Sitting of 4 February 1947

Preamble
The House met at Half past Two o'Clock
PRAYERS
[Mr. SPEAKER in the Chair]
ORAL ANSWERS TO QUESTIONS
  EMPLOYMENT

    Unemployment
    Mr. William Shepherdasked the Minister of Labour the number of men and women who have been unemployed for six months, 12 months and 18 months, respectively.
    The Minister of Labour (Mr. Isaacs): At 9th December, 1946, the latest date for which figures are available, 40,700 insured men and 8,600 insured women in Great Britain had been continuously unemployed for six to 12 months, and 25,000 men and 3,500 women for more than 12 months. Statistics showing the numbers who had been unemployed for more than 18 months are not available.
    Mr. Shepherd: Is the Minister able to tell us what he proposes to do about this hard core of unemployment?

    —

    1911.

    1939.

    1946.

    Numbers employed in national Government Service including industrial and non-industrial staff

    220,000

    539,000

    1,007,000

    Local Government Service including teachers

    450,000

    846,000

    1,025,00

    These figures exclude employees of the public service in manufacturing and trading establishments such as shipyards, gas works, etc.

    South Wales
    Mr. W. Shepherdasked the Minister of Labour how many of the men unemployed in South Wales are regarded as
    Mr. Isaacs: Yes, Sir. The Government's proposals in this matter have been repeatedly told in the House. These people are mainly in the development areas, where very successful efforts to introduce new industries have been carried on.
    Mr. J. Langford-Holt: Can the Minister tell us how many of these are men disabled by the war?
    Mr. Isaacs: I should be glad to give that information to the hon. Gentleman. The number is very small. I will get him the figures.
    Mr. Langford-Holtasked the Minister of Labour the number of men and women, including ex-Service personnel on release leave, not employed and temporarily stopped, on the latest date for which figures are available.
    Mr. Isaacs: At 9th December, 1946, there were 362,976 unemployed, including 269,660 males and 93,316 females, of whom 2,635 males and 1,696 females were temporarily stopped. At the end of November, there were 345,000 ex-Service men and women who had not taken up employment, made up of 330,000 men and 15,000 women.

    Public Service
    Brigadier Mackesonasked the Minister of Labour how the total number of persons employed by the State and local authorities in 1913 and 1938 compares with similar figures for 1946.
    Mr. Isaacs: As the reply contains a table of figures, I will, with permission, circulate it in the OFFICIAL REPORT.
    Following is the reply:
    Statistics are not available for 1913 and 1938, but the following estimate is given for 1911, 1939 and 1946.
    suitable for work in the coalmines or the tinplate works.
    Mr. Isaacs: It is impossible to state with any degree of accuracy the number of unemployed men in South Wales who are in all respects suitable for work in the coalmines. The case of each man who, at first sight, appears suitable is, how-

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    ever, examined individually by my local officers, and the possibility of guiding such men into coalmining employment is fully explored. Details of the number of men suitable for work in the tinplate industry are not available. Consistent efforts, including a publicity campaign, have been made jointly with employers to recruit men for tinplate manufacture, and will be continued.
    Mr. Shepherd: Will the Minister be able to tell us what results are obtained from these efforts, because both industries are very short of men?
    Mr. Isaacs: Yes, Sir, but I could not give the figures without notice. We have had fair results—not very good, because many of these men were disabled from working in the coalmines before they became unemployed.
    Mr. Peter Freemanasked the Minister of Labour whether he is aware that the population of Glamorgan is now lower than it has been at any time during the last 35 years, in spite of the fact that births have exceeded the number of deaths in every year; and what further steps are being taken to stop the continued migration from South Wales to other areas.
    Mr. Isaacs: I understand from the Registrar-General that the population of Glamorgan at 1st November, 1946, was higher than it was 35 years ago, although in most of the intermediate years it seems to have been higher than now. The Government are pursuing an active policy designed to encourage the establishment of new industries in South Wales, but in the meantime it would be wrong to discourage unemployed workers in South Wales from finding productive work elsewhere, particularly under the special arrangements I have introduced for temporary transfer.
    Mr. Freeman: While I am glad the figures are not as bad as I was informed they were, may I ask my right hon. Friend if he is aware of the growing consternation in the dock and mining areas of South Wales about this unemployment, which is still growing?
    Mr. Isaacs: That is a different question. I was asked about population, and I have given the answer. But if anybody in South Wales, or in any other part of the
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    country, has a job to go to elsewhere we must not try to stop him.
    Mr. Boyd-Carpenter: Can the right hon. Gentleman explain this eagerness to leave a county which has been under Socialist control for 30 years?
    Mr. Isaacs: I would like the hon. Member to give us evidence of the Socialist control of the country. [HON. MEMBERS: "County."]

    Building Training
    Mr. A. Edward Daviesasked the Minister of Labour in which trades in the building industry men are most urgently required for training.
    Mr. Isaacs: At the present time the greatest need is for bricklayers.
    Mr. Davies: Are steps taken at the recruitment depots, or at depots where applications are received, to make the position clear to men from time to time, so that we may get the advantage of their services?
    Mr. Isaacs: Yes, Sir. The demand fluctuates. At one period there will be a shortage of carpenters, at another of plumbers, and so on. In consultation with the industries we get the numbers balanced as far as we can.
    Mr. Jennings: Is the Minister aware that this is typical bungle? There is a shortage of one class here; and a shortage of another there. Does not he know where he is with them?
    Mr. Isaacs: That is quite right. This is a bungle we have had to deal with for over 20 years.
    Mr. George Hicks: Is the Minister satisfied that, providing he has the labour, the materials are available for them to use?
    Mr. Isaacs: I am concerned only with the materials for training. We certainly have adequate supplies of those.
    Mr. John E. Haireasked the Minister of Labour on what conditions building trainees are accepted for training under the Government Training Scheme.
    Mr. Isaacs: Building trainees are accepted for training if they satisfy the conditions set out in the statement made by the Parliamentary Secretary to the Ministry of Labour in the House on 6th April, 1944, of which I am sending a copy to the hon. Member.
    Mr. Haire: Will the right hon. Gentleman say whether he thinks it possible for approved trainees who have been employed by builders to disappear after a couple of days' work presumably into a job in the building black market?
    Mr. Isaacs: I should like to have some specific examples of that, so that I could give an answer.

    Work Stoppages
    Professor Savoryasked the Minister of Labour how many strikes have occurred in Great Britain since the end of hostilities with Germany; how many of these strikes were unofficial; how many working days were lost in all these strikes; and how many working days were lost in unofficial strikes.
    Mr. Isaacs: On the basis of reports received by my Department there have been 3,855 stoppages of work arising out of industrial disputes since 1st May, 1945, involving a loss of approximately 4¾ million working days. Most of the stoppages have been unofficial, but the information available does not permit a distinction to be made between these and official stoppages.
    Professor Savory: May I ask how the right hon. Gentleman explains this very large proportion of unofficial strikes? Have the trade unions lost all control over their members, while maintaining such absolute control over His Majesty's Government?
    Mr. Isaacs: As to the second part of the supplementary question, anybody with any commonsense knows that that is not a correct description. As to the first part, the evidence is that a great many of these unofficial strikes that have started are stopped and controlled by the unions, who get the men back to work.
    Mr. Awbery: Is it not a fact that for a similar period after the last war 11,000,000 days were lost?
    Mr. Isaacs: No, Sir. The fact is that for the similar period after the last war 43,750,000 days were lost.
    Mr. Manningham-Buller: Can the right hon. Gentleman say why it is he cannot give us the number of unofficial strikes? Is it because the Government cannot distinguish between unofficial and official strikes?
    Mr. Isaacs: Not in the least. But we get information of many of these strikes only when they have started and finished. Some last only an hour or two; but they are, in fact, strikes; but we know nothing about them until we get information from our regional offices. It is not then always possible to distinguish between what is an official and an unofficial strike.
    Mr. Gallacher: Is the Minister aware that after the last war there were a great many unofficial strikes, and very violent unofficial strikes, such as we have not had this time?

    Fuel Shortage
    Lieut.-Colonel Sir Thomas Mooreasked the Minister of Labour (1) the number of workers in all types and grades of industry which it was found necessary to stand off during the period 1st to 14th January owing to the shortage of industrial fuel;

    (2) the number of man-hours lost during the period 1st to 14th January owing to the shortage of industrial fuel;

    (3) an estimate of the number of people thrown out of employment between 1st and 14th January owing to the shortage of industrial coal.

    Mr. Isaacs: I regret that statistics are not available as to the effects on employment of shortages of industrial fuel.
    Sir T. Moore: What contact does the right hon. Gentleman maintain with the Minister of Fuel and Power to ensure that the dangerous policy of the latter is to some extent minimised?
    Mr. Isaacs: That is quite another question.
    Sir T. Moore: No, it is not. In my three Questions, I refer to the activities of the Minister of Fuel and Power in regard to his contacts with the Minister of Labour, and therefore the Minister of Labour is concerned with the results of the dangerous policies of the Minister of Fuel and Power.
    Sir Patrick Hannonasked the Minister of Labour how many persons, male and female, have become unemployed consequent upon the reduction of coal allocation to 50 per cent. of November, 1946, in engineering works in Birmingham and the Midlands; and if any plan is in process to improve coal supply

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    to enable the urgent orders for export trade to be fulfilled in the next few months.
    Mr. Isaacs: I regret that information is not available as to the volume of unemployment consequent on reductions in coal allocations. As regards the second part of the Question, I understand from my right hon. Friend the Minister of Fuel and Power, that this matter is receiving his urgent attention.
    Sir P. Hannon: This is becoming an extremely grave situation. What pressure is the right hon. Gentleman bringing to bear on his colleagues in the Cabinet to take some substantial action to prevent mass unemployment?
    Mr. Isaacs: I can only assure the hon. Gentleman and the House that every possible attention is being given to this matter. It is not my duty, as Minister of Labour, to discredit the actions of another Minister.
    Mr. Jennings: Is not the right hon. Gentleman aware that he should have figures of the unemployed, and that owing to the lack of coal in Sheffield people in the steel industry there are much interested in this matter? Is it not time that his Department was interested in it, too?
    Mr. Isaacs: Records come to us from time to time, but unless we make a special investigation we have no information as to why a person comes on to the register. By the time of the last return, unemployment in those areas had not risen to any great extent, because most of the time lost was through men being away for an odd day a week. In those cases, they did not sign on at the exchange.
    Mr. Butcher: If a worker registers at the employment exchange for unemployment benefit as a result of a fuel shortage, is he immediately transferred to other employment or given benefit until fuel is available to his factory?
    Mr. Isaacs: It all depends. If there is employment available which he is capable of performing he goes to that work. If not, he is entitled to benefit. This acute position has arisen only during the last week or two. [HON. MEMBERS: "Oh."] Yes, firms have been shutting down for a short time only during the last
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    week or two. As people sign on for benefit we shall ask them what caused their unemployment, so that we may get the information later.
    Mr. Quintin Hogg: Will the Minister tell us when he expects to give the information to the House? Will he not undertake a special investigation, in view of the seriousness of the situation?
    Mr. Isaacs: The special investigation was meant for those on part-time. We shall take into consideration those unemployed for a period, but it will take two or three weeks before the statistics, which are being collected, are complete.
    Sir P. Hannonasked the Minister of Labour the volume of unemployment in Sheffield in numbers of male and female workpeople for the week ended 1st February, consequent upon reduction of coal allocation; and the percentage of production compared with the output of November, 1946.
    Mr. Isaacs: I regret that information is not available as to the volume of unemployment consequent on reductions in coal allocations, and I am informed by my right hon. Friend the Minister of Supply that he is not in a position to give the figures asked for in the last part of the Question.
    Sir P. Hannon: May I ask the Minister why there has been a departure from the allocation of coal which was determined at the conference with the Minister of Fuel and Power last October?
    Mr. Isaacs: I think that it would be better if the hon. Gentleman asked the Minister of Fuel and Power that question.
    Mr. Jennings: In view of the unsatisfactory nature of the reply, I beg to ask leave to raise the matter on the Adjournment.

    Vocational Training
    Mr. Piratinasked the Minister of Labour how many ex-Servicemen are now being trained for new jobs at his Department's training centres, stating the various occupations for which they are to be trained; how many are waiting to be trained; at what rate per month can these latter men expect to enter a training centre; and what steps is he taking to speed up and extend the training schemes.
    Mr. Isaacs: 28,182 ex-Servicemen are now being trained under the Government Vocational Training Scheme. As the details by occupations are lengthy, I will, with the hon. Member's permission, give them in the OFFICIAL REPORT. 26,138 ex-Servicemen have been accepted for training and are awaiting allocation. They are being admitted to training at the rate of about 5,000 a month. The training facilities provided are arranged in consultation with the representatives of the industries concerned, and have regard to future employment prospects and the needs of industry for which I am satisfied they are now adequate.
    Mr. Piratin: As the Minister has stated that it will be some five months before these 26,000 ex-Servicemen have started their training, may I ask him what is to be done while these men are awaiting training, and what steps he is taking to speed up the whole scheme?
    Mr. Isaacs: The majority of these men are in employment, and they are waiting the opportunity to be trained for new employment. It is no use speeding up the scheme, because it is no use having these men trained and ready for work if the work is not there. Therefore, the training is phased to the needs of industry.
    Colonel Sir Charles MacAndrew: There are certificates given for efficiency at these training centres which enable men to join a trade union, but I have a letter here from a man who has an Army certificate as a painter. Cannot he be given a certificate from the Ministry of Labour so that he need not go through another course of training?
    Mr. Isaacs: That is another question, but I should be glad if the hon. and gallant Member will get into touch with me, because up to now the unions have accepted Army certificates. I do not think men need our certificates.
    Sir C. MacAndrew: I will see the Minister later, because this letter says that the man does require a certificate.
    Following are the details:

    LIST OF TRAINING OCCUPATIONS
    BUILDING AND CIVIL ENGINEERING: Blacksmiths, bricklaying, carpentry, civil engineering construction course, maintenance fitting, painting (house), paviors and flag dressers, pipe jointers, plastering, plumbing, slating and tiling stone masons, timbermen, wood machining.
    OTHER TRADES: Agricultural blacksmiths, agricultural machinery repair litters, bakery, basket making, boot and shoe making, boot and shoe repairing, brick and tile making, canteen cooking, clerical and commercial, commercial art, comptometer operating, cotton spinning, cotton weaving, diamond polishing, dressmaking, electricians, engineering (draughtsmanship, instrument making, sheet metal workers), welding (electric), welding (oxy acetylene), furniture (cabinet making, upholstery, wood finishing), gas fitting, glass process working, glove cutting, hairdressing, hosiery, hotel cooking, hotel waiting, leather belting, leather goods (heavy), leather goods (light), medical auxiliaries, monumental masons, motor mechanics, neon signs, optical mechanics, piano making, pottery, printing, radio mechanics, retail distribution, saddlery and harness making, shorthand typists, store-keeping, surgical instrument making, tailoring, taxi driving, typewriter mechanics, watch and clock repairs, woollens (weaving, etc.), Scottish.
    In addition, individual arrangements have been made to provide training in employers' establishments in a number of other trades.

    Ex-Army Officers
    Mr. Lipsonasked the Minister of Labour how many ex-Army officers of the last war, between 35 and 50 years of age, are at present unemployed.
    Mr. Isaacs: The statistics of ex-officers registered at appointments offices do not distinguish between the three Services, and I regret that separate figures for ex-Army officers are not available.
    Mr. Lipson: Can the Minister say whether he has any information to show that there is a large number of unemployed ex-Army officers? Many would like to rejoin the Army if the regulations permitted. Will the right hon. Gentleman consult the Secretary of State for War in this matter?
    Mr. Isaacs: I shall be very glad to do that, because I think they could serve in more ways than one. We have not got the separate figures for Army officers, but I have the-overall figures.
    Lieut.-Commander Gurney Braithwaite: Will the Minister give the overall figures?
    Mr. Isaacs: Yes, Sir. They are 5,116 for 45 years and under, 1,380 for 46 to 55 years of age, and 487 for over 55 years of age, making a total of 6,983.

    Scotland
    Mr. Willisasked the Minister of Labour the number of men and women,

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    respectively, who have been registered as unemployed in Scotland for more than six months.
    Mr. Isaacs: The numbers of insured males and females registered as unemployed in Scotland on 9th December, 1946, who had been continuously unemployed for more than six months, were 14,427 and 2,556, respectively.
    Mr. Willis: Is the Minister aware that this represents a considerable increase during the past three months, and can he state whether any special action is being taken about it?
    Mr. Isaacs: Yes, Sir, my colleagues are doing the best they can to get the available factories taken over by industrialists.
    Mr. Henderson Stewart: Will the Minister confirm the impression that the number is rising steadily since, that date?
    Mr. Isaacs: Without looking at it, I would not like to say one way or the other.
    Mr. Hector Hughes: Can we have the incidence of unemployment for the counties in Scotland? How many unemployed are there in Aberdeen, and how many workers in the building trade are unemployed?
    Mr. Isaacs: I cannot give the figures without notice.
    Mr. Willis: Is the Minister satisfied that this heavy unemployment is in the development areas, and not so much in other areas?
    Mr. Isaacs: I was asked for the overall figures, and not the figures for localities I should say that the bulk of unemployment is in the development areas.

    Foreign Labour
    Sir Patrick Hannonasked the Minis ter of Labour the volume and quality of surplus labour available in Italy, Austria and Hungary which could be introduced into this country to supplement deficient manpower in productive employment and in promoting the interests of British export trade; and if plans can be arranged with trade unions to enable the expansion of production with the aid of foreign imported labour.
    Mr. Isaacs: I have no information which would enable me to answer the first part of the Question, but I am at present
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    investigating all practical possibilities in regard to the additional introduction of any suitable and available foreign labour that could be used to meet labour shortages and to expand production.
    Sir P. Hannon: Can the Minister say when he hopes to be in a position to give the House some definite information about filling up the present gaps in manpower?
    Mr. Isaacs: I could not undertake to give definite information at a very early date. There is the question of finding out from which countries we can get them, their capacity for work, opportunities of placing them in employment here, and, above all, the overriding problem of finding accommodation for them.
    Mr. Peter Thorneycroft: Is the right hon. Gentleman aware that only a few months ago the President of the Board of Trade said that the introduction of foreign labour into this country was a wholly impracticable suggestion? Are we to take it that the Government, at any rate, have had a complete change of mind on that matter?
    Mr. Isaacs: It is not for me to interpret the answers given by my colleagues, for the simple reason that I do not think they need any explanation.
    Mr. Frank Byers: Is it not a tact that the vast majority of displaced persons have now been classified, so that the information which the Minister said he was going to get is available? Can he not get into touch with U.N.R.R.A., to see whether something cannot be done to expedite this matter?
    Mr. Isaacs: I do not think it is necessary to get in touch with U.N.R.R.A. We are in touch with the Control Commission and other missions which have been sent out to investigate the matter. I ask the House to accept the assurance that we intend to get as many people here as we can provide work for.

    Poles
    Mr. Francis Noel-Bakerasked the Minister of Labour (1) how many of the 58,000 Poles in this country who are still in uniform are employed, respectively, on Polish administration, maintenance of their own camps, other War Department work and civilian work;

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    (2) what civilian work is now being performed by Poles in uniform in this country who have not enrolled in the Resettlement Corps.
    Mr. Isaacs: There are 36,360 on Polish administration and maintenance of their own camps, 21,462 on other War Department work and 493 on civilian work in agriculture. It is not possible to state how many of the latter have not enrolled in the Resettlement Corps, because enrolment is still in process.
    Mr. Lennox-Boyd: Will the right hon. Gentleman remind his hon. Friend that 1,903 Polish airmen were killed in the Battle of Britain and afterwards, and that all of us were, at one time, glad to see their uniforms in our streets?
    Mr. Isaacs: I did not quite get the point of that question, but I think I understand its spirit, which was that this House and the country should bear in mind with some respect the services which Poles gave to this country.
    Mr. Scollan: While paying tribute to those Poles who rendered us service during the war, may I ask whether that is an excuse for placing on the Scottish people the burden of keeping an army of them doing nothing, when they ought to be doing some useful work?
    Mr. Lennox-Boyd: Is it not a fact that the vast majority of Poles are desperately seeking employment in this country?
    Mr. Gallacher: Let them get employment in their own country.
    Several Hon. Members rose—
    Mr. Speaker: We had better get on with the next Question.

  NATIONAL SERVICE

    Students (Release)
    Mr. Chetwyndasked the Minister of Labour if he will make a statement on the conditions governing the release of students from the Forces who wish to resume their studies in October, 1947.
    Mr. Championasked the Minister of Labour if he will now make a statement on the release of students in groups above 55.
    Mr. Isaacs: It will be open to universities to apply for the release of scholars and highly promising students in any subject who are still serving in the Forces and are in release groups one to 62. A memorandum of guidance will be issued to the universities shortly, and they will then be able to put forward nominations. Arrangements will be made for men who can be released to be made available as far as possible shortly before the beginning of the 1947–8 academic year.
    Mr. Wilson Harris: Will the same arrangements be made in respect of 1947 as were made in 1946, whereby 90 per cent. of the places were reserved for ex-Servicemen?
    Mr. Isaacs:That matter was discussed with the universities last week, and if the hon. Member will put down a Question next week, I think that I shall be able to give him a definite answer.

    Mine Optants
    Mr. Mathersasked the Minister of Labour whether he will arrange for the period spent in the mines of optants for that form of national service at the time they were originally called up, who are now in the Army, to be taken into account in determining their period of Army service.
    Mr. Isaacs: I would refer my hon. Friend to the reply I gave to the hon. and learned Member for Daventry (Mr. Manningham-Buller) on 21st January, a copy of which I am sending him.
    Mr. Mathers: Is my right hon. Friend aware that this is not good enough? Does he not consider that there is something incongruous in putting these men in a worse position than those who considered themselves unfortunate in being balloted into such a position? Is he aware that many of those who opted for mining did so under the stress of serious domestic circumstances, and why should they be penalised for it?
    Mr. Isaacs: I would ask my hon. Friend to look at the reply I have referred to.
    Mr. Manningham-Buller: Is the Minister aware that that answer gives no reasons for his decision? Is he further aware that these men when registering were urged to give full weight to the importance of increasing manpower in the coal industry,

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    which largely determined their choice of service to the nation? Is it the policy of the Government to victimise volunteers?
    Mr. Isaacs: I am tempted to say that some people know more about victimisation than others. I would remind the hon. and learned Member that we have to consider fair play to the men who have borne the heat and burden of the war in the Forces, as well as to the men outside.
    Mr. Manningham-Buller: In view of the unsatisfactory nature of the reply, I beg to give notice that I shall raise the matter on the Adjournment at the earliest possible moment.

  HOUSING (SCOTLAND)

    Temporary Houses
    Mr. Henderson Stewartasked the Secretary of State for Scotland in respect of how many temporary houses completion during the last four months of 1946 was delayed because sites were then under tillage; how many other sites were ready to receive temporary houses; and why these latter sites were not supplied with the available temporary houses.
    The Joint Under-Secretary of State for Scotland (Mr. Buchanan): The fact that a number of sites were under tillage in 1946 made it impossible to begin the servicing and slabbing of these sites until towards the end of the year. This delay naturally held up progress, to an extent which cannot be accurately determined, on the erection of the houses on these particular sites, but did not seriously affect the number of houses completed in the last four months of the year. With the exception of the aluminium house, hulls were available to meet contractors' requirements in full. At the end of 1946, 13,268 slabs had been made available for all types of temporary houses except aluminium and 13,153 hulls had been delivered to those sites. More than sufficient hulls were in store to meet all immediate demands. As the aluminium house cannot be stored, a reserve of slabs—amounting to 3,392 at the end of 1946 has been specially built up in anticipation of the period when the house will be in full production.
    Mr. Stewart: The hon. Gentleman has said that the number of houses held up on account of the sites being under tillage
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    is not large. How does he reconcile that statement with that which he made a fortnight ago, when he told us that he was short of a large number of sites because they were under tillage?
    Mr. Buchanan: I will read the relevant part of that answer again:
    "We could not get into a number of sites because they were under tillage, and it takes some time to service and slab a site."
    In the City of Edinburgh, almost 2,000 houses were held up because of tillage.
    Mr. Stewart: is it not a fact that in the hon. Gentleman's last housing return something like 3,000 local authority sites were then available for temporary houses?
    Mr. Buchanan: At the request of this House and of Members opposite, who raised the matter in Debate, we did not force entry on to sites under tillage, because we took the view that although the housing need was great, it would be wrong to interfere with food production.
    Mr. Stewart: In view of the unsatisfactory reply, I beg to give notice to raise the matter on the Adjournment.

    Small Houses, Glasgow (Sale)
    Mr. McGovernasked the Secretary of State for Scotland if his attention has been drawn to the action of Messrs. Spiers and Knox, House Factors, Bridgeton Cross, Glasgow, who sold two or three 2-room and kitchen houses at or adjoining 596 Pollokshaws Road, Glasgow, recently; that one of these houses has been unlet for two months; that Messrs. Spiers and Knox are asking the sum of £970 for this house which is nearly 60 years old; and, as overcrowded tenants have asked for one at present empty and have been refused, if he will requisition this house and all houses empty in similar circumstances.
    Mr. Buchanan: I am informed that the facts are substantially as stated. Prompt action was taken to requisition a vacant house at 608, Pollokshaws Road, Glasgow, which, I understand, is the one referred to in the question. I am prepared to consider with a view to requisitioning, any similar cases in which small houses are being kept vacant for possible sale.
    Mr. McGovern: May I ask the hon. Gentleman if he would urge the Secretary of State for Scotland to have a

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    complete inquiry into the number of houses in Glasgow of small type which have been offered for sale; if he is aware that whole groups of tenants are being asked to make an offer for their houses, and that shopkeepers are being driven out of their shops on the option of paying exorbitant prices? Is he also aware that this attack on small businesses, coming from the Tory landlords of Glasgow, is resented?
    Mr. Buchanan: I am concerned about the people who, I understand, have been asked something in the region of £900 for these houses. I am also concerned about not keeping these houses vacant, and I have taken prompt action, without the loss of a day, to take over houses that have become vacant. With regard to the question of shops, that is certainly a matter (01 the Secretary of State, who has heard the Question and will, no doubt, consider it.

    Housing Association Rents
    Mrs. Jean Mannasked the Secretary of State for Scotland if he is aware that the proposed rentals for Scottish Special Housing Association's houses are so much in excess of present rentals as to give concern to most local authorities; and if he will make a statement on the proposals.
    Mr. Buchanan: It is the case that the Association's rent scales are on the whole higher than those of local authorities. In many cases, however, the rents of local authority houses were fixed specially low for tenants coming from unfit or overcrowded houses, whereas the houses now being built are for the general working-class population. Local authorities can, moreover, keep rents low by making an additional contribution from the rates. In view of these considerations, and the larger accommodation and better equipment now being provided, as well as the higher cost of commodities generally, the scales cannot be said to be unreasonable.
    Mrs. Mann: Does not my right hon. Friend regard that reply as highly unsatisfactory? Is it not the case that local authorities will have the greatest difficulty in persuading tenants of overcrowded houses to take houses at a rent of 23s., in preference to the local authority houses at 16s. 6d.? How does he justify that increase?
    Mr. Buchanan: The hon. Lady must look at the facts as they are. The local authority can make the rent lower by, in addition to the national subsidy and the local authority subsidy, a further subsidy from the local rates. The Housing Association have only power to use the two subsidies. Until a further grant is given by this House that is the position, and I think that it would be necessary to have that altered before we criticise the Association.
    Mr. Henderson Stewart: Is this not another example justifying the criticism of this Association by the local authorities which I expressed a fortnight ago?
    Mr. Buchanan: This is nothing to do with the criticism of a fortnight ago. It relates only to rent. The issue is rents and how to fix them. The Association is limited to the State subsidy and the-local authority subsidy. The local authority can get a further subsidy from the rates. Until that position is dealt with, it must stand.

  SCOTLAND

    Police Action, Glasgow (Complaints)
    Mr. McGovernasked the Secretary of State for Scotland if he has considered the letter of Mrs. Susan Campbell, 64, Sunnybank Street, Glasgow, which has been sent to him complaining that on four occasions after midnight the police have called at this house and compelled John Campbell to go to the police office as a deserter; that John Campbell was detained for 12 months without trial and ultimately discharged; that on 14th December an inspector, two sergeants and two constables arrived with a warrant to arrest every man in the house; that Mr. Johnson, a visitor, protested, was arrested, kicked and dragged from the house; that Mr. Campbell and his brother were arrested and maltreated; and if he will hold an inquiry into all the circumstances.
    The Secretary of State for Scotland (Mr. Westwood): To deal fully with the points raised in the Question necessitates a somewhat long answer, and I propose, therefore, with the hon. Member's permission, to circulate it in the OFFICIAL REPORT.
    Mr. McGovern: May I ask the right hon. Gentleman if the inquiry was held by the police, against whom the allegations were made, or was it made through some independent source?
    Mr. Westwood: It was made through the Procurator Fiscal in an endeavour to get all the facts in this case, and if the hon. Gentleman, after reading the statement which will be in the OFFICIAL REPORT, has any further point to raise, I shall be only too pleased to deal with it, and to see that fair play applies all round.
    Following is the statement;
    The allegations made in Mrs. Campbell's letter have been investigated and the facts are as follow:
    Since 1941 the police have on various occasions called at Mrs. Campbell's house in connection with the desertion of two of her sons from the Armed Forces and have sometimes found it necessary to take some of the sons, to the police office because of their indiscriminate use of identity documents. There have been only two police visits after midnight, one in January, 1946, to execute a warrant for the arrest of John Campbell on charges of breach of the peace and assault, and the other about I am, on 15th December, 1946, for the purpose of making inquiries about Joseph Campbell, a deserter from the Armed Forces. The December visit was made by two sergeants, and two constables were detailed to watch the outside of the house. The police did not arrive with a van, did not have warrants for arrest, and did not say that they had such warrants.
    In the course of their inquiries, the sergeants discovered that John Campbell had an identity card and a ration book with different registration numbers, and decided to take him to the police office to have the matter cleared up. John Campbell was not taken from his bed, did not produce any medical certificate to the police officers, and had, in fact, been up and about for some days prior to the police visit. Meanwhile Frank Johnston who was in the house incited a collie dog to attack a sergeant, kicked the other sergeant, and tripped and kicked a constable who, on hearing the disturbance, had come into the house. In view of Johnston's violence a police van was sent for, and a police inspector on seeing the van at the house went there
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    to find out what was happening. At this stage, James Campbell arrived, refused to answer questions about his identity, and was taken along with John Campbell and Frank Johnston to the police office. The two Campbells returned to their home after the police had satisfied themselves that James was not the deserter they were looking for, and that John's explanation of the possession of discrepant ration and identity documents was a proper one. Johnston was detained on a charge of assaulting three of the police officers. He pled guilty to the charge on 18th December, admitted a previous conviction for assault, and was sentenced to 60 days imprisonment.
    So far as the criminal authorities are concerned, no foundation has been found for the allegation that John Campbell was at some stage in his career detained for 12 months without trial. As regards the allegation that the two Campbells and Johnston were maltreated and assaulted by the police during the December occurrence, this has been the subject of careful inquiry by Crown counsel who are satisfied that there is no evidence which would justify the institution of proceedings against the police.

    Mineral Development
    Mrs. Mannasked the Secretary of State for Scotland if he will make a statement regarding the alleged deposits of chromite, magnesite, asbestic and allied materials at Killin, concerning which he has already had correspondence.
    Mr. Westwood: I understand that the possibility of economic working of minerals in the Killin area is being considered by the Scottish Sub-Committee of the Mineral Development Committee appointed by my right hon. Friend the Minister of Fuel and Power.

    Shop Rents, Glasgow
    Mrs. Mannasked the Secretary of State for Scotland if his attention has been called to the plight of shopkeepers who are being asked to pay 300 per cent. increases in Glasgow or quit their long-established businesses; and if he will consider protecting them as English shopkeepers are protected.
    Mr. Westwood: I am not aware of increases in shop rents of the order indicated, or of any legislation which protects shopkeepers in England against

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    increase of rent. I should be glad to have particulars of any cases which my hon. Friend may have in mind and to consider whether there is any action which I could usefully take, but I see no immediate prospect of legislation on this subject.
    Mrs. Mann: Can my right hon. Friend say if he considers it fair that shopkeepers in Sauciehall St., Glasgow, should be asked to buy their shops at £7,500, the offer being an increase of £4,000 from that of last year; that they were told to put up that figure or get out; and that all over Glasgow a decision has been taken to raise the rents on the shopkeepers of that city?
    Mr. Willis: In view of the very unsatisfactory state of the Scottish law in regard to landlord and tenant, would my right hon. Friend consider setting up a committee to go into the whole of this question with a view to the possibility of introducing legislation in two or three years' time when it becomes possible to do so?
    Mr. Gallacher: Is it not possible for the Minister to get a short Bill generally accepted and passed through this House without any difficulty, which would allow control of rents or sale prices for shops in Glasgow and throughout Scotland generally?
    Mr. Westwood: The prices which are being charged for these properties put up for sale in Glasgow may not be fair, but I have no power under the administrative powers given me by Act of Parliament to deal with the unfairness of those who at the present time are taking full advantage of the shortage of property in the City of Glasgow, nor can I hold out any hope of legislation dealing with this particular problem.
    Mr. Carmichael: Is the right hon. Gentleman aware that today in Glasgow it is not the wealthy shopkeepers in Sauciehall Street, but hundreds of very small shopkeepers in the working class districts, who are being requested to make offers for their premises; that a number have already admitted that they cannot make an offer and already are being threatened with eviction on 28th May; and if he has not power to stop that, surely some investigation should be made so that Parliament or at least the Secretary of State for Scotland could prevent the
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    wholesale dismissal of people from premises where they have built up their small businesses?

    Prison Officers (Qualification Certificates)
    Mr. W. J. Brownasked the Secretary of State for Scotland, whether he is aware of the delay in the issue of Civil Service certificates to auxiliary prison officers in Scotland who have qualified for the established staff; and, since these delays have a serious effect on the superannuation and seniority of the persons concerned, if he will give instructions that the dates of the certificates will be made retrospective to the date on which the recipient actually qualified.
    Mr. Westwood: I understand that there has been unavoidable delay in the issue of certificates of qualification by the Civil Service Commissioners owing to heavy pressure of work in that department. The, basis of seniority and the superannuation position of the officers concerned will be determined in consultation with the Prison Officers Association.
    Mr. Brown: May I interpret the reply as implying that these men will not, in fact, suffer through any act of delay over which they have no control?
    Mr. Westwood: Definitely I can give the hon. Member that assurance. It is the answer which I have given.

  MINISTRY OF PENSIONS

    Surgical Boots
    Mr. Niall Macphersonasked the Minister of Pensions the average time taken from the date of order to supply surgical boots and shoes; and what steps he is taking to accelerate manufacture and delivery.
    The Minister of Pensions (Mr. Wilfred Paling): It is not possible to give precise information of the time taken to produce surgical footwear as this varies between the several contractors and according to the special requirements of the pensioners. In normal cases orders are generally completed in about four months. My principal contractors removed to a modern and larger factory recently and arrangements have been made for additional trainee labour. Unfortunately all my contractors are finding it almost impossible to obtain skilled labour.
    Lieut.-Commander Braithwaite: Can the Minister say whether any priority in this matter is given to disabled men who are able to show that they have an offer of employment which they cannot accept until they get their appliances?
    Mr. Paling: There are special facilities for obtaining these things and I think that would apply to ex-Servicemen particularly.
    Mr. N. Macphersonasked the Minister of Pensions whether, in view of the long delay that elapses in supplying surgical boots and shoes from the date of order, he will consider the issue of three pairs instead of two pairs as at present, so that every disabled man requiring surgical boots or shoes may at all times have two pairs fit for use.
    Mr. Wilfred Paling: The delay in supplying surgical boots and shoes is caused in the main by a shortage of skilled labour in this comparatively small but specialised industry but it is hoped that to some extent this will be offset by the introduction of disabled ex-Servicemen as trainees. To adopt the hon. Member's suggestion in every case would throw an additional burden upon the industry which it would be unable to bear at present and would lead to increased delay.
    Mr. Macpherson: Is the right hon. Gentleman aware that the officials now do not allow boots to be ordered until one of the present pair is condemned and that long before the boots are delivered the other pair is worn out so that a disabled man cannot go to work?
    Mr. Paling: There may be something to be said for an increase of from two to three pairs, and as a matter of fact we did consider it but had to drop it until we could catch up with the arrears.
    Captain John Crowder: Is the Minister satisfied with the arrangements made for having these boots and shoes repaired free of charge, and are there sufficient shops in the localities where these boots can be repaired?
    Mr. Paling: I will consider that, but there are no such arrangements at the moment.

    Appeals
    Brigadier Lowasked the Minister of Pensions if he will make a statement
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    on the progress of appeals made to the Arbitration Tribunals; and whether the administrative work involved in these appeals is carried out by the same persons who have previously supported the decisions appealed against or by a special staff.
    Mr. Wilfred Paling: Approximately 12,600 applications have been received. Nearly 3,400 have been reviewed depart-mentally of which 500 have been allowed. About 120 cases have been sent to the Special Review Tribunal and, in a further 130 cases, a statement of case has been sent to the applicant. A special section has been set up within my Department to deal with applications.
    Mr. Godfrey Nicholson: What does the right hon. Gentleman mean by "reviewed departmentally"? Does it mean that an effort has been made in these cases to get them an extra review?
    Mr. Paling: This special tribunal was set up to deal with approximately the cases that had been reviewed before August last, but before they go to the tribunal we review them ourselves in our Department to see if we can do anything about them there.

  BRITISH ARMY

    Detention, South Africa
    Mr. Boyd-Carpenterasked the Secretary of State for War when the hon. Member for Kingston-upon-Thames can hope to receive a final reply to the question raised in his letter dated 27th August, 1946, on the subject of the continued detention in South Africa of one, Carmine Lanzellotta, an American subject.
    The Secretary of State for War (Mr. Bellenger): As the hon. Member has been told, this matter is one for the Union Government. I have been in touch with their representatives here, but can only await their report.
    Mr. Boyd-Carpenter: May I take it from that answer that the right hon. Gentleman and his Department have ceased to detain this man?
    Mr. Bellenger: I do not think so. At any rate, the American Government know all about the suggestion of this Italian that he is an American citizen as well as an Italian citizen.

    Territorial Army
    Brigadier Lowasked the Secretary of State for War if he will make a statement on the terms and conditions of service for the Territorial Army.
    Mr. Sidney Shephardasked the Secretary of State for War if he will state the terms and conditions of service for commissioned officers in the T.A.
    Mr. Bellenger: I hope to place in the Library this week a copy of a pamphlet setting out the conditions of service for male officers and other ranks of the Territorial Army.
    Brigadier Low: Is it not a fact that some part of the terms of service has already been communicated to the Press, and would it not be a good thing if the right hon. Gentleman in future first communicated the terms of such an important thing as the future of the Services to this House?
    Mr. Bellenger: Yes, Sir. I always endeavour to acquaint the House with matters affecting my Department. I do not think any communication has been made to the Press from my Department, and certainly not on my authority.
    Colonel Ropner: Can the right hon. Gentleman say whether any communication has been made to the Territorial Army Associations in the counties?
    Mr. Bellenger: I could not say without notice.

  NATIONAL FINANCE

    Printing Expenditure
    Brigadier Mackesonasked the Chancellor of the Exchequer what progress had been made at the end of 1946 towards the expenditure of £3,272,350 shown under the Civil Estimates as being required for departmental forms, circulars, pamphlets, etc., during the current financial year; and how this expenditure compares with the amount expended during a similar period in 1945.
    The Chancellor of the Exchequer (Mr. Dalton):£2,048,600 to the end of 1946, which is about a million pounds less than for the corresponding period of 1945.

    Taxation (Suggested Concessions)
    Sir Robert Youngasked the Chancellor of the Exchequer whether he will consider the position of those receiving
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    an allowance for maintenance of dependent relatives in view of the increase of pensions given to widows to 26s. per week so that the full relief of £50 will not be impaired.
    Mr. J. E. Haireasked the Chancellor of the Exchequer (1) whether he will exempt all craft used for pleasure purposes, such as dinghies and canoes, from Purchase Tax;
    (2) whether, in view of the fact that caravans are now exempt from Purchase Tax, he will extend such exemption to other camping equipment.
    Colonel Gomme-Duncanasked the Chancellor of the Exchequer if he will now remove or reduce the rate of Purchase Tax on damask goods in order to bring them into line with recent adjustments for utility goods of a similar kind.
    Mr. Dalton: My hon. Friends will not expect me to anticipate my Budget Statement.

    World Bank for Reconstruction
    Colonel J. R. H. Hutchisonasked the Chancellor of the Exchequer what demands upon the World Bank for Reconstruction have been made from this country.
    Mr. Dalton: None, Sir.
    Colonel Hutchison: Does that mean that the World Bank is not functioning, and is the Chancellor prepared to make some statement as to why the World Bank has not got into its stride?
    Mr. Dalton: No, Sir. What it means is that no demands have been made from this country—and I think that answers the hon. and gallant Gentleman's Question. It has nothing to do with the functioning of the World Bank in other directions.
    Colonel Hutchison: But it does lead to the question whether the World Bank is available for the receipt of demands such as those referred to in the Question.
    Mr. Dalton: That is not the Question on the Order Paper. If the hon. and gallant Gentleman wants further information and will put down a Question I will endeavour to answer him.

    Income Tax
    Mr. Bossomasked the Chancellor of the Exchequer whether he is prepared to propose any remedy to overcome the hardship suffered by certain taxpayers who, under Section 3 (2) of the Income Tax(Offices and Employments) Act, 1944, have borne tax under the Pay As You Earn system in respect of income earned is the Year ended 5th April, 1944, and which they cannot normally recover until the employment ceases or a Year arises in which no income is earned.
    Mr. Dalton: No, Sir. I do not agree that there was any hardship.
    Mr. Bossom: Does not the Chancellor think that it is most unfai that the money cannot normally be recovered until employment ceases or until a year arises in which no income is earned, and does he consider that it is fair that money taken in 1944 should be held up all this time until the person concerned stops earning?
    Mr. Dalton: The hon. Member has had a long correspondence with my right hon. Friend the Financial Secretary to the Treasury on the subject, and I have looked at the letters exchanged. I believe, in the latter part of last year. My right hon. Friend did his best to make it clear why the Treasury feels that there is no hardship in our view In concluding a letter dated 25th August, he said:
    "The taxpayer had the benefit of the cancellation of part of the tax charged in the period 1943–44 to bring him up to date with his tax payments, and if as a result of this he paid tax on the receipt basis instead of the earnings basis there could be no hard ship of ground for complaint."
    Mr. Bossom: This farmer paid £750 and the Treasury concluded their letter by saying that there was no hardship ground for complaint. Would the Chancellor himself like to have someone take £750 away from him, and would he say then that there was no hardship?
    Mr. Dalton: I have looked into this very carefully and I am quite satisfied that the man concerned has not been requirea to pay any more than is due over the series of years.
    Sir Frank Sandersonasked the Chancellor of the Exchequer whether, in view of the increasing amount of work incurred in preparing Income Tax and Surtax returns, he will consider allowing
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    the charges of an accountant against such income to a private person, as is legally the case for both private and limited companies.
    Mr. Dalton: No, Sir.
    Sir F. Sanderson: Does the Chancellor not consider that it is in the interests of the Treasury that Income Tax returns should be strictly accurate? Does he not also agree that it is necessary to appoint an accountant for this purpose, and can he say why a company should be given an advantage over a private individual.
    Mr. Dalton: The hon. Gentleman has put this Question on four occasions to my predecessors. He asked Mr. Neville Chamberlain the Question in July, 1936; he asked Sir John Simon the same Question in December, 1939, and he repeated it to Sir John Simon in February, 1940. He also put it to my immediate predecessor in October, 1943 All my illustrious predecessors gave the hon. Gentleman exactly the same answer in a lot more words than I have used.
    Mr. Oliver Stanley: Are we to under-stand, then, that the right hon. Gentleman is bound by the answers of his predecessors?
    Mr. Dalton: When they are good answers, yes.

    Dollar Expenditure
    Mr. De La Bère asked the Chancellor of the Exchequer whether, in view of the substantial fall in tonnage of agricultural machinery imported into this country in 1946 as compared with 1945, he will provide the necessary dollars to purchase agricultu
    Mr. Dalton: I always find dollars for this purpose, on the recommendation of my right hon. Friend the Minister of Agriculture.
    Mr. De la Bère: Is the right hon Gentleman aware that food which has to be imported from abroad has to be paid for with foreign money; is it not better to have really modern machinery here in order to produce more food on the spot instead of paying for importing it with borrowed money? Does this not indicate that the Chancellor of the Exchequer and the Minister of Agriculture are not paying

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    proper attention to these matters? It is thoroughly disgraceful.
    Mr. Walkden: May I ask the Chancellor if, by contrast to accepting this suggestion of the hon. Member for Evesham (Mr. De la Bère), he will stimulate the International Harvester concern which came here from America to produce machinery, since if they produce sufficient we will not need to import any more from the United States?
    Sir. Dalton: I hope they are getting on with their production.
    Mr. Osborneasked the Chancellor of the Exchequer what proportion of the domestic fat ration was provided by the £1,500,000 spent in the U.S.A. on oils and fats for the half-year July to December, 1946.
    Mr. Dalton: 6.8 per cent.
    Mr. Osborne: Does the Chancellor not think it would be wiser to spend a little more on fats, and that by spending less on tobacco he might be able to increase the purchase of fats in America?
    Mr. Dalton: Many people attach great importance to tobacco, and of course we do obtain some of the supplies to which the Question relates from sources other than the United States.
    Sir F. Sandersonasked the Chancellor of the Exchequer whether, in view of the fact that it is necessary to conserve our dollar resources, he will consider materially cutting down the importation of non-essential commodities, including films and U.S. tobacco, which two items alone amount to approximately 40 per cent. of our total imports from the U.S.A.
    Mr. Dalton: I never cease from studying all the possibilities of reducing all sorts of overseas expenditure.
    Sir F. Sanderson: Can the right hon. Gentleman say how it is wise or expedient to mortgage the country's credit in purchasing non-essential commodities at a time when dollars are required to purchase capital goods?
    Captain Marsden: Is the Chancellor aware that many millions of people who, like myself, do not smoke at all and rarely go to the pictures thoroughly object to this big expenditure over the last half year?
    Mr. Dalton: That is a very selfish point of view.
    Mr. M. Philips Price: Does the Chancellor not consider that he might usefully explore sources of non-dollar tobacco, in order to conserve our dollar resources?
    Mr. Dalton: They are being thoroughly explored, but they are still very small.
    Mr. Churchill: Is it not of the highest importance that the American loan should be used to bring in the appliances to put our industry in the latest condition, and also essential foods, and that all other expenditure should be viewed with severe restraint by the Chancellor of the Exchequer?
    Mr. Dalton: It would indeed be a great convenience to the balancing of our accounts and the rate of expenditure of the loan if large numbers of the population did not desire to consume tobacco, but since they do we are placed in a difficult position in refusing to supply the needs of the smoking population. In spite of the very heavy tax which the right hon. Gentleman knows we impose for that practice, the demand has gone up until we are now consuming tobacco to the extent of 130 per cent. of the prewar figure.
    Mr. Churchill: The right hon. Gentleman always tries to make a joke by turning a point against a questioner as a personal taunt. May I ask a question which relates entirely to his public duties as Chancellor of the Exchequer, which he sometimes forgets are national duties? Is there any reason to suppose that the British nation would not be willing to submit to any curtailment of non-essentials in regard to imports of films and tobacco out of the American loan in order either that that loan should be expended on essentials or that it should last longer?
    Mr. Dalton: I also smoke occasionally myself, and I assure the right hon. Gentleman that there was no personal taunt intended. It would, indeed, be very helpful if such a state of opinion were to grow up; and if we could have appeals made from any quarter, I would be quite prepared to do my part, if it could be made a national appeal that people should economise, particularly on tobacco.
    Mr. Churchill: What about American films?
    Mr. Dalton: With regard to American films, I have stated before—and so, I think, has my right hon. Friend the President of the Board of Trade—that we are very anxious that more good British films should be produced and there is, of course, an improvement in this matter over the past few years. The more good British films there are produced the less need will there be to fill up the screen with films from the United States or from anywhere else abroad, but for the moment the production of British films is not sufficient to fill the screen and the film-going public must, I think, count on seeing films from the United States and other places abroad as things stand at present.
    Lieut.-Commander Braithwaite: Is it not more important to fill people's stomachs than to fill the screen?

    Blocked Sterling Balances (Negotiations)
    Colonel Crosthwaite-Eyreasked the Chancellor of the Exchequer with what countries negotiations are now proceeding relative to the liquidation of blocked sterling balances.
    Mr. Dalton: Preliminary discussions are now taking place with India, to be followed by similar discussions with Egypt and Iraq.
    Colonel Crosthwaite-Eyre: Can the Chancellor say whether the discussions will be under way by July of this year, and can he give an assurance that none of them will be brought to a conclusion without first coming before this House for discussion?
    Mr. Dalton: They are under way. I tried to convey that preliminary discussions have already begun with India. July is a date which is set for us to endeavour—whether with success or not time will show—to reach agreement with all the holders of sterling balances.
    Mr. Walter Fletcher: In view of the crushing amount of the Indian sterling balances—between £1,000 million and £2,000 million—and the special circum-stances attached to them, will the Chancellor of the Exchequer give an assurance that any arrangement now under way will not be finalised until it has been discussed in this House?
    Mr. Dalton: The discussions have only just begun, and if we reach any conclusion
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    or any settlement which is satisfactory to the Government we shall certainly inform the House.
    Mr. Churchill: Is it not a fact that the Governor-General of India was notified in the time of the late Government that Great Britain reserved her full rights to present a counter-claim on account of the effective defence of India by all means—land, sea, air and diplomacy—by which the freedom of India from foreign invasion was secured?
    Mr. Dalton: I cannot charge my memory. The right hon. Gentleman was Prime Minister at the time, and if he says that such a message was sent I would not for a moment challenge him. It is not contrary to my recollection, although I do not exactly recall the message. It may be a fact that that is so.
    Mr. Churchill: Is that point going to be made? How do we accept the great concessions made on Lend-Lease by the United States and yet divert a large portion of our remaining assets to-payment of an exactly similar war debt to the Indian Government?
    Mr. Dalton: I would prefer to wait until these preliminary discussions have advanced a stage further.

BUSINESS OF THE HOUSE
Mr. Eden: May I ask the acting Leader of the House a question about Thursday's Business? I want to ask whether he is aware that the Food and Agriculture Organisation's Report was only available in the Vote Office 45 minutes ago. It is a document of nearly 100 pages. Does he really think it is reasonable to ask the House to discuss this document on Thursday? Does he think that to do that is fair either to the importance of the subject, or to the responsibilities of hon. Members of this House?
The Lord Privy Seal (Mr. Arthur Greenwood): There was published last Saturday morning what had already appeared in the newspapers—a summary of the Report—and if hon. Members were not aware of that, it is unfortunate, but I did take steps to see that the summary was in the Vote Office at the end of last week—[HON. MEMBERS: "But it was not"]. I know. I took immediate steps last Thursday to see that the Report

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of the Preparatory Commission was published as early as possible. There were two copies in this country. I had hoped that it would have been published early yesterday, but printing difficulties made that rather awkward, and it was published shortly after the House met. But the principles involved are surely in the minds of hon. and right hon. Members and I should have thought—[HON. MEMBERS: "Speech."]—I never abuse Question time. I do not make statements except in answer to Questions. I would now say that as the Report is now available, Thursday's Business should stand, and in no circumstances can I agree to an alteration.
Mr. Eden: It is quite true that this Report was made available on Saturday for those hon. Members who were here to receive it—[HON. MEMBERS: "Only the summary."] May I ask the right hon. Gentleman whether he himself has read the summary? I have sought to do so. The right hon. Gentleman will find it extremely difficult to follow this summary of eight pages without reading the full document of 100 pages. If he will look at paragraph 12, he will see that it is almost unintelligible without the full document. Nobody will belittle the significance of this subject. Does the right hon. Gentleman consider that it is treating the House fairly to bring forward a document like this and ask for a discussion on it at such short notice? I know of no precedent for such a procedure when there is, as far as I know, no urgency. Why has this subject to be taken this week? Why could it not equally well be taken next week, when the House will have had reasonable time to examine and study the document?
Mr. Greenwood: I would remind the hon. Members, if they will carry their minds back to last Thursday, that the Debate is not on this Report—[HON. MEMBERS: "What is it on?"] Perhaps hon. Members will give me a minute in which to reply. What I asked the House to agree to last Thursday was a Debate on the whole world food situation and the work of the F.A.O. No hon. or right hon. Member questioned me about the Preparatory Commission. I had already taken steps to put the printing of it in hand. This discussion will be as wide as Mr. Speaker will allow. If hon. Members
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have not been giving their minds to consideration of world-wide questions of great significance and importance, I am awfully sorry, but I imagine that the vast majority of hon. Members will welcome a Debate on this important subject.
Mr. Eden: May I ask the right hon. Gentleman again if he does not understand that this document is the basis of the international work that is to be done? Does he really consider it reasonable to ask the House to consider this document at 48 hours' notice? I register all the emphatic protest I can against this important international instrument being treated in this way, and I repeat my question, as to what the urgency is, and why it cannot be taken next week.
Mr. Greenwood: In these interchanges with right hon. Gentlemen on the other side, they always have arguments to show why things should never be taken now. They would always postpone things—[An HON. MEMBER: "Answer the question."] I am answering the question whether we regard it as a matter of urgency at this time to have this Debate, which I had hoped would be far above the party level. It is a world-wide question of the greatest importance and I should have thought that hon. Members of this House, if they had paid attention to their duty, would be able to discuss it 48 hours after receiving this Report It was only as a matter of great pressure that I was able to get the Report published. I am sorry that it was not published yesterday. I have done my best about it, and I still think there is adequate knowledge- in this House to enable us to discuss the food situation on Thursday.
Mr. Eden: Does not the right hon. Gentleman realise that to ask the House to discuss a Report of this significance with this notice is not treating the subject fairly but frivolously?
Mr. Greenwood: I have tried to make it clear that this Debate is on the work of the F.A.O. and the world food situation. This is a document which will contribute to the discussion of the problem, and I should have thought that hon. and right hon. Members opposite who are so keen on studying the Report, would consider 48 hours ample time to digest the document if they really wished to do so.
Mr. Churchill: I understand that the Debate is to be on the Adjournment of

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the House and, if I may, I should like to inquire, with great respect, Mr. Speaker, whether any special limitation will be imposed upon the full freedom of hon. Members to speak as they choose upon the subject of the Adjournment, if they are fortunate enough to catch your eye?
Mr. Speaker: The only Rule on the Adjournment is that one must not discuss legislation; otherwise the Debate must be quite open.
Mr. Henry Strauss: Has not the right hon. Gentleman himself said that he has hastened the production of this document because he considers it relevant to the Debate on Thursday? When he said that if hon. Members take their duties seriously they can read it, surely he means precisely the opposite? The only hon. Members who will be able to read this document by Thursday are those hon. Members who neglect today's and tomorrow's Business. In those undoubted circumstances, is he not bringing this House into contempt—[HON. MEMBERS: "Speech."]—with the country when he takes a step which, to the knowledge of the country, renders a serious Debate on the subject impossible?
Hon. Members: Answer.
Mr. Speaker: How can the Minister answer what was a provocative debating question?
Earl Winterton: What is the objection?
Mr. Quintin Hogg: On a point of Order, Mr. Speaker. Are we to understand that you now rule that we may not ask provocative debating questions?
Mr. Speaker: Certainly—
Earl Winterton: Hear, hear.
Mr. Speaker: If the noble Lord would not say "Hear, hear," quite so loudly when I am speaking, he would hear that I was saying "Certainly not." Hon. Members can ask any questions they like, but it is not necessary that a Minister should answer them, particularly when they are framed as they are sometimes in what is a non-answerable way.
Mr. Hogg: Further to that point of Order, Mr. Speaker, while I quite appreciate the difficulty which Ministers may feel in attempting to answer questions
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which are, in fact, unanswerable, is it to be ruled from the Chair that we are not entitled to demand an answer when such questions are asked?
Mr. Speaker: Hon. Members may demand an answer but there is no need to give it. A Minister can always refuse, and Erskine May lays down some Rules about Questions and supplementary questions which have been broken frequently lately.
Mr. Hogg: Further to that point of Order, is it one of the Rules in Erskine May that one may not ask provocative or debating questions? And are we to understand that the Chair will intervene to support this?
Mr. Speaker: It is one of the Rules in Erskine May that provocative and debating supplementary questions are out of Order, strictly speaking.
Earl Winterton: Might I ask you, Sir, if it is now your Ruling that it is out of Order to say "Hear, hear"?
Mr. Speaker: Certainly it is not out of Order to say "Hear, hear," but I rather thought, if the noble Lord does not mind my saying so, that it was rather provocative as far as I was concerned.
Earl Winterton: Further to that point of Order, Mr. Speaker. [HON. MEMBERS: "Apologise."] May I say that if there was anything provocative in the way that I said "Hear, hear" I am very sorry, but I have never before heard a Ruling from the Chair which criticised the tone of voice in which the term "Hear, hear" was uttered.
Mr. Wilson Harris: On the question of Business may I, as a Private Member, point out to the right hon. Gentleman the Lord Privy Seal how impossible he is making it for Private Members to follow these discussions intelligently, particularly if they have work to do outside this House, in the service of this House. We have had to consider, in the short time since we have reassembled, a most elaborate Transport Bill, a most elaborate Town and Country Planning Bill and a most elaborate Electricity Bill. We are to spend the whole of today on the Electricity Bill. Tomorrow afternoon there is an important Debate upon Germany. How is there time to study this Report in order to make it possible for us to do our duty?

1579
I ask the right hon. Gentleman to reconsider this arrangement.
Mr. Walter Fletcher: Having spent most of the last six weeks analysing some of the more egregious errors in the food policy of the Government in the Far East, may I point out—[HON. MEMBERS: "No,"]—that it will be absolutely impossible, within 48 hours, to study the document which is now being pushed out and thereafter make an intelligible survey of a question which must need the deepest study in detail, and not only, as the right hon. Gentleman airily said, on matters of principle? It is quite impossible for those who take a serious interest in this question, who have studied it on the spot and have seen the result of the errors which are being made, to draw conclusions as to the future and carry out their duty properly if they are not given sufficient time to make a proper examination of the document.
Mr. Greenwood: The hon. Gentleman obviously has his speech ready for Thursday after his study of one aspect of this problem. As regards the hon. Member for Cambridge University (Mr. Wilson Harris), he has taken a great interest in these problems over a long period of time. It is perfectly true that hon. Members are being worked—it may be they consider that they are being over-worked—but then that is the responsibility they took on themselves when they were elected at the last General Election.
Mr. Oliver Stanley: Might I ask the acting Leader of the House, in view of the statement made by the Secretary of State for the Colonies last week that he would keep the House in touch with any developments in Palestine, whether the Secretary of State proposes to make a statement
1580
during the week on the recent events, and if so, upon what day?
Mr. Greenwood: I am very grateful to the right hon. Gentleman for raising this-matter. Of course, we will fulfil the undertaking we gave about keeping the House informed. I will get in touch with my right hon. Friend, and will let the right hon. Gentleman know when it will be convenient for the Secretary of State for the Colonies to make a statement. However, as he knows, discussions are still going on, and it might be a little difficult to make a statement of any definitive character.
Mr. Stanley: Is not the right hon. Gentleman aware that I was not referring to the result of the discussions going on now? I was referring to the events in Palestine.
Mr. Greenwood: On that, of course I will ask my right hon. Friend to make a statement, if it pleases the right hon. Gentleman, on, say, Thursday?
Mr. Stanley indicated assent.
Mr. Greenwood: I will ask him to give a report on Thursday on the present situation.
Mr. Douglas Marshall: On Business, may I ask the Government whether they will consider an extra hour tomorrow night on the Adjournment Debate, in view of the fact that so many hon. Members wish to take part?
Mr. Greenwood: I think this is an inappropriate moment to ask a question about Business, since we are dealing with the subject of Palestine. I cannot give a guarantee, but I will consider that request through the usual channels.

BILL PRESENTED

  NAVAL FORCES (ENFORCEMENT OF MAINTENANCE LIABILITIES) BILL
  "to authorise deductions under the Naval and Marine Pay and Pensions Act, 1865, for the maintenance of wives and children; to restrict the discontinuance of allotments of pay; and for purposes connected with the matters aforesaid," presented by Mr. John Dugdale; supported by Mr. Walter Edwards; to be read a Second time upon
  Monday next, and to be printed. [Bill 34.]

BUSINESS OF THE HOUSE
Motion made, and Question put,
"That the Proceedings in Committee on Electricity [Money] be exempted, at this day's Sitting, from the provisions of the Standing Order (Sittings of the House)."—[Mr. Arthur Greenwood.]
The House divided: Ayes, 264; Noes, 125.

Division No. 67.]

AYES

[3.50 p.m.

Adams, W. T. (Hammersmith, South)

Evans, E. (Lowestoft)

Lewis, T. (Southampton)

Alexander, Rt. Hon. A. V.

Evans, John (Ogmore)

Lipson, D. L.

Allen, A. C. (Bosworth)

Ewart, R.

Lipton, Lt.-Col. M.

Anderson, A. (Motherwell)

Fairhurst, F.

Logan, D. G.

Anderson, F. (Whitehaven)

Farthing, W. J.

Longden, F.

Attewell, H. C.

Field, Capt, W. J.

Lyne, A. W.

Austin, H. Lewis

Foot, M. M.

McAdam, W.

Awbery, S. S

Forman, J. C.

McAllister, G.

Ayles, W. H.

Fraser, T. (Hamilton)

McGhee, H. G.

Ayrton Gould, Mrs. B

Freeman, Peter (Newport)

McGovern, J.

Bacon, Miss A

Gaitskell, H. T. N.

Mack, J. D.

Balfour, A.

Gallacher, W.

McKay, J. (Wallsend)

Barton, C.

Ganley, Mrs. C. S.

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

Battley, J. R.

George, Lady M. Lloyd (Anglesey)

McKinlay, A. S.

Bechervaise, A. E.

Gibson, C. W.

Maclean, N. (Govan).

Bellinger, Rt. Hon. F. J.

Gilzean, A.

McLeavy, F.

Benson, G.

Glanville, J. E. (Consett)

MacMillan, M. K. (Western Isles)

Berry, H.

Gooch, E. G.

McNeil, Rt. Hon. H.

Bing, G. H. C.

Greenwood, Rt. Hon. A. (Wakefield)

Macpherson, T. (Romford)

Blyton, W. R.

Greenwood, A. W. J. (Heywood)

Malialieu, J. P. W.

Boardman, H.

Grenfell, D. R.

Mann, Mrs. J.

Bowden, Flg.-Offr. H. W.

Grierson, E.

Manning, Mrs. L. (Epping)

Bowles, F. G. (Nuneaton)

Griffiths, D. (Rother Valley)

Mathers, G.

Sraddock, Mrs E. M. (L'pl, Exch'ge)

Griffiths, Rt. Hon. J. (Llanelly)

Medland, H. M.

Braddock, T. (Mitcham)

Gunter, R. J.

Mellish, R. J

Bramall, Major E. A.

Guy, W. H.

Messer, F.

Brook, D. (Halifax)

Haire, John E. (Wycombe)

Middleton, Mrs. L

Brown, George (Belper)

Hale, Leslie

Mikardo, Ian

Brown, T. J. (Ince)

Hall, W. G.

Mitchison, Maj. G. R.

Brown, W. J. (Rugby)

Hamilton, Lieut.-Col. R.

Monslow, W.

Bruce, Maj. D. W. T.

Hannan, W. (Maryhill)

Montague, F.

Buchanan, G.

Hardy E. A.

Morgan, Dr. H. B.

Burden, T. W.

Harris, H. Wilson

Morley, R.

Burke, W. A.

Hastings, Dr. Somerville

Morris, Hopkin (Carmarthen)

Butler, H. W. (Hackney, S.)

Henderson, A. (Kingswinford)

Moyle, A.

Carmichael, James

Henderson, Joseph (Ardwick)

Murray, J. D.

Castle, Mrs. B. A.

Herbison, Miss M.

Nally, W.

Champion, A. J.

Hicks, G.

Naylor, T. E.

Chetwynd, G. R.

Holman, P.

Neal, H. (Claycross)

Cobb, F. A.

Holmes, H. E. (Hemsworth)

Nicholls, H. R. (Stratford)

Cocks, F. S.

House, G.

Noel-Baker, Capt. F. E. (Brentford)

Coldrick, W.

Hoy, J.

Noel-Buxton, Lady

Collick, P

Hubbard, T.

O'Brien, T.

Collindridge, P.

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

Oldfield, W. H.

Colman, Miss G. M.

Hughes, Hector (Aberdeen, N.)

Oliver, G. H.

Comyns, Dr. L.

Hynd, H. (Hackney, C.)

Orbach, M.

Cook, T. F.

Hynd, Rt. Hon. J. B. (Alteroliffe)

Paling, Rt. Hon. Wilfred (Wentworth)

Cooper, Wing-Comdr. G.

Iiving, W. J.

Paling, Will T. (Dewsbury)

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

Janner, B.

Palmer A. M. F.

Daines, P.

Jay, D. P. T.

Parkin, B. T.

Dalton, Rt. Hon. H.

Jeger, G. (Winchester)

Paton, Mrs. F. (Rushcliffe)

Davies, Edward (Burslem)

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

Pator, J. (Norwich)

Davies, Ernest (Enfield)

Jones, D. T. (Hartlepools)

Pearson, A.

Davies, Harold (Leek)

Jones, Elwyn (Plaistow)

Peart, Capt. T. F.

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

Jones, P. Asterley (Hitchin)

Piratin, P.

Davies, R. J. (Westhoughton)

Keenan, W

Porter, E. (Warrington)

Davies, S. O. (Merthyr)

Kenyon, c

Porter, G. (Leeds)

Deer, G.

King, E. M.

Price, M. Philips

Dobbie, W

Kinley, J.

Proctor, W. T.

Dodds, N. N.

Kirby, B. V.

Randall, H. E.

Driberg, T. E. N.

Kirkwood, D.

Ranger, J.

Dugdale, J (W. Bromwich)

Lavers, S.

Rankin, J.

Dye, S.

Levy, B. W.

Rees-Williams, D. R.

Edwards, N. (Caerphilly)

Lewis, J. (Bolton)

Reeves, J.

Reid, T. (Swindon)

Soskice, Maj. Sir F

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

Rhodes, H.

Sparks, J. A.

Warbey, W. N.

Richards, R.

Stamford, W.

Watson, W. M.

Ridealgh, Mrs. M.

Stephen, C.

Webb, M. (Bradford, C.)

Robens, A.

Stewart, Michael (Fulham, E.)

Weitzman, D.

Roberts, Goronwy (Caernarvonshire)

Stross, Dr. B.

Wells, W. T. (Walsall)

Roberts, W. (Cumberland, N.)

Stubbs, A. E.

West, D. G.

Robertson, J. J. (Berwick)

Symonds, A. L.

Westwood, Rt. Hon. J.

Rogers, G. H. R.

Taylor, H. B. (Mansfield)

Wigg, Col. G. E.

Ross, William (Kilmarnock)

Taylor, R. J. (Morpeth)

Willey, O. G. (Cleveland)

Royle, C.

Taylor, Dr. S. (Barnet)

Williams, W. R. (Heston)

Sargood, R.

Thomas, I. O. (Wrekin)

Williamson, T.

Scollan, T.

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

Willis, E.

Scott-Elliot, W.

Thorneycroft, Harry (Clayton)

Wills, Mrs. E. A

Shackleton, Wing.-Cdr. E. A. A

Thurtle, E

Wilson, J. H.

Sharp, Granville

Tiffany, S

Wise, Major F. J.

Shinwell, Rt. Hon. E.

Titterington, M. F.

Woods, G. S

Silverman, J. (Erdington)

Tolley, L.

Wyatt, W.

Silverman, S. S. (Nelson)

Turner-Samuels, M

Yates, V. F.

Skeffington, A. M.

Usborne, Henry

Young, Sir R. (Newton)

Smith, C. (Colchester)

Vernon, Maj. W. F

Younger, Hon. Kenneth

Smith, Ellis (Stoke)

Viant, S. P.

Zilliacus, K.

Snow, Capt. J. W.

Wadsworth, G.

Solley, L. J.

Walken, E.

TELLERS FOR THE AYES

Sorensen, R. W

Wallace, G D. (Chislehurst)

Mr. Simmons and

Mr. Popplewell

NOES

Agnew, Cmdr. P. G.

Grimston, R. V.

Neven-Spence, Sir B.

Amory, D. Heathcoat

Hare, Hon. J. H. (Woodbridge)

Nicholson, G.

Assheton, Rt. Hon. R

Harvey, Air-Comdre, A. V.

Noble, Comdr. A. H. P.

Baldwin, A. E.

Haughton, S. G.

O'Neill, Rt. Hon. Sir H

Barlow, Sir J.

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

Orr-Ewing, I. L.

Beechman, N. A.

Hinchingbrooke, Viscount

Osborne, C.

Birch, Nigel

Hogg, Hon. Q.

Peto, Brig, C. H. M

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

Hollis, M. C.

Pickthorn, K.

Bcssom, A. C.

Hope, Lord J.

Prior-Palmer, Brig. O

Boyd-Carpenter, J. A.

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

Raikes, H. V.

Braithwaite, Lt.-Comdr. J. G.

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

Rayner, Brig. R.

Bromley-Davenport, Lt.-Col. W

Jeffreys, General Sir G.

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

Buchan Hepburn, P. G. T.

Jennings, R.

Roberts, H. (Handsworth)

Bullock, Capt. M.

Kerr, Sir J Graham

Roberts, Maj. P. G. (Ecclesall)

Butcher, H. W.

Kingsmill, Lt.-Col. W. H

Robinson, Wing-Comdr, Roland

Carson, E.

Lambert, Hon. G.

Ropner, Col. L.

Challen, C.

Lancaster, Col. C. G

Sanderson, Sir F.

Channon, H.

Langford-Holt, J.

Savory, Prof. D. L.

Churchill, Rt. Hon. W. S

Law, Rt Hon. R. K.

Shepherd, W. S. (Bucklow)

Clifton-Brown, Lt.-Col. G.

Logge-Bourke, Maj. E. A. H

Smithers, Sir W.

Cole, T. L.

Lprnex-Boyd, A. T.

Snadden, W. M.

Cooper-Key, E. M.

Lloyd, Maj. Guy (Renfrew, E.)

Stanley, Rt. Hon. O.

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

Low, Brig. A. R. W.

Stewart, J. Henderson (Fife, E.)

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

Lucas-Tooth, Sir H.

Strauss, H. G. (English Universities)

Crosthwaite-Eyre, Col. O. E

MacAndrew, Col. Sir C.

Stuart, Rt. Hon. J. (Moray)

Crowder, Capt. John E.

McCallum, Maj. D.

Sutcliffe, H.

Cuthbert, W. N.

Macdonald, Sir P. (I. of Wight)

Taylor, C. S. (Eastbourne)

Davidson, Viscountess

Mackeson, Brig, H. R.

Thorneycroft, G. E. P. (Monmouth)

De Ia Bère, R.

McKie, J. H. (Galloway)

Thornton-Kemsley, C. N.

Digby, S. W.

Maclay, Hon. J. S.

Thorp, Lt.-Col, R. A. F.

Dodds-Parker, A. D.

MacLeod, J.

Touche, G. C.

Drewe, C.

Macpherson, Maj. N. (Dumfries)

Vane, W. M. F.

Dugdale, Maj. Sir T. (Richmond)

Maitland, Comdr. J W.

Ward, Hon. G. R.

Eden, Rt. Hon. A.

Manningham-Buller, R. E.

Wheatley, Colonel M. J.

Elliot, Rt. Hon. Walter

Marlowe, A. A. H.

Williams, C. (Torquay)

Fleming, Sqn.-Ldr. E. L

Marsder, Capt A.

Williams, Gerald (Tonbridge)

Fletcher, W. (Bury)

Marshall, D. (Bodmin)

Willoughby de Eresby, Lord

Galbraith, Cmdr. T. D.

Mellor, Sir J.

Winterton, Rt. Hon. Earl

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

Moore, Lt.-Col. Sir T.

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

Glossop, C. W. H.

Morrison, Maj. J. G. (Salisbury)

Glyn, Sir R.

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

TELLERS FOR THE NOES

Grant, Lady

Mott-Radclyffe, Maj. C. E.

Major Conant and

Gridley, Sir A.

Mullan, Lt. C. H.

Major Ramsay.

ORDERS OF THE DAY

  ELECTRICITY BILL
  Order read for resuming Adjourned Debate on Amendment to Question [3rd February], "That the Bill be now read a Second time."—[Mr. Shinwell.]
  Which Amendment was to leave out "now," and, at the end of the Question, to add "upon this day six months."—[Mr. R. S. Hudson.]
  Question again proposed, "That 'now' stand part of the Question."
  3.59 p.m.
  Mr. Pickthorn: It is not from any over-estimation of my personal importance in this matter that I rather regret the absence throughout the whole or most of yesterday, and the absence now, of the Prime Minister, of the Deputy-Leader of the House, of both Law Officers and of the Chancellor of the Exchequer—[Laughter.] The right hon. Gentleman the Minister has a great advantage over the rest of us, in that when he is not audible he is, apparently, always extremely amusing. He really should try either to be audible or to keep his mouth shut, unless he is in possession of the House.
  The Minister of Fuel and Power (Mr. Shinwell): I will listen.
  Mr. Pickthorn: Thank you. I was saying that I do not attribute this absence to any personal deficiencies on the part of the right hon. Gentlemen concerned. I do attribute it to what we have just had a discussion of—the excessive and indeed fantastically ridiculous rate at which we, all of us, are being asked to work. Secondly, I have to avow a direct personal interest in the matters I am about to discuss. Thirdly, with the permission of the House, I will lay out the order in which I hope to discuss these matters.
  First, I want to say something about compensation; then something about the prospect of practical concrete improvements to be expected from this Bill; then something about the treatment of directors, and then about the general constitutional importance of this Bill, and of the way in which this Bill has been introduced. I put these topics, not in ascending order of importance, but I think they
  1586
  have something like an ascending order of importance. Not that I would suggest that the interests of directors are matters of immense importance, but because that question does, I think, form the natural transition from the question of practical improvements under the Bill, to the general constitutional question. I would begin, if I may, by saying a word about compensation. It is common for the right hon. Gentlemen and hon. Gentlemen opposite to talk about the soul of the people. That is metaphor. Peoples do not have souls. Men who talk of peoples having souls generally land in one form or another of Nazism or totalitarianism. What a people does have, which takes the place for a people, as nearly as such an analogy is ever fair, of a soul for a man, is language, and by destroying a language you do to a people what you do to a man if you poison his soul.
  This word "compensation" has been destroyed from the beginning of this Parliament when the Chancellor of the Exchequer told us simultaneously, first that the public was getting a very good bargain in the Bank of England, although how there could have been any bargain in the matter I know not, when the terms were fixed by the ipse fixit of the ministerial party to it, and secondly, that other shareholders or business interests fearing nationalisation, must not expect to be treated so well. When he told us that, he made it quite clear that the word "compensation" no longer means what it used to mean, which was a "counterbalance or the rendering of an equivalent." The second general consideration I would offer to right hon. and hon. Gentlemen opposite is that you cannot, in fact, compensate when you nationalise on a very large scale. There is nothing with which to compensate except what people in the nation own, and if more than quite a low proportion of that is to be taken over, there is not enough left elsewhere with which to compensate. That I believe to be the real reason, and not particularly moral delinquency, common though I have no doubt that moral delinquency is among right hon. and hon. Gentleman opposite—we are all of us sinners, and I have no reason to suppose that they are better than the rest of us. It is to that inescapable fact that we owe this destruction of language which makes debate and discussion more and more difficult, and government by discussion mere camouflage.

  1587
  There are three smaller, less general, things I wish to say about compensation. The first is that if the Stock Exchange nominal price at a given moment is to be taken, clearly payment ought to be in what the Stock Exchange was paying in at that moment, that is, in money, and in transferable money. Here the payment is offered not in money, and what is offered in lieu of money is not, so far as the Statute provides, necessarily transferable, or transferable under any particular conditions, it is left at the mercy of the Minister. Secondly, of compensation I would say that this is the first occasion, I think, in all our history where there has been the distinction which is made by this Bill between the company and the shareholders of the company, where entities brought into existence by Parliament, legitimately performing their work under the aegis and supervision of Parliament for one or two generations, the entities which own the things which the Government want, are simply being caused, by the mere bare fiat of the Government, to go out of existence, at a date not yet known, without any sort of compensation, their shareholders, meanwhile being treated in the way which is nowadays called compensation. That is a new thing. I believe it to be, constitutionally a most regrettable step.
  Then, the third and last thing I wish to say on the compensation point is that the argument that, of course, shareholders ought to be satisfied with smaller incomes because they are getting better security, is now plainly nonsense. From the way in which the right hon. Gentleman the Minister of Fuel and Power talked of capital and dividends and so on yesterday, I am extremely doubtful whether his understanding is aware it is nonsense, but I cannot believe that either his Parliamentary Secretary, or the Chancellor of the Exchequer doubts that it is nonsense. There is no greater security in having the promise of a paper Dalton pound at this moment than in having a pound's worth of almost anything one chooses. If right hon. and hon. Gentlemen opposite doubt that, I would ask them whether they would sooner take a paper pound, transferable or non-transferable, at this moment, or job back to the date to be taken for the Stock Exchange price, and take a pound's worth of things, particu-
  1588
  larly electrical machinery, at that date. I have no doubt whatever what their answer would have to be.
  I come next to the question of practical improvements in production and distribution. We heard nothing yesterday from the right hon. Gentleman to show any prospect of practical improvements arising out of this Bill. Who are the persons for whom practical improvements might arise? First they are the employees. What happens to the employees under this Bill? They will lose the guarantees they have had. And they do not get what I think I am right in saying, in legislation like this, in every year for more than 80 years until 1946 they always got—that is, a proper statutory guarantee of compensation for disturbance. They are not getting that. Really it is difficult to see what it is the workers are to get out of it. I was a little surprised yesterday to hear more than one spokesman of the unions concerned, one of whom is now present, say that all the workers were in favour. They did not all take that line not long ago, because one of them wrote a book three or four years ago, in which he said:
  "It is doubtful if even a small minority of engineers and administrators could be mustered to support immediate nationalisation."
  [Interruption.] Did the hon. Member ask, "Who said that?"
  Mr. John Lewis: What would be the position today if the people in the industry were asked what they would prefer?
  Mr. Pickthorn: It is very funny: they always face the future. They always ask a question about something which is hidden by the mists of futurity or by the fog of mere assumption. I am talking about what was said three or four years ago. There have certainly been no technical changes to alter that opinion since, so the whole of yesterday's argument that what is here wanted is not political but purely technical, falls by the board. I do not think anybody can say that it is the workers who are clearly going to gain out of this. I do not suppose anybody would say that it was the shareholders who were clearly going to gain. Thirdly, then, there are the consumers. I do not propose to go into arguments about the exact prices of current here and there. I should be perfectly prepared to face those arguments on any appropriate occasion: I

  1589
  will say one or two things about that. Yesterday I feel sure hon. Gentlemen opposite exaggerated the contribution of the grid to the cheapening of electricity. Secondly, I feel sure that in one case, which I think was given by the hon. Member for North Wembley (Mr. Hobson), comparing prices between a company and a municipality, he did not get in all the relevant figures—but I think it would be inappropriate on a Second Reading Debate to go into those arguments in detail.
  The test I would put to the right hon. Gentleman on the Treasury Bench about the probability of direct concrete improvement to consumers is this: Will he write into the Bill, will he accept Amendments to give consumers under the Statute the same rights as they have now? Will he do that?
  Mr. Shinwell: What are they?
  Mr. Pickthorn: Does not the right hon. Gentleman know? I guessed yesterday that the right hon. Gentleman had not read the Bill and, still less, read the earlier Acts. That was very obvious. He referred to Clause I and then jumped to somewhere about Clause 30, and left out almost all the guts of the Bill. Are they going to get a guaranteed right to receive their current at the same rate as other comparable people asking for rates for comparable purposes? That is one of the things they have now. Are they going to get any kind of fixing of price ceilings, or making it difficult for prices to go up above a certain level? Are they going to get any right of appeal to any independent tribunal, if they think they are being overcharged, as they all of them have now?
  On the contrary, they are going to get none of these things. They are going to lose the check of competition on the supplier; they are going to lose the check of appeal to the Electricity Commissioners on the supplier, and the check of the possible take-over of his own concern to the supplier. All those things they are going to lose. Fourth—if it is possible at all to differentiate population into these entities, the workers, the shareholders and the consumers—if there is any fourth entity it is the general interest of the nation as a whole. Is that going to gain out of this? I do not wish to enter upon criticism of the Central Electricity Board, but I think it fair to say that if there is
  1590
  one part of the industry which is open to criticism at this moment, it is that part. If there is one thing clear it is that if the planners had had their way, we should, unless God had done even more for us than He did, have lost the war.
  They decided before the war and during the first year of the war that generation capacity needed would be less than in peacetime—considerably less. In fact, it turned out to be considerably more. If the "chaos of private interests" had not produced that result, if the infallible planning of the right hon. Gentleman and his congeners had been left omnicompetent and uncontrolled, then, as I say, Heaven alone knows whether we should have won the war, or how we could have won it.
  To come to my third head, I wish to say something about the treatment of directors under this Bill. There is nothing particularly, necessarily, unusually wicked about directors, so far as I have been able to observe, comparing them with dons, military and Air Force officers, with Ministers of the Crown, trade union secre-tarys, and with other people with whom, at one time or another, I have been permitted I will not say to mix, but at least to converse. That is why I very particularly regret the absence of the Prime Minister and the Law Officers yesterday and today. I cannot believe that if they fully understood what this Bill proposes to do in these matters, they would think it proper.
  I wish to be as quick as I can. I invite hon. Members to look at Clauses 13, 15, 22, 25, 49 and 54. There are others, no doubt, but under those Clauses they will find directors of electricity concerns placed in a sort of untouchable class of upside-down privilege, treated as no men—I do not hesitate to say it—as no men under the British Crown have ever before been treated. That is a matter of immense constitutional importance. It is much more a matter of constitutional importance because the right hon. Gentleman is either unaware of it, or is now already so—I am not sure whether "insolent" is a Parliamentary word or not—overweening, that he thought it did not matter a bit and that this House could be trusted to swallow anything, that the legions behind him were safe, and that really it was not worth bothering to explain anything to the people on this side: so he said not a word about all that.

  1591
  Directors of electricity concerns are to be made personally liable even though a man may have voted against the action for which he is being made liable, and even though he was serving abroad at the time. What is more, they are to be made liable for acts which are not really their acts; for some of the acts for which they are being made liable are acts which are the acts of shareholders, and for which the directors would merely be the executive or administrative authorities and not the ultimately responsible authors. Yet upon them, the responsibility is being put. And the onus of proof is being shifted the wrong way. It is a long time since I studied criminal law, and then not deeply, but at that time the only man who had the onus of proof upon him in criminal charges, was a man found lurking with housebreakers' tools in London or Birmingham.
  Now, the onus of proof is being shifted to the doing of acts which may not have been really the ultimate responsibility of the man against whom it is being shifted. I do not want to go into detail about that side of the matter because my right hon. Friend who opened the Debate yesterday for the Opposition put most of it, I think, plainly enough and quite clearly. At the very least even if we are all wholly misunderstanding these Clauses, it must be admitted by the House that such Clauses should not be supposed by the responsible Minister; to need no kind of explanation or apology. That is a very remarkable constitutional milestone.
  So also is this Bill a remarkable constitutional milestone from the point of view of the powers it gives the Minister. All the Bills we have passed so far in this Parliament, and all the Bills now before us, every one of them, might have the same short Title, "Additional Ministerial Powers Bill." Every one has been the same. This is as bad, or worse than most. I am not sure that I have counted right, but I think in this Bill there are 80 or 90 different places authorising the Minister to "direct," to "determine," to "require" or to "prescribe" something or other. On several of these occasions he is himself the sole judge of when he is entitled to exercise these powers. For instance, in Clause 5 (1) it is in any matter "appearing to the Minister to affect the national interest." I do
  1592
  not know why it should be the "national interest." I thought there was a time when national interests had been jettisoned but now apparently they will, as interpreted by a Minister, suffice any action by any Minister.
  Some of these powers are framed so as to exclude any appeal against their exercise in the ultra vires ground. Then again, they involve an enormous patronage. The Minister receives under this Bill the distribution of a great many jobs of all sort's—jobs which are remunerated, jobs not financially remunerated but desirable as ministering to vanity or politics, and jobs the function of which should be to keep an eye upon the Minister. All these jobs are in the power of one man. The Minister appoints all the boards and councils, and has the power to dismiss them and each of their members as he chooses. The amount of delegated legislation which he has in his power is immense, and on this I would remind the right hon. Gentleman of his own words. He talked about coal, and said that our future depends upon the success of these experiments, and he added:
  "We cannot afford to take risks. If we should fail with coal, we cannot hope to promote further schemes of nationalisation."
  Perhaps that is why the Government are hurrying all these schemes of nationalisation through. We know that there is no real necessity for them, because the Chancellor of the Exchequer told us the other day that they could do all the nationalising they wanted to do this year, and would then have a year on their hands. If that is so, was there any purpose in not trying to see if the coal experiment worked out well, or did they want to be sure there was not time to see if, before new experiments were started, it was working well or not? The right hon. Gentleman said on almost the same date:
  "…A bad Government, a bad Minister or a bad Board could under the powers available in the Bill"—
  the Coal Industry Nationalisation Bill—
  —"go far to wreck the whole economic structure of industry, and, thereby, of the country as well."—[OFFICIAL REPORT, 29th January. 1946; Vol. 418, c. 707.]
  I submit that that is true of this Bill. I submit that this Bill is, indisputably, a Bill of great constitutional importance. Further, I submit this to the right hon. Gentleman. There is no constitutional im-

  1593
  propriety, there is not necessarily any intellectual imbecility, in supposing that this is a bad Government, and, though it may surprise the right hon. Gentleman more, it may surprise some of his colleagues less, if I add that there is no constitutional impropriety nor even necessarily any intellectual imbecility, in judging this Minister to be, even in this Government, an unusually bad Minister. The business of this House of Commons is not to pass Bills of which it can even plausibly be stated that, they put in the Minister's hands the power to ruin the country.
  I wish to be short. I now come, almost, but not quite, to the end. There is a great fallacy in the argument often used by right hon. Gentlemen, and especially by the Lord President of the Council—for the cause of whose absence we are all regretful—there is a great fallacy, I say, in the argument, that we must have Bills in this form which give Ministers immense additional powers of control, in order to save time. If right hon. Gentlemen really mean their own argument, that argument must turn round and appear, even to themselves, to be fallacious. What do they say? They say to arguments that there is no proper control in this Bill in the form of accounts, or that there is no way in which Parliament can control the area boards. They say in answer that we can always put down Questions, or ask for a day to Debate the matter. The fallacy of this answer is that if this was an honest attempt to control the electrical industry half as much as if is being controlled now, today, by statute, a great deal more time would be wasted in questions and in parliamentary days than can ever be saved by this so-called "streamlined" method of legislation.
  There is another constitutional point. The House will remember the phrase in Erskine May about the right of petition in Parliament for redress of grievances being regarded as being fundamental in the Constitution. Clause 10 of this Bill, in a way which I think unprecedented, though I believe it is being done in the Transport Bill also, proposes that corporate bodies legally created shall be precluded from approaching the House either to oppose or to propose a Bill. There are many other constitutional points with which I will not weary the House.
  Next, I would say that the constitutional importance of these things is not
  1594
  unknown to right hon. Gentlemen opposite. I will say afterwards who spoke as follows:
  "I would sooner the State got into its control key industry after key industry until, within a reasonable, time, they were substantially masters of the economic framework. Then would be the time to take the big decisions."
  The "Daily Herald" added to the report of the speech in question:
  "By the time the country has become a Socialist country, they can make a clear and equitable plan, instead of insisting on a guarantee for 25 years."
  That was the present Lord President of the Council. In other words, they were going to be in a position of economic control, giving a political guarantee of not a five-year plan but a 25-year plan. They want to get political control of economic necessities for constitutional purposes. That was the view put by the Lord President of the Council in the sentence I have just read.
  Mr. Turner-Samuels: Would the hon. Gentleman look at Clause 10? He has just said that it prohibits petitioning to Parliament. Would he look at Clause 10 and tell the House where that appears?
  Mr. Pickthorn: No, I would not. I think the hon. and learned Gentleman is well able to do it himself, and, anyhow, I have passed that point. I rather guess that the hon. and learned Gentleman is not as learned about the word "petition", and the relation between petition and Bill, as he is leading the House to suppose. I think that may indicate the answer to his question. I should now like to read, as a supplement to the extract which I have read from the Lord President, a sentence from the right hon. Gentleman the Minister. He said:
  "Without increased production and a greater effort on the part of everybody, we shall fail."
  Of course, obviously, any Government will succeed if everybody behaves better than they did before and produces more. The right hon. Gentleman went on:
  "No doubt, there are people in our country who would delight in our failure. Unfortunately, failure for the Government would mean failure for the country, and that none of us can afford."
  By Heaven, none of us can. We could not find a phrase which, more simply or more strongly, puts the case against the policy of this Bill than that sentence.

  1595
  This Bill intertwines in large measure the mere party fortunes of the second-rate and ephemeral men who happen to occupy the Treasury Bench. That policy intertwines the interests of these men with the general interest of the country, so that they may presume to threaten the country that, if they fail, the country will be ruined. That is an intolerable thing for a Minister to say to the inhabitants of these Islands.
  4.28 p.m.
  Mr. John Lewis: I am very glad to have the opportunity of catching your eye, Mr. Speaker, immediately after the senior Burgess for Cambridge University (Mr. Pickthorn). I remember that, a day or two after I took my seat in this House, I smiled at a certain statement by the hon. Gentleman, who warned me that I should find myself in intellectual difficulties if I followed this course. From my limited experience, the cut and thrust of Debate has always been characterised by courtesy, but I will say, so far as the hon. Gentleman is concerned, he characterised his remarks with pugnacious offensiveness, and would expect Members of the Cabinet to leave their Departments in order to come into the House to hear him.
  Mr. Pickthorn: Certainly, that is what Parliament is for.
  Mr. Lewis: The hon. Gentleman has just said that, when my right hon. Friend is not audible, he is extremely amusing. May I assure the hon. Gentleman, on behalf of those who sit on this side of the House, that he is least amusing, when he is most audible.
  We witnessed a somewhat extraordinary spectacle yesterday when the right- hon. Member for Southport (Mr. R. S. Hudson) stood up to answer the case put forward by my right hon. Friend the Minister of Fuel and Power. Instead of being supported by the ranks of those who, on previous occasions, when Bills for nationalisation have been under discussion, have always acclaimed with resounding cheers the statements from the Opposition Front Bench, the right hon. Gentleman found himself, on some occasions, in splendid isolation. We have a right to ask ourselves why the right hon. Member for Southport, who is regarded in some parts of the House as being an
  1596
  agricultural expert, should have been called upon on this occasion to reply for the Opposition. Where was the right hon. Member for the City of London (Sir A. Duncan)? Where was the right hon. Member for the Scottish Universities (Sir J. Anderson)? On many occasions, we on this side of the House disagree with the views expressed by those right hon. Gentlemen, but, at least, we respect their views, because we know that they are based on knowledge and experience.
  Mr. R. S. Hudson: Would the hon. Member allow me to tell him that it so happens that the right hon. Gentleman the Prime Minister and I are the only survivors in this House of the Committee of this House which originally got through the 1926 Electricity Act? Actually, I think there are three of us.
  Mr. Shinwell indicated assent.
  Mr. Hudson: We are the only survivors. Therefore, the hon. Member cannot say that I do not know anything about it.
  Mr. Lewis: I am obliged to the right hon. Gentleman. May I say that I would have been impressed by his argument had I not heard his speech? With respect, I think that the right hon. Gentleman is to be congratulated in that he had the courage to stand at the Despatch Box and make the kind of speech he did, lamentable performance though it was. We on this side of the House, and hon. Members sitting in other parts of it, do not know what the official Conservative policy is with regard to this matter. The argument of the electricity supply companies, which is, to some extent, supported by hon. Members opposite, and which is published in a document entitled "To those with Open Minds"—not" Let us Face the Future"—runs as follows:
  The industry is not, and never has been, a field of pure commerce. Where it has been built up by free enterprise, it has been within a statutory framework which has subordinated private to social aims, and that is the case today. The industry is, and is content to be, under close statutory supervision."
  Quite clearly, the view of the power companies, as expressed in this document, is that the status quo in the industry should be maintained—in short, that there should be no alteration. That, presumably, is the view of the right hon. Member for South-port, since his arguments were purely negative; he did not put forward one positive constructive alternative to the case presented by my right hon. Friend.
  Mr. R. S. Hudson Mr. R. S. Hudson indicated dissent.
  Mr. Lewis: I read the right hon. Gentleman's speech in HANSARD very carefully this morning, and I failed to find any reference to those and other matters, to which I shall refer in a moment.
  There is another section of the Tory Party which feels that the best way of dealing with the electricity industry would be to implement the recommendations of the McGowan Committee, or those of the White Paper which followed. It is significant that, in his speech, the right hon. Gentleman omitted to refer to two of the most important recommendations of the McGowan Committee, which are as follow:
  "Any attempt to carry through a scheme of reorganisation on a voluntary basis is bound to fail, and legislation must confer definite and adequate compulsory powers. The schemes of reorganisation should make provision for the possibility of ultimate public ownership of all undertakings, including those not at present subject to purchase by the local authorities."
  Mr. Hudson: The hon. Member must really be a little more accurate. I did not refer in my speech to any recommendation by the McGowan Committee; the only time I referred to it, was to refute a remark made by the Minister.
  Mr. Lewis: I am grateful to the right hon. Gentleman because-he has borne out what I was saying. I refer to the fact that he did not deal specifically with any particular policy; his attitude was purely negative. Had he done justice to the case of the hon. Members sitting behind him, it would have been his duty, in the circumstances, to refer to that particular recommendation in the Report which stated that
  "the ultimate public ownership of all undertakings …"
  is essential in the industry. Therefore, it is quite obvious to those of us who sit on this side that, on this matter, the Conservative Party is divided in its ranks.
  I now propose to deal with one or two other references by the right hon. Gentleman to the young and efficient industry to which he referred in the course of his speech. In Column 1431 of the OFFICIAL REPORT it will be seen that the right hon. Gentleman sought to question my right hon. Friend, whether or not it would have been necessary to nationalise the coal industry had there been voluntary amal-
  1598
  gamation, had there been no industrial strife, and had the output multiplied tenfold in the course of the last 20 years. I think it is fair—we on this side of the House always try to be fair to the Opposition—to examine what might be considered to be a reasonable argument, in view of the fact that they were so few and far between in the speeches which we heard from the Opposition benches yesterday. I would like to ask the right hon. Member for Southport, had the output of the coal industry increased twentyfold, and if he, personally, were satisfied that under a system of national ownership—and only under a system of national ownership—would it be possible to increase it fortyfold—whether in these circumstances he would then have stood at the Despatch Box, and said to my right hon. Friend that the nationalisation of the coal industry was not in the interests of the nation as a whole?
  For that reason, I think that we are entitled to examine the degree of efficiency to which so much reference has been made from the Opposition benches. I concede that there has been efficient organisation in the electrical industry, and that some of the power companies are extremely efficient. But what the Opposition fails to realise is that efficiency is purely relative, and that, in so far as the electrical industry is concerned, whereas there may be certain constituent parts which are in themselves efficient, as far as the whole framework of the industry is concerned, the situation has somewhat to be compared with the situation of the constituent parts of that organisation which comprised the London Passenger Transport Board before it was incorporated.
  Hon. Members opposite referred to gas as being a competitor of electricity. For that reason, they attributed some of the efficiency in the electrical industry to the competition of the gas industry. That would be true were the national expenditure on gas lower than that on electricity. In point of fact, however, and I do not believe that it is generally known among hon. Members that, as far as our national Budget is concerned, whereas we expend £550 million per annum on tobacco and hundreds of millions on liquor, we expend only £63 million on gas and £54 million on electricity. That seems to me to indicate that if the gas industry is consuming more than the electricity industry, the

  1599
  tendency on the part of the electricity industry must be to increase the efficiency of the gas industry, and not vice versa. No doubt hon: Members opposite will use that argument when, as I hope shortly, my right hon. Friend the Minister of Fuel and Power introduces a Bill to nationalise the gas industry.
  The other point the right hon. Gentleman made was that competition reduces costs. When we consider the question of advertising, is that true? Is it true to say that, in so far as showrooms and advertising are concerned, costs are brought down because of the competition between the gas and electricity industries? I submit that the position is nothing of the kind, and, in view of the fact that both gas and electricity derive their power from one common source, which is coal, it will only be possible to plan for the maximum thermal efficiency when the whole of the fuel and power industries are co-ordinated on a national basis.
  What is the basis of efficiency to which hon. Members opposite attach so much importance? I think the criterion is profit, and I am not saying that they are not right. So far as the profits of a private company are concerned, we must obviously accept that if it cannot run at a profit it cannot run at all, and, as to day 80 per cent. of the whole of our in dustrial activity throughout the ountry is in the hands of private enterprise, it is foolish to say that that private enterprise should operate at a loss, because it would not function. I think that is a reasonable argument but in so far as public utilities are concerned it must be a reasonable profit. There is absolutely nothing to establish that the local authorities and private power companies have been as efficient as they possibly could have been, by reason of the fact that they have exercised a virtual monopoly and it is no use denying that that monopoly has existed.
  I heard an hon. Member opposite yesterday say that it is possible for certain consumers to get supplies from alternative sources. Those of us on this side of the House who know something about industrial matters understand full well that it is not practicable, and that it would not pay a consumer to bring a cable 10 miles if he had the service laid on in the road outside his premises. I think the reason
  1600
  why the price of electricity has come down over the past 20 years is because the electricity supply undertakings have been faced with a constantly increased demand. Until the demand becomes stabilised or until the law of diminishing returns operates, it is impossible to tell whether or not they have reached the peak of efficiency which they would have reached had there been national reorganisation under public ownership at a much earlier date. The fact that the prices have come down over the past 20 years is no criterion whatsoever of efficiency, but is an indication of the principle, well appreciated by industrialists, that with increased turnover and output overheads are reduced.
  The cost of generation between 1924 and 1934 fell from.963d. to.5231d. per unit. The cost of distribution, however, remained constant at about 766 of a penny per unit over the whole field of electricity supply which includes the private companies and the municipalities. The fall in the cost of generation and transmission due to the efficient system which was imposed upon the industry in 1926 by the Central Electricity Board and the fact that the only section where there was no drop in costs was on the distributive side, clearly indicates that distribution should be nationalised, and I do not think there is any argument that can be put forward to refute this argument.
  I do not think any hon. Member who has spoken from the opposite benches has failed to refer to the dislocation which will result from the implementation of my right hon. Friend's proposals. But very few of them have attempted to refer to the form that it is suggested this dislocation will take. Is it suggested that the selected stations will cease to provide power to feed the grid? Will local authorities and private companies cease to supply electricity? I would like to refer those hon. Members to the electricity supply companies' statement, which was referred to in another respect yesterday by my hon. Friend the Member for Winchester (Mr. G. Jeger):
  "The electricity supply companies are not allowing any uncertainty about the intentions of this Government to interfere with their duty to the public. They are proceeding with the five-year programme outlined above, and no threats or rumours will deter them from fulfilling their promises of extending, increasing and cheapening the electricity supply of Great Britain."
  I prefer to accept the assurance of the power companies that they will carry on

  1601
  doing their duty, and I am not impressed by the argument that there will be any dislocation whatsoever for the electricity industry when the vesting day dawns.
  On the question of the security and length of tenure, I would like to refer to a document prepared by the Tory Reform Committee. This document purports to put forward the argument that the McGowan Committee's Report should be implemented. I know that it disagrees, to a large extent, with the statement made by the right hon. Gentleman the Member for Southport but, nevertheless, it is a document put forward officially by the Conservative Party.
  Mr. Pickthorn: Tory Reform Committee documents do not necessarily bind the Conservative Party.
  Mr. Lewis: The hon. Gentleman's intervention amazes me. I thought the Tory Reform Group was associated with the Conservative Party, and I have heard the view expressed from time to time on all sides of the House that those documents which have some connection with the Conservative Central Office have at least the general approval of the majority of hon. Members sitting on the benches opposite. I must admit that I am somewhat surprised to hear that the senior Burgess for Cambridge University disowns this pamphlet which has been prepared by the Tory Reform Group.
  Mr. Pickthorn: The hon. Gentleman said that it was a Tory Reform Committee document, and that it has been officially put forward by the Conservative Party. All I am saying is that the two are not identical, any more than it is possible to say that documents emanating from hon. Members opposite, necessarily bind the Socialist Party.
  Mr. Lewis: I am obliged for the intervention of the hon. Gentleman. He said, so far as I can understand, that the Tory Party and reform do not go together, and I am quite prepared to accept his statement. I wish to refer to a statement which appears in this document. In the light of some of the speeches we heard yesterday from the benches opposite, I think it is a good document because it makes certain honest admissions. It is a carefully prepared document and puts forward an argument which might be considered to be reasonable. On page 18 of
  1602
  this document the following statement appears:
  "Security and length of tenure. The McGowan Committee stipulated that where power companies are retained under the new organisation, the consolidated undertaking should, at the end of a prescribed period not to exceed 50 years, be liable to purchase by some form of public authority."
  The statement goes on to say:
  "This provision appears to aim at future homogenity of ownership, and was possibly intended to bring the Committee's recommendations into line with the express intentions of the early Electric Lighting Acts, that electricity supply should eventually become a public service."
  I would like to know whether this is a confession that, owing to this sense of insecurity and the absence of guarantee of tenure to which reference is made the private companies have not extended and developed in the rural areas as they should have done or as it was possible for them to do. Is that an admission? If it is not an admission, and if the recommendations of the McGowan Committee or of the right hon. Gentleman the Member for Southport are implemented—hon. Members opposite may take which of them they prefer for the purposes of my argument—I should like to be told what guarantee we have that the power companies will be forced to provide a service in the rural areas. I suggest there is none at all. But at least we can be satisfied of one thing, namely, that public ownership does guarantee the provision of all amenities in the national interest, irrespective of considerations of security or tenure; nor will they be hampered by any question of insecurity so far as future profits are concerned.
  On one of the principal recommendations of the McGowan Committee, I think there is one thing we can say before we leave that point. The Committee most certainly recognised that any scheme for reorganisation on a voluntary basis was doomed to failure. And that was a Committee of experts set up to look into the question. I am at a complete loss to understand how hon. Members opposite who have taken part in this Debate have not been prepared to make that concession at the commencement of their remarks, because quite obviously it would determine the nature of most of their subsequent arguments. I think they were quite right in asking in what way nationalisation can benefit the consumer. After all, that is a most important question.

  1603
  But as far as the two alternative propositions put forward by the Opposition are concerned, it is my view that only national ownership and centralised management can effect those important economies which can benefit the consumer. We know, for instance, that under the present system local authorities and public companies own selected stations. And the Central Electricity Board buy the power from these undertakings, and then sell back to them what they, need for their own consumers. I suggest this involves a highly complex system of accountancy. Surely hon. Members opposite must concede that under national ownership this present necessity would be eliminated, and thus effect an important economy in the general administration in the industry as a whole?
  It is, however, in the field of distribution that, in my view, the greatest benefits will accrue. Here, I must say the Opposition's case, if there was a case, was at its very weakest. The first task of a nationalised industry must involve redetermination of the areas of supply. I think that will be agreed that redetermination should have some relation to the national and local requirements. In spite of the fact that under any scheme of reorganisation many of the small uneconomic units will be eliminated, I think the principal recommendation of the McGowan Report in this respect was that areas should be created which might involve the necessity of private companies taking over municipalities, in other areas municipalities taking over the private companies. I would like to ask hon. Members opposite, who will have to make their peace with their constituents, how they are likely to react to the suggestion that consumers who have been buying electricity from a local authority should be placed in the tender care of a private company under their scheme? I think most certainly that such a proposal would not be generally acceptable.
  I must reiterate another point, although it has been said so often when dealing with the question of nationalisation of our basic industries. The party sitting on this side of the House has a mandate to nationalise the electricity industry because it undoubtedly did appear in the book called "Let Us Face The Future," to which the senior Burgess for Cambridge University
  1604
  referred. We should be failing in our duty were we not to implement our promise in this respect.
  Mr. Boyd-Carpenter: Like the Minister of Health in regard to housing.
  Mr. Lewis: I now wish to deal with some of the differences which exist be tween the areas concerned, both in respect of the McGowan Committee Report and my right hon. Friend's Bill. In view of the fact that hon. Gentlemen opposite are looking at the clock—[HON. MEMBERS: "Hear, hear."] I am not going to stop for a moment or two—I will confine myself to saying this. The difference be tween the two schemes is that whereas in the Bill it is intended to permit a rural area to be carried by an industrial area so that there shall be expansion outwards, so that the good area shall carry the bad, in the McGowan Committee Report this consideration is not taken into account at all. I could give specific examples to indicate the difference between the two schemes if any hon. Member should so desire. On a comparison between private companies and municipalities there are facts and figures which will undoubtedly substantiate he necessity for this Bill, so far as capital debt, interest charges and dividends are concerned. In those particular cases where private companies have been supplying urban areas, although they sold more units than the boroughs in hose particular areas they were still dearer, which is significant. I do not wish to take up the time of the House further on that. If any hon. Member cares to question those figures I shall be quite happy to give them.
  The point which does more to disturb the minds of hon. Members opposite than anything else is the question of compensation. What they have failed to realise is the point which is expressed this morning in "The Times" editorial. There is an element of monopoly value in the price at which the shares exist, but what hon. Gentlemen opposite fail to comprehend is that some of us on this side of the House know just as much as they do about the financial structure of any industry. When my right hon. Friend was attempting to prove, as he did yesterday, in my view quite conclusively, that if bonus shares are issued and the dividends are halved, that profit which should have

  1605
  gone back to the consumer, by way of reduced charges, is being put into the pockets of the shareholders.
  Lord Roy den, the Chairman of Edmundson's Electricity Corporation, was at great pains, in the summer of last year, to point out how his organisation had been responsible for giving the consumers the benefit of the efficiency which had grown up over a large number of years. What do we find? We find there was a bonus issue of 50 per cent. in 1938; but also that there was another one previously, in 1924, so much so that those shareholders who were fortunate enough to have stock in Edmundson's Electricity Corporation before 1924 are not getting 37½ per cent. on their investment—which is the declared dividend—but are getting 37½ per cent. on their money. The difference between the 7 per cent. and the 37½per cent. should have gone back to the consumers by way of reduced charges.
  I have one final appeal to make to my right hon. Friend. I know the question of compensation for local authorities must be occupying his attention. Frankly, I should say there is no ethical ground whatsoever for any compensation being paid, to them, for the simple reason that in the same way as private companies were using their profits and reserves for bonus issues and thus have declared a higher dividend than they should* have done, local authorities have been doing precisely the same by means of rate aid from the proceeds of electrical undertakings. These proceeds should have gone towards reducing the price to the consumer. The point I want to impress upon my right hon. Friend is that what has happened in the past, must rest in the past. The senior Member for Cambridge University said that we are all sinners, that even the municipalities have sinned in this matter, but I hope that in his compassion my right hon. Friend will at least give consideration to the position in which some municipalities will be placed, in particular my own constituency, in regard to this particular matter. I am, however, quite prepared to make it clear in my own constituency that what in my view would be a strictly ethical system to be adopted by the Minister would be that there should be no compensation at all. I have gone very carefully into this matter and although my own local authority is very much concerned I hope my right hon.
  1606
  Friend if he does make concessions will not give way to unreasonable demands.
  I support this Bill because it is a good Bill. I support it as one who has a certain knowledge of industry; I think our industrial recovery and reconversion can be assisted tremendously by the implementing of a Bill framed, as this is, to assist the nation's power supply. In Lancashire there are still dozens of old steam engines running mills which should be switched over to electrical transmission. We know that as far as thermal efficiency per unit is concerned the country would benefit were they to be converted from the direct use of coal to electricity. It is only through this Bill that it will be possible to get a nationwide scheme, which will give consumers of all classes, domestic, agricultural and industrial, the reorganisation which is so vitally necessary. I commend the Bill to the House.
  5.2 p.m.
  Sir Arnold Gridley: Before I embark upon the points I wish to develop in my speech, I would like to deal at once with one or two observations made by the hon. Member for Bolton (Mr. J. Lewis). One statement he made was that the power companies want the present status to remain. That is not true, and I shall deal with that further in my subsequent remarks.
  Mr. J. Lewis rose—
  Sir A. Gridley: I shall be dealing with it in the course of my speech, and I do not want to be interrupted, because I have a great deal to say on this occasion. Another statement he made referred to a quotation from the McGowan Report. The words that he used, I think, said that future legislation must anticipate the possibility—it put it no higher than that—the possibility of purchase by the public undertakings.
  Mr. Lewis: Perhaps the hon. Member will permit me to say that I was quoting from the Tory document known as "Power."
  Sir A. Gridley: I cannot accept that. In an earlier part of his speech the hon. Member quoted from the McGowan Report.
  Mr. Lewis: I have not a copy of the report here. I only quoted from the Tory document specifying the report.
  Sir A. Gridley: I beg the hon. Member's pardon if I misunderstood him, but I want to make it clear that the McGowan Report only contemplated the "possibility" of ultimate purchase. There was no certainty whatsoever. Then the hon. Member quoted a figure which I really could not follow. If I understood him he said that the revenue from the sale of electricity was £50 million a year. He was making a comparison between the apparently slow progress of electricity sales as compared with gas.
  Mr. Lewis: I said that national expenditure on electricity was £54 million.
  Mr. Deputy-Speaker (Mr. Hubert Beaumont): The hon. Member must rise when he addresses the Chair.
  Sir A. Gridley: Very well, I will deal later with that particular point. There is one other error he made which I think might be corrected at once. The Central Electricity Board is in no sense responsible for the great economies that have been achieved by the power stations. It does not own the power stations; what the Central Board owns are the main high tension transmission lines linking one station and another. As the hon. Member knows, his own constituency of Bolton owns a very important power station, and any economies that may have been achieved in that station have been achieved by the Corporation's own engineers. Of course, when a company or a municipality is asked nowadays to put down a new power station, or to extend an existing one, there are technical conversations with the officers of the Central Board, and between them they decide what type of plant should be put down, but it is misleading to say that the successes which have been achieved by municipal and company engineers in making economies have been due to the introduction of the Central Electricity Board. I would like to reply to one other question he raised, namely, when he asked whether an industrial power user formerly taking a supply from a municipality would like the responsibility transferred to a power company. There are many places where that has happened, and in all my experience I have yet to learn that an industrial power user has had the slightest objection, so long as he has continued to get good service at a fair price.
  1608
  I have never intervened in a Debate with a deeper sense of responsibility since we debated in this House, in the last Parliament, the Beveridge fuel coupon proposals which were strongly sponsored by the then Government. Fortunately wiser counsels prevailed and the scheme was dropped. It Is perhaps not necessary for me to declare to hon. Members my personal interest in this industry, for I think it is widely known. It is true that I have been actively engaged in it now for, I am sorry to say, nearly 50 years, and during that long period I have had experience of serving under a large municipality, as head of a Government Department—as Controller of Electric Power Supplies in the Ministry of Munitions during the first world war—later in another Government Department, and more lately in private enterprise undertakings. Starting at the very bottom, I have seen this industry grow into the vast and efficient industry it is today. I saw some of the first attempts at are lighting in the public streets, and I saw the first electric tram line put into operation. Today, as the House probably knows, I am a director of one of the large power companies and I am also chairman and deputy chairman of some smaller company undertakings. I am not ashamed of it, nor am I ashamed of the record of those who have built up this great industry, whether in municipal undertakings or private enterprise. Although I do feel very deeply some of the monstrous proposals which are contained in this Bill, I want to discuss it today constructively, without heat and with restraint, and I hope the House will give me a patient hearing, as I know it invariably does when the speaker is a Member who has had life-long experience in the subject under discussion.
  I claim at once that the industry has put up a performance over the years surpassed by none. I know well from personal experience the tremendous services it rendered to the nation during the first world war. During the four years I was at the Ministry of Munitions, the development equalled that of the previous 32 years. All hon. Members know how, again, in the second world war, the industry stood up to the terrific calls that were made upon it, in spite of the enormous handicaps it faced by reason of the difficulty of getting the right kind of coal and sufficient labour. Having said that, I would not assert that in the present

  1609
  structure of the industry there are no improvements that could be made. There are certain defects which are capable of being remedied, and it is with those defects that I now propose to deal.
  In the first place, there is too large a number of small undertakings, both municipal and company It is too often assumed that the responsibility for this lies with those who have developed the industry, but that is not the case. Who, then, is responsible? Let hon. Members realise that just as we today are responsible for the legislation we are enacting, so past Parliaments were responsible for any Parliamentary mistakes that were made in the past. It was past Parliaments that were mainly responsible for the fact that there are so many separate undertakings today.
  In the early days, when we knew nothing about alternating current and its possibilities, we were confined to the distribution of direct current over small areas, but those small areas could have been larger had Parliament been wiser. It was both technically and administratively impracticable to transmit current any great distances, such as we do today, and Parliament at that time, as the Minister said yesterday, decided to grant powers to establish electricity undertakings, either to companies or to municipalities, only for local area? which were invariably the municipal boundaries. Where companies were given powers to develop undertakings in those municipal areas, the local authorities were given the right to purchase the undertakings after 21 years. The people who were finding the capital at that time and who had to wait for, perhaps, four or five years before there was any hope of their getting a return on it, found that the period of 21 years was too short, and consequently, further representations were made to Parliament, with the result that the period of 21 years was extended to 42 years. But still those small areas were left to go on as they were. So unwise were our past legislators—let us be sure that we are not equally foolish today—that they even prevented by Statute one electrical company or municipality from having any association with another. That, surely, was isolation run mad. As time went on, however, there was a move towards grace, and at last undertakings
  1610
  were allowed to go so far to marry up with one another that they could enter into an agreement to exchange current, and that was all.
  Meanwhile, the progress of science and invention brought the use of alternating current into practicability, and although many millions of capital had by that time been spent on direct current generating stations, the more enterprising undertakings, both company and municipal, risked their capital on building alternating current stations and developing more lengthy alternating current transmission networks. Here, again, the development was limited on account of the large number of undertakings already in the electricity industry, and this gave rise to the formation of power companies, because the more progressive and skilled engineers of the day gave evidence before an important Parliamentary Commission that the then structure would not put at the disposal of domestic users and industrial users this new form of power in the best possible way unless very large areas of supply were authorised and companies formed for the purpose of providing big power stations and mains networks which ran into hundreds of miles That is how the power companies came into existence.
  They were, however, limited, in so far as their powers were concerned, because they could not enter into the area of any municipality or company which already had powers inside the big power area authorised by Parliament, but could only give those undertakings supplies in bulk. Outside those existing authorised areas, they were able to supply both industrial and domestic users. That accounts for the fact that, as the hon. Member for Bolton said just now, the prices charged by the power companies were sometimes higher than in the case of the municipalities. Obviously, if one is supplying a small area which is very densely populated, one can supply it at a lower price than one can supply a great rural area where only one-tenth of the number of consumers are connected per mile of cable.
  I have ventured to trouble the House with that brief historic survey because it is necessary if one is to understand the structure of the industry today and to appreciate why the next defect to which I will refer arose. There was, as a result of

  1611
  the legislation, that overlapping of direct current and alternating current systems. This was unavoidable. In its turn, it gave rise to the varying voltages and systems of supply. I do not wholly blame past Parliaments for these minor defects, for obviously the progress of science and engineering were also partly responsible, but when one is dealing with an industry and one cannot tell what future developments may take place, just as past Parliaments made mistakes because they could not foresee what the position might be in 10, 20 or 30 years' time, so today which of us can be absolutely sure that we have sufficient knowledge and experience to be able to say what will be the best form of structure for this industry to enable it to develop in the best way to the advantage of the nation in the future?
  Complaints are also made—and this is the third defect to which I wish to refer—about the variation in tariffs, but if, as many of us agree, there ought to be some rearranging of the industry, and if there are set up a small number of larger areas instead of a large number of small areas, then the question of variations in tariffs would practically solve itself. I accept frankly that there are these defect's, and I have explained, I hope clearly, as I see the position, how they have arisen and what responsibility past Parliaments had for that state of affairs. Notwithstanding these minor defects, the industry has shown a most remarkable expansion both commercially and technically. In my time I have seen the efficiency of boiler plants so advanced that to one lb. of coal per unit generated in these days we used five lb. of coal in the days when I was a younger man in the industry. The industrial uses to which electricity can be applied have been vastly increased, because of the immense application of electrical engineers, both in company and in municipal service. This is true also in the manufacture of electrical plant. The two sides of the industry work admirably together. There is no other industry, I say in reply to the point made by the hon. Member for Bolton, that has spent so much capital annually in its own development as has this industry. It has built up so sound a reputation that it is able to raise capital today as if the undertakings provided gilt-edged security.
  I know that the House is no great lover of figures but there are a few which I
  1612
  would quote, showing the development that has been made possible, and how the average price to the consumer has fallen. The units sold in 1922 were 3,000 million. By 1939 that figure had increased to 22,500 million, or seven times the growth in the 17 years.
  Mr. J. Lewis: Is that both public and private undertakings?
  Sir A. Gridley: These are the public service undertakings figures from which I am quoting. From 1939 to 1944 which includes four years of war, the figure increased to 32,000 million, which was another 50 per cent. increase. Between 1922 and 1939, the average price to domestic users fell by 72 per cent., and to industrial users by 61 per cent. in spite of the cost of coal having increased by 124 per cent. to 140 per cent. in different parts of the country, and wages and materials also having risen in cost. This immense reduction in charges to the consumer took place in face of increased costs. I would ask the hon. Member for Bolton to bear that fact in mind. The reductions were made possible largely because of the technical improvements in steam generating.
  In 1922, 690 units were generated from a ton of coal. Today—if we can get proper coal—we have increased that 690 to 1,635. There you have an immense economy achieved in the power houses of the country. I suggested just now that no other industry spent such immense capital sums. Between 1922 and 1943 the industry spent £537,750,006 of capital expenditure. The total capital expenditure of the public and private undertakings by that year had reached £681 million. Is there any other industry to which any hon. Member can point that has annually spent so large a capital sum on development as has this industry? During the same period, the number of consumers increased from 2½millions to 8 millions and—this is an important point—the units sold per head of the population increased from 73 to 666. Those figures show that there has been a most amazing growth. It is indicative of the fact that this vigorous industry has been efficiently managed.
  What hope has the Minister of Fuel and Power of cheapening electricity in the future? At what price will he be able to put coal at the disposal of the power

  1613
  stations? They are consuming today 26 million tons of coal per year. Put the price up by 5s. a ton; what is that? It is £6½ million added to your cost right away. Power stations being put up today, being ordered today, are costing 60 per cent. more in capital cost per kilowatt than they were before the war. Interest and depreciation charges will have to be met upon that capital. For Heaven's sake let us not mislead the nation into supposing that the Bill will lead to cheaper current. I honestly think that the Minister is attempting an utterly impossible task.
  Now let me say a word on a subject to which I was glad to hear the hon. Member for Bolton make a favourable reference—the power companies. I pointed out that the power companies, supplying electricity through their great areas, risked enormous capital in dealing with areas of 3,000 or more square miles. What was their earliest history? Scarcely one of the companies, started between 1900 and 1902, were able to pay any ordinary dividend at all until the great war of 1914–18. Then the demand doubled, and, for the first time, business was thrust upon those companies. At last they were able to start to pay a dividend. Those companies have created now a goodwill, and they had every reason to expect that, under the statutory powers which were granted to them, they had a right to continue to carry on their work in perpetuity. It is now proposed to wrest those undertakings from the power companies, on totally inadequate financial terms, just as the municipal undertakings are going to be grossly and unfairly treated.
  Another fact that I want hon. Members to get into their minds is that nearly two-thirds of all the electricity produced today by companies and municipalities is used for industrial power purposes, and only one-third for domestic purposes. Where do we get any complaint from industry that it is not satisfied with the service it is getting, and that it is not being supplied on fair and reasonable terms? Why has this industrial load grown so enormously for industrial power purposes if the users have not been supplied cheaply and efficiently?
  Mr. J. Lewis: They cannot get enough power.
  Sir A. Gridley: One never hears a word of complaint. I challenge any hon. Member to produce any evidence that industry is at all dissatisfied with the service that it is receiving from the public service undertakings.
  Mr. Lewis: Will the hon. Member allow me to interrupt him on this point? The trouble with industry today is that while the service is good—it must be conceded that it has been good service for many years—there is insufficient plant to meet the demands of industry. That is the responsibility of the industry that is a legacy from the past.
  Sir A. Gridley: I must say, from my experience, that the hon. Member is entirely wrong.
  Mr. Lewis: Is there enough plant today?
  Sir A. Gridley: Of course there is not. There has been a war. The undertakings were not allowed to extend their powerhouses. They made demands on the Government for extensions during the war, which demands, I happen to know, were severely cut down. That is one reason why we are short of plant today, and are likely to be short until 1950.
  Mr. Shinwell: Would the hon. Gentleman say that again, for the benefit of his friends on those benches?
  Sir A. Gridley: I do not think there is any need for me to give any information to my hon. Friends on this side. I think they are as well informed as I am.
  Mr. Lewis: It is not due to coal shortage in the main.
  Sir A. Gridley: It is due partially to the fact that we are short of plant today, and load has to be shed to a considerable extent due to the fact that we are not getting in the power stations the kind of coal to enable us to generate another 400,000 horse-power. If the Minister challenges me on that I will meet him with a report issued by the Central Electricity Board.
  Mr. Shinwell: The hon. Member can read what he pleases, but I am also in contact with the Central Electricity Board, and I know the Central Electricity Board. While it is perfectly true that we know of complaints that have come from' power stations in respect of the

  1615
  quality of coal—though we admit that, and I do not seek to dispute it myself, because, on occasion, it is so—at the same time, the fact that load has to be shed, and has been shed frequently of late, is not attributable to shortage of coal or to the quality of the coal, but is entirely due to the inadequacy of the plant.
  Sir A. Gridley: I do not want to quarrel with the Minister—at is never my desire to quarrel with anybody—but what he has just said is true only in part. The fact is that the shedding of load today is due to two factors. One is the insufficient quantity of plant in the power stations, and the other is that another 400,000 horse-power could be turned out by those plants if the right kind of coal were available. That is the truth. I would refer the right hon. Gentleman to page 15 of the 18th annual report of the Central Electricity Board, 1945.
  When I was interrupted, I was saying that there is no demand from industry for any change in the structure of this industry. They are perfectly satisfied with it. If I want any reinforcement of that I would remind the Minister and the House that in the past few days the Minister has received reports from the Federation of British Industries, the London Chamber of Commerce and the Association of British Chambers of Commerce, all saying that they do not want this Bill. They speak for the users of electricity.
  Mr. Shinwell: They do not speak for the nation.
  Sir A. Gridley: This industry's assets are not what the Chancellor of the Exchequer has described as a bag of poor assets. Its assets are worth every penny spent upon them, less the depreciation sum by which they have been written down. Nor is there any truth in what the Leader of the House said in Bristol in April, 1945. It is extraordinary how little Ministers opposite seem to understand this matter. The Leader of the House said:
  "Electricity is an industry in which the middleman's part is played by a public board whose operations have been notable for efficiency and enterprise, the Central Electricity Board."
  The Central Electricity Board does not play any middleman's part. It is a central board who are responsible for seeing that adequate power stations are provided and linked up with the main
  1616
  transmission networks, and that those networks are extended as and when necessary. But the Lord President went on to say:
  "On either side of the middleman's field there is chaos and muddle the continuance of which the most diehard Conservative do not defend."
  There is no chaos and muddle, other than that for which past Parliaments have been responsible. The engineers and administrators of this industry have done a great work—[An HON. MEMBER: "Hear, hear."]—and I am glad to hear that that is admitted by my Friend the hon. Member for Wimbledon (Mr. Palmer), with whom I had the pleasure of debating this subject some little time ago.
  The Lord President went on to say:
  "On the plain merits of the argument there is an overwhelming case for public ownership."
  Public ownership, mark you—not State ownership; public ownership. Two-thirds of the industry is in public ownership, and, therefore, the demand of the Lord President for public ownership is, to a great extent, already satisfied.
  Mr. J. Lewis: But it is unco-ordinated
  Sir A. Gridley: Let me point this out. We have heard yesterday and again today certain Members on that side refer to the views of local authorities owning supply and distributing undertakings, and say that they are willing to come in under this scheme. Well, Sir William Walker is chairman—I think he is still the chairman: if not he has been for many years—of the Incorporated Municipal Electrical Association; and speaking recently in Manchester, what did he say? He said:
  "Everyone on the local authority side has devoted his time and attention, unpaid, to the idea of public duty in order to make electricity supply success, and now we are told we are not competent to continue as public authority representatives to work the orders that we have given to us by Parliament to provide and distribute electricity. To our Jeep grief we find the great and most successful organisation that has been built up jeopardised by something entirely new and untried, and that may not be a success."
  Those are dignified words. Surely, there is no case for divesting of their undertakings great cities like Liverpool, Manchester, Sheffield, Birmingham, Glasgow, amongst many I could mention—including my own constituency Stockport, which

  1617
  has a very successful local electricity undertaking, and from whom I received a telegram since the House sat at 2.30 o'Clock. It reads as follows:
  "Stockport Electricity Committee resolved with only two abstentions that Government be requested to amend terms on which assets of municipal undertakers be acquired and to provide adequate compensation for loss which will fall on local authorities' ratepayers. Resolution subject to confirmation by Council today. Committee request your support. Town Clerk, Stockport."
  I have not the least doubt that that decision of the electricity committee will be endorsed by the Council. Probably, it has been by this time.
  I must pass very briefly to touch on one or two Clauses in the Bill. Clause I (6 b) deals with one of the purposes of the Bill, which is the cheapening of current, so far as is practicable. I have already dealt with that a few moments ago, so I shall not go over the same ground again; but, of course, there is one point which arises on the financial terms which have been suggested, and that is this. When the electricity scrip is given in exchange for the present stocks held by undertakings there will, if I have calculated the figures correctly, be a reduction, an economy for the State, of something like £4,750,000 per annum. That is the measure of the income which the present stockholders, unfortunately, are faced with losing. Assuming that the State does get that advantage, what is it going to amount to?. One thirty-second of a penny per unit. That is all we are going to profit (the users of electricity.
  Then Clause 2 (4 b) is so wide that it would enable the Board to undertake any kind of activity in order to enable them to perform their functions or to make the best use of their assets. I do not know whether hon. Members realise it would even be possible for the Government to set up some electro-chemical industry using electricity throughout the 24 hours in order to keep, perhaps, some unused plant in a power station in constant operation. There is no mandate given to the Labour Party for embarking on any business of that kind.
  There is one Clause to which I should like to refer, and I hope that the Parliamentary Secretary will give me his complete attention on this. It is Clause 13 (2, b,)which deals with holding companies. I doubt whether there is an hon.
  1618
  Member in this House who really understands the implications of this Clause. If a holding company had 75 per cent. of its securities invested in authorised electric supply undertakings, and none of those investments gave control over such authorised supply undertakings, then the holding company could, nevertheless, be taken over with its remaining 25 per cent. investments, no matter what the character of those investments might be. The absurd position is that the State will be taking over all the shares of the authorised undertakings in which the holding company had no controlling interest whatever. I cannot think that it is the intention of the Government to do anything so patently absurd. I want the Minister, to deal specifically with this point, and to make it clear beyond any doubt whatsoever what are the Government's intentions. I think that the Government's intention must be to ensure that the State shall acquire all the share capital of authorised undertakings, no matter how held, and it is not their intention to take over holding companies, unless the 75 per cent. electric supply investments of a holding company gives it control over the electric supply undertaking in which such investments are held. This is rather a complicated matter to put across, but it is a point of great importance, which certainly ought to be dealt with.
  Yesterday, the Minister made an attack upon holding companies, and he mentioned one company of which I happen to be the deputy-chairman. I resented his remarks, and I wish to refer to two or three sentences he uttered. He said:
  "There are many other ways in which holding companies could make undue profits in their transactions with their subsidiaries, the statutory undertakings. They could make excessive charges for purchasing materials, for technical advice or for raising capital It is difficult to obtain information on those charges, which are not necessarily shown separately in the accounts of the subsidiaries, but enough is known to justify uneasiness."—[OFFICIAL REPORT, 3rd February, 1947; Vol. 432, c. 1420.]
  In the next column, he refers to the company with which I am associated, the Southern Areas Electric Corporation. In 1936, which is 11 years ago, I put into the speech made by the chairman to the shareholders of this company these words:
  "I would however, like to interpose here a general observation on the practice of your holding company qua our subsidiary undertakings. We give our subsidiaries every

  1619
  penny of advantage that we can secure for them. They pay only the net cost price as charged by contractors and suppliers, and there are passed on to them all discounts receivable from contractors and others. In short, all profits made by your holding company are derived solely from the dividends receivable from the subsidiary companies and I have thought it desirable to acquaint shareholders of this fact feeling sure that this policy will meet with your approval."
  If the Minister doubts what has been the practice since 1936, I have here and will show him a letter signed by the chartered accountants, one of the most eminent firms in the City, who audited the accounts of this holding company in all the intervening years, which will confirm the statement made in that speech. I ask the Parliamentary Secretary whether he will withdraw any implied imputation against me, or those associated with me, in the conduct of the affairs of this holding company.
  I now come to a point about which I feel a little bitter. This arises out of' Clause 13 (13), under which every company is to disappear on the vesting date, as well as every director. No director is allowed to be appointed as the stockholders' representative, although the shareholders may have known him for 20 years and have implicit confidence in him. I think that a provision like that is a calculated insult to responsible and honourable men, and it is not in accordance with the true dignity of a British Parliament that such a provision should be contained in any Bill. I should also like to know why it is that the Electricity Commissioners are, apparently, to, disappear, and provision is made for their retirement. We, in the industry, have learned to appreciate the work which the Electricity Commissioners have done. They have done a great job, and we were hoping that they would be strengthened and allowed to go on with their good work. What is going to happen to the Central Electricity Board? They are apparently not dealt with in this Bill.
  I apologise to the House for having been so long, but there is one question which I wish to put before I conclude. I am sorry that the Minister is not here, because this is a point which I must put to him personally, unless the Parliamentary Secretary can give me a satisfactory answer. My question is this: Did the Minister consult the Central Electricity Board on the drafting of this Bill? That
  1620
  is a very direct question, and I want an answer, "Yes" or "No." I hope that the Parliamentary Secretary will be able to give me a reply, but if he is unable to-do so then the Minister must be told of the question.
  I do not usually use very strong words, but I feel compelled on this occasion to say this, after nearly half a century of experience in the working of this great industry. No argument advanced in support of this Bill shows the slightest justification for nationalising the industry, which is already so largely under public ownership and control, through the Central Board and the Electricity Commissioners, appointed by a Minister responsible to Parliament. No industry has been, or is today, more efficient, more progressive, or has spent so many millions of capital on its development. No other industry has had happier relations with its employees, and no other industry has given its customers such benefits in reduction of prices, in spite of the very heavy rise in costs. The Bill contains grossly unfair compensation proposals, which are described by some writers as mandated robbery.
  This is no case of a poor bag of assets, but very much the reverse. There are no adequate safeguards in the Bill for consumers or employees. It contains provisions which are a studied insult to the honourable men who have devoted a lifetime of technical and administrative experience to creating and expanding a most efficient public service.
  The power which the Bill seeks, to enable the State to embark on the manufacture of electrical plant and equipment, is undoubtedly ultra vires their mandate; It asks acceptance by this House of a plan which is utterly at variance with the expert advice contained in reports of Government committees. In short, the Government have made a faulty diagnosis of the indisposition of this industry, and quack remedies are prescribed by quack doctors. This Bill is not brought forward in the national interest, but purely to fulfil Socialist theories. Whatever test is applied to it it is a thoroughly bad Bill, and a far better and simpler Measure could have been brought in to remedy the admitted defects of the structure of the industry. All that I have said is a damning indictment against this Bill, which can be riddled through and through because of its technical and administrative defects.

  1621
  I ask every Member of this House to put this question to himself: Which of us here would place a limit to the rapidity of the progress of atomic energy coming to the aid of industry and domestic use? The other night, on the wireless, a scientist stated that if the same thoughts were applied to the development of atomic energy as were applied to many things during the war, such as the Mulberry harbour and F.I.D.O., it would be a short time before the electric lamp would be lit by atomic energy. Who will say how rapid may be the development of this energy? If it comes within the next three or four years we may all look foolish in having agreed that the State should spend hundreds of millions of pounds in acquiring an industry, when much of the capital which has been acquired will be utterly wasted on the provision of such things as boiler houses and that side of the work of the production of current, because atomic energy would take its place. This is a big and solemn question that we have to face, and in all these circumstances anybody who votes for this Bill will be doing nothing to further the national in terest, but may do it irreparable harm.
  5.53 P.m.
  Mrs. Castle: We have had a number of expert speeches during this Debate, and I have listened to them with great attention and mounting awe. I intervene in this select atmosphere today only because I am still trying to get an answer to one or two very simple questions about a problem which, I am afraid, even the most expert speakers have not enlightened me. I have great respect for the hon. Member for Stockport (Sir A. Gridley), and I signalised that respect by sitting all through his speech. But even he did not help me. Indeed, he ended on a note of remarkable confusion because his peroration was, I thought, the most damning indictment of the generosity of the compensation to be provided under this Bill. I hope his arguments may reach the Chancellor so that he may consider reducing the figure, because I have had a few qualms myself, realising that the unknown quantity of atomic energy was hanging over the whole scene, lest he may have been a little reckless with public money in proposing the present compensation terms in the Bill.
  All this emboldens me to come forward with my one or two simple questions, and
  1622
  I want, in the beginning, in accordance with the traditions of this House, to declare my interest. I am a housewife. I run a home, and in it I use a considerable amount of electricity. I stand here today as one of those consumers to whose interests so much lip service has been paid, although I was rather summarily dismissed by the hon. Member for Stockport as being one of the domestic third whose complaints should hardly be listened to compared with the point of view of industrial users. I have as housewife, a very immediate and practical interest in this Bill. I think I can say that I represent the ordinary domestic consumer's attitude of mind and desire for clarification. I come here genuinely seeking enlightenment on how the Bill will affect me. That has been my whole objective during this Debate.
  I am anxious to know the merits and demerits of the case presented by both sides. When this Bill was originally mooted I received a pamphlet. As it was called "To those with Open Minds," I was aware that it was particularly addressed to me. I have perused this pamphlet with all the honesty of intention of which I am capable. It is issued by the public relations committee of the electricity supply companies. I gather that my hon. Friend the Member for Bolton (Mr. J. Lewis) has also received one. As a matter of fact, I believe that so considerable are the sums being spent on the public relations work of these companies that he and I have not been exclusively honoured in this way. I sometimes wonder at which point the public relations officer—that anathema to some Members opposite—ceases to be a public relations officer when he is employed by private industry.
  Three-quarters of this pamphlet give me a history of the whole thing. It is the sort of survey for which my right hon. Friend the Minister was attacked when he devoted a portion of his speech to it. On the last page but one of the pamphlet, we reach "The Problem." I am informed that the industry is fully aware that the present situation is not perfect in every respect. But, following this admission, we have a pledge that the industry will proceed to carry out a five year programme, which runs as follows:

  "(1) To make electricity available to 95 per cent. of the premises in their areas.

  1623

  (2) To reduce prices to the lowest possible consistent with the cost of coal, wages and facilities.

  (3) To standardise forms of tariff.

  (4) To complete the standarisation of voltages.

  (5) To complete the abolition of Direct, in favour of Alternating, current."

  I am prepared to welcome that programme, although I must say, that in view of the many eulogies which the hon. Member for Stockport has expressed about the progress made by the electricity industry, it formed an imposing catalogue of existing deficiencies. However, I welcome it as a housewife who has experienced a number of these drawbacks in our present organisation of electricity supply. But I think I am entitled to ask two questions. First, why has all this not been done before, and, second, what new guarantee have we that it will be done in the future?
  At this point, I am irresistibly reminded of other five-year plans which seem to have been floating about recently. I do not refer to the Soviet ones. Indeed the five year plans which have been produced by British private enterprise since the Labour Government's policy of nationalisation has been mooted, makes the State Planning Commission in Moscow look like a local branch of the Conservative Party. We have had a five year plan for the railways, a five year plan for rural electrification, and we should probably have had a five year plan from the coal owners, if my right hon. Friend had not broken in on their happy cogitations. It is said that the deathbed repentance of a condemned man is no real guide to the conduct he will pursue if he is reprieved. I am not quite so unkind as to say that. I do, however, ask why we have not had this development before, and what guarantee there is that, if the industry is left alone, we shall have these improvements in the future. At this point, I must correct the hon. Member for Stockport when he declared that the private companies had never suggested that no legislation was necessary. The document to which I have referred concludes as follows:
  "There is no aspect of the reorganisation of electricity supply into more balanced and efficient groupings which cannot be carried out by the industry itself with more skill and speed, and at lower cost and with far less disruption than is possible for any mushroom Department of State."
  1624
  I want, therefore, to pursue this matter a little more closely. I think that we can only look for a guarantee for future redress if we know what the cause of our troubles has been in the past. So I continued my research, and in the McGowan Report, I found this:
  "The present admitted lack of uniformity in systems of supply and voltages, tariffs and methods of charge, facilities for hire or hire-purchase of apparatus, assisted wiring, etc., is undoubtedly due primarily to the existence of such a large number of separate undertakings."
  We were told by the hon. Member for Stockport that Parliament is to blame for that. Presumably, therefore, Parliament should be called upon to put the matter right. Indeed, the McGowan Report clearly established the following:
  "Past experience has demonstrated beyond question that any attempt to carry through on a voluntary basis a scheme of reorganisation on the general lines we have recommended would be bound to fail."
  This is not a Socialist document. That point was made earlier in the Debate and not challenged by hon. Members opposite. Presumably, therefore, we can agree, so far at any rate, on the analysis of the situation. In other words, we find that unless we have reorganisation, with a smaller number of undertakings, larger units, and wider planning we cannot hope to carry out the five year plan, whatever propaganda may be produced by the supply companies. We must also conclude from the McGowan Report that that reorganisation must take a compulsory form. At least, my right hon. Friend has produced his answer to that situation in this Bill. I am still waiting to know from hon. Members opposite what is their alternative?
  Presumably the hon. Member for Stockport stands behind this document, and he says, "Leave it to the industry. Leave us as we have been in the past." But the McGowan Report demonstrates that voluntary action produces no results. What are the arguments that have been advanced against my right. hon. Friend's method of meeting this agreed situation. Point number one was made yesterday by the hon, and gallant Member for Pollok (Commander Galbraith), who said, and he has been echoed by others, that there is absolutely no proof that this Bill will cheapen costs in any way or produce the desired results. But I again refer hon. Gentlemen opposite to

  1625
  what the expert committee, to which they have called attention, says on this matter. The McGowan Report states:
  "Substantial savings could be realised in all future development by planning on a wider scale."
  It is, of course, true that if other factors deteriorate, if, for example, coal costs rise:, electricity costs may rise also, but it is inescapable that if we are to get the rationalisation which will enable economies to be introduced, we must have larger areas of supply.
  What is the second complaint of the hon. and gallant Gentleman? This is not the hour, this is not the moment—"The whole energies of the electricity industry should be devoted to increasing output."[HON. MEMBERS: "Hear, hear."] Perhaps the hon. Gentlemen who say, "Hear, hear," can clarify my dilemma, because this statement, to my simple and, I hope, not illogical mind, means one of two things: It either means that the hon. Gentleman disagrees with the five-year plan—the case on which private supply companies are trying to gain public support-—or he disagrees with the McGowan Report, which says that we will not get the basis on which any five-year plan can be carried out without compulsory reorganisation. What hon. Gentlemen opposite have to prove, and have not attempted to prove during this Debate, is what scheme of compulsory reorganisation they are prepared to advocate to meet this situation and how much less disruption their compulsory scheme would cause compared with the nationalisation proposals. From my reasoning of this situation all this talk of improving conditions for domestic consumers, of extending standardisation and uniformity, of ironing out those diversities which bedevil the domestic position, is mere propaganda, unless it is based upon some scheme of reorganisation, the details of which we still wait to hear from hon. Members opposite.
  I think that it was a bit cool of the right hon. Member for Southport (Mr. R. S. Hudson) to criticise my right hon. Friend's speech as inadequate. We were told that the scheme which he worked out in detail for meeting this situation is inadequate. If this scheme is not the one, what is the scheme? I see the right hon. Gentleman is not to be lured into the danger of stating a policy which might
  1626
  create so much controversy outside that all this talk of nationalisation causing disruption would seem nonsense. I realise that if I want to go with an innocent, open mind in search of information, I had better not go to the right hon. Member for Southport. He is so good at developing negatives that he is probably in the wrong profession. I read very carefully in the cold morning light of today the speech which he delivered yesterday and I find that there are other points on which he has rather unfortunately misled the House. Of course, it may not be his fault. Sometimes we are not adequately briefed on these occasions. There is one point on which I should like to clear the mind of the House, because it has been beclouded by the right hon. Gentleman. During the course of the speech, pointing an accusing finger at my right hon. Friend, he said this:
  "What he did not tell the House—and it is significant of his methods of argument—is that a committee to go into this matter"—
  that is the diversity of charges today—
  "was set up, and set up by whom? It was set up by the Central Electricity Board. At the instance of the Minister, the Board of Trade or the consumer? No, it was set up at the instance of the companies concerned."—[OFFICIAL REPORT, 3rd February, 1947; Vol. 432, c. 1426–7.]
  Of course, as the House will be well aware, the Central Electricity Board could hardly set up such a Committee, because it is not competent to do so, and it is not even within its functions. The Committee was, of course, set up by the Electricity Commissioners, and I should be glad to take any opportunity of telling the right hon. Gentleman privately what is the difference between the Electricity Commissioners and the Electricity Board. One point is quite obvious, the Electricity Commissioners have no powers of compulsion. Therefore, all these signs of activity—I am prepared to accept that this may have been done at the request of the companies as one of those last minute activities—are intended to show that everything in the garden is perfectly lovely if only the Labour Government will not press ahead with their distracting and disruptive activity. This is the second attempt to clarify this question of charges on a voluntary basis, but without compulsion I am afraid I see no reason to accept the view that its result will be any different from that of the first attempt.

  1627
  I must say that the passionate interest taken by private enterprise in the interests of the consumer as soon as the Government propose to do something to remedy the injustices done to the consumers reminds me irresistibly of the story of the man who never kissed his wife for five years and then shot the first fellow who did. I declared my interest at the beginning. I am here as a simple housewife, representing ordinary women who run the home, and there are three things in which the housewife is interested. She is interested, first, in seeing that the scope of electrification of the home is greatly expanded in the future; she is interested, secondly, in better services now; and she is interested, thirdly, in the democratisation of electricity. She wants to see it cease being a middle class privilege and become a privilege available to every home.
  It is not denied by anyone that the technical development of the electricity industry has been remarkable in recent years, but I believe that it is owing to a lack of administrative flair inside the industry that this has not been reflected to any adequate degree in improvements or extensions of the services. Technical efficiency is not only a factor which is necessary for the development of services on an imaginative scale; administrative ability is needed, too, and in that respect the electricity industry in the past has not particularly distinguished itself. With regard to the first point of more facilities, we need a very great deal more imagination in this field. It is absolutely imperative that we should realise that we are at the end of the era of cheap labour, the end of the era when under the misrule of, hon. Gentlemen opposite labour was the commodity that was least prized and least conserved. We have reached the end of that era as far as industry is concerned, and we have got to, reach it as far as domestic labour is concerned, because the time, labour, health, happiness and energy of the housewife is of vital importance in the future development of this country, and particularly in the years ahead.
  Electricity can be made to do a great many more things in the home than it has been allowed to do. Not only can it heat the water and the rooms, but it can wash dishes and launder the clothes, peel the potatoes, clean the silver and do the hundred and one odd jobs which are the unavoidable necessity of female life. A
  1628
  utility motor on, the kitchen wall will help the housewife with all these jobs. These are not merely the dreams of Hollywood homesteads; they are in operation in Scandinavian countries today, and they are not remote to those who believe in civilised living and in the possibilities which electricity can achieve in that direction. That is for the future, but I believe that through this Bill we shall have an opportunity of going ahead in a really imaginative way. There are more immediate needs in the way of service and improvement. It is absolutely intolerable that at this late hour of our national development there should be such confusion and such diversity in the provision of ordinary services in the home. The housewife must have complete mobility of all her electrical equipment, whether motor driven or any other form of electrical equipment. Despite the great advances to which the hon. Gentleman the Member for Stockport referred, that is not the situation today.
  In 1936 P.E.P. examined this situation in some detail and in its Report it found that of the undertakings then in operation although 84 per cent. had assisted wiring schemes, 25 per cent. were without showrooms or hiring schemes and 20 per cent. had no hire purchase schemes. There has been some development since, but certainly not sufficient to eliminate those glaring inadequacies. At the moment, a housewife living in West Ham can hire a washing machine or a refrigerator from the electricity authority, but if she moves into another area like Hampshire she will live in the dark ages where she will have to carry all the burdens of the home without the assistance of electricity in any imaginative way.
  I want to suggest to the Parliamentary Secretary to the Minister of Fuel and Power that there is one immediate improvement that can and must be introduced and to which I see no reference in the Bill. We urgently need the establishment of an official testing station for all electrical equipment. I believe that one is in operation in Holland today, and I am surprised that an industry that has made ail these rapid and dramatic strides has not taken as a voluntary step within the industry this effort to set up a testing station for the purpose of safeguarding the reputation of the whole of the industry, particularly of the manufacturing

  1629
  side. It is common knowledge today that injuries are being caused in the home to children and others by burns arising from the use of utterly unsafe equipment, such as fires, water heaters and irons, which is a scandal to the whole industry. At the present time there is no legal means of stopping it and there has been no voluntary effort by the industry itself to rectify this matter. That is one immediate amelioration under State enterprise that we could introduce.
  One final point. We must realise that the blessings of electricity are at the moment confined in any imaginative sense to the middle class, and the only way in which we shall extend them into working class homes is by the most ruthless standardisation. I thought that the right hon. Gentleman the Member for South-port once again revealed how completely he is out of touch with the realities of the situation when he airily dismissed the need for standardisation by saying:
  "There is something to be said for standardising the size of plugs, and things like that, though I am not altogether sure that the housewife and the ordinary purchaser will be awfully pleased when given nothing but a series of austerity models."—[OFFICIAL REPORT, 3rd February, 1947; Vol. 432, C. 1427.]
  I do not know whether he was referring to austerity models of plugs or to rather more elaborate equipment, but the attitude of mind which he showed was a purely middle class one. Standardisation alone has brought refrigeration within the scope of working-class folk. Thanks to the efforts made by the Government to secure and encourage the development of a standardised refrigerator which is now going into all Government-sponsored, prefabricated homes, working-class housewives are seeing that amenity coming into their houses for the first time, and we need an extension of these amenities on the basis of standardisation. I am glad, therefore, that the Minister has taken powers to manufacture equipment if he considers it necessary, because it is a remarkable thing, which we have experienced on more than one occasion, that only when there is the threat of State enterprise going into a certain field does private enterprise really pull up its socks and begin to offer some of the service it should have been offering of its own initiative.
  It has been rightly said that the establishment of the grid won the war, and that
  1630
  without it we could not have survived. In my opinion this Bill, with the possibilities it presents of a sound basis for going forward with the electrification of the home, the setting free of vast resources of women power in this country, and the saving of human energy and prevention of ill health, can be a most important factor in winning the peace.
  6.22 p.m.
  Lieut.-Colonel Elliot: I am emboldened by the incursion into the Debate of the hon. Lady the junior Member for Blackburn (Mrs. Castle) to enter it myself being, like her, merely a lay man, or should one say a lay woman, not acquainted with the enormous array of technicalities with which the House has had to deal, in a great proportion of the review of this Bill. I am all the more emboldened since, after the very thorough review of the Minister's speech by my right hon. Friend the Member for Southport (Mr. R. S. Hudson), all that the hon. Lady could find to object to in it was that he had said "the Central Electricity Board" instead of "the Electricity Commissioners." If that was all that was wrong with his speech, it was not such a bad one.
  Mrs. Castle: I do not know whether the right hon. and gallant Gentleman was in the Chamber when I said that it was a totally inadequate case which showed no alternative policy at all to that proposed by the Government.
  Lieut.-Colonel Elliot: I am hurt and astonished that the hon. Lady did not see that I paid the compliment which she paid my right hon. Friend the Member for Southport of sitting throughout all her speech and listening to it most attentively, because I have a great admiration for her powers as a debater. It was only last week that we found ourselves on the same platform pressing, upon the Government a reform about which they had showed themselves singularly coy, and I grasped the truth of the epigram of a friend of mine which I think showed out through the whole of her speech—that women have a very poor grasp of excuses. The difficulty in which we are placed is that, so many times, hon. Members opposite seem to think that although a thing is bad, it will be all right if a Minister is put in sole charge. I do not

  1631
  think that is a self-evident proposition, and I certainly do not think it is a proposition which applies to this industry.
  Two lines of argument have stood out very clearly in our two days' Debate, and I do not think we shall get them much closer together. In fact it is only experiment and trial which will bring a solution to them because they are so sharply opposed. They are the lines of those who desire centralisation as against those who believe that, in spite of its disadvantages, decentralisation is, in fact, the line along which this industry, has made great progress and along which it can yet make more rapid progress than by the centralised or so called "streamlined" method presented in the Bill. Is its working wear to be the pullover of private enterprise—admittedly an untidy garment—or the strait-jacket, which although streamlined is not the very best working wear? I do beg hon. Members opposite to grant first of all that we are in an interesting position here because we can debate this subject without having it bedevilled by the continual introduction of the words, "the profit motive." This is an industry of which 60 per cent. is already held under public management of one kind or another, which means that the matter of centralisation or decentralisation' can be discussed apart from the question as to whether the profit motive should or should not be eradicated from the process of the supply of electricity.
  The difficulty in which we are placed is that hon. and right hon. Gentlemen opposite have made their reputation, and have worked their way up on these great public bodies, from whom it is now proposed to remove these tasks completely. The ironing out of diversities and the standardisation of voltage may be worthy objects. It may be a very good thing to bring our standardised voltage down to 240, but, after all, the development of the industry was pioneer work. Does anybody believe that a quarter or half a century ago an agreement could have been reached on a standard voltage, or, if it had been reached at that time, that it would have been right? Only last week we were debating the Town and Country Planning Bill.
  I remember some years ago visiting a planned town—the great city of Buenos Aires. It had been planned a consider-
  1632
  able number of years before and all the streets were of a uniform width. But that width was too narrow, and now there is no way in which the city can be improved unless the whole town is pulled down from one end to the other. There is that danger in standardisation; you may standardise prematurely. The danger of our impatient friends is that they produce a demand for standardisation in a growing industry which, it may well be, is not the best way to tackle the problems which lay before it. In particular, I would say that in my view the destruction of the great municipal undertakings is a retrograde and not a progressive step.
  After all, such great undertakings as that of the city of Leeds, which has raised for its electricity undertaking £10½ million, Manchester £16⅓ million and Birmingham £23½ million, are the work of committees upon which people from humble origin and homes have learnt the technique of management of great businesses and from which hon. and right hon. Gentlemen learnt to rule. Tonight they say, "Cast that all aside. Nobody else is to have the chance. In the future these things will be done by bodies nominated by a Minister." Nomination by a Minister is no substitute for popular election and the growth of knowledge over many years. If we had removed from the County Hall across the river, and its predecessor, all the great undertakings which under this administration it is proposed to remove from them, should we have had that powerful comprehensive grasp which the Lord President of the Council so admirably applies to the business of the day? They kick away the ladder by which they have climbed and say, "We have got to the position in which we have by the process of popular election and managing these great municipal undertakings, but we remove from our successors any chance of following our footsteps." That was not the view of the Prime Minister when the matter was discussed on a previous occasion, and it was certainly not the view of the municipalities until the day before yesterday.
  What then does their argument turn upon? It turns upon the companies. The companies are attacked on the assumption that under the Ministry everything will be very much better. The Treasury will come in and that will make a great difference. It will loosen things up, thaw the long frost which has overhung the in-

  1633
  dustry for many years and free the channels choked up to now by the repressive measures of the great town councils or the great power companies. I have been a Minister for many years, and I assure hon. and right hon. Gentlemen opposite and I beg the hon. Lady the Member for Blackburn to take it from me that the Treasury is not all that good fairy when it really gets down to its work. What has it to provide? Capital? But the industry has had no difficulty in raising capital. Is it to find plant, material and men? That is not its province. There is only one perfectly definite evidence that will remain that the Treasury has been there, and that is loot. The Treasury is about to help itself to the reserves and to 30 per cent. odd of the revenues of the present undertakings. The Treasury says, "You will be surprised to see what we will do with it when we get it." So they will, too. On this point it is interesting to note that all the people who are being approached are complaining. The private companies are complaining, and the local authorities, too, complain bitterly.
  The great city of Glasgow has been mentioned. Nobody could say that the great city and town council of Glasgow was a Tory stronghold. Nobody could say that it would not look with the utmost favour on a Measure introduced by Labour Ministers, particularly a Labour Minister who for some time held the honourable position of a town councillor in that great city. What are the views of the town council of Glasgow about compensation? It would make the companies' mouths water till they drooled down their beards. They said that the Glasgow undertaking, instead of being taken over with compensation of £2,340,000, should be paid compensation of £12,400,000—from £2,000,000 to £12,000,000, six times as much. The hon. Member for Stockport (Sir A. Gridley) would fall back aghast and appalled at a multiplication to anything like that of the modest figure for compensation which, he suggested. But I am not surprised. I was looking up some of the figures. The city of Glasgow, which borrowed £11,670,000, has repaid nearly £9,000,000 and is left with a debt of £2,870,000. That is the Socialist city of Glasgow. The Tory city of Birmingham—
  Major Cecil Poole: Since when?
  Lieut.-Colonel Elliot: It was the Tory city of Birmingham during the time it was borrowing all this money. It has borrowed £24,238,000 and has repaid £8,600,000, and the debt remaining which the Minister of Fuel and Power is going to take over is £13,570,000. I can assure hon. and right hon. Members opposite and the hon. Member for Dumbarton Burghs (Mr. Kirkwood), who was a town councillor for Glasgow for many years, that Labour Members will have a pretty stiff task to explain to the people of Glasgow why the Tory city of Birmingham is getting away with £13,500,000 and Glasgow only a little over £2,750,000.
  However, the proposed compensation, it is said, will do great things for the shareholders. It will give them security—a far better security than they have now. All they have now is dynamo boiler plant. They will get Dalton bonds instead. Does anybody out of a madhouse suggest that a Dalton 2½ per cent. bond is a better security than an electrical plant in full working order? Because if there is any such person and he has an electricity plant for sale, let him come to me, and I will take all the electricity plant he likes to give and I will produce paper for him in wonderful streams. Let me get away with an electricity plant—I do not care how much paper I give, especially when I see the latest antics and speeches of the Chancellor of the Exchequer. It is interesting to note how his subconscious mind reveals itself when attacking the argument that it is unfair to take over shares at a certain valuation. He quoted the instance of a stockbroker. That is the sort of thing that is running in his mind. He might be called a giant stockbroker. The Chancellor of the Exchequer is not really engaged in finance at all, but in gigantic stockbroking activities just now and, naturally, his ideal is a stockbroker. When he speaks of a stockbroker dying after a long and not un-remunerative life, he is speaking of his ideal figure. But that is different from the great group of productive enterprises in this country, which are being dispossessed and centralised under the technique which is brought before us today.
  The speeches tonight have been full, and I have no chance to spend the time I should like to spend on analysing a little more closely the remarkable financial

  1635
  operations and the remarkable arguments used to justify them, but I hope there will be a chance of discussing them at some length at a later stage. However, I say again that the fundamental theory of the whole transaction that one increases a man's security by taking away a piece of real property and handing over a piece of paper, under the depreciatory powers of the present Chancellor of the Exchequer, is not the sort of contention that could be sustained in any series of reasonable arguments, and certainly before any arbitration tribunal. A further argument which has been put forward strongly by the hon. Lady, for which I have the greatest sympathy, was that we must improve the position of consumers, that electricity must be cheap and put into every home. I think we should all agree with that.
  I was looking up the figures for the area of the country which I know best, the Clyde Valley. I found the great city of Glasgow and the Tyne Valley Company cheek by jowl. In the year ended May, 1946, the cost per unit in Glasgow city was.827d. per unit and the cost in the Clyde Valley was.839d. per unit—.012 of a penny difference. We must admit that the City of Glasgow enterprise, not conducted for private profit but by a go-ahead municipality, which has been praised by no less an authority than Mr. George Bernard Shaw—although, of course, he praised it in its Tory days before it got round to its present Labour majority—is doing the best it can, and making current and devices available at the cheapest possible rate. Yet all it can show with this close-packed, remunerative area, with every wire as it leaves one house passing into the next house, is.012 of a penny in favour of the City as against the undertaking covering the countryside, and all the extensions and unremunerative work which the countryside involves. No, I really do not think this argument holds water.
  Finally, it is said, "Well, it ought to be done. At some time or other it has to be done, and why not now?" To which the argument has been advanced from this side, "But this will involve dislocation at a time when undoubtedly we should avoid everything tending to any kind of dislocation of our industrial effort." The Minister laughed that off. The Minister is one of the best laughers
  1636
  on the Front Bench—except, of course, the Chancellor of the Exchequer, who is its king humorist, although his jokes are not as funny to other people as they are to him; but they are very funny. Everyone quotes the McGowan Report. Why only the McGowan Report? Why not the Report which was asked for from a committee appointed by a Socialist Secretary of State, reporting to a Socialist Secretary of State, at a much later date than the McGowan Report, and with good Socialists upon it such as Neil Beaton, who is well known, at any rate to all the Scottish Members, as no Tory die-hard. What was the verdict of Neil Beaton, reporting to Tom Johnston in the year 1942? He said:
  "We have examined the different aspects of the problem…Theoretically, there would be a superficial attractiveness in a complete reorganisation of the entire Northern Area under a scheme by which all the existing undertakings, whether belonging to companies or to local authorities, would be acquired and merged in a public corporation with new and wide powers…we do not recommend so drastic a proposal—the obstacles to which in our view substantially outweigh the theoretical advantages which would be secured. Such a scheme could not be carried into effect without very serious and needless dislocation of electricity supply, and we are not satisfied that the consumers would derive any compensating benefits."
  That is what Neil Beaton said to Tom Johnston in 1942, and it is impossible to laugh that off as simply the maunderings of an effete capitalism. It would be astonishing if it did not cause some dislocation. I was looking at what would happen. The new electricity law will not be complete until the Minister has made 24 sets of Regulations under the Bill, until he has examined 500 Provisional and Special Orders, and over 200 special Acts to discover whether their provisions are inconsistent with, or rendered redundant by the new Act, and until the Minister, by Order, repeals, amends or extends any of the above-mentioned 700 statutory enactments so as to obtain a uniform statutory code. If that is not to cause a certain amount of dislocation then it is a miracle because, in addition, the present legislation comprises 14 public general Acts. No attempt is made to codify this legislation.
  If hon. Members examine the Second and Third Schedules, they will find that this legislation has simply been assassinated—that is the only word for it. Six Acts are completely repealed, and out

  1637
  of the 270 remaining Sections and Schedules, 166 are repealed. Of the 104 remaining Sections of the Code, the Second Schedule amends in a pretty complicated way no fewer than 73 of them. And we are told that this is not to cause any dislocation. It may not, because some ingenious devices are provided: Section 6 of the Electric Lighting Act is repealed. By the way, it is the Section under which Regulations are made for the safety of the public. Then, having repealed that Section, Clause 52 states that, notwithstanding the repeal, the present Regulations are to remain in force until the Minister can think of some further Regulations. He might go through the whole Statute Book on that basis. The consumer is left completely in the air because all the Sections dealing with charges for supply to consumers, maximum prices, power to call for revision, the power to make charges by agreement—all these are repealed. Nothing is put in their place. What is retained? Those powers one would expect from something with which the Treasury is pretty closely concerned-all the Sections which put obligations on the consumer, the Section requiring a guarantee of certain financial return, and the Section demanding proper notice from the consumer. All the Sections, in fact, which the industry has been most severely criticised for applying are retained; the ones repealed are the ones that protect the consumer.
  For the purpose of.012 of a penny, it seems a pretty big upheaval. One must remember that when the Board has been set up, when it has bought its castle, when it has attained that select category of those entitled to inhabit the stately homes of England, which is confined to Borstal boys, mentally deficients, and members of the Coal Board—then its troubles begin. Some pretty rough things are to be done when it gets into the saddle. A good deal of comment has been made on the way legislation treats directors, but it is nothing to the way in which it treats employees. For 80 years, covenants of every kind have been established in this industry to protect the position of the employee. These are repealed, and wide powers are taken over the person of the employee to which I beg the attention more particularly of the hon. Member—I may call him my hon. Friend the Member for Dumbarton Burghs, who has in his
  1638
  time protested pretty severely about transfer of labour, and being moved about by Government Departments in ways to which he, himself, had not previously given his consent.
  The Electricity Supply Acts of 1919, 1922, 1926, 1928 and 1933, all provide compensation rights for the electricity worker. He was entitled to be compensated if the transfer or other events harmed him in any way; if he lost his employment, if his awards or emoluments were reduced, or his conditions of service made worse; also, if he himself gave up his job—which is quite a sound trade union reason—because he was required to do work "not analogous to his previous duties." He was entitled to have his claim heard in an industrial court by an impartial referee, or a board of referees appointed by another Minister, not the Minister who was being accused under the Bill. He was entitled to call witnesses, to be represented by counsel or solicitor, and, if he proved the facts on which a claim could be based "there shall be paid" say the Acts "such compensation as the referee thinks just." The Minister asks this House, this night, to abolish those rights. This Bill is to repeal all those provisions. An hon. Member of the Liberal Party was saying yesterday that they were about to support this Bill. Do they stand for that? We are entitled to ask. The work of many former Liberals is being repealed. The voice or at least the vote of the Liberals should make itself evident. It is a very difficult thing to detect those intentions. They can however be identified in the Bill. What is more, the Minister goes further. Under Clause 13, to which reference has already been made, he asks this House to say that employees, who are transferred by the Bill without their consent, shall have their service contracts so altered as to require them to render
  "any reasonable comparable services under the appropriate board, to be selected by that board."
  That is not a power which this House would give to any employer. The board is to judge what is comparable, and no right of appeal seems to lie against the board's selection. These are strong measures which it is necessary for this House to swallow to save.012 of a penny. I am not at all sure that the savings justify the sacrifice this House is being asked to

  1639
  make even in the civil liberties of the subject.
  As Minister of Health, I well remember having to direct the movement of several thousands of employees of the Ministry of Health as a war measure under the threat of the blitz. They were men and women who were running the great pensions machine of this country and who had millions of payments to make. We had to move them out of the range of the blitz from London to Blackpool. I still remember the feeling of horror and disgust that came over me at the power, which one man could exercise; to take a man from his house, leaving his garden derelict, and to break up a family by moving the employment without which the man or woman could not continue his or her economic life. The great Hollerwitz calculating machines were moved. The men had to follow them. They went on a promise that they would be brought back. A week ago, I heard the hon. Member for Rugby (Mr. W. J. Brown) upbraiding the Minister; another Pharaoh had arisen who knew not Joseph. Some new figure had appeared to whom that pledge could not be applied, or by whom it could be interpreted in another sense. That was a war measure, and only as a war measure could it be defended. Under this Measure we are asked to make that a permanent power of any Minister of Fuel and Power. We are being asked to do too much, even in the name of efficiency. There are even greater things than the efficiencies we expect to secure under this Bill. Those greater things are threatened tonight. I ask the House to refuse to give these powers into the hands of the Minister.
  6.55 p.m.
  Mr. Turner-Samuels: I am quite sure that everyone in this House admires the verbal dexterity of the right hon. and gallant Member for the Scottish Universities (Lieut.-Colonel Elliot), but some of us who listened very carefully to the robust speech he made, felt rather sorry that he should have employed his great talents in order to endow this discussion with the cheap points he made. All the right hon. Gentleman did was to show his skill in employing his power of badinage. There was not a single argument put forward by him which disposed of the necessity or effectiveness of the
  1640
  Bill as printed and presented by the Minister. The right hon. and gallant Gentleman and his colleagues put themselves forward as defenders of local authorities, amongst other things. Does he really ask us, who have been in political life for over a quarter of a century and have seen the devastation private enterprise has brought upon industry and the life of the nation, to believe that he or his colleagues care two straws about local authorities? What they are concerned about, and the only thing they are concerned about, is the continuation in industry of private enterprise and profit. That is the difficulty in which he and his friends find themselves.
  Mr. Pickthorn: On a point of Order. Since the hon. and learned Member for Gloucester (Mr. Turner-Samuels) seems to be making this the basis of his argument, may I ask your guidance, Mr. Speaker? Is it in Order to attribute motives, and to say that hon. Members who have asserted constitutional principles are really concerned with nothing but profit?
  Mr. Speaker: Actually, of course, if one attacked an individual and said that that was his motive, that would be out of Order. But, generally speaking, one attacks all parties, one way or the other, and one can apply motives to them in that general sense. That is not out of Order. As time is getting rather short I hope we can get down to the point without these generalisations.
  Mr. Turner-Samuels: I was just saying that the difficulty in which the right hon. and gallant Gentleman and his colleagues find themselves is that they either own these private interests with which this Debate is concerned, or they represent them, and if they do neither, they are always supporters of vested interests. The one thing this Bill will do now and do permanently is to dispose of those vested interests and put them under public ownership. I do not want to go into the metaphysical gibberish to which the House listened from the senior Burgess for Cambridge University (Mr. Pickthorn), but he dealt with a point on Clause 10 with which I also desire to deal. I ask the House to assess the value of his speech by what he said on this particular point. His reference to Clause 10 was about something for which that Clause gives no foundation whatever; neither does any other Clause in this Bill give it. He

  1641
  represented to the House that, for the first time, this Bill prevents the right to present a petition to Parliament. The Bill does nothing of the sort. Clause 10 makes absolutely no reference to any such thing. It envisages no such purpose. Like the gallant advocate that he is, when I taxed the hon. Member with this inaccuracy he fell into evasive retreat and refused to be drawn.
  Mr. Pickthorn: If the hon. and learned Member will read the Clause he will sec that it says that, without the consent of the Minister, certain corporate bodies are not to be allowed to promote or oppose legislation. I do not think that I said categorically that that was absolutely unprecedented, but I said that I thought it was highly improper and unusual, and I read in support Erskine May's opinion that the right of every entity under His Majesty's Government to petition the House of Commons, is an old and fundamental part of the Constitution.
  Mr. Turner-Samuels: The hon. Gentleman, having been completely caught out, is now hedging. I am quite familiar with that Clause, in contradistinction to the hon. Member. The Clause merely deals with Bills being presented to Parliament. It has no concern with, nor does it make any reference to, petitions to Parliament. He may try to persuade the House to the contrary, but he will not succeed.
  I listened to the speech of the right hon. Member for Southport (Mr. R. S. Hudson) with great interest and respect. I think he was anxious to deal quite fairly with what he thought was in the Bill, but as so often happens, he was quite obviously speaking from a misleading brief, because what he tried to lead the House to believe was that the whole of our legal system was going to lie in pieces, under the devastating effect of the provisions of this Bill. I do not think it is putting it too high to say that he asserted that things could be done under this Bill which were never capable of being done before, which were contrary to all natural rights and justice, and which were contrary to all previously existing law. I will take one or two of the instances he gave. First he said that by Clause 5 of this Bill the courts and Parliament are superseded, and arbitrary powers conferred on the Minister. He made that definite allegation. If it were true, it
  1642
  would be a serious allegation indeed. He went on to say that there was no relief that could be afforded by the courts if the power of the Minister was so exercised that it exceeded what was in the Bill That is absolutely wrong and a misrepresentation, quite unintentional, no doubt, of what the law is. It was laid down explicitly in the House of Lords in 1931 that if any directions or powers of this description which are conferred upon any Minister or given by any statute, are so exercised as to exceed the power vested in the Minister the court has power, not only to intercede but to give the proper relief. Therefore the right hon. Gentleman's contention on this head was quite erroneous.
  Moreover, there is a further safeguard, an important one. These powers have to be exercised reasonably and in a bona-fide way. In exercising them, the Minister has to have strict regard to the objects of the Bill or the statute which confers these powers upon him. Although a reference was made by the right hon. Gentleman to Clause 5, he omitted to mention Clause I (6) which defines the objects of this Bill, and in that way limits Clause 5 so far as these particular powers of the Minister are concerned. Therefore, it is quite incorrect to say that all control will have gone, either from Parliament or from the courts, to the Minister. Of course, it is perfectly true that these powers are not conferred upon Parliament in the Bill, they are conferred by Parliament upon the Minister, because Parliament cannot administer electricity; it is the Ministry that is to do so. There fore, it is essential for that purpose, to give the powers to the Ministry. It would be absolutely ludicrous to talk about giving these powers to Parliament. There is enough complication here already. If matters are even taken upstairs to be dealt with in Committee there are protests from the other side. This House may be very jealous that everything should come before Parliament, but the idea that Parliament can administer electricity as an industry is absolutely ludicrous.
  There was a complaint that the Minister has almost licentious powers to eliminate the whole of local and public Acts in connection with electricity. That is an exaggeration; there are two important modifications. First, he can deal only with local or public Acts which directly

  1643
  effect electricity. He can deal only with those in order to get a uniform code, and it is perfectly clear to any lawyer who scans the Measure before the House that what is being sought to be done here is codification. It is all very well for the right hon. and gallant Gentleman the Member for the Scottish Universities sneering at this and throwing sarcasms at it, but if this matter is reasonably discussed and interpreted, it will be seen from the Clauses that this is a codification. All that is to be done with the other applicable local Acts or public Acts is to coordinate them, to approximate them to the provisions that are in this Bill, and the power given is clearly limited to that desirable purpose. The only modification of that is that the Bill does not say that that is to be done at once; it leaves it to the discretion of the Minister to do it either all at once, if he thinks it necessary, or in stages as it becomes necessary. Therefore, these provisions are strictly limited to the provisions of Clause 50, (1) to (4) in that respect. It is in order to get a uniform statutory code.
  I would like to refer to a further matter which the right hon. Gentleman raised. He complained that the Minister has a right, under Clause 15, to disclaim agreements. That is a serious power to confer upon anyone, but it is not the first time a power of disclaimer has been given. A trustee in bankruptcy has a power of disclaimer, liquidators of companies have a power of disclaimer when there is property which they do not want to take over. The point has to be noted that this power of disclaimer given by the Bill does not apply universally to all agreements. The Bill describes specifically the type of agreement that can be disclaimed. Such agreements are, first of all, unnecessary agreements, agreements which ought never to have been entered into, or imprudent agreements. The right hon. Gentleman the Member for Southport then went on to say that there was in this instance no redress. If that were so it would certainly be a very serious matter.
  As a matter of fact, his view is not correct. There is redress. The very provision which he was discussing and condemning provides machinery in these cases for arbitration. It says, most explicitly that, in the case where an agreement is disclaimed, the party against
  1644
  whom the disclaimer is made may take the matter to arbitration. There is one exception and that is where it is an agreement in regard to personal services. I ask the Minister to look at that again. [HON. MEMBERS: "Hear, hear."] Certainly—that part of it. That is an entirely different matter to saying that no redress applies to the whole of the provision. I do not know, but it may well be that the Minister may have a very good reason for excluding agreements relating to personal services. That matter may be more justified than appears on the surface, but I ask him to look at that part of the Clause again. Apart from that, in my submission, the power to disclaim agreements is absolutely unexceptional.
  The question has been raised of the liability of directors. The right hon. Gentleman the Member for Southport somehow or other got it into his mind that the phrase, "shall be liable," was some extraordinary phrase which had never been used in Statutes before. If he cares to look at the Companies Act of 1929, he will see this phrase strewn all over it, not only in connection with civil affairs but also in regard to criminal matters. In any case, the liability in question here applies to a company paying excessive dividends, or making excessive payments, other than those permitted by the Act, after the directors have received notice that they ought not to do it. It seems perfectly right and proper in the public interest that this safeguarding provision ought to be made. It is said that that liability is there, without any right of appeal. Of course, that would be a monstrous thing if it were, true. It is a monstrous thing to say, because it is not true.
  The Clause expressly and explicitly provides for arbitration in that respect. Any director who is charged with that liability can say, "No, I am not liable. I am not going to pay," and he is entitled to go to arbitration. A word in regard to what the right hon. Member for Southport said about criminal matters. Objection has been taken to this aspect of the Bill. It has been said that, normally, the onus of proof, is on the prosecution. I quite agree. Normally, the onus of proof ought to be on the prosecution. However, the Clause that is here under examination is Clause 54. That was referred to by the right hon. Gentleman without considering the preceding Clause 53. If those two Clauses

  1645
  are read together, the position becomes clear at once. Clause 53 applies to the case of the making by a director of a false statement. Where we have a false statement there is no difficulty as to any question of onus applying. The offence would have to be proved in a case where there is a body corporate which is liable for an act of that kind. That body corporate can be liable in such a case only through 3 servant or agent. The offence in such a case would have to be proved before a director or a servant or agent could be made liable.
  The right hon. Gentleman the Member for Southport referred to and criticised other legal aspects, without any foundation whatever for his criticisms. His main attack on this Bill was in fact based upon these legal matters and, as those completely fail and fall to the ground, I ask the House to vote for the Second Reading of this Bill, which is a good and necessary Measure.
  8.15 p.m.
  Major Peter Roberts: In the absence of the Law Officers of the Crown we are grateful to the hon. and learned Member for Gloucester (Mr. Turner-Samuels) for giving us his opinions. However, he started his speech with so much prejudice that anything he said afterwards carried very little weight as far as I was concerned. The shortcomings of this industry have been ventilated from both sides of the House. We are getting rather familiar in these nationalisation Debates with supporters of the Government running down the great industries of this country one after the other. I suggest that no evidence has been produced by any speaker, and I have listened to practically all of them, to show that the benefits which they axe seeking must necessarily be obtained by a change of ownership. That is a point to which I hope the Parliamentary Secretary will refer when he replies.
  In the speech of the Minister, I thought his only argument on that score was an anti-profit one. In one sentence he referred to "manipulation," "lining the pockets," "undesirable profits" and "excessive charges." If in point of fact he is attacking the making of profits, whatever the industry may be, then he should come out in the open and say so. In connection with this Bill as it is framed, I feel it is unnecessary to have a change of
  1646
  ownership. Many hon. Gentlemen opposite have suggested that there should have been some alternative put forward by hon. Members on this side of the House. [HON. MEMBERS: "Hear hear."] I hope hon. Gentlemen opposite listened to the very good speech by my hon. Friend the Member for Southern Dorset (Viscount Hinching-brooke) last night. I admit that the speech was made rather late in the Debate, approaching 11 o'clock. Nevertheless, if hon. Members read that speech they will see that some very constructive ideas were put forward. Therefore, in the main issue, I put it to the House that no proper argument has yet been advanced why the taxpayers of this country should be asked to pay something approaching £2,000 million in order to effect the nationalisation we are endeavouring to obtain.
  I want to address myself to two aspects of this case. The first is the municipal aspect, particularly that of Sheffield. Also, I want to take further some of the good remarks which were made by the right hon. and gallant Gentleman the Member for the Scottish Universities (Lieut.-Colonel Elliot). To take the position of Sheffield, I want' to ask the Parliamentary Secretary whether there is any suggestion of criticism of the way in which Sheffield has been running its electricity undertaking. Do hon. Members opposite suggest that the municipal organisation in Sheffield has been badly and inefficiently run? If they do, I suggest that they should say so and then we would know where we stand. If not, what are the advantages which this Bill proposes to give to Sheffield as a city?
  I can see pienty of disadvantages, and I am not alone in that. The Socialist chairman of the City Finance Committee was reported in the "Sheffield Telegraph" as showing dissatisfaction about the way in which local authorities are being penalised. I must agree with that. For 20 years the City of Sheffield have been paying off the debt which they incurred at the beginning. They have reduced that debt to £5 million. In another 10 years they would have paid it off altogether. Is it not right that at the end of 10 years the municipality of Sheffield should own the equity of that undertaking? That would mean that each year £500,000. which has been spent in paying off the debt and paying interest

  1647
  charges, would be used in Sheffield to reduce the rates of electricity and thereby provide cheap power which would attract to the city production which, in its turn, would bring employment and prosperity to the citizens. I submit that is a very real asset. I stand here representing my constituents in Sheffield. As far as I can see, they will lose a great possibility of future employment and prosperity.
  Anther point was made by the hon. Member for Winchester (Mr. G, Jeger), and I am sorry that he is not in his place, because I agree with him when he asked the Minister to look into the question of costs. In Sheffield, £9,000 a year from the electricity undertaking has been used towards the overheads of the City Council. That is going to be lost under the Government's proposal. Though the Minister talks about not wanting people to make a profit, so far as I can see, from the point of view of Sheffield, there is going to be a loss, and I put the point to the Parliamentary Secretary, hoping that he will look into these matters, which I have put up sincerely from the point of view of Sheffield.
  Then there is the question of electricity. I have not heard any suggestion that the municipal undertakings, particularly that of Sheffield, are inefficient. Again, I ask that question of hon. Members opposite. I have facts and figures, for instance, showing that, to the largest type of consumer, the price is.29d. per unit, which is extremely low, though it has risen recently. I should like to quote one comment from the Socialist Chairman of the City Electricity Committee:
  "The Committee claims that Sheffield possesses at the present time one of the most efficient and well-managed electricity undertakings in the United Kingdom."
  I believe that to be true. The point I am trying to make is, What advantage is to be expected from this Bill, so far as the municipal undertaking of Sheffield is concerned?
  There are other disadvantages to municipal undertakings. First of all, municipal undertakings—water, electricity, trams and so on—are correlated and run from one office. What are the Government proposing to do, under this Bill and the Transport Bill? They are taking away the co-ordination which has been built up and splitting it up amongst new
  1648
  authorities, thus disintegrating what has been built up in the past. Secondly, there is the question of local industries. In Sheffield, special alloy steels for furnaces are required, and it has always been the pride of Sheffield that we have produced the kind of power at the right place and at the right time in order to build up our industries. What advantage can there be in taking that away from the people who really know about it and centralising it in Whitehall? I do not accept what the Minister says when he declares that the area boards will be autonomous. The Bill says quite definitely that the Central Authority will determine policy and the final authority goes to the Minister.
  We have heard in the past of the great record of municipal work, and, while looking back into the past and recalling how Conservative and Liberal Governments have built up this municipal idea, I want to appeal to our Liberal friends. I hope that, before they vote tonight, they will consider the great traditions which Conservative and Liberal Governments have built up in municipal trading. In just under two years of Socialist rule that achievement of the local-authorities is being taken away from them and centralised in Whitehall. Socialist councillors are getting worried about this, and I hope that there will be some enlightenment. I only wish to quote the Socialist Chairman of Cardiff, who was mentioned by my right hon. Friend in his opening speech yesterday:
  "There is more danger to Socialism from over centralisation than from local bias. We are in danger of passing into the hands of regional gauleiters and commissars appointed by the Minister in the name of efficiency."
  I feel most strongly that there is a great deal in that. If the Socialist Government are going to take away the right of the local authorities to run these local industries, the time which has been given by people who know the facts about those industries will be wasted in handing them over to a central authority.
  My next point is in regard to the position of the employees in this industry. The Coal Industry Nationalisation Bill, when it appeared on Second Reading, was badly drafted in this respect, and, in the Committee proceedings upstairs, hon. Members from this side of the House succeeded in securing considerable amendment. I hope that that will be the case with this Bill; but the Bill, as at present

  1649
  drawn, does not give anything like the safeguards which should be given to the employees in this industry. Despite what was said by the hon. Member for Stratford (Mr. Nicholls) early yesterday afternoon, I maintain that happy relations already exist in this industry. The hon. Member described the conditions of people working on the top of boilers as being bad conditions. We had the same sort of argument about people working at the coal face in two feet of coal. Nationalisation is not going to make boilers any less cold—unless they do not get any fuel at all—and conditions at the coal face will remain the same as they are now, so that those arguments, I think, are quite unavailing. Labour relations in this industry, I repeat, are good. What is going to happen? Mention has been made of the compulsory transfer of services, and I do not propose to labour that point. All I want to say is that, in the law of this land, we have never allowed the compulsory transfer of personal services. I cannot say to a man, You work for me today; I will force you to work for somebody else tomorrow. Yet this Bill is bringing in that concept, which, I am sure, is wrong. On the question of pensions, I think these should be obligatory, whereas the Bill says that the Minister may produce pensions. The Coal Industry Nationalisation Act makes pensions obligatory, and I hope that the Parliamentary Secretary will refer to this point and give us an answer.
  The last basic point on this subject concerns the question of the position of the employee in a nationalised industry. What is going to be his position? Is it really going to be any better, because, at the moment, taking Sheffield as representative, the employee has the opportunity of seeing his councillor, and he can, if he likes, go to see the committee on the spot. When we get nationalised industry, we get the impersonal touch. The Post Office is a good example. There has been a good deal of dissatisfaction in the Post Office, particularly among the night telephonists, but what is the attitude of the Department? What does the Assistant Postmaster-General say when we press him with questions? That the staff are expected not to raise this issue through Parliamentary channels until they have first made full use of their own machinery. Is that right? Do hon. Mem-
  1650
  bers really believe that? Have not we been fighting in this House so that members of the Forces may use us if they wish to ventilate their cases? Why, if we can ask questions of the Secretary of State for War, cannot we ask questions about the great T.U.C. and its workings? I suggest that that is very wrong, and that people should be able to come here, if they want to, and get help, and I am vey much perturbed about this aspect of nationalisation.
  What about the civic rights of these people? Are they going to be allowed to enter into local councils and be on Church councils? We have had an unfortunate experience of this with the National Coal Board. As hon. Members know, in the North-Eastern Division, the civil rights of councillors and others have been taken away from them. Will that put them in any better position? I ask the Parliamentary Secretary to consider these things. Lastly, on this point of labour, are we certain that it is the intention of the provisions of the Bill, which says that the Minister shall be able to come to terms between certain trade unions in order to bring up conditions—and I think the hon. Gentleman knows the Clause to which I refer—to bring about the justice for all workers which we want? This was another point which comes as a legacy from the Coal Industry Nationalisation Act, though it now seems that we can draw an analogy from that Act suggesting that the Authority is saying, "I will talk to this union, but not to that one. I will select the union to which I will talk." How can it be to the advantage of the employee to be placed in that position? To sum up, I can see nothing in this Bill, as at present drawn, which' gives the worker a better position than that which he is in at present, under either a municipality or private ownership. Therefore, I would plead with the Parliamentary Secretary to reconsider whether this is the time, when the White Paper on industry has just been published and when we realise that we must get down to reconstruction, to introduce a Bill of this kind.
  We have heard a lot about dislocation. I am afraid that, if this Measure is rushed through, the organisation will not be ready to take over and run the industry after the vesting date. If I may be allowed to draw another analogy from the national-

  1651
  ised coal industry, I would remind the House that a certain large number of coke oven undertakings in Yorkshire were taken over on the vesting date. One particular manager was called out and told to run all those undertakings. He was also told "We have no offices and no staff for you." That is what we mean by dislocation. I am certain that, this time, we want everybody's energy and co-operation for the production of electricity; we do not want men looking round and saying to themselves, "Am I going to get a job on this board or that, or am I going to be moved elsewhere." I suggest that the Minister should reconsider that particular aspect. Nationalisation has not always proved a success. This year, the nationalised coalmines of Czechoslovakia made a loss of £5 million. Is the Minister right in thinking that he can now rush ahead on these schemes and always produce the answer he wants?
  I should like to quote two instances of where he was not infallible. Last year, he hoped he would get 8,000,000 extra tons of coal; he hoped it, but he did not get it. This year, he hopes that he will save 3,000,000 tons of oil fuel; he has hoped, but he has not got it. I do not blame him for that, but I would ask him to think again. I suggest that people of all parties should say, "The Minister has nationalised coal. Let him see whether that is a success or not before going ahead with these other schemes." Therefore, at this stage, I would ask the Minister to reconsider the matter, and to withdraw the Bill.
  7.34 p.m.
  Mr. Burden: I note with pleasure the tribute paid by the hon. and gallant Member for the Ecclesall Division of Sheffield (Major Roberts) to the work of the Sheffield Municipality and, in particular, to its electricity undertaking. It is not often that one receives tributes of that kind from hon. Members opposite, and they always choose their opportunity for paying such tributes. It is only necessary for me to mention in that connection, that, since 1926, with the exception of one brief year, I believe, Sheffield has been controlled by a Labour majority. When one remembers the bitter opposition which has been the normal policy of the Tory Party in regard to municipal trading and
  1652
  undertakings, one is very pleased to receive such a tribute.
  Major Roberts: Surely, the hon. Member will agree that the electricity undertakings, as such, were placed in the hands of the municipalities with the wholehearted support of the Liberal and Conservative votes?
  Mr. Burden: But it must be remembered that it was the vision and forethought of Socialist Members, wishing to develop the services for the good of the community, which led to this great development. When one looks back through the history of municipal trading, one finds that, all along, it has been Members of the Socialist Party who advocated municipal trading and municipal enterprise, as against the line taken by the other side.
  I join with other hon. Members in protesting to? the Minister against what I regard as the somewhat cavalier treatment of the local authorities under this Bill. It is true that the Minister pays lip service to local authorities, but, having done that, he proceeds to take over their undertakings on terms which, I am sure, he would not dare to propose to private enterprise. The Minister gave not the slightest indication that he had any appreciation of the severe financial impact of his proposals on local authorities owning electricity undertakings. Surely, local authorities are entitled—and here I must differ from the hon. and gallant Member for the Ecclesall Division of Sheffield—to say to the Minister, "We are ready and willing to come into any national plan which will help to bring the benefits of electricity to the whole of the community, but, in so doing, we do not think that the local authorities ought to be placed in a worse financial position." I suggest to the Minister that it is unfair to thrust upon the ratepayers increased local rates as a result of the willingness of local authorities to co-operate in a great national plan. To put the matter quite bluntly, local authorities ought not to be placed in a worse financial position just because their profitable undertakings must now form part of a national plan. I would ask the Minister to tell the House how he proposes to deal with that problem.
  Secondly, I beg the Minister to realise that many members of local authorities have devoted much time, knowledge and enthusiasm to the building up and to the success of the operations of electricity

  1653
  undertakings. Those undertakings have been matters of civic pride, and members of local authorities, in creating and building them up, have developed that civic pride and community spirit. Is all that valuable public work on the part of devoted men and women in the public service to be ruthlessly scrapped? It is not good enougl to say that consumers' interests will be adequately safeguarded by the appointment by the Minister of a few members of the local authorities to consumers councils. I repeat that that is not enough. I would ask the Minister 10 ensure that members of local authorities now owning electricity undertakings should be appointed, as a right, on the area boards, and thus maintain that direct representation as between the municipality and the governing body, so far as the industry is concerned. Many progressive local authorities have built up substantial financial reserves. That was part of a wise business policy. Does the Minister propose—I will try to use a non-controversial expression—to appropriate those reserves?
  I would like to say a few words about the staffs of local authorities who may be adversely affected by these changes. In view of what has been said about these staffs, I hope the Minister will give the House an assurance that long-established precedents in relation to the staffs of undertakings which are taken over will have full and adequate protection, and that there, will be a complete understanding between the Minister and the appropriate organisations which can rightly claim to speak for these people. I hope local authorities, though feeling the loss of these undertakings, will see the wisdom of coming into a national plan, but I beg the Minister not to leave with the local authorities a rankling sense of injustice in connection with the transfer. Therefore, I ask the Minister to take into the fullest possible consultation those organisations who have an established right extending over many years to speak the united voice of the local authorities.
  7.42 p.m.
  Colonel J. R. H. Hutchison: There is in this Bill some variation of the pattern to which we have become accustomed as one nationalisation Bill after another passes rapidly across the Floor of this House. Hitherto, some evil or major defect of the past has been
  1654
  pointed at by the Government as requiring to be put right. Coal, for example, was the cockpit of political ideologies for a generation; rail and roads were at loggerheads until the war; in the matter of Cables and Wireless there was representation from the Dominions, and, of course, any representation that comes from overseas—India, Burma, Egypt and Palestine—must be treated with deference. Those Measures have some substance of argument behind them, but here we come to a very different case. It has been admitted on all hands that the record of this industry has been one of constant efficiency and improvement. The Simon Report, commenting on this, said it was largely clue to the intense competition of the gas industry that both those industries and the public had benefited by that competition. The Minister himself, in one of those moments of fairness which descend upon him from time to time and which I admire, used these words only a short time ago:
  "In the matter of electricity, let me admit the great developments which have been made by those in control of the industry."
  Here we have a record of growing consumption of electricity, of constantly reducing prices, of constantly improving fuel efficiency. Is that progress to be continued under this Measure? Is it not a natural assumption that if the war had not intervened that progress would have been continued? That is one of the answers to the hon. Lady the Member for Blackburn (Mrs. Castle) who asked what guarantee there was that this progress would continue without this Bill. That progress has gone on throughout the history, of this industry, and there is no reason to suppose that it would not have continued in the future.
  I agree, and on this side of the House we freely admit, that there were defects. What industry, what Ministry, has not some defects in it? Let the Ministry that is without defect cast the first stone. It may be true that there may be too many generating and distributing undertakings, that more standardisation of voltage and of equipment, and variation in boundaries are desirable. All that is already planned and can be carried out without half the disturbance which will be caused by this great Measure with 56 Clauses and 85 pages, whatever the Minister says. The McGowan Report and the Cooper Report,

  1655
  both of which have already been quoted, came down against this radical and drastic cure for so small defects. Of course, one can cure a headache by cutting off one's head. This proposal leaves efficient industries aghast. Up to now there has been at least this to be said for the Government programme: there was the spur upon industries that if they were not efficient they ran the risk of nationalisation. But here we have the proposal to nationalise an efficient industry for no better reason than that it is an efficient industry, and presumably the Government want the credit for that. Industry is despairing. When they see a Measure like this, when, in spite of this industry's magnificent record, they find it is to be treated in the same way as those against which so many stones have been cast and against which so much criticism has been levelled, they despair.
  I congratulate the Secretary of State for Scotland on the organisation which he has achieved for my country. He has managed to wrest from the hands of the Minister the right for the North of Scotland Hydro-Electric Board, now to be called the North of Scotland Board, to continue with its rights, responsibilities and allegiances. I only wish he had been able to go further. He has certainly had the boundaries extended, but, as my hon. and gallant Friend the Member for Pollok (Commander Galbraith) said yesterday, it would have been a much more reasonable and rational line of delimitation if under that organisation the whole of Scotland had been treated as one unit. The Secretary of State for Scotland has been making great play with this and, no doubt, with the psalm in his heart:
  "I to the hills will lift mine eyes
  From whence doth come mine aid."
  —he has been making speeches about what he has achieved. We welcome what he has achieved, but we urge him to go on with the struggle. There is no boundary more normal, no decentralisation more natural, than to decentralise from Whitehall that part of Britain that lies most distant from it. The right hon. Gentleman the Lord President of the Council has already told us that reasonable decentralisation is part of the Government's plan. No decentralisation could be more reasonable than that the Scottish Board which is already in existence should look after the whole of Scotland.
  1656
  I wish to protest as vehemently and as strongly as I can against the treatment of municipal undertakings' and to add the weight of my words to the wise words that we have heard from the hon. Member for the Park Division of Sheffield (Mr. Burden). This is expropriation from municipal authorities without a vestige of justification. Here we have that very thing which the Chancellor of the Exchequer appealed to us in one of his Budget speeches to do. I refer to ploughing back, prudent management being penalised, big and small debts being taken over and assets being taken away. In the city a constituency of which I have the honour to represent there are assets which have been paid for by the consumers of electricity who, in the main, are the ratepayers. That property belongs to the ratepayers of the city and they regard it as an asset. That is going to be taken away.
  I would like to draw the attention of those Members of the House who are interested in Scottish rating to the fact that if the rates in the City of Glasgow were put on an equivalent basis to those in England and the same calculations used, they would already be approximately 40s. in the £. We cannot afford to lose anything, to have any further burden put upon the shoulders of the ratepayers of the city. Therefore, I wish to add my voice, as strongly and as vehemently as I can, against what is being done. What are the Government teaching the country? What subversive lessons are being thrown out to the population of Great Britain? First, that the efficient are to be dispossessed equally with the inefficient; secondly, that prudence is to be penalised; and thirdly, that fair play is to be abandoned. Blithely they face the future, and blindly they ignore the present.
  Now, for a few short moments before I finish, I wish to draw attention—and particularly the attention of the Parliamentary Secretary—to a small body of individuals and of undertakings which has been completely left out of the Bill. I know the Ministry are now aware they have been forgotten; perhaps the light went out when they came to consider it. I refer to the non-statutory undertakings. There are more than 300 of them; small people, insignificant people, sometimes commercial concerns who supply a village with its electricity, sometimes a private

  1657
  individual who does it. So far as I can see, in this Bill there is no provision whatever for what is to happen to these people. Will the Parliamentary Secretary tell them, tell me, tell us, what is the intention? Have they been left out purposely? Are they to be left out of this great plan, to muddle along as best they can? What will happen if that, in fact, is the intention? Why, sooner or later one of the area boards will come along and say, "But we ought to supply electricity there". Then what will happen? They will come to these non-statutory undertakings and say to them, "You clear out". What, then, will be the basis of compensation? Those individuals, those small concerns, will be completely at the mercy of the area boards, and no provision of any kind is made for them in the Bill. I ask the Parliamentary Secretary to regard this matter seriously. A relatively large number of people are concerned. What I suggest to him is that, before the Bill reaches the Committee stage, there should be inserted a Clause which allows those individuals, when they are dispossessed by the area boards, as undoubtedly they will be, to have their compensation assessed by a neutral tribunal.
  The roundabout goes on. The piling upon Ministers' shoulders of responsibilities with which they have neither the time—because there are not enough hours in the day for them to be able to consider them—nor the ability to cope, from which "Solomon in all his glory" would have shrunk, is producing a situation of evergrowing chaos in this country. The country is frustrated, hesitant, doubting, despairing, and is carrying on its back, like a modern Sinbad, one tenth of a civil servant for every working man in the country. That is gradually bringing a once sturdy industry to its knees; and with Measures of this kind, penalising prudence and nationalising efficiency, would it be surprising if, what half a dozen enemies have failed to do throughout a generation was brought about in two short years by a Socialist Government?
  7.54 p.m.
  Major Wise: During this Debate we have travelled round the large cities of the United Kingdom and dealt with the problems of the corporations of those cities and their local
  1658
  government affairs. I want to take the House to the countryside, and to look at this Bill from the point of view of those who have to dwell in the rural areas. If I may paraphrase what the hon. and gallant Member for Central Glasgow (Colonel Hutchison) has said, we say to them: "Darkly we have sat in the past; now let there be light." I hope this Bill will be instrumental in bringing to the British countryside the light which we need. I desire to make an appeal on many grounds. First and foremost, I appeal on behalf of those women of Britain who, in the past, have had to work in cottage homes, and the large farmhouses, under the disadvantage of oil lamps and similar illuminations. Those people deserve the same treatment, facilities and amenities as their opposite numbers living in the cities and the towns. I also wish to make an appeal on behalf of the great agricultural industry. In agriculture, we are looking to the benefits which electricity can give to us in the future, benefits which have never been conferred upon us in the past by private enterprise. At the moment, there are hundreds of thousands of farmhouses and farms in this country which are not served, in any shape or form, by any electrical body. It is their needs which are uppermost in my mind at the present time.
  I now wish to deal with the facilities which must be granted for the purposes of the housing progress to which we are all looking forward. We cannot possibly expect to get our folk back into the villages, unless it is made possible for electricity to be brought to them. We on this side of the House are not thinking of building all our houses in the villages. We are hoping to create colonies where they are needed, and it is impossible to complete these houses unless we can bring to those colonies the necessary electrical services. The smallholdings programme will, I hope, be accelerated in the next few months. Each smallholding will require electrical services. In the existing circumstances, is it possible for private corporations, or private concerns, to take electricity to these outlying farms of Britain?
  I wish to give the House the benefit of an experience which I had. My farm is a lone farm, two miles from the main electricity supply line. A few years ago,

  1659
  like every other farmer who wanted electricity, I asked the local company what would be the cost of supplying me with electricity. It needed two miles of lines, a transformer possibly, posts and the rest, and the estimate given to me by that private concern was £600 per mile—£1,200 to put me on electricity. It was simply a desire on their part to obtain from me part of their overhead charges. The obvious thing to do—which I did—was to instal my own plant, at a cost not of £1,200 but of £200, and I saved by that a good round £1,000. That, however, does not end the story. That plant is not sufficient to supply all my buildings and my machinery with electricity, and over a year ago the local concern came to me and said, "Can we bring you into a scheme with other farmers around?" I said that I was prepared to accept such a scheme, and to go in with the rest of the farmers, because within sight of my house there is not at the present time a single farm served by electricity apart from my own. That was over a year ago. The Opposition are talking in terms of progress and efficiency, but none of us has heard a word about the project since. It might have been window-dressing, it might have been anticipation, it might have been knowledge of the great Bill which is now before the House. Schemes have also been mooted between the supplying companies and the National Farmers' Union.
  Colonel J. R. H. Hutchison: Is not that just the very sort of dislocation which we say will supervene on all these plans?
  Major Wise: No, in my view it is the collapse of private enterprise initiative. If initiative had been shown the scheme no doubt could have gone on. It is not only in my own county that it is almost impossible to take electricity to the farms, hamlets and villages. We are stuck on all sides. With regard to the scheme of the National Farmers' Union, which has been mentioned by hon. Members opposite, the scheme itself may be good in parts, but its cost to the farmers is prohibitive. According to the notes I have in my hand, if the scheme went through 150,000 farmers were to be supplied with electricity, and the average cost to each farmer would be £200 for the installation. In some cases it might be £100, but in others it might mean that farmers would
  1660
  have to pay between £500 and £1,000, and under that scheme there is no guarantee that electricity will be carried to the outlying farms. Where it is not profitable to take electricity, the supplying companies will not take it.
  I commend this Bill to my friends in the countryside. We are safeguarded, and we are particularly interested in Clause 1 (6). Agriculture and the countryside are not over much referred to in the Bill but there is our safeguard, and we are further safeguarded by the excellent speech made yesterday by the Minister, in which he purposely and emphatically dealt with agricultural problems and gave us an assurance that at long last those in rural Britain who need electricity will obtain it.
  8.5 p.m.
  Mr. Boyd-Carpenter: The hon. and gallant Member for King's Lynn (Major Wise), for very understandable reasons, devoted most of his speech to a discussion of the very real need for electricity in the rural areas. I would very respectfully suggest that that has remarkably little to do with this Bill. Electrification in the rural areas could be obtained without this Bill, and it is equally true that there is no guarantee whatsoever contained in this Bill that such electrification schemes will be carried out. The hon. Member made a perfectly fair point that there was no guarantee in the scheme put forward by the National Farmers' Union that electricity would in fact be carried into every homestead. Nor is there any such guarantee in this Bill, and I would invite the attention of this House to the fact that the issue before it this-evening is not whether rural electrification is a good thing—as to that there is really no argument—the question before the House is really twofold; whether a case has been made out for the nationalisation of electricity, and, if such a case has been made out, whether this Bill is a good and efficient method of doing it.
  The two habitual and by now rather threadbare arguments for nationalisation cannot be used in this case. It is not sought to be suggested that this is an inefficient industry, nor is this the case of a straight clash between the principle of private enterprise and the principle of enterprise by public authority. The Minister himself, in moving the Second Reading yesterday, told the House that

  1661
  the major part of this industry was already in the hands of public and local authorities, and therefore there is no question here of those matters which arouse so much emotion opposite as to the wickedness of private profit and the moral-superiority of public enterprise. So far as the greater part of the industry is concerned, what this Bill does is to transfer ownership and control from a number of local and public authorities and place it all in the hands of one enormous and monstrous corporation. I listened with very great interest and great respect to the very couragous speech made from the opposite benches by the hon. Member for the Park Division of Sheffield (Mr. Burden), who with considerable force made the case against this taking-over of the electricity undertakings of the local authorities. Even from the standpoint of hon. Members opposite, "Let us Face the Future" and all that sort of thing, what case is there for transferring the industry from one form of public ownership—local, democratic, flexible and in close touch with local needs and local feeling—to this monstrous corporation which, if the precedent of the Coal Board is followed, will be completely isolated from criticism, Parliamentary or otherwise?
  The right hon. Gentleman dealt in a very cursory way with the very strong financial case for the local authorities to which the hon. Member for the Park Division of Sheffield referred. Why is no compensation other than the taking-over of their debts being given to the local authorities? The right hon. Gentleman the Minister, when he spoke yesterday, said in a rather airy way:
  "Local authorities have always displayed a sense of public duty and will not wish to make any profit from the transaction."—[OFFICIAL REPORT, 3rd February, 1947; Vol. 39, c. 1416.]
  How does the right hon. Gentleman know that? Has he asked the local authorities whether they agree that his terms of compensation are fair? Is he really satisfied, without asking them, that these responsible public bodies are quite prepared happily to let the assets of their ratepayers go and enjoy the process? The right hon. Gentleman has no right whatever to tell the House that the local authorities have no objection to these compensation terms unless he is in a position to assure the House that he has asked the local authorities that question and
  1662
  they have given him their answer. I hope that when the Parliamentary Secretary replies, he will tell the House whether, when his right hon. Friend said that the local authorities did not want to make any profits, that was simply the right hon. Gentleman's ordinary technique of airy persiflage, or whether he has any evidence to give to the House in support of it. The Parliamentary Secretary must realise, as did his right hon. Friend, according to his speech, that local authorities have carried out different policies in this respect. Some of them—the right hon. Gentleman said 20 per cent. of them—instead of paying back capital, have used the proceeds of the undertaking for the benefit of the rates. Those—and from the tone of his speech they are the local authorities of whom the right hon. Gentleman disapproves—are, comparatively, to benefit under these terms, because they are to be relieved of their full capital liabilities, whereas the others who have conscientiously and painstakingly paid back the money which they borrowed are correspondingly less compensated.
  I ask the Parliamentary Secretary, when he replies to the Debate, to tell the House, first, whether the local authorities are satisfied with this miserable form of compensation and to give the names of the local authorities which have been prepared to say that they are so satisfied; secondly, to deal with the question of why there should be transfer from one form of public ownership to another; and, thirdly, to say whether he considers it fair to compensate on a basis which penalises the prudent and economic authority and is correspondingly less severe on the more extravagant authority? Let the Parliamentary Secretary, and the Government of which he is such a distinguished, though somewhat recent, recruit, bear in mind that what they are doing today in this industry has its repercussions throughout the whole of the industrial field. Right hon. Gentlemen opposite, in their more sanguine moments, tramp the country announcing that they propose to nationalise right, left and centre. They may not appreciate that those speeches are listened to. [An HON. MEMBER: "They are meant to be."] An hon. Member says that they are meant to be listened to. Having read some of the speeches, I take leave to doubt that; but in any event, right hon. Gentlemen opposite are putting out in the country this general threat of nationalisation. Does

  1663
  not the House realise that the example of the method of compensation in the case of electricity, in which the authorities that conscientiously pay back capital are penalised, is an extremely bad example to the rest of the industrial field, and that precisely the economic policy which the Chancellor of the Exchequer is untiring in advocating in the House and elsewhere is being sabotaged by the bad example of the compensation provisions proposed in this Bill?
  There is only one other matter to which I invite the attention of the House. The right hon. Gentleman the Minister of Fuel and Power, in a speech which, I suppose, achieved a new record of calculated irrelevancy in introducing a major Bill, observed, in parenthesis:
  "Too long has the electricity consumer been made the victim of financial speculation."—[OFFICIAL REPORT, 3rd February, 1947; Vol. 432; c. 1421.]
  The House, I believe, is already in possession of the facts that in the 23 years between 1922 and 1945 consumption of electricity provided by this industry multiplied 10 times, and that during that period the cost per unit fell from over 1.3d. to just over id., a fall of roughly one-third. To describe an industrial expansion which resulted simultaneously in a tenfold increase in consumption, and a 33⅓ per cent. fall in cost, as exploitation of the consumer is really to misuse the English language; and I can only comment that the consumers of an existing State monopoly, the Post Office, would be very thankful indeed if they had been exploited in so beneficial a manner. It is really nonsense for the right hon. Gentleman to bolster up his case by describing as exploitation of the consumers a state of affairs of that nature. It is surely beyond dispute that great benefit has been spread throughout this country, to industry and domestic consumer alike, by the immense increase in productivity of the industry, coupled with a steady fall in cost. I hope that, if the right hon. Gentleman is going to describe this as exploitation of the consumer, he or the Parliamentary Secretary will point to any other industry in the country with a comparable record.
  The House well knows that it is neither of the normal reasons for nationalisation which has actuated the right hon. Gentleman in bringing forward this Bill. No sensible person could suggest that there is
  1664
  exploitation. No sensible person could say that any great principle or issue arose in an industry of which already more than half is publicly owned. What is apparent is that this is simply one instalment of the process in which the right hon. Gentleman is a most vigorous practitioner, the process of bringing into the centralised hands of Whitehall and the Whitehall bureaucracy a stranglehold over the economic life of this nation.
  8.17 p.m.
  Wing-Commander Shackleton: I must congratulate the hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) on his terrifying eloquence, but I think he went a little far when he put words into the mouth of my hon. Friend the Member for the Park Division (Mr. Burden) in suggesting that the local authorities, as reported by the hon. Member for the Park Division, opposed nationalisation. My hon. Friend did not make that point. He said—and I hope to address myself to this matter—that the local authorities are not satisfied with the treatment they are to receive from the point of view of compensation. That point has been put to the Minister on many occasions, and I must apologise for trying to ram it home once again. It is not simply a question of paying compensation only. It is a question of preventing loss to the local authorities.
  In my constituency, Preston, there is a very efficient electrical undertaking which has been wisely, and I might even say conservatively, administered for the last 24 years. For the last 18 years there has been a Socialist chairman of the electricity committee. The Preston undertaking has not aided the rates. A neighbouring undertaking has aided the rates to the tune of £176,000. We have not done that in Preston, and now we feel rather aggrieved. We feel that, far from making up the rates to the other places, we should get some of the benefit that we have been denied in the past. In fact, we have a very convenient sum on which we would like to lay our hands. There is a total of £250,000 in reserves and in balances, some of which we suggest should be made available to make up the loss which the county borough will suffer. The way in which they will suffer a loss is already known to the Minister, and it was referred to particularly by my hon.

  1665
  Friend the Member for Houghton-le-Spring (Mr. Blyton). I will mention only the question of the off-setting of Income Tax and the loss to the establishment. By removing the business of the undertaking from the establishment of the borough, we shall be losing a return in actual payments from the undertaking of about £6,000 per annum. Some of the staff will probably go, and therefore the loss will not be a total one. Nevertheless, a loss will be suffered.
  I suggest that it is only fair to the municipal undertakers who have done their duty properly and have administered their undertakings in a wise and efficient way, that they should not be made to suffer. On the other hand, I would again emphasise that I strongly support the nationalisation of electricity. We realise that there are a lot of individual, and probably efficient, producers, but they are not as good as a properly co-ordinated industry, which will be geared for the benefit of the whole country. That point has not been answered by hon. Gentlemen opposite. Every committee report up to, and possibly including, the time of the Coalition Government, advocated some form of unification. The alternatives were clear. They were either the unification—which the McGowan Committee did not openly advocate—of the industry under private enterprise and the wiping out of municipal undertakings, or, on the other hand, total public ownership in a nationalised concern.
  The argument which was presented by the hon. Member for Stockport (Sir A. Gridley), that the advent of atomic energy was one reason why the State should not take over the power stations on a national basis, is, to my mind, the final argument for nationalising the electricity undertakings. I hope that the Minister will be able to tell us that the electricity authority will investigate the application of atomic energy to the production of electricity. I hope that he is in close contact with the Minister of Supply on the matter. I mention that point only by the way, because I feel that it supplies an additional argument for nationalisation.
  I am satisfied that the Opposition have completely failed to answer the arguments which have been put forward from this side of the House, or—and this is the millstone around their necks—to supply a satisfactory alternative. I suggest that they con-
  1666
  tinue their search for a policy for the Conservative Party. They may find that the nationalisation of electricity comes within it.
  8.23 p.m.
  Mr. Harold Roberts: If I am to declare at the outset my interest in the electricity industry it would be that I am a ratepayer of the city of Birmingham. The object and the purport of the Bill is, in the course of unifying the electricity industry, to confer upon the Minister power over that industry such as he has at the moment over coal, which, is another form of fuel. It is well that we should have been reminded that one day we shall have to face our constituents. An hon. Member opposite who reminded us of it addressed a kind of solemn warning to us to be careful lest we might find angry constituents. It makes me tremble to think that I might have to go back to Birmingham and face the people from Austin's and. Dunlop's who are out of work, and have to admit to them that I have not voted in favour of giving greater powers to a Minister who has displayed such powers of coordination and management. I only hope that they would deal lightly with me.
  The Bill marks a further stage in that divorce between morals and arithmetic which was so happily foreshadowed by the Chancellor of the Exchequer during the Debate on transport. Subject to qualifications, I think that divorce is beneficial. It enables one, in criticising finance, to use metaphors and similes, and to say things which would otherwise be thought grossly offensive and improper. Two qualifications are open. The first is that arithmetic should, as far as possible, be free from glaring errors, and, secondly, that an argument, once adopted, should be pressed to its logical conclusion. Suppose, in criticising this Bill, we were to say: "If we are able to cut down loan charges from £40 million a year to £23 million, then we shall save £17 million, which can go to the improvements of the undertaking." That is the type of argument used by the very right hon. Gentleman who wanted to divorce morals from arithmetic. He completely forgot, and very often I think the Government benches forget, a little matter of nine shillings in the pound Income Tax. In that particular Measure the true saving was not £17 million but just £9 million. After

  1667
  all, what are £8 million in these days of spacious finance?
  The other proposal is this: A dispute has been raging between the Government and the supporters of private enterprise with regard to whether compensation on the basis of Stock Exchange quotations is right or wrong, and whether Stock Exchange quotations should be augmented on account of hidden assets. On that subject, the Chancellor of the Exchequer has been delighting the people of Gateshead with stories about charging more for Estate Duty. I will waste no time in arguing a point of that kind. Indeed, I am delighted to find the Chancellor definitely pledging and binding himself to treat people on a Stock Exchange basis.
  What is a Stock Exchange basis? If happened to have a trifle of electricity stock—which I have not—and went to my broker to sell it at the price of the day, he would sell it, and within 14 days I should get my cash. Suppose he were to say: "Yes, Mr. Roberts, I will do it at that price, but, of course, you won't get the cash. One of these days, at the discretion of, the Minister, you will get stock at a rate of interest to be hereafter fixed, and redeemable—well, some time, but probably within the present century." I should then probably want more for my stock. I venture to make a remark. I really believe that the Eighth Commandment is still valid, and that if I take away goods from a man or from a corporation and do not pay the full and proper value, I am doing a robbery. The stockholders are to be given, not cash for the Stock Exchange figure but stock. Why? The obvious course for the Chancellor would be to pay the Stock Exchange figure, float a loan of the required amount, and pay cash out of it to the stockholders, giving those who desired it the option to take up stock.
  Mr. H. Hynd: If the hon. Member wants cash, is there anything to prevent him from selling his stock now to get it?
  Mr. Roberts: That is a bright idea. It would not have occurred to me. This is the reason. As the hon. Member for Central Hackney (Mr. H. Hynd) has so cleverly mentioned, it is open to the stockholder to sell his stock. I wish I had thought of it before. But the point is that the stock is at the holder's risk, whereas.
  1668
  on the other footing, the risk would be that of the Government and the Treasury, and, probably, it would hardly be hoped that the Government broker would be strong enough again to interpose to stop the local loans fiasco.
  There is a further reason why this stock is, or might be, unprofitable, and why the Government desire to get out of it. Hon. Members may not all know it, but it is the declared policy of this Government to unbalance the Budget; to raise—[Interruption.] I am very glad indeed to see the Minister so amused. I will give him a, little more occasion for merriment. It is the declared policy of the Government to charm as much cash as possible out of the pockets of the people, and to ply reductions in taxation. I can understand the Minister's amusement, but the fact is that when the Ministers go into the provinces the exhilaration of the air there makes them say some things which, perhaps, they would not say here. On 19th November the Chancellor of the Exchequer came to Birmingham to address a meeting in support of savings, and, in answer to a question, he made a remarkable statement. In reply to a question about the remission of taxation, he said:
  "If you give me a little longer I may be able to do more towards reducing taxation, particularly if you save well, because the more I get in savings the less I need to get in taxation."
  I recognise that even the greatest of men may sometimes be caught napping, and I think it unfair to fasten on to a casual remark of that sort without giving full and ample warning. Two days thereafter I wrote to the "Birmingham Post." I can assure the Minister that the report of this statement in the "Birmingham Post" coincided with the report in "The Times." I checked one against the other. I set out the passage and said this:
  "One hopes that the Chancellor spoke unguardedly and without full reflection, because this statement, as it stands, can only mean that, if people subscribe handsomely in the savings drive, he will further unbalance his Budget by reducing taxation, and so widen, instead of narrowing, the gap between income and expenditure in our national Budget—a poor inducement to the public to lend to the Government."
  One assumes the Chancellor of the Exchequer has a proper and adequate Press cutting agency; but he took no steps whatever to disavow the statement that he

  1669
  made in Birmingham. The Minister can say, if he likes, that the Chancellor of the Exchequer is an irresponsible person; but I believe there is still such a thing as Cabinet responsibility, and that being so, I say that mat is the Government policy.
  Mr. Kirkwood: On electricity?
  Mr. Roberts: I am very glad indeed to Find—
  Mr. Kirkwood: I thought the hon. Member said the Government had no policy. He cannot have it both ways.
  Lieut.-Commander Gurney Braithwaite: Do not make the row in the Cabinet worse.
  Mr. H. Roberts: I will say a word now about the local authorities. I hope I am not interrupting the genial conversation just proceeding. I say there is no moral reason whatever why local authorities should not be compensated for the loss of equity in their undertakings. It is significant that Socialist Members, although they applaud the Bill, and will, of course, vote for it—one would not catch them voting against the Government—try to placate their own neighbourhoods by saying they hope the Minister will do something about it. I have no expectations of that sort, but that does not deter me from saying what I think about the transaction. I say that the robbing of local authorities of their assets is quite unpardonable, and that there is no reason for it. I would not have given this illustration, but for the separation of morals and arithmetic by the Chancellor of the Exchequer. Take the case of two shops. The one sells goods honestly, and the other deals only in stolen goods until the police deal with it. It is the second shop which may make the better profit. The purpose of this fictitious Measure, as applied to public authorities and private investors, is merely to bolster up unsound finance and enable undertakings to show a profit on a fictitious written-down capital. In a recent debate of the Birmingham City Council, the Chairman of the Transport Committee said that if the policy of payment for assets was adopted it would strangle the scheme from the outset.
  I now wish to say a word on the merits of the Bill. [HON. MEMBERS: "Hear, hear."] It is very touching to receive this encouragement from hon. Members
  1670
  opposite. They have managed to prove how extraordinarily inefficient is this industry, and how it must be inefficient in its heterogeneous state of non-nationalised ownership. I would point out that there is one institution which was socialised long ago, namely, the Post Office. The Post Office has always been held up by the Socialists as a model of administration of what might be if the State were to run things. At that time electricity was supplied at a cost of 1.55d. per unit, which means that a man could buy a unit of electricity for roughly 1½d. He could also post a letter for 1½d. In 1944, electricity was down to 1d. per unit, which, of course, shows the inefficiency of private enterprise. The same man could, therefore, buy a unit of electricity and have a ½d. change, but if he went to post a letter, he would have to pay a penny more, because the cost had been increased to 2½d. I take things as I find them, and I find that over a period of 15 years private inefficiency has managed to cut down the charges by about one-third, whereas the highly efficient State owner has put the prices up by about 70 per cent.
  8.39 p.m.
  Mr. Ivor Owen Thomas (The Wrekin): The more I have listened to the contributions by hon. Members opposite, the more I have become convinced of the rightness of the Measure before the House. Nothing I have heard has made me think that Members opposite have any positive ideas as to the future of the electricity industry. It leaves me cold when I hear them posing as champions of the interests of local authorities. Local authorities go into business for one purpose and one purpose only, that is for giving adequate and reasonable service to the people whom they exist to serve. On the contrary, everybody knows that when a group of people go into an industry as a private company, be it the electricity supply industry or any other, they do so with the-ruling motive of making a profit, rather than to serve the public.
  Mr. Osborne: Does not the hon. Member realise that no company can hope to make a profit, unless they give good and efficient service?
  Mr. Thomas: I can assure the hon. Member that I have paid many times for things and services with which I have afterwards been extremely dissatisfied.

  1671
  Further, I have had no remedy open to me to rectify the injustice. In those cases, a profit was made at my expense from each transaction. But when a service is rendered by a local authority I, as an elector, have a channel open to me through which I can make a complaint in order to secure rectification. That channel -does not exist between the customer and private enterprise.
  Mr. Osborne: Has the hon. Member tried it with the Post Office?
  Mr. Thomas: I will not waste time in rebutting the criticisms which have been made of the Post Office. I will merely ask whether any Member opposite would, calmly and deliberately, hand over the Post Office to a gang of private enterprise merchants. There might be a scramble to secure the holding, but I tremble to think what would be the nature of our postal services after the transaction had been effected.
  Mr. Osborne: No worse than Austins today.
  Mr. Thomas: It is no exaggeration to say that the Post Office is a great credit to our public service. We get full value for our money. But let me get back to electricity. [HON. MEMBERS: "Hear, hear."] I am glad that I have at last -stimulated the enthusiasm of hon. Members opposite. I will not go over the whole field of the present position of electricity supply today, but I have been reading a report in connection with the supply of electricity in the London area, I find that there are 70 or more services in the area, both municipal and private. I understand that there are competing services in many parts of London, that people can make their choice whether they take their supply from one side of the street, 01 the other. This fact stands out plainly, that if all those concerns were unified in one competent, rationalised, authority, there would be a far better and more economical service than that which is available today.
  What suggestions have Members opposite to make as to the future of the industry? They have no alternative to the scheme put forward in this Bill, and no positive suggestions to make. I have reached the regrettable conclusion that They are entirely barren of ideas with
  1672
  regard to the future of this great industry. Everything which they have said is in the nature of "Stand fast," and there is good reason for that from their point of view. This Bill is the rational development of municipal enterprise into a national co-ordinated concern. What do we find in the field of private enterprise in the electricity industry? We have competition for a time, and it is usually the consumer who suffers by that competition. Sooner or later we have the development of combines and cartels, and this industry is a classical instance of how private enterprise in competition can sink its differences and make a bargain to its own advantage. The only conclusion that one can draw from that is that it pays private enterprise to get together, in some way or another, to fleece the innocent consumer. Private profit is the sole determining influence in electricity supply and every other field of private enterprise. The fundamental choice is not between municipal organisation and national organsiation, but between social organisation and private capitalist organisation. That is the fundamental issue in this Bill, which follows logically on the Transport Bill.
  I had hoped to give figures of the amalgamation development in this country in connection with electricity, but I understand my time is limited. It is clear to me, that if we wish to get effective development in the distribution and production of electricity, this Bill is the only means by which that can be achieved. I challenge hon. Members opposite to place any alternative before the House or the country. I gladly make that challenge, because I am confident that they have nothing in their political programme to put in place of the Bill.
  8.50 p.m.
  Mr. Raikes: The hon. Member for The Wrekin (Mr. I. 0. Thomas) inquired in a rather hopeful voice whether anyone in this House would hand over the Post Office to private enterprise. It might have been more relevant, in view of the fact that this discussion is on electricity, if he had asked whether anyone would take over the telephones. I think the answer is not a very difficult one. In view of past losses, it would be extremely difficult to get any private individual or individuals to take over the telephones, but if we did,

  1673
  we would get, as a result, a telephone service such as there is in the United States and in various other countries, under private enterprise. Such a change would be well worth while.
  In making the last speech on this Bill from the Opposition benches, I propose to speak without indulging in personalities. Personalities are not my long suit, and at any rate are only valuable when one's case is a bad one. When one is presenting a good case, they go by the board. I listened to the Minister with deep attention yesterday afternoon and I found that one thing is beyond all dispute. Whatever might be at the back of the right hon. Gentleman's mind, he dealt with this Bill in a way which I would not have thought possible in the case of any Minister. He turned the whole barrage of his eloquence upon the so-called iniquities of the electricity companies, and by so doing, drew attention away from the Bill. He talked at some length upon the question of dividends. As far as the dividends are concerned there is no evil in them as such. The only case where dividends become evil, is if as a result of high dividends the public suffer, but I think that that does not apply here. What the Minister said with regard to dividends is not applicable to the industry which we are discussing. He knows as well as I do that, as far as the power companies are concerned, their dividends are dependent upon price conditions and upon a sliding scale.
  Mr. Shinwell: Not in electricity. The hon. Gentleman must be referring to the gas industry.
  Mr. Raikes: I do not wish to get into any violent dispute with the right hon. Gentleman, but I maintain without the slightest hesitation that although certain dividends were agreed to in the first instance in the early Acts, it has been, of recent years, a statutory policy to encourage efficiency of the power companies, by permitting them to pay higher dividends when costs fall. As far as other electricity undertakings are concerned, the position is slightly different,? They are subject to a maximum price. Not only are they subject to a maximum price but consumers can appeal, and ask the Minister to reduce the charges if those charges are considered too high. That is one of the great safeguards existing at the present time, and it is a safeguard which will vanish the moment this Bill receives the
  1674
  Royal Assent. The right hon. Gentleman is aware that, in the past, power was given to local authorities to take over companies if they thought that they could do electricity distribution and supply better.
  That brings me to a point which the Minister himself made. Indeed he made it one of his great points early in his speech yesterday. He took the case of Bournemouth, and said that here we had an instance where a corporation desired to take over a company or that part of a company operating in their own area. He went on to state, as one of the reasons why he opposed that system, that it would have had the effect that 85 per cent. of the consumers of that company would have been absorbed by the Bournemouth Corporation, and that the result would have been high costs for scattered rural areas because the company would simply be left with 15 per cent. of a sparse area. As the right hon. Gentleman took that case, I assumed that it was the best he could bring out of the bag to prove his point. It was, in fact, half a truth, and we all know what a half-truth can be. As I have said, I will not enter into personalities. I merely remind the Minister that Poole, Bournemouth, Christchurch and Ring-wood rural district councils have, at the present time, a joint committee which proposes to purchase not only their part of the electrical company undertaking within Bournemouth but the whole lot. Negotiations have been going on—which this Bill will doubtless change—to enable the whole of the company concerned to be bought out by Bournemouth and certain other councils. I am assured that this is so, and it shows quite plainly that even in the Minister's own prize case a company can be bought up under existing conditions without any disadvantage to anybody.
  Mr. Shinwell: Do I understand that this is the declared policy of the Conservative Party—that the municipal undertakings have the right to buy out private companies?
  Mr. R. S. Hudson: My hon. Friend was just showing how inaccurate the Minister was.
  Mr. Raikes: I have no desire to enter into an argument with the right hon. Gentleman, but I say that under the law as it stands today—a law which has been

  1675
  accepted for many years by many Parliaments, including Conservative ones—it has been admitted and permitted that local authorities could, if they were able to show that they could do the job better, have the opportunity of buying out a company. There is no objection to that whatever, and now the right hon. Gentleman has approved my reply. It has sometimes been said that words are a means to cloud one's real meaning, and I wondered whether anybody who listened to the right hon. Gentleman yesterday afternoon would have discovered the faintest glimmer from his speech of what was the position today. Would anyone have realised that the electricity industry in the course of the last 23 years has provided a tenfold increase for the people of this country? Would anybody who listened to him have realised that this industry, which he is determined to destroy from end to end, even during the darkest days of the war increased its output for all purposes by 45 per cent? [Interruption.]
  Mr. R. S. Hudson: Does the Minister not know his brief?
  Mr. Shinwell: I just wanted to confirm what I said to the hon. Member for Wavertree (Mr. Raikes), that he was quite wrong about the electricity industry being regulated by Statute in respect of prices and dividends. It was the gas industry.
  Mr. Raikes: I have no doubt that the right hon. Gentleman makes that statement with the fullest confidence in his own check that it is correct. Nevertheless I have most carefully looked into the matter and have taken legal advice on it, and I am not prepared to withdraw what I have said. I challenge and disagree with the right hon. Gentleman's interpretation, but I accept that what he has said, has been said in good faith.
  I have drawn a picture of certain facts which no one would have believed possible after listening to the right hon. Gentleman's speech. They were the things hidden behind the scenes. Would anyone listening to that speech have believed that the cost of coal had increased by 117½ per cent. in the course of the last six years and that the cost to the consumer of electricity had only increased by 8½ per cent.? Would anyone, from the Minister's speech,
  1676
  have realised that not only are those figures correct but that coal actually represents 62 per cent. of the total cost per unit generated at the present time—coal which has increased by 117½ per cent.? I maintain that those few facts alone put a very different complexion on the picture which has been painted of the working of the electricity industry. Would anyone who listened to the Minister have believed that the industry which he was nationalising was, so far as the consumers are concerned, already somewhere about two-thirds publicly owned? No one listening to the Minister could have taken any view other than that this was an industry primarily governed by private evil monopolies.
  I want to say a word about the municipal angle, which is of vital importance to the majority of the people who use electricity. Undoubtedly, this Bill strikes a bitter blow against a big aspect of municipal enterprise. The Minister has said that because municipalities do not intend to make profits, they need no compensation and that if the Minister takes over the debt, all will be lovely in the garden. The Minister is doing well. He gets all the assets, and the sinking fund, but is that all? Did the Minister listen to the speech by the hon. Member for Houghton-le-Spring (Mr. Blyton) yesterday?
  It was made by a man whose knowledge of the working of electricity undertakings, especially in Sunderland, is second to none. What will happen? The Minister takes over the debt and he gets the assets. In the City of Liverpool alone, the Ministers pays £7,500,000 to clear off the debt, and he gets assets valued today at £15,500,000. Not too bad, but the city which I happen to some extent to represent loses somewhere about £8 million. What does it mean? It means that where municipalities make a profit out of their electricity, that profit is an advantage in various direct and indirect ways to the ratepayers. In those cities which have been refered to, after providing for the reserve fund, a contribution is made towards the rates. In Liverpool alone, about £2 million has been subscribed towards the rates in five years, as a result of the profits of the electrical municipal authority.
  Mr. Murray: The Minister wants some, plums as well as stones.
  Mr. Raikes: But they are the sort of charges that affect the rates, and the hon. Member for Houghton-le-Spring said that in Sunderland these charges alone would make a difference of an 8½d. rate. And I imagine that the hon. Gentleman, having been chairman of the electricity committee of Sunderland, knew his business possibly rather better than the hon. Gentleman who endeavoured to interrupt me a moment ago.
  Mr. Murray: The hon. Member for Houghton-le-Spring (Mr. Blyton) was not chairman of the Sunderland electricity committee. He was not even a member of it. He was chairman of the South Shields committee.
  Mr. Raikes: Well, "a rose by any other name"—
  Mr. J. Lewis: Would the hon. Gentleman subsidise the ratepayer at the expense of the consumer?
  Mr. Raikes: As every hon. Member here is fully aware, there are indirect advantages gained by the municipality owning its own electricity. On the one hand, as the House knows, the advantages gained by profits upon the electrical side can be set off, for Income Tax purposes, and indeed are set off against the Losses on the services. Apart from that, in every conceivable instance where you have an electricity undertaking, that undertaking contributes towards the town clerk's office, towards the city engineer, and towards certain other departments where occasion warrants. All those things are an advantage to the ratepayers who, incidentally, are also consumers of electricity. All those things go under this Bill. The ratepayer is faced with a serious and complete loss but, on the other hand, the hopes of urban areas for reduction in electricity prices as a result of this Bill must be very slight. After all, if there is any object behind this Measure at all, it must be to pool, to some extent, urban and rural districts. Yet the Minister has utterly refused to commit himself upon that. I hope the Parliamentary Secretary will have the courage to do so, because the fact stands out that, in the urban areas it means a loss, direct and indirect, to ratepayers when these concerns go and if, on top of that, it means a further raising of costs to them in order to subsidise rural areas, whatever the, national interest may or may not be, it
  1678
  is a pretty gloomy picture for those who live in urban areas and in urban municipalities.
  Mr. Gallacher: Bear up under it.
  Mr. Raikes: I shall bear up long after the hon. Gentleman has paid his next visit to Moscow.
  Before passing to my next point, I should make reference to power companies. The book at my disposal is Studholme on "Electricity Law and Practice," which has been placed in my hand—[Laughter.] Hon. Members might laugh, but the Minister apparently has had nothing in his hand and merely relies on a verbal statement. I suppose the Minister will agree that this is the official book. It says:
  "Control of dividends. Dividends payable by power companies are normally limited by special Acts which prescribe a sliding scale according to the difference between specified, standard, or maximum prices, and the prices actually charged by the company."
  Mr. Shinwell: The hon. Member has made no point at all.
  Hon. Members: Oh.
  Mr. Shinwell: When the ribaldry has stopped, perhaps I may make my point. It is within the recollection of the House that what the hon. Member tried to convey was that every one of the electricity undertakings was governed by statutory Orders.—[HON. MEMBERS: "Nonsense."]—and it is also within the recollection of the House that he tried to convey the impression that the consumer could appeal to the Minister in the event of the case being valid. I have no power in the matter.
  Mr. Raikes: I regret to say that the Minister has misrepresented what I said. The House will recollect that I differentiated most carefully between power companies and other electrical companies. Every hon. Member who listened knows that my first observations were directed to power companies, and power companies alone.
  Mr. Shinwell: I am still within the recollection of hon. Members—and this is regarded as a vital point—that what the hon. Member tried to convey to the House was that general consumers are protected by statutory Orders. Now the hon. Member brings in this question of power companies, which are to some extent

  1679
  affected by statutory Orders. But he forgets that these companies supply in bulk, and the average consumer, particularly the domestic consumer, is not affected.
  Mr. Raikes: I think there is no need for me to labour the point further, except to remind the right hon. Gentleman that when I said there was an appeal by the local authority, or the consumer, to the Minister, I directly and deliberately said that was in regard to other electrical undertakings, after I had dealt with power companies. If there is one thing I claim, it is that I have never intentionally misled this House, and I have not done so tonight.
  It has been suggested by an hon. Member that there is no alternative of arty sort to nationalisation. My answer would be this. We realise that certain things could be done. We believe it is totally unnecessary to alter the whole structure of the electricity industry, but we believe that distribution in the country could be reviewed and the strengthening of the Electricity Commissioners could well be done with the object of reducing the number of undertakings. We believe again that the Electricity Commissioners should be empowered to require further and more rapid development in rural areas. They have power today to ask every company to give annual reports with regard to what their rural schemes may be. There is not one word in this Bill about rural development.
  Mr. Ivor Owen Thomas: May I interrupt?
  Mr. Raikes: I always like to give way to an hon. Member, but I have promised to sit down by 9.20, and I want the Parliamentary Secretary to have his full run. I hope—
  Mr. Thomas: On a point of Order. I merely wish to deal with the comments—
  Mr. Deputy-Speaker (Major Milner): That is not a point of Order.
  Mr. Raikes: There is a strong argument for having tariffs and voltages standardised throughout the country, but I would remind the House that there is a committee, instigated by the companies themselves, already sitting on that matter. I suggest that if these steps were taken
  1680
  within the structure of the present industry, it would be possible to obtain all we require at the present time without producing a Measure so fraught with dangers as this Bill.
  I would sum up in a few words what are the greatest errors in this Bill. First of all, it removes all existing safeguards for the consumer as to price—every one. Secondly, it contains not one word placing an obligation upon the Board to develop rural supplies. I challenge the Parliamentary Secretary to find one word about that. We have heard what the Minister wishes, but that and what the Bill contains are separate things. The Bill destroys the existing rights of employees to compensation. It sets up consultative councils which are mere eyewash, which have no powers, no right of appeal, and are merely set up as certain other councils are set up, in other parts of the Bill, to look pretty and do nothing. Compensation to the companies has been shown, repeatedly in this Debate, to be inadequate. So far as the municipalities are concerned, it is not compensation but confiscation. Finally, during this period, before the vesting date is reached, the Measure means a period of uncertainty which can only create delay.
  These are my principal reasons for believing that this Measure is a retrograde and reactionary Measure. It is nationalisation for the sake of nationalisation. It is typical of this Government that we have seen, again and again, the theoretical ideals of Fabian Socialism forced into our public life, to hamper and injure industry at a time when industry is fighting for its life as never before. That, in due course, will destroy this Government. That will be no loss. The danger is that if it is unchecked, if this form of restrictive folly is carried on, it may, in due time, bring chaos and catastrophe to the nation. It is for that reason that we on this side of the House in spite of the jeers directed at us about vested interests—because we believe that the interests of the nation come first- will fight this Bill to the end.
  9.20 p.m.
  The Parliamentary Secretary to the Ministry of Fuel and Power (Mr. Gaitskell): I am obliged to the hon. Gentleman the Member for Wavertree (Mr. Raikes) for courteously curtailing his speech so as to leave me sufficient time to reply to this long and interesting De-

  1681
  bate. If it is not thought presumptuous for a fairly junior Member of this House, I should also like to extend a strictly personal welcome to the right hon. and gallant Gentleman the Member for the Scottish Universities (Lieut.-Colonel Elliot). I think we all enjoyed his speech. As to form, it was of high quality: as to matter, not quite so high. No doubt, however, he may take it as a compliment that his party invited him on the first occasion after his return to this House to bat on such a very sticky wicket. I am also bound to say that he, rather wisely as I thought, disclaimed any special knowledge of the subject.
  If we were to have a Member for Scottish Universities speaking on this subject, it seems strange to me that the senior Member for the Scottish Universities (Sir J. Anderson), who was Lord President of the Council and Chancellor of the Exchequer in the Coalition Government, was not invited by his party to speak. Of course, it would have been particularly interesting for the House, because the right hon. Gentleman in the course of the General Election declared himself in favour of the nationalisation of the distribution of electricity.
  There are other omissions, which I regret, from the list of speakers. There is the right hon. Gentleman the Member for the City of London (Sir A. Duncan), who played a distinguished part as Chairman of the Central Electricity Board. I think we should all have enjoyed hearing his views and having the benefit of his great experience of the workings of a public corporation. He might have been able to tell us whether he himself thought there was anything wrong with the idea of public boards. Then there is the right hon. and gallant Gentleman the Member for Pembroke (Major Lloyd-George), the late Minister of Fuel and Power. As is well known, the Coalition Government gave much attention to this problem. Statements to that effect were made in another place. Yet we have not had the benefit of his advice. I think it is very unfortunate that we could not enjoy his views on this important matter.
  Then there is the right hon. Gentleman the Member for Southport (Mr. R. S. Hudson)—a man also of wide Ministerial experience but not, I think, of any great Ministerial experience in the field of electricity. It is true that he has a
  1682
  somewhat dynamic personality and it may be said that he generates heat, in which respect perhaps he resembles my right hon. Friend the Minister. As for any particular knowledge of the electricity industry, I think that the only point that he could claim was that he had been, 20 years ago, a Member of the Standing Committee on the 1926 Bill. I am told that at that time Conservative Members of that Committee were divided into two groups. [HON. MEMBERS:"HOW do you know?"] I said "I am told." Perhaps hon. Members would do me the courtesy of listening to what I say. I am told that the Conservative Members of that Committee were divided into two groups—the undertakers and the mutes. I am glad to be able to tell the House that the right hon. Gentleman was one of the mutes.
  Mr. R. S. Hudson: As the hon. Member has referred to me, he had better consult his own Leader and ask whether I was a mute, or whether I took an active part in actually promoting the particular Clauses of the Bill which are the foundation of a great deal of the progress which has been made.
  Mr. Gaitskell: If the light hon. Gentleman had waited a moment, he would have found that I was going to explain to the House that the term "mute" meant that he was supporting the Government, unlike the undertakers. [HON. MEMBERS: "What about the Bill?"] I hope hon. Members will be a little patient. I wish to start with a reference to a number of specific questions soliciting information which have been put to me in the course of the Debate. I frankly say that it is impossible to answer all these tonight. Most of them, however, will in any case come up during the Committee stage of the Bill.
  The hon. Member for Stratford (Mr. H. Nicholls) made a most admirable maiden speech, and the hon. Member for Houghton-le-Spring (Mr. Blyton), and, I think, one or two others, suggested that the consultative councils were not large enough for some of the areas, and also put forward proposals that they should be composed exclusively of representatives of the local authorities. We have made provision in the Bill, in Clause 7 (8), for schemes of local committees to be put forward by these consultative councils, and

  1683
  I have not the slightest doubt that, in many cases, they will make use of those powers. Secondly, I think we must recognise that, valuable as is the work done by local authorities, nevertheless, we cannot regard them as in every way representing every type of electricity consumer. They do not, as it happens, represent very well the industrial consumers of electricity, and, in some instances, where company undertakings have operated, it can be said that local authorities have not had much experience in the field of electricity.
  I was also asked about the negotiating machinery between the Boards and the unions, and I want to say emphatically, in answer to the senior hon. Member for Dundee (Mr. Cook), that recent agreements which have been made will be honoured, just as in the case of the coal industry. Further, the joint industrial councils will continue, though discussions will no doubt be necessary between the unions and the Boards as to the modifications which may be desirable in the light of the changes made by the Bill. I can assure the hon. Member that we have discussed this problem with the unions concerned, and, so far as I am aware, they are very satisfied with the Clause as drafted. Should there be any desire to look into the matter further, we are perfectly willing to meet them.
  The noble Lord the Member for South Dorset (Viscount Hinchingbrooke), in a very elegant speech, though highly in- accurate in places, asked about research in relation to existing organisations. Clause 2 of the Bill specifically provides, not only that the Central Authority shall conduct research itself into matters affecting the supply of electricity, but also that it shall assist other persons conducting such research, and it is intended, therefore, that, if the Board desires, and considers that the research associations to which the noble Lord refers are doing good work, they can support those associations. As regards the research work of the companies themselves, if they are electric supply companies, they will be taken over. I think the noble Lord probably realises that most of the research in this field is, in fact, conducted by the manufacturers of electrical equipment, and that does not come into the Bill at all. The hon. Member for Buckrose (Mr. Wadsworth) asked about the area boards competing with small traders. Existing
  1684
  electrical undertakings sell and hire domestic equipment, and we have not the slightest intention of depriving the area boards of the right to do the same thing, but the consumer will be perfectly free, if he so desires to go elsewhere to get his supplies. He can go where he will get the best service and the best prices, from his own point of view. I am sure that the Liberal Party will agree that healthy competition of this kind is most desirable.
  Finally, the hon. Member for Stockport (Sir A. Gridley) asked me a series of questions, to which I will now reply. He asked me about Clause 13 (2) (b) and suggested that there might be a case where a holding company, although holding 75 per cent. of its assets in electricity undertakings, nevertheless, had control of none. There may be such cases, though we do not know of any. It is our intention, of course, to take over holding companies which have a controlling interest in subsidiaries. If there were a case where it could be shown that a company would be caught by the Clause as at present drafted, even though it had no controlling interest whatever in any authorised undertaking, we should be happy to consider a suitable Amendment to exclude such a case. Secondly, the hon. Member for Stockport also asked for an assurance, which I readily give, that my right hon. Friend did not cast any imputation against him personally, or, indeed, against his company, in the matter of certain practices of holding companies. It so happened, I think by coincidence, that the reference to his company, which related to bonus share issues, came fairly close to the other matter of the possible abuses of holding companies to which my right hon. Friend referred. My right hon. Friend has asked me to say that he had no intention of casting any imputations against the hon. Member.
  With regard to the hon. Member's further question about the Central Electricity Board, the Board is, of course, not merely mentioned in the Bill, but mentioned several times. It is an authorised undertaker, and, as such, is covered by all the Clauses affecting such undertakers, and there are special references to it, in addition. Finally, he asked me whether we had consulted the Central Electricity Board in the drafting of this Bill. It is

  1685
  not, I think, the practice of the Government, for very good reasons in my view, and, indeed, not the practice of any Government, to disclose precisely with whom they have consulted before they bring a Bill to this House. The reason is that it is undesirable that bodies, such as the Central Electricity Board, should become involved in party politics. I can, however, tell the hon. Member that informal conversations with certain individuals, as individuals, have taken place.
  I would now like to turn to the fundamental issues raised in this Debate.
  Colonel J. R. H. Hutchison: I would like the Parliamentary Secretary to answer the material and important point as to the non-statutory bodies, because the Bill makes no provision for them at all.
  Mr. Gaitskell: The answer is that that is quite deliberate. It is not intended to interfere with non-statutory undertakings. As the hon. and gallant Member knows, they can supply not only themselves, but, if they wish, and if they are able to compete successfully with the undertakers and area boards, may continue to supply consumers.
  The first fundamental issue is. Must we do anything at all? Can we leave things as they are? In my opinion, my right hon. Friend made out a very powerful case for the view that action must be taken. I am bound to say that the case which he made out has not been weakened by anything said in this Debate. That is not surprising because the facts are beyond dispute. I am bound to say, however, that I am a little disappointed at the uncertainty and the vagueness of the Opposition's attitude in this matter. Some hon. Gentlemen and right hon. Gentlemen seemed to do no more than pay lip service to the view that, of course, reorganisation was necessary. Others, better informed, were prepared to go into rather more detail. I think that we had better assume, at any rate, that the Conservative Party, as before the war, still broadly supports the recommendation of the McGowan Report, and at least stands by the 1937 White Paper.
  I do not wish to weary the House with quotations from these documents, but I wish to quote a few words from the McGowan Report because, as I shall hope to show, it is of great importance in
  1686
  enabling us to make up our minds on this issue. First, the Report states in paragraph 84:
  "In all the circumstances, and having regard to the evidence placed before us, there can, in our opinion, be no question that an improvement in the present organisation can and must be effected.
  Secondly, it specified the essential objects, as they were described, as follows: first, a substantial reduction in the present number of undertakings by the substitution, where appropriate, of larger and more economic units; secondly, the prevention of the splitting up of comprehensive undertakings in consequence of the exercise of rights of purchase by individual local authorities; thirdly, the elimination of duplicate powers wherever they exist in the same area. Why were the McGowan Committee so much impressed with the desirability of larger areas? They, in fact, listed five great advantages which they thought would accrue from a change of this kind. These advantages were: improved technical layout and economy in capital expenditure, diversity of load, better financial resources, central purchasing, and personnel. Those were the five major results which they believed would accrue from a change of this kind. I emphasise that fact, because it is from these changes that we believe great technical improvements will result from our Bill. When hon. Members opposite ask how we can show that there is to be any cheapening of supplies to consumers as a result of the Bill, we must point to the McGowan Report. I would describe it as the Report not of a fully expert committee but, at least, of a semi-expert body.
  There is one further point. We have taken the view that we cannot wait any longer, and we do so for two reasons. In the first place, as my right hon. Friend has pointed out, the local authorities are now in a position to exercise franchise rights over a very wide field indeed, and, secondly, in the course of the next few years—five or 10 years—there is bound to be in this field of electricity very considerable development and very heavy capital expenditure. We regard it as essential that we should make these changes, because if we do not we shall, in fact, be imposing unnecessary waste on the country. We shall be permitting the maintenance and extension of an uneconomic and wasteful system of electricity distribution. There is no doubt that, whatever Government had been in power,

  1687
  if they had had the country's interest at heart, they would have been bound to intraduce some Bill to reorganise the electricity industry now.
  I do not propose to say much about generation. Little attention has been paid to this subject in the Debate, and I think it is generally agreed that the present system, under which the Central Electricity Board controls but does not own the selected stations, is most unsatisfactory. Some very good arguments to that end were put forward by my hon. Friends the Members for Wimbledon (Mr. Palmer) and North Wembley (Mr. Hobson). We really cannot go on with this extraordinary system of "refined horse dealing," as it was once described to me, which the Central Electricity Board has had to carry on with the owners of selected stations, because 21 years ago there was a Tory back bench revolt in which, incidentally, the "mutes" were defeated.
  I now turn to the major issue of the Debate—the form of the organisation for distribution. We take the view that the case for public boards in this field is overwhelming, for these reasons. First, the electricity supply business is, inevitably, in practically every case a monopoly, and it is our general attitude that monopolies, whether they are formed naturally or for special purposes, are particularly suitable for public ownership. There are very good reasons for that, because whatever may be the effectiveness of the profit motive when it comes to competitive enterprise, it is certainly not the same when it comes to a monopoly. High profits under monopolies are all too frequently the result, not of efficiency, not of low costs, but of high prices, and the absence of competition makes it all the more desirable and all the more essential that there should be supervision.
  At one time I had hoped that we would have the support of hon. Members opposite in this matter. No less a man than the right hon. Gentleman the Member for Woodford (Mr. Churchill), when he broadcast—[HON. MEMBERS: "Oh."] Hon. Members opposite should be more respectful to their Leader. On 21st March. 1943, he spoke of
  "the broadening field for State ownership and enterprise, especially in relation to monopolies of all kinds."
  I have often wondered what he had in mind on that occasion. Apparently it
  1688
  was not transport. Perhaps it was gas. But if gas, why not electricity? If it was none of those things, perhaps some day he will tell us what he did have in mind. I can assure him, and hon. Members opposite generally, that we should all be very interested to know what are these other fields for the extension of public ownership and control. We shall shortly be coming towards the end of our, immediate nationalisation programme, and we shall be considering in what direction to move again. We should be very happy to have his advice on that.
  Mr. Osborne: Transport House.
  Mr. Gaitskell: There are, of course, other reasons, too, why the organisation of distribution should be a public service. This has, indeed, been the view of Parliament, expressed again and again, over the past 60 years. Municipal enterprise, which has been so much supported, perhaps rather surprisingly, by hon. Members opposite—they do not always support municipal enterprise—is recognised in this field as having been highly efficient. The Central Electricity Board, so far as I know, is recognised as a most successful public undertaking. Even the McGowan Report proposed that eventually there should be public ownership after 50 years. Why after 50 years? Why not now? Again, in this industry there is special importance to be attached to capital charges, amounting, as they do, to somewhere between 40 per cent. and 50 per cent. of the total costs. Surely, it is clear to hon. Members opposite that if capital charges are very high there is a strong case for borrowing money on the lowest possible terms? We shall get the lowest possible terms by State guaranteed loans.
  The McGowan Report raised one or two objections. First, the familiar objection, repeated again and again by hon. Members opposite, that it would cause dislocation. My right hon. Friend dealt with that very effectively. Here we have the great coal industry, extremely complicated in character, with many day-to-day production problems, which has passed into public ownership without any sign whatever of any dislocation.—[Laughter.]—Hon. Members opposite are laughing to keep up their courage. The truth is, the dislocation argument is the last refuge of the reactionary. I have no doubt at all that when King John, faced with hordes of angry barons at Runnymede, was

  1689
  asked to sign Magna Carta, he said, "Gentleman, this will cause terrible dislocation."
  The second argument of the McGowan Report was that the compensation provisions would give rise to uncertainty. Whatever may be said about our compensation provisions, it cannot be said that they will give rise to any uncertainty. I think that the stockholders know exactly where they stand, and I shall hope to say a word or two about that later. Finally, the McGowan Report put forward the astonishing argument that they would not recommend public boards unless the industry was hopelessly inefficient. This is quite irrelevant. There may be cases where industries are very inefficient but where, nevertheless, we should not regard public ownership as at all a suitable solution to the problem. There may be other industries which are efficient but which can, nevertheless, be made far more efficient by public ownership. That we believe to be the case with electricity supplies.
  Little has been said in the Debate about the alternative to public ownership, but one must make the best one can of it, and proceed on the basis of the 1937 White Paper. What is our objection to that? Firstly, I do not think it can really be sustained that the approach made by the prewar Conservative Government to this problem was at all likely to lead to the right size of area. The 1937 Report had an appendix setting out the provisional views of the Electricity Commissioners as instructed by the Government of the time. There were, I think, 121 separate districts listed there, and we take the view that that is far too many if we are to reap properly the economies which can be reaped by large scale distribution. It is perfectly true that the question of the size of area is, to a large extent, a technical one. It is not something on which we have had a little party together, my right hon. Friend and myself with a few of our colleagues, and have decided that we will treat the matter like this. That is not the way we have gone about it. We have consulted technical opinion on this matter and—I am not putting the responsibility for this on the technical experts, that would be very wrong, because it is our responsibility—I want to assure the House that we have come to this conclusion in no light-hearted manner, because it is of immense importance.
  1690
  At the present moment some of the companies control very wide areas. For instance, the North Eastern Supply Company, which claims with some justification to be a highly efficient company, controls, an area of 6,000 square miles. That is slightly above the average of our areas. Edmondson's, which equally claim—I think with justification—to be efficient, control no less than 16,000 square miles, scattered all over the country, it is true; I think all would agree they would be far more efficient if it were not so. Therefore, we are bound to take the view that, if we are to have the areas which from the technical point of view are of the right size, we cannot adopt local authority boundaries. We must accept that, and any honest person looking at this problem from the point of view of how to provide the best electricity service for the country must recognise that it cannot be done on the basis of local authority areas. Therefore, we are driven to something larger, we are driven to the idea of regional public boards. I think many hon. Members opposite would probably go a long; way with me in this argument. What, then, is the difference between us?—a difference which, I am bound to say, it sometimes seems to me, has been greatly exaggerated in the rather virulent speeches made by one or two hon. Members opposite. One difference is that we do not propose to maintain the companies. But hon. Members opposite are not consistent in this matter. If they are really concerned at the elimination of private companies, if they really believe that private monopoly is the best way of distributing electricity, why do they stop short? Why do they not recommend that we should have private monopolies everywhere in this industry, and hand the whole thing over to the private companies? For instance, why should—as, I think, was the proposal in the 1937 White Paper-South London be handed over to a private company and North London be left in what, apparently, hon. Members opposite would regard as the less efficient municipalities? There is no consistency in their attitude.
  The real point is that the McGowan' Report in this matter was essentially, political. It was a political document in those paragraphs, based on the political situation. That situation has altered. The fact that it has altered has already-been recognised by the Heyworth Com-

  1691
  mittee which, facing a very similar problem for the gas industry, has recommended, in effect, what we are putting into this Bill. The alternative proposal, which, so far as one can gather, is what hon. Members opposite favour, is a weak, shuffling, shabby expedient to avoid a clash with vested interests. It would not secure the economies which can be achieved, it would not provide the necessary permanence, and it is not, in our opinion, a satisfactory basis on which to establish a sound electricity supply industry.
  I turn now to some of the major issues raised in the Debate and connected with the details of the Bill. Much has been made by hon. Members opposite about the lack of protection for consumers. The hon. Member for Wavertree made some play on that in his speech. What are the facts? How much protection have consumers had in the past? They have had certain Statutory rights regarding supplies. Most of those rights remain. They are not affected by the various alterations which we propose to make in the Schedules to the Bill. There are some alterations which have been made because the points are covered elsewhere in the Bill. Substantially, however, where we thought that the protection was of any value whatever, we have retained it, either in the existing legislation or in the Bill.
  Reference was made to prices. No honest man can possibly maintain that in this field there has been any effective price control. Those who have been concerned with the industry know that perfectly well. It is true there were maximum prices in special Orders. What were the maximum prices? Hon. Members may be interested to know that, in practically every case, the maximum price was 9d., 10d., or is, a unit. What possible use is that as a form of consumers' protection? In any case, it does not in the least deal with what is the most common form of charge, the two-part tariff, which is a private agreement made between a company and a consumer, and is quite unaffected by the Statutory provisions. Instead of that, we now have public authorities providing services, not for profit, but on a basis of cost. We do not claim that no protection is needed for the consumers, but we
  1692
  do claim that the consumers are in very much less danger than they were from private monopoly, and we propose the setting up of consultative councils, not merely to protect the consumer in the narrower sense, but to participate in the planning of the electricity supply for the whole area. We want them to work extremely closely with the area boards, and one reason we think that will be possible is that we have introduced this overlapping, so that the chairman of the consultative council is, in fact, a member of the area board.
  Much, reference has been made to Ministerial powers. The Opposition objection seemed rather weak. They have not specified, except in one or two instances, what they object to. It is true they have asked in what circumstances the Minister would decline to allow a direction which he gave to the Central Authority to be published. There may well be strategical considerations in this matter which would make it most undesirable to publish, as responsible right hon. Gentlemen opposite know perfectly well. I have no reason to believe that the powers in the Bill are excessive.
  What do the Opposition want in this matter? My right hon. Friend is entitled to some explanation. Do they wish public undertakings to be quite outside Parliamentary control? In that case, my right hon. Friend might be prepared to consider giving up some of these powers, but in that case they must not go on questioning him.
  I wish I had time to answer some of the extraordinary and inaccurate statements made by the right hon. Member for Southport on the matter of compensation. He really is quite extraordinary. One would suppose that, as it is some time since he has been removed from agriculture, he would be able to find out the facts. He stated that the value of shares in the pre-Election period was higher than in the period immediately preceding the Bill. The facts are entirely the contrary. The values were, as a matter of fact, £17 million higher in the latter period than in the earlier period. The right hon. Member is reflecting seriously on many of his colleagues when he suggests that the Stock Exchange does not take into account the reserves of an undertaking or what its prospects are. I

  1693
  see the hon. and gallant Member for Holderness (Lieut.-Commander Braithwaite) there. Are we really to suppose that the hon. and gallant Member advises his clients without taking into account such considerations? I think that he and others are much too fly and much too sly to be caught in that way.
  There are three courses open to us. We can take the easy way out and have no legislation at all. That leads to chaos. We can adopt the timid, opportunist, half-hearted policy so characteristic of the Conservative Party in their prewar days, or we can adopt the obviously sensible solution propounded in the Bill. We can convert the industry into a public
  service, with regional boards responsible for administration from day to day, with consultative councils to keep the consumers in the closest touch with the various local authorities in the area and with a Central Authority concerned with the coordination of policy. We believe that this is the clean and sensible way to do the job, and that it will give us an efficient electrical supply industry. For those reasons I now ask the House to give the Bill a Second Reading.
  Question put, "That 'now' stand part of the Question."
  The House divided: Ayes, 340; Noes, 165.

  Division No. 68.]

  AYES.

  10 p.m.

  Adams, Richard (Balham)

  Comyns, Dr. L.

  Greenwood, Rt. Hon. A. (Wakefield)

  Adams, W. T. (Hammersmith, South)

  Cook, T. F.

  Greenwood, A. W. J. (Heywood)

  Alexander, Rt. Hon. A. V.

  Cooper, Wing-Comdr. G.

  Grenfell, D. R.

  Allen, A. C. (Bosworth)

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

  Grierson, E.

  Allen, Scholefield (Crews)

  Corlett, Dr. J.

  Griffiths, D. (Rother Valley)

  Alpass, J. H.

  Cove, W. G.

  Griffiths, Rt. Hon. J. (Llanelly)

  Anderson, A. (Motherwell)

  Crawley, A.

  Griffiths, W D. (Moss Side)

  Anderson, F. (Whitehaven)

  Crossman, R. H. S

  Gunter, R. J.

  Attewell, H. C.

  Daines, P.

  Guy, W. H.

  Attlee, Rt. Hon. C. R.

  Dalton, Rt. Hon. H.

  Haire, John E. (Wycombe)

  Austin, H. Lewis

  Davies, Clement (Montgomery)

  Hale, Leslie

  Awbery, S. S.

  Davies, Edward (Burslem)

  Hall, W. G.

  Ayles, W. H.

  Davies, Ernest (Enfield)

  Hamilton, Lieut.-Col. R

  Ayrton Gould, Mrs. B.

  Davies, Harold (Leek)

  Hardman, D. R.

  Bacon, Miss A.

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

  Hardy, E. A.

  Baird, J.

  Davies, R. J. (Westhoughton)

  Harrison, J.

  Balfour, A.

  Davies, S. O. (Merthyr)

  Hastings, Dr. Somerville

  Barnes, Rt. Hon. A. J.

  Deer, G.

  Henderson, A. (Kingswinford)

  Barstow, P. G.

  Delargy, Captain H. J,

  Henderson, Joseph (Ardwick)

  Barton, C.

  Diamond, J.

  Herbison, Miss M.

  Battley, J. R.

  Dobbie, W.

  Hewitson, Capt. M.

  Bechervaise, A. E

  Dodds, N. N.

  Hicks, G.

  Belcher, J. W.

  Donovan, T.

  Holman, P.

  Bellinger, Rt. Hon. F. J

  Drlberg, T. E. N.

  Holmes, H. E. (Hemsworth)

  Benson, G.

  Dugdale, J. (W. Bromwich)

  House, G.

  Berry, H.

  Durbin, E. F. M.

  Hoy, J.

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

  Dye, 8.

  Hubbard, T.

  Bing, G. H. C.

  Ede, Rt. Hon. J. C.

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

  Blackburn, A. R.

  Edelman, M.

  Hughes, Hector (Aberdeen, N.)

  Blenkinsop, A.

  Edwards, John (Blackburn)

  Hughes, H. D. (W'lverh'pton, W.)

  Blyton, W. R.

  Edwards, N. (Caerphilly)

  Hutchinson, H. L. (Rusholme)

  Boardman, H.

  Edwards, W. J. (Whitechapel)

  Hynd, H. (Hackney, C.)

  Bowden, Flg.-Offr. H. W.

  Evans, E. (Lowestoft)

  Irving, W. J.

  Bowles, F. G. (Nuneaton)

  Evans, John (Ogmore)

  Isaacs, Rt. Hon. G. A

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

  Evans, S. N. (Wednesbury)

  Janner, B.

  Braddock, T. (Mitcham)

  Ewart, R.

  Jay, D. P. T.

  Bramall, Major E. A.

  Fairhurst, F.

  Jeger, G. (Winchester)

  Brook, D. (Halifax)

  Farthing, W. J.

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

  Brown, George (Belper)

  Field, Capt. W. J.

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

  Brown, T. J. (Ince)

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

  Jones, D. T. (Hartlepools)

  Brown, W. J. (Rugby)

  Follick, M.

  Jones, Elwyn (Plaistow)

  Brucs, Maj. D. W. T.

  Foot, M. M.

  Jones, P. Asterley (Hitchin)

  Buchanan, G.

  Forman, J. C.

  Keenan, W.

  Burden, T. W.

  Foster, W. (Wigan)

  Kenyon, C.

  Burke, W. A.

  Fraser, T. (Hamilton)

  Key, C. W.

  Butler, H. W. (Hackney, S.)

  Freeman, Maj. J. (Watford)

  King, E. M.

  Byers, Frank

  Freeman, Peter (Newport)

  Kinley, J.

  Carmichael, James

  Gaitskell, H. T. N.

  Kirby, B. V.

  Castle, Mrs. B. A

  Gallacher, W.

  Kirkwood, D.

  Champion, A. J.

  Ganley, Mrs. C. S.

  Lang, G.

  Chater, D.

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

  Lavers, S.

  Chetwynd, G R.

  George, Lady M. Lloyd (Anglesey)

  Lee, F. (Hulme)

  Cocks, F. S

  Gibbins, J.

  Lee, Miss J. (Cannock)

  Coldrick, W.

  Gibson, C. W.

  Leonard, W.

  Collick, P.

  Gilzean, A.

  Lever, N. H.

  Collindridge, F.

  Glanville, J. E. (Consett)

  Levy B. W.

  Collins, V. J.

  Gooch, E. G.

  Lewis, J. (Bolton)

  Colman, Miss G. M.

  Goodrich, H. E.

  Lewis, T. (Southampton)

  Lindgren, G. S.

  Parker, J

  Strachey, J.

  Lipson, D. L.

  Parkin, B. T

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

  Lipton, Lt.-Col, M.

  Paton, Mrs. F. (Rusbcliffe)

  Stross, Dr. B.

  Logan, D. G.

  Paton, J. (Norwich)

  Stubbs, A. E.

  Longden, F.

  Pearson, A.

  Summerskill, Dr. Edith

  Lyne, A. W.

  Peart, Capt. T. F.

  Symonds, A. L.

  MeAdam, W.

  Platts-Mills, J. F. F.

  Taylor, H B. (Mansfield)

  McAllister, G.

  Poole, Major Cecil (Lichfield)

  Taylor, R. J. (Morpeth)

  McEntee, V. La T

  Porter, E. (Warrington)

  Taylor, Dr. S. (Barnet)

  McGhee, H. G.

  Porter, G. (Leeds)

  Thomas, I. O. (Wrekin)

  MeGovern, J.

  Price, M. Philips

  Thomas, John R. (Dover)

  Mack, J. D.

  Proctor, W. T.

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

  McKay, J. (Wallsend)

  Pursey, Cmdr. H

  Thorneycroft, Harry (Clayton)

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

  Randall, H. E.

  Thurtle, E.

  McKinlay, A. S.

  Ranger, J.

  Tiffany, S.

  Maclean, N. (Govan)

  Rankin, J.

  Titterington, M. F

  McLeavy, F.

  Rees-Williams, D. R.

  Tolley, L.

  MacMillan, M. K. (Western Isles)

  Reeves, J.

  Tomlinson, Rt. Hon. G

  McNeil, Rt. Hon. H.

  Reid, T. (Swindon)

  Turner-Samuels, M.

  Macpherson, T. (Romford)

  Rhodes, H.

  Ungoed-Thomas, L.

  Mallalieu, J. P. W.

  Richards, R.

  Usborne, Henry

  Mann, Mrs. J.

  Ridealgh, Mrs. M.

  Vernon, Maj. W. F

  Manning, C. (Camberwell, N.)

  Robens, A.

  Viant, S. P.

  Manning, Mrs. L. (Epping)

  Roberts, Emrys (Merioneth)

  Wadsworth, G

  Marshall, F. (Brightside)

  Roberts, Gorohwy (Caernrvonshire)

  Walkden, E.

  Mathers, G.

  Roberts, W. (Cumberland, N.)

  Wallace, G D. (Chislehurst)

  Mayhew, C. P.

  Robertson, J. J. (Berwick)

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

  Medland, H. M.

  Rogers, G. H. R.

  Warbey, W. N.

  Mellish, R. J.

  Ross, William (Kilmarnock)

  Watson, W. M.

  Middleton, Mrs. L

  Royle, C.

  Webb, M. (Bradford, C.)

  Mikardo, Ian

  Sargood, R.

  Weitzman, D.

  Millington, Wing-Comdr. E. R.

  Scollan, T.

  Wells, W. T. (Walsall)

  Mitchison, Maj. G. R.

  Scott-Elliot, W.

  West, D. G.

  Monslow, W.

  Shackleton, Wing.-Cdr. E. A. A

  Westwood, Rt. Hon. J

  Montague, F.

  Sharp, Granville

  Wigg, Col. G. E.

  Moody, A. S.

  Shawcross, C. N. (Widnes)

  Wilcock, Group-Capt. C. A B.

  Morgan, Dr. H B

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

  Wilkes, L.

  Morley, R.

  Shinwell, Rt. Hon. E.

  Wilkins, W. A.

  Mort, D. L.

  Shurmer, P.

  Willey, O. G. (Cleveland)

  Moyle, A.

  Silkin, Rt. Hon. L.

  Williams, Rt. Hon. T. (Don Valley)

  Murray, J. D.

  Silverman, J. (Erdington)

  Williams, W. R (Heston)

  Nally, W.

  Silverman, S. S. (Nelson)

  Williamson, T.

  Naylor, T. E.

  Simmons, C. J.

  Willis, E.

  Neal, H. (Claycross)

  Skeffington A. M

  Wills, Mrs. E. A

  Nicholls, H. R. (Stratford)

  Skeffington-Lodge, T. C

  Witmot, Rt. Hon. J

  Noel-Baker, Capt. F. E. (Brentford)

  Smith, C. (Colchester)

  Wilson, J. H.

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

  Smith, Ellis (Stoke)

  Wise, Major F J

  Noel-Buxton, Lady

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

  Woodburn, A.

  O'Brien, T.

  Snow, Capt. J. W

  Woods, G. S.

  Oldfield, W. H

  Solley, L. J.

  Wyatt, W.

  Oliver, G. H.

  Sorensen, R. W.

  Yates, V. F.

  Orbach, M.

  Soskice, Maj. Sir F.

  Young, Sir R. (Newton)

  Paget, R T.

  Sparks, J. A.

  Younger, Hon. Kenneth

  Paling, Rt. Hon. Wilfred (Wentworth)

  Stamford, W.

  Zilliacus, K.

  Palmer, A. M. F.

  Stephen, C.

  Pergiter, G. A.

  Stewart, Michael (Fulham, E.)

  TELLERS FOR THE AYES.

  Mr. Hannan and Mr. Popplew ll.

  NOES.

  Agnew, Cmdr. P. G.

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

  Gridley, Sir A.

  Aitken, Hon. Max

  Crosthwaite-Eyre, Col. O. E.

  Grimston, R. V.

  Amory, D. Heathcoat

  Crowder, Capt. John E.

  Hannon, Sir P. (Moseley)

  Anderson, Rt. Hon. Sir J. (Scot. Univ.)

  Cuthbert, W. N.

  Hare, Hon. J. H. (Woodbridge)

  Assheton, Rt. Hon. R

  De la Bare, R

  Harvey, Air-Comdre. A. V.

  Baldwin, A. E.

  Digby, S. W.

  Haughton, S G.

  Barlow, Sir J.

  Dodds-Parker, A. D.

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

  Beechman, N. A.

  Donner, Sqn.-Ldr. P. W

  Henderson, John (Cathcart)

  Birch, Nigel

  Drayson, G. B

  Hogg, Hon. Q.

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

  Drewe, C.

  Hollis, M. C.

  Boothby, R.

  Dugdale, Maj. Sir T. (Richmond)

  Hope, Lord J.

  Bossom, A. C.

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

  Howard, Hon. A.

  Boyd-Carpenter, J. A.

  Duthie, W. S.

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

  Braithwaite, Lt.-Comdr. J. G.

  Eccles, D. M.

  Hurd, A.

  Bromley-Davenport, Lt.-Col. W

  Eden, Rt. Hon. A.

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

  Bullock, Capt. M.

  Elliot, Rt. Hon. Walter

  Jarvis, Sir J.

  Butcher, H. W.

  Fleming, Sqn.-Ldr. E. L.

  Jeffreys, General Sir G.

  Butler, Rt. Hon. R. A. (S'ffr'n W'ld'n)

  Fletcher, W. (Bury)

  Jennings, R.

  Carson, E.

  Foster, J. G. (Northwich)

  Joynson-Hicks, Lt.-Cdr. Hon. L. W.

  Channon, H.

  Fraser, Sir I. (Lonsdale)

  Kerr, Sir J Graham

  Clarke, Col. R. S.

  Fyfe, Rt. Hon. Sir D. P. M

  Kingsmill, Lt.-Col. W. H.

  Clifton-Brown, Lt.-Col. G

  Gage, C.

  Lambert, Hon. G.

  Cole, T. L.

  Galbraith, Cmdr. T. D

  Lancaster, Col. C. G.

  Conant, Maj. R. J. E.

  Glossop, C. W. H.

  Langford-Holt, J.

  Cooper-Key, E. M.

  Glyn, Sir R.

  Law, Rt. Hon. R. K.

  Corbett, Lieut-Col. U. (Ludlow)

  Grant, Lady

  Legge-Bourke, Maj. E. A. H

  1696

  1697

  Lennox-Boyd, A. T.

  Nicholson, G.

  Spearman, A. C. M.

  Linstead, H. N.

  Nield, B. (Chester)

  Stanley, Rt. Hon. O.

  Lloyd, Maj. Guy (Renfrew, E.)

  Noble, Comdr. A. H. P.

  Stewart, J. Henderson (Fife, E.)

  Lucas-Tooth, Sir H.

  Nutting, Anthony

  Stoddart-Scott, Cot. M.

  Lyttelton, Rt. Hon. O.

  O'Neill, Rt. Hon. Sir H.

  Strauss, H. G. (English Universities)

  MacAndrew, Col. Sir C

  Orr-Ewing, I. L.

  Sutcliffe, H.

  McCallum, Maj. D.

  Osborne, C.

  Taylor, C. S. (Eastbourne)

  MacDonald, Sir M. (Inverness)

  Peake, Rt. Hon. O.

  Thomas, J. P. L. (Hereford)

  Macdonald, Sir P. (I of Wight)

  Peto, Brig. C. H. M.

  Thorneycroft, G. E. P. (Monmouth)

  Mackeson, Brig. H. R.

  Pickthorn, K.

  Thornton-Kemsley, C. N.

  McKie, J. H. (Galloway)

  Pitman, I. J.

  Thorp, Lt.-Col. R. A. F.

  Maclay, Hon. J. S.

  Poole, O. B. S. (Oswestry)

  Touche, G. C.

  MacLeod, J.

  Price-White, Lt.-Col. D.

  Turton, R. H.

  Macpherson, Maj. N. (Dumfries)

  Raikes, H. V.

  Vane, W. M. F.

  Maitland, Comdr. J. W.

  Ramsay, Maj. S.

  Walker-Smith, D.

  Manningham-Buller, R. E.

  Rayner, Brig. R.

  Ward, Hon. G. R.

  Marlowe, A. A. H.

  Reed, Sir S. (Aylesbury)

  Watt, Sir G. S. Harvie

  Marsder, Capt. A.

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

  Webbe, Sir H. (Abbey)

  Marshall, D. (Bodmin)

  Renton, D.

  Wheatley, Colonel M. J.

  Marshall, S. H. (Sutton)

  Roberts, H. (Handsworth)

  White, Sir D. (Fareham)

  Maude, J. C.

  Roberts, Maj. P. G. (Ecclesall)

  Williams, C. (Torquay)

  Medlicott, F.

  Robinson, Wing-Comdr. Roland

  Williams, Gerald (Tonbridge)

  Mellor, Sir J.

  Ropner, Col. L.

  Willink, Rt. Hon. H. U.

  Molson, A. H. E.

  Sanderson, Sir F.

  Willoughby de Eresby, Lord

  Moore, Lt.-Col. Sir T.

  Savory, Prof. D. L

  Winterton, Rt. Hon. Earl

  Morris-Jones, Sir H.

  Scott, Lord W

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

  Morrison, Maj. J. G. (Salisbury)

  Shephard, S. (Newark)

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

  Shepherd, W. S. (Bucklow)

  TELLERS FOR THE NOES:

  Mott-Radclyffe, Maj. C. E.

  Smith, E. P. (Ashford)

  Mr. James Stuart and

  Mullan, Lt. C. H.

  Snadden, W. M.

  Mr. Buchan-Hepburn.

  Bill accordingly read a Second time.
  Mr. R. S. Hudson: I beg to move, "That the Bill be committed to a Committee of the Whole House."
  Question put.
  The House divided: Ayes, 169; Noes, 330.

  Division No. 69.]

  AYES.

  [10.11 p.m

  Agnew, Cmdr. P. G.

  Fletcher, W. (Bury)

  Macdonald, Sir P. (I. of Wight)

  Aitken, Hon. Max

  Foster, J. G. (Northwich)

  Mackeson, Brig. H. R.

  Amory, D. Heathcoat

  Fyfe, Rt. Hon. Sir D. P. M.

  Mckie, J. H. (Galloway)

  Assheton, Rt. Hon. R

  Gage, C.

  Maclay, Hon. J. S.

  Baldwin, A. E.

  Galbraith, Cmdr. T. D.

  MacLeod, J.

  Barlow, Sir J.

  George, Lady M. Lloyd (Anglesey)

  Macpherson, Maj. N. (Dumfries)

  Beechman, N. A.

  Glossop, C. W. H.

  Maitland, Comdr. J. W.

  Birch, Nigel

  Glyn, Sir R.

  Manningham-Buller, R. E

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

  Grant, Lady

  Marlowe, A. A. H.

  Boothby, R.

  Gridley, Sir A.

  Marsden, Capt. A.

  Bossom, A. C.

  Grimston, R, V.

  Marshall, D. (Bodmin)

  Boyd-Carpenter, J. A.

  Hannon, Sir P. (Moseley)

  Marshall, S. H. (Sutton)

  Braithwaite, Lt.-Comdr. J. G.

  Hare, Hon. J. H. (Woodbridge)

  Maude, J. C.

  Bromley-Davenport, Lt.-Col. W

  Harvey, Air-Comdre, A. V.

  Medlicott, F.

  Bullock, Capt. M.

  Haughton, S. G.

  Mellor, Sir J.

  Butcher, H. W.

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

  Molson, A. H. E.

  Butler, Rt. Hon. R. A. (S'ffr'n W'ld'n)

  Henderson, John (Catheart)

  Morris-Jones, Sir H.

  Byers, Frank

  Hinchingbrooke, Viscount

  Morrison, Maj. J. G. (Salisbury)

  Carson, E.

  Hogg, Hon. Q.

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

  Challen, C.

  Hollis, M. C.

  Mott-Radclyffe, Maj. C. E.

  Channon, H

  Hope, Lord J.

  Mullan, Lt. C. H.

  Clarke, Col. R. S.

  Howard, Hon. A.

  Neven-Spence, Sir B.

  Clitton-Brown, Lt.-Col. G

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

  Nicholson, G.

  Cole, T. L.

  Hurd, A.

  Nield, B. (Chester)

  Conant, Maj. R. J. E.

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

  Noble, Comdr. A. H. P

  Cooper-Key, E. M.

  Jarvis, Sir J.

  Nutting, Anthony

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

  Jeffreys, General Sir G.

  O'Neill, Rt. Hon. Sir H.

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

  Jennings, R.

  Orr-Ewing, I. L.

  Crosthwaite-Eyre, Cot. O. E.

  Joynson-Hicks, Lt.-Cdr. Hon. L. W

  Osborne, C.

  Crowder, Capt. John E.

  Kerr, Sir J. Graham

  Peake, Rt. Hon. O.

  Cuthbert, W. N.

  Kingsmill, Lt.-Col. W. H.

  Peto, Brig. C. H. M

  De Ia Bère, R

  Lambert, Hon. G.

  Pickthorn, K.

  Digby, S. W.

  Lancaster, Col. C. G.

  Pitman, I. J.

  Dodds-Parker, A. D.

  Langford-Holt, J.

  Poole, O. B. S. (Oswestry)

  Donner, Sqn.-Ldr. P. W.

  Law, Rt. Hon. R. K.

  Price-White, Lt.-Col. D.

  Drayson, G. B.

  Legge-Bourke, Maj. E. A. H

  Raikes, H. V.

  Drewe, C.

  Lennox-Boyd, A T.

  Ramsay, Maj. S.

  Dugdale, Maj. Sir T. (Richmond)

  Linstead, H. N.

  Rayner, Brig. R.

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

  Lipson, D. L.

  Reed, Sir S. (Aylesbury)

  Duthie, W. S.

  Lucas-Tooth, Sir H.

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

  Eccles, D. M.

  Lyttelton, Rt. Hon. O.

  Ronton, D.

  Eden, Rt. Hon. A.

  MacAndrew, Col. Sir C.

  Roberts, Emrys (Merioneth)

  Elliot, Rt. Hon. Walter

  McCallum, Maj. D.

  Roberts, H. (Handsworth)

  Fleming, Sqn.-Ldr. E. L.

  MacDonald, Sir M. (Inverness)

  Roberts, Maj. P. G. (Ecclesall)

  Roberts, W. (Cumberland, N.)

  Strauss, H. G. (English Universities)

  Ward, Hon. G. R.

  Robinson, Wing-Comdr. Roland

  Stuart, Rt. Hon. J. (Moray)

  Watt, Sir G. S. Harvie

  Ropner, Col. L.

  Sutcliffe, H.

  Webbe, Sir H. (Abbey)

  Sanderson, Sir F.

  Taylor, C. S. (Eastbourne)

  Wheatley, Colonel M. J.

  Savory, Prof. D. L

  Thomas, J. P. L. (Hereford)

  White, Sir D. (Fareham)

  Scott, Lord W.

  Thorneycroft, G E. P. (Monmouth)

  Williams, C. (Torquay)

  Shephard, S. (Newark)

  Thornton-Kemsley, C. N.

  Williams, Gerald (Tonbridge)

  Shepherd, W. S. (Bucklow)

  Thorp, Lt.-Col. R. A. F.

  Willink, Rt. Hon. H. U.

  Smith, E. P. (Ashford)

  Touche, G. C.

  Willoughby de Eresby, Lord

  Snadden, W. M.

  Turton, R. H.

  Winterton, Rt. Hon. Earl

  Spearman, A. C. M.

  Vane, W. M. F.

  Stanley, Rt. Hon. O.

  Wadsworth, G.

  TELLERS FOR THE AYES:

  Stoddart-Scott, Col. M.

  Walker-Smith, D.

  Sir Arthur Young and

  Mr. Buchan-Hepburn.

  NOES.

  Adams, Richard (Balham)

  Davies, Ernest (Enfield)

  Hubbard, T.

  Adams, W. T. (Hammersmith, South)

  Davies, Harold (Leek)

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

  Alexander, Rt. Hon. A. V.

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

  Hughes, Hector (Aberdeen, N.)

  Allen, A. C. (Bosworth)

  Davies, R. J. (Westhoughtan)

  Hughes, H. D. (W'lverh'pton, W.)

  Allen, Scholefield (Crewe)

  Davies, S. O. (Merthyr)

  Hutchinson, H. L. (Rusholme)

  Alpass, J. H.

  Deer, G.

  Hynd, H. (Hackney, C.)

  Anderson, A. (Motherwell)

  Delargy, Captain H. J.

  Irving, W J.

  Anderson, F. (Whitehaven)

  Diamond, J.

  Isaacs, Rt. Hon. G. A

  Attewell, H. C.

  Dobbie, W.

  Janner, B.

  Attlee, Rt. Hon. C. R.

  Dodds, N. N.

  Jay, D. P. T

  Austin, H. Lewie

  Donovan, T.

  Jeger, G (Winchester)

  Awbery, S. S.

  Driberg, T. E. N.

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

  Ayles, W. H.

  Dugdale, J. (W. Bromwich)

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

  Ayrton Gould, Mrs. B.

  Durbin, E. F. M.

  Jones, D. T. (Hartlepools)

  Bacon, Miss A.

  Dye, S.

  Jones, Elwyn (Plaistow)

  Baird, J.

  Ede, Rt. Hon. J. C.

  Jones, P Asterley (Hitchin)

  Balfour, A.

  Edelman, M.

  Keenan, W

  Barnes, Rt. Hon. A. J.

  Edwards, John (Blackburn)

  Kenyon, C.

  Barstow, P. G.

  Edwards, N. (Caerphilly)

  Key, C. W

  Barton, C.

  Edwards, W. J. (Whitechapel)

  King, E. M.

  Battley, J. R.

  Evans, E. (Lowestoft)

  Kinley, J.

  Bechervaise, A. E.

  Evans, John (Ogmora)

  Kirby, B. V.

  Belcher, J. W.

  Evans, S. N. (Wednesbury)

  Kirkwood, D.

  Bellinger, Rt. Hon. F. J.

  Ewart, R.

  Lang, G.

  Benson, G.

  Fairhurst, F.

  Lavers, S.

  Berry, H.

  Farthing, W. J.

  Lee, F (Hulme)

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

  Field, Capt. W. J.

  Lee, Miss J- (Cannock)

  Bing, G. H. C.

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

  Leonard, W.

  Blackburn, A. R.

  Follick, M.

  Lever, N H.

  Blenkinsop, A.

  Foot, M. M.

  Levy, B. W.

  Blyton, W. R.

  Forman, J. C.

  Lewis, J. (Bolton)

  Boardman, H.

  Foster, W. (Wigan)

  Lewis, T (Southampton)

  Bowden, Flg.-Offr. H. W.

  Fraser, T. (Hamilton)

  Lindgren, G. S.

  Bowles, F. G. (Nuneaton)

  Freeman, Maj. J. (Watford)

  Lipton, Lt.-Col. M.

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

  Freeman, Peter (Newport)

  Logan, D G.

  Braddock, T. (Mitcham)

  Gaitskell, H. T. N.

  Longden, F.

  Bramall, Major E. A.

  Gallacher, W.

  Lyne, A. W.

  Brook, D. (Halifax)

  Ganley, Mrs. C. S.

  McAdam,W.

  Brown, George (Belper)

  Gibbins, J.

  McAllister, G.

  Brown, T. J. (Ince)

  Gibson, C. W.

  McEntee V. La T.

  Brown, W. J. (Rugby)

  Gilzean, A,

  McGhee, H. G.

  Bruce, Maj. D. W. T.

  Glanville, J. E. (Consett)

  McGovern, J.

  Buchanan, G.

  Gooch, E. G.

  Mack, J. D.

  Burden, T. W.

  Goodrich, H. E.

  McKay, J. (Wallsend)

  Burke, W. A.

  Greenwood, Rt. Hon. A. (Wakefield)

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

  Butler, H. W. (Hackney, S.)

  Greenwood, A. W. J. (Heywood)

  McKinlay, A. S.

  Carmichael, James

  Grenfell, D. R.

  Maclean, N. (Govan)

  Castle, Mrs. B. A.

  Grierson, E.

  McLeavy, F.

  Champion, A. J.

  Griffiths, D. (Rother Valley)

  MacMillan, M. K. (Western Isles)

  Chater, D.

  Griffiths, Rt. Hon. J. (Llanelly)

  McNeil, Rt. Hon. H.

  Chetwynd, G. R.

  Griffiths, W D (Moss Side)

  Macpherson, T. (Romford)

  Cocks, F. S.

  Gunter, R. J.

  Malialieu, J. P. W.

  Coldrick, W.

  Guy, W. H.

  Mann, Mrs. J.

  Collick, P.

  Haire, John E. (Wycombe)

  Manning, C (Camberwell, N.)

  Collindridge, F.

  Hale, Leslie

  Manning, Mrs. L (Epping)

  Collins, V J.

  Hall, W. G.

  Marshall, F. (Brightside)

  Colman, Miss G. M.

  Hamilton, Lieut.-Col. R

  Mathers, G

  Comyns, Dr. L.

  Hardman, D. R.

  Mayhew, C P.

  Cool, T. F.

  Hardy, E. A.

  Medland, H. M.

  Cooper, Wing-Comdr. G.

  Harrison, J.

  Mellish, R. J.

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

  Hastings, Dr. Somerville

  Middleton, Mrs. L.

  Corlett, Dr. J.

  Henderson, A. (Kingswinford)

  Mikardo, Ian

  Cove, W. G.

  Henderson, Joseph (Ardwiek)

  Millington, Wing-Comdr. E. R.

  Crawley, A.

  Herbison, Miss M.

  Mitchison, Maj. G. R.

  Crossman, R. H. S.

  Hewitson, Capt. M.

  Monslow, W

  Daines, P.

  Holman, P

  Moody, A. S.

  Daiton, Rt. Hon. H

  Holmes, H. E. (Hemsworth)

  Morgan, Dr. H. B.

  Davies, Clement (Montgomery)

  House, G.

  Morley, R.

  Davies, Edward (Burslem)

  Hoy, J

  Mort, D. L.

  1700

  1701

  Moyle, A.

  Rogers, G. H. R.

  Thurtle, E.

  Murray, J. D.

  Ross, William (Kilmarnock)

  Tiffany, S.

  Nally, W.

  Royle, C.

  Titterington, M. F.

  Naylor, T. E.

  Sargood, R.

  Tolley, L.

  Neal, H. (ClayCross)

  Scollan, T.

  Tomlinson, Rt. Hon. G.

  Nicholls, H. R. (Stratford)

  Scott-Elliot, W.

  Turner-Samuels, M.

  Noel-Baker, Capt. F. E. (Brentford)

  Shackleton, Wing.-Cdr. E. A. A.

  Ungoed-Thomas, L.

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

  Sharp, Granville

  Usborne, Henry

  Noel-Buxton, Lady

  Shawcross, C. N. (Widnes)

  Vernon, Maj. W. F

  O'Brien, T.

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

  Viant, S. P.

  Oldfield, W. H.

  Shinwell, Rt. Hon. E.

  Walkden, E.

  Oliver, G. H.

  Shurmer, P.

  Wallace, G. D. (Chislehurst)

  Orbach, M.

  Silkin, Rt. Hon. L.

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

  Paget, R. T.

  Silverman, J. (Erdington)

  Warbey, W. N.

  Paling, Rt. Hon. Wilfred (Wentworth)

  Silverman, S S. (Nelson)

  Watson, W. M.

  Palmer, A. M. F.

  Simmons, C. J.

  Webb, M. (Bradford, C.)

  Pargiter, G. A.

  Skeffington, A. M

  Weitzman, D.

  Parker, J.

  Skeffington-Lodge, T. C

  Wells, W. T. (Walsall)

  Parkin, B. T.

  Smith, C. (Colchester)

  West, D. G.

  Paton,' Mrs. F. (Rushcliffe)

  Smith, Ellis (Stoke)

  Westwood, Rt. Hon. J.

  Paton, J. (Norwich)

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

  Wigg, Col. G. E.

  Pearson, A.

  Snow, Capt. J. W

  Wilcock, Group-Capt. C. A. B.

  Peart, Capt. T. F.

  Solley, L. J.

  Wilkes, L.

  Platts-Mills, J. F. F.

  Sorensen, R. W.

  Wilkins, W. A.

  Poole, Major Cecil (Lichfield)

  Soskice, Maj. Sir F.

  Willey, O. G. (Cleveland)

  Porter, E. (Warrington)

  Sparks, J. A.

  Williams, W. R. (Heston)

  Porter, G. (Leeds)

  Stamford, W

  Williamson, T.

  Price, M. Philips

  Stephen, C.

  Willis, E.

  Proctor, W. T.

  Stewart, Michael (Fulham, E.)

  Wills, Mrs. E. A.

  Pursey, Cmdr. H

  Strachey, J.

  Wilmot, Rt. Hon. J.

  Randall, H. E.

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

  Wilson, J. H.

  Ranger, J.

  Stross, Dr. B.

  Wise, Major F. J.

  Rankin, J.

  Stubbs, A. E.

  Woodburn, A.

  Rees-Williams, D. R.

  Summerskill, Dr. Edith

  Woods, G. S

  Reeves, J.

  Symonds, A. L.

  Wyatt, W.

  Reid, T. (Swindon)

  Taylor, H. B. (Mansfield)

  Yates, V. F.

  Rhodes, H.

  Taylor, R. J. (Morpeth)

  Young, Sir R. (Newton)

  Richards, R.

  Taylor, Dr. S. (Barnet)

  Younger, Hon. Kenneth

  Ridealgh, Mrs. M.

  Thomas, I. O. (Wrekin)

  Zilliacus, K.

  Robens, A.

  Thomas, John R. (Dover)

  Roberts, Goronwy (Caernarvonshire)

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

  TELLERS FOR THE NOES:

  Robertson, J. J. (Berwick)

  Thorneycroft, Harry (Clayton)

  Mr. Hannan and

  Mr. Popplewell.

  Bill committed to a Standing Committee.

  ELECTRICITY [MONEY]
  Considered in Committee under Standing Order No. 69.
  [Major MILNER in the Chair]
  Motion made, and Question proposed,
  That, for the purposes of any Act of the present Session to provide, amongst other things, for the establishment of a British Electricity Authority and Area Electricity Boards and for the exercise and performance by that Authority and those Boards and the North of Scotland Hydro-Electric Board of functions relating to the supply of electricity, it is expedient to authorise—

  (a) the payment out of the Consolidated Fund of such sums as may be required to fulfil any guarantee by the Treasury of the principal of and interest on stock issued by the said Authority or the principal of and interest on moneys temporarily borrowed by the said Authority or any Area Electricity Board, so, however, that the amounts outstanding in respect of the principal of the stock so issued, otherwise than for the purpose of paying compensation under the said Act, and in respect of any moneys temporarily borrowed as aforesaid do not at any time exceed the sum of seven hundred million pounds, excluding amounts outstanding in
  1702
  respect of stock issued or moneys temporarily borrowed for the purpose of redeeming stock or repaying moneys temporarily borrowed;

  (b) the payment out of the Consolidated Fund of such sums as may be required to fulfil any guarantee by the Treasury of the principal of and interest on any loan raised by the North of Scotland Hydro-Electric Board, or of either the principal thereof or the interest thereon, so, however, that the aggregate of the amounts outstanding in respect of the principal of any stock issued for the purpose of raising any such loan (other than stock issued to the British Electricity Authority in respect of compensation paid by that Authority under the said Act) and of any moneys temporarily borrowed by the said Board do not at any time exceed the sum of one hundred million pounds excluding stock issued and moneys temporarily borrowed for the purpose of redeeming stock or repaying moneys temporarily borrowed;

  (c)the payment out of moneys provided by Parliament of—

  (i) remuneration and allowances to, and expenses of, stockholders' representatives appointed under the said Act;

  (ii) remuneration and allowances to any auditor appointed under the said Act to ascertain sums payable to stockholders' representatives;

  1703

  (iii) remuneration and allowances to members and officers of the arbitration tribunal appointed under the said Act and to persons to whom proceedings are referred by that tribunal, and any other expenses of that tribunal;

  (iv) fees and allowances to any referee or board of referees appointed under the said Act to decide questions relating to the rights of or in respect of officers, and allowances to witnesses appearing before any referee or board;

  (v) pensions to persons who have been Electricity Commissioners or officers of the Electricity Commissioners;

  (vi) the administrative expenses incurred under the said Act by any Minister of the Crown or Government department;

  (d)the payment into the Exchequer of any sums received under or by virtue of the said Act by any Minister of the Crown or Government department."—(King's Recommendation signified.)—[Mr. Glenvil Hail.]

  10.25 p.m.
  Major Peter Roberts: I am surprised that we have not heard any explanatory statement of this' Resolution from the Financial Secretary to the Treasury. I waited to see if the right hon. Gentleman was going to rise when the Question was proposed and as he has not done so, I intervene to put some questions to him which, I hope, he will answer afterwards. I want first to draw the attention of the Committee to paragraph (a) of the Resolution, which begins by authorising
  "the payment out of the Consolidated Fund of such sums as may be required to fulfil any guarantee by the Treasury of the principal of and interest on stock issued by the said Authority."
  This involves a point which I raised on the Money Resolution on the Transport Bill. The principle is the same in both cases, but there is no top limit set' by the Motion now before the House upon the amount of money which we are asked to pay in compensation. We have admitted by the Second Reading of the Bill that compensation is to be paid, and the Parliamentary Secretary asked what was the difference between us. The answer is that we do not know; is it £2,000 million, is it £3,000 million, is it £4,000 million?
  The Minister of Fuel and Power (Mr. Shinwell): Is it £5,000 million?
  Major Roberts: That is exactly what I am asking. If I look very carefully through the Explanatory Memorandum
  1704
  to the Bill, to see whether there is some estimate of the amount of compensation involved, I find that nowhere is this mentioned. In the Coal Industry Nationalisation Act a rough figure was given and the limit was to be settled by arbitration, but here there is no limit at all. The point I want to put to the Financial Secretary is that it has always been the tradition of Parliament to be very careful in the spending of public money. In fact we have always said that we must keep a careful limit upon our expenditure, and the Army returns, for instance, have to appear every year. Here, however. Parliament will be asked—and I shall be asked on behalf of my constituents in Ecclesall—to pass a Resolution which is virtually a blank cheque. I, for one, am not prepared to pass it in this form unless some figure is given representing a limit to the guarantee of the Treasury.
  The second point under this heading is the effect of the Treasury guarantee, and I want to put a specific question on this because I feel that it is very important. We are issuing a Treasury' guarantee. These sums will come upon the Government stock market possibly at some date in 1948. Is the Financial Secretary quite happy in putting a Treasury guarantee of this kind upon the market together with those for transport, the doctors, coal and all the others? Is he certain that he will not be creating a position in which everybody will immediately try to sell this stock? Is he certain he can hold out. I do not want to go any further than to say that the right hon. Gentleman may find himself in a very serious position.
  10.30 p.m.
  I pass to paragraph (c), in which various payments out of moneys provided by Parliament are enumerated. I draw particular attention to items (iii) and (v) since, to my mind, there is a distinction between those and the other items, all of which relate to one specific act of nationalisation. In other words, once the nationalisation has gone through, these items will finish, but (iii) and (v) are continuing expenditure. Item (iii) relates to the remuneration and allowances to members of the arbitration tribunal which, I assume, will go on sitting month after month, year after year, and, item (v) refers to pensions of Electricity Commissioners. What I want to ask is, why this has been put as a charge on the

  1705
  public. Why should it not be a charge upon the electricity industry? This is a continuing item. I should have thought there would be a distinction between those and the other items, and I should be happier if these matters were put upon the central board. Those are the two questions to which I should like an answer, and the Financial Secretary might have saved time if he had given some explanation earlier.
  Mr. Gallacher: I did not speak on the Second Reading of the Bill, so I would like to put a question on the matter of compensation, which bears hardly upon some of the aged people of this country. Here in the Money Resolution we are leaving the matter quite open. It may be £1,000 million, £5,000 million, £10,000 million, or £100,000 million. A former leader of the Labour Party used to say "on and on and on, and up and up and up," and this is capable of going on and on and on, and up and up and up, without a stop of any kind. I am prepared to show the Minister how, in the simplest way and the shortest time, an estimate can be made of what should be paid. Give me a couple of accountants and I will do the job.
  The Chairman: That is a matter which can more properly be discussed on the Bill in Committee.
  Mr. Gallacher: We have here a Resolution which leaves the matter in such a way that we do not know how much money is going to be involved.
  The Chairman: Precisely. That is a matter which the Committee may decide.
  Mr. Gallacher: We have to decide whether we are going to pass the Resolution in this form or whether we are going to put down a stipulated sum. I am demanding a stipulated sum, and in order to make the point clear, I will take a case that was in the newspaper the other day. It is the case of an elderly couple, and according to the basis upon which compensation will be paid, their income will drop from £250 a year to about £50 a year. Nobody could stand for that, could they. The only solution is to provide compensation in the form of a life annuity, for these old folk and for all the others and not a penny more for anybody. That will give the old folk
  1706
  all the security they require, and will give the other fellows all they deserve, and more than they deserve. If the Minister will accept that principle he will be able to put an estimate in the Resolution of the amount of money he is going to spend, and it will not be £5,000 million or even £1,000 million. Instead of "up and up and up" it will be "down and down and down." I propose that the Minister give us an estimate for this Resolution on the basis of life annuities, and not a penny more for anybody. Strip them naked.
  The Chairman: That would not be in Order. The hon. Member's proposal would not be within the terms of the Money Resolution.
  Mr. Gallacher: I am very sorry if I have been out of Order, but you must admit, Major Milner, that my proposal would be very sensible.
  Mr. Boothby: The hon. Member for West Fife (Mr. Gallacher) complains that the Committee is giving carte blanche to the Minister, and that we are going "on and on and on and up and up and up." Roughly speaking, that is what we are doing, but then that is the sign of all the legislation which we are passing now, and I should have thought that that would have been in accordance with the hon. Member's own ideas.
  Mr. Gallacher: I am all in favour of going "on and on and on, and up and up and up." What I am not in favour of is handing over cash to the friends of the hon. Members opposite.
  Mr. Boothby: I always thought that the hon. Member was in favour of handing cash to everybody. I think he is quite right in saying that we are giving the Government the power to spend an unspecified amount. We do not know what the amount is. All we know is that it is a very large amount, and I should like the Financial Secretary, when he replies, to tell us where he proposes to get the money from. The Resolution says that it must come from the Consolidated Fund, but a lot is coming from the Consolidated Fund; we do not know how much. All we know for certain is that we are spending £1,000 million a year more than we are getting. Therefore, I ask the Financial Secretary to say whether it is

  1707
  true that he will have to fall back on the only really prosperous industries in this country—the manufacture of pound notes, and the manufacture of cupronickel coins.
  Major Cecil Poole: Is the hon. Member on the side of the hon. Member for West Fife (Mr. Gallacher)? Is it his fear that the Government will be too generous in their terms of compensation?
  Mr. Boothby: No, our great fear is that the Socialist Government are spending much more than they have any right to spend—more, in other words, than we are earning in this country—and the fear that they will have to pay for it in the long run.
  The Financial Secretary to the Treasury (Mr. Glenvil Hall): The hon. and gallant Member for Ecclesall (Major Peter Roberts) got on his feet so quickly that I was prevented from explaining to the Committee at the outset what this Resolution does contain. I would say at once that, in our view, it is a simple and straightforward Resolution. The various heads have been covered, over and over again, in the two days' Debate, which we have just had on the Bill. But I will, as briefly as I can, try to answer the points which have been put to me from the other side of the Committee. The hon. and gallant Member for Ecclesall wanted to know why certain of the expenses which are listed in paragraph (c)—particularly (iii) and (v)—are not recoverable from the Central Authority. The short answer is, that so far as (iii) is concerned, the amounts expended should be recoverable from the authority. If the hon. and gallant Gentleman will look at paragraph (d), he will see that provision is made for the payment of any sums, which are recovered, into the Exchequer.
  The same argument holds for item (v). It will depend on who is liable to pay the pension. In some cases the pension will come from two sources. So far as the Central Authority is liable, it will have to bear its share of the cost. The hon. and gallant Member also wanted to know if I could give an estimate of the total liability under the heading of compensation. I agree that no amount is mentioned, and that might be regarded as not at all satisfactory. The reason no
  1708
  amount has been given is because we do not know what the figure will be. Later I will give a guess and indicate what is in our view a fairly close estimate. But it is true, and I have to take the Committee into my confidence here, that we do not yet know what the global sum will be. Therefore it is quite impossible to insert a figure as we would like to do, in the Money Resolution.
  —So far as we can judge, and on the best estimates that we can get, it is computed that the amount of compensation payable to boards and companies under the terms proposed in the Bill will be approximately £350,000,000. A closer estimate cannot be given until it is known exactly what holding companies are acquired under Clause 13 (2). But so far as we can estimate under that head, the amount will be in the neighbourhood of £350,000,000. The hon. and gallant Member did not mention local authorities, but I think I ought to refer to them in order to give a true picture and to put the Committee in possession of all the facts. As the hon. and gallant Member and the Committee know, these authorities are brought in under another Clause, and another set of regulations. The terms, of course, will be in respect of their outstanding liability, both on loans and accruing interest year by year. Therefore, so far as we can gather, we have here a nearer estimate than we have for boards and companies. The outstanding loans amount to between £180,000,000 and £200,000,000. Of course, that sum will be payable—perhaps my hon. Friend the Member for West Fife (Mr. Gallacher) will be interested to know—by a series of annuities, if one can so describe them, over a period of years. This will mean accruals of sinking fund and interest during the period the loan is outstanding, for the authority concerned.
  Mr. Medland: A grand bargain.
  Mr. Glenvil Hall: The hon. Member for East Aberdeen (Mr. Boothby) asked where the money is to come from. I think it would be out of Order if I discussed at length where the money is to flow from into the Central Authority's coffers. But we have made it quite plain in the Financial Resolution, that our view is that it will come. Payments under the guarantee will come from the

  1709
  Consolidated Fund, and from the growing produce thereon.
  Mr. Nigel Birch: Will the Financial Secretary answer one question? The other day, he said that it was impossible to split up a transport corporation and repay the stock. Now I would like to have from him an assurance that this is exactly on all fours with a direct Government obligation, and that any reorganisation of this authority will not mean that the Government will hold themselves able to split it up and say that the corporation no longer exists, and that therefore the stock can be paid off and replaced with securities at some other rate of interest.
  Mr. Glenvil Hall: I do not know, in the first place, whether it would be in Order for me to reply to that. In the second place, I am not sure if I understand the question aright.
  Mr. Birch: I will put the question again, if the hon. Gentleman wishes.
  Mr. Glenvil Hall: As I understand it the question is whether any guarantee was given to the holders of the stock.
  Mr. Birch: It was not in other cases.
  Mr. Glenvil Hall: I know that is what the hon. Gentleman is trying to say. I wish he would say it clearly, because there is a perfectly good, straightforward answer, and that is that, so far as the L.P.T.B. stock and one or two similar classes of stock were concerned, no pledge which was given by the Government, has been broken. The guarantee was in respect of any default by the company in question, and that guarantee—
  The Chairman: The right hon. Gentleman may not go into that question. It is another matter altogether.
  10.45 p.m.
  Mr. Pickthorn: I would like to congratulate the Government on this Financial Resolution in one respect, and that, I think it fair to say, a major respect. I think this Resolution is drafted widely so as not to cut out Amendments to the Bill, and I think it is a good thing that such Resolutions should be so drafted. In that respect, this Resolution is a return to the older and better practice. There was some rather bad practice in the course of the war in that respect. I am sorry I cannot
  1710
  continue the congratulatory note further on the point which the Financial Secretary raised, that is the lucidity of this Resolution. I do not think it is all that clear. I am very glad to know., after his explanation, that it is in Order to guess what is the right sort of sum to be provided for the compensation payments, and that the matter of compensation is to that extent, and I think a slightly greater, extent in Order at this point. I take the greater extent to be in Order from what the Financial Secretary and the hon. Member for East Aberdeen (Mr. Boothby) said about where the money has to come from. The point I wish to put is, that, in respect of the sums which the right hon. Gentleman was allowed to mention, and which, I suppose, therefore, I may mention, the estimates which my advisers give to me are slightly larger than his, but they agree very closely. Where he said £180 million 10 £200 million for the municipalities, I should have supposed that the upper figure was the more likely to be right. I have forgotten how much he put for the companies, but I think it was £350 million—
  The Chairman: It is true that I allowed an hon. Member to ask the question and the Financial Secretary to make a partial reply, but I cannot allow the Debate to develop into a discussion on the details of this amount. Those are matters which may be decided on the Committee stage of the Bill.
  Mr. Pickthorn: With every respect, Major Milner, I was not proposing to argue the matter, but I was supposing that as the reference to the amount had been already admitted to be in Order, and also a question of where the money was to come from had been admitted to be in Order, and as there had been extremely little explanation of any of this matter on Second Reading by either of the Ministers in charge of the Bill—and I think everybody will agree with that, and I do not think the Ministers will deny it—I had, therefore, hoped it might be in Order to refer to the particular way proposed of spending a sum of this character. I do not go into details as to the exact sum, and there is very little between me and the Treasury Bench in our guesses about that but I had hoped that it might be in Order to indicate that the method of computation suggested is a peculiarly inflationary one, because it means that upon this occasion, the Treasury is

  1711
  bound to make a 20 per cent. profit by paying off on the vesting day in scrip in denominational pounds, the number of pounds which was computed on the date of three years previously as the number of pounds which the assets were then worth. There is bound to be a 20 per cent. gain to the Treasury.
  The Chairman: I must point out that all those questions will be discussed on the Committee stage of the Bill. It is quite impossible for anyone to give an estimate on matters which are at large in the Financial Resolution, and have to be decided on the Committee stage of the Bill. There are financial provisions in Part III of the Bill, and those are matters which the Committee may or may not alter. It will depend upon how the Bill comes out of the Committee stage on what matters the sums provided for in general are to be expended.
  Mr. Bowles: On a point of Order. You have just given an important Ruling, Major Milner, on the question of the Committee's-being allowed to extend the width of the Money Resolution, so far as I understand it—
  The Chairman: I did not say a word about the Committee being allowed to extend the Financial Resolution. It is not within my power to do so. The Committee cannot go beyond the terms of the Resolution on the Order Paper which has the King's Recommendation.
  Mr. Pickthorn: I am sorry, Major Milner. I am not trying to push up to and beyond the limits of Order; I am trying to make a difficult argument on what, I think, is not a very lucid Resolution, in spite of the Financial Secretary. I assure you I was not trying to discuss the merits of these estimates. I see that that might not be in Order. But the Financial Secretary has been permitted to say that xmillions of pounds are to be expended in a particular way. I say that that is a peculiarly inflationary method. It is a method which tempts the Treasury to go on doing it again and again. They must be tempted to take this increment of 20 per cent., or more. They themselves are making a profit out of inflation which has happened in three years, and, therefore, I think that we ought to have some case put to us why a non-inflationary Treasury, represented here by the
  1712
  Financial Secretary, has approved of this method.
  The second question which I wish to put is this. The Financial Secretary to the Treasury rather strangely—I daresay quite properly, but rather strangely—may I have his attention: it is difficult to speak otherwise—the Financial Secretary devoted all his remarks to the authorisation of payment out of the Consolidated Fund for compensation. But now this Resolution authorises the payment out of the Consolidated Fund for other purposes of £700,000,000. That is a very large sum, and I think, before we come, as we may, I suppose, to the Amendment upon the Paper, it is not unreasonable to ask why so much money as that is wanted for the expansion of a business which, he has told us, he means to acquire for a sum of £550,000,000. The whole electricity industry of this country is going to cost the Government only £550,000,000; but they must now, today—not in the course of the future, but now, in the course of this short discussion—be given authority for £700,000,000, for more than the whole amount of the thing as it stands. It does seem to me, whether or not the Amendment be moved later on, that this ought to be explained and expounded to the Committee at this stage.
  Mr. Mitchison: Would the hon. Gentleman explain to a patient listener, skilled in economics, although, possibly, not in the Cambridge version, how it can be inflationary for the Treasury to pay too little?
  Mr. Henry Strauss: The point I wish to address to the Government is this. I want to be clear on the meaning of the paragraph which the right hon. Gentleman the Financial Secretary says is so plain, namely, paragraph (a), which seems to me quite needlessly complex. I want to know whether I have understood it correctly. As I understand paragraph (a), it authorises the payment of £700 million, with two additions. The additions, which make the matter very complex, are introduced, the one in line 11, by the words:
  "otherwise than for the purpose of paying compensation …"
  and the second in line 13, by the words:
  "excluding amounts outstanding."

  1713
  If I am right, and if what is authorised under paragraph (a) is £700 million, plus these two additions, would it not be simpler to say" £700 million apart from (a), stock issued for the purposes of paying compensation, and (b), the amounts outstanding in respect of moneys borrowed for redemption"? If this is the meaning, I suggest that that would be a simpler wording. It seems to me to be introducing an extraordinary complication to bring in two parallel exceptions, introducing one by the words "otherwise than for the purpose of," and the other by the words "excluding amounts outstanding in respect of." I should be glad if the Financial Secretary would say whether I have correctly understood the paragraph, and, if so, why this extraordinary complexity of verbiage has been used.
  Sir John Mellor: I wish to raise only one point, which was mentioned by the hon. Member for Flint (Mr. Birch). I want to ask the right hon. Gentleman whether the Treasury guarantee, which this Resolution proposes to authorise, may be regarded as having any more reliability than the Treasury guarantee of the stocks of one of the undertakings which is to be acquired. I am referring to the debenture stock of the North Metropolitan Power Station Company Limited, for which the Treasury guaranteed that 5 per cent. would be paid until 1957, which the stockholders are not now going to get. I want the right hon. Gentleman to say whether the guarantee, which this Resolution proposes to authorise, can be regarded as merely equivalent to the guarantee which was given in respect of this other stock.
  Mr. Glenvil Hall: The question put by the hon. Member for Sutton Coldfield (Sir J. Mellor) has been answered more than once. Furthermore, when I was in the middle of trying to answer it again, in reply to an hon. Member opposite, we were both called to Order.
  Sir J. Mellor: In my respectful submission, the right hon. Gentleman was out of Order in making reference to the L.P.T.B. stock. That is on quite a different footing. I am referring of the North Metropolitan Power Station Company, which is one of the undertakings to be acquired. Therefore, if the former matter
  1714
  was out of Order, I respectfully submit that this matter is in Order.
  Mr. Glenvil Hall: The hon. Member will know that he put a Question to the Chancellor of the Exchequer last Thursday, and that I, on behalf of my right hon. Friend, gave him the answer. I do not know how many times I have to answer this particular point from this Box.
  Sir J. Mellor: I am now asking about the guarantee given by this Resolution, which is a different question, and I should be grateful for an answer.
  Mr. Glenvil Hall: The hon. Member for the Combined English Universities (Mr. H. Strauss) asked me to explain paragraph (a) of this Resolution, and what lines 11 and 13 meant. I think it is perfectly straightforward. It does two things. It provides for guarantees by the Consolidated Fund for two main purposes. One is for compensation—that is the issue of stock by the Central Authority for payment of compensation where we do not limit the amount, because, as I have explained to the Committee, we are not quite sure what the amount should be. The second is for capital expenditure by the new central board and the area boards. Paragraph (b) does the same thing for the North of Scotland Board. In paragraph (a), the only two main purposes for which money can be raised and stock issued are capital expenditure—there is an Amendment on the Order Paper about the figure of £700 million, which the Committee will not want me to go into now—and compensation.
  The phrase to which the hon. Member for Cambridge University (Mr. Pickthorn) called attention is quite plain. It means that if money has been borrowed temporarily for the redemption of stock, that money should not be counted twice. The words are inserted for that reason. I have been told by my advisers that the phrasing is in common form. I cannot tell the Committee or the hon. Gentleman more than that.
  11.0 p.m.
  The Chairman: Does the right hon. Member for Southport (Mr. R. S. Hudson) propose to move the Amendment in his name on the Order Paper?
  Mr. R. S. HudsonOn a point of Order, Major Milner. I understood that the Debate was to elicit in-

  1715
  formation about the first part of paragraph (a) to which the Financial Secretary has replied. I assumed that as this was a specific point, you would call first on hon. Members who wished to deal with some general points on the Motion, and then we could have a discussion in this particular point.
  The Chairman: There is an Amendment on the Order Paper, and we have had the general Debate in which a good deal has been said on the subject. matter of the Amendment. I assume that the right hon. Gentleman intends to move his Amendment as, clearly, we cannot have more than one Debate on the same question.
  Mr. Hudson: I beg to move, in line 13, to leave out "seven," and to insert "four."
  The Financial Secretary, in his speech, has referred to the fact that the provision in paragraph (a) covered two specific points. One was the money necessary to pay for compensation, an unspecified sum, and the other was a specific sum of £700 million required for the capital expenditure of the new boards. In the course of the Second Reading Debate, a passing reference was made to this question. Now we are faced in this Money Resolution with the specific request to provide a sum of £700 million.
  I am moving to reduce that sum to £400 million, for two purposes. We want to give the right hon. Gentleman an opportunity of explaining to the Committee why he requires so large a sum. The Financial Secretary has already said that the cost of compensation to the companies will be £350 million, to the local authorities £200 million—a total of £550 million—and I am informed that it may be assumed that the whole of the capital outlay involved at present in the electricity industry is of the order of £800 million. Whichever figure is selected, £550 million or £800 million, it is clear that the Government are asking for provision for virtually double the sum.
  We on this side feel that the Committee is entitled to know why the Minister thinks that such a very large sum is necessary. We should like to know, in detail, how that estimate is arrived at. We should like to know what are the technical details and technical arrangements on which that sum is based. We should like to know,
  1716
  for instance, what the Minister envisages will be the number of new generating stations which are likely to be required, and which are likely, having regard to the national resources available, to be provided during next year. Further, we wish to know how it is that such a large figure is required for the development of distribution. On none of these points have we had any adequate information up to date. In order to give the right hon. Gentleman an opportunity of supplementing what he said on Second Reading on these points, I have moved this Amendment.
  Mr. Glenvil Hall: My right hon. Friend the Minister of Fuel and Power dealt with this matter when he opened the Second Reading Debate. There is little I can add to what he said. He indicated that it is expected that during the next five years a considerable sum of money will have to be paid for generating stations. I have here an estimate of the Central Electricity Board which, during the next five years, planned to spend about £250 million. On past experience, so I am informed, for every million capital expenditure on generation two millions are spent on distribution. If Members will work out that simple sum, they will see that, as my right hon. Friend said, it is expected that £200 million will be spent on new power stations, and that about £400 million will have to be spent on distribution by the area boards and the Central Authority, making a total of £600 million.
  It has been thought wise—and I hope the Committee will agree with this—to add £100 million for the standardisation of voltage, equipment and development, especially in the rural areas. All of us have suffered from the cuts which have taken place during the last month, and the Committee should remember that a great deal of leeway has to be made up. It is estimated by those competent to judge that during the next five years this need will be met and that something like £200 million will have to be spent on generating power stations. That, in turn, will mean a great deal of expenditure in the direction which I have mentioned. That being so, we see at once how the £700 million is made up for England and Scotland. As the Committee knows, a further £100 million is in the Resolution to cover the North of Scotland Hydro Electric Board, making £800 million in all. These facts have been carefully investi-

  1717
  gated, but we do not know what the trend of costs will be. Though this money is being put in the Resolution, it does not mean that it will all be spent, but this new authority should, we believe, have elbow room to expand and so give to this country what it has wanted and needed for many years—a real electricity service which will help every section of the community, industry and people alike.
  Mr. Osborne: Financial Resolutions are something of which a "new boy" generally fights shy, but I know that if I am not in Order, you, Major Milner, will quickly bring me back to Order. The Financial Secretary did mention the amount of compensation. What we have not heard, is the way in which he proposes to raise that money.
  The Chairman: The hon. Member now appears to be dealing with the question of compensation, whereas the question before the Committee is the sum of £700 million required for capital expenditure. The hon. Member must keep to the matter which is before the Committee.
  Mr. Osborne: I am much obliged to you, Major Milner, for correcting me, and now may I take up the other point? [An HON. MEMBER: "Yes, try another point."] I will and I will keep on trying until hon. Members opposite are tired. I object to the larger sum, and I support the smaller sum on these grounds—that one day that money will have to be raised in the ordinary way in the money market. Already the City of London is choked with nationalisation stock, and in two or three years' time, when nationalisation has failed, nobody will want to hold such stock. I can see under those conditions the 2½per cent. long-dated stock being down to 70 to the ruin of the banks and trade unions which hold them. The Chancellor of the Exchequer said the other night at Newcastle that he had sufficient power to ward off any financial crisis. The more we give the Government the right to borrow, the higher and higher is the amount of money going to be and the greater the burden on his shoulders, which, in turn, will increase the magnitude of his task. One day I fear that these stocks which are being created for nationalisation compensation and other purposes will be almost unsaleable. Therefore, I think that the Committee would be wiser to insist on the smaller figure than on the larger one.
  11.15 p.m.
  Lieut.-Colonel Elliot: I think that we require to scrutinise these figures a little more closely, especially in view of the explanation given by the Financial Secretary. As I understand it, he is asking for money to double the electrical equipment in this country. This is more than double and this is to cover 10 per cent. of the area, as 90 per cent. is already covered and 30 per cent. of housage, because 70 per cent. is already covered. These are enormous figures. I leave out of account the fact that the amount for the Scottish Board is to be raised from £30 million, to £100 million. I frankly do not believe it is possible to spend the money in the time.
  Mr. Glenvil Hall: I am sorry to interrupt the right hon. and gallant Gentleman, but, if they do not want the money, they will not raise it. This Resolution enables that amount to be raised if it is required.
  Lieut.-Colonel Elliot: As a former Financial Secretary I had the honour of occupying the seat which the right hon. Gentleman now occupies, and, believe me, a great violence is being done to Treasury tradition and sound accounting if you put in an amount and then say "It does not matter; if it is not needed it will not be spent." The purpose of the House of Commons is to control the Executive by means of votes of money. That is what we are doing, and that is the only way in which the House of Commons can assert its authority over the Executive. This is an attempt to ask the House of Commons to abrogate its main purpose. It is very lax budgeting of money and it is very lax budgeting of material, because material is going to be a limiting factor unless there is inflation of a runaway character, quite beyond anything that has been anticipated. It is to say we shall require double the amount of money that has equipped 70 per cent. of the housage and go per cent. of the area. That is runaway inflation if you like.
  I do not believe that the accounts have been correctly brought forward, and I do not think it is a right and duty of the House of Commons to vote on this sum for the purpose of maintaining not by control of the Executive of the day, this side or that side of the House, but by the whole House of Commons. The

  1719
  Chairman of the Committee is the officer of the House who sits as guardian of the rights of the House over money. We get the Speaker out of the Chair, so that he will not tell the King that possibly we have been refusing him money; and then we really get down to the question of the accurate budgeting. That is why we have a Financial Secretary of the Treasury, and that is what he is paid for. It is not good enough for the Financial Secretary to come and say "Give me as much money as the whole of the rest of the industry has been able to spend in the whole of the time electricity has been in existence, since Evelyn rubbed a piece of amber with a piece of silk, and produced a spark in the reign of Charles II."
  Mr. Glenvil Hall: I know the right hon. and gallant Gentleman once occupied the position I now have the honour to occupy, but I think he is forgetting that this will enable the Central Authority, not the Government, to raise the money.
  Lieut.-Colonel Elliot: But this is the money of the House of Commons; if we part with it, we part with control. He who holds the purse, holds power. That was rubbed into me when I was Financial Secretary to the Treasury, and it is indeed an axiom and a cardinal point of the British Constitution. It is not good enough to say that if we give him this money, he will give it to somebody else. That is all the more reason for not letting him have the amount. I still say, and I am in no way desiring to delay or hold up the business of the House, that to ask for these enormous sums on these shadowy and sketchy estimates, is to ask for something which the Financial Secretary has no right to ask and the House of Commons has no right to give, and we will divide upon it without any hesitation.
  The Minister of Fuel and Power (Mr. Shinwell): The Opposition have a perfect right to ask for information on this important matter, but let us try to ascertain the facts and see the matter in its proper perspective. First of all, as the right hon. and gallant Gentleman is aware the private companies themselves gave an assurance to the National Farmers' Union which, in effect, meant they intended to spend £150 million in the next few years. That is a very large sum, and that was the assurance given by the private under-
  1720
  takings. Well, but then, as everybody is aware, the private undertakings are a minority in the electricity supply industry. We have the huge municipal undertakings which have an elaborate programme, so that we can see at once that the combined programme of the private and municipal undertakings would amount to a very large sum indeed. The Central Electricity Board, which is responsible for generating electricity on the grid, has prepared this programme to which my hon. Friend the Financial Secretary has just referred. It is a vast programme, amounting to £256 millions in the next five years or so. But it has to be remembered that that is for generating purposes alone. As everybody associated with the electricity supply industry is aware, the expenditure of power stations on the gigantic plant which is required in these stations is very great and, moreover, it becomes more expensive every day. That is a fact which cannot be ignored. If we are to accept the estimate of the Central Electricity Board—and we must rely on the facts given us by those who are experts—if we are to accept this estimate of £256 million for additional generating capacity during the next five years then, equally, we must have cognisance of the vast sums required for the distribution network, without which the generating plant is incomplete. As we are advised from the findings made, which are well known to the department over which I preside, it requires twice the amount, approximately, to provide a distribution net as it does in the case of generating capacity. If one remembers that, then clearly gigantic sums are involved.
  Some hon. Members have asked if it will be possible to spend this amount. We have been told of the North of Scotland Hydro-Electric Board. I would state that it has been found impossible to proceed with the programme, even in that limited area, on the amount which has been specified, and we have had to go forward and ask for this additional sum. If we find ourselves confronted with physical difficulties which prevent the North of Scotland Hydro-Electric Board, and, indeed, the rest of the country, from proceeding with these generating schemes—to meet not necessarily nationalisation projects, but the ordinary requirements of the country in respect of electricity supply—then we require these sums. As I pointed out on the Second Reading of the Bill, all this depends on the physical

  1721
  resources. The Central Board, and the area boards must have elbow room, and, provided that the physical resources are available, then we must proceed with the expansion programme.
  I should like to make it quite clear that there is nothing abnormal about this. Irrespective of any nationalisation scheme of the character with which we are concerned to-night, expansion would have had to be proceeded with; all we are doing is to follow the normal procedure in expansion. I really do not think that there is any quarrel between us. Before we talked of nationalisation of the electricity industry, right hon. and hon. Members opposite wanted expansion of electricity supply, and, therefore, it seems that this would be necessary. Several hon. Members opposite have said that it is fully agreed that expansion had to take place. I would just like to add this on the subject of the Financial Resolution, that I always gathered, and it has always been my experience in the House, that hon. Members on all sides objected to a Financial Resolution which was narrowly drawn, because it inhibited discussion in the Committee stage of the Bill. I myself have participated in protests on various occasions relating to this matter. But here is a Financial Resolution very widely drawn. Therefore there is no inhibition of discussion in the Committee stage, and, no doubt, any question fundamental to electricity supplies can be raised in the larger arena of discussion which will then be available.
  Mr. John Foster: No Member of this Committee, Major Milner, would quarrel with the statement that this is an important scheme of electrification. But what they would quarrel with is, the estimate of the amount involved. The estimate of the Minister and the Financial Secretary has been founded mainly on the figure, £256,000,000, which has been given as the estimate of the Central Electricity Board of what they were going to spend for generation, and this extra amount has been justified by an entirely arbitrary formula. I say "arbitrary," because it is not applied to the same conditions. The reason that the cost of the distribution was in the ratio of two to one—and I accept that figure for the moment given by the Minister and the Financial Secretary—was that while that expansion was going on, more houses were being connected, and there was a
  1722
  vista of more connections to be made. A large proportion of the expenditure was because the distribution network, as the Minister calls it, was being put into what may be called virgin soil. But now the bulk of the country is connected, and the main distribution work is done. An increase in the generation of power will not mean a proportionate increase in the distribution network. This is the fallacy, if I may say so, of the Minister and the Financial Secretary.
  The only other point I would like to bring to the attention of the Committee is, that the Minister has been sweetly reasonable about the wideness of the Financial Resolution. He has already been congratulated upon that by the senior Burgess for Cambridge University (Mr. Pickthorn). But it will not be possible, I believe, to discuss in Committee upstairs Whether this sum of £700 million can be reduced or not. This is the only occasion when this subject can be discussed. I do not think it, lies in the Minister's mouth to say, "I have granted you a wide Resolution. Therefore, you cannot discuss this." I think that in a Committee of the whole House, and not in the Committee upstairs, I should draw attention to this point. The Committee is entitled to discuss an important question like this.
  There is another thing I should like to mention. It is that the real reason why this large sum is taken is the one which my right hon. Friend stated a few minutes ago, namely, that inflation is coming. The Financial Secretary to the Treasury has said that he did not know what prices would be in the future. They were always rising, and he regretted that it was so. I regret very much that a Socialist Government have so little confidence in their power to stop inflation, that they have to make allowance for it in the sum devoted to the cost of producing this extra generation and distribution of electricity. I am afraid that the Chancellor of the Exchequer is behind this—again in a financial fog. He is like the Eddystone Lighthouse, a lot of fog and very little light.
  11.30 p.m.
  Mr. I. J. Pitman: We are discussing an Amendment to reduce this sum of £700 million to £400 million. It seems to me that the Minister himself has produced the strongest argument for such a

  1723
  reduction, because he claimed that the companies and the municipalities will require that sum of money in expenditure for expansion during the future; but he is making a major error of confusion, because he is assuming that it must be new money. He is overlooking three other sources from which both municipalities and companies would find the money for such expansion. There are, as I say, three sources. The first is undistributed profits, the second is reserves, and the third is a large part of the depreciation. If, as he claimed, he is making hi9 calculation on the supposition that because £700 million is required, it all has to be found out of new money, then from his own words is deducible the fact that he has overestimated the requirement of new money. That is all we are saying on this side of the Committee, that he has grossly overestimated this. We also contend that it is not in any way a narrowing of the Resolution. We thank him for the broad terms of this Resolution. All we are seeking to do is to reduce that figure from £700 million to £400 million, and thereby to save money to the taxpayers.
  Mr. Mikardo: I will take only two minutes to inquire on what basis hon. and right hon. Gentlemen opposite work out their arithmetic. During the course of the Debate, we have had three pieces of arithmetic offered from the Benches opposite, only one of which seemed to me to hold together at all. In the first place, I cannot see on what the right hon. and gallant Gentleman the Member for the Scottish Universities (Lieut.-Colonel Elliot) bases his argument that the proposal we are here discussing is a proposal to double the capital of the industry. If we seek to find what is the present capital of the industry, if we begin by taking the figure given by the right hon. Gentleman the Member for Southport (Mr. R. S. Hudson)—I am sure no hon. Member opposite will quarrel with his authority in the electricity industry—then the present value is £800 million. To this there needs to be added—as any accountant would add, as a part of the capital value—existing commitments of £256 million, which makes the present capital value of the industry £1,056 million. To this it is proposed to add a further £444 million, namely, the difference between
  1724
  £256 million and £700 million. According to my arithmetic—but of course, I did not go to any university—that makes an increase of 42 per cent.
  The second piece of queer arithmetic which we had came from the hon. Member for Northwich (Mr. J. Foster), who argued that we were still sticking in this amount of money to the ratio of two to one of distribution to generating costs, but if he will look at the figures, he will see that, if we take off the £100 million specifically devoted to the Scottish project, which leaves £650 million, the ratio of the amounts allowed for distribution to generation is the figure of £344 million to £256 million, which is not two to one, but 1.3 to one; so that, in point of fact, my right hon. Friend has met the objection of the hon. Gentleman and brought the two to one figure to 1.3 to one. The third piece of arithmetic, however, was quite unexceptionable. As the hon. Member for Bath (Mr. Pitman) pointed out, with complete accuracy, the difference between £700 million and £400 million is £300 million.
  Mr. Charles Williams: I congratulate the hon. Member for Reading (Mr. Mikardo) on his arithmetic. I feel sure that his figures were as clear to every other hon. Member as they were to me. I do not wish to be really controversial tonight but I should like to comment on the speeches made by the Minister of Fuel and Power and the Financial Secretary. I am being driven by every speech from the Front Bench into a greater determination to vote for the reduced sum. In the first place, the Minister just now gave one of the greatest of justifications for limiting the money, and that was, that we are spending this money in a time of rapidly rising, prices. That being the case, surely we do not want to put such a sum of money at the disposal of this Board as would encourage them in any extravagance; and, purely from the point of view of the taxpayers, the Minister Has, by his arguments, compelled a vote against him.
  The Financial Secretary used the words "elbow room." Can anyone remember, or can anyone find a case in which the Treasury has come to this Committee of the House of Commons and said the reason why we must expend money, and give an almost indefinite sum, is to give someone elbow room? I cannot imagine

  1725
  any more mad or imbecile reason for asking the taxpayers for this sum of money—simply to give elbow room. I can only say as regards the finances of this country, that the Financial Secretary to the Treasury, become, day by day, more like a celebrated figure in "Alice in Wonderland."
  Mr. Pickthorn: I am sorry that my expository powers were not sufficient to convince everybody that a method of compensation which, while inflation is going on, might tempt the Treasury to inflation, is unsound. But on this point with which we are now dealing, I really cannot suppose anybody wants it explained that what we are doing is highly inflationary. The Minister talks about needing elbow room—elbow room for a sort of daddy-long-legs seen through a convex glass. The Financial Secretary to the Treasury tells us that prices are rising, and that we cannot tell how far they will rise. Then how did they fix this sum? Why this sum, and no other? The Financial Secretary or the Minister must know, and J think they owe it to the Committee to tell us one of two things, either the cost
  of putting up generating stations now, as compared with 1938 and as compared with, say, 1950—because unless they have some such estimate their figures are per fectly meaningless—or, if they cannot tell us this, to let us have the thing the other way round. All this is based upon generating capacity which, they say, the Central Electricity Board tell them to be necessary. Very well then, what was that generating capacity? For how many kilowatts or horsepower, or however they like to reckon it, is this £700,000,000 to be expected to buy extra generation? If we know that, we can relate that to the pound now, and to the pound as it was, and to the pound as we guess it is going to be; and to 700,000,000 of such pounds. But unless we know that, the whole thing is at large: they are doubling, squaring and trebling the number in a sealed envelope. And unless they tell us, the Committee ought to resist this Resolution.
  Question put, "That 'seven' stand part of the Question."
  The Committee divided: Ayes, 287; Noes, 122.

  Division No. 70]

  AYES

  [11.38 p.m.

  Adams, Richard (Balham)

  Coldrick, W.

  Follick, M.

  Adams, W. T. (Hammersmith, South)

  Collick, P.

  Foot, M. M.

  Alexander, Rt. Hon. A. V.

  Collindridge, F.

  Forman, J. C.

  Allen, A: C. (Bosworth)

  Collins, V. J.

  Foster, W. (Wigan)

  Allen, Scholefield (Crewe)

  Colman, Miss G. M.

  Fraser, T. (Hamilton)

  Anderson, A. (Motherwell)

  Comyns, Dr. L.

  Freeman, Peter (Newport)

  Anderson, F. (Whitehaven)

  Cook, T. F.

  Gaitskell, H. T. N.

  Attewell, H. C.

  Cooper, Wing-Comdr, G.

  Gallacher, W.

  Austin, H. Lewis

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

  Ganley, Mrs. C. S.

  Awbery, S. S.

  Corlett, Dr. J.

  Gibbins, J.

  Ayrton Gould, Mrs. B

  Crawley, A.

  Gibson, C. W.

  Bacon, Miss A.

  Crossman, R. H. S

  Gilzean, A.

  Baird, J.

  Daines, P.

  Glanville, J. E. (Consett)

  Balfour, A.

  Dalton, Rt. Hon. H

  Goodrich, H. E.

  Barnes, Rt. Hon. A. J

  Davies, Clement (Montgomery)

  Greenwood, Rt. Hon. A. (Wakefield)

  Barstow, P. G.

  Davies, Edward (Burslem)

  Greenwood, A. W. J. (Heywood)

  Barton, C.

  Davies, Ernest (Enfield)

  Grenfell, D. R.

  Battley, J. R.

  Davies, Harold (Look)

  Grierson, E.

  Bechervaise, A E.

  Davies, Hadyn (St. Panoras, S.W.)

  Griffiths, D. (Rother Valley)

  Belcher, J. W.

  Davies, S. O. (Merthyr)

  Griffiths, W. D. (Moss Side)

  Bellinger, Rt. Hon. F. J.

  Deer, G.

  Gunter, R. J.

  Benson, G.

  Delargy, Captain H. J.

  Guy, W. H.

  Bing, G. H.C.

  Diamond, J.

  Haire, John E. (Wycombe)

  Blackburn, A. R.

  Dobbie, W.

  Hall, W. G.

  Blenkinsop, A.

  Dodds, N. N.

  Hamilton, Lieut.-Col. R.

  Blyton, W. R.

  Donovan, T.

  Hannan, W. (Maryhill)

  Boardman, H.

  Driberg, T. E. N.

  Hardman, D. R.

  Bowden, Flg.-Offr. H. W.

  Dugdale, J. (W. Bromwich)

  Hardy, E. A.

  Bowles, F. G. (Nuneaton)

  Durbin, E. F. M.

  Harrison, J.

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

  Dye, S.

  Hastings, Dr. Somerville

  Braddock, T. (Mitcham)

  Ede, Rt. Hon. J. C.

  Henderson, Joseph (Ardwick)

  Bramall, Major E. A.

  Edelman, M.

  Herbison, Miss M.

  Brown, George (Belper)

  Edwards, John (Blackburn)

  Hewitson, Capt. M.

  Brown, T. J. (Ince)

  Edwards, N. (Caerphilly)

  Holman, P.

  Buchanan, G.

  Edwards, W. J. (Whitechapel)

  Holmes, H. E. (Hemsworth)

  Burke, W. A.

  Evans, John (Ogmoro)

  House, G.

  Butler, H. W. (Hackney, S.)

  Evans, S. N. (Wednesbury)

  Hoy, J.

  Byers, Frank

  Ewart, R.

  Hubbard, T.

  Carmichaol, James

  Fairhurst, F.

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

  Castle, Mrs. B. A

  Farthing, W. J.

  Hughes, Hector (Aberdeen, N.)

  Champion, A. J.

  Field, Capt. W. J.

  Hughes, H. D. (W'lverh'pton, W.)

  Cocks, F. S

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

  Hutchinson, H. L. (Rusholme)

  Hynd, H. (Hackney, C.)

  Morley, R.

  Skeffington-Lodge, T. C.

  Irving, W. J.

  Mort, D. L.

  Smith, C. (Colchester)

  Janner, B.

  Moyle, A.

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

  Jay, D. P. T.

  Murray, J. D

  Snow, Capt J. W.

  Jeger, G. (Winchester)

  Nally, W.

  Solley, L. J.

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

  Neal, H. (Claycross)

  Soskice, Maj. Sir F.

  Jones, D. T. (Hartlepools)

  Nicholls, H R. (Stratford)

  Sparks, J. A.

  Jones, Elwyn (Plaistow)

  Noel-Baker, Capt. F. E. (Brentford)

  Stamford, W.

  Jones, P. Asterley (Hitchin)

  Noel-Buxton, Lady

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

  Keenan, W

  O'Brien, T.

  Stross, Dr. B.

  Kenyon, C.

  Oliver, G. H.

  Stubbs, A. E.

  Key, C. W.

  Orbach, M.

  Symonds, A. L.

  King, E. M.

  Palmer, A. M. F.

  Taylor, H. B. (Mansfield)

  Kinghorn, Sqn.-Ldr. E.

  Pargiter, G. A.

  Taylor, R. J. (Morpeth)

  Kinley, J.

  Parker, J.

  Taylor, Dr. S. (Barnet)

  Kirby, B. V.

  Parkin, B. T.

  Thomas, I. O (Wrekin)

  Kirkwood, D.

  Paton, Mrs. F. (Rushcliffe)

  Thorneycroft, Harry (Clayton)

  Lang, G.

  Paton, J. (Norwich)

  Thurtle, E.

  Lavers, S.

  Pearson, A

  Tiffany, S.

  Lee, F. (Hulme)

  Peart, Capt. T. F.

  Titterington, M. F.

  Lee, Miss J. (Cannock)

  Platts-Mills, J. F. F.

  Tolley, L.

  Leonard, W.

  Poole, Major Cecil (Lichfield)

  Turner-Samuels, M.

  Lever, N. H.

  Porter, E. (Warrington)

  Ungoed-Thomas, L.

  Levy, B. W.

  Porter, G. (Leeds)

  Usborne, Henry

  Lewis, J. (Bolton)

  Price, M. Philips

  Vernon, Maj. W. F.

  Lewis, T. (Southampton)

  Proctor, W. T.

  Wadsworth, G.

  Lindgren, G. S.

  Pursey, Cmdr. H.

  Walkden, E.

  Lipton, Lt.-Col. M.

  Randall, H. E.

  Wallace, G. D. (Chislehurst)

  Logan, D. G.

  Ranger, J.

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

  Longdan, F.

  Rankin, J.

  Warbey, W. N.

  Lyne, A. W.

  Rees-Williams, D. R.

  Watson, W. M.

  McAllister, G.

  Reid, T. (Swindon)

  Weitzman, D.

  MoGhee, H. G.

  Rhodes, H.

  Wells, W. T. (Walsall)

  Mack, J. D.

  Richards, R.

  West, D. G.

  McKay, J. (Wallsend)

  Ridealgh, Mrs. M.

  Wigg, Col. G. E.

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

  Robens, A.

  Wilcock, Group-Capt. C. A. B.

  McKinlay, A. S.

  Roberts, Emrys (Merioneth)

  Wilkes, L.

  McLeavy, F.

  Roberts, Goronwy (Caernarvonshire)

  Wilkins, W. A.

  MacMillan, M. K. (Western Isles)

  Robertson, J. J. (Berwick)

  Willey, D. G. (Cleveland)

  Mallalieu, J. P. W.

  Rogers, G. H. R.

  Williams, W. R. (Heston)

  Mann, Mrs. J.

  Ross, William (Kilmarnock)

  Williamson, T

  Manning, C. (Camberwell, N.)

  Royle, C.

  Willis, E

  Manning, Mrs. L. (Epping)

  Sargood, R.

  Wills, Mrs. E. A

  Marshall, F. (Brightside)

  Scollan, T.

  Wilson, J. H.

  Mathers, G.

  Scott-Elliot, W.

  Wise, Major F. J.

  Mayhew, C. P.

  Shackleton, Wing.-Cdr. E. A. A

  Woodburn, A.

  Medland, H. M.

  Sharp, Granville

  Woods, G S

  Mellish, R. J.

  Shawcross, C. N. (Widnes)

  Wyatt, W.

  Middleton, Mrs. L

  Shinwell, Rt Hon. E.

  Yates, V. F.

  Mikardo, Ian

  Shurmer, P.

  Younger, Hon. Kenneth

  Millington, Wing-Comdr, E. R.

  Silkin, Rt. Hon. L.

  Mitchison, Maj. G. R

  Silverman, J. (Erdington)

  Zilliacus K.

  Monslow, W.

  Silverman, S. S. (Nelson)

  Moody, A. S.

  Simmons, C. J.

  TELLERS FOR THE AYES

  Morgan, Dr. H. B

  Skeffington, A. M.

  Mr. Michael Stewart and

  Mr. Popplewell.

  NOES.

  Aitken, Hon. Max

  Duthie, W. S.

  Joynson-Hicks, Lt.-Cdr. Hon. L. W

  Amory, D. Heathcoat

  Eden, Rt. Hon. A.

  Kingsmill, Lt.-Col. W. H.

  Baldwin, A. E.

  Elliot, Rt. Hon. Walter

  Lambert, Hon. G

  Barlow, Sir J.

  Fletcher, W. (Bury)

  Langford-Holt, J.

  Beechman, N. A.

  Foster, J. G. (Northwich)

  Legge-Bourke, Maj. E. A. H

  Birch, Nigel

  Fraser, Sir I. (Lonsdale)

  Lennox-Boyd, A. T

  Boothby, R.

  Fyfe, Rt. Hon. Sir D. P. M.

  Linstead, H. N.

  Bossom, A. C.

  Gage, C.

  MeCallum, Maj. D.

  Boyd-Carpenter, J. A.

  Galbraith, Cmdr. T. D

  Mackeson, Brig. H. R.

  Braithwaite, Lt.-Comdr. J. G.

  Grant, Lady

  McKie, J. H. (Galloway)

  Buchan-Hepburn, P. G. T.

  Gridley, Sir A.

  Maclay, Hon. J. S.

  Carson, E.

  Grimston, R. V.

  Macpherson, Maj. N. (Dumfries)

  Challen, C.

  Hare, Hon. J. H. (Woodbridge)

  Maitland, Comdr. J. W.

  Channon, H.

  Harvey, Air-Comdre. A. V.

  Manningham-Buller, R. E.

  Clifton-Brown, Lt.-Col. G.

  Haughton, S G.

  Marlowe, A A. H.

  Cole, T. L.

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

  Marsden, Capt. A.

  Cooper-Key, E. M.

  Henderson, John (Cathcart)

  Marshall, D. (Bodmin)

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

  Hinchingbrooke, Viscount

  Marshall, S. H. (Sutton)

  Crosthwaite-Eyre, Col. O. E.

  Hogg, Hon. Q.

  Maude, J. C.

  Crowder, Capt. John E.

  Hollis, M. C.

  Medlicott, F.

  Cuthbert, W. N.

  Hope, Lord J.

  Mellor, Sir J.

  De la Bère, R.

  Howard, Hon. A.

  Molson, A. H. E.

  Digby, S. W.

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

  Morrison, Maj. J, G. (Salisbury)

  Dodds-Parker, A. D.

  Hurd, A.

  Mullan, Lt. C. H.

  Drayson, G. B.

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

  Neven-Spence, Sir B.

  Drewe, C.

  Jarvis, Sir J.

  Nicholson, G.

  Dugdale, Maj. Sir T. (Richmond)

  Jennings, R.

  Nield, B. (Chester)

  1728

  1729

  Noble, Comdr. A. H. P

  Robinson, Wing-Comdr. Roland

  Turton, R. H.

  Nutting, Anthony

  Ropner, Col. L.

  Vane, W. M. F.

  Orr-Ewing, I. L.

  Sanderson, Sir F.

  Walker-Smith, D.

  Osborne, C.

  Shephard, S. (Newark)

  Ward, Hon. G. R.

  Peto, Brig. C. H. M

  Shepherd, W. S. (Bucklow)

  Watt, Sir G. S. Harvie

  Pickthorn, K.

  Smith, E. P. (Ashford)

  Whealley, Colonel M. J.

  Pitman, I. J.

  Spearman, A. C. M.

  Williams, C. (Torquay)

  Poole, O. B. S. (Oswestry)

  Stoddart-Scott, Col. M.

  Williams, Gerald (Tonbridge)

  Price-White, Lt.-Col. D.

  Strauss, H. G. (English Universities)

  Willink, Rt. Hon. H. U.

  Prior-Palmer, Brig. O

  Stuart, Rt. Hon. J. (Moray)

  Willoughby de Eresby, Lord

  Raikes, H. V.

  Taylor, C. S. (Eastbourne)

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

  Ramsay, Mai, S.

  Thomas, J. P. L. (Hereford)

  Rayner, Brig. R.

  Thornton-Kemsley, C. N.

  TELLERS FOR THE NOES:

  Roberts, H. (Handsworth)

  Thorp, Lt.-Col. R. A. F.

  Commander Agnew and Major Conant.

  Roberts, Maj. P. G. (Ecclesall)

  Touche, G. C.

  Question put, and agreed to.

  Main Question again proposed.
  Mr. John Foster: I want to go back to the point which my hon. and learned Friend the Member for the Combined English Universities (Mr. H. Strauss) put to the Financial Secretary. I think in the interests of good drafting, paragraph (a)could have been more simply worded. I think, with great respect to the Financial Secretary to the Treasury, that is proved by the fact that the Financial Secretary, when he explained it, explained it wrongly. If he looks in HANSARD tomorrow at what he said he will see that he said the paragraph (a)did two things. It provided £700 million for the development of industry and it also provided an unspecified amount for compensation. He then added that there was a "common form" of phrasing to cope with money which had been temporarily borrowed. As a matter of fact, it is more than that. If the Financial Secretary examines the wording of paragraph (a)he will find that it is also to pay for any amounts outstanding in respect of stock that has been issued, as well as money temporarily borrowed. I think he corrected himself, but he did say money temporarily borrowed.
  Mr. Glenvil Hall: I dealt with that. As a matter of fact, it is the other way round. I knew that it covered both, but I raid, by way of example, that it covered redemption of stock. What I did not say was that it covered temporary borrowing. One cannot do everything in one speech.
  Mr. Foster: With great respect, the only thing that the Financial Secretary did say was that it covered temporary borrowing. I submit that the paragraph would have been more simply drafted if it had said that it authorised the payment of £700 million plus compensation, plus money to redeem or refund stock or money borrowed temporarily. There
  1730
  have been discussions in the past as to what a Money Resolution means, and the fact that the Financial Secretary says he said one thing when, in fact, he said another shows the confusion which arises. I think we should all be grateful if Money Resolutions in future were more precisely drawn.
  Lieut.-Colonel Elliot: We have no intention of dividing the Committee against the Money Resolution, because we are in favour of a reasonable expenditure of money on electrical extension. We were making our protest against what the Financial Secretary called giving elbow room, which is the last thing that should be given to the Executive by the House of Commons.
  Mr. Pitman: There is one point submitted by my hon. Friend the Member for Sutton Coldfield (Sir J. Mellor) which the Financial Secretary either did not understand or else in regard to which he was not being fair. In any case he slid off the issue completely. My hon. Friend was referring to line 7, and if the Financial Secretary will look at the Resolution he will see that it says:
  "…any guarantee by the Treasury of the principal of and interest on stock. …"
  He was not primarily referring to the North Metropolitan Power Company. What he did ask was, how valid was that guarantee in line 7? Is the Financial Secretary prepared without any prevarication, to say that the Government intend really to stand by that guarantee, because the stockholders of the North Metropolitan Power Company, at least, consider that a Government guarantee has not been met? It is not a question of whether they are right or wrong, or what the Financial Secretary says; it is the question of the new guarantee and the new stockholders. It is essential in their interests that there should be a clear statement that the Government mean

  1731
  what the public think they ought to mean. My hon. Friend asked the Financial Secretary to give that guarantee and the Committee is entitled to know that the word "guarantee" does mean what it is accepted by this Committee as meaning.
  Sir J. Mellor: Now that the question has been asked by three hon. Members from this side of the House, are we not entitled to an answer from the Financial Secretary to the Treasury?
  Resolution to be reported Tomorrow.
  Committee to sit again Tomorrow.

  ELECTRICITY [MONEY]

    SUNDAY CINEMATOGRAPH ENTERTAINMENTS
    Resolved:
    "That the Order made by the Secretary of State for the Home Department, extending Section 1 of the Sunday Entertainments Act, 1932, to the Urban District of Whit by, a copy of which Order was presented on 31st January, be approved."
    Resolved:
    "That the Order made by the Secretary of State for the Home Department, extending Section 1 of the Sunday Entertainments Act, 1932, to the Urban District of Oakham, a copy of which Order was presented on 31st January, be approved."
    Resolved:
    "That the Order made by the Secretary of State for the Home Department, extending Section 1 of the Sunday Entertainments Act, 1932, to the Urban District of Bridgend, a copy of which Order was presented on 31st January, be approved."
    Resolved:
    "That the Order made by the Secretary of State for the Home Department, extending Section 1 of the Sunday Entertainments Act, 1932, to the Rural District of Eton, a copy of which Order was presented on 31st January, be approved."—[Mr. Oliver."]

    TIMBER SUPPLIES
    Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Snow.]
    11.57 p.m.
    Mr. John E. Haire: I apologise to the House for rising at this late hour. I do so only because the matter which I wish to raise is one of extreme urgency. It is, in fact, the re-
    1732
    grettable situation which has arisen in connection with the timber supplies of this country. The situation is so serious that, generally speaking, it endangers our housing programme for the next year, and more particularly it threatens widespread unemployment and under employment in my own constituency and elsewhere in the furniture industry.
    Let me first deal briefly with the soft wood position. My right hon. Friend the Minister of Health a few days ago issued a most admirable housing programme for this year, 1947. By the end of the year he hopes to build 300,000 new permanent and temporary houses, but unless the present bottleneck in timber is overcome the realisation of those 300,000 houses will not take place. It is estimated by the trade that we shall be something like 147,000 standards of soft wood short next year, which would normally go into building. At the present rate of 1.6 standards per house, we shall be something like 100,000 short of our programme for next year. Further, there are no accumulated stocks or very few stocks of soft wood in this country. Before the war we had something like two million standard imports with one million in reserve. Last year we had approximately only 800,000 standards for all purposes, building, railways, shipbuilding and so on. So, in fact, we are living from hand to mouth and unless we can maintain a steady flow of imports, up to the programme rate of house building, that programme must run down.
    Our soft wood supplies before the war produce some rather interesting figures, especially when we compare them with the present imports. Our main suppliers were Finland, Canada, Sweden, and Russia. Finland has dropped to one-quarter of her 1938 supplies to us, Sweden has dropped to one-half, but the most astonishing drop of all is that of Russia, which has dropped to one-fortieth of her 1938 figures. Recently Russia agreed to send us 25,000 standards of soft woods, but up to November last only some 10,000 standards had arrived in this country owing to the normal seasonal freeze-up. Canada, fortunately, has almost regained her 1938 position, and exported to us last year some 360,000 standards. Poland, who supplied us with 100,000 standards in 1938, sent us none last year, and we had none from Latvia,

    1733
    from whom we had 62,000 standards in 1938.
    In all, our imports of soft woods are down by over one million standards, and are now only one-third of the 1938 imports. This shortage of soft woods for building purposes affects our housing drive today as seriously as the bottle neck in bricks last year. I suggest to my hon. Friend the Parliamentary Secretary that the same urgency ought to be adopted to cure it.
    When we turn to the hard wood position we find it is almost worse, and the same applies to plywood and veneer. This is what vitally affects the staple industry in my constituency—the furniture trade. As the House knows, the present demand for furniture is enormous. Even if we had enough second-hand furniture in this country the present inflated prices make it impossible for most people to buy it. Yet, because of the present shortage of hard woods, this essential furniture industry which employs 120,000 is seriously threatened with unemployment. Some authorities in the industry estimate this will be as high as 15 per cent. within the next month or two. For most workers in the industry—apart from those who will be unemployed—the nationally agreed 44-hour week will probably be reduced to 38 hours, or perhaps 35 hours. The effect on furniture production is going to be startling, I venture to suggest. One furniture factory in my constituency which is designated to turn out 150 dining room suites a week is even now only able to produce some 25 to 30 suites a week. It is highly regrettable that our production of utility furniture, which steadily increased during the past year, has now had this set-back.
    The United States of America was our main supply of hard woods before the war, but now we are down to one-tenth of what she gave us in 1938. Russia in 1929 supplied us with £10 million worth of hard wood, but none at all now. Poland, Yugoslavia, and Japan all sent us considerable quantities, and now send none. We know the obvious reasons for this—their own domestic requirements, transport difficulties, and barter problems—but it is impossible to resist the conclusion that political reasons are largely responsible for our failure to recover our sources of supply in Central and Eastern
    1734
    Europe. I believe that the timber is there. I have the evidence which was provided for me during a recent tour I made in Central and South Eastern Europe. I believe there is timber in Sweden which we can get, and not just for coal. I had evidence recently of a Midlands manufacturer who went there in company with an Eire timber merchant. The Eire timber merchant bought a considerable quantity, but, unfortunately, the English manufacturer had an embargo placed upon him since he had no mandate to buy. I understand that there is a considerable amount of African timber going into Denmark. I have a picture from a Danish magazine which shows a number of the kinds of wood which have recently arrived from Africa and South America, and the letterpress says that Danish manufacturers have lacked these during the war. I believe that oak logs can be had in France, and I have a letter from one of my constituents saying he knows of a firm in France which has found large supplies of first-clas oak. There were, I understand, recent deliveries of 20,000 tons of oak from Russia to Belgium, against the last barter of steel.
    It is true that the Timber Control have representatives in foreign countries—I believe in as many as forty—but the fact is that they have very largely failed to provide the timber, and that is the grievance of the furniture industry in this country. I believe that a member of the Timber Control has recently gone to Canada with instructions to find timber, and that he has said that "the sky is the limit." Well, all I would say is that in spite of his gambling spirit, I wonder if he will get the timber. Fundamentally, the solution of this problem has lain with Timber Control. In 1943, the Furniture Industry Postwar Reconstruction Committee issued a warning about the possible postwar situation, and in 1944 they referred again to the grave anxiety they felt with regard to the re-availability of timber and other raw materials on which depended the whole future of the industry, the re-employment of labour, and the satisfaction of the urgent needs of the public.
    Last September it was made clear by the report of the working party concerned with furniture and the future of the in-

    1735
    dustry, that that future was based on the supply position. What have Timber Control done about this? Last September they cut the allocation to the furniture industry by 25 per cent. Before that, in July, they had the waste allowance withdrawn, and that amounted to about 20 per cent. There was a cut of 20 per cent. in hard wood, and 40 per cent. in soft wood last December, so that it is true to say that there has been a cut of about 60 per cent. in the last six months and on top of this there is delay in honouring the certificates of allocation. I do think it is true that these cuts in such rapid succession give the impression that the policy of Timber Control is makeshift and muddle-headed.
    The President of the Board of Trade, and I would say his Parliamentary Secretary, should ask themselves "Are we being properly served by Timber Control as at present constituted?" I would ask how can control consisting of timber merchants and brokers—people representative entirely of private enterprise—be a satisfactory arrangement for this Government? This is a private monopoly which the Government have sponsored. No consumer interests are represented, whether they be manufacturer, builder, or employee. All the timber brought into this country from abroad by Government representatives goes through the hands of Timber Control, who apparently enjoy a rake-off. Recently, under pressure, Timber Control agreed that private manufacturers and others could go abroad and see for themselves if they could find any timber. Any timber found would rightly have to go through Timber Control channels, but only two per cent. would be allowed on such purchases, and the rest of the profit would go to Timber Control.
    While the present scarcity continues, it is right that a Government control should continue. But must it be a set-up such as the present? Let us, if necessary, have a control of civil servants, freed from the taint of personal motives, with an advisory committee representative of all parties concerned in timber. I understand that this was promised by the President of the Board of Trade in November last, but has not yet been set up. If we cannot reconstitute the Timber Control we might do even better to consider sending a mis-
    1736
    sion to Russia and the Eastern European countries to investigate the supply position. Also, will the hon. Gentleman indicate any results of the Colonial survey of timber at present being carried out, and will he consider the present policy regarding furniture imports, which I understand are restricted to £6,000,000. This must to some extent prevent foreign suppliers from sending us their timber. Will he give an assurance that this timber crisis is being treated as a matter of grave urgency, because, without timber we cannot build houses, and without furniture we cannot make homes.
    12.12 a.m.
    Mr. Edelman: The House will be grateful to my hon. Friend for bringing before it in so cogent a manner, the grave difficulties in which both our building programme and also our furniture programme are placed because of an impending timber shortage. Recently the Minister of Health reduced the amount of timber required for a house from two standards, which was the normal amount before the war, to the present level of 1.6 standards. Despite that fact, we are still faced with grave difficulties in providing the necessary soft woods, in particular, for our housing programme. Consequently, we have to consider whether at the present time we are doing everything possible to obtain, from all available sources, the maximum amount of timber. I cannot help feeling that largely through the intransigence of the Russians, we have not Deen able to obtain the soft woods which we normally consider to be the staple of our programme from the Soviet Union, and from Eastern Europe and North-West Europe. In the past, we derived the great bulk of our soft woods from sources which are now controlled by the Soviet Union. I think we made a small contract for about 25,000 standards of timber, but I believe that the bulk of that quantity has not been shipped to us.
    Therefore I would like to ask the Parliamentary Secretary specifically whether he has made any approach to the Soviet Union for shipments of a quantity of that timber from the open water ports of the Soviet Union, from which, before the war, the Russians used to ship even when the Baltic was closed by ice. I am thinking particularly of Odessa and Murmansk. Before the war I had some association with the timber industry, and shipments

    1737
    were in fact made, by arrangement, from the Southern ports, and from the ice-free Northern ports. I would also ask whether the Parliamentary Secretary has impressed on the Russians our need for timber shipments from those ports, and finally whether he has tried to make any reciprocal arrangements with the Russians for the supply of portable saws, so that the Russians could cut the timber on the Yenisei River round the port of Igarka. I ask that, because I believe that if these two steps were taken for obtaining timber from the ice-free ports and developing the areas which have been undeveloped in the past, we might be able to obtain a substantial contribution from them.
    12.15 a.m.
    The Parliamentary Secretary to the Board of Trade (Mr. Belcher): I am very grateful for the opportunity afforded to me by both my hon. Friends to say something about this extremely difficult and vexed question of timber supplies. If I fail to go into very great detail on a number of the points that have been raised, it is only because of the limitations of time. The facts of the timber situation as set out by my hon. Friend the Member for Wycombe (Mr. John E. Haire) are, as far as I can see, accurate. It is the case that there has been a shrinkage in world exports. In 1928–29, world exports of timber were nearly 6 million standards. By 1934–38 this had become 4½ million standards. All these figures exclude Germany for purposes of comparison, since one could not compare prewar years with 1946 if one included Germany. Last year the total world exports had diminished to 2 million standards. Prior to the war, this country took about 2¼million standards, but in 1946, the total imported into this country was under one million standards. 'In other words, the total world supply has shrunk, and with it, of course, our share.
    My hon. Friend the Member for Wycombe mentioned that in a recent tour in foreign parts, he had seen plenty of timber, but I would remind him that there is a difference between growing trees and sawn timber, and he has to take into account, particularly in those countries to which he was referring, difficulties arising out of the war. Roads, railways, power stations, vehicles, production equipment of all kinds, neglected or
    1738
    destroyed or damaged during the war, have to be repaired or renewed, and renewal of these in many of the great timber-producing countries has made only slight progress. Our own heavy industries, of course, could make a contribution, and so could coal, if we had sufficient coal to export to the countries which need it. Many of the most important sources of supply are still dislocated, and have their own very serious reconstruction problems. A particular example of that is the Soviet Union, one of our greatest suppliers in the years before the war. May I say here to my hon. Friend the Member for West Coventry (Mr. Edelman) that we need no urging to buy timber from the Soviet Union, but it does take two to make a bargain. My right hon. and learned Friend the President of the Board of Trade has made it plain in the House many times that we are only too anxious to deal with the Soviet Union in a number of things, and particularly in timber. My hon. Friend the Member for Wycombe asked, quite legitimately, what we are doing. He made some criticisms of the Timber Control, one of which was that the Timber Control consists of timber merchants. I cannot imagine anybody more suited and fitted to go abroad and buy timber than people who have spent the whole of their lives buying timber, and I certainly would not be prepared to suggest that this job should be handed over to amateurs who might have the advice, which they might or might not take, of a panel of professional people. The hon. Member criticised the fact that there was no representation of the consumers on the Timber Control. He may or may not know that I have recently received several deputations, and on several occasions I have suggested to these people that if they would provide us with somebody who would be prepared to come into the Timber Control on the same terms as those who are already there—to come into the Timber Control and give us the full time use of their services—we should be only too glad to see them, but, unfortunately, none has yet been forthcoming.
    What, in fact, are we doing? The hon. Member referred to the fact that we have a mission in Canada at the present time. That mission is headed by the Timber Controller, and, as he is reported to have said, his terms of reference are to buy all the timber he can get, and those are his only terms of reference. One cannot go

    1739
    further than that. Sweden and Finland were important prewar suppliers, and we are negotiating with them at the present time, but it is the case that unless Sweden can get coal, we cannot have Swedish timber. We are unable to give Sweden coal, and, therefore, Sweden is using the timber which is being produced for fuel. In Finland, I am advised that there is a necessity for iron and steel, without which the timber will not come out of Finland.
    Mr. Haire: Is Eire supplying Sweden with coal for the timber she is getting from Sweden?
    Mr. Belcher: I am afraid I do not know the answer to that question. I have heard the case quoted by my hon. Friend of an Eireann manufacturer who went to one of those countries and was able to buy timber which was not available to British manufacturers. All I can say about that is, that when that case was brought to my notice said, "Please provide me with factual evidence, and I will have the whole thing inquired into." But I have not yet received that factual evidence, and until I do there is nothing I can do about it. That is not the only case of allegations of that kind, quite unsubstantiated by factual evidence on which I might be able to act.
    We are buying a certain amount of soft wood from the United States of America, and Czechoslovakia and Austria—not as much as we should like; but, here again, we are bound by the amount of timber that those countries are prepared to let us have. If they do not want us to have more than we are getting there is nothing I, or anybody else in the Board of Trade or in Timber Control, can do about it. We have been trying to buy timber in Jugoslavia for over a year unsuccessfully. A question was answered about that in the House on Thursday last. The House has been informed it has not been possible to buy from Roumania.
    I have left till last the question of Germany, possibly one of the most important. We did not import a great deal of timber from Germany in prewar years. In fact, Germany was, on the whole probably, an importing country itself. But we decided that we would avail ourselves of whatever timber there was in that country. We set up the North German Timber Control, and put the Director of
    1740
    Home Timber Production, Sir Gerald Lenanton, in charge of it. But that could not be expected immediately to begin delivering the goods. There was a number of problems—the problem of staffing, the problem of providing food in an impoverished country, in the British zone, for the people who were going to hew, cut and transport the timber. It was necessary to provide transport. There was a slow start; but we are proceeding, with a measure of success. We are concentrating on producing from Germany, either cut in Germany or imported here in logs, timber of housing size; in the main soft wood; and we have been successful in getting some timber out of the American zone of Germany, somewhat better placed than we are in the British zone. [AN HON. MEMBER: "Are we getting any from the Russian zone?"[No. Last year we got 55,000 standards out of Germany. That is considerably more than was exported out of Germany in prewar years. We hope, and, indeed, we are pretty sure, we shall do better this year.
    On hard woods, I would ask hon. Members who are interested in this subject to glance at the "Board of Trade Journal" for 23rd November last, in which the situation was set out very clearly. Before the war there was little home produced hard wood, but during the last two or three years the greater part of our supplies of hard wood have been produced at home; but these supplies are now declining—inevitably, because of the inroads made in them in two world wars.
    We should like to cut down consumption to a minimum of hard woods in order to conserve our stocks, but so far that has not been possible; but, as it is, the decline in home production, unaccompanied by an increase in imports, has meant, as my hon. Friend the Member for Wycombe said, drastic cuts in the allocations of hard wood to our furniture manufacturers. We did import, prewar, large quantities from the United States of America, our largest supplier, but here we are limited by the home demand in the United States, which, in fact, are importing hard woods themselves, and have a ceiling placed on export licences. This, of course, applies to most of the other countries that are normally suppliers of hard woods.
    We have expanded to a very considerable extent imports from West Africa,

    1741
    and we shall go on doing our very best in that direction. We are trying a number of new and unfamiliar timbers from a variety of countries, including timbers which we have had almost to force upon manufacturers who are quite unaccustomed to dealing with particular kinds of wood we are importing from these new sources.
    May I say, to conclude, that the available supplies of timber, whether of soft wood or hard wood or plywood, have to be shared out between housing, furniture, and other requirements. It is unwise to hope for a spectacular improvement, and I should be rash if I speculated now, at the beginning, or just before the opening,
    1742
    of the buying season, as to what is going to happen. We are doing our very best. We are scouring the world for these supplies of timber, and it is not easy; but we shall go on trying. But British industry can make a contribution. In so far as we can increase our exports of those things which the people in the timber producing countries want, so shall we be able, I hope, to get increasing supplies of both soft woods and hard woods.
    Adjourned accordingly at Twenty-six Minutes past Twelve o'Clock.

EMPLOYMENT
  Lancashire Cotton Mills (Foreign Labour)
  Lancashire Cotton Mills (Foreign Labour)
  Vocational Training
  Vocational Training
  Distribution of Manpower
  Distribution of Manpower
  Tied Workers
  Tied Workers
  Cotton Operatives, Lancashire
  Cotton Operatives, Lancashire
NATIONAL SERVICE
  Personal Case
  Personal Case
  Fishermen
  Fishermen
  SCOTLAND (MONTHLY HOUSING RETURN)
  SCOTLAND (MONTHLY HOUSING RETURN)
NATIONAL FINANCE
  British Railway Holdings, Argentina
  British Railway Holdings, Argentina
  Sterling Purchases (U.S.A.)
  Sterling Purchases (U.S.A.)
  Foreign Exchange (Imported Foodstuffs)
  Foreign Exchange (Imported Foodstuffs)
  Savings Certificates (Old Age Pensioners)
  Savings Certificates (Old Age Pensioners)
CIVIL SERVICE
  Government Industrial Workers (Conditions)
  Government Industrial Workers (Conditions)
  Revenue Duties (Wartime Concessions, Withdrawal)
  Revenue Duties (Wartime Concessions, Withdrawal)
    INCOME TAX
    INCOME TAX
    DEATH DUTIES
    DEATH DUTIES
TRADE AND COMMERCE
  Clothing Supplies
  Clothing Supplies
  Timber
  Timber
  Sheet and Plate Glass
  Sheet and Plate Glass
  Industrial Coal Supplies
  Industrial Coal Supplies
  Plastics, Scotland (Factory)
  Plastics, Scotland (Factory)
  Tobacco (Increased Prices)
  Tobacco (Increased Prices)
  Rubber Boots
  Rubber Boots
  Russia
  Russia
  New Factories
  New Factories
  Italy
  Italy
  Textile Machinery
  Textile Machinery
  Mink Skins (Imports)
  Mink Skins (Imports)
  Steel (Import Duty)
  Steel (Import Duty)
  Camera Films
  Camera Films
  United States Films (Importation)
  United States Films (Importation)
  Printing Trade (Census)
  Printing Trade (Census)
  Tobacco (Dollar Purchases)
  Tobacco (Dollar Purchases)
  Women's Raincoats and Macintoshes
  Women's Raincoats and Macintoshes
  Locomotives (Exports)
  Locomotives (Exports)
BRITISH ARMY
  Personal Cases
  Personal Cases
  Territorial Officers' Pay
  Territorial Officers' Pay
  Casualties, Palestine
  Casualties, Palestine
  Maltese Officers
  Maltese Officers
  General Service Medal (Palestine)
  General Service Medal (Palestine)
  Training Areas
  Training Areas
  Barrack Conditions
  Barrack Conditions
  Welfare, (Improvements)
  Welfare, (Improvements)
  Wretham Training Area (Cultivation)
  Wretham Training Area (Cultivation)
  Demobilisation
  Demobilisation
  Compassionate Postings (Termination)
  Compassionate Postings (Termination)
  Germany (Cost of Living)
  Germany (Cost of Living)
  Education
  Education
  Short Leave
  Short Leave
  Records Office, Leicester
  Records Office, Leicester
  Grade C 1 Men
  Grade C 1 Men
PRISONERS OF WAR
  Unfit Men (Repatriation)
  Unfit Men (Repatriation)
  Agricultural Work (Injury Compensation)
  Agricultural Work (Injury Compensation)
  Repatriation
  Repatriation
  Japanese, Malaya
  Japanese, Malaya
  Football Matches
  Football Matches
  EX-SERVICEMEN (POLISH FIANCEES)
  EX-SERVICEMEN (POLISH FIANCEES)
TOWN AND COUNTRY PLANNING
  Services Land Requirements (Fairlight Glen)
  Services Land Requirements (Fairlight Glen)
  Overspill Town, Leeds
  Overspill Town, Leeds
NATIONAL INSURANCE
  Old Age Pensions
  Old Age Pensions
  Guardian's Allowance
  Guardian's Allowance
ROADS
  Bus Drivers (Conduct)
  Bus Drivers (Conduct)
  Pedestrian Crossings (Signals)
  Pedestrian Crossings (Signals)
  RAILWAY DIVIDENDS
  RAILWAY DIVIDENDS
  JAPANESE TRADE
  JAPANESE TRADE
FOOD SUPPLIES
  Oatmeal
  Oatmeal
  Slaughterhouses
  Slaughterhouses
  Invalids (Special Diets)
  Invalids (Special Diets)
  Cooking Fat
  Cooking Fat
  Brewing Barley, Eire
  Brewing Barley, Eire
  SOAP RATION
  SOAP RATION
MINISTRY OF SUPPLY
  Office Machinery
  Office Machinery
  Ordnance Factory, Poole
  Ordnance Factory, Poole
  Armed Forces (Manpower)
  Armed Forces (Manpower)
  AGRICULTURAL TRAINING
  AGRICULTURAL TRAINING
  PENSION COMMUTATION
  PENSION COMMUTATION
  PETROL RATIONING
  PETROL RATIONING
EDUCATION
  Grammar School Pupils
  Grammar School Pupils
  Charity, Presteign
  Charity, Presteign
  NAVAL OUTFIT GRATUITY
  NAVAL OUTFIT GRATUITY
MINISTRY OF WORKS
  Industrial Building Licences
  Industrial Building Licences
  Slate Industry, Scotland
  Slate Industry, Scotland
  PALESTINE (CASUALTIES)
  PALESTINE (CASUALTIES)
  CIVIL AVIATION (SAFETY)
  CIVIL AVIATION (SAFETY)
  AIRMAIL (HELICOPTERS)
  AIRMAIL (HELICOPTERS)
Preamble
The House met at half past two of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers.

  PALESTINE: EVACUATION OF BRITISH CIVILIANS.
  VISCOUNT SIMON: My Lords, on behalf of my noble friend Lord Altrincham, who has asked me to apologize for not being here as he is laid low with influenza, I beg to ask His Majesty's Government the following question of which he had given them private Notice: To ask His Majesty's Government whether it is true that all British civilians living in Palestine have been informed that they must leave the country at once or accept internment in a concentration area unless their vocations are considered essential by the Palestine Government, and that British and other journalists have been placed in the unessential categories; and further, what steps will in that event be taken to deal with anti-British propaganda and to prevent the dissemination of all hostile rumours regarding the conduct of our Forces and the action of the Palestine Government?
  THE FIRST LORD OF THE ADMIRALTY (VISCOUNT HALL): My Lords, as the High Commissioner for Palestine announced on February 1, British women and children and certain other British civilians are being evacuated from Palestine so that the Government and the Armed Forces may not be hampered in their task of maintaining law and order. No Government officer is being evacuated except some female teachers who will go to Trans-Jordan temporarily; and members of religious orders, missionaries, doctors and nurses are remaining. I understand that those civilians who remain will be assembled during the next few days into cantonment areas to facilitate the task of safeguarding them, since in the special circumstances in which the co-operation of the Jewish community against terrorism cannot be counted upon it is difficult to take
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  adequate measures for their protection elsewhere.
  British journalists were informed of these arrangements and the reasons for them, and advised that if they chose to stay in Palestine and continued to move freely, the Government could not accept responsibility for anything that might happen to them at the hands of the terrorists. There is no question of their being compulsorily evacuated as nonessential. As regards the last part of the question, I can assure the noble Viscount that both His Majesty's Government and the Palestine authorities are fully seized of the vital importance of dealing with anti-British propaganda and preventing the dissemination of any hostile rumours that may arise regarding the conduct of our Forces and the action taken by the Palestine Government.
  LORD STRABOLGI: My Lords, arising out of that answer could the noble Lord give us a little more information about the position of British business men in Palestine, a number of whom have been there for many years? Are they to be compulsorily evacuated, or are they being given the option of remaining at their own risk?
  VISCOUNT HALL: I understand that they have been advised to evacuate.
  LORD STRABOLGI: Suppose they desire to remain, are they allowed to stay at their own risk? In other words, are they treated in the same way as journalists?
  VISCOUNT HALL: I would like to have notice of that question.

  MALTA (RECONSTRUCTION) BILL.
  Brought from the Commons; read 1a; and to be printed.

  REMEDY AGAINST THE CROWN AS OCCUPIER BILL. [H.L.]
  VISCOUNT SIMON: My Lords, I beg leave to introduce a Bill to provide a remedy against the Crown as occupier of premises, analogous to that now existing against a private occupier. I beg to move that the Bill be now read a first time.
  Moved, that the Bill be now read 1a.—(Viscount Simon.)
  On Question, Bill read 1a, and to be printed.

  SUNDAY ENTERTAINMENTS ACT, 1932 (URBAN DISTRICT OF ASHFORD ORDER).
  LORD WALKDEN: My Lords, I beg to move that this Order be approved.
  Moved, That the Order made by the Secretary of State for the Home Department under the Act, for extending Section 1 of the Act to the Urban District of Ashford, and laid before the House on Thursday last, be approved.—(Lord Walkden.)
  On Question, Motion agreed to.

  SUNDAY ENTERTAINMENTS ACT, 1932 (URBAN DISTRICT OF HUCKNALL ORDER).
  LORD WALKDEN: My Lords, I beg to move that this Order be approved.
  Moved, That the Order made by the Secretary of State for the Home Department under the Act, for extending Section 1 of the Act to the Urban District of Hucknall, and laid before the House on Thursday last, be approved.—(Lord Walkden.)
  On Question, Motion agreed to.

  SUNDAY ENTERTAINMENTS ACT, 1932 (URBAN DISTRICT OF RUGELEY ORDER).
  LORD WALKDEN: My Lords, I beg to move that this Order be approved.
  Moved, That the Order made by the Secretary of State for the Home Department under the Act, for extending Section 1 of the Act to the Urban District of Rugeley, and laid before the House on Thursday last, be approved.—(Lord Walkden.)
  On Question, Motion agreed to.

  EXCHANGE CONTROL BILL.
  2.38 p.m.
  Order of the Day for the Second Reading read.
  THE SECRETARY OF STATE FOR INDIA AND BURMA (LORD PETRICK-LAWRENCE): My Lords, this is a complicated and highly technical Bill, and I do not think your Lordships would desire from me a long and detailed speech in its defence on its Second Reading.
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  What I will try to do is to lay before your Lordships the main objects and purpose of the Bill, and say a few words about the means by which it is sought to obtain those objects. In the spacious days of the second half of the nineteenth century, when Britain owned capital in almost every inhabited country, when the City of London and the Bank of England were the recognized pivot of the financial structure of nations, and the sterling area was almost synonymous with the civilized world, no one thought, or perhaps needed to think, of exchange control. But with the coming of the twentieth century, and more particularly the two world wars, vast changes have taken place. Britain has lost much of her foreign investments which brought her food and raw materials, and much of her merchant marine has been sunk. She has contracted a large amount of foreign debt. She is no longer the only centre of world finance. It is, moreover, recognized to-day that movements of capital, if unregulated and unchecked, are liable to threaten the financial and economic stability of nations; and of no country is this more true than of our own highly industrialized land.
  In these circumstances, we are compelled to husband our foreign resources with the utmost care, and it has become essential for us to watch over them most fully to prevent their being squandered. During the war the legal basis of exchange control was provided by the Emergency Powers (Defence) Acts under which the Treasury had power to make Regulations. These Regulations were set out, added to and modified during the years 1939 to 1942. For reasons that I have already explained, the need for this control did not end with the war. In the difficult period which lies ahead, this control remains urgently necessary. In 1945, accordingly, powers were taken under the Supplies and Services (Transitional Powers) Act temporarily to continue exchange control; and this Bill now rewrites those powers, dropping those no longer required and adding a few new provisions.
  One of the main reasons for exchange control is the need to stop capital transfers unless they are desirable—for example, to develop an existing and profitable British venture or to assist our export trade. The

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  crisis of 1931 was brought on and aggravated by wild movements of capital between financial centres. We must not let that happen again. But in any case we have at present no surplus in the balance of payments out of which we can afford to lock up purchasing power in capital investments abroad. We need our purchasing power for current imports. But a capital transfer does not always show itself with a convenient label round its neck. One can identify a purchase of foreign securities easily enough, but a transfer of funds to a foreign account may masquerade as sales expenses, or as capital for local stocks; while without an adequate control, capital could easily go abroad in the form of marketable goods, looking like desirable exports until it became apparent that the sale proceeds were not coming back here. These and many variants have been tried. The Bill provides adequate powers to deal with them, because it applies a legal control, modified administratively, to all transfers and all exports to destinations outside the sterling area.
  Though we speak of exchange control we are at least as much concerned with sterling control. Sterling in the hands of a non-resident is a demand claim on our current production. We can afford to increase the volume of such claims only if we are getting equivalent current value in the form of necessary imports and the like. I should point out, however, that exchange control as such does not determine the volume of imports. This is part of the import licensing technique, and the import programme is under constant oversight and review. Exchange control sees to it that what we buy we pay for. There has been wide acceptance of the need for this Bill in well-informed quarters. The Chancellor of the Exchequer, in his speech in another place, quoted a number of approving expressions of opinion. Only a few days ago Sir Clarence Sadd, Chairman of the Midland Bank, addressing the Institute of Bankers, used these words:
  "There is a Bill to vest in the Government permanent powers to regulate foreign exchange transactions—a necessary Bill conferring wide and strong powers upon it; it is essential not only for our own country but for all other countries interested in the successful working of the International Monetary Fund."
  It was suggested in another place that a limit should be set on the life of the Bill,
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  and an Amendment was moved which would have caused the Bill to expire in the year 1950. This was a most unfortunate date to choose, in view of the obligations under the American and Canadian credits which we have to shoulder as from 1951. But in any case the idea of a time limit is misconceived. It may well be that as the years go by we shall be able to modify and relax many of these controls. Even immediately, we intend by Exemptions Orders to allow many relaxations from the strict text of the Bill. But because we succeed in weathering one financial storm, are we to assume absolute immunity from all external pressure on our exchange resources for all time? When the rain stops and the sun comes out it is reasonable to take down the umbrella and to leave it in the hall-stand, but no reasonable man breaks it up for firewood on the ground that if it happens to rain again he can always buy another. These powers are permanently needed, in reserve but immediately at call. It is, of course, for the Government of the day to justify their use.
  With regard to the mechanics of exchange control, it may interest your Lordships to have the following facts. The pre-war German system of exchange control involved a Government Department to which everything was referred, and which carried 30,000 people on its pay-roll. The Exchange Control division of the Treasury consists of eight people. In the Bank of England, where the central executive decisions are given and the statistics are kept, about 1000 people are so engaged. But the great mass of transactions is handled under delegated powers in the banks and in the stock exchanges; and some essential controls are administered at the ports by Customs and Immigration officers alongside their other duties. All this means not only a considerable economy to the Exchequer but much greater speed and general satisfaction in the administration of the control. In particular, the public and the commercial community benefit by the really admirable services given by the banks to their customers. Under our system they have considerable authority to deal with their customers' exchange requirements, and they combine these agency functions most happily with advice and services on behalf of their customers including the presentation of cases to the central Exchange Control.

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  This is a typically British arrangement, of which we can be justly proud.
  Your Lordships will find a summary of the actual provisions of the Bill in the White Paper. To this I need add only a few words to-day. Part I controls gold and foreign exchange, mainly through the banks, and is broadly similar to the present control, though Clause 3, which deals with people who say that gold or foreign currencies in their possession are not held on their own account but for someone else, is new. And so is Clause 4, which is intended to clear up the position about travellers' cheques. Part II is concerned with the control of payments. Clause 5 controls payments in the United Kingdom and operations on bank accounts which are equivalent to payments. Clause 6 controls payments outside the United Kingdom, and Clause 7 controls a class of payments which is really a round-about way of getting value abroad without appearing to remit any money. Part III is concerned with securities and is very much like the existing securities control, except that a number of loopholes have been stopped which the Rouse will not expect to be identified.
  In the main, the Bill retains the provisions of the Treasury Regulations but the important provision giving the Treasury powers compulsorily to buy certain classes of foreign securities at the market price of the day is not retained. This omission does not, however, affect the position of securities already acquired by or placed at the disposal of the Treasury under the Financial Powers (U.S.A. Securities) Act, 1941. The system of control projected by the Bill contains one important new feature, namely, in relation to bearer securities, as usually understood, and all certificates of title to securities for which there is no register, or of which the register is outside the scheduled territories. A large number of such documents were exchanged during the war for registered stock, while others were lodged, to ensure their safety, in an official deposit in Canada. The latter are now available to their owners once again, and it is necessary to institute some form of control over them.
  It is proposed, by the Bill, to introduce in relation to them a safeguard parallel to that which exists in relation to securities on a United Kingdom register, by virtue of the fact that they can usually only be transferred with the co-operation of the
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  registrar, who is required to satisfy himself as to the approved nature of the transfer. The form of control devised requires that, after an appointed date, such securities should be lodged with or to the order of an authorized depositary which will, no doubt, generally be a bank. The ownership of such securities will, of course, remain unaffected, and ordinarily income upon them will be collected in the normal way, but the document of title will remain with the approved depositary until it is presented for redemption. It is the intention, by these means, to prevent illicit transfer of such securities, without placing undue restrictions on the owners.
  I think that these are the principal provisions of the Bill to which your Lordships will wish me to call attention at this stage, and I move, therefore, that the Bill be now read a Second time.
  Moved, That the Bill be now read 2a.—(Lord Pethick-Lawrence.)
  2.54 p.m.
  VISCOUNT SIMON: My Lords, we are grateful to the noble Lord, the Secretary of State for India and Burma, for his exposition of the Bill, which, I agree with him, is a most important measure and one which involves a great deal that is exceedingly technical. Like the noble Lord, I will try to avoid dealing with too many details, but I have a challenge to make, for, in the course of his speech, he was pleased to claim that this Bill is a "typically British arrangement." I do not think it will be very difficult to show that, so far from it being typically British, it is an attempt to introduce into the field which it covers arrangements which are very far from being typically British, however much they may be admired by those who have adopted Socialist theories.
  Do not let us have any doubt, at any rate, as to what the main object of the Bill is—and I do not think that we shall have any such doubt. The main object of the Bill is to establish, on a permanent basis, the mechanism of exchange control that functioned—and on the whole, functioned very smoothly—during the war and which at present operates under the Supplies and Services (Transitional Powers) Act, 1945. That is the main object of the Bill, and therefore admittedly what this Bill seeks to do for all time is to transform restrictions devised for the conditions of war, and at present only temporary, into permanent measures

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  of official control over a vast field in which, hitherto, there has been room for decisions of individual judgment and enterprise. Nobody will doubt that that makes this a very important measure. How it can be described as "a typically British arrangement," I leave your Lordships to judge.
  The field it covers is so vast that if anybody really attempted in a Second Reading debate to describe it, even in outline, a most lengthy and elaborate explanation would be necessary. It is enough for me to say on the first point that hitherto the Government preference—the pathological preference, I am bound to call it—for Departmental regulation over the exercise of individual rights and judgment, has, for the most part, been expressed in temporary legislation. Take the position as regards food, or petrol, or coupons for clothes and furniture. These powers are now being exercised by the appropriate Government Departments under a temporary Bill, which, as the noble Lord has reminded us, was given at the beginning of this Parliament a life of five years. Nobody, I agree, can say whether at the end of five years we shall want any more regulation of that sort. We are none of us prophets, and it may be that we shall. But common sense dictates that we should not make these provisions permanent measures and then announce to the public, as the noble Lord has done just now: "After all, you will, very likely, find that, certain changes will be made in these permanent arrangements, and we hope that they will be for the better."
  The truth is that the appetite of this Government for government by civil servants, just like the number of civil servants themselves, grows under this Socialist Administration, and on this occasion we are told that nothing but a permanent Bill will do. Not a word of regret is uttered, not a single word to suggest that this is fundamentally and permanently altering the way in which British trade has developed in the past. But this is the Socialist ideal.
  LORD PETHICK-LAWRENCE: Oh, no.—not at all.
  VISCOUNT SIMON: The noble Lord says that it is not the ideal; but, at any rate, the Chancellor of the Exchequer, when he thinks of these things, has "a
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  song in his heart." I wish to define exactly the position which we—I think that my noble friends around me are all agreed—take up in regard to this Bill, because I do not wish it to be misunderstood and I am sure that no one would wish to misrepresent it. We do not deny at all the necessity for some time to come, and for an uncertain time to come, of the maintenance of a very considerable measure of exchange control. Nobody who knows anything at all about it will doubt that it is right to keep on (I do not say entirely and I do not criticize details) what may be called a system of exchange control in the present circumstances. The noble Lord, the Secretary of State, gave us some reasons, and they are absolutely convincing reasons: no sensible person would dispute them. How it has come about, whether there may be any blame for it and, if so, where the blame may lie, it is not for the moment material to ask. But the fact is that, eighteen months after the war is over and eighteen months after we have enjoyed the blessings of the present administration, the pound sterling would certainly cut and run if it were not tied by the leg and rigorously confined. I think it is a most lamentable fact.
  "'Tis true 'tis pity;
  And pity 'tis, 'tis true."
  But while the Chancellor of the Exchequer is boasting, as he did the other day, that our credit was never better than now—it is one of his "songs"—our balance of foreign payments is deplorable. I do not dispute that for the time being and for some time to come we must retain a control of which this country in its palmy days never dreamt. No doubt, as the noble Lord opposite states, this is due to the war; but some day we shall recover from some of the effects of the war, so do not let us proceed on the basis that things can never get better. This is a permanent Bill. The noble Lord in the course of his speech spoke of the difficult period which lies ahead. Well, provide for the difficult period. But surely the noble Lord, who knows this side of our national life so well, realizes that it is a very serious and lamentable matter that we should proceed to write into the economic history of this country that, in the view of the Government, there is nothing for it but to have a permanent measure of this sort; that is to say, the clamping on our external trade for all time of the iron hand of the Treasury.

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  I do not know how far the noble Lords sitting on the Benches opposite have really studied this Bill. I heard a murmur or two just now. But do they know how many times in this Bill, at the beginning either of a clause or of a subsection, there occur the words: "except with the permission of the Treasury"? They occur twenty-eight times. There are twenty-eight separate provisions in this Bill in which you start with a prohibition which is to last for ever, and you introduce it with the words: "except with the consent of the Treasury". Let me give one or two examples. Take Clause 23, which I especially commend to members of the House who may be interested in the export trade. This is what it provides, and I would ask you to read it:
  "The exportation of goods of any class or description from the United Kingdom to a destination in any such territory as may be prescribed"—
  that means prescribed by the Treasury—
  "is hereby prohibited"—
  it is a prohibition, then, at the will of the Treasury, of the export of goods of any class or description—
  "except with the permission of the Treasury, unless the Commissioners of Customs and Excise are satisfied"—
  I will leave out (1) (a) and take (1) (b)—
  "that the amount of the payment that has been made or is to be made is such as to represent a return for the goods which is in all the circumstances satisfactory in the national interest."
  That is to be a permanent provision of the Bill. We all have the greatest respect for the Commissioners of Customs and Excise. They have plenty to do, but am I to understand that they are to assemble and to ask themselves a question which I should have thought it inconceivable that they were well qualified to answer? This question may be in reference to any class or description of goods, and they are to say to themselves: "Well, now, we cannot allow the export of these goods to the certain territories that may be prescribed without being satisfied that the contract is one which provides for payment which, in all the circumstances, is satisfactory in the national interest." This is indeed national trading. Very respectfully but very firmly, I wish to ask: Does anybody suppose that these gentlemen of the Customs and Excise Department have any qualifications at all to form a judgment on such a matter?
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  It is perfectly well known, or it used to be well known in the past, that British subjects sometimes developed trade abroad by selling their products at a very small return, and even at a loss. They did it because they hoped by that means to show the excellence of their goods, to establish a connexion, or to make for custom. I do not know whether the noble Viscount the Leader of the House thinks I am quoting something that does not happen, or that I have not had forty years' commercial experience, but I believe I know something about it. I repeat that it has been a perfectly common thing for exporters in this country to sell their exports abroad at a small return, if they find it necessary, in order to cultivate custom and in order to establish a connexion. I would like to know from those responsible for this Bill whether they really think that Commissioners for Customs and Excise can form a wise judgment as to whether a particular price charged for a product is, in all the circumstances, satisfactory in the national interest.
  I take another example which illustrates that the prohibitions in this Bill are so wide that it is only by the working of a vast amount of Treasury permission that our affairs can be conducted at all. Look at Clause 22. Clause 22 prohibits the exportation from the United Kingdom of any Treasury note or any postal order, except with the permission of the Treasury. I have read the words of the Bill. I take a very simple illustration, and I shall be very grateful if I may know how it is to be dealt with. I gather that my noble friend on the Woolsack may be replying at the end of the debate, and I am sure he would be pleased to tell me how it will be dealt with. There are in this capital, and in many other large towns at the present time, a large number of Irish girls engaged as waitresses or in other similar employment, in receipt of weekly or monthly wages. Like many a good girl in such circumstances—like many Scottish girls certainly—periodically they send a portion of their wages to their mother and father in their own country; in this case, Eire. Eire is not within the United Kingdom, so what does this provision do? By this provision it becomes a criminal offence to export from the United Kingdom any postal order except with the permission of the Treasury.

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  Nobody contemplates that the Government will be so foolish as to apply this to the sort of case I have described, but I want to know how the exception is to be made. Is the young woman to go hopefully and call on Mr. Dalton? Is she to ring the front bell of the Treasury? If she knew a little more about it, she would know that as a matter of fact the Treasury do not handle this at all; it is dealt with in the Bank of England. Whether legitimately or illegitimately, the power which is given by the authority of Parliament devolves on other people. There is a clause in this Bill to make that regular. What is this woman, then, to do? It seems to me quite inconceivable that whatever she does should be done by individual application. It may be said that the difficulty will be met by a general and beneficent permission which the Treasury are prepared to grant. How is it going to be done? Is there anything in this Bill about publishing a permission? Under the Food Acts we have had heaps of cases where people have been accused of offences—and I think convicted of offences—although the particular Regulation had never been published. How do you inform the Eire girls in this country that they may send a portion of their wages to their parents in Eire, notwithstanding the terms of this Bill? I only take that instance as one amongst hundreds. What I should like to know from my noble friend, who is always reasonable in these matters—I cannot expect him at the moment to give me detailed answers—is how, under this Bill, are you going to make publicly known the extent of the permission which the Treasury grant?
  There is one other question which I might ask in this connexion. How are you to find out whether the rule is broken? In war-time that was easy enough, and I will tell your Lordships why. During the war period we had a postal censorship. I do not, for one moment accuse the Government of attempting to establish, as part of the permanent rule of the land, the right to open other people's letters. If they tried that I think they would get a pretty quick answer from what remains of the liberty-loving citizenship of this country. Nobody would accept it for a single moment. But how are you going to administer this, in view of the fact—which
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  would be admitted at once—that censorship has ceased? I say it is a most serious matter that the Government should seek to fasten upon the country, as part of the permanent economic law of our hitherto free land, the provisions to be found in this Bill. I really cannot accept the explanation which the noble Lord offered, that there is something about this Measure which cannot be made temporary.
  What is there about the Measure which cannot be made temporary? You pass a Measure in the form of a temporary Bill because you are legislating for an emergency. That is not to say you know how long the emergency will last. I do not know and noble Lords on the Government Benches do not know. But the way in which that is overcome—and it is perfectly familiar to every Parliamentarian—is either 'by introducing a new Bill at the end of the temporary period already provided for, or, indeed, if it is thought right, by including it in the Expiring Laws Continuance Bill. There is nothing in the least unusual about that. I do not know whether the noble Lord recalls that the Ballot Act, 1872, was enacted for only six years, and after that it was carried on year after year, for a whole generation, in the Expiring Laws Continuance Act.
  LORD PETHICK-LAWRENCE: It was a misguided way of doing it, too. They would have done much better to put it on the Statute Book.
  VISCOUNT SIMON: The noble Lord's criticism is a very just one, but for the moment his memory has not served him. When we came to have a comprehensive franchise measure, we did put it in the Franchise Act, instead of going on with the old method.
  LORD PETHICK-LAWRENCE: Certainly.
  VISCOUNT SIMON: If, as a result of twenty or thirty years of these conditions, we lived in a country which said: "Well, there is nothing for it; we will have to have this thing for ever," then I agree that we might legislate for it for ever. But why do it now? There is no reason at all except this appetite for securing in every direction Governmental Regulations in preference to free enterprise. A suggestion has been made to explain it—I think that the noble Lord referred to it in a short sentence just now. It is sug-

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  gested that the control of what is sometimes called "hot" money is a control which will be needed indefinitely. Well, we are getting into the recesses, the arcana which not everybody easily follows. I understand that by "hot" money is meant speculative movements of short-term capital entered into in order that a speculator may make a quick profit, as distinct from legitimate and useful current transactions. The argument, as given in another place, is: "Well, surely it is not too bad a thing to try to stop this 'hot' money all the time; therefore this Bill must be permanent."
  I am afraid that I regard the argument as puerile. It is quite true that you cannot always distinguish by looking at transactions what is their nature. But there are plenty of ways of dealing with that. At the very worst you can give to the Bank of England, or to whatever is the appropriate body, the right to determine that such and such transactions, and such and such policies, shall be regarded as prohibited "hot" money transactions, unless the opposite is true; but to say that all the inflictions imposed by this Bill on all and sundry are necessary because of the difficulty of defining "hot" money is more than I am able to swallow. It is quite true that there are occasions when it is difficult to distinguish capital movements from current transactions. Every banker in the House knows it, and every Chancellor of the Exchequer knows it. That is not the question. The question is whether this Bill, by conferring on the Treasury powers which can only delay and frustrate currant transactions, does not involve damage to our external trade which would not be compensated for by stopping, or trying to stop, these speculations.
  The noble Lord said just now that the service which the banks have rendered in this matter must have been very gratifying to their customers. But it was an extra burden on the banks. The banks are accustomed to doing things to help their customers, and we are all very grateful to them. Surely he is not going to say that the banks, on that account, are not being put under an extra burden, and the customer is not put under the necessity of making more applications? It is common knowledge in most of the great branches of commerce in this country that under modern conditions a man who wants to export has to get such a
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  lot of permissions, fill up so many forms, satisfy so many people, that his whole opportunity may be prejudiced, and he may return heartbroken by the extent to which we are having our affairs administered, not by the Government—because noble Lords opposite are the political chiefs and do not administer our affairs—but by a committee in the Bank of England.
  Mr. Dalton does not administer these things; and there is nobody of any high standing in the Treasury who administers them. They arc, as I say, administered by a Committee in the Bank of England, and the transactions in respect of which application is made are so numerous that it is literally impossible to give a wide discretion to individuals concerned. The result is, as it is in some other connexions, that those who get exemptions are very often those who are most persistent in demanding them.
  I do not for a moment say that those concerned in administering this business are not doing their best, and doing their honest best, but it arises from the nature of the case. Is anybody going to tell me that at this time people who require an extra allowance of petrol are not more likely to get it if they are people who are persistent and whose names are known? Is anybody going to tell me that if you want a "sleeper" from Edinburgh to King's Cross it is not better to be a civil servant than to be a man with an afflicted wife, or a man pursuing an ordinary business? It is really too much, in a House of Parliament where we are entitled to state the truth as it is, and not to be afraid of anybody, to be told that this sort of administration really secures promptly and accurately the best results for everybody.
  I know the view of Mr. Ernest Bevin, which is in strange contradiction with some of these proposals. His ambition, expressed in a heartfelt outburst at the Bournemouth Conference of the Socialist party, was to go abroad, taking with him what he might require—I will not use his words—without a passport. What a foolish wish, to take abroad, without the consent of the Treasury, whatever he might require. Surely, the Government are not going to tell us that Mr. Ernest Bevin is to have shown to him a little favour which other people would not have shown to them if they were going on a holiday? Surely, no one would suggest that an

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  Under-Secretary can get a sleeper, when a person who is not known but who has arthritis cannot get one?
  THE SECRETARY OF STATE FOR DOMINION AFFAIRS (VISCOUNT ADDISON): Are you suggesting that?
  VISCOUNT SIMON: I think the way it works is that people who may have very good claims do in fact find that it is the persistent person, or the person who is known, who ultimately gets the concession.
  VISCOUNT ADDISON: This is really a very serious charge against the Civil Service. Do I understand the noble Viscount to suggest that an Under-Secretary gets favour as against a crippled woman?
  VISCOUNT SIMON: What I suggest is this. In point of fact, when you have so many applications it is quite impossible—
  VISCOUNT ADDISON: That is not what you said.
  VISCOUNT SIMON: You must listen. I do not want to say that there is favour for anyone but, as a matter of fact, when these applications are made for exemption they would in most cases be automatically turned down except where people persist. I think that is true. I make no reflection against anybody, for it may be that the person who applies has a perfectly good case. I am confident, however, that a number of other people who have equally good cases do not stand an equally good chance. That is not because of favouritism, but because the system is one by which the exercise of the power contained in the words "except with the permission of the Treasury "involves handling, after some fashion, tens of thousands of cases, in which really the only thing the authorities can do in any but the cases specially called to their attention is to say: "Application refused." And they do say so.
  I submit that the observations I have made show that this ought to be a temporary measure. It ought to be liable to extension, or amendment, or expiry after a few years. It is said that the financial regulations worked very well in the war. So they did, and if I may say so I take that as a small compliment. They were
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  all worked out before the war began. They were the result of earnest consideration by people then at the Treasury, and especially by the permanent officials. Persons who might be interested in different ways were consulted, and the financial regulations were pigeon-holed ready to be produced. They worked well for another reason. Not only was there a postal censorship at that time—and I take it that there is not now—but at that time everybody was quite prepared to put up with the restrictions involved. The whole population were prepared to do so in support of the effort for winning the war. I have no doubt that these regulations for a certain number of years may well receive a similar support, and for an analogous reason. I recognize what a very hard task the Government have, but what I will not accept is the proposition that the case made out for making this law permanent is a "typically British arrangement."
  LORD PETHICK-LAWRENCE: I never said that. You are quite mistaken. You have attributed that to me three times.
  VISCOUNT SIMON: I thought I heard you aright.
  LORD PETHICK-LAWRENCE: I did not apply it in the way in which the noble Viscount has three times charged me with doing. That is all.
  VISCOUNT SIMON: I am glad to be corrected. I thought what I was told was that it was considered that this was a typically British arrangement.
  LORD PETHICK-LAWRENCE: I never said that.
  VISCOUNT SIMON: Then I apologize to the noble Lord and I wish he had explained it to me on the first occasion. I have not the slightest desire to say anything which is not entirely fair. At any rate, we may agree that it is not a typically British arrangement. It is a gross departure from the methods by which British trade has hitherto been worked. I think we ought to deplore the necessity for the Bill. I admit that at present regulations of this sort are absolutely necessary, but to put it upon the Statute Book as a permanent measure is unnecessary and humiliating to the country.
  3.29 p.m.
  LORD RENNELL: My Lords, I wish in advance to say that if I appear to support this Bill, as I propose to do, it is for reasons which I shall adduce in the latter part of what I say, and not because I like the Bill for its own sake, or for its appearance, or for anything to do with it. However, I will come to that in due course. In order to get the right perspective about this Bill, it is perhaps necessary to refer quite briefly to its antecedents. As is well known to your Lordships, it is not the fact that exchange control owes its origin to this war. There may be some delight on one side of the House or the other if I remind your Lordships of the fact that in recent years exchange control was introduced for the first time in the year 1931, when a very rigid Order was made under the Gold Standard (Amendment) Act of 1931. That Order stated:
  "The Lords Commissioners of His Majestys Treasury, pursuant to Section 1 … hereby order that until further notice the purchase of foreign exchange and the transfer of funds with the object of acquiring such foreign exchange directly or indirectly by British subjects resident in the United Kingdom"—
  the same phrase which has been used throughout our war Orders—
  "shall be prohibited except for the purpose of financing normal trade requirements.…"
  That Order, in point of historical fact, was signed by that man of great and good memory, Philip Snowden.
  We find the second main exchange control provision enacted (not in war time, as that Order was not enacted in war time), by this Labour Government. I think it is fair to say that the Exchange Control Regulations which will be superseded by this Bill, if and when it becomes an Act—as I feel sure it will—were the outcome of experience and of growth. As one loophole after another had to be stopped in time of war, a new administrative device was sought to stop it. All those Orders and Regulations (with one exception to which the noble Lord, Lord Pethick-Lawrence, referred, and which has been dropped) find their place in this Bill, together with one or two other provisions—notably the one on securities—designed to stop up certain additional loopholes which have been created by the ingenuity of man. I have no objection to those Regulations at all. I think they are necessary to proper administration, and if they did not find their place in a Bill they
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  would no doubt find their place in an Order or some amending Rule.
  What were the reasons for those Orders in time of war? The reasons fall into two categories. In the first place there was the necessity for conserving our foreign exchange resources in order to prosecute the war, and in the second place—and perhaps no less important—there was the necessity to administer the Trading with the Enemy Regulations and contraband control and to further the policy of our Government in time of war in trading with neutral countries under the provisions of the Black, White and Grey Lists. May I add parenthetically that those were the subject of Regulations, as your Lordships know. The Statutory Black List was published and made known to the world, and it made it an offence for persons in this country to trade with firms or persons whose names had been declared in it. We submitted to that in order to conserve our resources to prosecute the war and also to further the policy of His Majesty's Government in dealing with neutral and other countries. With the termination of the war the second of those two groups of motives—the statutory Black List, Grey List and White List—has in fact been swept away, except for certain surviving elements in regard to investigations into the activities of certain neutral firms which may have acted as a cover or a cloak for enemy transactions. At least, we have been told it has been swept away, but I want to revert to that point in a minute.
  When we come to the Bill itself, it behoves us to inquire what are the motives (if we do not question, as I do not, the necessity for it) which underlie the presentation of the Bill in this form at this moment, instead of continuing for several years, as I am advised we could have continued, the existing Rules and Regulations under which we are administered now in these respects. The precise moment is one which I think has a very considerable bearing on the whole issue, and it is the one thing which makes me hesitate to give the Bill the support which I would otherwise give to it. I personally question the opportuneness of presenting at this moment so drastic, so Draconian, a Bill which may have the effect of frightening people about our position in this country. May I observe that exchange control had to be introduced in 1931 precisely on account of the fear which had been engendered abroad and by people here about

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  what was happening in this country. I would not like to see a repetition of that and I am therefore inclined to question the wisdom of introducing this Bill at this moment.
  That must lead me to examine briefly what are the reasons which have induced His Majesty's Government, and the Chancellor of the Exchequer in particular, to do this now. It seems to me there may be three reasons, the first of which is a legislative reason near and dear to the heart of every administrator—namely, to have the powers under which he and his officers act tidily and concisely in one instrument instead of having to deal with a problem that arises under one of several Orders, amending Orders, exceptions and so on. It is obviously tempting to have the legislation nice and tidy in one Act. It has been alleged that that was the Chancellor's motive, and indeed something he said in another place lends a certain amount of colour to that allegation: I refer to the occasion when he said the powers granted under this Bill gave him great pleasure because he hoped to be able to have a better hook with which to catch the crook. There is no doubt at all that it will facilitate the catching of crooks, but I wonder whether the consequences of this Bill could be justified solely by being able to catch a few more crooks. In fact it is very often better to let a few crooks go and to let honest people get on with their work rather than take too much trouble in catching the few crooks.
  Moreover, I cannot believe that in the pressure of legislation with which this Parliament is faced any responsible Minister would have sought to introduce a Bill which must have a good deal of repercussion and echo elsewhere, and to take up the time of your Lordships' House and another place solely for the purpose of having a tidy piece of legislation. That cannot be the reason; it would be too paltry. I cannot accept that, and I do not think anyone in your Lordships' House would seriously suggest that that was the reason. The second reason is one which, as your Lordships on the other side of the House will realize, has been made much of in certain quarters—namely, that there is underlying this Bill some hidden motive, some desire to obtain greater powers to do certain things in the way of furthering a policy which it is perhaps not desirable to say too much about: in other words, to
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  have hidden powers. I cannot accept that either. It is, quite frankly, obviously nonsense. No responsible person acts in that way, and it is cheap, I think, to accuse the Chancellor, whether you like his policy or whether you do not, of being motivated by a reason of that sort.
  There remains, therefore, the only other reason—the third reason—which may have prompted him to introduce this Bill in another place at this time, and why we are discussing it here to-day. That is, that the situation warrants it. There are a few more powers assumed in this Bill than are contained in the Orders. They are very few, but broadly speaking they are much the same. It appears to be urgent to get this Bill through now, and without the time limit which has been urged by the noble and learned Viscount who has just sat down, and also by others in another place. The Government, in its wisdom, have not seen fit to insert a time limit. I take it that there must be reasons both for the decision to introduce the Bill now and for the decision to refuse to insert a time limit. I am, therefore, driven back to the unfortunate and to me unhappy conclusion that the economic situation of this country is so serious that we cannot afford to delay another year or two years before granting to the Government permanent powers of this sort.
  If that conclusion is right it is a very serious one, and I cannot but feel that that is the real motive. Would it be impertinent to describe as jeremiads the statements which have come from the more senior Ministers in His Majesty's Government in recent weeks? Scarcely a week passes without our being told that the economic situation of this country is really very serious indeed, and the White Paper which was published the week before last did nothing to alleviate that feeling. No doubt we shall have the opportunity of discussing that White Paper in perhaps a month's time, but I am left with the inescapable conclusion that the Government feel that they must have this Bill now because things are serious. If that is what they mean, then I accept it. Those of us who sit on the outside cannot know as much as those who are sitting inside, and if the Government put forward those reasons then they are good enough reasons for me to accept and, in accepting them, to accept also the Bill which is part and parcel of the machinery for dealing with the situation.

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  Moreover, if this constitutes an alarm signal, a call of alarm to all concerned, then I say that, whether we like the Bill or not, we must support it. That is why I support it, although I do not like it. I conclude that the situation is bad enough, as expressed by this act of policy and as expressed by His Majesty's Ministers, to make us accept this Bill in its present form, now. If that is so, then I can quite see why there cannot be a time limit of two, three, four or five years, because obviously we shall not get out of a situation like that so quickly as to be able to set a time limit. Such being the case, much as we dislike the Bill, we must accept it, substantially in its present form, subject to a few Amendments and improvements which I hope will be made in the course of its passage through your Lordships' House. The provisions for dealing with escapees, with the ingenuity of people's minds in evading exchange control, I regard, by and large, as necessary. And I do not believe that the powers which have been taken, and the complicated provisions which are contained in the Bill, will in fact create more burden than the exchange Regulations which we have had for the last six years have created and are creating.
  Here, I must express some difference of opinion with the noble and learned Viscount who has just sat down. If I understood rightly the noble Lord who introduced this Bill, what he meant by referring to a "typically British arrangement" was the arrangement by which this body of exchange Regulations has been administered; and there I agree with him entirely. It is a typically British arrangement, because it has been administered by professional people for, and on behalf of, whichever Government has been in power, and not by a body of civil servants. Because it has been so administered I think I am entitled to claim, on behalf of all those of us who know something about it, that it has been well administered from the point of view of the public, and the small person has had the same attention as the large person—the same attention that he would have had as a customer of a bank at any time. I do not believe that the persistent person has had advantage over the widow and the old man, if only because they have gone to the people to whom they have been used to going—the bank officers who have dealt with their private affairs in the
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  past and who deal with their exchange troubles to-day.
  That is a typically British arrangement, and we all hope that it will continue indefinitely. If it cannot, I can only say that I do not believe that any other series of complicated Regulations—and they are extremely complicated, and necessarily so—have formed the subject of less complaint on the part of the public affected by them. The credit for that is due to the small body of civil servants and officers of the Bank of England who have built up their experience of regulations over a period of years, and who, in practically every case—and very few complaints have come to my knowledge—have earned nothing but praise from the people with whom they have had contact.
  There are, however, two points in the Bill with which I find myself in profound disagreement, although not because I disagree with the principles or the application of the Bill as a whole. At the beginning of my remarks I referred to one of the reasons for exchange control during the war—namely, to administer the Black List, the White List, and the Contraband Control and Trading with the Enemy Regulations. There is one clause in this Bill to which I take the greatest possible exception because it appears to me to connote a return to the gravest practices which we thought finished with the war and which created so much ill feeling, not only in this country but outside it. I refer in particular to Clause 30, which, briefly, provides that any person in the United Kingdom shall do what the Treasury want in regard to a company or person abroad without, so far as I can see, any reason being given and without a Statutory List to announce who are those people abroad who are so to be treated.
  Anyone in this country may be required so to conform his actions as regards a foreign company as to cause that company to comply with any Treasury requirements, or to remove any obstacle to a foreign company complying with any of the requirements, or to render it in any respect more probable that the foreign company will comply with any of the Treasury's requirements. This is singularly near the Black and Grey List practices of the time of war, and to my mind is intolerable in time of peace. It is calculated to create the maximum amount of difficulty to foreign concerns and

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  notably to concerns across the Atlantic. I trust that on the Committee stage your Lordships will think it fit to take that clause into very serious consideration. To my mind it represents the greatest possible danger.
  My second criticism is perhaps of lesser importance but it is one which affects us all personally. I refer to Clause 22, to which reference has already been made and to part of which the noble and learned Viscount in particular referred. The assumption of powers by the Treasury under subsection (1) (f) of Clause 22 is really vital. It affects you and me—all your Lordships—when we go abroad. In fact, it gives the Treasury powers to remove our boots or socks or trousers out of our bags—I particularly do not say shirts, because the Treasury have already removed mine, and perhaps your Lordships' as well! Under this clause the Treasury have power to remove everything else. If there is to be an export prohibition on articles or a single class of goods, for heaven's sake let us have the appropriate prohibition, and do not give the Treasury freedom to say: "You must not take your boots abroad; leave them here," or "You must not take your watch or watch-chain"—that of course, is gold and the matter is much more serious. Powers of this sort are calculated to bring what is otherwise a complicated but extremely competent piece of legislation into disrepute, and I would like to see them dropped.
  In conclusion, I can only repeat what I have already said. I do not like the Bill and I do not like the reason I have given why this Bill has been presented. I think it is a pity that the Bill was presented at this time, because if the situation is as bad as it appears to be the presentation of this measure is not going to improve it. It is going to create a lack of confidence. I cannot help thinking that it is a mistake that it was presented and adopted in another place. However, the mistake has been made, and those who are responsible will no doubt answer for it. Having made those observations on the Bill which is now before you, I trust your Lordships will, as I will, support its Second Reading.
  3.55 p.m.
  VISCOUNT BRIDGEMAN: My Lords, as the noble Lord who introduced this Bill said, it is a very complicated and
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  technical document, but I do not think that need really influence us very much on Second Reading, because the fact of the matter is, that for the purposes of Second Reading the whole matter might be summed up, as the 1931 Order was summed up, in a short sentence: No one is to carry out any foreign exchange transaction without the permission of the Treasury. That is really the situation in which we shall find ourselves under this Bill.
  I do not think there is anybody in this House who does not reluctantly agree that the continuance of exchange control is necessary at the present time. I wonder, however, whether I can go so far as the noble Lord, Lord Rennell, who justified it by saying that the economic situation may be grave and therefore we must have the Bill. I should much prefer to go with my noble and learned friend Viscount Simon, who said that there should be a time limit to the Bill or that exchange control should be continued under the Expiring Laws Continuance Act. However, that is as it may be.
  I would question one remark which, if I heard rightly, fell from the lips of the noble Lord who moved the Second Reading. He gave us to suppose that the banks were largely in favour of this Bill. I would not dispute that they are, like us, accepting an unavoidable necessity, but I have here the speech of a prominent banker which I think better represents the feelings of the banking world. It states that while control necessarily must continue for a long time, it is to be hoped that we should retain as an object of policy the establishment of free exchanges. I do not believe that the banks have gone any further in support of His Majesty's Government than is indicated in the words I have just quoted.
  When we come to look at this Bill, I think we should be very brave to give it a Second Reading. We may have to be brave because, judging from the text of the Bill, it is a matter of much conjecture what is really going to happen when we pass it. In one sense, I know it is conjecture, because a number of regulations will be carried on which have been in force under the Defence (Finance) Regulations, and so forth. It is a conjecture especially as to what effect the Bill is going to have on foreign trade. The present Defence (Finance) Regula-

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  tions, although they have been modified, nearly all date from war-time. As my noble friend Lord Rennell said just now, they were then operated for two purposes. We were not concerned then, as His Majesty's Government are rightly concerned now, to stimulate the export trade; we were more concerned to restrict the import of anything that was not absolutely necessary. But now the case is entirely altered.
  In White Papers and in many speeches His Majesty's Government have made it clear that the promotion of foreign trade is vital to recovery. We all agree with that. But the promotion of foreign trade will be very largely affected in a thousand small ways by the manner in which the powers given to the Treasury in this Bill are implemented. It is not as if foreign trade were entirely a matter of exports; we must have a certain amount of raw and partly-finished materials from other countries. We may have to stimulate these essential imports by foreign investment, and so on, and we may have to give admission to foreign experts and others so that we may get the value of their services in stimulating the production of goods for export in this country. I do not know whether your Lordships all realize—many of you do—the enormous extent to which we benefited in the ten years before the war by the arrival of foreign experts, with their skill and even with their money, and how much business and profit they brought to the United Kingdom from Central Europe and from elsewhere. All I can say is that it is ten times less likely that these foreign experts will come into this country in such numbers now, because once they come in here they stand no chance of being able to get their money out again, even if they get themselves out. So we are running a very great risk, in this Bill, of freezing up the pipes of foreign trade. The seizing up, or freezing up, of pipes is, no doubt, a matter of which many of the domestically-minded among your Lordships will be thinking just now.
  Those who were acquainted with the German financial machine before the last war know how much that machine was slowed down by controls, very much of this kind, that were applied in Germany under the Nazi régime. It was not quite the same thing, of course, and I do not want to press the analogy too far. Not only did the Nazis impose controls but
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  they also removed all Jews and all anti-Nazis from their particular world of finance and commerce. Their loss was largely our gain. But in adopting these provisions in this Bill as a permanent addition to the Statute Book, we must face the fact that we are not stimulating initiative and enterprise but are reducing the likelihood that enterprise and initiative will restore and reconquer the ground which has been lost, perforce, during the war. That makes me ask once again, as so many noble Lords have asked in this debate, is it really the considered policy of His Majesty's Government that we must go on with controls for ever, or do they, like some noble Lords on these Benches, look forward to a time when we can have a free exchange? If not, why do they not?
  I am now going to turn for one moment to some of the clauses of the Bill. I would like your Lordships to look, for a moment, at Clause 42, by which it is proposed to give the Treasury the power permanently to decide who is to be allowed to come into the foreign exchange business and which defines the meaning of "authorised dealer" and "authorised depositary." Is it not reasonable to ask what is going to be the size of that closed shop, and how difficult is it going to be for any new entrant to get into the foreign exchange market? Then again, look at Clause 36 (5). It gives power for the revocation of any Order made under this Act by a subsequent Order, apparently without any notice being given and subject only to a negative resolution by Parliament.
  Clause 37 (4) gives the power to delegate. How is the power to delegate going to be used? It seems that, under this Bill, it can be used—I do not know whether it will be so used—to delegate powers to certain financial firms, to the exclusion of their rivals. That, I think, is a point which we shall have to watch very carefully. Then Clause 41 (2) gives power to decide as to the residence of individuals, and, as usual, there is no appeal. Finally, I could not associate myself more strongly than I do with what the noble Lord, Lord Rennell, said about foreign companies. It is quite inconceivable, to my mind, that companies or individuals here should be put under the necessity of having to obey Treasury orders in this way. The order might perhaps be a general one, absolutely inappropriate or, what is still more likely,

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  absolutely impossible to carry out in the circumstances prevailing in a foreign country. What relations will be like between British parent companies and foreign subsidiaries once it is known that we are no longer free agents but liable at any time to accept orders from the Treasury, I tremble to think. So, how far do we know what we are really committing ourselves to when passing this Bill?
  Of course we shall be told, as we have already been told, that the Treasury have been very reasonable and that they have operated the controls, so far, in a typically British manner. No one, I think, has accused anybody—any paid official, that is—who has had the duty of operating the regulations up to now, of any unfairness. What one does doubt is whether, by their mere conscientiousness, the result will not be to slow up or forestall transactions which have been undertaken as a private risk by private persons in the interests of their country. Everybody knows, as Lord Rennell has said, how important it is, once you have official control, to stop up all loopholes and to try to prevent evasion. You will always get a certain number of evasions. But, far more important, to my mind, is the point that you cannot chase the crooks without chasing everybody else; and the result will be that the whole of the City of London, and everywhere else, instead of getting on with the job of creating wealth and stimulating foreign trade, will be running round to the Treasury to know whether or not, in certain conditions, they will be allowed to do this or that which is what is happening every day of the week.
  One other word of regret which I do not think ought to go unspoken in this House, relates to the fact that the publication of the First Schedule puts off still further the day when there can be freedom of trade between this country and the Dominion of Canada. I know that that is part of a much wider subject, but, none the less, I think we should be wrong if we did not record the point in this debate. To sum up, we on these Benches agree, I am sure, that a Bill is regrettably necessary in the situation. But I myself have heard nothing which leads me to think that the situation could not have been dealt with by a temporary measure. I admit that I am a bad judge because, amongst other things, I have been quite incapable,
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  merely by reading this Bill, of discovering what is going to happen and what is not. Therefore, I hope that if this Bill passes His Majesty's Government will take the earliest opportunity of explaining as clearly as possible what orders the Treasury are going to make, and that we, in your Lordships' House, will not be placed in the position of having this afternoon, and in the following debates, handed out a blank cheque. Lastly, I hope the Government will—as I know they will—relate this matter to the promotion of foreign trade, a matter which is equally near their hearts, because one cannot have a situation like that of a jockey whipping his horse with one hand and pulling it in with the other.
  4.8 p.m.
  LORD HAWKE: My Lords, the final words of the noble Viscount who has just sat down give me an opening to remind your Lordships of some words which were spoken by the noble Lord, Lord Pethick-Lawrence, in moving the Second Reading of this Bill. He said that the Bill is going to help us to be able to pay for what we buy. I do not think it would be quite accurate to describe it in those words. There is nothing in this Bill to help us to pay for anything. Paying is a positive action; this Bill is entirely negative. If the noble Lord had used the word "borrow" instead of "pay," it would have been, I think, more accurate. I do not see how we are going to pay for many of the transactions in which we are indulging in these days. It seems to me quite extraordinary that this Bill should ever have come before Parliament. These powers for exchange control exist, and I should have thought that a wise Government would have used them as long as necessary and said as little about it as possible. I think that there has been a serious lack of co-ordination between the planners and the publicity department. I cannot imagine a worse advertisement for Socialism than this Bill.
  It can, of course, be argued: "We are doing all this now; why should we not tidy it up and put it into a permanent form?" But that is an attitude which, I think, betrays a great lack of knowledge of human nature. Confidence is everything in this world, and this Bill breathes lack of confidence. Never was it so important that people abroad should have confidence in Britain and in sterling as

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  to-day. In July of this year we are committed to exchange on demand for other currencies the balances of sterling resulting from current transactions. It would be really inconvenient if everybody who had such a balance took advantage of it, and I can see nothing in this Bill to encourage them to refrain from so doing, but rather the reverse. This is true not only of people outside the scheduled territories or, as I prefer to call it, the sterling area; it applies also to people within it. When they see that their countries can be expelled from the sterling area by a Treasury order which does not require the prior approval of Parliament they may well say: "Let us not run too big a balance in London, just in case of accidents."
  So much for people abroad; what about our own people? They may well say: "The Government have treated our savings with savagery; surely this permanent legislation means that savagery is in store for ever, and if that is the case ought we not to try and remove some money into a place where it will be safe from depredations, if we can?" If they come to that frame of mind they will be tempted to break the law. There are also (as the noble Viscount, Lord Bridge-man, said) many people in this country who fled from persecution abroad—persecution which was always coincident with exchange regulations. The more nervous of them may take fright at the coincidence, and may think that it is time to get out and take their money with them. If they do so, we shall lose their skill and the number of our traducers abroad will be increased. If they decide to take their money away, and they cannot do it by fair means, they will certainly be tempted to break the law. The Government may say: "All these transactions will be illegal, and we shall catch these people," but exchange regulations have been in force for many years all over the world, and people who wanted to get their money out of a country at some sacrifice generally seem to have been able to do it. That is the effect on individuals, as I see it.
  The noble Viscount, Lord Simon, brought to your Lordships' attention the case of exports, with which he has had a long connexion in his career at the Bar. I would dike to bring it again to your notice from the point of view of a mer-
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  chant, because I have been a merchant. I can assure your Lordships that his statement—which I believe met with some doubt—that goods were frequently sold at a loss in order to establish a brand, and so on, was absolutely and perfectly true. I defy any Customs officer in the world to be able to judge, except on a very few commodities indeed, within a few per cent. whether the goods are being invoiced at the right price or not. It is quite impossible. Further, I am not at all sure that in Clause 23 (1) (b) the unfortunate Customs officer does not get involved in deciding whether the currency in which the goods are invoiced is the one most suitable in the national interest. If this is so, we are in very deep waters. How difficult is it for His Majesty's Government to agree what is the national interest; and how seldom do we agree with them! To expect a poor Customs officer (and he will be a junior) to make this decision is, as the noble Viscount, Lord Simon, pointed out, quite ludicrous.
  Under Clause 24 of the Bill it will become an offence, without seeking Treasury approval, to do anything towards letting off a debtor. That means that if any of your Lordships happens to win £5 from a Frenchman at bridge, he must seek Treasury 'permission to refrain from reminding the Frenchman of this debt at suitable intervals. I know that that is an absurd instance, but the doctrine of de minimus seems to be a very dangerous one. If you creat offences right and left who is to say when the border is crossed? In certain less happy countries than ours these trifling types of offences often contribute very considerably to the emoluments of minor officials.
  Clause 30 has met with considerable obloquy from all speakers, and I can only join in condemning it. The position of British capital abroad is already sufficiently delicate, and to publish to the world that the Treasury can require a company to influence its wholly-owned subsidiary abroad would be sufficiently tactless; but when one considers the qualifications in the Second Schedule which render a foreign company susceptible to this attention of the British Treasury one wonders where sovereignty begins and ends. One fears, in fact, that Governments, whether Dominion, Colonial or foreign, may think twice in future about allowing British companies to form sub-

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  sidiaries on their soil when the British Treasury have powers of this nature in the background. Would it not have been much better to leave these things in some Order where, no doubt, they quietly lurk, and say nothing about them? Clause 29 seems to provide an anomaly which, as a non-lawyer, I put forward with some diffidence in the hope that I shall be told I am raising an unnecessary hare. Under that clause, as I see it, if any one makes a settlement in this country, other than by Will, then no one can ever benefit from it if he happened to reside outside the sterling area at the time of the settlement.
  VISCOUNT SIMON: Except with the permission of the Treasury.
  LORD HAWKE: And unless his name was brought to the notice of the Treasury at that time, and the Treasury gave permission. If that is so, this is an instance that might arise. One of your Lordships might settle £1,000 on an unmarried daughter, half to go to her husband on marriage. If she had the fortune to win a Canadian as a husband, so far as I can see that Canadian would never be likely to benefit. To return from the particular to the general, I am perfectly certain that the fact of this being permanent legislation will increase the number of people wishing to break the law. They will have a bigger stake to play for, and will be proportionately the more desperate. They will be escaping not from a short term but from life imprisonment; thus the volume of work thrown on an already overburdened Civil Service will increase.
  I do not believe that this Bill can be enforced without a postal censorship, and I am sure that the Treasury, or some agency of theirs, will before long require a permanent pensionable staff of "narks" and "stool pigeons," and we shall probably have the usual wrangle between rival trade unions for their allegiance. Even the efforts of this army will, I think, be in vain. In the Daily Telegraph some months ago it was alleged that Scotland Yard believed that the proceeds of most of the recent jewel robberies had left this country and only a negligible amount had been traced. If this is true, and it sounds credible, how on earth is it possible to prevent widespread evasion of the provisions of this Bill? I do not pretend to know the legal
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  loopholes, but I am perfectly certain there will be some. We shall find that currency brokers who specialize in evasion will set up and probably operate from countries in the sterling area, where Governments will probably not be quite so zealous in "crook" hunting as we are in this country; and that, of course, will make for bad blood between the different Governments in the sterling areas.
  I hope that the Government will make the best of a bad job and allow individuals to take away their money as freely as possible, because, by so doing, they will encourage it to stay. Perhaps it is ton much to ask them to follow a policy which will attract capital to this country, but, until they do so, sterling will remain sick. There are not many currencies to-day which are devoid of some risk or another, and it would not take much to make sterling able to look them all in the face again. A bit more coal and a little less dogma would probably do the trick. I do not know whether the Government really want London to be again a great financial centre. The precedents are mixed. Where we had the finest market in the world, the Liverpool Cotton Market, we are throwing it away; where, on the other hand, the Germans had the fur market of the world at Leipzig, we seem to be trying to bring it to London. There is no consistency about these things.
  I cannot close without some mention of the Memorandum which accompanied this Bill. When I read in this Memorandum that under Bretton Woods we were bound to produce this Bill, I was so dumbfounded that I hastened to turn up the papers to see if my understanding of the Bretton Woods Agreement was so utterly false. I do not think it was. I understood, and I understand, that the Articles of Association of the International Monetary Fund provide measures for members to be able to make their currencies freer, but that the Fund may ask a member to take steps to stop a large and sustained drain of capital. I can only conclude that the Government are anticipating a large and sustained drain of capital, and have brought out this Bill with the explanatory Memorandum. If so, they clearly have a guilty conscience, because capital does not leave a sound currency. Under Article VIII, Section 2, of the Fund, we are not at liberty to impose restrictions on payments for current trans-

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  actions. I cannot reconcile this with the limited amount of exchange allowed to travellers. Surely, if people choose to draw from their income and maintain themselves abroad, that is a current transaction or a series of current transactions. I am quite certain that the signatories to the Fund never thought that they were limiting foreign travel, or even limiting the importation of books and so on.
  I had hoped that during the debate the Government might give some news of what is happening with regard to the International Monetary Fund and Bank. It is most disquietening that so little is being heard about them. If the world is to obtain dollars in 1950, surely the Bank ought to be sponsoring loans in American markets to-day, because until the borrowers can get their money they cannot place their orders. And there is a two-year queue for most of the goods they require. So if we ourselves want orders to be placed in this country for delivery in 1950, to provide us with dollars in these years it is to our interest to see that the Bank staff are functioning as quickly as possible. I hope that by this Bill the Government are not writing off in their minds both the Bank and the Fund, though the Bill is not very reassuring in this respect.
  4.29 p.m.
  THE LORD CHANCELLOR (VISCOUNT JOWITT): My Lords, I will do my best to reply briefly to some of the questions that have been raised in this interesting discussion. I am bound to say, however, that the questions seem to me to have travelled rather far afield. Some noble Lords, like the Walrus, seem to have thought that the time has come to talk of many things. In the last speech we heard about the Liverpool Cotton Exchange, the fur market, the international Monetary Fund and so on. With great respect to the noble Lord, I do not intend to refer to any of those matters, because I have not the necessary material and information.
  May I, at the very outset of my remarks, say that sterling is, in my firm belief, still a first-rate currency, far more stable than many other currencies, and we all hope that it will remain stable. But it is quite idle for anybody to pretend that in the immediate future sterling may not be exposed to very great strains and stresses. I do not say that it will
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  be. I do not say that it is to-day. Of course, as the noble Lord who spoke last said, it is largely a matter of confidence. I regretted very much to hear the noble Viscount, Lord Simon—who, after all, speaks with the great authority of an ex-Chancellor of the Exchequer—give it forth to the world in our debate to-day that, if it were not for the powers in this Bill, sterling would cut and run. I ask myself if, as the noble Lord who spoke last said, it is largely a matter of confidence, does such a statement as that, coming from such a quarter, increase that confidence? Let us face the facts, not in an alarmist spirit, but do let us get away from the man who preaches smooth things because he thinks they will give pleasure.
  On the one hand, we are accused of uttering jeremiads; on the other hand, of preaching smooth doctrines. Let us look at the facts for ourselves. What are the facts? Although we waged the recent war mainly on our own behalf, yet equally surely it was that the civilization of the whole world might live. We saved India, we saved Egypt, and we saved many other countries, from the horrors of invasion and conquest. The saving of other countries from these horrors seems to me to have been most expensive. We had to incur vast sums of money, largely in order to bring about those very ends in their interest. What is the result? To-day to our friends abroad we owe a sum, expressed in sterling, of somewhere between £3,000,000,000 and £4,000,000,000, and it is much nearer the latter figure than the former.
  VISCOUNT SIMON: I wonder if I may interrupt the noble and learned Viscount. I paid very great attention to his comment. I thought, but I may be wrong, that I was only repeating in my own words what was said by the Chancellor of the Exchequer on the Second Reading of this Bill. May I be permitted to remind the noble and learned Viscount of what he said? He said:
  "This is one reason why I do not think any rational person who studies the subject could argue that we could decontrol capital exports until we can see our way more clearly than we do now. Indeed, if we were to decontrol external capital movements, the result would be that the consequent uncontrolled movements of capital would very soon make complete hay of our balance of payments. I say that quite, deliberately."

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  I agree that it is a serious statement, but I am not the first one to make it.
  THE LORD CHANCELLOR: The noble Viscount in his statement said that sterling would "cut and run." That is the phrase to which I objected, and that is very different from the phrase used by the Chancellor of the Exchequer. I was dealing, when I was interrupted, with the figures. I was saying that we now owe to those friends whom we helped and whom we saved something between £3,000,000,000 and £4,000,000,000 expressed in sterling; and in or about June or July of this year sterling is to be made convertible. What is the rest of the economic situation? Your Lordships know it quite well. In the year 1946 our imports, cut down grievously though they were, exceeded our exports by £330,000,000. What is the solution? It is obvious that unless we can very substantially increase our productivity we must face up to a very substantial cut in our imports. This, to my mind, is not a situation which lends itself to Party capital or Party repartee. We are all in this together, and all sections of the community have got to pull their weight and more than their weight.
  If we are going to get through this trouble it is going to be a test of the virility, the strength and the courage of our people. I say quite definitely that had the Tory Party been in power now they would have had to introduce this Bill just as we have had to introduce it, and for this reason. There are always some people who in a time of grave national difficulty would far rather safeguard their own interests than the national interests; people who would see that their nest is feathered and not mind how bad the national nest might be. There are some people who, by devious methods and by devious ways, by contracting a debt abroad and then by remitting the debt, or in a hundred and one ways, would endeavour to store up for themselves, if they thought a crisis was coming, a nice little nest egg in some other country. Faced as we are with the obvious possibility of serious strains and stresses, which no reasonable man can deny on the figures which I have given, we should be mad if at the present time we did not have a measure of exchange control. I do not think anybody denies
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  that, although, as I shall point out presently, the noble Viscount did raise some points which seemed to indicate his doubt.
  I do not like this Bill; I hate it. Quite frankly, I hate the Treasury having to take vast powers and then having a right in certain cases not to exercise them. I hate the twenty-eight clauses the noble Lord mentioned with the qualification: "save with the permission of the Treasury." It would have made Mr. Gladstone turn in his grave; but if Mr. Gladstone had seen the present financial situation he would have been going round in his grave like a turbine. You cannot possibly pretend that measures or decisions which would apply to what the noble Lord, Lord Pethick-Lawrence, called the spacious days have any applicability at all to the time through which we are passing today.
  Should the Bill be temporary, or should it be permanent? By this Bill we have enormous powers in reserve. Why do you have a temporary Bill? You have a temporary Bill for two reasons, as I follow it: first of all, you have it because you are doing something experimental. The Ballot Act of 1872 is a good illustration. In those days it was experimental, and they wanted to see how it would work. Secondly, you have a temporary Bill if you can be reasonably satisfied that at the end of the specified period the need for the Bill will go. There can be nobody who studies these facts who can doubt that the need to have these powers in reserve—perhaps not to exercise them—must last more than a period of five years. The disturbed conditions which followed the war which ended in 1918 reached their climax in 1931, twelve or thirteen years afterwards. Is there any man with any financial knowledge at all who could lay his hand on his heart and say that he thinks there is a chance of these powers, albeit in reserve, not being needed in five years time? I should be playing with your Lordships if I pretended that this or any other Government would contemplate such a possibility.
  On the other hand, I sincerely hope that these powers will not have to be used to anything like their full extent, that we shall be able to mitigate the rigour and control, and that from time to time we shall be able to allow all sorts of things to be done. These powers, however, must be in reserve, for once a leak starts in a time of

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  crisis—like the parable of the Dutch child who put his thumb in the wall of the dyke—the leak is apt to get out of control very quickly—much more quickly than the time in which you can pass an Act of Parliament. We have seen it for many years in Income Tax legislation. We have seen how some clever person gets hold of a way of evading the tax, and then long clauses to meet the situation are included in the next Finance Bill. But there is much time between one Finance Bill and another, and much harm might be done. We are not prepared to adopt any such scheme as that.
  The noble Lord, Lord Rennell—with the greater part of whose speech I found myself in entire agreement, because he and I both dislike this Bill, but we both dislike more the necessity for the Bill—said: "Why introduce the Bill now?" It is not merely a tidying up. I agree that if tidying up had been all that was necessary it would not have been wise. It is that the existing measures, in some respects which I decline to specify at present, are inadequate. When this Bill receives the Royal Assent, if it does, I shall be delighted to tell your Lordships the respects in which the present machinery is defective, but, if you will forgive my saying so, wild horses would not drag it from me now. To put this matter right, we must have legislation, and legislation now. That being so, it is obviously wise to take this opportunity in some respects to enlarge and in some respects to relax the existing requirements, and to bring them up to date and to make them tidy at the same time. Why we do not put this in the form of a temporary measure is not because this sort of legislation causes a song in our hearts, as your Lordships know perfectly well; it is because we must construct, as any Government would have to construct, a complete defence against dangers which may come upon us, not only in the near future, but in the years to come. That is our case for introducing the Bill, and for introducing it in this form.
  The noble and learned Viscount, Lord Simon, does not, if I follow him aright, object to the Bill coming in now, so long as it is a temporary measure. If that is so, what was the point of the observation he made about Clause 23? Clause 23 is the clause containing the phrase "satisfactory in the national interest." The noble and learned Viscount asked: "How on earth can these people, the Customs
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  and Excise authorities, say whether the payment is in the national interest?" But he would not mind that for five years.
  VISCOUNT SWINTON: I mind it for any length of time.
  THE LORD CHANCELLOR: I am not speaking of the noble Viscount, Lord Swinton, for the moment. I am thinking of him, of course, as I always do, but I am speaking of the noble Viscount, Lord Simon.
  VISCOUNT SIMON: I am afraid I must interrupt. I was using an argument, which I thought had force, to show that exchange control should not in the present circumstances be made the permanent law of the land. That has nothing to do with references to particular clauses which seem to be in themselves quite extravagant. I certainly should have thought that the Customs and Excise authorities were hardly the people to deal with Clause 23, even for the next five years.
  THE LORD CHANCELLOR: I still do not see the point. This power is not a new power. It is a power which the noble Viscount, as he so proudly told us, introduced before the war. I will not say it was the only one, but it was one respect in which they got ready for the war. The Customs and Excise authorities were put in then. They worked it all through the war. I do not think he minds very much if they work it for five years; it is the permanency he objects to. I make the point (which I think is a legitimate one) that if they worked it well in the past and if they are working it well at the present, why should they not work it equally well in the future?
  The long and short of the matter is that this clause is not intended to deal with a case where the two parties, the exporter and the person to whom the goods are sent, are at arms length. In such a case as that, we are perfectly prepared to trust very largely to the exporter's own judgment. We quite realize, even though we have not been for forty years at the Bar, that a man may need to export goods to build up some connexion, even if he gets practically nothing for them. What we also realize is that the exporter and the man to whom the goods are sent may not be at arms length, but that one may be merely the nominee of the other. Therefore there may be a price fixed which is quite obviously a wholly inadequate and

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  improper price, and we should in that way be allowing the export of capital. This scheme has worked without any difficulty in the past, so far as I know, and it will undoubtedly work well in the future, thanks, let me say at once, to the way in which the Bank of England and the banks generally have co-operated with us, which is typically British, as the noble Lord, Lord Pethick-Lawrence said. Thanks to them it has worked well in the past and will continue to work well.
  Then the noble and learned Viscount referred, in regard to Clause 22, to the postal order to Eire. He asked, "How is it to be publicly known?" We intend, if we can, to publish and promulgate some order about it. Then the noble Viscount went on to ask, "You are not going to have a postal censorship, are you?" That is true.
  VISCOUNT SIMON: Is that agreed?
  THE LORD CHANCELLOR: Certainly. Therefore, he said, the Order is ineffective, the whole scheme is ineffective, and the Bill is ineffective. Then why have it for five years? That is what I could not understand, and that was what makes me think the noble Viscount did not really want this Bill at all; but then, at a later stage, he seemed to say, "The vice of the whole thing is that it is not merely for five years." Then there came, at the end of his speech, a passage which I frankly say I very much regret. If a charge is to be made, let it be made openly. I do not like insinuations. I confess I do not understand the relevance of this business about being able to get a first-class sleeper from Edinburgh to London and the relevance of Mr. Bevin going abroad and whether some special concession was made. I suppose behind all this there is the suggestion that somebody 0: other has been granting favours, or doing some other dishonest business.
  VISCOUNT SIMON: The noble Viscount says he does not understand, and I hope therefore he will forgive me if I explain quite briefly the point I was trying to make. If I caused any misunderstanding in any quarter I am glad to take this opportunity of correcting it. I was not making any reflection on anybody. All I was saying was this, and I am sure the noble and learned Viscount the Lord Chancellor will appreciate that it is a
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  legitimate argument. It seems to me that in these cases the number of applications for exemption, for permission, is so great, that it is quite impossible that each application should be examined separately and judged by comparing one case with another. That is quite impossible. I am quite confident that that is not the way in which it is done. It is inevitable that unless there be something which, in the view of the authorities, justifies the making of an exception, the ordinary answer must be, "No"—and it is. What I was pointing out was that when that is the situation it is inevitable that those who, for one reason or another, are able to press their claims, are more likely to have them granted than the ordinary man in the street, who has just got to apply and take the best chance he can as to the result. That is a perfectly legitimate argument and one which makes no reflection on anybody. It is, I think, the result of having legislation which involves such a multitude of applications, only a very small section of which can possibly be dealt with.
  THE LORD CHANCELLOR: I am grateful to the noble Viscount for explaining what I failed to understand. I confess I thought that he intended to convey that, as kissing goes by favour, so do sleepers from Edinburgh. That is what I thought he was saying, and if he was not, I am glad to hear it. No one can understand better than he does (because he was the author of these things, as he is proud to boast) how this thing works. The Treasury gives broad instructions, which are public property, and then the administration of the details is left to the banks and not, broadly speaking, to the civil servants at all. If the noble Viscount has any case in mind when he makes this rather minor form of accusation, in which a man has been granted some privilege which has been refused to his less favoured brother, then I should like to hear it, because I believe that although these controls are drastic their administration has given universal satisfaction. If this kind of suggestion is to be made, I think there should be some sort of case to back up the statement which, at any rate as I first understood it, seemed to me to be very derogatory to the Civil Service. It appears to me to be rather questioning the efficiency with which the banks have done their work.

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  I pass from that and come now to the speech of the noble Lord, Lord Rennell, whose main theme I have tried to deal with in pointing out the reason why we believe that it is necessary to have this Bill at the present time. It is not exactly an alarm signal, but we want everybody to realize that we are coming into a very difficult time. It is to my mind a foolish argument to say that people stood this thing during the war and they will not stand for it now, after we have had eighteen months of peace, eighteen months of a Socialist Government. The noble Lord knows perfectly well that a Socialist Government have nothing whatever to do with this point.
  LORD RENNELL: That was not my suggestion.
  THE LORD CHANCELLOR: I beg the noble Lord's pardon; I meant the noble Viscount, Lord Simon. But I do say this; in some ways our economic situation to-day is a more difficult situation than it was during the war. During the war we had the great benefit of Lease-Lend, and we have not that benefit to-day. The economic and financial situation is, therefore, more difficult now than it was during the time when we had Lease-Lend. I cannot see how it can be said that it is reasonable to have these powers during the war, but unreasonable to have them when the war is over. Now is the testing time for sterling.
  The noble Lord then raised the question of Clause 30. I suppose he realizes that Clause 30—he obviously knows his subject very well—is merely Regulation V (c) enlarged. I do not believe that on this point there is any difference, and I think it has worked fairly well. The reason for Clause 30 is this. It deals, for instance, with a man who is, broadly speaking, in control of a foreign company, who can be ordered by the Treasury to do certain things, always assuming that he has the power to do them. The reason is that an individual who has a store of dollars abroad can be made to bring his dollars back here, and I think that is reasonable and fair. For instance, there is an island called the Prince Edward Island—I am not sure where it is—
  VISCOUNT SIMON: I thought it was one of the nine Provinces of Canada.
  THE LORD CHANCELLOR: Very well. It is one of the Islands beloved by
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  tax dodgers. What would be easier than for a person to get somebody to form in Prince Edward Island a company of which he owns every single share? He then, instead of building up his own pile of dollars, builds it up in the name of that company. If you are going to take from the man who owns his dollars, why should you not equally take from the man who has interposed this mere figment of the imagination between himself and the Treasury? Therefore, the effect of Clause 30 is that in such cases as that we have the right to demand that the owner of those shares should act just as he would have to act if he were the direct owner.
  The noble Lord also raised the question of Clause 22 (1) (f). It is, of course, true that under that clause it is possible that the Treasury might specify anything. It might, as he said, specify his trousers or, as was said in another place, the Scotsman's kilt. The list of articles which they have in fact is such articles as diamonds, jewellery, rare postage stamps and various articles of that sort, and I hope that the Treasury will continue to use their powers with discretion.
  The noble Viscount, Lord Bridgman, referred to many detailed clauses. I hope the noble Viscount will forgive me if I do not go through them all now, because I think he will agree they are more appropriate for discussion in Committee, and on the Committee stage of this Bill—assuming that your Lordships give it a Second Reading—the noble Lord, Lord Pethick-Lawrence, and I will be pleased to deal with these various clauses. It is not really the fact, as he said, that to-day people have to go running round to the Treasury. It is the fact that they go to their bank. There are only eight people in the Treasury dealing with this, and the way the Treasury deal with it is that they give broad general regulations, and the bank, in case of difficulty, would refer to the Bank of England; further, of course, the Bank of England would refer to the Treasury.
  VISCOUNT BRIDGEMAN: If I might interrupt the noble and learned Viscount, in a great many cases the people would not go to the Treasury, but would go to someone to whom the Treasury have delegated the responsibility. But that, I submit, does not for a moment alter my point that you cannot in the City of

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  London do more than the simplest routine transactions without going to the Treasury, or the person to whom the Treasury have delegated the responsibility. That is the point I wish to make.
  THE LORD CHANCELLOR: That is true, but there is all the difference in the world in the way this thing has been administered. You have not to go to the Treasury, but to the banks; and the banks have administered this with almost universal satisfaction. I do not think, therefore, that the difficulty is as great as is suggested. The noble Lord, Lord Hawke, referred in particular to the question of letting off a debtor, and also, I think, to settlements abroad. Assuming always that the Treasury are going to use their powers sensibly, of course they would not deal with the sort of cases he had in mind, but I am sure he will realize that in order to stop up all the holes and prevent people who want to evade the provisions of this Bill—notwithstanding what the national need may be—and want to put themselves as individuals in a strong position, we must have this power. I think I can assure the noble Lord that in the sort of cases he has in mind, the commission would be ready to assist.
  That is the position. I have tried not to create any alarm or despondency. I have tried to state the facts because I believe our people are always at their best when the facts are stated. I think the facts cannot be too widely known, or too often stated. We are up against a testing time, but that we shall get through I do not doubt. We shall get through all these matters by all of us pulling together. I am not trying to make Party capital out of what is a great national problem which our people will surely solve.
  On Question, Bill read 2a, and committed to a Committee of the Whole House.

  HOUSE OF COMMONS (REDISTRIBUTION OF SEATS) BILL.
  Read 3a, with the Amendment (according to Order), and passed, and returned to the Commons.

  REMEDIES AGAINST THE CROWN.
  5.0 p.m.
  VISCOUNT SIMON VISCOUNT SIMON asked the Lord Chancellor what progress is being made in the preparation of the Bill which it is understood that he intends to introduce dealing with remedies against the Crown, and what are the prospects of such a Bill reaching the Statute Book in the course of the present Session? The noble and learned Viscount said: My Lords, I wish to put to my noble friend on the Woolsack the question which is on the Paper. Very briefly, I would remind the House of the recent history of the matter. It has long been realized that the immunity of the Crown from proceedings directly taken against it for damages and the like, though historically explicable, has somtimes created difficulty. In the ordinary case where a claim is for compensation—that is to say, for an accident in the street, a case where an Army vehicle has been driven too fast and dangerously—the method which has been followed, and followed for many years, has been, since the Crown could not be sued, to find the name of the driver (which the War Office would give) and to sue him. On proof that he had been negligent, judgment was given against him and the amount of the damages was paid by the Crown. Indeed, the case was usually defended by the Crown. That is a very cumbrous method, but it provides a remedy. Recently, however, another class of case has been given publicity in which not only is it unfortunate that we should continue the present arrangement but, if present arrangements are not altered, there will be an absolute denial of the possibility of justice in the courts. It is the case where the Crown is the occupier of premises, and of course the Crown is becoming more and more the occupier of a great many premises.
  If a private person was the occupier, and if a person who went there was a person with a licence to go there, and he was injured owing to the defective condition of the premises, to an unlighted, dangerous staircase, to a hole in the floor, to something falling out of the window and hitting the individual on the head as he walked by, then as against the private occupier there would be a remedy; it would be a breach of duty of the occupier. But as against the Crown there is no remedy at all. That was called attention

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  to prominently when the House of Lords was sitting in a judicial capacity as long ago as last September, or early October. It led to a great deal of correspondence in The Times in which the difficulties were pointed out and a claim for remedy was very urgently made.
  It is right to add that under a Commission appointed some time ago, there has already been an elaborate investigation of this whole subject, including the case of the occupier. Although that Commission made no recommendation, it did produce a draft Bill which the Lord Chancellor and his advisers did not think was in the proper shape. The matter was continued at the time of the gracious Speech last November, when a number of members of the House pressed the Government on this subject. They pointed out that the King's Speech contained no undertaking or promise or reference to the introducing of any legislation of the kind, although it was obviously very urgent that the matter should be put on the proper footing. I do not blame my noble friend for saying what he had to say at the time, in view of the Government's programme. He said that unfortunately it was not possible to put it in the King's Speech.
  It was pointed out that, at least in the case where the Crown is the occupier, the private citizen has no remedy at all, and I noticed that The Times on October 12 said that in the interests of justice the present position was untenable. Later, when the matter was raised again in the House, the Lord Chancellor showed real interest in the subject. On November 13 he said he might be able to introduce a Bill on the subject and he hoped to find a loophole to get it in. I have reason to believe he has pressed his colleagues on the matter to the very best of his ability and his authority.
  This afternoon, I have taken a course which I do not think has been taken for many years, but which is still permitted to members of this House: that of introducing a Bill of my own, dealing only with the single point about the occupier. That is an extremely urgent matter, because people are being denied their rights and no one wishes that to continue any longer. I have not done that with the idea of endeavouring to interfere with the Lord Chancellor's project. What I Viscount is: what are the prospects of a want to know from the noble and learned
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  Bill covering the whole subject, as no doubt his Bill will do? Is it really being introduced and, what is more important, what are the prospects of the Bill reaching the Statute Book? Because introducing a Bill in itself gives no one any remedy; it has to get on the Statute Book. I need hardly say that nothing would please me better than to see the Lord Chancellor's Bill reaching the Statute Book and containing the clause which I indicated; then my little Bill could be thrown in the waste paper basket.
  I will again say that the real question is not whether he is willing to introduce the Bill, because I know he is. I know his heart is in it. It is not a question whether he and his advisers have been working at it, because I know they have. What I desire to know, and what I think in the public interest ought to be asked, is: what can he tell the House now about the extent to which the Bill is prepared, and have all difficulties been overcome? Departments raise difficulties and they may have to be overcome. What can he tell us of the prospects of its being passed into law this Session? Of course it does not depend on this House; it depends on both Houses and the time available in another place. In the meantime, I very much hope he will be able to give us an assurance that the Bill which he has at heart will be introduced and carried through this House in good time, so that there is every reasonable chance that it goes on the Statute Book.
  5.10 p.m.
  VISCOUNT CECIL OF CHELWOOD: My Lords, I will not detain the Lord Chancellor more than a moment, but I should like to take the opportunity of expressing my very warm support for what has fallen from my noble friend, Viscount Simon. He has touched on an actual case and I do not propose to repeat what he has said. Everything he has said is absolutely right and true. In my own personal capacity I have come across very serious inconvenience, and in some cases even injustice, from the present state of affairs. It is really a pure survival; there is nothing to be said in its favour except that it exists. That is an argument which I do not think will appeal to the Lord Chancellor; it certainly does not appeal to me. I venture to think that the supremacy of the law is the principle on which we all rely for progress and free-

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  dom. This solitary exception to that great principle ought to be swept away.
  THE LORD CHANCELLOR: I concur with my noble friends in what they have said. The principle we ought to adopt is this: we should treat the Crown just as we do any ordinary employer, either in contract or in tort. I should like to see exactly the same procedure available against the Crown as against any individual. There are, of course, certain exceptions; the analogy does not quite hold because, of course, no private individual has to run a Post Office, to maintain an Army or a Navy, or fire guns or anything of that sort. Therefore it is quit obvious that there must be same exceptions. But the broad, general principle which I would like to introduce is that in all matters the courts shall be open to anybody who has a claim against the Crown in the same way as they are open to anybody who has a claim against an individual.
  What I am going to say now as to my progress is subject to the difficulty which has arisen over the introduction of the noble and learned Viscount's Bill to-day. He, of course, knows the rule about two Bills dealing with the same subject matter not being able to proceed at the same time. I have not had time to look it up, but he will find the material passages, I think, on page 491 of the 14th Edition of Erskine May.
  VISCOUNT SIMON: I consulted the Authorities at the Table.
  THE LORD CHANCELLOR: What I am saying is that I confess I very much wish the noble Lord had delayed introducing his Bill until after he had heard my answer at a quarter past five, because I think that he might then have not wished to introduce his Bill. As the noble Lord knows, and as he was good enough to say, I have been working on this matter for a long time. I do not propose to make a promise, to which I can be held if anything unforeseen happens, but the ship, after a stormy passage, is so near port that it is there but for tying up at the quay. I very much hope—and I firmly believe that I shall be able to do so—to introduce a Bill on the lines I have indicated, certainly in the course of this month. Indeed, if this question had been asked in a week's time I might have been able to give your Lordships something
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  more specific than that. But I must not treat as a mere formality some consents which I still have to get. So far as I know, all Departmental objections have gone. For a very long time I have been anxious to get the Bill drafted, and I have used all my ingenuity to get it drafted. I think that I may now say that all is well.
  VISCOUNT SIMON: I would like to say at once—indeed I think it goes almost without saying—that if indeed it should be the case that my Bill sets up the smallest obstruction to that which the Lord Chancellor is ready to introduce, I should never allow it to continue as a Bill before the House at all. But this is an entirely new point to me, and at present I am not at all sure—nor do I think the Lord Chancellor is—that that is so.
  THE LORD CHANCELLOR: I am not absolutely sure myself, for I have had no advice on this, but I looked up Erskine May. As I have said, it is a pity that the noble and learned Viscount's Bill could not have been introduced say tomorrow, after the noble and learned Viscount had given me a chance of answering his question on the Order Paper. I cannot quite understand why he did not do so. I am now asked, as a further question, what are the prospects of this Bill. Well, I hope to be able to introduce this Bill, and I think I have good grounds for trusting that it will prove to be non-controversial. I had intended to send the Bill round to some noble Lords who have particular knowledge of this matter before I introduced it, but in view of the present situation I think it will perhaps be better to introduce it and, if necessary, to incorporate their suggestions by means of Amendments. I hope that the Bill will prove non-controversial, and that it will be possible to get it through your Lordships' House in a very short time. When that has been done, it will, of course, go to another place. There, I think, it depends entirely on the Opposition whether it is to be non-controversial. Personally, I see no reason why it should not have an easy passage. But if the Bill is going to be controversial in this, that or the other respects, of course it might not get through.
  There are in the Bill, as I have indicated, certain safeguards. I mentioned the Post Office. That is one illustration. Unless we had some safeguard in that

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  respect we could not go on with the Bill. It must obviously be made impossible for anyone to say: "I posted a letter containing a lot of money and it has not arrived at its destination," and to proceed to make a claim against the Post Office. The case of a registered letter, of course, is different. We must also have some protection for the Armed Forces, and a few other points which are fundamental to the Bill. I believe that those matters will be clearly set out. They certainly were in the draft Bill of 1927. As I have said, I have no reason to think that it will prove controversial, and I very much hope that the Bill will be passed. I anticipate that it will, though I am not going to be held liable for breach of contract if it is not. But I anticipate being able, in a very short time, to introduce my complete Bill dealing both with contract and with tort, on the lines which I have indicated, into your Lordships' House.
  VISCOUNT SIMON: Does it not deal with occupation?
  THE LORD CHANCELLOR: Yes, it deals with the whole subject matter. A great difficulty that arises to-day not only in the case of occupation—that is a very common illustration—is exemplified where you cannot designate the particu-
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  lar servant of the Crown that you say is a wrong-doer. If, for instance, some one while walking along a country road is run down by a lorry which all the witnesses say is an Army lorry, and then the fullest inquiries fail to show which lorry it was, or who was the driver, the injured man is in the position of not having a remedy. I shall, in due course, rely on the assistance of the two noble Lords who have spoken to help me to get the Bill through, and to mould it so that we can get a really satisfactory instrument for doing justice as between the Crown and the subject.

  SUNDAY ENTERTAINMENTS ACT, 1932.
  Orders made by the Secretary of State for the Home Department extending Section 1 of the Act to the

  Urban District of Bridgend;

  Urban District of Oakham;

  Urban District of Whitby;

  Rural District of Eton:

  Laid before the House (pursuant to Act) for affirmative Resolution, and ordered to lie on the Table.
  House adjourned at twenty minutes past five o'clock.