend for training a boy. The expenditure on a band boy is £300, and on a seaman boy, £150; but both do take quite considerable time and expenditure of money to train, and we feel that ft would not be right lightly to allow them to take their discharge. As I have said, many of them can, in fact, get their discharge on compassionate grounds, either free or by purchase. But I am willing to agree that there may be cases of hardship with which we cannot at present deal. There may be cases of boys who would like to get out but who believe that applications on compassionate grounds would not be granted.
  Commander Maitland: Can the hon. Gentleman give us any figures of how many boys, during any particular period, actually put in requests to leave the Navy, and how many have been granted?
  Mr. Dugdale: Yes, Sir. I have figures here—not for those entered as boys, but for those who wished to leave at various ages. In the first six months of 1947, of 22 applicants, 9 received a discharge by purchase and 8 received a free discharge. Five cases were refused. That is during that particular period. I do realise that there may be still some cases of hardship, and while I would not wish in any way

  1791
  to commit myself tonight, I will say this. I will undertake that we will examine the possibility of arranging that any man who has entered as a seaman boy or as an artificer may, at the age of 18, opt for seven years with the Colours and five with the Reserve. I do not say that I will give a definite promise that we can carry out this suggestion, but that we will give it very careful consideration. We will examine it from the point of view of the boy who may be suffering hardship today, though I do not think, quite frankly, there are many, if any. We will examine it also, as we must, from the point of view of the Royal Navy and the country as a whole, which has expended such a large sum of money in the training of these boys.
  Colonel Gomme-Duncan: Can Regular sailors at the present time, in certain circumstances, purchase their discharge?
  Mr. Dugdale: Yes, Sir—but only on compassionate grounds, or if their particular branch is overstaffed.
  Captain Marsden: I do not think the Parliamentary Secretary has confined himself sufficiently to the main
  1792
  purpose of the Debate on the Motion for the Adjournment, that is, should boys have to make up their minds on then-future career at 15½? That was the whole purpose of raising this matter. What else can they do? They must get their training in the training ship as boys. At 18 they have got to go to sea as boys at sea, and I think the Parliamentary Secretary is not acting in the boys' own interest if he allows them to opt for 7 years with the Colours plus 5 years in the Reserve. That would destroy, at the age of 18, any possibility of continuing in the service and getting a pension. I cannot understand hon. Members opposite, who say they move with the times, wanting to stop every tried and proven method of training for the Royal Navy, whether it is officers or men. We have evidence on the other side -of the House on the Front Bench, on the second row, and on the third row. The Navy is a mighty fine Service, and its methods have been tried and proven over long years, and yet hon. Members opposite are messing about with them.
  Adjourned accordingly at a Quarter past Eleven o'Clock.

  CIVILIAN WAR CASUALTIES (CERTIFICATE)
  CIVILIAN WAR CASUALTIES (CERTIFICATE)
  LICENSED PREMISES (CLOSING)
  LICENSED PREMISES (CLOSING)
PUBLIC HEALTH
  Institutional Care (Mental Deficiency)
  Institutional Care (Mental Deficiency)
  Water Supply, Halstead
  Water Supply, Halstead
  National Health Service (Local Authorities)
  National Health Service (Local Authorities)
  Blood Transfusion
  Blood Transfusion
  Smallpox s.s. "Carnarvon Castle"
  Smallpox s.s. "Carnarvon Castle"
  Nurses
  Nurses
  LOCAL AUTHORITIES' STAFFS (WORKING HOURS)
  LOCAL AUTHORITIES' STAFFS (WORKING HOURS)
  NATURALISATION (QUALIFICATIONS)
  NATURALISATION (QUALIFICATIONS)
  ALUMINIUM HOUSES, ESSEX
  ALUMINIUM HOUSES, ESSEX
EDUCATION
  School Management (Parents' Co-operation)
  School Management (Parents' Co-operation)
  Transport (Ilford)
  Transport (Ilford)
EMPLOYMENT
  European Displaced Persons
  European Displaced Persons
  Football Pools (Canvassers)
  Football Pools (Canvassers)
  Unemployment, South Wales
  Unemployment, South Wales
  Disabled Person (Petrol Allowance)
  Disabled Person (Petrol Allowance)
  Partially-Disabled Miners
  Partially-Disabled Miners
  Unfilled vacancies, Wales
  Unfilled vacancies, Wales
CIVIL AVIATION
  Low-Flying Aircraft
  Low-Flying Aircraft
  Corporations (Establishment)
  Corporations (Establishment)
TRADE AND COMMERCE
  Foreign Tourists (Clothing Purchases)
  Foreign Tourists (Clothing Purchases)
  Children's Raincoats
  Children's Raincoats
  Price Regulations (Infringements)
  Price Regulations (Infringements)
  Northern Coachbuilders, Ltd. (Factory)
  Northern Coachbuilders, Ltd. (Factory)
  Timber (Importation)
  Timber (Importation)
  Re-Sale Price Maintenance (Committee)
  Re-Sale Price Maintenance (Committee)
  Unemployment Areas
  Unemployment Areas
  Trading Estates
  Trading Estates
  Royal Ordnance Factory, Bootle
  Royal Ordnance Factory, Bootle
COAL INDUSTRY
  Holidays (Local Customs)
  Holidays (Local Customs)
  Dirt Tips
  Dirt Tips
  Polish Labour
  Polish Labour
  Equipment, Fleets Colliery
  Equipment, Fleets Colliery
  Miners' Transport Facilities
  Miners' Transport Facilities
  Opencast Working
  Opencast Working
FUEL AND POWER
  Coke Output (Plymouth)
  Coke Output (Plymouth)
  Domestic Allocation
  Domestic Allocation
  Demonstrations (Petrol)
  Demonstrations (Petrol)
ELECTRICITY SUPPLIES
  Generation
  Generation
  Development Programme (Materials)
  Development Programme (Materials)
  U.K. AND U.S.S.R. (1939 TREATY NEGOTIATIONS)
  U.K. AND U.S.S.R. (1939 TREATY NEGOTIATIONS)
GERMANY
  Civilian Correspondence (Censorship)
  Civilian Correspondence (Censorship)
  Penicillin
  Penicillin
  Travel Documents (Fraulein Heuer)
  Travel Documents (Fraulein Heuer)
  Control Commission (Officials' Statements)
  Control Commission (Officials' Statements)
  Tinplate
  Tinplate
  Land Reform (Compensation)
  Land Reform (Compensation)
  INDONESIA (SECURITY COUNCIL RESOLUTION)
  INDONESIA (SECURITY COUNCIL RESOLUTION)
AGRICULTURE
  Pigs (Feedingstuffs)
  Pigs (Feedingstuffs)
  Prisoner of War (Employment)
  Prisoner of War (Employment)
  TIMBER (INDISCRIMINATE FELLING)
  TIMBER (INDISCRIMINATE FELLING)
  WAR PENSIONS (PERSONAL CASES)
  WAR PENSIONS (PERSONAL CASES)
MINISTRY OF WORKS
  Temporary Building, Harrogate
  Temporary Building, Harrogate
  Allotments (Royal Parks)
  Allotments (Royal Parks)
MALAYA AND SINGAPORE
  Padi Cultivation
  Padi Cultivation
  Prefabricated Houses
  Prefabricated Houses
  Armed Criminals
  Armed Criminals
  HONG KONG (POLICE)
  HONG KONG (POLICE)
  NORTHERN RHODESIA (EUROPEAN EDUCATION)
  NORTHERN RHODESIA (EUROPEAN EDUCATION)
BRITISH ARMY
  Ammunition Store, Sandy
  Ammunition Store, Sandy
  Training Area, Coniston Water
  Training Area, Coniston Water
  Personal Case
  Personal Case
  Issued Stores (Allied Governments)
  Issued Stores (Allied Governments)
  Tank Transporter Company, B.A.O.R. (Complaints)
  Tank Transporter Company, B.A.O.R. (Complaints)
  TERRITORIAL ARMY (PROMOTIONS)
  TERRITORIAL ARMY (PROMOTIONS)
FOOD SUPPLIES
  Wheat Supplies
  Wheat Supplies
  Food Subsidies
  Food Subsidies
  Meat, south Kensington (Quality)
  Meat, south Kensington (Quality)
ROYAL AIR FORCE
  Invalided Officers (Retired Pay)
  Invalided Officers (Retired Pay)
  Education Advisory Committee (Formation)
  Education Advisory Committee (Formation)
  HOUSING ESTATE, PLYMOUTH (PILLAR BOXES)
  HOUSING ESTATE, PLYMOUTH (PILLAR BOXES)
  ALLEGED OIL POLLUTION, CAWSAND BAY
  ALLEGED OIL POLLUTION, CAWSAND BAY
  EX-GERMAN MERCHANT SHIPS
  EX-GERMAN MERCHANT SHIPS
MINISTRY OF SUPPLY
  Mining Machinery (Steel)
  Mining Machinery (Steel)
  Agricultural Small Tools
  Agricultural Small Tools
  UNIVERSITY STUDENTS (STATISTICS)
  UNIVERSITY STUDENTS (STATISTICS)
  OLD AGE PENSIONS
  OLD AGE PENSIONS
  STATE SERVANTS (PENSIONS AND SICK PAY)
  STATE SERVANTS (PENSIONS AND SICK PAY)
Preamble
The House met at half past two of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers.

  BUSINESS OF THE HOUSE.
  LORD AMMON: My Lords, as you are already aware, it has become necessary, owing to urgent public business, to prolong the present sittings into the coining week. This naturally has involved a considerable change in the programme originally proposed. In the first place, there will be no sitting to-morrow, Friday, as the Royal Commission has been postponed. Our next meeting after the adjournment this evening will be on Tuesday next, 12th August, at half past two o'clock. Then we shall expect to receive the Supplies and Services (Transitional Powers) Bill from another place, and to take the Second Reading stage of that measure forthwith. The first business that afternoon will be to take the Commons Messages on the Lords Amendments to the Electricity and the Town and Country Planning (Scotland) Bills.
  On Wednesday, 13th August, we shall meet at eleven o'clock and hope to take the remaining stages of the Supplies and Services Bill after which there will be a debate on. Palestine on a Motion by the noble Viscount, Lord Long of Wraxall. We may expect a Royal Commission that afternoon after which the House will adjourn for the Summer Recess until the 20th October when it is expected that Parliament will be prorogued. The new Session will be opened by His Majesty the King the following day, the 21st October.

THANKS TO THE SERVICES IN INDIA
2.36 p.m.
THE SECRETARY OF STATE FOR INDIA AND BURMA (THE EARL OF LISTOWEL)had given Notice that he would move to resolve, That this House
1146
on the occasion of the transfer to Indian hands of the responsibility for the affairs of India wishes to place upon record its profound appreciation of the ability and devotion with which. during the long period of British rule, the Civil and Military Services of the Crown in India have served India and its peoples.
The noble Earl said: My Lords, I know that by inviting the House to put on record its appreciation of the part played by the Services during the years of British rule in India, I am asking your Lordships to do something to which you will readily accede. For we all recognize that this country owes to the rare qualities of character and intelligence displayed by this small hand of Crown servants the successful and sustained application, in face of every sort of difficulty and danger, of a policy that has by now accustomed the people of India to the inestimable advantages of honest and efficient administration, impartial justice and internal peace.
I should like, if I may, to say a very few words about the principal Services to which we are indebted for this achievement. It is sometimes forgotten that as long ago as 1853 the Indian Civil Seri ice was thrown open to competition, without distinction of race. It was therefore in advance of cur own Civil Service in the United Kingdom, which took longer to replace the traditional system of appointment by one more favourable to merit. The trickle of Indians into the ranks of the Indian Civil Service began in 1854. It was the policy of training men of Indian birth to share with us the administration of the country that has made possible the attainment of self-rule without administrative breakdown. There has been a gradual and deliberate increase in their numbers, from a mere handful to half the total in the Service ever since that early date. For many years, pending the association of Indians with governmental bodies, and the growth of representative institutions, the Indian Civil Service voiced the needs of the people of India in the councils of the Government, as well as carrying out its multifarious administrative duties. In the latter capacity its officers provided the framework of the administration, holding all the key points and maintaining everywhere British standards of efficiency and conduct. It is due to their disinterested and efficient work that we are now able to hand over

1147
to our successors a machine that is in good running order, and well able under new guidance to discharge those vital functions on which the welfare of the ordinary people of India depends.
The Indian Police have been at the right hand of the District Magistrates in maintaining law and order throughout the country, and they have done much to establish firmly this pre-requisite of a quiet and civilized life. The circumstances they have faced have often proved a most severe test of character and discipline, but their courage, loyalty and steadfastness have carried them through every emergency with credit to themselves and to the Service to which they belong.
I should not like to pass by in silence certain Departments of government which have rendered outstanding service to India. To the Public Works Department are due the great railway and road systems of India, the bridges over her broad rivers, and the canals, which have secured the harvest and the distribution of food without which starvation and famine would have afflicted many millions of people. The Indian Forest Service has been responsible for the preservation and development of a most valuable source of national wealth. The Department of Agriculture and the Veterinary Department have, by improving the cultivation of the soil and the maintenance of livestock, done invaluable service to the basic industry of India on which the majority of its inhabitants will continue to depend for their livelihood. The Education Department has made possible the beginnings of popular education in every province, and has created the mental climate indispensable for social and political advance.
The Indian Medical Service, though its primary function has been the care of the civil and military services of the Crown in India, has also contributed substantially to the advance of medical science and has played a leading part in building up a modern system of applied medicine in India. Its research into the cause of malaria resulted in discoveries about the malarial mosquito which enabled the Panama Canal to be built. In the application of medicine it reduced the death-rate from cholera in India by two-thirds, and its mastery of the diagnosis
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and treatment of many tropical diseases has brought relief to thousands of victims. It was the pioneer, and for many years the only source of medical education, and the father of the three medical colleges which were founded in British India in the nineteenth century. The result of the pioneer work done by the Indian Medical Service is that India now possesses a well-organized medical profession of more than 50,000 practitioners.
I should not like to omit from this review the important contribution that has been made by the Indian Political Service to the security of India's frontiers, and to the high measure of uniformity that has been achieved over a wide field between British India and the Indian States. The co-operation which they helped to achieve will be one of the most useful legacies to the future of the whole sub-Continent.
The Ecclesiastical Department of the Government of India has also rendered signal service. The Crown has continued the obligation imposed upon the East India Company by its charter to provide Christian ministrations for its servants, civil and military. It is largely due to the ministrations of these chaplains that the Church of India has emerged as an autonomous member of the Anglican community.
The security of India from external aggression, and its internal stability through the long period of British rule, have rested mainly upon the Indian Army, a body of men whose record of achievement is second to none among the great armies of history. For the first time in centuries India, during this period, has not been overrun by a foreign invader or rent asunder by civil strife. This unprecedented degree of tranquillity has been rendered possible because the Indian Army has been the unfailing shield between the ordinary folk of India and the forces of violence and destruction which would otherwise have overwhelmed them.
I need hardly remind the House that it made outstanding contributions in both World Wars. In the 1914–18 War there were four expeditionary forces sent to France, Mesopotamia, Salonica and Africa, and the total contribution in men was 1,300,000. In the Second World War the Indian Army fought in the Middle East, the Far East and Burma. Their most notable achievement was in driving the Japanese out of Burma by means of a most

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gruelling campaign fought under conditions more trying than any experienced in other theatres of war. Recruitment exceeded 2,500,000, a figure that had never been reached before and, as Mr. Churchill pointed out at the time, this represented the largest volunteer army that has ever been raised. The contribution of the Indian Army during the recent communal disturbances has been of outstanding value. The absence of communal feeling in the Army, a source of strife which might easily have blunted the edge of this magnificent instrument, deserves the highest praise and is a tribute to the spirit that informs all ranks. No better evidence of the morale of the Army can be adduced than the fact that the political controversies which burn so fiercely in India have not spread among the soldiers.
The Royal Indian Navy also played an active and honourable part in the war. It assisted the Royal Navy in the defence of the Bay of Bengal and the Arabian Sea, and participated in the protection of convoys in the Atlantic. The Royal Indian Air Force, the most recent of the fighting forces of India, has always consisted exclusively of Indians. It discharged its duties with distinction during the last war, when it assisted us in the defence of India and in the Burma campaign.
The record of the servants of the Crown in India is one that fully entitles them to the gratitude of India and of our own country. They have added a fresh lustre to the best traditions of the British public services, and their work is part of an indestructible heritage which we are now bequeathing to our successors. It is surely fitting that Parliament should place on record, before its responsibility for Indian affairs has finally ceased, its pride in their unique achievement, its admiration for their example of duty and its sense of obligation for what the country owes them for one of the finest chapters of British and Indian history. I beg to move the Resolution which stands in my name.
Moved to resolve, That this House on the occasion of the transfer to Indian hands of the responsibility for the affairs of India wishes to place upon record its profound appreciation of the ability and devotion with which, during the long period of British rule, the Civil and Military Services of the Crown in India
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have served India and its peoples.—(The Earl of Listowel.)
2.50 p.m.
THE MARQUESS OF SALISBURY: My Lords, on behalf of the noble Lords who sit on these Benches I rise to support the Resolution which has been moved so well by the Secretary of State for India, and also to congratulate the Government, if I may respectfully do so, on putting this Resolution on the Paper. I would add only a very few words to-day for I spoke my mind very fully on this subject on the occasion of the Second Reading of the Indian Independence Bill. But I would say this, the debt that we and India too—and I use the word "India" on this occasion in the sense in which we have hitherto understood it—owe to these devoted men and women, both British and Indian, soldiers, sailors, airmen, civil servants, and if I may add, although they do not come directly within the terms of this Motion, doctors, and missionaries and other unofficial people—the debt we owe to them is incalculable.
It is sometimes suggested by those who know nothing of the facts—mostly in other countries—that we have held down India with an iron hand. What is the truth? The British in India have never, I think, at any time numbered more than a few thousand troops and a few hundred officials, with a like number of well Are workers, among, the teeming millions of that great country. They have held their position not by the force they have commanded but by the respect they have inspired. From the sun-baked plains of Central and Southern India to the snows of the Himalayas they have moved quietly and efficiently, administering justice, keeping the peace, and dedicating their whole lives to those who make up the great population of that sub-continent.
These British to whom I refer for the moment have handed down their trust to their sons and grandsons. Generation after generation they have gone out from this country and have come home only to die. I remember some words once spoken to me by a very eminent Indian. He said: "The British have always stood in India for justice to the poor." That is the reputation we have had in this country and it is one of which we may well be proud. It is mainly due to those men and women of whom we are thinking to-day. Equally, of course,

1151
I would pay tribute not only to the British but to the Indian members of the Services. Their services have been equally fine and to them, equally with the British, all that I have said applies. At this moment when we are passing on our trust to others, I think it is very fitting that Parliament and the country should pay this tribute of heartfelt gratitude to those faithful servants of the Crown in India who so quietly and so worthily have upheld the name and fame of the British connexion. They have done their duty nobly and we shall not forget it. I beg to support the Motion.
2.54 p.m.
THE MARQUESS OF READING: My Lords, noble Lords sitting upon these Benches desire to associate themselves most warmly and unreservedly with the terms of this very timely Motion. But in supporting it on their behalf I am very conscious that my own knowledge of India was always limited, largely secondhand, and is now long-since obsolete. At the same time no one can have been for a period of five years in close contact with a Viceroy, and even for brief periods have seen him actually at work, without being deeply and doubly impressed, first by the almost insupportable weight of responsibility that rested upon the Viceroy himself, and secondly by the magnitude, the diversity, and the efficiency of the work of the Indian Services, both military and civilian, in all branches.
The period during which I was privileged to know something of the Indian Services and Army and some of the Indian soldiers and civilians was one of constant and urgent difficulty. Twenty-five years ago the rise in the cost of living at the end of the 1914–18 war, unaccompanied by a parallel rise in their salaries, placed the Indian Services in a parlous position which the financial stringency and political tension then prevailing in India could do little to mitigate and nothing to resolve. I know very well that it was one of my father's most intense preoccupations and most grievous disappointments that he was unable to do what he regarded as justice to the legitimate claims of the Services. Yet the members of the Services never for one moment allowed their public duty to be subordinated to their private cares, but continued to carry on with their work without relaxation and without rancour.
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I venture to refer to that phase of history not because it was exceptional but because it was typical of the spirit which has animated and dominated the Services in India throughout. As the noble Marquess has said, it has of late years been the fashion in some countries to depict India as crushed beneath the oppressive heel of Britain. It would be a truer picture to say that India has come to resent external rule not because it was British and not because it was oppressive, but because it was not Indian and therefore not in accord with the spirit of modern times or with the dignity and self-reliance of the peoples of India. Certainly India has offered a career to successive generations from this country, but a career not baited with glittering prizes except to the very few, rather a career of selfless devotion to the work in hand and to the people on whose behalf that work was undertaken; a career of separation and of exile, of heavy anxiety and unremitting toil, often pursued in a wearing climate and, in recent years, in face of growing hostility and obstruction. Yet in spite of all discouragement they have set and maintained a standard of justice, of integrity, of industry, and of impartiality which may well be their abiding and invaluable legacy to the two new Dominions.
They have been at most a tiny handful of men guiding and regulating the affairs of a huge and densely populous subcontinent, their authority based not on force or weight of numbers but upon their own native qualities of leadership, accessibility, and understanding. Perhaps the source of their strength and the key to their achievement have laid mainly in this, that they have taken up their task not as men avidly seeking power but as men resolutely accepting responsibility and, if power was placed in their hands, using it not as an end in itself, but as a means of discharging their responsibilities to those to whose service they had dedicated their working lives. It will be a source of satisfaction to all well-wishers that these two sister ships of Hindustan and Pakistan, when they set out upon their maiden voyage, will have this great assurance: that amongst the crew there will be many old hands who have signed articles for the new voyage, whose loyalty, fortitude and experience will now be at The disposal of those

1153
charged with the navigation of the unknown seas ahead.
The thanks of Parliament are amply due to the Indian Civil Service and Army, both British and Indian; for they have indeed, in the old austere Roman formula, "deserved well," not only of the State, but of the Empire of India, of the British Commonwealth and of the world. May the motto of the Most Exalted Order of the Star of India: "Heaven's light our guide" light their future as surely as it has guided their past.
3.1 p.m.
THE LORD BISHOP OF SALISBURY: My Lords, I hesitate to detain your Lordships, even for three or four minutes; but there are four reasons for my rising to address you. The first is that His Grace the Lord Archbishop of Canterbury, who had hoped and planned to be here this afternoon, is regrettably prevented by duties of his office; and in his absence I feel that the one white-robed person here must say a word or two on behalf of the Churches in support of this Motion, so ably proposed and with such eloquence supported by noble Lords who have gone before me.
My second reason is that I have great personal feeling in this matter because it was one of the highest privileges of my life to visit almost every part of India from Kashmir right down to the southernmost extremity at a time of very great stress and, strain—the time referred to by the noble Marquess who spoke before me, just after the 1914 war, that is to say, in 1920 and 1921. There I saw at very close range both the work and the fidelity clay by day in that work of hundreds of our civil servants in India and of members of the Army in India; and I became more and more impressed with their amazing qualities of patience, understanding, integrity and endurance under, at times, a tremendous stress and strain, and I cannot refrain from standing to pay my humble tribute to these great services who have brought such lustre to our fair name in history.
I must say one word about certain of our own people in India whose work and careers have now come to an end. Many of them are on their way home. I refer to the chaplains of our Indian establishment, whose ministries have been largely
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to our own people in India. They must now be re-absorbed into the life of the ministry here at home. I must also say a word of profound gratitude for the unseen but quite extraordinarily growing and effective work during a hundred years past of the missionaries, and not missionaries merely of the Church I represent but of all the Christian Churches, from the clays when William Carey set out to convert India against the jeers and evil foreboding of his fellow-Christians in this country. The seeds sown in those far-off days have borne abundant fruit in these later years in the great mass of Christian tradition in India. More particularly I think of the educational institutions, schools and colleges which have sprung up as the work of these missionaries in every Tart of India, and the hospitals, dispensaries and medical services which have earned a tremendous 'need of gratitude from the hearts of Indian people themselves. The work of those missionaries is by no means over. The Church in India is now indigenous but will ask for generations yet to come, for the help and leadership of members of the Christian Church in this country. Their work will be carried on in some ways under greater difficulties, but in many ways with greater opportunities.
My last reason for detaining your Lordships is this. As one looks back over the quite short time that has elapsed since our last debate in your Lordships' House on the subject of India, one realizes the immense and amazing amount of progress that has been made in the affairs of India and in the process of handing over. I wonder how many of us dared to hope that these last weeks since that debate could have been so fruitful and so good as they have been. For all of that, we pay our humble mood of gratitude and admiration to our fellow-Britons in India who had so large a share in it, and to the Indian members of the administration. But also I think we most of us must have been conscious of the action of a Divine Providence, of a Wisdom wiser than ours, and of a Hand guiding the affairs and destinies of the nations that has not been inactive in these last weeks. On the Burma Road there is a monument to the troops who gave their lives in the Burma campaign, and on it is written these words:

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"When you go home, tell them of us and say
'For your to-morrow we gave our today."
I think the Indian civil servants and all our fellow Britons who have laboured in these last years may give that message to the two Dominions that now set out on their journey—"For your to-morrow we gave our to-day." I regard it as a great honour and privilege to be allowed to say these words and to support the Resolution already so ably proposed.
3.8 p.m.
LORD CHETWODE: My Lords, having heard it supported by such eloquence, it is not a little embarrassing for me, as an old soldier whose business is to do and not to talk, to ask leave to support the Motion so ably proposed by the noble Earl. I can only say a very few things which I know from my own connexion with the Army in India. It is a subject which is very close to the hearts of us old soldiers, now that this wonderful partnership between us and the Indian Army is to cease for ever. I myself served for nineteen years in India, and I am more proud of the time I spent there than of any other period in my whole service: not because of what I did there, but because I very soon realized that the work we English have done in India, civil and military, has been good work, magnificent work, in spite of what our detractors say about it.
I very soon became enthusiastic about the Indian Army. Those of your Lordships who have known it—and many of your Lordships have known it—will know of the intense love and pride which exist in the hearts of the English officers who have been privileged to serve in that Army with their Sepoys. I myself will say without fear of contradiction that the relations between the British officer serving in that Army and his Indian officers and his Sepoys made the finest and, in a way, the most efficient military partnership in the history of the world. That partnership rests on complete mutual confidence between the two races on the complete assurance that each of them will stand by the other in battle and on the complete confidence that the Indian soldier has in the justice and the care shown by the British officer for his Indian Sepoy.
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Our old friend Gandhi the other day made use of the expression that the British Government and the British rule in India were Satanic, and we are told in addition, that we have spent many years in exploiting the Indians. Well, it has already been said today that, when the Hitler war came, we called upon the men of India to serve the Empire—I will not use that new expression—as they had done before and defend their own country, and no fewer than 3,000,000 came forward completely voluntarily without any compulsion at all. It must be very very difficult for our detractors to explain that away.
The Indian Army has, indeed, a splendid record in war service for the Empire. It has fought for the Empire on many stricken fields, and not least in this last war. One need only mention the famous Indian 4th and 5th Divisions, who enhanced their reputation all over the world and took a major part, as has again been said, in driving the Japanese from their own soil and right away down through Burma. As again has been mentioned, now that peace has come I believe that no Indian unit has shown the slightest signs of disaffection in spite of those ghastly communal troubles which have torn India in two, and that, I venture to think, is because the Indian soldier still believes what his British officer says and the advice he gives him. The Indian Army is now to be split into two parts, and I understand that a large number of senior British officers have been asked to remain to help the Indian Army. We can only wish them all good fortune in their difficult task, for it will be a very difficult task. Whole units have got to pass over from one Dominion to another; even companies have to leave regiments in which they have been all their lives, and pass across. That is not easy.
There is only one point which has been omitted by speakers so far. You cannot refer to the deeds of the Indian Army without saying something of the share which the Gurkha troops have taken. They have fought alongside their comrades of the Indian Army and their Allies of the British Empire in many stricken fields, and we hope that we have not seen the last of them. I see in the papers, which are the sole source of my information nowadays, that consultations have taken place to see if we cannot use

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those Gurkhas in the Indian services and if we cannot use them in the purely British service. God grant we may use them in both.
There are in the Indian Army a large number of officers belonging to families in which for over 200 years son has succeeded father one after the other. When a few months ago all the British officers in the Indian Army received an official notice in writing that no more British officers would ever enter the Indian Army, I had more than twelve letters from my old staff and old friends in India. They said that that, of course, was not news to them, but they did feel disappointed and rather hurt that no one in England the India Office, the War Office, the Houses of Parliament, or anybody else had thought fit at the conclusion of this wonderful 200 years partnership to say "Thank you" from England. Now that is no longer the case. I can assure your Lordships, from my knowledge of those officers, that this vote to-day will give the utmost satisfaction to many hundreds of officers who have served for many years in the Indian Army, and I do think that it is merited. I beg leave to support the Motion.
3.17 p.m.
LORD HAILEY: My Lords, it would be very unbecoming if I, who have spent all my working years in the Civil Services of India, were to attempt to add to the tributes which have been so eloquently and, I know, so sincerely paid to the work of the Military and the Civil Services in India. Indeed, it is impossible for me to conceive that any addition on my part could be made to what has already been said. But I know that my own colleagues in the Civil Services would desire me to express their appreciation of the tributes which have been paid to-day to their work, work not only for the Crown, not only for Parliament, whose purposes they have served, but above all principally—and this must be most in our minds—for India.
I feel that that satisfaction which the Services must entertain at this vote of Parliament will be felt especially by those who have during the more recent years carried on the standards of administration in India and met difficulties far more formidable and circumstances far less favourable than those which some of us encountered in an earlier day. Although
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service in India has always been exacting and although it has made great demands on our sense of devotion to duty, yet there were in earlier days circumstances and indeed satisfactions which sensibly lightened the task, but those conditions no longer prevailed for the assistance of the men who in recent years have attempted to carry on their duties in India. As I say, the vote of Parliament will be viewed with special satisfaction by them; but it must be remembered that their task has not been rendered easier by the knowledge that their careers would be prematurely terminated by these constitutional changes. That imminent fate has always been hanging over them to add very greatly to their difficulties and their task.
May I say that I hope that the public in Great Britain will find some way of utilizing for the benefit of this country the qualifications and the experiences which some of these men have gained in India? I acknowledge gratefully the steps that the Government, and the Prime Minister himself, have already taken to initiate a movement for securing employment for them. I appreciate that, and I know that the Services appreciate it; but there are many men for whom the future can only mean employment in this country. I hope sincerely that the public will appreciate that they have, among those men, qualities which might well be used for the benefit of the people in Great Britain itself.
We must not forget, also, that although many of the European members in the Services will come back to this country there will be left in India a large number of Indians who have also served the Crown, sometimes in the same grades and in the same conditions as the European members of the Services and sometimes in subordinate Services. I fear that many of those Indians who have thus served their own country will suffer greatly, in these changes; and though I know that the control of Parliament will be withdrawn and that there can be no direct intervention on their behalf from this country, yet I hope that such influence as can still be exercised by Parliament, or by the public of this country, will be utilized to their benefit and to assist their lot. There is no European who has served in India who has not the strongest feeling for the work of his Indian col-

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leagues, and who has not every desire to see that they should be suitably supported in the future, if that is possible.
But on behalf of all of the Civil Service, alike of men who have held positions of high responsibility and those who have served in lower grades, I would like to say this. We have had a great and, I think, legitimate, pride in our past, and it is not a pride that is founded only on past performance. We believe, and I think we rightly believe, that we shall have left behind us a tradition of disinterested service, of integrity and devotion to duty, which will be one of the greatest assets of the new India in her new career. We hear to-day many expressions of good will and hope for the new India, and surely none can be more genuine and more heartfelt than those from the people who have served India in the past, not merely because they perhaps may have the most realistic view of the difficulties that India may have to encounter, but because their long, their close and their intimate connexion with India gives them a special and a particular interest in the welfare of that great population.
On Question, Motion agreed to nemine dissentiente.

ECONOMIC SITUATION.
3.25 p.m.
Debate resumed (according to Order) on the Motion moved yesterday by Viscount Samuel: That there be laid before the House Papers with reference to the economic situation.
THE FIRST LORD OF THE ADMIRALTY (VISCOUNT HALL): My Lords, the complete unanimity which the Motion just passed received at the hands of your Lordships makes it a little more difficult to refer again to what I trust will not be too controversial a matter—the economic situation of this country. Your Lordships' House was placed at some disadvantage in the opening of this debate yesterday by reason of the fact that the debate was well on its way before your Lordships were made acquainted with the proposals of His Majesty's Government. Now that your Lordships have had an opportunity of reading and carefully examining the Prime Minister's statement on the situation, I trust that the
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changes proposed by His Majesty's Government have satisfied you that the Government are fully seized of the seriousness of the situation, and can be relied upon to carry the proposals through. I trust that the report which appears in one of the morning papers, that the Opposition propose to divide against the Government on this question, is not true.
I listened to every speech during the debate yesterday and was impressed with their restraint and, indeed, their quality, particularly the speeches of the noble Viscount, Lord Samuel, and of the noble Marquess, Lord Salisbury. I must say that I have for twenty-five years greatly admired the way in which the noble Viscount, Lord Samuel, marshalls his facts and the clearness with which he states his case. There are very few noble Lords, or, indeed, members of another place, who have had such a long, responsible and distinguished period of service as the noble Viscount. I am not going even to hazard a guess as to his age, but his vigour and industry are such that one would hardly think that he had been so long in public life and rendered such valuable service. The noble Marquess, as he always is, was reasonable, conciliatory and helpful, and I trust that to-day's debate will be conducted in the same manner. I would like to refer to the maiden speech in this House of my noble friend, Lord Trefgarne. I will not reply to the points which he put, because I am going to leave those to be dealt with by my noble friend, Lord Pakenham, but he made a first-class speech, as one would expect of him after his long record of useful service in another place.
I would like now to make some reference to conditions as they existed during the crisis at the conclusion of the First World War. In both wars everyone had a job to do. At the end of the 1918 war there was considerable difficulty with regard to the placing of men in industry. Indeed, without being unduly critical of the administration at that time, it can be said that the suffering of the people of this country in those first two post-war years were incomparably greater than those in the first two post-war years at the conclusion of the recent war. First we had a short inflationary boom, then we had heavy deflation. Controls were removed, with the result that food prices in this country reached the unprecedented height

1161
of no less than 291 points above that of 1914. With the removal of controls, wages tumbled.
At that time I was employed in a colliery in receipt of a minimum wage of £5 per week, which I received until April 30, 1921. During the week preceding May 1, a notice was posted at the pit top informing me and all my colleagues employed in the mining industry in South Wales, that, as a result of the removal of controls, if I continued to work at the colliery, my wage would be reduced from £5 to just over £2 a week. Where is there an agriculturist in your Lordships' House who has not some memory of the removal of the control of agricultural prices at the same time, and of the result? Industrial disputes raged in almost every industry. In 1919, no fewer than 34,970,000 working days were lost through industrial disputes. The year 1920 was even worse: 26,570,000 working days were lost. The following year was worse still, for in 1921 no fewer than 85,870,000 working days were lost, making a total for those three immediate post-war years of 147,410,000 working days lost through industrial disputes. Compare that with the condition at the present time. Whatever criticism may be levelled against His Majesty's Government, the country have been spared that difficulty. From June, 1945, to June, 1046, 3,000,000 working days were lost through. industrial disputes, and from June, 1946, to June, 1947, 2,360,000 working days, making a total for the two years of 5,360,000 as compared with 6o,000,000 in the first two post-war years after the 1918 war.
That is not all the story. Every month after August, 1920, men were thrown out of work, the result being that the percentage of insured workers without employment rose to 15.4 in March, 1921, and to 22.4 in June of the same year. In June, 1921, no fewer than 2,110,000 registered as unemployed, the majority being ex-Service men. Hundreds of thousands of ex-Service men were wandering the streets with no unemployment pay, begging for jobs or charity. That was the beginning of a long period of unemployment in this country, for it was only in one year during the period between the two wars that the percentage of unemployed fell below 10 per cent., or, in number, 1,000,000. That was in
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1927. The amount of misery, poverty and ill-health caused by unemployment can never be estimated.
That is a short description of the methods adopted by the then Government to deal with the crisis. The crisis was dealt with on a basis of low wages, unemployment and the misery of the people of this country. That is not His Majesty's Government's method of dealing with the present problem. I am not pretending that we are not again faced with a postwar problem. We should analyze it to see what it is, and what are its causes. Apart from weathering the very difficult post-war reconversion period, His Majesty's Government achieved the successful demobilization of over 6,000,000 men and women, who have been transferred from the pursuit of war to peace-time production in the last two years. It has been accomplished with the minimum of industrial dislocation and with a scrupulous concern for individual justice. During this period, unemployment has not risen above an average level of about 400,000, except for a few weeks during the winter fuel crisis. That record speaks for itself, and I thought it should be stated in this House.
This nation pooled all its manpower and wealth and poured all of it into the fighting of the last war. The result was that the war was won, but we became a very much poorer country. We have lost much of our foreign income and we have an unprecedented national debt which, it will be remembered, was just £700,000,000, in 1914. At the conclusion of the 1914–18 war it was £8,000,000,000, and at the present time is seine £26,000,000,000. Our industrial and productive potential needs building up and reconditioning. We have commitments which, in the unsettled state of foreign affairs, involve the use of a large number of our men for military and non-productive purposes at home and abroad. With all these difficulties, we are seeking to provide a higher and better standard of life for the people. We are seeking to provide full employment at good wages, and to give the people of this country a fair share of the amenities of life; we are seeking to provide a new social service, better housing and better education. Towards these objectives we are anxious to have a full response from the people of this nation, for without this the task which it has set itself will not be accomplished.

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There is not one single member of your Lordships' House but who will say that the people of this country deserve what the Government intend them to have.
It is not my intention to cover any of the ground traversed by my noble friend Lord Pakenham yesterday. I will only repeat that the difficulty which brought the crisis to its head is the reduction of dollar resources to make up dollar deficits brought about through a dollar shortage, which is world wide. On this matter the noble Marquess, Lord Salisbury, expressed a hope that the borrowings from America have not been frittered away. I think I can give your Lordships a guarantee that they have not been frittered away. How have they been spent to date? For food for the people of the United Kingdom, 25 per cent.; for food, and so on, for the Germans, 11 per cent.; for raw material and petrol, 27 per cent.; for machinery, etc., 14 per cent.; for purchase of ships, 7 per cent.; for tobacco, 12 per cent.; and for films, 4 per cent. That is how 1,540,000,000 dollars have been spent in the United States. I think the noble Marquess will agree that they have not been frittered away.
The crisis is the reflection of a shortage of goods outside of the dollar area which, in its turn, is an inevitable legacy of the destruction of the war. But, it should also be pointed out that during the past year or two, owing to bad harvests and the recent cessation of the operation of U.N.R.R.A. in Europe, dollars have tended to flow into the United States. If this country could supply more goods for export, other countries would be less disposed to convert sterling into dollars in order to buy American goods. At the present stage of the nation's affairs what is needed is an immediate increase in the production of dollar-earning and dollar-saving goods. This increase should come as soon as it is possible. There is little time to obtain increased production by reorganization and re-equipment of which so many of our industries are in need. Some quicker method, such as additional effort and, indeed, longer hours, should be made until such time as our balance of trade begins to right itself, and our economic position improves.
The trade unions, through the National Joint Industrial Council, have already heard the Government's case, and have
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decided to recommend in the essential industries that their members should agree to the recommendations, for they fully understand what is at stake. Like so many noble Lords, I am not a trained economist nor a currency expert; indeed, I should be happy to describe myself, as the noble Marquess did yesterday, as "just a common man." I thought while he was speaking that if only he had been the boss and I had been the trade union leader, how peaceful industry would have been in this country! That is, of course, if he and I had been allowed to practice what we preached. But we all have sufficient knowledge of economics to realize that this nation's economy, which has been built up for a century on the basis of import and export trade, cannot be maintained unless the export trade, visible and invisible, overbalances the import; and that when we are left to our own resources, our salvation must depend upon the balancing of that trade and the stepping up of production for export. This cannot be too strongly emphasized. By itself a large increase in our production of coal would enable us to export coal to meet the needs of countries who are at the present time suffering considerably as the result of the lack of this valuable fuel, in addition (and this is most important) to meeting all our fuel requirements in this country, avoiding the tragic necessity of importing coal from other countries, and reducing oil consumption 10 a minimum. I propose to deal with the coal industry a little more fully later.
The Government proposal is not only to deal with coal. It asks for further increases in production generally, particularly in the production of steel and of manufactured articles dependent upon steel—engineering, shipbuilding, textiles—not only to meet more demands, but to enable us to fill the gap between our import and export trade. Dealing with production, the question of the person who is employed upon production must be brought into the picture. One has heard so much about harder work, and how necessary it is. I entirely agree; but it must be harder work for everyone. The manual worker of this country becomes a cynic when he is lectured. He is of the opinion that there are too many persons who are ready to lecture and give advice—persons very like the parson who told his parishioners: "Don't do what I do, but do what I tell you"; which means

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that those who lecture are themselves often in a much too comfortable position, and perhaps do not have sufficient regard to the importance of the person who is engaged in manual employment and his surroundings. I refer to the man at the coal face, or working underground; to the man working on the land, at the steelworks, at the machine in the factory, on the railway; the seaman; and of course I include the members of the managerial and technical branches of industry—the man on the spot, without whom production is impossible and, indeed, less efficient. Without the closest co-operation of all those who work at the point of production the results which the nation requires will not be forthcoming.
In what industries is there a scarcity of labour at the present time in this country? In mining, in agriculture, in textiles, and in all the unattractive industries. Why is there this scarcity? It is because other industries not only pay higher wages in proportion but also offer much more comfortable jobs; and a large number of persons have discovered that the farther one gets away from the point of production, the better the person is paid and the more comfortable is the job. I left the pit to go to Parliament, transferred with one sweep from being a weekly wage earner to a salaried earner; and, for being a member of Parliament, I got, merely as expenses, nearly twice as much as I could earn by digging coal underground. I thought then with my colleagues that we were very badly paid. That is the situation in life generally, and our economy is becoming unbalanced.
I read that the waiters in a well-known refreshment house in London, because their takings have been reduced below £6 a week, think that the clients should now be allowed to give them tips. I wish I could get a guarantee of £6 for the fellows who dig the coal in this country. I may have something more to say about that later. We find that too many of the very best men on the production side leave it because of inducements to go elsewhere, and they will see to it that their sons are brought up in some other vocation where the general standard of living is much higher. There must be a realization that without the complete confidence and effort of the productive worker this nation is sunk. It is true that the distinction is not now as great as it was in the past, but
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there is still a tendency for the productive industries to be neglected and for the more comfortable jobs to be filled.
I was very interested in a letter which I saw in one of the daily papers yesterday from a Canadian, which reads as follows:
"A lot of us over here remember with affection the times we had in the Old Country. It was a comfortable place even in the uncomfortable times. But it seems to us there are still too many people in England who are too comfortable—they ought to get clown to it and do some real work. We would like to see manual work more honoured in Britain than it is. We over here don't reckon a man is a man unless he's done some manual work in his time. The sons of the richest do it. We would like to see, for instance, your students working their way through college as ours do. Britain has got to earn it can't be a nation of five-days-a-Neck clerks."
That is not my opinion; it is the opinion of an observer from outside. How much truth is there in it? A full recognition must be given to the place of the manual worker in our national life, and no batter example can be given than that of the coal industry.
I was asked a number of questions yesterday, some by the noble Viscount, Lord Samuel. First of all, he dealt with the question of paper consumption and referred particularly to the paper consumption of the Government and how, if it was measured in a certain way, it would go 120 times round the Equator. I want to assure the noble Viscount that there is no need to go round the Equator 120 times. It is public knowledge that the Government use of paper has been reduced from 71,000 tons by nearly 3o per cent. I am not suggesting that it is not too much at the present time.
VISCOUNT SAMUEL: That is still 80 times.
VISCOUNT HALL: But the reduced figure of 55,000 tons is 55,000 tons of nearly 2,000,000 tons which is imparted and processed in this country, so indeed it is a very small proportion of the whole. I am not suggesting that it ought not to be further reduced, and I am sure His Majesty's Government have already taken notice of the suggestion made by the noble Viscount.
The noble Viscount referred to the Severn Bridge, and indeed there were very few noble Lords who spoke yesterday who did not refer to the Severn Bridge. I thought that there was much

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in what they said. May I say that up to the present the work has consisted of just making preparatory drawings and taking soundings? The next stage to be undertaken will be taken next year, and will consist of the construction of some concrete piers and anchorages. This will involve a very small amount of material and labour. The building of the bridge itself cannot take place for two years at least, and when the real work begins it can only commence after experiments have been concluded. The Government surely cannot be blamed for carrying out the necessary preliminaries and bringing the scheme to a position in which it can be put in hand as soon as conditions indicate that this is desirable.
The noble Viscount, Lord Samuel, does not often slip up, and I am very pleased that he did yesterday because I can now say that he slipped up very badly. I do not know whether he said someone had informed him or that he had seen it in the Press, that a coal miner who worked four days and did not continue for the fifth, that if he had worked on the fifth day—this is how I understand the matter—he would be only 2s. 3d. better off than if he stayed at home.
VISCOUNT SAMUEL: I did not state that as a fact. I said it had been stated and I wanted to know whether it was true or not.
VISCOUNT HALL: If I might say so, with all respect, it seems so ridiculous in itself, because it would mean that Income Tax would be based on a very high figure. Assume that a miner got his full one pound a day for five days, his income would have to be considerable before they would deduct 18s. for a day out of his income.
VISCOUNT SAMUEL: Let me add that the case which I read was that of a miner who said he had earned £9 in the four days. I do not know whether that is possible.
VISCOUNT HALL: There is a good deal of misconception in the minds of many people concerning the five-day week. No person employed in the pits of this country will get the bonus of the extra day's pay unless he works the full five days. If a person loses one day he not only loses one day's pay but two days' pay. So there again his earnings during
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the first four days must be something far in excess of the £9. Let me give the case of a person who is earning £9. In the case of a single man earning £9 a week, for the first day his gross wages would be £1 10s.; at the end of the second day his wages would be £3; for three days his wages would be £4 10s.; for four days his wages would be £6, and for five days £9, because the bonus comes in. Now tax deduction. The net income for the same man for one day would be £1 10s.; for two days £2 19s.; for three days 7s. would be deducted for Income Tax, for four days 15s. would be deducted for Income Tax and for five days £1 18s. would be deducted for Income Tax. But that would still leave him with £7 2s. or £2 better off than if he only worked four days.
LORD HAWKE: That is a single man?
VISCOUNT HALL: Yes; a married man would be correspondingly better off. If you take a married man with two children he would not pay Income Tax until he earned his £9. If he worked five days and got the full week's pay, which would be £9 gross, he would pay 8s. in Income Tax. I am pleased the noble Viscount put the question, because it does clear away a good deal of misconception in connexion with this matter.
The noble Viscount, Lord Portal, put a question about contractors and the difficulty of obtaining licences for subcontractors. I understand that unfortunately he is unable to be present to-day, but I can assure him that this matter is not quite as he stated, and I will explain the position to him when I see him.
A question was put to me concerning the employment of Poles in the mines. Up to the present time 2,400 Poles have entered employment in the mines; 3,281 have been trained at Government training centres, and of these 909 are already experienced miners and waiting to be placed. Another question which the noble Lord, Lord Croft, put to me was whether I could break down the figures of the 80,000 reduction in the Armed Forces. He thought these men were taken mainly from the men in the Army in the field. I cannot break down the figures, but I can give him the total strength of the Army as the Government estimated it on March 31 next year after the 80,000 have been deducted.
LORD CROFT: The question was whether those 80,000 will be chiefly from the ancillary troops who are employed in the Services as a result of our occupation of various countries, and I asked whether the actual field Force would be affected.
VISCOUNT HALL: I am afraid I cannot give the noble Lord the assurance that the field Force will not be reduced.
I want now to come to this question of coal. This debate centres very much around coal production. Many of your Lordships referred to the importance of coal and the difference which an increase of some 20 per cent. in coal production would make. Such a difference would revolutionize the whole basis of the nation's economy. It would do much to right the trade balance. It does seem very strange that this nation, whose great industrial world position has been based upon coal, should now be talking in terms of importing it. A combination of the importation of coal from hard currency countries and the converting of former coal-burning machines to oil-burning in many of our industries only aggravates the problem which we are so anxious to solve. Indeed, no other industry in this country, apart from agriculture, can make a better contribution to the nation's needs. Without coal our industrial, financial, and economic life and domestic comfort are at stake. The noble Viscount, Lord Samuel, said that the loss of 2,000,000 or 3,000,000 tons of coal lost us £200,000,000 of exports. That indicates the significance and the importance of this problem.
My own connexion with the coal industry covers a very long period, and during my life time I have seen its rise and fall. When I entered the pit in 1893, the coal output of this country was 180,000,000 tons. A substantial proportion of that was exported. That was during the days when we were building up those foreign reserves which became so beneficial to this nation during the period of the two world wars, and without which we could not have carried on the last war. It was the coal and the steel and manufactured articles which were produced from the 'eighties until the outbreak of war in 1914 which gave us those reserves. During the twenty years from 1893 to 1913 we saw a rapid increase in the production of coal in this
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country. In 1913 we reached the peak of 287,000,000 tons, the highest output of coal in our country. During that year we exported to foreign countries and for bunkers 100,000,000 tons of deep mine coal, which brought credits to this country. In 1945 and 1946 the output of coal in this country went back to where it was in 1893. The nation's wealth, it can truly be said, was built upon an abundance of cheap coal—too cheap. At no time over the past sixty years has output fallen to the very low point which it has reached during the past two years, and at no time for eighty years have we exported less coal than we are exporting this year.
I do not propose to dwell too long on the conditions which existed in the coal-mining industry of this country in the old days, other than to tell your Lordships that I myself cut thousands of tons of best Welsh steam coal for which I received 1s. 1½ d. per ton after the coal had been weighed a mile and a half from the coal face and after deduction for the small coal screened away—I was paid for the large coal. I ought to say that in addition to that 1s. 1½ d. I got a percentage of 10 to 15 per cent. on the ton. Such were the wages paid in the mining industry at that time, whilst the living conditions were not becoming to a great industry or, indeed, to a great nation which was in the main responsible. The history of the lives of the miners and their treatment by the nation in obtaining cheap coal is a chapter about which the less said the better, and I trust that that chapter will be closed for ever. I want to see a completely new era, and I trust it has commenced, in which the nation fully acknowledges the importance of coal, more particularly to the persons who are called upon to produce it. A completely new start is needed and we have to see that this new start comes.
In 1938, the year which is so often referred to at the present time, we produced 227,000,000 tons of coal, and we produced that amount of coal with 782,000 miners. It will interest your Lordships to know that we produced that coal upon the basis of an average of a five-day week—indeed, less than a five-day week. The average number of shifts worked during 1938 was 4.96 per week. Of that coal 181,000,000 tons was used for consumption in Britain and 46,000,000

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tons was sold for export. Last year the number of persons employed was just under 700,000 and they produced 189,000,000 tons of coal, of which 184,500,000 tons was used in this country, and 4,000,000 tons, plus another 4,000,000 tons from stock, was exported to meet urgent requirements abroad.
In 1938 the output per man shift at the coal face was 3 tons. In June of 1946 it was 2.75 tons, and in June, 1947, it was 2.87 tons. The over-all output in 1938 was 1.14 tons and in June, 1947, 1.8 tons per day. I would like, in fairness to the coal miner of this country, to give the comparative figure in all European countries, with the exception of Russia. The figures I am about to give represent the proportion of the 1938 output. It was 55 per cent. in the Ruhr; 56 per cent. in Holland; 70 per cent. in Poland; 73 per cent. in France; 79 per cent. in Belgium, 81 per cent. in the Saar and 89 per cent. in this country. This means that, much as we complain about output in this country, we are better off than the countries to which I have referred.
There has been this reduction in output notwithstanding the substantial increase in machinery, and many reasons can be given for it. I would say that I have been a very strict advocate of the introduction of machinery into coal pits—not because I have not recognized the disadvantages, and there are many. I hope that some time I may be able to speak to your Lordships concerning the difference between hand-got coal and machine-mined coal. The machines are doing away with a considerable amount of laborious work, but the machine is not human, and I suspect the machine is responsible for the condition of the coal supply to so many people at the present time, for we lack sufficient manpower for cleaning the coal at the pit surface. In addition, the plant in many cases is ineffective, and the coal itself does not get an opportunity of doing its job properly.
I regret that I have taken up so much of your Lordships' time. The noble Lord, Lord Pakenham, dealt in his speech with the increase of manpower into the coal mining industry. The target of 730,00o is being approached and I hope we shall soon have reached that target—
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and then I shall be able to inform the noble Viscount that another target has been touched. The number of face workers has also increased during the same period by over 8,000. And there has been a large intake of machinery, such as conveyors, of which 1,000 were introduced during the first six months of this year, and 470 coal cutters. Orders amounting to £9,500,000 have been placed for new machinery during the second period of this year.
The miners do not desire to be pampered. Indeed, this improvement in their conditions can be regarded as no other than giving them the just treatment which has been denied them in the past. I shall never forget a peroration of my fellow countryman, the late Earl Lloyd George, in dealing with this coal question at the conclusion of the 1914–18 war. He said:
"I have seen the coal miner under many conditions down in Wales. I have seen him as a worker; there is none better. I have seen him as a soldier; there is none braver. I have seen him as a singer; there is none sweeter. I have seen him as a footballer; and he is a terror. I have seen him as a politician; and there is none sounder. Always a loyal friend, but a dangerous enemy."
I believe that that does give a description of the miners of this country. They want appreciation; they do not want pampering. They want conditions applied to them which ought to be applied for men who have to do the kind of work which these men have to do.
Miners and management—and I say this as one of their colleagues—should respond to the demand which is now made for larger increases in production. The target set in consultation with the miners' representatives could well be passed. It should be done, and then the miners, with other industrial workers, can turn a severe industrial reverse into a glorious victory. There is a job for every citizen in this combined offensive. The Battle of Production must be won. If we do not get the coal to meet our requirements and leave a substantial amount for export, the battle will be lost. No responsible miners' leader would be doing his duty if he did not express dissatisfaction with the present output of coal. The nation is hungering for more coal; for it would give us more steel, more goods of all kinds, more imports, more exports; it would raise Britain's prestige in Europe and the world, and would make Britain independent of assistance from other nations.

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To-day we meet a new challenge, a challenge to the capacity of the British people. It is within our competence. It demands renewed efforts and sacrifice. We must meet this challenge as we have met others in the past; and history will recall these months through which we are passing as a great opportunity courageously undertaken by the whole of the British people.
4.18 p.m.
LORD CHERWELL: My Lords, I am certain that the whole House has listened with interest and pleasure to the speech of the noble Viscount. I am sure that most of us will agree with the late Earl Lloyd George's description of the miner, except perhaps in the adjective which he applied to the miner as politician. It is just fifteen months since I moved for Papers in your Lordships' House on the economic position of this country, and in particular the likelihood of inflation at home and of an unmanageable negative balance of payments abroad. At that time I was reproved, even from the Liberal Benches, for being unduly gloomy. I do not think anybody would echo that reproof to-day.
It is, of course, a commonplace that no other nation is so vulnerable as ours. The Chancellor of the Exchequer, according to the Press, declared a few weeks ago that even to maintain our present exiguous ration we should have to import 75 per cent. of our bread, 56 per cent. of our meat, 64 per cent. of our bacon, 73 per cent. of our sugar and something like 90 per cent. of our cheese and butter. Everybody knows that we paid for our imports of food partly by exporting coal, partly by working on raw materials, such as wool and cotton, iron ore and the like, and partly by services such as banking, insurance, and shipping, and partly from the profits derived from investments made abroad in the bad old days of private enterprise, when our exports greatly exceeded our imports and we had something left over to invest in foreign countries. It was upon this precarious foundation that our swollen population of 47,000,000 people, 53o to the square mile, nearly one per acre, was built up.
In the early months of the war, when we were fighting alone, we had to sell a great part of our foreign investments to pay for munitions and food. When Lease-Lend started, we were able to concentrate on munitions production and to allow our exports to lapse to one-third of their pre-
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war volume, since our immediate needs were satisfied gratis from America. But when Lease-Lend was ended so abruptly in 1945, it was plain that we should starve unless we could export enough to pay for our imports. To tide us over whilst we were building up our exports, the. United States and Canada lent us some £1,250,000,000 worth of dollars. But it was clear that unless we could expand our exports sufficiently to pay our way before the Loan was exhausted a crisis was inevitable. Anybody would surely have expected, in these circumstances, that the Government would make every effort to expand their production and our exports as quickly as possible, at no matter what cost to their predilections and their Party dogmas. They were working against time; nobody expected the Loan to last more than three years. Nothing could exceed in importance this terrific problem. The noble Viscount has jest told us that they had the advantage in that they had practically no strikes and no unemployment; we hope that they will not have some unemployment as a result of the circumstances which are new arising.
My complaint against the Government is that they failed to tackle this superlatively urgent problem. Let us look at one or two examples. As has been stated by the noble Earl, Lord De La Warr, the most direct and immediate way of replenishing the national larder at a minimum cost in dollars is to increase food production at home. It was estimated, during the Coalition Government, that more than £100,000,000 worth of food over and above the high war-time level could be grown in this country; and prices have risen since then. What happened? Instead of increasing our agricultural supplies, the Socialist Government have allowed them to dwindle by something like £100,000,000 worth. The not le Lord, Lord Pakenham, told us yesterday that the Government were going to make intensive efforts to foster agriculture and hoped to achieve an increase of £100,000,000 worth by 1951–52. That will just about put us hack where we were during the war. Why did the Government let it drop below this when our need was so clear?
Let me turn to coal, the topic to which the noble Viscount has just devoted so much attention. Since the invention of

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the steam engine it has been plain, as he said, to the meanest intelligence that our industries could only flourish if we got enough coal. I do not know, of course, whether the intelligence of some members of the Government is not sufficiently mean to appreciate this; they move in such rarefied esoteric realms that a dirty black substance like coal eludes their observation. It was not always so. When it appeared in the winter of 1944–45 that there was a remote risk that there would be a shortage of coal in the coming year, the Government of the day at once took steps to increase manpower in the mines, to stop coal exports and similar practical measures to improve the position. The Socialist Government could think of nothing better to do than to nationalize the mines.
I do not deny for one moment that nationalizing the mines may have had some psychological advantage. Socialists have been preaching to the miners for generations that all their hardships were due to the wicked capitalists and that it only needed nationalization to put everybody on easy street. Once the Labour Government were in power the miners might well have thought that they were being cheated if nationalization had been withheld. The idea that it would materially increase coal production was really naïve. Can it really be that the Minister of Fuel and Power was taken in by this soap-box claptrap, and that he thought that nationalization would increase output by 10 per cent? If production did not approach consumption, there were only two courses open: either to get more men into the pits or to get the men to work harder—or at any rate not less hard—than before. What happened? On the day that the Labour Government came into power the number of men on the colliery books declined, though not very much, and only in April of this year did it again reach the figure of July, 1945. The noble Lord, Lord Pakenham, can check this in the Digests; that is where I obtained these figures.
LORD PAKENHAM: Since the noble Lord has been kind enough to refer to me, may I ask him whether he has in his mind-offhand the general trend of the figures before the Labour Government came into power?
LORD CHERWELL: Certainly. The output per head over the period from 1922, apart from the General Strike, up to 1937 went up steadily, except for one year when the Labour Government were in power, and a brief interval between 1929 and 1931, when I think the Labour Government were again in power. Apart from those two setbacks, the trend was steadily upwards.
In the hour of our most urgent need, on top of all this, the five-day week was introduced. It is all very well to paint a rosy picture of the results, but the fact remains that in June the weekly output per head for the number of wage earners on the colliery books was only just over 5.1 tons, as against just over 6 tons in 1937. The number of men in the pits is down 10 per cent.; the output of coal is down 22 per cent.—and this despite the increasing mechanization. I do not want to-day to recapitulate in detail the monumental incompetence which allowed the short-fall of 2 or 3 per cent. of coal to throw 2,000,000 men out of work, and which will probably cost us some £200,000,000 worth of exports. What should we think of an explorer who, finding that he had taken 3 per cent. less rations with him than he intended, ate them all in the first fifty weeks and starved to death in the last fortnight before the relief ship arrived? The whole handling of the coal situation is only another example of the Government's obsession for their long-term nationalization panacea as against immediate effective remedies.
I will mention one other instance of the same mentality. It was perfectly plain at the end of the war that we must at once renew and increase our electrical generating capacity. Demand had swollen, and maintenance and re-equipment had perforce been inadequate. What was the Government's remedy? To nationalize the electric industry. Does anyone really believe that this can give one extra unit of electricity in the coming year? Of course not. Two years have passed and great quantities of electrical generating machinery have been exported. And only this year did the Government finally decide to build a new power station in London. Admittedly they did take some short-term action concerning electricity. Notwithstanding the shortage of electrical generating capacity which stared them in the face, they increased the supply of electric fires and

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cookers which consumed the current. That is surely an extraordinary method of planning.
Let me not recapitulate the later stages of the Government's hysterical efforts in this matter, how the Chancellor took off the purchase tax in the first year, and thus ensured that fires were bought and installed, how that led to a breakdown in the electrical generating stations, and to the current being cut off under the euphemism of shedding the load, how the Chancellor promptly doubled the tax in this year's Budget; and then, finding that modern houses had been finished without chimneys so that no other means of heating and cooking were possible, how he had to halve it again before the Finance Bill was passed. All these are merely instances of the planner who has failed to plan in big broad outline trying to recover by thrashing about amongst the details.
It is strange that the Government should have failed to build electrical generating stations, for they seem to have a fatal passion for capital expenditure. According to their plan 20 per cent, of the national income is to go in capital equipment and maintenance. Whether this might be right or wise in normal circumstances is arguable, but obviously it can have no effect whatever on production for some time. Even if half this amount—if £8000,000,000 or £9000,000,000 worth of raw material and labour could be used to produce goods for export, and if the goods could be sold, all our troubles would vanish. Yet steel and labour which can be used for motor cars for export are being used to electrify railway lines, although trains can be drawn quite well in the old-fashioned way by locomotive and although we are so short of electricity. Although millions of square feet of factory space were built in war time, enormous new factories are being erected all over the country. Instead of getting on with manufacture, factories are being re-equipped with the most modern machinery. In the long run, of course, that may be a good thing to do, but we have not got a long run, we have got to mend and Make do. We must produce now, and not prepare to produce later.
The Government's prime error seems to be that they confuse short-term and long-term remedies, and instead of concentrating on meeting our short-term problems they have spent the last two years messing
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about with remedies or what they believe to be remedies, for long-term problems. Some of their ideas such as growing groundnuts in Central Africa to relieve the fat shortage, may be quite good in the long run, but it will not help us turn the corner next year. Other ideas, like nationalizing our principal industries, we believe to be radically bad. But, be these ideas good or bad, not even the most fervent Socialist can pretend that they will take effect so quickly as to augment our production and exports appreciably before bankruptcy stares us in the face. Those facts, happily, seem at last to have dawned upon the Government, as I all pleased to discover from some of the statements made by the noble Lord, Lord Pakenham, yesterday, and of the noble Viscount who has just sat down.
Though there are still traces of their obsession for long-term remedies, some of their proposals, if they can be carried out, should take effect immediately. If the number of miners can be increased by 2 per cent., it may be hoped that coal output will rise proportionately. An extra half an hour on a seven-hour day, if no bottlenecks arise, would increase coal output by some 14,000,000 tons. We all hope that this will be achieved, but it was stated by a very expert speaker in another place yesterday that for technical reasons is this was not possible. I had hoped that perhaps the noble Viscount would be able to correct this.
VISCOUNT HALL: I do not accept that statement.
LORD CHERWELL: I am much relieved to hear that. The noble Viscount speaks with great authority, and I sincerely hope that the increased half an hour may really lead to a corresponding increase in output. The noble Lord, Lord Pakenham, may remember my asking him some fifteen months ago how the Government expected to get labour into some of the important industries working for export, such as textiles, in conditions of full employment without direction. I am sorry that his hopes of achieving this have riot been fulfilled. However, I think it is a brave decision of the Government to take the unpopular steps required, even though belatedly. Once the British people realize the serious nature of the emergency they will certainly respond. But surely it was obvious a year ago flat something like this would be necessary.

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Was it really inevitable to let the crisis break before anything was done?
I am sorry that the noble Lord, Lord Pakenham, made no reference in his speech yesterday to the question of incentives to increased production, and to the removal of red tape which has clogged the wheels of enterprise. Anybody who has had anything to do with industry has heard heartbreaking stories of the frustration and friction caused by the number of forms and permits required before anything can be done. The noble Viscount assured us that the amount of paper to be used was being reduced. I was much relieved to hear that.
VISCOUNT HALL: It has been done.
LORD CHERWELL: I see. But the amount used even now is still enough to send one form every morning to every individual in the United Kingdom, and it seems to me that is rather an excessive amount of paper to send out. How can the Government expect anyone to face all the worry and trouble involved in any expansion when go per cent., or even 97 per cent., of any reward for extra work is confiscated? It is all very well to hate the rich. If, to satisfy this hate, penal taxes are imposed on them not only are the rich hit but the whole country is impoverished. Whether they like it or not, the profit motive cannot be swept away with a stroke of the pen. I hope that Ministers will harden their hearts and pander to it in every walk of life. It may not be very high-minded but it is human nature. The Government must face facts as they are, and not as they would like them to be. If they want people to work and struggle to increase output they must make it worth their while.
I now turn to the financial side. Though I listened with great attention and pleasure, as I always do, to the noble Lord, Lord Pakenham, who spoke on this matter yesterday, there are some facts which I find it difficult to understand. Above all, the extraordinary suddenness with which this crisis in our affairs has overwhelmed the Government is inexplicable. In the White Paper published in February no hint was given of any immediate danger. According to this document we expected to draw on the dollar Loan at a rate of less than £30,000,000 a month, leaving us a credit in dollars of £620,000,000 at the end of
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the year. Yet now, only five months later, it emerges that in the first seven months of the year we have drawn nearly £540,000,000 worth of dollars; that is to say at the rate of £77,000,000 a month—more than two and a half times the expected rate. Surely the Government should explain this monstrous miscalculation. How can we trust planners who are out to an extent of two and a half times. It cannot be due to the rise in American prices, for they have only risen 10½ per cent. above those obtaining in the last quarter of 1946; and in partial compensation export prices have also risen by 8½ per cent. It cannot be due to the fuel muddle. For, whatever it may cost us in the long run, our exports in the first half of the year were only £100,000,000 below expectation.
The noble Lord, Lord Pakenham, yesterday gave us a series of figures which accounted for £405,000,000 of our dollar drafts, a rate of nearly £60,000,000 a month. It is very strange that the February White Paper should not have foreseen these vast demands, which were more than twice the amount forecast. What is the explanation of our colossal July draft of £175,000,000? Surely the £405,000,000 spent in six months cannot have risen to £537,000,000 in this one month. I am glad to hear that the convertibility obligation was not to blame. I hope that we have not given any undertaking to convert any of the abnormal sterling balances which should have been blocked as soon as the war ended, and which we should be very chary of repaying until our affairs are in better shape.
Some of these are genuine commercial transactions. But the vast preponderance, especially those claimed by India and the Middle East are not genuine at all. Why should the United Kingdom pay many of our Allies for the use of their ships in the common cause? Why should we pay the Egyptians for building fortifications for their country, or the Indians for making airfields required for their own defence? Anyhow, there is no reason why we should pay excessive prices. Above all, it is improper to convert these exaggerated prices in inflated currencies claims at pre-war rates of exchange. If these balances are to be recognized then they should be scaled down to take account of these factors. They should

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have been blocked as soon as the war was over, and not used until proper arrangements were made. Instead, it seems that they have been drawn upon to the extent of scores of millions of pounds. In other words, we have sent abroad after the war valuable goods which could have been sold for scores of millions of pounds of current cash, and all we have in return is the cancellation of a minute part of these alleged phoney debits.
I come now to the completely inexplicable volume of our foreign spending. The Foreign Secretary told us on April 30 that since the war we have advanced or sent abroad £740,000,000. This is more than the whole of our drawings on the American Loan. We, the country which bore the heat and burden of the day, the only country which fought the war from beginning to end, burdened with an internal debt of £550 per head of the population, and owing abroad, if the phoney figures are accepted, £80 a head, have advanced since the end of the war to foreign countries, some of which gave little or no help and others which fought against us, £740,000,000. Now we are surprised that we have an unfavourable balance, and that bankruptcy stares us in the face. One way of keeping the wolf from the door of course is to take the door away, but it is not usually a very adequate means of saving the family from misfortune.
It is no use saying that about half of this sum is recoverable. It may be in the long run, though I doubt it; but we are not concerned with the long run; we are concerned with the short run. If we lent France £100,000,000, and she has used it, this means that she has had £100,000,000 worth of goods from this country. If we had sold these goods to a hard currency area we should have had dollars with which to buy our food. It is no good saying that France will one day be able to pay us back and that we shall be able to buy the food then. We are going to be very hungry this year. We cannot wait.
In this connexion I should like to ask the Government a question. As I understand it, the currencies of all the countries that signed the Bretton Woods Convention should be convertible—I believe as from July 15. In this case there would no longer be hard and soft currency areas, except for those countries who staved out.
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Is this arrangement having unexpected repercussions, in the sense that former soft currency areas are deterred from importing? Again, are we taking steps to have dollars declared a "scarce currency" with all the easements as regards quotas and discrimination that this should give? Many of us would welcome information on such points.
The Government's intentions to increase exports, and thus help to bridge the gap in our balance of payments, are, of course, excellent. But they are only broad intentions. No quantitative estimate of their effect can be made. Their negative contributions to recovery, on the ether hand, can be measured. The proposed cuts on food—£12,000,000 a month—are very severe. All the others put together are trivial compared to this. But how far will they go to meet the crisis? .In June our negative balance on visible imports and exports was no less ban £60,000,000. In the first seven months of this year the drafts on the American Loan have averaged £77,000,000 a month. Unless we can jump up exports, and what is more, exports to hard currency areas, by something like £40,000,000 a month—nearly 50 per cent.—these cuts in imports, severe though they are, will barely go a quarter of the way to bridging the gap.
Failing some spectacular immediate expansions of exports, what will our position be? The Government are apparently banking on the Marshall offer. I hope and trust that this will help Europe. I am not so confident that it will help us. We are no longer to be treated on special terms. We are in the queue with the others. Unless things work out very differently from the way they usually do we shall find ourselves at the end of the queue. Every other country, except perhaps Belgium, produced before the war something like 80 per cent. or more of its own food. We alone produce less than 50 per cent. Such is the Government's weakness in stating and pressing our case at international conferences that we nearly always end with a smaller allocation than the others. I am most anxious lest we should supply all sorts of goods to the Continent without getting paid, whilst we run up dollar debits to finance our own needs. This happened after the last war. I fear that it may occur again.

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The root cause of our troubles is that the Government are trying to do too much. For years electors have been assured that there is no limit to what can be achieved once Labour is in power, and now they think they can claim the reward promised for their votes—a high standard of life, social services, less work, and so on. Everywhere we hear talk of reduced hours of work. Sometimes it is a five-day week; sometimes a 40-hour week. How much effect this has had it is difficult to say. Where output per head can be readily measured it is certainly down. As I have said, coal output has dropped over 6 tons per week in 1937 to less than 5¼ tons since May. Bricklayers, who used to lay about 450 bricks a day, now lay between 250 and 350 a day. In the textile industries the production of yarn is down 45 per cent. although the number of people engaged in cotton spinning is only down to 22 per cent.
I know that some of your Lordships believe that the reduction of output per head can be made up by cutting the effort devoted to distribution. It is true that there may be some waste there, but the manpower in distribution is already down by some hundreds of thousands; and that, of course, is why we have all these queues. To try to make up for shorter hours in the factories by slowing up distribution is merely to reduce the man's work and increase the woman's. She will have to stand round longer waiting for others to get served ahead of her. If output per head is down the number of people contributing to the amenities of our everyday life is also reduced. We have about 3 per cent. more of the working population in the Armed Forces. We have another 3 per cent. more in the Civil Service.
The immediate raising of the school leaving age, although neither schools nor teachers were available, has taken another 2 per cent. or so out of the working population. Thus the proportion of our people contributing to the amenities of the community is some 8 per cent. less than before the war. If the rest turn out 10 per cent. less per head there must be a drop in the standard of life of between 15 and 20 per cent. I do not assert with any confidence that the output is down by as much as 10 per cent. Where it is down, it is often
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due to a shortage of fuel, and to delays and difficulties in getting raw material. Stocks were allowed to run down in 1946, and bottlenecks are developing in all directions. Vast quantities of forms and permits have to be filled up to correct any minor shortage, which formerly could have been rectified in a day or two by a telephone call.
It is unfair to blame the workers in many industries for slackness, when the real cause for the reduction in output is shortage of raw materials, fuel and the like. However, whatever the cause, the total amount available for consumption is down. Even if we had the same total output as before the war, the fact that we have—no doubt quite properly—diverted 6 to 8 per cent. more of the national income than before the war to social services—education, health, old age pensions, and so on—must mean that the poorer classes will have normally some 6 to 8 per cent, less purchasing power in their pockets to spend. The cost of schools, teachers, hospitals and doctors has to be met by someone. As has been pointed out again and again, the so-called rich have been soaked to such an extent in order to pay for the Armed Services, the swollen Civil Service and so on, that there is nothing more to be got from them. But, misled by generations of propaganda, the unhappy man in the street thinks that he can get all these social services free, and still have as much to spend as before. When he finds he is getting less, he strikes for higher wages. With labour sub-divided to the degree that it is, any group can hold the community up to ransom and can secure the rise demanded. Prices go up, and the vicious spiral is in full swing. This is largely responsible for the continuous inflation we have experienced since the Labour Government have been in power.
The only way to cure this is to spread the truth, and bring the facts home to the people. Unless rewards are offered, both to wage-earners and management, which rise and fall with rising and falling output, production will remain stagnant, or will even decrease. Unless production rises, social services, however desirable, must involve a fall in the workers' purchasing power; that is to say, a drop in the amount of food he can buy, the amount of tobacco he can consume, and the amount of clothes he can obtain—

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broadly, the amenities he can select and enjoy in his own home. To explain this, of course, implies denying the tales that have been preached by the Socialists at street corners for generations. It is a hard thing to ask them to do. But the Government have demanded sacrifices all round. Let Socialist Ministers make this contribution. Let them face the facts and broadcast the truth.
As to the immediate urgent problem of our balance of payments, all we can do is to hope that the Government proposals, even if they be not a cure, will eke out the Loan long enough for a cure to be found. The cuts in imports, severe as they are, and hardly as they will press on our under-nourished people, must be accepted with a good grace. But they will go only a quarter of the way to bridging the gap, and unless all classes throw their whole weight into the export drive, and augment exports by some 5o per cent. within the next few months, we shall face the same sort of crisis again next spring, with further harsh cuts in our consumption—unless, of course, we are given further breathing space by the generous, warm-hearted American people. We cannot go on spending £450,000,000 a year more than we produce. Equally, we cannot allow ourselves to become pensioners of the American people, and expect them to work six days a week so that we can work five. We must make ourselves self-supporting and able to pay our way.
If the Government had a year ago taken measures to this end, of the sort they have adopted now, we might never have come to this pass. Instead, they spent themselves in futile long-term pseudo-remedies like nationalization. All we can do is to hope that it is not too late, and that a united nation will be able to find a way out of the tragic conditions into which the Government have led it.
4.57 p.m.
VISCOUNT CECIL OF CHELWOOD: My Lords, I have had the misfortune for some years now to dwell in a political wilderness and, therefore, I am not quite so much interested in the Party question as I used to be. I do not doubt that my noble friend who has just concluded his interesting speech is perfectly right in saying that the Government have made a
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great number of mistakes. I never knew a Government that did not do that, and I have not the least reason to suppose that this Government are wiser than those which have preceded them. But, substantially, I cannot help feeling that the main point of this crisis is that we have got to pay the bill. We did not know what an enormous bill it was going to be, but we did know that it was going to be a big bill. Now we have got to pay it. I do not propose to follow my noble friend in his line of argument, as I should be quite incapable of doing so, and it would rather interfere with the other things that I wish to say. Similarly, I do not propose to examine the emergency proposals which the Government have produced. I will only say that I hope they are enough. I have some little doubt about that, but I am quite sure that something of the kind is essential, and I am glad that the Government are, at any rate, doing their best to discover the best means of meeting the immediate situation by the kind of steps which I suppose any Government would try to take in the same conditions.
The reason why I venture to intervene in this debate is rather different. I have for more than fifty years taken a very great interest in one aspect of our economic policy and problems. If I may, I will state the point quite simply and shortly. I entirely agree, of course, with what the noble Lord, Lord Cherwell, said about the immense sums that we have to pay for our imports. There no doubt that our daily life requires large quantities of imports; that is to say, we have to buy extensively from producers in foreign countries, and in order to do that—apart from loans—we have got to sell them a corresponding amount of our own manufactured products. That is common knowledge, and familiar to everybody. It is also equally familiar that of our products one of the most important—perhaps the most important—is coal. There we have a rather different position. We have lots of coal, but we have got to get it out of the ground. It really is a question of how much we can get out of the ground, not only for what we want to buy from foreign countries, but for the purpose of carrying on our own manufacturing. We have got to get these great weights of coal out of the ground, and we have not nearly enough for our present needs.

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Several suggestions have been made as to how we could increase that production. I shall have a word to say about it later on, but I put aside for the moment the appeals which have been made by people from all parts of the political world to those engaged in the production of coal to work harder and more successfully. Apart from that, it is said you could do a great deal if you had better machinery. I do not think anyone now really suggests that that is a remedy which is of much use at the moment. To begin with, you would have to make the machinery or import it, and that alone would mean that you would have to have a fresh expenditure of coal immediately. I think my noble friend Lord Hall said that the re-equipment of the mines is a very elaborate and lengthy business and would not have had the slightest effect on the crisis with which we are at present dealing.
Then it is said that the management of the mines has been very defective and that that might be put right. I dare say it has. I am not an expert on the matter and I do not pretend to know, but I have read a good deal on the subject lately and I have not seen any very strong evidence that the management of the mines has been defective in any general respect except one, and that is the cooperation between the employers and employed. There is no doubt that there has been a very great failure there. Some people put that down to the perversity or dishonesty of the employers or employed. Personally, I do not believe that is true. I have no doubt that some of them, like the Government—I do riot mean this Government but all Governments—are stupid and make mistakes, but I believe that both employers and employed are, broadly speaking, well-meaning and patriotic citizens; so I do not believe you will do much good by altering the management in that sense. But there can be no doubt that industrial relations in the coal mines are far from satisfactory—there is no doubt about that at all. I have been in public life now for more than half a century, and I very much question whether I could find two consecutive years during that period in which there has been no serious trouble in the coalfields. There has always been trouble. Some of the disputes have been
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very serious indeed, such as the dispute which ended in the General Strike shortly after the First World War, and there have been several others of almost comparable importance.
My noble friend Lord Hall gave a number of figures showing the immense loss of days work that had ensued in the past—not now but in the past—by reason of the strikes, disputes and difficulties that have arisen. I have no doubt at all that difficulties of that kind between the employers and employed in the coal mining industry—this applies to other industries as well, but I am dealing this evening only with the coal industry—mean an immense loss of power, partly by the strikes and partly by the general deterioration of the quality of the effort that is being made. I have no doubt it has meant a tremendous diminution of our wealth in various ways. You must reflect how frightfully serious it has been in times of crisis. I remember very well in the First World War how fearful it was that in one of the very many crises we had there were great strikes in the coal industry, and it looked as though the whole country was going to be held up. It would have been held up, I have no doubt, except for complete surrender to whatever the strikers asked for in order to get the work going again. Therefore, it is a very serious matter indeed. It is not only the actual strikes. We are tired of hearing all the charges about slackness (not only by manual workers, because I am talking of all the people engaged) absenteeism, discontent and consequent loss of cooperation. That is a common topic in the Press. I do not know if any ingenious statistician has worked out what has been the loss occasioned by these disputes, but it must have been prodigous. All these suggestions (of which we have heard a great deal in this debate) of the various steps which might be taken are really fleabites compared to the central difficulty of our industry at this moment.
This is, of course, quite commonplace, and I ought to apologize to your Lordships for repeating it, but it is essential for my argument, which is going to be a short one. I will ask what has been done to meet this; what steps have been taken? I think very little. No doubt there has been a great deal of talk about

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the necessity of improving conditions of labour, increasing wages and lessening hours. Many people have suggested that if you do that you would have what has been called the incentive to work which is necessary, and that there would be no further trouble. I can only say, as an onlooker, that in my lifetime I have seen those expedients tried over and over again but apparently without anything like permanent success. I must say that looking at it as an individual, or as what the Leader of the Opposition called "a common man," I cannot help feeling it is a complete mistake in psychology to suppose that you can get harder work or more successful work by means of that kind. I do not mean for a moment to say that that is a good ground for not improving wages or conditions of labour. Of course that ought to be done. I am sure the noble Viscount, Lord Hall, impressed every one of us with the grave evils that have existed in this industry and the necessity for putting those evils right. That should be done not as a means of getting the men to work harder, but because it is just and right that those evils should be put right.
That is the position. I do not want to be misunderstood as being one who denies the existence of these evils, but only that I do not think that is the way to get over this particular difficulty. Looking merely at the psychology of it, I cannot think that an increase in the reward makes one work harder. I have worked for money a good deal in my lifetime, but I never remember saying to myself that I must work very hard and so be able to earn a lot of money, whereas if I worked less hard the reward would be so much less. I do not believe that the offer of large wages is in itself going to produce better work. Of course, if the wages should be so low that the people are not able to do the work, that is a different matter altogether. But I believe that this is not the right way of proceeding. I believe that if we want work, whether it be from managers or manual workers, and we want them to put their best into it, the first essential is to get them to believe that the work they are engaged in is of public importance and that its success depends upon their exertions.
As my noble friend Viscount Hall put it—I did riot take his words down—but I think he said something like this—without
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the confidence of the manual workers the future of this country cannot be assured. What we have to aim at is to create a personal interest and a sense of responsibility in this industry as in all others. I do not think that is going to be easily accomplished by eloquent appeals, although no doubt they should be made. In my experience the effect of eloquence is evanescent. It may sometimes by itself produce good resolutions but rarely does it produce continuous effort. What is wanted is an organization of the industry in such a way as will make all feel, from the manager down to the last-joined apprentice, that the mine or factory in which they are engaged is their mine, their factory, for which they are responsible.
It has been suggested by my noble friends here—and I hope they will forgive me for being a heretic in this matter—that nationalization is going to do the trick. With the greatest respect, I cannot believe that. I cannot see how that is going to be a real influence in convincing the worker that he is the proprietor, the owner, the person interested in the nine. In point of fact, under the nationalized system, if he perceives something wrong he will not have any more influence in putting it right than he had under the old system; that is to say, practically none. If he does a very good job of work the consequence to him as a citizen—because that is the point of view we have to take—is a very remote connexion. It will no doubt be some satisfaction to him—at least I am told it will—to know that his efforts are not going to enrich the "bloated capitalist." I do not deny that that motive exists—I should feel it myself, I know. But I do think that in England at any rate it is not a very strong motive. It is powerful in some countries on the Continent, but I believe it belongs to the domain of class jealousy, and that is a rare disease in England.
I am not saying that nationalization is wrong always and in all cases. Nobody but an idiot says that—even a greater idiot than I am. It is obvious that it is quite right in some cases and quite wrong in others, and where it is right by all means let it be tried. I do not believe it will have any effect in improving industrial relations. We must have a direct participation in the undertaking by those employed in it. In ordinary undertakings, I suppose, under the old system, the final control is exercised by the board of

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directors elected by the shareholders. Under the new system, the nationalized system, there will be, I presume, something in the nature of a committee of management—there must be—and the members of the committee of management, will be chosen, very indirectly, by the taxpayers. I submit to your Lordships—and this is my central point—that it is essential if you are really to get a hold of this problem that there should be on such board or committee direct representatives of those engaged in the work. They should be precisely in the same position as the other members of the board or committee. They should have exactly the same rights as their colleagues. They should have the same full information, and the same liberty to make practical suggestions or criticisms. There should be a full recognition of the fact that their co-operation is essential to the success of the undertaking. A change of that kind could, of course, be made immediately, it does not require any alteration of structure.
That is only a part of what I recommend—I mean what is recommended—under the name of co-partnership. I believe myself that it is an important part, but only a part. With it would naturally come profit-sharing and even in some cases a sharing of capital. I am speaking now of what actually happens. Such a system once established would carry with it many subsidiary arrangements for the settlement of contentions and controversies, should they arise, the provision of housing and other amenities, the encouragement of education, and the preservation of health—in a word, for the maintenance of a full community life in the undertaking. That is not mere theory, that is what actually happens in an undertaking I have known about and of which I still have some knowledge—the South Metropolitan Gas Company. They publish a little paper once a quarter, I think it is, explaining what has been going on. From that it is seen that there is a full community life, and there has never been any trouble at all with the managers or with the manual workers.
I am perfectly aware, of course, that proposals of this kind are regarded with suspicion by two influential sections of opinion. I am speaking with the frankness which your Lordships recommend to all speakers in this House. There are
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the old-fashioned employers who reject the notion of any interference in management by their workers. So far as this is a question of principle, it certainly seems to me that the people who provide labour for the undertaking have just as good a right to be consulted in its management as the people who provide the money. They are equally essential to the undertaking and they are or ought to be just as much concerned in its failure or success. Of course I admit that if it can be shown that the presence of representatives of workers on the board of directors or the committee of management impedes the success of the undertaking, that would be a very powerful argument against what I am submitting to your Lordships. But experience does not bear out any such objection. On the contrary, the evidence is all the other way. It is quite true that the experiment has not been tried in a very large number of cases; but examination will show that wherever it has been fairly and honestly tried the results have been admirable.
Then on the other side there is a section of the trade unions. Certainly not all of them—I have had the honour of collaborating with some of the very best and most respected of trade .unionists in the advocacy of the changes I am now recommending—but there are trade unionists who take a different view. They seem to fear that a change aimed at improving collaboration in particular undertakings would tend to split up the industry and to make the workers less powerful both in labour disputes and in politics. If that is the view held I can only say that it seems to me a very regrettable point of view. Labour disputes are not a good thing intrinsically. They are in the nature of industrial war, and should have no place in a properly organized industry. By all means let the unions continue their present activities as a safeguard until such an organisation has been successfully and beneficially established. But do not let us refrain from working for full industrial co-operation from a fear that it might interfere with the conduct of industrial disputes.
As to the political effect of such a plan as I have suggested, I do not believe that it would make the slightest difference in the world. On the other hand (and here I am on very delicate ground, I know) I submit that the difficulties which according to the newspapers are besetting some

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of the unions—the unofficial strikes, the shop stewards movement, yes, and so far as it has gone and has any importance, the drift towards Communism—may be due in part to the tendency towards a kind of union bureaucracy, an aloofness, and a consequent disregard of local feeling and prejudices. If I am right in that, closer local co-operation would strengthen and not weaken the unions. In any case I venture to appeal to your Lordships and to the Government to give this aspect of our economic difficulties full and earnest consideration. It was very well said by my noble friend Lord Brand in his speech the other day, that our hope of prosperity depend on national union; and the same thing has been repeated eloquent), by the Prime Minister and by various other leaders of opinion. Some have even gone as far—I think one of your Lordships did yesterday—as to suggest a political Coalition. I earnestly hope we shall not be driven to that. I have a horror of Coalitions, except perhaps in war-time. They seem to me to make for inefficiency and insincerity. But to industrial unity there is no such objection.
The other day a distinguished scientific professor, Professor Oliphant, recited a list of the horrors which a new war would bring—not only atomic bombs, but a great many other things. It was terrifying reading. The only safeguard is the preservation of peace; there is no other way to stop it. I believe that nothing is more necessary than industrial good will and co-operation in this country and in the Commonwealth, which has always been the chief adversary of war. What I am recommending is nothing new. The civilized world is engaged in one of the greatest controversies possible. On one side is what is called dialectical materialism—a horrible delusion. On the other side is what I must venture to call applied Christianity; and it is that which I am advocating this afternoon.
5.27 p.m.
LORD LAYTON: My Lords, it would be tempting to follow the noble Viscount, Lord Cecil, into the questions which he has raised. It is noteworthy that he is broadening out the enormous interest which he has always had in international affairs into the realm of industrial affairs. He will find many supporters on this question, myself amongst them; and
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so will the noble Viscount, Lord Hall, in his opinion that we should not have as much coal as we are having today if we had not nationalized the industry.
I wish to bring the debate back to the general question which arose out of the Government's statement, but as there has been so much said about coal this afternoon I cannot resist the temptation to add just one footnote on that subject in the form of some figures. In the last complete year of peace before the 1914–18 war, that is to say, 1913, the internal consumption of coal in this country—not production but production less exports—was 184,000,000 tons. In 1920, the year after that war, the internal consumption was 181,000,000 tons. Between the General Strike and the world depression of the 1930's the internal consumption of coal was 179,000,000 tons. In 1939 the internal consumption of coal was 180,000,000 tons. In 1946 it was 181,000,000 tons—though I am told that this was not worth the 181,000,000 tons of 1913, owing to the ash and the poor quality. But it is an interesting fact, which has a bearing on the future, fiat the internal coal consumption for a third of a century has been almost on a horizontal line, with only very slight fluctuations and practically no increase.
I have tried to get an exact estimate of how much the physical production has grown during that period; it must have been by at least 50 per cent.; it may have been much more. The noble Viscount, Lord Samuel, in his opening speed yesterday, referred to the need for the 'getter utilization of coal, and that, of course, has its bearing on the problem. I do not want to suggest that we do not need more coal than we use at home, because what coal we can produce is invaluable in the international balance of payments; but from the point of view of British productivity and its future development, we do not need to budget or plan ten years ahead for sending more and more hundreds of thousands of men into the mines. It is the back room boys who will solve the problem for us.
I come back to the general issue. The grim story that was revealed yesterday in both Houses of Parliament in the Government statement really marks a turning point in British economic history. For 156 years we had leadership and assets

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abroad. Our ancestors built up a great inheritance abroad which lifted the standard of living of the people. That trend received a very sharp blow in the First World War. We lost a very large part of our foreign investments, and we had to meet the competition of industries all over the world. That meant that we had a period of very considerable readjustment which lasted a decade. The Second World War has given a much greater blow of that kind to Britain, and we are facing to-day, therefore, not merely the problem of reconversion from war but a problem of adaptation to a new situation in which Britain has lost its investments. It is like a family that has lived on its accumulated capital plus its work, and now it has lost its accumulated capital. We have to budget for a situation from now onwards—and this debate marks the fact that the whole country realizes it—in which we have to depend on our earnings, and on our earnings alone.
The Government statement, therefore, is of enormous importance in the sense that it is the first broad outline in what is a new departure, the building up from bedrock for this country. But it is only the first step; it is very sketchy, and it is not until this debate and the debate in another place have been completed that we shall be able to fill in the details of that very broad sketch. It is very difficult to judge, too, how far it will go to meet the immediate situation. Previous speakers have said that they doubted whether it would meet it, and certainly I feel that it is insufficient. I hope that, in the reply to the debate, we shall have a closer estimation, but, so far as I can see, after allowing for all the cuts that are announced, the economies already made that were announced a month ago, the economies in Germany, in the Services and so on—after everything has been put into the pocket, it is certainly less, at a very generous estimate, than £300,000,000 compared with a deficit of £600,000,000 and a deficit in the hard currency areas of £800,000,000.
Naturally the question arises how the Government propose to fill that gap. I have no doubt that other speakers will put this point as a question. I suggest that that is the picture, as I see it, and I hope that the noble Lord, Lord Paken-
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ham, will be able to check up or give the correct picture when he replies. The fact that it is only a sketch means that it is very difficult to follow it point by point, and therefore I am not sure that the more useful course would not be to follow the precedent set by the noble Viscount, Lord Bruce, and consider the situation disclosed in the statement in a broader setting. It is of value to do that because one gets the background, as it were, to this problem; it helps to show the scale of the problem and also, which is of vital importance in judging the proposals, the question of how permanent the situation is with which Britain is faced. Are we budgeting for a long period, or for a short period?
I want for a moment to give my attention to the specific question of the economic relations and bond between the United States and this country because, after all, this crisis is, in one sense, a question between the United States and Britain. I first want to make the point that the dependence of this country on the United States for its imports is quite abnormal and contrary to the whole trend of recent history. I have a curve here which I can describe in words quite easily, showing the percentage of our imports which come from the United States. The curve shows three peaks. The trend in the latter half of the nineteenth century was for us to draw more and more imports from the United States, which was, at that time, opening out enormously with its development of cotton, wheat, oil and so on. There is a strong upward curve in our drawings from the United States, for which the United States in return took finished commodities. It reached its peak in 1897 at a figure of about 26 per cent. or thereabouts of our total imports coming from the United States.
Between that time and the First World War that percentage fell rapidly, because we turned to other sources of supply for our food, and because the United States wanted it at home, and became industrialized. The curve drops steadily to a materially lower figure in 1914—below 20 per cent. Then came the First World War, and our need to crowd all our shipping on to the North Atlantic, and during that war the percentage rose to 36. That is a very sharp upward move in the curve. But, as soon as the war was over, it was followed up by a sharp

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downward move, and then the sagging tendency renews itself. In 1934, that percentage was down to 11, and in 1938 it was slightly higher at 12 and a little per cent. Then the Second World War came, and in 1944 it had risen higher than in the First World War to no less than 40 per cent. There is a trend shown in the curve, with a peak in the First World War and a peak in the Second World War. Some of that peak has fallen off with the stoppage of munitions, but the point is that for the time being the drop in the curve has been checked, because the recovery of all our other markets has been so delayed.
This is a crisis of prolonged adjustment, speaking economically. What are the causes of that delay and how far are they capable of adjustment by policy? Of course, first of all, there is the slow speed of peace-making; two and a half years and we have not yet peace with Germany. That unquestionably is a fault which has to be shared, and this country cannot escape altogether from a part of the blame for that, seeing that Potsdam was a joint responsibility of both Conservative and Labour sides—I think it was stated as a national responsibility—and that the signing of Potsdam was one of the things to which this country agreed, which has undoubtedly served to delay our economic recovery. That has reacted in various ways, including a reaction on the world supply of food. In that respect not only have we made political mistakes but we have had bad luck with the harvest. Sir John Boyd Orr has said:
"The food position of the world is no better than it was a year ago and, unless measures are taken to provide the war devastated countries with agricultural equipment and other requisites for the 1948 harvest, a severe food shortage will last for at least two years more."
There is no doubt at all that the world shortage of food is one of the most important things which is delaying the adjustment of which I have spoken. But there is one factor, of which I will only speak very shortly, which I think is attributable wholly and completely to His Majesty's Government, and that is the delay in really getting out plans, of which yesterday's statement was in a sense the first attempt. The closing down of the war-time planning organization, and the slowness with which the Government have pulled themselves together for the
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purpose of planning, undoubtedly played an important role in delaying reorganisation.
Note in passing that, if my thesis is correct, and I am sure the economic trends are certainly sound, this tendency to drop in our dependence on the United States might well be thought to have a bearing on the famous discrimination clause in the Loan Agreement, because it is sometimes supposed that the Loan Agreement assumes that the proportions of our imports from all sources will, in all circumstances, remain the same. But, of course, as my noble friend Lord Trefgarne, who spoke about this matter yesterday, pointed out in his description, that is not the case. What the clause says is, that the proportions are to remain the same where the imports are under control, except on account of commercial considerations. In other words, if other countries than the United States wire offering the same goods cheaper, we should be perfectly entitled to take them. The clause in fact, as was stated yesterday, is not operative at the moment in the main, because, broadly speaking. the other countries concerned have not got the goods to supply to us. But I do agree with Lord Trefgarne—and I think perhaps this may be dealt with in Ire reply from the Government Bench—that there is a very strong case for saying that the non-availability of dollars is a commercial consideration under that clause, and that in fact would in present circumstances, or might shortly, become a difficulty in regard to the promise not to discriminate as between sources of supply.
But sooner or later a change—the disappearance of our undue dependence upon the United States—will take place. Can we accelerate that? If you look at markets very briefly-it is not possible to discuss this at length—the Empire has already been spoken of in this context, and is a very great standby. There is another very important issue in the case of India. It cannot be too strongly stated that India for many years was cur largest single market. An economic agreement with India is of the greatest urgency at the present time, and it is to be hoped that our commercial relations with India will be developed during this period of change.
The vital area, of course, is Europe. if I may take it from the point of view of

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food, which is such a key issue at the moment, it is not always realized that the greatest wheat producing Continent is Europe west of the Urals, leaving out Russia. Indeed, the average wheat harvest in the five-year period 1930–1934 in Europe was almost equal to the combined wheat harvest of the United States and Russia put together. The wheat production of France in 1938 was greater than the wheat production in that year of Canada. That certainly is not generally realized. The 360,000,000 in Europe are growing a large part of their wheat, and it is only the overflow-margin that moves backwards and forwards across the world. I have quoted Sir John Boyd Orr's reference to the fact that it was feared that this year's harvest will be less than was estimated. It is likely to be six per cent. down, and that reduces that harvest, which is the harvest of the greatest wheat-producing continent of the world, to 72 per cent. of the pre-war figure. That is a very big drop, and the gap has to be filled by drawing on the margins that sail the seas. Until that has been corrected, our economy cannot correct itself, and the whole situation will remain in disequilibrium.
The meaning of those facts is important. If the food production of Europe is to be reviewed, the price of wheat, and of many other things which are rising higher and higher because of shortage, must come down, and the ratio between food prices adjusted in the right direction. It is vital also to our balance of payments, for this reason, that as the basic production of Europe recovers Europe can become a most important market for British exports. Therefore I deeply and profoundly disagree with the noble Lord, Lord Cherwell, who seemed to think that the discussions which are going on in Paris were not of great importance, and rather under-rated the importance to us of the Marshall Plan. I venture to suggest that there is nothing in the situation more vital in providing the answer to the present situation than the Marshall Plan. The conclusion I would draw from what I have been saying is that there has been a delay, and the time-table has been prolonged, by mistakes of government, by political reasons, and by bad luck, for another two or three years. That has naturally to be
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put into the balance when we are considering the length of the period for which we have now to legislate.
I would like quickly to say something about the background at home. Here again, I find 'myself in disagreement with Lord Cherwell. It is important that this point should be cleared up if possible from the Government Benches. I do not accept his proposition that our production is less than it was before the war. On the contrary, I believe the figures show that a total goods and services estimated quantitatively for 1946 were about 115 in relation to 100 in 1936, and are at the same level now, after having fallen during the coal dispute. Steel is up. The volume of railway traffic is up, passenger and goods. The consumption of gas and electricity is up. Coal consumption is about the same. Taking all industries together, the total production is up.
If that is so, why the crisis? And of course the answer is that even 115 is still insufficient contrasted with our abnormal commitments, commitments so big that no production index we may expect to attain in a reasonable space of time can equal it. I include not only the need to maintain pre-war standards of living and strengthening them in that part of the population where they need strengthening, but also immense capital replacements, arrears of maintenance, modernization and in certain directions re-equipment of industry. There is involved an immense Government expenditure of capital on health services and education, and on that same national income has to be charged the upkeep of the British zone of Germany and of course our military commitments. When you add those together they are, out of all proportion, in excess of our present production index. Therefore it seems to me, although it was not very clearly defined in the statement. from the Government, that the most important internal step is to reduce capital commitments. For two reasons. One is in order to reduce inflationary pressure. The other is that if you concentrate your production into a more limited number of channels you will get a speedier production, which is cheaper from the export point of view and puts money in the hands of people who are turning out corresponding goods to balance. In short, less money and more goods.

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When it comes to the points of the plan, I must talk generally, as it is impossible to go into details. They require a great deal of thinking over. Broadly, so far as they go as a series of headings, I do not think anybody would have any quarrel with them. Agriculture must clearly stand in the front, certainly as a long-term proposition. The only complaint one would make is this: Why is it a long-term proposition and not an immediate one? Cuts in capital commitments were vaguely referred to, but I take it that the intention of the Government is to prune these programmes very drastically. To do that and to concentrate industry will unquestionably involve some power of direction both of firms and labour, but I think the Government must not expect a blank cheque here. And it will not be misunderstood if the powers in the Bill that is to come are scrutinized with a very keen eye indeed.
A moment ago I used the word "concentrate" and I want to suggest that it may prove indeed necessary to do some concentration of industry, possibly for export and possibly in other directions, on an analogy with the concentration of industry which took place during the war. I want to make the point very forcibly that it must be done in the closest' collaboration with both sides of industry, with the major part being taken by the employers and organized labour. When I say that, I mean it is impossible to do that sort of thing to-day centrally from Whitehall. The only way is to give leaders of industry a job of work to do, not bring them back into a Government office. That is the only way to get unity of purpose of the whole nation in this terrific campaign.
I am reminded of a conversation I had with M. Monnet, whose plan for France attracted a great deal of attention a year ago. I said: "How is it you have managed to put over so many things and get them accepted by labour—increase of hours and so on—which one would have expected would have met with so much obstruction? " He said: "We made them realize it was their plan." We never allowed a Government official to take the chair at any meeting; it always was either a representative of labour or of capital. We put the position before them with all the relevant material and asked them to suggest the answer. It
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therefore became "Our Plan," and when a change of Government took place and there was a disposition on the part of the Government to water down the plan to current resources, to see how they would work for the rest of the year, the Labour representatives at once got up and said that if that was all that was going to happen they washed their hands of be whole affair, because they could not ask the workers of France to accept longer hours unless there was some assurance of prosperity at the end of five years to hope for. They had made their plan, they were linked to it and they were going to hold to it whatever Government came in or went out. That is the conception we have to put over in this country. If we have to concentrate industry or take other measures for moving labour and capital about, I recommend most strongly that general conception.
I have only one other point to make and that relates to cuts. Quite rightly the Government have refused to cut raw materials, except in the case of timber, which is a capital cut of the kind I indicated. Any general cut in raw materials means industrial paralysis and a gradual reduction of the means of buying anything more. The food cut is very severe. So far as I can gather it represents about 50 per cent. of cur present purchases from hard currency areas. I think that figure is probably right but it may be checked.
THE CHANCELLOR OF THE DUCHY OF LANCASTER (LORD PAKENHAM: That is food?
LORD LAYTON: Yes, food cuts. It is of that order of magnitude, and that is a very considerable figure indeed. It is not to be supposed that it can possibly be placed from soft currency areas at once; it may, to some extent, but obviously only in a small measure. Important points were made in the Prime Minister's statement, when he said, first, that the impact of that would be on points; and, secondly, that if the rationing had to be cut, it would be cut on a discriminating basis. No doubt subsequent speakers will ask the Government how, in the light of that big cut, it is possible to maintain the nutrition of the country. I only want to say one thing on that, and it is this. With all its disadvantages, it does strike me as a wise and sound thing to-day to withdraw from the market

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for all food in hard currency countries, except for our long-term contracts. I say that largely because it may help to lower the general price level of food, which is a vital element in the international balance of payments. That may be stigmatized across the Atlantic as a buyers' strike. It will probably be imitated by other countries, but they will imitate it for the same reason that we have had to do it. A buyers' strike is obviously a misnomer when, in fact, you withdraw from the market because you have no money to buy. That is the situation. If it should have the effect of lowering prices, it will have been a very important contribution towards the re-establishment of our balance.
In saying that, I would like to make it quite clear that I am not saying it in any sense of hostility to the United States; nor has anything I have said been of that nature. It is obvious that every reference that has been made to the United States has made it quite clear that, first, this country cannot conceive itself going on indefinitely as the pensioner of the United States; and, secondly, that we have the profoundest gratitude to the United States for what they have done during and since the war. This is my last word. I agree with the noble Lord who said that our relations with the United States would be best on a basis of complete understanding and frankness. That is how best we shall maintain our co-operation with them. As I say, this country realizes its enormous debt of gratitude to the United States. We must, however, destroy illusions between the two countries, which exist on both sides; and it is only when we destroy the illusions harboured on one side or the other that we shall be able to enter into that co-operation between ourselves and our cousins across the sea, which is, as I see it at all events, the hope of the world.
6.3 p.m.
LORD HAWKE: My Lords, I am quite incapable of commenting on the very learned and brilliant speech of the noble Lord who has just sat down. It is clearly one that will have to be studied with great care in the OFFICIAL REPORT. But I particularly like one of his final statements, that there was a hope of heating down these awful prices we are having to pay for foodstuffs by sitting out of the American market for a time. I hope the noble Viscount, the First Lord of the
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Admiralty, will not forget his promise to tell us at some future date some of the technical details of coal, because I, for one, will be a very interested listener. I am anxious to buy 100,000 tons of coal to ship to the Western Hemisphere next year, and if the noble Viscount could suggest some co-partnership scheme at the coal face, then between us we may be able to come to terms.
VISCOUNT HALL: Shall we go down together?
LORD HAWKE: Currency convertible into other currencies seems to me to be a mark of civilization, but whether we have aspired to the mantle of civilization before we have the power to support it is a matter for argument. The superficial cause of the present crisis is obviously the world shortage of dollars, but I wonder whether, if this reason had not occurred, another would not have been found before long. The moment our currency becomes convertible we, as a great trading nation and the banker of the world, have to behave like a banker. In other words, we have to manage our affairs with discretion and circumspection, or there is a run on the bank. The world must have confidence in our ability to restore our war losses, and I cannot think that we have altogether achieved that confidence. War is the great destroyer, and it .s the duty of any Government in office after war to restore, as soon as possible, as much as possible of the national economy: or, rather, it is the duty of the Government to create the conditions under which the people can do the restoration, because it is not Governments that do these things, but men and women. If these matters are tackled properly, then the confidence of the world will be gained, and a balance kept here which will tide us over the temporary period of trade deficit.
In the first instance, this means production. But production in itself is not enough, because if all production went in current consumption there would be no margin for restoration or, indeed, for exports. To accompany production, then, we must have savings. To achieve this we must create an atmosphere in which production and savings can flourish. What sort of atmosphere do we want for this purpose? We must not have inflation, because that is the deadly enemy of abstinence. At the same time, we do

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not want too much deflation, because that is not good for production. Men must feel that by extra effort, or by extra risk, they can obtain an extra reward and keep it for themselves. Men must also think that by postponing tasting the fruits of that reward it will fructify with time. In other words, they must feel that they may get better value for their money if they wait; that their money will not melt away by inflation, or be confiscated by the State, but meanwhile can earn a satisfactory interest.
Every man must become aware of his responsibility to provide against misfortune. If he leaves these things to the State, the State, by his very neglect to save, will itself be unable to provide these things for him, for social security means nothing unless backed by a large volume of private savings. If we can create an atmosphere of this sort men can exert themselves and may exercise abstinence in the consumption of the fruits of their toil. They will not exert themselves for the State, or save for the State, in times of peace, for man is still an individualist and the family, thank God, is still the economic unit of the State.
What steps have His Majesty's Government taken to produce this atmosphere, and what results have they achieved? In the first place, a great burden of taxation has been maintained. Now at first sight taxation is deflationary; it takes the spending money out of the pockets of the people. But when it goes too far it is inflationary. When you try to take more than a certain proportion of the national income away from the people by taxation, the reaction of the body politic is to increase the national income not by production—far from it—but by inflation; and in fact production will decline through lack of incentive. In another direction, high taxation is inflationary because it enables the Government to employ too large a proportion of the nation on unproductive tasks.
There is a further inflationary effect of high direct taxation. It acts as a bludgeon, distinguishing only very little between men in the same income class. The man whose commitments are very large will find the load overwhelming. He will live by selling assets, and if the inflation caused by taxation helps him in this he may well be followed by others who have not the same need to do so. In
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other words, bad habits are catching. Another great evil of high direct taxation is, of course, evasion, which can have never been so rife as it is in this country to-day, from the old age pensioners to tae millionaire, and many fine brains are wasted advising on legal avoidance. To sum up, taxation, particularly direct taxation, creates a slow but vicious circle of inflation, accompanied by a widespread evasion and sapping of the will to produce. So far the actions of His Majesty's Government in the field of taxation have not been such as to provide an atmosphere suitable for production and abstinence.
I now turn to another factor which has been equally disastrous, and that is the cheaper money drive. In the course of this campaign. His Majesty's Government have increased the price of every income-producing asset in the Kingdom and with it, of course, the price of every other asst, thus further adding to the inflation. In the event, the inflationary atmosphere caused by these two main factors has been quite disastrous to savings and production. The standard of expenditure of the nation has been higher than the situation would justify, and has not been deterred by any example set by His Majesty's Government. The result has been too low production and too high current consumption, leaving too little for savings. and restoration.
Who got us into this mess? The noble Lord, Lord Calverley, said he thought it: was the economists. These witch-doctors of the modern State certainly speak out in no uncertain manner, but they very rarely achieve unanimity, and I think the task of a professional economist at the Exchequer in attempting to act as a judge and not as an advocate in his own court must be overwhelming. How are we to get out of the mess? When in doubt I suggest that recourse to the methods of our grandfathers is frequently a wise proceeding. A classic remedy for over-consumption and living beyond our means is dearer money, and I suggest that this should be applied at a level which Will defend itself now and after January 1. It is no good losing the battle for 2½ per cent. to find another battle of doubtful outcome on the 3½ per cent. loan. The Alamein line may well be further back. Classic remedies for under-production are reduction in direct taxation and in Government expenditure. If Government ex-

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penditure on subsidies and emoluments is drastically reduced, and indirect taxation is maintained, surely we could aim at an Income Tax of something in the neighbourhood of 5s. in the £ thus giving a great incentive to practically every member of the population. A further smaller point which has been brought to my notice, and of which I hope the Government will take notice, is this. Is it not an anomaly that in these days the old age pensioner, between 65 and 70, if he goes to work loses a portion of his pension?
Then we come up against one of the greatest problems of the modern State. and that is savings. The modern State exists largely as a machine for removing money from the pockets of those who have the tradition of saving and handing it over to those who have unfortunately not acquired that tradition. In these circumstances, how can we get the immense volume of saving which is required to-day out of the people who now have the wherewithal to save? On these Benches we stand for high wages for high production, but somehow out of those high wages we have to obtain this enormous volume of savings to implement these various Bills that we have had before us.
The best solution that I can see is to shift the method of taxation more from direct to indirect taxation, in the belief that the wage earners will thereby get more through increased production, and the salary earners will get more through less taxation. We must then launch a great campaign to try to see that as much of this money as possible is saved. The salary earners are easier to deal with, for they have the long tradition of life insurance and so on which we must seek to increase. The wage earner is a really difficult problem, and I suggest a much more realistic approach by the National Savings Movement. They could appeal less to the general patriotic instincts of the people than to the more private instincts of home and family. This may mean letting the cat out of the bag that the State is a bad universal provider, but it has got to be done sooner or later.
Our need for savings is desperate. The noble Lord, Lord Layton, suggested that we must cut down our capital commitments. My thesis is precisely the same; we must either save more money or cut down our capital commitments. We
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desperately need houses. Cannot we marry these two things together? Cannot we provide an inducement for the thrifty, that a man can own his own house if he chooses to deny himself in order to buy it? After all men will deny themselves a great deal if by so doing they can avoid thereafter a long sojourn with their mothers-in-law! If by these and other methods we can get greater production and greater savings we shall regain the confidence of the world. The balances of the world will stay here if we offer attractive rates of interest, and in due course they will be spent on our goods. Meanwhile they will tide us over any temporary trade deficits.
6.21 p.m.
LORD DUKESTON: My Lords, we have had a debate, lasting now almost two days, which has been at a very high level, and it is exceedingly difficult to avoid traversing the ground already covered. I will do my best to lay a little emphasis here and there, and I come to the immediate problem which confronts us now. Most economists, although they always talk about a short-term policy, invariably expound a policy which obviously could not operate for a period of years. If we can apply our minds to what I think the noble Viscount, Lord Cecil of Chelwood, referred to as the central problem of to-day—namely, how to secure an immediate increase in production—we may be helping the country and perhaps making the approach to the long-term policy a little easier than it would otherwise be. If, of course, this great economic problem were something that we could approach by simply wiping the slate clean, and making an entirely new start, the task would be relatively easy.
But we cannot escape from our history. We cannot evade the traditions or the prejudices which have grown up in our midst, and I think it is profitable to face them quite frankly. I was very much interested in the brief survey made by my noble friend Viscount Hall, and particularly in his arithmetic in which he balanced the position in the post-war world after World War No. r as contrasted with what has happened now. Those of us who lived through that period have bitter recollections of how the first post-war effort in 1919 broke down, with lamentable results. I do not think that is

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going too far back. at all if we are to understand the problem that confronts us to-day. In fact, if I were going to analyze this problem thoroughly I should go back prior to the First World War.
Perhaps I may tell your Lordships' House that from 1911 to 1914 I was never out of a strike. I do not think I ever advised one, but I led many and I make no apology. We were living then in a period of rising prices and declining wages. We had acute unemployment, and it is difficult to imagine what might have happened if the war of 1914 had not brought the social conflict to an abrupt end. I am very pleased that it did end, but I am not too happy about the cause that brought it to an end. Some noble Lords will remember the development of the conflict in that early episode of the Liverpool Dock Strike. I will not relate that history, but some noble Lords present will remember it, perhaps as well as I do. It is just as well that we should have that kind of background in considering what it is we have to do now.
We hear many complaints of absenteeism. We all deplore it, but we are apt to forget that throughout the interwar years absenteeism was called by a different name: it was called "short-time working." In those years the workpeople largely became inured to that kind of short-time working as an alternative to total unemployment. It is very easy to make speeches and appeals, but, human nature being what it is, we do not change the character of a people as easily as all that. Those of us who, had to handle those great human problems know the difference between stating what we would like to achieve and getting people in the mass to conform to what appears in the debates in your Lordships' House and elsewhere to be so very reasonable. I agree as to the reasonableness; but when we have to handle men in the mass we find matters rather different from the form in which they are presented in debate, even at the high level of your Lordships' House.
I do not want to traverse the ground covered by my noble friend Viscount Hall relating particularly to the mining problem, but perhaps I may say this. We shall not completely understand the mining problem by just looking at the arithmetic. There are thousands of men in the mines to-day whom it would be very difficult to describe as miners if
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we are talking in terms of mining efficiency. We have a lot of unwilling miners in the mines, and our misfortune is that we have got no other supply front which to replace them. If the new policy of the Government of bringing home men who are serving overseas results in bringing some more willing recruits into the mines, then I think there is a reasonable prospect that we may be able to step tip our production.
But let me for a brief moment, and in no sense of offering an apology on behalf of the miners, say quite frankly that the miners are getting a little tired of being singled out and lectured. That is the impression that the miners create upon me, and it is certainly the opinion of their leaders. Too many people in the country are always thinking in terms of what the other fellow ought to do. We accuse the miners of absenteeism. They go to the "dogs" and they do many things that inevitably interfere with the flow of production, but miners' leaders find it exceedingly difficult to go into a mining area and chastise the miners for absenteeism when within the very region of their pits and their habitations 50,000 to 60,000 people attend the Doncaster races. I suggest that it is not an easy task, even if we were to convey into that area all the oratory of your Lordships' House, to persuade the miners that it is wrong for them to go to the dog tracks, when all and sundry may go to the Doncaster Races. I am not condemning them; I like a little sport myself. But if we are going to approach this problem, it should be understood that everybody must conform to what, for the time being, might be regarded as the new morality in relation to productive effort. I must say that the miners will be no worse than any other element in the community. I think it is very necessary that your Lordships should be reminded of those matters in consideration of this problem.
There are some points to which I think we ought to refer, which, so far as I have heard, have not hitherto been referred to at all. We have to effect economy in raw materials and power supply, wherever that becomes practicable. We have this great difficulty of the electricity load, and our information is that we must at the peak period shed no less than one-third of that load. But that is only the beginning of the problem. How are we to deploy our labour force in the industries

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of the country to effect that end? It means further sacrifices. It means that we shall have to recast our systems of work; it means we shall have to consider—and perhaps I am not giving any secret away if I say it is at present under active consideration—making arrangements whereby young persons and women can work in hours in which at the present time they are prohibited from being employed. It may mean a six o'clock start for young people of sixteen years of age. These are very easy things to suggest, but those of us who have to get them accepted have an entirely different problem. I am convinced it must be done, and I think we shall hear more about it in the course of the next few days. It may mean an extension of the third shift system of working, or, in some particular industries, even four-shift working. I suggest that these are matters which cannot be put into operation simply by committing them to paper, and putting them on the notice board in the factory or workshop.
I was very interested in the point raised by the noble Viscount, Lord Cecil of Chelwood. I am of the opinion that very few people in this country realize the degree of co-operation that exists in industry. One noble Lord made a reference to unofficial strikes, sporadic disputes, and things of that sort, and reminded us that we can always get Press headlines for that kind of thing, but we never get any publicity for the day-to-day work that is carried on by the leaders of industry, which is far more important. That is the misfortune of the circumstances. Perhaps I can tell your Lordships one or two things that are being done. I believe that the extra half hour for miners is actively under consideration; and I think I can say, so far as the leaders are concerned, that that policy will be urged upon the miners of the country. It required a great deal of co-operative effort to achieve that.
The things to which I have referred are matters which are now under active consideration at the highest level by the Joint Industrial Advisory Council, to which I made some reference in your Lordships' House some little time ago. That body is constituted, on the one side of the Federation of British Industries and the Employers' Confederation, and the T.U.C. on the other side. I am pleased
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to be able to inform your Lordships that we are now bringing into more active operation the Regional Production Boards, and we are going to hand on these policies to them, and also hand on to them the responsibility of implementing them when they are finally agreed to. I do not think we shall have to wait very long. I suggest that this is a degree of co-operation which has never previously existed in this country. In war-time, of course, we do many things under the urge of fear; but people are no longer afraid of the enemy at the gate—although there is an economic enemy, and there is a battle of production that we have got to try to win. I believe this is the way of winning it.
If we can begin by establishing national and regional machinery, bringing the representatives of industry together, I see no reason why we should not extend that form of co-operation right from the top to the workshop level (or the other way round, if people like to put it that way). The things we have to do to effect an increased production mean a suspension of agreements which have taken half a century to build up; and industry, in this old industrial country of ours, is so complex that it is difficult to touch it at any point without creating a new problem. It is so in the staggering of hours, which I think is a very large contribution to our production effort. Even there we find that special arrangements will have to be made for women and young persons to work six hours with just an interval of fifteen minutes; and the moment we are through difficulties of that sort we are into problems of transport, because the alteration of hours of employment inevitably brings up new transport problems. We shall not get women to work double day shifts unless the transport is there to take them home.
These changes will have to be attempted in localities and in parts of the country where traditionally the workers have always resented and resisted the obligation of double-shift working. But I suggest that, with the incoming of more modern machinery, nothing can be more profitable in the great textile industries of the country than to get double day shift working. I suggest that if co-operation by both sides of industry can be built up to give effect to some of these changes, the result will be an enormous economy. I was in Lancashire recently and saw some

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of the new American spinning frames. They are very expensive machinery; I believe three of these machines cast £64,000. But I was very sorry to learn that for sixteen hours in the day they stand idle. These are some of the difficult competitive facts that this country has to face, because in other parts of the world the machines turn over wherever practicable, apart from maintenance at the weekend, twenty-four hours in the day. It seems to me that that is the only kind of efficient production upon which we can restore our economy.
I know that Viscount Cecil of Chelwood had to go. I am very sorry; I wish he had been here because I want to say something about this problem of co-partner-ship. It has a very bad name. I am not saying that the idea is wrong, but, apart from the exceptions—and the noble Viscount mentioned one that I know something about, and it is an exception; I had better say that—employers for many years used this as a means of seducing workers from their allegiance to their trade unions. It is a fact that, unless some new name is coined for it, it simply is not going to work. That is the way that things inevitably develop. I was very pleased to hear what he had to say regarding forms of co-operation in industry, but I doubt very much whether he is up to date in his information. I say that kindly; I am inclined to the view that he has rather forgotten the machinery built up even in the very industry to which he referred. Here is a rather glaring example of something I have already mentioned. The specific reference that he made is to a company that has never been associated with the Joint Industrial Council for that industry which was one of the first to be formed. That is the kind of thing that creates much of the suspicion that is in the minds of the workpeople in this country.
I am one of those who believe that we have to make a new approach to this problem. I said so in my presidential address to the British Trades Union Congress. We have to turn our back upon all those restrictions and practices which hitherto, for good or ill, were practised in the belief that in some way, shape or form they protected the workers' interests. In a statement that I made in a Sunday newspaper—the article was written more than a month ago but appeared only this
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week-end and I quote it with the consent of your Lordships merely to prove that this is no new idea—I said:
"Wages and working conditions are no longer the sole incentive. Young people will not be content to stake their future in industries where the incentives of the nineteenth century and the first half of the twentieth century left the workers generally at the mercy of conditions which they themselves had no voice in regulating."
So that we have got to do a little propaganda on both sides of industry and we must start from what I think is the reasonable position of accepting the view which I rather gathered is the view of the noble Viscount—that those who invest their life in industry have as much right to a say in the management as those who invest their money. I think that is incontrovertible. You cannot have at the disposal of an employer, even if that employer be the State, a reservoir of labour that can be called upon at any time, dismissed or put on short time, arid expect that labour to remain always on tap to meet the employer's convenience. That day has gone. Much of that kind of thing practised over so many years has built up a great deal of the bitterness that we have to do our best now to remove.
I was interested to hear my noble friend Viscount Hall, when dealing with the problem of the miners, making a general reference to the basic industries of the country. It is a fact: the farther you get away from the basic industries, the greater the prospect of enjoying not only reasonable wages, but the best working conditions. If we are going to attract people back again into those basic industries, then those industries have to be shaken up. I confess immediately that the mining problem is a problem entirely apart from others, notwithstanding the general principle that I am now enunciating. We cannot take modern factory conditions down the mine and right through to the workings: we know that to be a physical impossibility. If we think of the basic textile industries of the country and we come to realize that there is a labour shortage in cotton textiles alone of something approaching 200,000 people, how are we to attract back again into that basic industry women who have had a war-time experience of working under ideal workshop conditions, receiving a higher remuneration, and

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working under conditions in which they could leave and go home looking as respectable as though they were employed—in many cases, at all events—in an office? So I think the basic industries have got to be shaken up.
It is not a bit of use just assuming that this is a problem of labour reluctant to work hard and all the rest of it. I believe that the present generation are no worse than the past. In many respects I think they are much better and give a far better labour effort than they have ever given before. I suggest to your Lordships' House that there is a far greater co-operative spirit in industry as a whole now than has ever existed before in this country—fortunately for us. We have had none of the post-war bitternesses at the end of this war, notwithstanding that there has been here and there a sporadic strike which I suggest has been quite unnecessarily magnified. While that has been a little irritating, there is no reason at all why it should be given such a prominence as to throw a rather heavy shadow upon the workers' effort generally.
I shall not trouble your Lordships by traversing any of the main economic factors that have been referred to, but I have this as as a growing conviction. It is perhaps not all to the bad that this crisis has come upon us. I think that the sooner this country can stand on its own feet the better it will be for our future. The less we need to lean upon any other country, the better it is going to be for us in the long run. I have had sufficient recent experience to be able to say that, where we can meet people in the mass and be less inclined to score Party points than to put the facts of the existing economic situation frankly before them, I have found no reluctance at all on their part to express their willingness to cooperate to the full. Our duty is to try to marshal that spirit and that will, and I am certain that if, now that we are confronted by this difficult economic situation which we know is to hand, we face that courageously and make an appeal to our people, they will respond in a manner that will give us a productive effort which will contribute very largely to getting us out of the present difficulty.
6.50 p.m.
LORD WARDINGTON: My Lords, I do not know whether it would be to your
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Lordships' convenience that we should adjourn. I cannot flatter myself that what I have to say is going to be of any outstanding value, but I am afraid I cannot say what I had proposed to say in less than a quarter of an hour or twenty minutes. So I am in your Lordships' hands.
LORD AMMON: Perhaps noble Lords would agree that it would be convenient if we adjourned now.
THE MARQUESS OF SALISBURY: I agree.
[The sitting was suspended at nine minutes before seven o'clock, and resumed at twenty minutes past eight.]
LORD WARDINGTON: My Lords, the noble Lord, Lord Hawke, who spoke just now said that as he was not a banker he was not going to indulge in any arithmetical calculations and statistics or figures. Although I am a banker, it may be a disappointment to your Lordships—or much more likely a relief—that I, too, am not going to trouble you with statistics and figures. It is really with considerable diffidence that I venture to address to the House a few remarks, as so much has already been said and there is so little which one can say which will be of any great help. We do, however, owe a great debt of gratitude to the noble Viscount who initiated this debate and who has so clearly and eloquently demonstrated the seriousness of the crisis with which we are confronted. It is because of that seriousness that I hope I may be forgiven if I emphasize some points which have already been made and make some obvious and, I am afraid, rather platitudinous remarks on matters which are well known to your Lordships but are perhaps not known generally outside to the same extent; and they may help me in making the general outline of the picture a little clearer.
We are, as the President of the Board of Trade (Sir Stafford Cripps) stated the other day, engaged in the battle of the balance of payments. I wonder how much that conveys to the general public. The plain fact is that we have been 'living beyond our means and that we are buying from abroad a large portion of our food without which we cannot exist, and a

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large portion of our raw materials without which we cannot find employment for our people, and we are paying for them with the help of money borrowed from America, of which only a small balance is still available and which, at the present rate of expenditure, has a very short life. What then? I have seen in my business career, only too often, the truth of Shakespeare's dictum that "A loan oft loses both itself and friend." If it fails in its original purpose of setting business on its feet again, if it is frittered away, if by some miscalculation or unlucky chance it proves insufficient for its purpose, how else can we pay for what we need when the loan is exhausted. We have a limited amount of gold and dollar exchange. I think the noble Lord, Lord Pakenham, told us yesterday that it amounted to £600,000,000. That, I presume, must be kept largely in reserve for any acute emergency.
Of course, our main method of paying for our imports is by our visible exports, if we can produce them. For instance, as we saw the other day, it might be possible to buy timber and wheat from Russia, arid pay for it by the export of our machinery. Or it might be possible to buy meat from the Argentine, and pay for it by the export of rails, textiles, or anything else they want. That sounds quite easy and understandable in ordinary conditions. But what has happened? We have failed to strike a bargain with Russia, and the Argentine has imposed restrictions on imports into her country, with the result that what would have been of mutual advantage to all three countries—as all proper business should be—is for the present, at any rate, not possible or is severely restricted. The same tendency to restrict imports is apparent in other countries, and may, as we have lately heard, prove unavoidable in our own case.
The great majority of our imports are paid for by the export of physical and visible commodities. But we have had in the past a very valuable adjunct to this means of payment in the shape of invisible exports, as they are canal. The nature of these is well known to your Lordships, but in order to complete the story perhaps I may be permitted to enumerate them. They are the freights paid by other countries for the carriage of goods and passengers in our ships; the
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premiums paid by other countries on policies taken out with British companies; the loans and services rendered to foreign countries by our financial houses; and.. lastly, the interest on investments, due to our companies and to individuals who have invested their capital abroad. Closely allied with that is the question of profits which British Companies operating abroad have made, and which they desire to remit home. All these invisible experts fulfil precisely the same function as the physical export of visible goods. My noble and learned friend Viscount Simon, on the Second Reading of the Finance Bill, showed very clearly how these had dwindled from being equal to half the total value of imports of goods and raw materials in 1913, to only one-sixth of the value of our imports in 1946. I am afraid they will drop still further in the future, because not only have our investments been largely disposed of, but restrictions are being imposed on the remittance of profits earned overseas while, paradoxically enough, the Governments concerned are expressing themselves anxious to welcome foreign capital into their country; though how they can expect capital to be invested there if the resultant profits are not allowed to be remitted home I do not know.
I know of no other means of paying for our necessary imports than those I have mentioned, and if we cannot pay for them the only alternative is that we shall have to do without what are to us necessities, with all the accompanying hardships and deprivations involved. When we were discussing these matters the other day the noble Lord, Lord Lucas, said that he was satisfied that the nationalization of our industries would so improve our exportable capacity that everything would be all right. No doubt he said that with all sincerity, and it is a belief which is shared by all his colleagues on the Benches opposite. I wish I had the same confidence and the same grounds for optimism. Seeing is believing, and I look round and fail to see any grounds for this optimism. What I am going to say is merely to illustrate my own view, and I am riot saying it with any Party view. When I look round I see that the Bank of England has been nationalized for many months. What has been the result of that? It has not provided an extra ha'p'orth of value, arid has done no good to anybody. Indeed, if

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we are to attach any importance to the silly cry which I see is being resurrected in some quarters lately—and which has as little substance now as it had when it was started in the early 'thirties—that our financial troubles and the slump on the Stock Exchange are due to a bankers' ramp, then I am afraid we are driven to the conclusion that the nationalized Bank of England has either participated in that ramp or has failed to do its duty in stopping it.
Coal mines have also been nationalized, and what has been the result of that? We all know that we are suffering from a shortage of coal and an increase in price. This, above all else, perhaps, is our greatest handicap. It is impoverishing and hampering all our industries and failing to provide an appreciable quantity for export. Again, look at our railways. Are we travelling in any greater comfort or security than we did during the war, when the trains were crowded with the movement of troops as a necessary consequence of the time? Are we paying more, or less, for the privilege of standing in corridors? Are we paying more, or less, for the cartage of goods? Indeed, we are threatened with an increase of rates which will add to the cost of all manufactured goods and still further hamper our capacity to quote competitive prices for our exports.
If it is retorted that railways are not yet nationalized my reply would be, "What good does a mere change of ownership effect?" It is the control which is the material factor. If an individual finds that his business is in trouble, does he seek to put it right or does he think the only remedy is to sell it to somebody else? When a house is found by the local inspector to be insanitary or unsafe, do the local authority purchase the house or do they tell the owner to put it right or pull it down? In all these examples I entirely fail to see how a mere change of ownership can remedy our ills, while on the other hand it adds materially to the difficulties and complications of an already difficult and complicated situation.
I have tried, in this brief broad outline, to show the difficulties which we have to face in paying our way. For many months we have been entitled to ask the Government how they propose to meet the
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situation. Up to yesterday they seemed, generally speaking, to pin their faith on the good effects to be achieved by the nationalization of our chief industries—an expectation which, as I have said, I have seen no signs of being justified. It is true that there has been a certain amount of exhortation to the country but until yesterday we had little information as to what the Government's plans were. And even after yesterday, although perhaps I see the targets more clearly, I am none the wiser as to how we are to hit them. Occasionally a lone voice is raised to show our people the critical nature of our position. I read the other day the report of a speech by the President of the Board of Trade. I agree most heartily with practically everything he said. Perhaps your Lordships will allow me to repeat a few of the things that he mentioned.
He gave pride of place to priorities for production, and his remarks here, of course, apply particularly to coal, the fundamental basis of all production. He explained that we could not as a country continue to live on "tick," any more than we could as individuals. He realized that we were in for a hard time, and that any further reduction of imports would mean definite hardships which would have to be faced, that a lower standard of living was inevitable, and that to increase profits, salaries or wages, or to shorten hours without further production, would merely increase the inflationary process and be of benefit to no one; quite the contrary. All this I believe is absolutely true. But what good are mere notes of warning, if their sound is drowned by that tiresome bird singing songs of triumph in the heart of the Chancellor of the Exchequer? The Government have not been speaking with one voice, and people are slow to pay attention to the discordant utterances of different Ministers. I know the position is a difficult one; it is very hard to be always preaching to the people, and the public are growing weary of exhortations unless they are accompanied by definite instructions, a recognition of facts, and a clear programme for reconstruction.
Perhaps I may be allowed to illustrate this by a small episode which happened to myself, though I confess that I did not come out of it with flying colours. I chanced to make some allusion, in an address to shareholders about two years ago, to the difficult times ahead and to

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the necessity for hard work and redoubled efforts in order to restore prosperity. This was reported in the Press, and I received a letter from an unknown and indignant correspondent asking how I could be so hard-hearted and unsympathetic. Did I never think of the toil and hardships ungrudgingly undertaken by thousands of members of the Mercantile Marine, who unceasingly brought me my daily bread over stormy waters, threatened from above, below and on the surface? Did I not agree that they deserved some rest and relaxation? I replied as best I could, saying that they had been seldom out of my mind, and that when I thought of them it was always with pride, gratitude, and admiration; but that the hard fact remained that the renewed efforts of everyone were required to make good the destruction of wealth—wealth of men and material—caused by the war, and to enable us satisfactorily to effect the conversion from war to peace conditions.
Shortly afterwards I received another communication, which definitely closed the correspondence, asking, "What is this that I saw in the Press? Lord Wardington has retired from the Chairmanship of the Bank and is proposing to live a life of leisure for the future." It is much more pleasant to preach comfortable things, but it is much more useful to state facts, however uncomfortable; and it is better still to take action in plenty of time. I find it encouraging and not unhelpful in the present emergency to recall the words of the late Lord Tweedsmuir. In his delightful last book, Memory Hold The Door, written after the first Great War, he writes:
"It was a war won not by the genius of the few but by the faithfulness of the many. There was no leader, civil or military, to whom I felt I could give unreasoned trust, but I could confide implicitly in the mass of my own people."
He also confessed to finding encouragement by saying that an undercurrent of optimism is in good times a luxury but in bad times it is a necessity. I share John Buchan's confidence in the mass of the people, but they must be bravely led and, above all, they must be told the truth in a way which carries conviction to their minds, and shown a clear road to victory, one that they can recognize and follow hopefully to the end.
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I can believe that the announcement of yesterday required some courage on the part of the Government, after all the pleasant promises which have been made. But cannot they take an example from our war leader, whom they so often are inclined to decry, and, though happily they are not now called upon to promise "blood and tears and sweat," can they not convince the people that in this present crisis the greatest of these is the last?
Let me take the case of coal for a moment, because, as I have already said, it is fundamental to the whole situation. A return to our pre-war figure of production would, to a large extent, sweep away our difficulties by keeping our industries going without interruption or unemployment and even by providing a balance for export. I like to speak of our miners. All my younger days I spent in their neighbourhood in the North. I knew runny personally and frequently I went down the pits. I know them as a sturdy, brave, independent race. They are not money-grubbers. When they have earned enough to satisfy their immediate wants, they like to spend their days in the open air enjoying their sports and games; and who can wonder at this? I sympathize entirely. But once convince them of a serious emergency and they will throw all that to the winds. When any of their comrades are in danger, they rush to their assistance without thought of hardship or of peril. When their country was fighting for its life in two great wars, none were bonnier fighters than the miners. If they were convinced now that again their country is literally fighting for its life from want of coal, I believe you would have the same response.
I do not know whether noble Lords have read that special article in The Times this morning on the mining industry. It is written, I think, realistically and sympathetically, but it points out that they are not convinced of the existence of a crisis. As the noble Viscount, Lord Hall, said, "How can you expect them to think there is a crisis when they see money being spent on all sides and huge crowds enjoying themselves?" They see no visible instances of a crisis. We have been talking of visible and invisible exports. I wish we could make the signs of crisis more visible, so that they really could be appreciated. How can you expect other countries to give us help and sympathy when they

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know we have the coal which, if won, would get us out of most of our difficulties, and yet is left undrawn? As Lord Brand pointed out in a letter to The Times a few months ago, they see the American Loan, which was meant to give us a breathing space in which, by our own exertions, we could restore our leading position in the world again, acting as a soporific rather than a stimulus. My Lords, I am very conscious that my contribution to this debate is of little constructive value, but my final belief is that, if the nation as a whole recognizes the serious nature of the crisis as clearly as your Lordships, all will be well. I can only hope that that recognition will take place before the full effect of the crisis shows itself in visible form in every home in the land.
8.52 p.m.
LORD ROCHDALE: My Lords, having listened with some attention to many noble Lords who have spoken during this debate, I am more than ever convinced that we have two quite separate problems facing us to-day. There is the short-term problem and the long-term problem. Many noble Lords mentioned this, in particular the noble Viscount, Lord Bruce, and, therefore, I will say very little about it; but I mention it now because I want to make one particular point about it. It seems to me that there is a very serious danger that the country as a whole will overlook the fact that there are these two problems. They will take it for granted that, if we make this tremendous effort that we have been called on to make now, then in a relatively short space of time—perhaps a year or so—everything will perhaps get substantially right, that we will get back into calmer waters, and can then carry on at the same level of individual effort that we have to-day. Never was there a more fallacious idea, or a more dangerous one.
If we are to maintain our present standard of living later on, after this present period of temporary austerity, if we are indeed to improve our standard of living as so much recent legislation pre-supposes, then we must rise to a higher level of effort. Of course, that is obvious to your Lordships, and to anyone who thinks about it, especially when one realizes the great amount of wealth of one kind and another that has been
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flung away and dissipated in the war, and the extent to which we have lost a large proportion of our invisible exports. It was only those invisible exports, which indeed had taken generations to build up, which in point of fact made it at all possible for us to have the standard of living that we had become accustomed to before the war. The gap between what we produce and what we consume, which of course the war has widened, can only be narrowed again by improved methods of production (we hope through an ever-widening use of our developing scientific knowledge), and also by improved external conditions. But again we must rely, to a very large extent, on increased individual effort on the part of everyone and not of one particular section of the country.
We are now being asked to make a supreme effort to get over the present position. That, I take it, is to meet the immediate crisis. One accepts that; the details have to be worked out and we shall see how they develop. I am not sure that it has been made sufficiently clear that, whatever we are called on to do now, to meet the long-term problem we must arrive at a higher level of national effort that is possible to sustain indefinitely. Until it is accepted that the immediate crisis does not cover the whole scope of our problem to-day then, however brilliant our planners, however hard the people work, and however favourable other factors in time become, the present short-term efforts will be worth a relatively small amount. We have to use this short-term period of austerity to prepare plans for the indefinite effort that will be required during the coming decades. During the war a great appeal was made to us. That appeal was driven home by numberless early disasters and it produced an effort unprecedented in our history. I do not believe that anything like an effort on that scale is to-day possible. We had then one quite clear objective—victory. Everyone could appreciate that. To-day, to the ordinary man in the street the objective is far more confused, and the dangers are not so easily seen in advance.
Since the war we have been suffering from many things, as your Lordships have indicated—the effect of the post-war world conditions, shortages of many commodities, and so forth. But one factor which I

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do not recollect having heard mentioned is the natural reaction after five years of over-exertion. That natural reaction has not been minimized by propaganda—and, to be quite fair, by example—whether justified at the time or not. What I am referring to is that propaganda which came all too near the gospel of "Rights before responsibilities." I hope that noble Lords will understand me when I explain that I am not saying that by way of condemnation but, just as a doctor before prescribing a cure must make a diagnosis, I see this as a factor which exists and which must be taken into account. The result is that our effort to-day has sunk back, despite what industry has done during the last two years—to give honour where honour is due, industry has made a considerable effort—not to where it was before the war but to a lower level.
One has only to look round to realize that that is apparent at all levels of income. I believe that the great demand for the five-day week which we have heard so much about—I am not referring to the five-day week in the coal mines because I know nothing about the coal industry—is a symptom of what I have been trying to put to your Lordships. Personally I am very much in favour of the five-day week. I only wish that when I was working a five and a half day week, before I became a member of your Lordships' House, it had been a five-day week. But, having said that, one must realize what are the implications of it. They are too often overlooked. I know it is claimed that with the longer week-end the Monday morning will be approached with greater vigour, and the output will go up, which will more than compensate for the loss of the Saturday morning's work. That may he true in some cases, but in other cases it is not possible, owing to different factors altogether.
I believe those who enjoy the system far too often regard it as a means of being able to take up other more interesting week-end occupations which, in point of fact, sometimes prove to be so exhausting that the value of what should be a longer period of rest and refreshment is actually lost. This is no theoretical danger, but a very real one. The lesson is obvious and needs no further statement from me, except that I would like
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to say this. I believe that, possibly due to a lowering of the feeling of responsibility of individuals to the community at large and, therefore, to the individual becoming less susceptible to periodic national appeals, such appeals are, at best, likely to lead to only temporary bursts of activity. They are rafter like inoculations, to which in time the individual becomes immune. That is Why I instinctively feel a certain measure of suspicion about the present appeal which His Majesty's Government ire making to the country as a whole.
I would feel more happy about it if one could have some assurance on three points. The first is that it is not just one more of a series of appeals, and the second is that it is intended that it should, so far as possible, be of relatively short duration. I can illustrate that by suggesting that human beings are like machines. If you take an aeroplane or a motor car and run it flat out indefinitely, it breaks down. What you try and arrive at is the maximum optimum level of cruising speed at which it can carry on indefinitely. The third point on which I should like an assurance is that it is intended that the breathing space which this great effort is going to give us will be used, not merely to wait for some assistance from outside or for some improved conditions in the world generally, but to enable a long-term economic Flan (the noble Earl, Lord De La Warr, mentioned a ten year plan when referring to agriculture to be followed in this country. That long-term plan should be as impartial as possible, within reason, so that every member of the community can pull his weight, and not 'for one or more sections of the community to go a little easy in their efforts.
I have said something about the five day week as regards the individual. I should like to say something about that with regard to the machine aspect, because that is equally important. It is important in that, whilst admittedly there are many industrial tasks where the efforts of the individual can directly influence the output, there are equally a number (and I would not be surprised to find that there are more in this second category) where the machine goes at a certain optimum speed and is largely unaffected by the effort of the man or woman who tends it. That is often the case with heavy

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machines and with chemical processes where the machine goes at a certain speed and where, therefore, the output is solely related to the hours that the machine runs. The difficulty, of course, occurs where you get these two types of process in the same factory: that is to say, the kind of process where direct effort on the part of the operative can affect the output, and the process where direct effort on the part of the operative cannot affect the output.
In the first case, however hard the operative works, however much effort he puts in, the output must be limited by the second category. Of course, if you then change a factory from a five and a half day week to a five-day week, with the output of the slow-running machine not being related to the effort put into it, the change will be bound to produce a bottleneck there and a new balance will have to be reached. The balance, of course, can be arrived at in various ways, it may be by that particular machine running longer hours and the operative working overtime. My own feeling is that for one section of an industry to have to run overtime where the others do not, is not really satisfactory. You may put in new machines to do away with that bottleneck. That is an excellent plan, but to-day machinery is difficult to come by and may take two, three, and one has heard cases of four, years for delivery.
That brings me to my next point, which is the question of what is the policy of His Majesty's Government as regards the export of productive machinery. I would like to see a thorough review of the whole policy here, because I am not at all sure that we are not—to take a metaphor—exporting far too many of the geese which might well lay the golden eggs for us to-morrow. Is it that as a temporary and short-sighted expedient to raise more hard currency we are trying to make do with what old machinery we have, and are giving our competitors the more up-to-date modern machinery to beat us with in the future? After all, there is bound to come a time when the balance is such that the only way to increase our effective manpower is to do so by more automatic machinery, more modern machinery, more remote controls and so forth. In the 19th century it was because we led the world in the adaptation of machinery
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that we led the world in industrial effort. We want to be quite sure to-day that we shall have sufficient modern machinery at least to hold our own with the other great industrial countries of the world.
I have one other point on a similar subject which I want to mention. It is with regard to the question of manpower, a subject which the noble Viscount, Lord Ridley, mentioned. I am quite sure that there is a considerable, though obscure, loss of manpower in industry due to the shortage—I want it to be quite clear that I am not referring to the shortage of fuel and power—of quite minor things, small spare parts, special kinds of oil or special kinds of chemicals, of which in the ordinary way, before the war, we would automatically hold considerable stocks. To-day it is not possible to get many of the things I have in mind, except from hand to mouth, with the result that a whole department may quite easily be held up. While that department is held up, or is merely running slow, the operatives cannot be transferred to more productive work elsewhere. However keen they are to work they cannot produce that amount which their numbers would otherwise indicate as efficient. It is a very difficult problem, but my own feeling is that one of the reasons why there is this shortage of essential spares or factory stores is often that there is a lack of practical experience on the part of the individuals who operate the controls. I suggest that there is considerable opportunity for investigation in that direction.
In conclusion I should like to say this. Whatever practical measures the Government may decide to make, whatever steps they may take, I believe they will fall far short of the goal which they are intended to reach unless they are accompanied by a very much fuller sense of responsibility and duty on the part of everyone: in other words, a much fuller realization of fundamental values—call them ethical or spiritual values, or anything you like. I believe this is inherent in the British character. For the moment it may be somewhat in abeyance, but it is there. It is there to be evoked, and it must be evoked. This should be done not merely by the Churches, not merely by the schools and universities, which have a great responsibility in this matter, but also, I suggest, it should be done in the Forces and especially in the case of the

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young national service men when they are called up. I believe it can also be done through the trade unions. I believe there is a great opportunity there.
This is a task to which every one of us who realizes the need ought to put his hand, and we should do it not merely by precept but by example. It is a task which is not easy. It calls for tremendous imagination and great vision. That being so, I will presume to finish with a quotation which is particularly and literally appropriate to-day, as never before: "Where there is no vision the people perish."
9.13 p.m.
LORD QUIBELL: My Lords, I have listened with patience and interest to nearly all the speeches that have been delivered to-day, and certainly at this late hour one faces a problem in addressing your Lordships' House after so many speeches have already been delivered. I should like to refer, in a sentence only, to the speech of the noble Lord, Lord Wardington, in which he talked about the nationalization of the railways. I presume that he intended to convey the impression that he was not in favour—at least not enthusiastically in favour—of such nationalization. He said that he did not think there would be any guarantee that the railways would run any better under a nationalized service. But, talking of guarantees, so far as the passenger service where I come from is concerned, it could not be any worse.
I travelled up the other week from Doncaster to King's Cross and we averaged thirty miles an hour—and that was an express. I threatened the railway officials at Doncaster that I would fetch out the old "Rocket" from Darlington! That averaged thirty miles an hour, and it was the first railway engine that ever ran. I think that everything that has been done with regard to the nationalization of the railways has been justified. I wonder what the noble Lard, Lord Wardington, who I understand has been engaged in a very lucrative business—I only wish I had been a co-director of his—would have said if directors from the L.N.E.R. had come to him and asked for money to rehabilitate the railways. I have an idea he would have said, as I would have said in similar circumstances, "You have got to show me something
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better than that, or 1 cannot recommend anything for you to my co-directors. You must either show that there is an increase in income or a diminution in expenditure, or you will get nothing to rehabilitate your railways."
The noble Lord, Lord Rochdale, said that we had lost one of our greatest assets. I keep hearing about these invisible assets. I like the visible ones myself. But is it not true to say that the real asset we lost as a consequence of the two wars was the greatest of our losses—the virile manhood of this nation? Are we not as a consequence short of manpower? We all know and remember the brightest and best, most physically fit: men who went out to the war, hundreds of thousands of whom never came back. In many of our major industries we are housing machinery to an extent never before dreamed of, and yet we have not been able to make up the leeway. You cannot get away from the fact that there are still some coal mines in which it would be no help whatever to have plenty of machinery. Yet, according to some people, all you have to do to get more coal is to increase the number of coal cutting machines, and so on.
I want to refer to another matter. Coal, of course, is vital to our steel trade. I have heard speeches delivered in which there was much talk about the lack of initiative and of modernization in the steel trade of this country. I think that is only partially true. It has been stated that when industrialists at one lime wanted to modernize and to build works in geographical centres, either near water or where their raw material was, public men objected because it would destroy the whole social life of the neighbourhood to which those works were to be removed. I remember very well the case of Llanelly, when the steel works were to be moved. I was then in another place and representatives from those Parliamentary Divisions interviewed me because it was suggested that they should go into the Division that I then represented. What was the object? They said "It will destroy things completely. We have here schools, hospitals, churches and chapels, and you must not move those steel works to a site where they would be more efficient because it would destroy the whole economic life, for the time being, of that neighbourhood." Yet in that neighbourhood there were out-of-date plants. The consequence was that there

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was a plant that could have been more modern, but it was never put up.
I could take you to a steel works where there is not a shovelful of coal used, apart from local coal. The waste gases are taken from modern blast furnaces. They are then put into a gas cleaning plant. From there they go to the modern gas engine, a German gas engine, which in turn generates electricity, some 3,500 kilowatts. And the motors in turn run the whole of the steel plant, a steel plant that is turning out over 10,000 tons of steel without a shovelful of coal going into it. In my view coal is the key to most of our present troubles. Industries are compelled by force of circumstances to save coal and fuel and power. The cost of coal is such a vital factor in the production of a ton of steel that every bit of economy that the management of any steel works can effect they do effect. From Monday morning to Monday morning they are trying to find new devices in order to save this vital product. But if, alongside that, other firms continue to manufacture electric fires and electric irons and other equipment for household purposes, to such extent that it takes four or five places as big as Battersea power station to run them when they are installed, you will never solve the problem. We must cease to manufacture those things for which we cannot afford fuel and continue to manufacture those things that are essential to our recovery.
As I understand it, we want more from agriculture, and we expect to increase it by 20 per cent. Any agriculturist who knows anything about it knows how easily that could be achieved; it is a very modest claim. What is wanted is a little more courage and vision so far as agriculture is concerned. I remember reading a book—and I am perfectly certain that there is some truth in it—written over thirty years ago, when I was a young man, by Prince Kropotkin. It was called Fields, Factories and Workshops, and the writer laid down the premise that England could feed itself. That book left a great impression upon my mind. If England could not entirely feed itself, it could far more nearly do so than it is doing to-day.
I went on to a farm on Sunday—the better the day the better the deed! I went to have a look round on some farms belonging to a man who I consider is one of the most efficient farmers in the country.
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He farms 5,000 acres, and I went round to have a look at what was happening. Three days before I went there was a field of peas. When I arrived it was sown with turnips. Machines went into the field—American machines—took the peas out, and put the turnips in. The crop of peas was then put on two lorries and taken out of the field, and within 36 hours from the time it left the field the peas were all tinned. That is efficient farming. This farmer has the machinery for it. He has the money for it. He used to farm 12,000 acres, but he says that owing to the burden of taxation being so heavy he is losing his interest in farming. The consequence is that he has given up 7,000 acres of his land. He said: "Here am I, with all this modern machinery, with fertilizers, and with the means for ascertaining the quality of the land. My father farmed here eighty years ago, and if I could not grow two crops on one field I should not be much of a farmer. Anybody can grow one crop a year." But with all the modern machinery, and so on, what he did was to take his early potatoes up, twelve tons to the acre, and the pasture is growing up for his sheep at the back-end of this year.
His name is a household word in this country and he is a fine farmer, but what has it done to him? He has put up 140 cottages for his tenants, as I once mentioned before. I went to have a look at those cottages. They put to shame any cottages that we are building through the councils in the urban and rural districts of this country. He has left a bit of the old character in these homes. They fit in with the village. When I looked round some of the cottages that he has built for his men, with the aid of £100 under the Housing (Rural Workers) Act, it made me feel ashamed to think that, having made a mistake, we had not the courage to turn round and re-enact that measure. We ought to have turned round and been honest about it, and re-enacted it, in order that he might continue with this great work. That man is not alone, but that is an example from Willingham in Lincolnshire. He has done more than the two or three rural district councils. He is a modern farmer.
As to increasing production, what he says is: "I want my farm workers to be comfortable"—and there is a bathroom, a toilet, sewage works, and

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adequate water supply, all seen to by this man, who takes a full personal interest in all that happens in the farm and the village. I commend that to your favourable consideration in the campaign for increased production. If I could get one or two no Die Lords who are interested in agriculture, and who want to see what the possibilities are, it might help them to see how satisfied and comfortable these men are. They have a beautiful house, far better than the houses in my town of Scunthorpe, with gardens and everything to make them happy and comfortable and contented. The consequence is that it gets work out of them. This man is like the Scotsman who, when a man was having lunch with him, said: "You get it into you, and I will get it out of you." My friend is of that breed. He says, in regard to the production of meat, that the way to overcome that problem is not to expect the meat to come from the Argentine. He was feeding 1,000 pigs just before the war, when he could get the feeding stuffs. Now he cannot get feeding stuffs. Heaven knows, pork is not everybody's meat, but I would like a nice loin of pork for next Sunday's dinner. And no doubt there are not a few here who would like to join me in it. The farmer says, "Give us the feeding stuffs and we will produce the meat," but it will be a long time before we get back to the old position with regard to the supply of beef.
I am certain that, with all the improvisations that the Government are making in this—some of them may be right, they may all be right—they are not a solution to this problem. The solution, surely, is more production all round. We all know it. Let me give you one case. I know three camps that have been built for German prisoners of war. I know where there are six to seven hundred Poles living like gentlemen. (I do not worry about them living like gentlemen—provided that they are not living on me.) But there they are; well groomed and well fed. They have not a five-day week; in fact they start at twelve and knock off at one for dinner. There is in the immediate neighbourhood a camp to which German prisoners of war could easily be taken. This camp must remain empty while somebody, either at the War Office or the Air Ministry, or some hole and corner place in the De-
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fence Services, is deciding whether or net it is to be wanted in future. There are a team of thirty people to see that squatters do not go into it—thirty hefty fellows going into a camp that should properly be used by German prisoners of war!
Put the prisoners in; bring in four to five hundred Poles in that neighbourhood, and you will have solved the problem of labour for the great extension of steelworks at Scunthorpe. The kind of thing which irritates people who live among them and who see the practical solution, is the sight of these well-dressed fellows walking about. They are our guests, of course, but they have overstayed their welcome, so far as I am concerned. I would say: put them in camps and tell them: "Now you either work, or you go home." I would be more generous than Saint Paul, who said: "If any would not work, neither should he eat." I would not say that, so long as they did not eat anything of mine. A large number of Poles are running about doing nothing. There is a jot to be done and it is fair that the manpower available should be fully used.
There is no solution whatever in these little bits of savings. They may for a short time make a contribution, but the major contribution is for all who car. to work. I know of a certain foreman who sacked a man and sent him to the office. The man at the office, however, told him, "We cannot sack you," and sent him back. This is not a rare case; it is multiplied by hundreds. After that, of course, the foreman has no control over the man and the office say that if the mart is sacked the Labour Exchange will send no others. The consequence is that there is not that deep personal interest and keenness in industry. Those engaged in industry say: "This will not last, and it does not matter. We will give way to them." That is fatal. We shall never recover the equilibrium we want to recover unless we can kill that spirit and give more encouragement to them; and, as I say, harness everybody, both the management—who are not as keen as they might be—and the men, to get us out of the present difficulties.
9.35 p.m.
THE EARL OF RADNOR: My Lords, I think your Lordships always listen with great interest to a speech made by the

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noble Lord, Lord Quibell. I have often wondered whether I ought not to offer him a beckoning finger to come over to this side of the House. I am deterred from that, because I feel that his forthright common sense would pick holes in any administration or any Party of which he was a member. I found his speech very encouraging because, though I am not an economist and, therefore, probably ought not to take part in this debate, I see the problem that lies before the country in comparatively simple terms. It is a problem of food and fuel. Fuel is needed to keep the wheels of industry turning, and to provide the exports which we need. Other noble Lords have already spoken on this subject in this debate; it is a subject of which I know very little, and I do not propose to say anything about it. However, I do wish to say a word or two about food, because food is even more important than fuel. Food is necessary to keep us alive and, more than that, it is necessary to enable us to continue to work.
I was rather perturbed by the speech of the noble Lord, Lord Pakenham, which foreshadowed not only a curtailment of non-rationed foods and luxury foods, but also a possible curtailment of what he called basic foods, which presumably are the rationed foods. We know that in this country to-day our rations are very nearly as low as they possibly can be, if men are to continue to work. I do not know about industry, but the workers in it possibly have opportunities, through canteens and Civic Restaurants, of getting for themselves food which is off the ration. But I do know about agriculture. I know perfectly well that the agricultural workers, especially at times such as seed time, when they work hard, and hay harvest or corn harvest, when they work long hours, do not get enough food. I may tell noble Lords opposite that if we should be blessed this year—as we were not last year—with good harvest weather, men who are working on the land will be finished by mid-day Thursday, because they will not have enough food. If there is to be any curtailment of food in the future, I hope it will not affect the meagre rations which the countryman and the agricultural worker get to-day. Might I add also—this is rather irrelevant—that I hope that growing children will not be
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affected. I happen to be a father of a family, and I know their appetites.
My purpose in rising was to deal very briefly with the contribution which agriculture can make to the present crisis. As I have said, food is the most important problem that lies in front of us. May I say, incidentally, that I listened with great interest to the speech of the noble Lord, Lord Dukeston? I was interested in his comment that the peccadilloes—shall we say—of the agricultural industry, and of industry generally, have been too much stressed—particularly with regard to the fuel industry. May I suggest to him that when we are short of anything we blame the person who produces it rather than ourselves? I only hope that when we are short of food later on, the agriculturist will not be blamed in equal measure with those who produce our coal.
The target set for agriculture is to save £100,000,000 of hard currency by 1951–52. I do not think that that necessarily means that the production in this country will have to be stepped up by that amount, because I do not know the relative prices we are paying for foodstuffs from the hard currency countries, compared to the prices that are paid to our own producers. Like the noble Lord, Lord Quibell, quite candidly I think that is a very modest request. After all, as recently as February of this year that suggestion was put to this House by my noble friend Lord Teviot. At that time the noble Earl, Lord Huntingdon, poured scorn on the possibility of achieving anything like £100,000,000, and he was backed up by the noble Viscount the Leader of the House. We now come to that £100,000,000—or rather noble Lords opposite have come to it of their own volition—and it would have been very much better if they had accepted it in February last, rather than now, when it is too late to start a campaign for next year. May I say, incidentally, that I hope the agricultural community will be told as soon as possible what is expected of them? It is August now, and we are in the middle of harvest. If we get a bad day in the middle of harvest we get on with our preparations for the autumn sowings. We want to know what is asked of us, and we hope that we shall be given that programme, arid the prices we are to be paid, at the earliest possible moment.

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The noble Lord, Lord Quibell, said that England can feed itself; or rather he quoted somebody else who said that. I would not go quite so far as that, but the extent to which England can feed itself will depend upon the price which is paid to the farmer. It does not depend upon orders. You can issue orders right, left and centre and you will not get results, because it depends upon the price. I said this before, and I say it again: The price negotiating machinery is good, but the spirit in which those price negotiations are entered into by the Government is that of driving a hard bargain. If the Government are to get the full co-operation of the farming community they must not drive a hard bargain; they must be generous.
The noble Lord, Lord Quibell, spoke about a friend of his who was farming 12,000 acres, and he talked about vision and imagination. That is all very well with 12.000 acres, but the average size of farms in this country is 83 acres. The man who is farming 83 acres has little time for vision or imagination. He has his feet on the earth, and his nose on the grindstone. All he is looking to is his bank balance, his bank manager and the price. The friend to whom the noble Lord referred is farming good land. There is good land in England—a lot of good land—but there is also a lot of not so good land.
It is the smaller people who, in the ultimate issue, will make the difference between real want in this country and comparative plenty. It is these people who must be nursed and given a price for their produce which will justify them in their own eyes in continuing to produce to the absolute maximum. I know that it will mean that farmers on the better land will make a big profit, and it is unfashionable nowadays to be anybody who makes a big profit. But surely the Chancellor of the Exchequer can look after anybody who makes such a profit, and if by allowing some people to get deeply into the clutches of the Chancellor of the Exchequer at the same time you encourage a lot of small people to produce to the utmost, surely high prices in these circumstances are fully justified.
There are certain other things which are necessary in order to ensure that we get all the production that agriculture can give. First of all, there are what I call
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the weapons—fertilizers, machinery and feeding stuffs. We must have the fertilizers we require. My noble friend Earl De La Warr has talked on the question of machinery. We want the machinery within a reasonable time, not a year or two years hence. We also want—and this is very important; it has been a ruining sore in the agricultural community fir a long time—spare parts, especially for American machinery. These spare parts are not coming in, and surely His Majesty's Government, with all the powers they now have and all that they propose to take under this new Bill can ensure that someone makes those spare parts for that American machinery, if we cannot get them from America, and so keep that machinery running. This will make all the difference, especially in view of the probable shortage of labour.
I should like to spend a moment or two on the question of feeding stuffs. The noble Lord, Lord Pakenham, said that every endeavour would be made to keep up the supply of the necessary feeding stuffs. In the debate in February o this year, to which I have already referred, the noble Earl, Lord Huntingdon, made two remarks—he pointed out that they simply could not get feeding stuffs and also that a great many of the high-protein feeding stuffs came as the residue of oil seed and that that was not availably. I know of nothing that has happened between February and now which has made feeding stuffs for stock more available than they were then. I am quite certain that high-protein feeding stuffs are not available. I very much doubt whether the coarse grain feeding stuffs will be available, because they are still being used for direct human food. That means that in our agricultural programme, if it is intended to increase the amount of livestock—as I presume it is—we must pay a great deal more attention to the production of the necessary feeding stuffs at home. In other words, as my noble friend Earl De La Warr pointed out, we must press on with silage and grass drying: the steel and metal necessary to make the machines for that purpose must be available, and I hope the Minister of Agriculture will bear that in mind when he get his programme in order.
Shortage of labour, of course, underlines the necessity for keeping our machinery strength up to standard and increasing it.

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By that means one can, to some extent, mitigate any labour shortage. Also if we are going to restore the labour situation we must have not only new houses—we must have houses; the noble Lord, Lord Quibell said that and quoted his friend as having built a very large number of houses (I do not know when he did so, but if it was recently he must know ways and means of which the average landowner has no knowledge)—but we must also have the opportunity to improve our existing houses and so attract to our farms those young men whom we want to see on the land.
I would suggest that the landowner should be given a considerable measure of freedom to build houses, instead of, as now, being tied down by the four to one ratio. When any question of a tied house crops up he finds himself in grave difficulties. That question of tied houses is a very interesting one. I think the dislike noble Lords opposite have for tied houses is one of those things that were conceived in ignorance and nurtured in prejudice. I beg the noble Lord seriously to consider whether it would not be very desirable, at least in those cases where it is necessary to erect houses in a remote district, to relax all restrictions to enable the landowner to build those houses, and so encourage the keeping of stock in remote places where otherwise it would not be possible to make a contribution to agriculture.
Capital—that is to say, the landowner—is willing and anxious to play its part, but it needs more freedom. The ordinary landowner to-day is anxious either to repair his property, or improve it, or to build on his land for agricultural purposes. But he is tied down by regulations, by licences, by forms and questions, and finally he probably does not get the necessary permission. Give him more freedom and he will play his part. At least give him such small things as freedom to use the produce of his own estate in the form of timber, or it may be gravel for cement, or things of that sort, without having necessarily to apply for a licence. It would not make a lot of difference and it would not often be abused. I hope that more freedom can be given in that sort of direction.
I would, however, point out that if there is to be that real progress, that real
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step forward in agricultural production that is so necessary, it is inevitable that the landowner will have to get on an economic footing. That may involve a general rise in rents all over the country, because I think that to-day there are few big estates where the gross rents cover the gross outgoings, quite apart from any question of taxation. I feel it right to utter that warning because, as I know well, expenditure is bound up with prices, and it may have some effect on prices, although rents even to-day are only 10 per cent. of the total outgoings of the farmer. Therefore even a substantial rise all round in rents would not have any great effect upon the farmer's outgoings.
I have two other short points. I have mentioned the question of the programme largely from the short-term aspect. I know from experience, as a liaison officer, as my friend Earl De La Warr knows, that when it came to the point of getting the counties to do their job, the one thing they said was: "What do you want us to do? What acreage do you want? If you will tell us, we will get it." That is short-term programme. I would also support Earl De La Warr in pleading for a long-term programme to be given to the agricultural industry, affording not only security to the farmer but also security to those who will invest their money in the land in the way of improving capital equipment. The world food situation is not good. We know perfectly well that there are many Far Eastern countries which are short of food. Their standard of living is rising, their population is rising, and their production is not keeping pace with the rise either in the standard of living or in population.
I would take that point further, and I base my remarks on some information which I received quite recently from a member of a good will mission which went to South America on behalf of the Ministry of Agriculture. It was backed up by a banker who has considerable connexions with South America. Before the war, every country in South America was a food-exporting country, and South America is, or rather was, one of the great reservoirs of meat for the world. To-day there is one country, and one country only, in South America which is food-exporting, and that is the Argentine. All the rest are now food-importing

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countries. Therefore, His Majesty's Government, certainly so far as meat is concerned, can, I think, go right ahead with a really long-term policy, in the sure and certain knowledge that any increased production in this country will be absorbed by this country without fear of competition and without fear of loss, because the world situation is such that it cannot be rectified for a very long time.
There is a great deal more that one could say on this subject, but I do not want to turn this into an agricultural debate. Finally, I wish to say that food is such an important part of the Government's programme that your Lordships, with all the knowledge that there is on both sides of the House on the subject, ought at the earliest opportunity in the next Session to have a very serious debate upon the food situation. By then we shall know what the plans of the Ministry of Agriculture are and what the prospects are, and I hope that that debate will take place at a very early stage in the new Session, when presumably we shall not be quite so rushed with new legislation as we have been in the last few weeks.
10.0 p.m.
LORD WOOLTON: My Lords, when the Prime Minister of the country calls for a new "Battle of Britain" to rescue the country, then it behoves every one of us, according to our various and several capacities, to do what we can. I would like, if I may, to speak with the full confidence of those who habitually sit on these Benches and to assure His Majesty's Government that, in harmony with our traditions and according to the constant practice of members of this House, we shall do everything that we can to help. But, of course, nothing could be further from the truth than to think that the best way of helping the country is to refrain from making observations of a critical nature.
As I listened to the noble Viscount this afternoon, so persuasively talking to us, I wondered if I dared make a critical speech afterwards, or whether he would think that I was endeavouring to sabotage the efforts that he and his friends were making. When he told those stories of the past, and excited our sympathy regarding the unemployment that took place between the wars, he almost made me feel that he was reviving the bitterness of the past. Of course that period of unemployment was dreadful. It
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was at its worst when the Labour Government were in power. I do not say that with political bias, but I have just been exercising myself to trace unemployment over a number of years.
The noble Viscount who opened the debate will remember how bad it was at the period when the Liberal Party were at the height of their power. It was bad in a Tory reign, and it was worse under a Labour Government. Quite frankly, l do not think it had anything to do with the politics of any of them. I think it was due to economic circumstances that were entirely divorced from the Party politics of the time. The only thing that I would say is that recalling the bitterness of the past—and the unemployed undoubtedly had much reason for bitterness—will not help us in any way to find a solution to our present difficulties. It is the business of Parliament to be a centre of discussion, a centre of debate, and whilst I am always conscious that in this House one must be careful to speak in a manner that almost disguises what political views one has, the noble Lord, Lord Quibell to-night (most effectively, I thought) disguised his political views. He was following the modern practice, but only the modern practice of course, of your Lordships' House.
But there is room for conflict; there is room for expression of contrary views; and it is on the anvil of such discussion that very often we can beat out some practical instrument of effective government. I am bound to say that I think the anvil of discussion, and the bating out of some practical instrument, i very necessary to-day. We have had a most interesting and enlightening debate. I am sure that all of us are most grateful to the noble Viscount who leads the Liberal Party for having started it. What a wealth of opinion we have had! The noble Viscount, Lord Bruce, came along with his great experience and delivered, I thought, a speech of economic interest equalled only by that of the noble Lord, Lord Layton. Then we had my noble friend, Earl De La Warr, speaking with so much authority on the subject of agriculture. The noble Lord, Lord Quibell, I thought "spilled the beans"—if I may use such a phrase in your Lordships' House.
Then, for the first time in my life, I had the pleasure of listening to the noble Lord, Lord Dukeston, in what seemed to

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me, if he will forgive my saying so, a speech of great wisdom and great statesmanship. Yesterday we had the noble Viscount, Lord Portal, who was responsible for starting all these systems of priorities: perhaps sometimes he wishes he had not done it ! He was in at the beginning, and I thought he gave the Government some good advice. I hoe they will take it. All these noble Lords have added very much to our wisdom and the debate has been severely practical. It needed a little practice put into it. I imagine that there are few of us who did not have feelings of great sympathy with the noble Lord, Lord Pakenham, when he introduced this subject yesterday. The noble Lord has endeared himself to this House, not only by the breadth of his mind but by the courtesy with which he treats his critics. Sometimes he almost makes us feel we are his friends; and many of us wish we were.
LORD PAKENHAM: So you are!
LORD WOOLTON: He gave us the close reasoning of the student. But yesterday he was delivering somebody else's speech. They had brought him from his job of looking after Germany in order to do it. I have since had the opportunity of reading his speech in detail, but when the noble Lord finished he left me in a haze. We had figures: he gave us a lot of figures which I could not fathom. They did not seem to me to add up to anything. I found them most confusing. What we really wanted was a national balance sheet, so that we knew what our income was in terms of production, how much of our consumption was being consumed at home, and how much was going in export. I should have liked to know where our expenditure overseas was taking place: how much in hard currency, and how much in soft currency. It is all very complicated. I wonder why the Government did not adopt what has been the practice of Governments for some time past, and give us a White Paper beforehand, setting out all the facts and enabling us to be just a little more intelligent, as we needed to be, as we listened to the noble Lord making his speech.
I have a suspicion as to why they did not. I do not believe they knew themselves. The Government have not been very forthcoming about all this. This debate has taken place because the noble
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Viscount put it down. There has been a good deal of pressure brought on the Government, both from their own side in another place, as well as from those who sit opposite them, to let us know what the facts were. I know that I may be accused of looking at the thing with some bias, but I cannot help but feel that the Government have just been drifting on and on. The danger has been very obvious for months. We have been telling them about it, and the newspapers have been telling them about it. Why did the Government wait until the last days of Parliament before coming along and telling us this dreadful story? If they had come earlier, then the speech of the Prime Minister, made in another place—of which the noble Lord, Lord Pakenham, was merely the vehicle yesterday—might, indeed, have been a constructive speech for the expansion of trade and of production in this. country. Instead of that, what was it? It was a speech of shreds and patches, which left us feeling at the end that there was little real plan for the expansion of trade.
The noble Lord, Lord Dukeston, was the man who gave us the real plan of what was going to happen to the industry of the country; it was his speech which I found most convincing, and not the speech which the Prime Minister made yesterday. We have just drifted on. Many of us feel that we have drifted very near to economic disaster; and I think that the Government must feel that, too. I wonder whether it was necessary. The result is quite clear. The Government have shaken the confidence, not only of the people who sit in the Houses of Parliament, but, I venture to think, of the country, in their competence. As the noble Marquess the Leader of the Opposition said: What have you been doing? In the pursuit of your policies and your expenditure, you have been giving the people of this country a feeling that they are living in times of easy money—an appearance of success—and now you come and tell them what the true position is. Again we have the call for sweat and for toil, but the Government have not given the country the leadership which makes people feel that they are gallant in toiling and making sacrifices.
That is the reason why, reading over the speech of the Prime Minister, as I did last night, I began to wonder what all this amounted to when we came down to facts. I observed, for instance, that he made

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some observation about controlling capital investment. Why has he not been doing that? Why has not the Chancellor of the Exchequer been controlling capital investment? What is the good of telling us now that that is the thing to do? Then there is going to be something done about transport (I know just a little about transport), and it has to be speeded up in the future. Gracious me! there is not a railway manager in this country who is not at his wits' end. I go over the stocks of one of the railway companies. I ask them how much they have got a week ahead—sometimes only half a week ahead—and what they have done about it. Their answer is: "We have rung up the Government Department, but we cannot get any satisfaction." I do not know what they are going to do about it. The Prime Minister did not tell us yesterday. He just said that something had to be done, but it is all left vague except for the fact that the nation, in its hour of trial, must: be more controlled.
That is the result of that speech—more controls. Do you think that is really right? We are stiff with controls. Those of us who are engaged in industry cannot: move because of the number of controls, and really what we want is less control. I am not appealing for less control in order that some of us may go and make more money. It is not that at all. Money has ceased to be of interest to us—it all goes to the Chancellor of the Exchequer anyhow. We want freedom to be able to do our jobs in our businesses, and we have not got it now because of the multitude of controls that are impeding production. Since we all want the same thing, I beg the noble Lord, with his great intelligence—because he must see the problem—to see what he can do, whilst retaining the essential controls, to free human beings in order that they may put their best work into the country at this time of stress. The Government will never get anybody out of trouble; it will be the people of the country who will do that, and I beg the Government to give industrialists an opportunity of exercising their capacity.
I tried to look at this problem last night. I put this question to myself: Supposing this was a business in which I was engaged—and that is what it is all about; is it not?—and I found myself in the lamentable position we are in now,
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what would I do? Well, I will tell you what I will do, but, thank Heavens, I have never had any practical experience of being in this position, and I hope I shall never be sufficiently incompetent to be in it. The first thing I would do would be to cut down my unproductive labour. That is the first thing a business man does when he finds himself in trouble. In the language of trade, he goes and looks at his overheads. I beg the Government to go and look at their overheads and see how many people they are employing in order to rule ibis country, and see whether it would not be possible to reduce the number to create a little unemployment among the non, productive classes. They would not be unemployed long, because they would be very readily trained; they have all the capacity to be trained and they would be readily absorbed in the productive industries of the country.
I say to the Government: Look and find out how much unproductive labour you are carrying, because it is only by the production of goods that you secure the creation of wealth. After the last war—if I may also go back to those days—there was a body called the Geddes Committee. Well, of course, that was thoroughly bad. I do not remember which Government was in power at the time, and for the sake of my argument I had better not know.
SEVERAL NOBLE LORDS: It was a Coalition.
LORD WOOLTON: But of course it is all wrong that a Government should call in other people in order to go through its business, unless it recognizes that it is bankrupt and is calling in the receiver. I do not ask the Government to form a Geddes Committee, but what I beg the Prime Minister to do is to form a Committee of his own Cabinet to go through these several Departments of State and see how many people they can get rid of. They should see how many controls is possible for them to relax without giving up the essential principle. These controls are like rabbits, they just breed on one another. I imposed many of them on this country, but I was constantly having to fight against the temptation to add more controls, simply in order to see that the controls we had already were properly carried out. The noble Lord may

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say, "We have heard this story before." But I make this suggestion for another and a wider reason.
We are at the present time in the position of a person who needs credit; and the United States, being the nation that have accumulated all the credit that is going about, are the people to whom we shall go. We can rely upon it, I am sure—and I have many contacts with them—that we shall have sympathetic consideration if we are a credit-worthy people. But the first thing that they will look at, since we do not want to appeal to their sentiment to lend us money, is to see whether we are credit-worthy. And the place to begin to be credit-worthy is at home. It is not until we have a reduction of our overhead charges in running this country that we can with any confidence go along to the United States and ask them to give us further credits.
Of course they will want to give us further credit, because they have the credit, and what good is credit if you do not use it? They will want more trade, and we are not only their friends and their allies, but we are the best market that the United States have. If they are to find an outlet for their very great production—a production which has increased as technological advances have been made to such a great extent during the last few years—they will be anxious to trade with us. They will find that they are on a sound economical line if they do extend to us the facilities that will enable them to trade with us. That is what Britain, as a creditor nation, has done for generations. It is such credit that has built up the Argentine, that has built South America, that went so far to build up the United States itself.
As a result of the efforts we made during the war, when we were alone, the position has changed now, and the United States are the creditor nation. I was very delighted to hear the note of optimism in the speech of the noble Lord, Lord Pakenham, when he talked about the conditions of the American Loan—the conditions of convertibility and of discrimination. I will not say any more than just this. I hope that the Government will be successful. The United States cannot possibly say to us, "If you cannot trade with us, because you have not the dollars and we will not give you
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those dollars, then you shall not trade with anyone." That is not the way in which a great nation can possibly behave, and I hope that the negotiations which the noble Lord and his colleagues are to have with America will meet with success and will be most sympathetically received. It may, indeed, be that the people of this country in the short run—in the immediate run—will be very dependent upon the success of those negotiations.
I must look at the remedies that the Government are proposing, and I can only express a good deal of concern about them. What are the remedies? Some new targets, and a cut off the joint! I think that is about what it comes to. I do not see any point in having targets if you cannot shoot. We have had a lot of targets before, and how much better off shall we be because the Government say we must have higher targets, we must have greater exports, more agricultural machinery, more rural houses? And what is the value of this word "must"? It is for them to tell us how we are to get them, to give us the organization to get them. We are willing enough; manufacturers are willing enough to make more agricultural machinery; people are willing enough to build more houses, even to pay for them to be built.
Then we are told that we must work harder. I believe there is an awful lot of nonsense being talked about people working harder. In the engineering industry, with which I have some connexion, I find most people anxious to work harder. But they have not the materials. Give us the steel and we will make more motor cars. I do not believe that working men are finding any particular enjoyment out of not doing a full day's work. They know that the order books are full, but they know also that the amount of material they have at their disposal will not keep them going for long; and I believe that is the reason for their slacking off. It all comes down to coal.
Only yesterday I was talking to an American who was very concerned about the state of this country. He has, I think, some considerable influence. He said: "If you want anything from America you have got to go and dig more coal." I hope that we shall dig more coal. I would venture to say this to the Government: Do not bother about going round preaching to the miners. You—not we—have been

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doing the preaching. Give them some inducement. Put some goods into the shops so that their wives will see and want. The miners will have to go to work then, because their wives will encourage them. It is an incentive that is wanted—not a mere money incentive, but a better standard of living. And that is the thing, I am bound to say, which I cannot see how we are to achieve. We have no objection to the cutting of the petrol ration or of the travel ration. I hope Ministers will set a good example to the country this year and stay at home. Last year they went away from this country with great speed in order to get more food. They said it was to improve their education.
What are we going to do with these food cuts? I cannot make out what is to happen. The public do not understand when you tell them not to eat any more hard currency. What they want to know is: Are you going to cut the rations? Are we going to have less bacon, less cheese, less meat? Those are the things that come from hard currencies. Are we going to have less? Do you really think that the people of this country can live on less and still give you more production? What a trouncing I got from the Leader of the House a few months ago, when I ventured to say that the people of this country were in danger of having a food shortage! He trounced me for something that I did not say.
He said that I said the country was starving; I did not say that, but I do begin to wonder what is to happen. Do tell us. The Minister of Food must know, and he ought to tell us, so that the people know where they are, because I have the greatest possible fear of any serious reduction in the food supplies of this country if we are to pull through. It is no use saying that we are to have a differential rationing. I know; I have tried it. What a differential rationing does is to impose on the authorities the obligation of splitting up the country into hard workers and not-so-hard workers. That will create jealousies and discontents all round, and inevitably it will be unjust. I beg of the Government, at whatever risk to the American Loan, do not reduce the health of the country at a time when you are begging it to produce greater efforts.
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I have talked longer than I wanted to, and probably longer than your Lordships wanted me to. I conclude as I began. The Government will have full support from these Benches; it will inevitably be critical support but it will not be destructive support. We must ask the Government to do some things. We must ask them, first, to make adequate arrangements with the United States of America regarding convertibility and regarding the non-discrimination clause. Secondly, we must ask them to exercise a rigorous economy in the use of unproductive labour in this country. If they will do those things, then both in Parliament and out-side Parliament the Government may rely upon it that, according to our se Feral capacities, we on these Benches will do our best to support not the Socialist Government but His Majesty's Government, because we are concerned in the welfare of the country and it is our bounden duty to help in a time of emergency.
10.33 p.m.
LORD RENNELL: My Lords, had my noble friend, Viscount Samuel, had the opportunity of hearing the statement made by the Prime Minister before he opened this debate, he, no doubt, would have referred to certain of the points to which I propose to refer in the very short time that I intend to take. Before doing so, I would like to say that, so far as I am concerned in taking up the theme from where he left it, I must entirely agree with him and with other speakers who have said that the crisis which has come upon us is not, of course, the fault of the present Government. It is the inheritance of two wars and more especially of the last war. To try and attribute or hang the blame for what has happened on the Government would not only be unfair but entirely unconstructive in the position in which we find ourselves to-day. That, however, is not to say that the crisis which has come upon us has not in certain respects perhaps been aggravated by what has been done and by the policy which has been pursued and, above al], by the lateness in applying the remedies which were announced yesterday in another place by the Prime Minister and summarized here by the noble Lord, Lord Pakenham.
The remedies to the crisis, which I need not perhaps elaborate after the long

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debate which has taken place here, fall into two parts: those which are applicable from a short-term view, and those which may be said to cover a long-term policy. On the short-term view may I say only this—and at least one of the remarks that I have to make is applicable to the other part as well—that I am myself, as I believe are many others in this country since the statement was made yesterday, filled, I regret to say, with a strong sense of the inadequacy of the remedies which have been proposed. The first note of serious warning was struck in March, when two debates took place in another place and in your Lordships' House on the economic situation of the country. It was by then already apparent that the crisis which has now happened was inevitable, or would be inevitable if remedies were not applied in time. It is common knowledge to all of your Lordships that no remedies were applied at all, in spite of the warnings which were then given.
At that time, if your Lordships will cast your minds back, you will recall that it was said that this Government had been in power for a year and six months, during which time no coherent plan had been evolved. At that time there was a White Paper on the economic situation of the country and shortly afterwards an economic planning board was created, or was announced as being about to be created. Its creation, I think, has taken place only within the last few weeks. His Majesty's Government were asked at that time to take steps in the Government itself, as being the only place where a coherent plan could be evolved, and not in a planning board, to guard us against the crisis which has now come about, but nothing, I think, was done. It is true that one or two trivial cuts in imports were made, but no plan was evolved or stated, nor was it ever admitted that a critical situation was about to develop. As the noble Lord who has just sat down said, it was only under quite a considerable amount of pressure that in another place and in your Lordships' House those debates were allowed to take place which have brought home to us, and to the whole country, the full gravity of the situation.
If I may go back to the short-term remedies and show why they appear to be inadequate, I would refer your Lordships, without quoting, to the drawings on
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the American Loan in the first five months of this year, or indeed in the first four months of this year. There were average drawings of £60,000,000 a month. With the heavy drawings of July, it appears from a statement made in another place by the Chancellor of the Exchequer that the average drawing is something of the order of £77,000,000 a month. I find it very difficult, as Lord Woolton and as everybody else has found it difficult, to make any sort of Calculation on the figures published about the nature of the economies in exchange which will be effected by the various restrictions that have been announced. My noble friend, Lord Layton, arrived at a figure of approximately £300,000,000 a year, but, with all respect, I am inclined to think that that is on the high side, more especially as a large number of the economies proposed will not take effect until October 1. I prefer to take a figure of something of the order of £240,000,000 a year, of £60,000,000 a month, which is set against the drawings at the rate of £77,000,000. Even if drawings are not continued at this rate, on account of certain exceptional circumstances that may have taken place in July, and that we take a rate instead of £60,000,000, the economies in question cover about one-third of the deficit on our visible balance of payments.
If the situation is as grave as is shown by the statement made by the Chancellor of the Exchequer in another place to-day, that by some time in October—let us say the middle of that month—the American credit will have been exhausted, the economies which have been announced will be quite inadequate even to prolong the use of the credit for approximately two months from this date. After that we shall be thrown back on those resources which we possess in our own right—and not entirely ours inasmuch as they belong to countries which are members of the sterling area. I cannot believe that any of your Lordships will fail to agree with me that remedies of that nature are totally inadequate, for we must of necessity come to a crisis in six weeks from now unless our last remaining resources are to be employed, after which I leave it to your Lordships' imaginations what this country will do, not merely to keep the imports of raw materials going but to get enough food into the stomachs of the people. If, therefore, I concur in what has been said,

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as every one of your Lordships will—it is our bounden duty to help the Government and the country in its present state—I can only do so with the feeling that the programme proposed, in the near and possibly most critical short-term view, is entirely inadequate.
On the long-term programme I should briefly like to make several points. I ask your Lordships to throw your minds back to what the noble Viscount, Lord Bruce, said, and I beg the Government to consider whether (if in a few words I may summarize, perhaps even garble, what he said) the time has not now come to revise the whole of our attitude in the world and the whole of our policy. That in short was what he said. He asked for constructive thinking of the future without which any immediate short-term remedy was entirely vain. He gave three courses open to the Government. One of them must be chosen. In the programme which was announced by the Government yesterday, I saw no such thinking. On the long-term programme, or targets as they may be called, I see only an agricultural programme to develop our self-sufficiency in foodstuffs by 1951. Far be, it from me to try and analyse what those proposals amounted to. The noble Earl, Lord De La Warr, has said in convincing terms, which cannot by the nature of the facts he adduced fail to be critical, that the programme for which much credit is being taken by supporters of the Govern-merit is to restore the position of agriculture to what it was in 1944, as everyone who has any interest in agriculture has urged them to do for two years.
Is that the sort of programme which is going to get this country out of its long-term difficulties? Noble Lords opposite have heard from their own Benches that at least one of their number feels that the programme is wholly inadequate, a view which we on this side cordially share. But it is not only on the balance of payments that we believe there has been justifiable criticism. We on this side of the House—and I know I speak here not only for my friends on these Benches, but for other noble Lords on this side—have found the policy pursued by His Majesty's Government inadequate, in that throughout these last two years the various Departments have appeared to us to follow several separate policies of
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their own, which are not necessarily related to each other, or to a central plan.
If I may take only one example, to which I referred in the debate which took place in March, I would mention the financial policy followed by the Chancellor of the Exchequer. That is a policy which I consider to be ill-conceived, in the price which we have had to pay to reduce the short-term rate of money; a policy which has resulted, in my view—with which I think many will agree—in a decline in savings to a point where savings are, in point of fact, a minus, or where disinvestment is going on. That is not the result of pressure of economic circumstance. It is not, I submit, on account of the desire of people to spend their capital in a country where it is difficult to obtain the goods which they wish to have. In support of that, I would say that the desire to save is still as strong in this country as it was a year or two years ago, before this fall in money rates took place, and the rate of taxation to which we are subjected was maintained.
As evidence of that, I would ask your Lordships to consider what has happened. for instance, to life insurance. Never. I think, in the history of British insurance has there been such a large increase, month after month, quarter after quarter, and year after year, as there has been in the last two and a half years in growth of life insurance which, as your Lordships know, is one of the most popular and effective forms of saving. There are two figures only that I wish to quote. Though they are chosen from particular sources, I believe them to be representative of the trend of life insurance as a whole. If the figure of too is taken as new life policies taken out in 1945, the figure in 1946 was 212, and the figure in the first half of 1947—and that is perhaps the most important figure of all—was 310. In other words, the desire to save, where the method has been provided, where it is not subject to petal taxation, and where a reasonable rate of interest can be earned, has not only been fully maintained, but has been maintained, I believe, at the expense of saying by investment in securities provided by the Chancellor of the Exchequer. I believe that to be the result of a mistaken financial policy, for which we have ad to pay in the terms of the inflation which

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is visible to-day, and which is at least one of the most patent factors abroad in the apprehension which is expressed about our financial situation in this country.
I do not want to deal with any other facts at this late hour, but I would like to repeat what I said at the start. I do not think there has been an administrative continuity, or continuance of policy between various Departments. I regard the short-term remedies as applied as inadequate, and I fear that the long-term view is not one which will present itself to the imagination of people in this country to produce that effort which the Prime Minister has called for, and which we would all like to see brought in to the support of His Majesty's Government.
10.50 p.m.
LORD PAKENHAM: My Lords, I hope I have the permission of the House to address your Lordships for a second time. I am entirely in the hands of the House—looking at the clock and seeing that it points to ten minutes to eleven—as to whether I continue beyond the allotted hour of eleven or not, but I imagine that the House will wish me to cut my remarks rather shorter than if I had begun somewhat earlier in the evening. It follows inevitably that most of the score or so of very interesting and highly informed speeches will receive no adequate answer—indeed, no answer at all from me tonight. But I will do my best to write to noble Lords giving the answers to the particular points they have raised. And if they find that they are not getting the letters in time or are not getting enough letters, if they will let me know I will contact the score or so of Departments involved and see whether they cannot have suitable answers.
I feel a little like, I will not say a headmaster but a junior master, who is called upon to distribute the prizes at speech day. I feel that we have had so many excellent speeches that I should congratulate some speakers. To do so would be invidious, but in my own mind the speech of the noble Lord, Lord Dukeston, will stand out for a very long time, and of course we will remember many other speeches also. I must thank the noble Lord, Lord Woolton, for the kind things he said about me personally. He was so charming about my personality, and so brutal about the speech that I
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offered to your Lordships yesterday, that he has placed me in rather an embarrassing position. I must strongly resist this attempt at oratorical "debagging." It really cannot be permitted. I take full responsibility for every word in that speech. Indeed, I should be glad to go down in history, as another politician of no great ability, as "One-speech Pakenham"—all the more, as it was not of my own composition.
On a more serious note, I hope the noble Lord, Lord Woolton, will forgive my saying that the remarks he made about Ministers going abroad in order to get more food seemed to me—and I am sure he would wish it to seem to me—humorous in intention. I am sure he would not wish to be regarded as in any way serious, because he is always so very fair about Ministers and politicians of all kinds, and I know that he would not wish any misunderstanding to arise in future by people reading his speech.
LORD WOOLTON: It was purely humorous, but probably mistaken humour, and I beg your pardon.
LORD PAKENHAM: Now that I am certain it was humour, I appreciate it the more highly. The noble Lord made an appeal which I am bound to say drew so much enthusiasm from a certain part of this building that I actually heard clapping—for the first time since I have been a member of the House. It was, of course, rapidly quashed, but it is the first time that I have heard actual applause. While I hope that it will not occur again I think the noble Lord will go down to history as the first statesman for some years who drew clapping in this Chamber. But he did, of course, make a very solid contribution. I will try to reply, when I deal with the issue more generally, to the outlook that he presented to us, but I do not think any of us will deny the elevation of spirit that distinguished his speech.
May I come to one or two other speeches, dealing with them, I am afraid, far too rapidly? The noble Lord, Lord Cherwell, was relatively optimistic. I think he is generally regarded as the supreme architect of gloom in this House and indeed in public affairs. I have always found him gloomy, except during the war, when his spirit was always the most bright, and when he knew the darkest things that were going on, So it may be a good omen

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that his speech, while to others it might not be cheerful, to me was a positive tonic, far brighter than we have heard from him for a long time.
The noble Lord, Lord Cherwell, appears best in the senatorial toga of the national statesman, with the laurels on his brow suggestive of his services to the State. But just occasionally he dances with the cap and bells of the Party satirist. I do not think the cap fits him, and the bells seem to give a false and hollow sound. But today we have little cause for complaint, except with regard to his statistics. There I must leave the matter as between him and Lord Layton, who flatly contradicted him on the most important figures he produced. Perhaps the victor in this heat will allow me to take part with him in a final race in this respect.
I owe an apology to the noble Marquess who leads the Opposition in that I grossly exaggerated his objection to civil servants. What he actually said, to quote Hansard of yesterday, was as follows:
"These civil servants, if I may say so respectfully, buzz round the head of the ordinary citizen 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."
The last statement is not literally true, because the numbers have remained substantially the same for a little while, but I owe an apology to the noble Marquess in that I said he accused all civil servants of being non-productive. I would assure the noble Marquess—and I am sorry he is not here at the moment—and Lord Woolton that the Government have taken immense trouble to give effect to economies. A high level Committee have been studying the matter for some time, and no pains are being spared to see whether we cannot bring the numbers down.
I pass on rather rapidly to the very weighty agricultural speeches from the noble Lords, Earl De La Warr and the Earl of Radnor. Lord Radnor has left the chamber and I feel that those who have left the chamber may perhaps come later in the queue concerning the replies. I see that the noble Marquess, Lord Salisbury, is with us again. I have just been saving that I did not do full justice to the noble Marquess when I quoted what I thought he had said about civil servants.
THE MARQUESS OF SALISBURY: What I said was not at all that the civil servants were not good and patriotic men and women, but that there were far too many of them. I cannot believe that there is need for an army of 2,000,000 persons in a population of little more than 40,000,000.
LORD PAKENHAM: I will not regeat the reply I have just given. The noble Marquess will find it in Hansard tomorrow. But perhaps I may just mention that a high level Committee are studying the whole position.
I come now to the agricultural speeches, and more particularly the speech of the noble Earl, Lord De La Warr. I am authorized by my noble friend, the Joint Parliamentary Secretary to the Ministry of Agriculture and Fisheries, who has gallantly remained by me in order to see that I do not fall into any pitfalls, to say that he and his right honourable friend do appreciate the support that the noble Earl has promised in the efforts the Government are making to expand agricultural production. I have, of course, no intention of competing with the noble Earl on agricultural matters. I have no claim to speak on agriculture, except that I am a farmer. I am not, however, a very expert farmer: perhaps I am a sort of "spiv" agriculturist! But at any rate I am fully advised on some of the statistical matters that the noble Earl has raised.
I am bound to inform him that his figures—though not his general view—appear to be mistaken. He seems to be in error in his main calculation. It appears that the Government's proposals will in fact increase agricultural production by 15 per cent. beyond the peak figure of the war years. The noble Earl informed us that production had already dropped 20 per cent. since the peak years; but my information, which I think, the best available in the country, is that production has dropped only 4 per cent. and not 20 per cent.
EARL DE LA WARR: I rather hesitate to interrupt at this late hour, but my figures are also, I think, the best able in the country, because they are largely the official figures. The noble Lord, Lord Pakenham, told us in his speech that it was hoped to increase production by 20 per cent. I assume that

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that means by 20 per cent. since 1944. I based that figure on estimates given to me by those who are universally regarded as authorities in the agricultural world. And they were backed up by the fact that the official figures, as published monthly by the Government, showed that there was a reduction of 1,250,000 acres in our tillage area as between the 1944 and 1946 crop. It showed us, furthermore, that whilst our cattle figures were approximately the same, and our chicken figures are approximately the same, our figures for sheep and for pigs were quite immensely reduced—although, as the figures for sheep do not go further than March, we have not got the full reduction caused by the hard winter.
I think the noble Earl, Lord Huntingdon, will agree that these figures for the tillage area take us only to June, 1946, and that it is generally known in the agricultural world that since then, owing to the bad autumn sowing and other factors, there is a large reduction in our tillage area as between June, 1946, and June, 1947. I am not going to argue whether it is 10, 15, or 20 per cent., but it is of a large order. If the noble Lord will inquire of agricultural authorities he will find that their opinion accords with mine.
LORD PAKENHAM: I am not going to pit my personal authority against that of the noble Earl, Lord De La Warr, but the Ministry claim that there has been a reduction, since the peak year, of 4 per cent. Here is clearly a sharp difference of opinion, and I think I must abide by the information given by the Ministry, which I have had only to-day.
I do not think that we have any cause whatever to be disappointed with the reception given to the Government plan, either in this House or in another place, or, indeed, in the country. It has been accepted, it seems to me, as a workmanlike beginning. I fully accept the general implication of the eloquent speech of the noble Lord, Lord Rennell, that the balance of payments problem is not one that can be taken in isolation. The balance of payments, for good or for bad, reflects the general health of our country. At the same time, the general plan will be judged as to whether it does or does not bring about a radical improvement in our balance of payments position. No one in this House in my hearing—and I have sat practically through the whole debate—has
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brought forward any strongly felt argument against any particular measure that has been taken.
The noble Lord, Lord Woolton, voiced at one moment a certain feeling of sorrow that it involved new controls. I am bound to suggest, without wishing to imply any sharp contradiction, that a moment or two earlier he was crying to Heaven that we had been very slow in controlling investment. I recall that he was sorry that our measures seemed to involve so many new controls. I do not think it is within the recollection of the House that anybody, in spite of these far-reaching proposals, has stood up and said "This will not do; that will not do; I object to this, I object to that." That, I am glad to say, seems to he the attitude not only of this House but of the country. I think we can fairly claim that no one has found the proposals evil in themselves. Some people may have argued that they might have been brought in earlier. I do not feel unsympathetic with that point of view. I only ask those who wish to cast the first stone in that matter to examine their own consciences to see whether they are without sin. I hope they will not examine them too long or else they may creep away and I may be left, like the lady described in the Gospel, practically alone.
EARL DE LA WARR: She was not blameless either!
LORD PAKENHAM: Even from this hallowed spot I never claim any infallibility, either for myself or for the Government; but I look in vain for anybody else who can improve very much on our own showing because, frankly, we had a great debate on all this in March and, although all sorts of grim warnings were issued, by the noble Lord, Lord Cherwell, and by others, no one suggested firm steps of the kind that are being taken now. I do not think if we examine the record of our critics during the time that we have been in power that they can claim that anybody has come forward with a clear cut plan—
EARL DE LA WARR: I must really join issue with the noble Lord on that. For the last eighteen months we have brought before the House a large number of Motions. We have put forward quite definite proposals. The Government have accepted them, but have done nothing about them. I must challenge the noble Lord on that point.
LORD PAKENHAM: I must ask the noble Earl to continue his agricultural battle with the noble Earl who sits on this Bench. Taking the plan as a whole, I cannot agree that anyone, Conservative, Liberal or of any other Party, has come forward with any plan of similar—
LORD WOOLTON: I must protest. We are not in office. The responsibility for these things is on the Government, not on the Opposition.
LORD PAKENHAM: Frankly, I do not regard that attitude as altogether worthy of the noble Lord. Of course, he cannot have all the details, although the Government may possess all the details. The complain: is that this is too much of an outline plan—
LORD WOOLTON: I was talking about the previous plan, of the past. It is not the business of the Opposition to come and tell the Government how to do their jobs by producing details of plans. It is the business of the Opposition to produce general ideas, to ask questions, to endeavour to cajole the Government into the right way of thinking: not to produce plans. The noble Lord cannot get away with that, however late it is.
LORD PAKENHAM: I am afraid that the noble Lord who has just spoken assumes a very lowly role for the Opposition. It is not for me to interpret the role of the Opposition, but I should be surprised if the noble Viscount, Lord Samuel, would agree with the interpretation of the duties of the Opposition.
VISCOUNT SAMUEL: Yes, I do agree. The Opposition have not the information which would permit them to bring forward detailed plans. That is the business of the Government.
LORD PAKENHAM: Of course, the operative phrase is "detailed" plans; but we are told to-day that these are not detailed plans; that they are plans for increasing hours, for assuming increased powers of direction of capital, and powers and control over labour. They are plans for import cuts. I cannot agree that those are in themselves detailed plans, or that it is beyond the power of the Opposition Parties to have thought out plans of that character in the light of the information in their possession. Frankly, if I were in the Opposition, I
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should hope to have made far more constructive suggestions than have flowed from them in the last two years.
The other main criticisms of these proposals are that they are all general in character, not sufficiently detailed, and that they do not go far enough. With regard to the first point, I think the House will agree that on the home front, in relation to the industrial side of the proposals, the Government have been well advised to consult with the leaders of industry, both on the side of the employers and on the side of the workers, before the plans were given final shape. And I am sure we all pay tribute to the spirit in which the leaders of the employers and of the workers have received these plans. There was also, of course, the international side of the matter. It is obviously impossible for the Government to know precisely what will flow from these conversations with the United States. I am genuinely grateful—and here I hope we can resume harmony—to the noble Lord, Lord Woolton, and to the noble Viscount, Lord Samuel for the message of God speed that they have given us in regard to these negotiations with the United States. It is obvious that both these negotiations and certain other happenings in the field of crisis that may or may riot happen outside this country are bound to have a great influence, quite apart from any steps this Government take, on the future of our people.
May I just say one or two words about the manner in which it seems to me we should approach the United States? I entirely agree, from a strictly limited experience, with what the noble Viscount, with all his experience, said about the right approach to de Dominions. We must remember to speak to them with absolute bluntness. That, I am sure, is also the right way in which to speak to the United States. It seems to me that one should address them with cordial bluntness, and I say that as one who is proud and glad to call himself a pro-American. The truth is—and we might as well face it, and the United States might as well face it too—that the world dollar shortage from which this country and almost the whole world to-day are suffering is a result of two main factors. On the one hand, there has been the failure of the Old World to recover as quickly as was expected, and, on the other, there has been the rise in prices in the United

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States, which has been much faster than any of us anticipated. That is dearly the background of the situation that will confront us in these talks with the United States.
I would suggest to the House that we should do well not to approach the United States in any suppliant mood. We must face them on a footing of complete equality in a spirit of self-reliance. It is not a question of trying to get something out of them but of joining with them in trying to put the world on its feet. The noble Viscount has made very forcibly the point that this country can never recover full prosperity until world trade recovers. That seems to me absolutely true. We will continue to pursue the multilateral idea in every way open to us. But I would add two observations. On the one hand, I cannot accept for a moment that the ideal of increased trade with the Empire and the ideal of an increased total of world trade are contradictory ideals. They are in every sense complementary and mutually dependent, and while we shall persist in pursuing this ideal of multilateralism in every way open to us, if it proves impossible to realize that ideal we do not intend to allow this country, in any circumstances, to be crucified on a theoretical hypothesis.
Our first duty as a Government is to see that the people do not starve, and I know the whole House is with me when I say that in the last resort that must take precedence over anything else. I do not think my expression of that mood will seem provocative to the United States. It seems to me the kind of mood which they should welcome most cordially in that great country. But, of course, in the last resort, as many of your Lordships have said so brilliantly, it does all depend on us. World factors and world situations and world negotiations if they go well make things better for us, and if they go badly make things worse, but in the last resort we shall be dependent on our own efforts.
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In closing this debate, which may fairly be called memorable, I would like to convince any doubter that the Government is really making a national appeal for a national effort. I agree with what the noble Lord, Lord Woolton, said, that we must keep controversy in this country alive, that we must retain our own political standpoints and argue for them seriously and in a spirit of good fellowship, but in the last resort it will be the co-operation of this people which will pull us through once again. The spirit of the individual Englishman does not change much over the years, but the spirit of energetic co-operation is sometimes modified, sometimes seems to rise and sometimes to sag, and in fostering that spirit and making sure that it is even higher than at present—and I am not saying it is low to-day—a special responsibility falls on us in public life. We obtain certain advantages, great opportunities and much happiness, but at the same time we do bear the extra burden. It is up to us, of whatever Party, to make quite sure that the public are fully informed about the situation and that they realize that we mean ourselves to work together to give them the lead on which our country depends.
I said I was closing the debate, but I am giving way now to the noble Viscount, Lord Samuel. I would add in conclusion that the noble Viscount deserves our warmest thanks for initiating this debate, which should do great good throughout the country and the world.
VISCOUNT SAMUEL: My Lords, the practice of the House would allow me, as mover of the Motion, the right of reply, but I have neither the time nor indeed the need to avail myself of that right since a full reply from these Benches has been given by my noble friend, Lord Rennell. Feeling that this debate has fully served its purpose, I beg leave to withdraw my Motion.
Motion for Papers, by leave, withdrawn.

LONDON COUNTY COUNCIL (GENERAL POWERS) BILL.
Message from the Commons: That they concur in the Resolution of this House, communicated to them on Tuesday last, on the subject of the London County Council (General Powers) Bill.
CONSOLIDATION FUND (APPROPRIATION) BILL.
Brought from the Commons, endorsed with the Certificate from the Speaker that the Bill is a Money Bill within the meaning of the Parliament Act, 1911; read Ia; and to be printed.

LONDON COUNTY COUNCIL (GENERAL POWERS) BILL.
LONDON PASSENGER TRANSPORT BOARD BILL.
NEWHAVEN AND SEAFORD SEA DEFENCES BILL.
PRESTON CORPORATION BILL
Returned from the Commons, with the Amendments agreed to.

NORTH CUMBERLAND WATER BOARD BILL. [H.L.]
Returned from the Commons, agreed to, with Amendments: The said Amendments considered and agreed to.
House adjourned at twenty-one minutes past eleven o'clock.