Sitting of 8 July 1948

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

    Dentists
    Mr. Lipsonasked the Minister of Health whether in view of the large number of dentists who have decided not to take part in the General Dental Service under the National Health Act, he will invite the Dental Consultative Committee to meet him again in order to try and find agreement on outstanding differences.
    The Minister of Health (Mr. Aneurin Bevan): No, Sir. The terms of service offered to dentists are in my view generous and reasonable, and I believe that most individual dentists will feel the same.
    Mr. Lipson: May I ask my right hon. Friend whether, in view of the happy result which followed his gesture to the doctors, he will make a similar gesture now to the dentists, so as to ensure that the benefits of the dental part of the Health Service reach the people at the earliest possible time?
    Mr. Bevan: I am convinced from the figures of the dentists joining up, that very soon, almost all the dentists will be taking service under the Act. In any case, we cannot submit to what may, unless we are careful, become blackmail.

    Doctors
    Sir Henry Morris-Jonesasked the Minister of Health the proportion of the population that have selected a doctor under the National Health Act up to 5th July.
    Mr. Bevan: By 5th July well over 30 million of the total civilian population of 42 million in England and Wales had
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    been accepted by doctors under the National Health Service Act. There is still a flood of forms in the hands of doctors and Executive Councils, which have not been counted.
    Sir H. Morris-Jones: Does the right hon. Gentleman include in that the old panel figures?
    Mr. Bevan: Yes; but it is very difficult at this stage to analyse the figures, because it may be that many on the panel have applied unnecessarily.
    Mrs. Jean Mann: Is my right hon. Friend aware that certain hon. Members opposite are inserting in newspapers letters purporting to tell the people that they cannot have this service without a contributory stamp, and that—
    Mr. Speaker: This Question does not ask what hon. Members opposite are doing, but asks:
    "What is the proportion of the population that have selected a doctor."
    Mrs. Mann: It means that because of that false information only a quarter of the population in Glasgow have chosen a doctor.
    Sir H. Morris-Jonesasked the Minister of Health how the amount of the capitation fee to medical practitioners under the National Health Act will be arrived at; what deductions come out of the 15s. 6d. per head; and how the amount for each area will be computed, having regard to the proportion of the population who have not selected a doctor.
    Mr. Bevan: Detailed arrangements are still under discussion with the British Medical Association.
    Sir H. Morris-Jones: Is the right hon. Gentleman aware that a large number of general medical practitioners are very perturbed about this; that there is grave fear that their total emoluments and income will be considerably reduced from pre-National Insurance income; and that they want to know whether the total pool will be available to them?
    Mr. Bevan: I think they ought to await the results of the discussions with the representatives of the medical profession.

    Hospital Boards (Committees)
    Sir Ian Fraserasked the Minister of Health if Regional and Group Hospital Boards have power to co-opt a limited number of extra members.
    Mr. Bevan: No, Sir; but Regional Hospital Boards, hospital management committees and boards of governors of teaching hospitals have power to appoint committees and sub-committees consisting partly of outside members, and to delegate functions to them.
    Sir I. Fraser: Is it not inevitable when these committees are first set up that certain local interests, such as hospital boards and ex-Service men, and others, will be left out; and would it not give great public satisfaction if there were, say, a 10 per cent. margin for co-option?
    Mr. Bevan: As I have said, the local management committees and Regional Boards have power to co-opt people on to the sub-committees, and also on to the house committees of individual hospitals. I believe that will be done on a very considerable scale.
    Lieut.-Colonel Sir Thomas Moore: Could the right hon. Gentleman say whether verminous members will be included or excluded?
    Mr. Bevan: Well, of course, if there are verminous members on the Boards they will have to be fumigated.
    Mrs. Leah Manning: Is my right hon. Friend aware that in some localities the representatives of the local Labour Party seem to be the only people who have been left on these Boards?
    Mr. Bevan: I think that is a false impression, but I am here between two fires.
    Major Legge-Bourke: Would the right hon. Gentleman consider encouraging Boards, when selecting outside members to sit on the committees, to make sure that those areas which are not represented on the Boards, and which have hospitals, are allowed to produce members for the committees?
    Mr. Bevan: I think that probably hon. Members are now confusing membership of the Regional Board with membership of the management committee. Under the Statute I have no power over the selection of the management committee.

    Voluntary Hospital Workers (Tribute)
    Mr. Benn Levyasked the Minister of Health whether he has any statement to make regarding all those people who have administered the various past health services up to 5th July, and who have now handed over to the National Health Service.
    Mr. Hurdasked the Minister of Health if he intends to supplement the official circular dismissing the members of hospital committees with a personal letter expressing the thanks of the community for the devoted service they have rendered.
    Mr. Bevan: It would, unfortunately, not be practicable for me to send out personal letters to all those associated with the health services taken over on 5th July. But I should like to take this opportunity of expressing—I hope on behalf of the House, as well as myself—my keen appreciation of all that has been done in the hospitals, local authorities, insurance committees and elsewhere, by men and women who have had the public interest unselfishly at heart. Without their pioneer work, our new adventure would have been impossible. I am only too glad that many of them are going to join us in it still.
    Sir H. Morris-Jones: Could not the right hon. Gentleman have been more comprehensive in his statement—which is a very important statement—and included organisations such as the District Nursing Association?
    Mr. Bevan: It is, unfortunately, the fact that in answers of this sort it is assumed that what is not put in has been deliberately left out. Therefore, it would, I think, be improper to put them all in.

  HOUSING

    Construction
    Mr. A. Edward Daviesasked the Minister of Health how many new houses are estimated to be required in England and Wales at the present time to meet essential needs; and whether he is satisfied that the present level of housing construction is utilising to the full the manpower and materials available to the building industry.
    Mr. Bevan: I would refer my hon. Friend to the statement in the May Housing Return.

    Building Licence, Worcester
    Mr. Wardasked the Minister of Health whether, in view of paragraph 14 of Command Paper No. 7442, he is now prepared to authorise the issue of a building licence to Mr. A. Pagett, of 2, Pope Iron Road, Worcester, for the erection of a bungalow at Blue Hills, St. Agnes, Cornwall.
    Mr. Bevan: The matter is within the discretion of the local authority, to whom, as I understand, Mr. Pagett has applied for a licence and not to my Department.

    Agricultural Cottages (Subsidies)
    Mr. Toucheasked the Minister of Health how many local authorities are using subsidies granted to them in respect of houses built for agricultural workers for the purpose of reducing rents generally and not for the purpose of reducing rents to agricultural workers.
    Mr. Bevan: I regret that this information is not available.
    Mr. Touche: Does the right hon. Gentleman think it reasonable that agricultural labourers should be deprived of any benefit with regard to rents when subsidies are given to local authorities for the building of agricultural cottages?
    Mr. Bevan: The subsidies are to enable local authorities in agricultural areas to discharge their housing functions, and they have no direct relationship to the rent of a particular house.
    Mr. Touche: Is not the purpose of giving subsidies for agricultural cottages to lower the rents to the agricultural workers?
    Mr. Bevan: The rents are in the power of the local authorities themselves, and I have no authority over them.
    Mr. Manningham-Buller: Am I to understand that the right hon. Gentleman is in favour of local authorities using subsidies for this purpose generally?
    Mr. Bevan: I do not understand what the hon. and learned Gentleman means. The subsidies are used in order to enable the local authorities to build houses at
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    rents which are within reach of the tenants; and that I think is generally the case.
    Mr. Manningham-Buller: I asked the right hon. Gentleman whether he was in favour of local authorities using the subsidies for reducing rents generally.
    Mr. Speaker: That is a matter of opinion.

    Wales
    Mr. Goronwy Robertsasked the Minister of Health to what causes he ascribes the lower rate of progress in housing in Wales as compared with other regions of the United Kingdom; and if he proposes to take steps to correct the disparity.
    Mr. Bevan: Having regard to the labour available, the progress does not compare unfavourably. Every effort has been made to increase the labour force.
    Mr. Roberts: In view of the fact that in the Southern and Eastern regions of England, both of which have populations slightly less than Wales, the housing operations since the war are about double those in Wales, does he not think that there is a case for a searching inquiry into the position?
    Mr. Bevan: There is no need for an inquiry, as we know the reason. We know that between the war years, Wales, as a whole, lost a great deal of its population and a great deal of its building force. After the war, there was, therefore, a far greater building force in South and South-Eastern England than there was in Wales. In other words, this proves that we have to pay now for the pre-war neglect of Wales.

    Nottingham
    Sir Waldron Smithersasked the Minister of Health, in view of the fact that the builders of Nottingham have offered to build 1,000 houses for sale at £1,300 each, when he proposes to issue the licences.
    Mr. Bevan: The decision on applications for licences is a matter for the local authority under the terms of Circular 108/48, of which I am sending the hon. Member a copy.
    Sir W. Smithers: But is not the local authority subject to the decision of the Minister of Health; and is not the Minister

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    of Health deliberately trying to create conditions in which Communism can flourish?
    Mr. Speaker: That is an insinuation and not a Question.

    Local Authorities (Requisitioning Powers)
    Mr. Beswickasked the Minister of Health what changed circumstances have led him to withdraw from clerks to local authorities the requisitioning powers hitherto delegated to them.
    Mr. Bevan: I would refer my hon. Friend to the answer I gave on 1st July following the Question from my hon. and gallant Friend the Member for Brixton (Lieut.-Colonel Lipton).
    Mr. Beswick: I have seen that reply, but it does not give the answer I wanted. Is there any evidence that the clerks to local authorities have in the past wrongfully or mischievously used the power which he delegated to them?
    Mr. Bevan: There are cases on this matter before the courts at the moment, and I, therefore, would not wish to be asked to comment upon it.
    Mr. Tiffany: Would it not be better to to leave this power in the hands of clerks to the local authorities, who are aware of the local circumstances; and in any case, has not this power had good effect in seeing that unused accommodation was immediately taken up?
    Mr. Bevan: My hon. Friend need not fear that the powers will not be exercised promptly where they are needed to be exercised. The number of cases in which they are used now is falling very rapidly indeed. However, I must not be asked to comment upon the way in which clerks have used these powers, in view of the cases before the courts.
    Mr. Beswick: Will my right hon. Friend bear in mind that in certain areas these powers would still be very useful indeed if left with the clerks to the local authorities; and will he, therefore, reconsider the position as far as at any rate certain parts of the country are concerned?
    Mr. Bevan: No; but I will certainly keep my eye on what is happening, and
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    if it is found that this new machinery is too dilatory, then, of course, we shall reconsider it.

    Building Permits
    Mr. Heathcoat Amoryasked the Minister of Health how many building permits he expects to be issued by local authorities to private individuals under circular 108/48 during the current year.
    Mr. Bevan: I cannot add anything to the statement published in the current Housing Return.
    Mr. Amory: Is it not a fact that local authorities in general have already put in hand their allocations for the current year, and that very few, if any, permits for houses of private individuals are likely to be issued during this year.
    Mr. Bevan: Some of the local authorities who have not yet invited tenders for the whole of their last allocation can include this proportion in that allocation and all new allocations; but the House will probably have an early opportunity of discussing the matter.

    Hull
    Commander Purseyasked the Minister of Health the number of houses in Hull which were accepted as total loss by war damage; the number of new houses completed; the number now under construction and approved, respectively; and the probable number to be approved for the second half of 1948.
    Mr. Bevan: The number of houses in Hull destroyed or damaged beyond repair by enemy action is approximately 5,500. As regards the second and third parts of the Question, I would refer my hon. Friend to Appendix B to the Housing Return. As regards the last part of the Question, the local authority have been authorised to go to tender for a further 267 houses.

  MARSTON GREEN MATERNITY HOME
  Mr. Wyattasked the Minister of Health whether he is aware that the re-adaptation of Marston Green Maternity Home by the Birmingham City Council is being delayed by the inability to obtain piping; and what steps he will take to rectify this situation.
  Mr. Bevan: The provision of the first 30 beds will not be delayed by inability to obtain piping, but shortage may delay the completion of the central heating at the hospital. Everything possible will be done to reduce this delay.
  Mr. Wyatt: Will my right hon. Friend use his great powers of persuasion on his right hon. Friend the Secretary of State for War to release some of the considerable quantities of piping in store so as to enable this hospital to be completed?
  Mr. Bevan: I have said that I will take every step to complete it as early as possible.

  DISABLED PERSONS (ADVISORY COMMITTEE)
  Mr. Edward Evansasked the Minister of Health whether it is his intention to appoint an advisory committee in connection with the welfare services for physically handicapped persons provided for in the National Assistance Act, 1948; and if he will make a statement.
  Mr. Bevan: Yes, Sir. I told local authorities of my intention in a recent circular, and I shall shortly be taking the necessary action.
  Mr. Evans: Does that mean that the Minister proposes to set up an advisory committee on a representative basis of the various interests concerned with certain types of handicapped people; and will they be able to call on specialist advice by co-option?
  Mr. Bevan: It would, of course, be my action to consult representative bodies. But these advisory committees are not representative committees; they are conferences; they are the appropriate advisory committees under the Act; but everybody concerned in the matter will be given an opportunity of putting forward names.

  LOCAL GOVERNMENT BOUNDARY COMMISSION (REPORT)
  Mr. Medlandasked the Minister of Health if he will now inform the House on the action the Government propose to take to implement the recommendations for legislation contained in the
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  Local Government Boundary Commission's report for 1947.
  Mr. Bevan: I have nothing further to add to the reply given to my hon. Friend the Member for North St. Pancras (Mr. House) on 8th April.
  Mr. Medland: Can the Minister inform us whether it is proposed to discuss this report in the House prior to legislation being promulgated?
  Mr. Bevan: I suppose hon. Members have many opportunities for raising these matters if they so desire. I have no desire to obstruct a Debate, but there is no early prospect of legislation.

  EDUCATION

    Catholic Schools, Lancashire
    Mr. John Lewisasked the Minister of Education how many new Catholic schools have been opened in Lancashire since 1945, specifying the areas and the dates upon which the schools have been opened.
    The Minister of Education (Mr. Tomlinson): None, Sir. But work is being carried out, or should shortly begin, on 10 Roman Catholic schools in Lancashire, seven of which will be new schools. This is in addition to an extensive programme of war damage repairs to Catholic schools in Liverpool which has been approved and on which work is in progress.
    Mr. J. Lewisasked the Minister of Education (1) why his Department have refused to permit the use of the church hall as a temporary school at St. Osmund's, Bolton, pending the decision regarding the permanent Catholic school to be erected, in view of the fact that 1,800 new houses are being built in the area, of which a high proportion of the occupants will be Catholics;
    (2) if he will make a full statement regarding discussions which have taken place between his Department and the chief education officer and members of the education committee of the Bolton Town Council and the promoters, regarding the Catholic school which it is proposed should be built at St. Osmund's in Bolton; and why this matter has been constantly deferred, in spite of the fact that the need for such a school has been established.
    Mr. Tomlinson: The latest information before me shows that the number of houses under construction in this area does not approach the figure of 1,800 given by my hon. Friend, and that the proportion of Roman Catholics among the future occupiers is not expected to be unusually high. No immediate need for a new school has been proved, but I have promised as a result of recent discussions with the local education authority to review the matter at the beginning of September. I could not agree to the establishment of a new school in the church hall even as a temporary measure. My Department has on several occasions explained to the authority and to the promoters that this hall is quite unsuitable for the purpose.
    Mr. Lewis: Is my right hon. Friend aware that even if permission were granted for the building of a new school it could not possibly be completed before 1950, and that by that time there would be 280 pupils, based on an entry of 40 pupils per year, which would establish a claim for a school? A school cannot be provided at short notice to accommodate these children, and it is no use pretending that it can be.
    Mr. Tomlinson: Those figures are hypothetical. In every instance in which a new school is built these factors are taken into account.
    Mr. Lewis: In view of the completely inconclusive nature of the reply, I beg to give notice that I shall raise the matter on the Adjournment at the earliest possible moment.

    Secondary Schools, Birmingham
    Sir Patrick Hannonasked the Minister of Education the grounds upon which he refused a permit for the erection of a girls' grammar school in South Birmingham; if he approves of the reorganisation of the two secondary schools at Hortfield Crescent, namely, a mixed modern school for boys and a grammar school for girls; what conditions will attach to this proposal submitted at the instance of the Birmingham Education Committee; and if, in view of the efficiency of Birmingham educational administration, he will afford full facilities for rapid promotion of reconstruction of those schools.
    Mr. Tomlinson: The local education authority were informed in September, 1946, that the provision of a new grammar school in South Birmingham was not as urgent as others of their projects. I have approved the reorganisation of Hart-field Crescent Schools subject to certain conditions about which I am writing to the hon. Member. I shall help as far as I can to get the approved work done quickly.
    Sir P. Hannon: In view of the high standard of efficiency in the administration of education in Birmingham, will not the Minister give every possible facility for the development of these secondary schools in that area?
    Mr. Tomlinson: Yes, Sir, but not until questions that are more urgent in relation to other areas have been dealt with.

    Girls' Training Corps
    Sir P. Hannonasked the Minister of. Education if he has had under consideration any scheme for the encouragement of the expansion of the Girls' Training Corps; if he realises the valuable educational influence of this organisation upon the training and character of young women throughout the country; and if he will stimulate interest in this cadet movement through local education committees.
    Mr. Tomlinson: Yes, Sir. My Department has encouraged the Girls' Training Corps since its formation, both directly and through the local education authorities.
    Sir P. Hannon: What steps does the Minister propose to take to give publicity to the importance of development in this way?
    Mr. Tomlinson: I cannot separate the Girls' Training Corps from the many other youth organisations which are doing excellent work. I would point out that this corps figures with the others in the publicity that is being given.
    Sir P. Hannon: May I take it that the Ministry are in full sympathy with the development of the youth movement in its various phases throughout the country?
    Mr. Tomlinson: Yes, Sir, and that is shown by the grants which are constantly being given.

    Agricultural Subjects
    Brigadier Medlicottasked the Minister of Education if he will consider sending a circular to all local education authorities specifically urging them to include agricultural education in the school curriculum in urban as well as in the rural areas.
    Mr. Tomlinson: School authorities generally are already alive to the importance of including agricultural subjects in the curriculum in appropriate cases.
    Brigadier Medlicott: May we take it that the authorities will have the fullest support and encouragement of the Minister in this very important matter?
    Mr. Tomlinson: Certainly, and if Members who are particularly interested will take the opportunity to visit schools they will see that this is being done.
    Mr. Levy: Will the Minister, on the contrary, resist any suggestion that the few meagre years allotted to education should be used up for the purpose of pre-fabricating agricultural workers, plumbers, dentists or any other categories on purely economic as opposed to educational grounds?
    Mrs. Manning: Will my right hon. Friend consider, in view of the importance of interesting children in urban schools in agricultural education, the possibility of sending older boys and girls to work in schools in the country for three months in the Summer if they would like to go?
    Mr. Tomlinson: That is a bigger question which I should like to look into.

    Comprehensive Schools, Middlesex
    Mr. Keelingasked the Minister of Education which local education committees in Middlesex have expressed a wish either for or against the setting up of comprehensive schools in their areas.
    Mr. Tomlinson: I understand that when the Middlesex local education authority discussed with the divisional executives the proposal to include comprehensive schools in the Development Plan two of them, Enfield and Twickenham, formally opposed the proposal. Enfield have since
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    lodged an objection with me. Hayes and Harlington have written to me asking for a comprehensive school to be established there.
    Mr. Keeling: As the Minister said the other day that comprehensive schools would be set up in two Middlesex areas, may we take it that the experiment will be tried in two places only and in no others?
    Mr. Tomlinson: I could not say "In no others," because approval has since been given to a third which has been asked for.
    Mr. Keeling: Where is that?
    Mr. Tomlinson: Hayes.

    Youth Leaders (Training)
    Mr. Collinsasked the Minister of Education if he is now in a position to make a statement arising from the report by the Departmental Committee on the status and training of youth leaders.
    Mr. Tomlinson: No, Sir. I hope to receive this report at the end of July.

    School Premises (Lettings)
    Mr. H. Hyndasked the Minister of Education if he is aware that Buckingham Gate School, Westminster, is being let for a Fascist meeting on 24th July, although a similar meeting on 7th February last led to a defacement of the school; and whether he will issue a general directive that school halls shall not be used for such purposes.
    Mr. Tomlinson: The answer to the first part of the Question is in the affirmative. As regards the second part, the letting of county school premises outside school hours is within the discretion of the local education authority.
    Mr. Hynd: As this evil is likely to spread throughout the country, is it not time that the Minister issued some general directions, particularly in view of the experience of this school last time a Fascist meeting was held there.
    Mr. Tomlinson: No, Sir. I do not think the Minister is in a position to issue a direction regarding matters over which the local authority has discretion.

  PAKISTAN TROOPS (PALESTINE)
  Dr. Segalasked the Secretary of State for Commonwealth Relations (1) if he has received any information about the size and constitution of the military contingent pledged by the Dominion of Pakistan for operational service in Palestine;
  (2) whether he is aware that the Dominion of Pakistan has pledged itself to send a contingent of troops to engage in active military operations in Palestine; and what attitude has been taken in this matter by His Majesty's Government.
  The Secretary of State for Commonwealth Relations (Mr. Philip Noel-Baker): I have received no information that the Government of Pakistan has pledged itself to send a contingent of troops to Palestine. The second part of Question No. 32 does not therefore arise.
  Dr. Segal: Will the right hon. Gentleman, who has been associated with movements for world peace all his life make no representations to the Government of Pakistan? Is he prepared to accept the position that a British Dominion can engage in war-like activities without any word of warning or advice from the Government?
  Mr. Noel-Baker: First, I have no information, as I said earlier, and therefore none of this arises. Secondly, I think Members in all parts of the House hope that the fighting in Palestine will not restart, and therefore none of this is practicable anyway.

  TRADE AND COMMERCE

    Industrial Overalls
    Mr. Wardasked the President of the Board of Trade whether he is aware that the shortage of industrial overalls is having an adverse effect upon production in many factories; and whether he will take immediate steps to give overall manufacturers the increased supplies of utility cotton drills, without which they can neither speed up their deliveries nor reduce their costs.
    The President of the Board of Trade (Mr. Harold Wilson): I would refer the hon. Member to the answer given to my
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    hon. Friend the Member for Taunton (Mr. Collins) on 29th June.
    Mr. Ward: Without knowing what that answer was, may I ask whether the Minister is aware that one company in Worcestershire which is making overalls is down to 55 per cent. of its capacity and is likely to go down to 40 per cent. in the near future; and that it has 45,000 garments on order and can deliver only in 16 weeks instead of two? Does he realise how serious is this situation?
    Mr. Wilson: I will send the hon. Member a copy of the answer referred to. I am well aware of the shortage of industrial overalls. It is due to the shortage of drill cloth which is mostly being exported to Canada.
    Mr. William Shepherd: As the provision of overalls is a requirement under the Factory Acts, what is the right hon. Gentleman doing to ensure that these Acts are being complied with?
    Mr. Wilson: I am not aware that the shortage is sufficiently great to involve any infringement of the Factory Acts.
    Mr. Collins: Is my right hon. Friend aware that the main contributory factor, namely the shortage of material, arises out of a defect in the controls which permit finer cloths to be sold completely without control, thereby diminishing the supply of heavier industrial cloth? Will he look into this aspect of the matter?
    Mr. Wilson: No, Sir, that is not the explanation of this particular shortage. We are having a lot of discussions with the cotton industry at the present time about the working of the controls and the reaction on the production of different kinds of cloth.

    Higher Grade Utility Cloth
    Sir Wavell Wakefieldasked the President of the Board of Trade if he is aware of the shortage of higher grade utility cloth for home consumption; and what steps are being taken to make available increased supplies.
    Mr. H. Wilson: Production of the higher grade utility cloths is limited by the need to leave adequate capacity for the production of similar cloth for export especially to hard currency markets. Subject to this,

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    it is my intention to maintain a substantial production of higher grade utility cloths, but I cannot jeopardise supplies of the cheaper cloths required by those with less money.
    Sir W. Wakefield: Does the right hon. Gentleman mean that increased supplies of high grade utility cloth will be made available in the near future?
    Mr. Wilson: Yes, Sir, I hope production will increase, but we cannot have it increasing at the expense of the cheaper utility cloth.

    Industries, Salford
    Mr. Hardyasked the President of the Board of Trade if he has any proposals to attract or encourage additional industries in Salford now that the Corporation have been given powers to acquire valuable industrial land adjacent to railways and docks.
    Mr. H. Wilson: No, Sir. Salford is in the fortunate position of having a wide range of industries. Additional land can be used to full advantage for the re-siting or expansion of existing works.
    Mr. Hardy: Is my right hon. Friend aware that many industries were lost to Salford during the blitz, and that the Corporation have recently acquired 13 acres of land for industrial purposes? What encouragement is he prepared to give them?
    Mr. Wilson: I am well aware that the problem of finding factory space to employ people in Salford is much smaller than the problem we have in other parts of the country, to which we must first attend.

    Coatbridge Industrial Estate (Factories)
    Mrs. Jean Mannasked the President of the Board of Trade how many factories have been let to the Coatbridge Industrial Estate, when it is expected to be occupied or when building of factories will begin.
    Mr. H. Wilson: Approval has so far been given to the building of two factories with a total area of 120,000 sq. ft. These are in course of erection.

    Timber (Distribution)
    Mr. Roland Robinsonasked the President of the Board of Trade if he is aware that, following the decision that building repair work could be permitted up to the sum of £100 per annum free of building licence, the Timber Control has refused to continue the small allowance of timber given to builders and contractors for day to day repairs and is now insisting on the necessity of application for licences for timber with full details against definite work only; and what are the reasons for this decision.
    Mr. H. Wilson: Yes, Sir. It has been found by experience that a better distribution of the available timber can be secured by issues against actual orders. A licence can however be obtained against a group of orders covering three to four weeks ahead.
    Mr. Robinson: Does not the right hon. Gentleman's decision that a licence should be required for these small repairs cut across the recent authority given by the Minister of Health that repairs can be done up to £100 without a licence?
    Mr. Wilson: No, Sir, that decision was taken having regard to the supply of timber available for this kind of job. Something like 44 per cent. of the soft wood allocation for civil use is used on these kinds of jobs.
    Mr. Vane: Is the right hon. Gentleman aware that the Timber Control is considered inefficient and extravagant by all those who have to deal with it—builders and such like—and will he look into its entire operation?
    Mr. Wilson: No, Sir, I am not aware of that. The Timber Control has been responsible for great national savings during the last two or three years.

    Footwear (Retail Shops, Monmouthshire)
    Mr. Westasked the President of the Board of Trade the number of new retail businesses opened for the sale of footwear in Monmouthshire over the last two years; in what districts these businesses are located; and what coupon floats have been issued in respect of them.
    Mr. H. Wilson: As I stated in my reply to my hon. Friend on the 26th February last, it has not been necessary since 31st

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    December, 1945, to obtain a licence to open a shop for the sale of footwear, and I cannot therefore state the number of such new businesses which have been opened in Monmouthshire in the last two years. About 35,000 coupons have, however, been issued since June, 1946, to nine persons in Monmouthshire to start the retail selling of footwear, situated in or near Newport, Pontypool, Chepstow, Tredegar, Blaina and Risca. Approximately the same number of coupons have been issued to 14 other new retail businesses in the county to sell rationed goods, including footwear.
    Mr. West: Would my hon. Friend say how many of these coupon floats have been issued to ex-Service men?
    Mr. Wilson: I should want notice of that Question.

    Technical Publications (Imports)
    Sir W. Smithersasked the President of the Board of Trade when he expects to be able to give a decision on the importation from the U.S.A. of technical magazines, details of which have been sent to him.
    Mr. H. Wilson: I have now arranged that any person may import, either for himself or on behalf of others, single postal copies of learned, scientific, technical and religious periodicals, and periodicals printed exclusively in a foreign language. Details will be published shortly through the usual channels.
    Sir W. Smithers: Is the right hon. Gentleman aware that this will give great satisfaction? For once I have compelled a Member of the Government to give way. Is he also aware that these publications are the raw material for the export trade, and are well worth the small dollar expenditure involved?
    Mr. Wilson: Yes, Sir, I am aware of that.

    Curtain Material (Prices)
    Mr. Jannerasked the President of the Board of Trade whether he is aware that some curtain material since this material has gone off dockets has increased in price as much as 160 per cent.; and what action he will take to
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    stop such a practice which causes hardship to housewives.
    Mr. H. Wilson: I would refer my hon. Friend to the reply given to a similar Question by my hon. Friend the Member for St. Albans (Mr. Dumpleton) on 22nd June.

    Carpets
    Mr. Gallacherasked the President of the Board of Trade what steps he intends to take to limit the over-riding powers of the Carpet Manufacturers' Executive, who are not only discriminating against carpet wholesalers who do not submit to their authority, but who are actually encouraging traders to contravene the Goods and Services (Price Control) Acts, 1939–43, by insisting that they sell carpets at a higher price than that laid down by these Acts.
    Mr. H. Wilson: The answer to the first part of the Question is that I have at present no power to interfere with the arrangements made by the manufacturers for the distribution of their carpets on the home market. I have no evidence which supports the allegation in the second part of the hon. Member's Question.
    Mr. Gallacher: Is it not the case that in a prosecution by the Board of Trade in Edinburgh it was demonstrated that the order then in operation could not be understood, and that the new order which has been issued gives full power to manufacturers to charge what prices they like?
    Mr. Wilson: No, Sir, that is not so, and the decision of the court in that case was in direct contravention to the suggestion made by the hon. Gentleman in the second part of his Question.

    Newsprint Allocation (Holiday Periods)
    Mr. Edgar Granvilleasked the President of the Board of Trade if, in view of the fact that a large number of people on holiday and who are interested in test matches and other sporting events, including the Olympic Games, have no facilities for listening to the B.B.C. news bulletins, he will consider increasing the supply of newsprint as a special allocation for the holiday period to enable newsagents at seaside and holiday resorts to supply more weekly, daily and evening newspapers to meet the present unsatisfied demand.
    Mr. H. Wilson: I would refer the hon. Member to the reply which I gave to the hon. Member for Howdenshire (Mr. Odey) on 1st July.
    Mr. Granville: Is the right hon. Gentleman aware that large numbers of working people are now on holiday and are having to queue at newspaper shops where there is literally a famine in evening newspapers? Does he think that this will help his production drive during the coming winter?
    Mr. Wilson: It has been explained to hon. Members who have put similar Questions that the newsprint situation does not allow the allocation of extra supplies for these areas.
    Mr. Walter Fletcher: Has the right hon. Gentleman pursued the idea of getting an extra allocation from the United States, outside the E.R.P. arrangements, by asking for it?
    Mr. Wilson: We shall always be delighted to see any extra supplies coming in outside the E.R.P. arrangements. The question of newsprint in relation to E.R.P. is still under discussion with the American Government.
    Mr. Fletcher: I said "ask for it outside."
    Mr. Granville: If the right hon. Gentleman is unable to grant a special increased allocation for the holiday period, will he make representations to the Newspaper Proprietors' Association with a view to seeing that an allocation is made to the holiday resorts for this period?
    Mr. Wilson: I am prepared to go into that question.

    British Broadcasting Corporation (Inquiry)
    Mr. Geoffrey Cooperasked the Lord President of the Council in view of the importance of ensuring that at least one of our nationalised undertakings is brought into line with the new conceptions of socialist administration, proposals for which were included in a report which was submitted to him in February, 1947, if he will give an undertaking that the committee of inquiry into the B.B.C. will be set up within a month to enable the necessary full inquiry and re-organisation to take place before the new charter is
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    granted so that the terms of the new charter may incorporate the principles of organisation proposed to him.
    The Lord President of the Council (Mr. Herbert Morrison): I regret that I cannot give the undertaking for which my hon. Friend asks.
    Mr. Cooper: Is my right hon. Friend aware of the cases of alleged victimisation of members of the staff, and also of professional or other broadcasters? Would he have the question of adequate representation of an independent nature looked into, particularly when the eventual investigation into the B.B.C. is held?
    Mr. Morrison: There will be an investigation, a committee of inquiry, and I should have thought that it would have been perfectly competent for evidence on that subject to be tendered.

  EMPLOYMENT

    Building Trade Operatives (Discharges)
    Mr. Bossomasked the Minister of Labour why certain building trade operatives, who have been discharged on account of lack of work, have been authorised by the officers of employment exchanges to continue to draw their wages through the employment exchanges without necessarily doing any constructive work.
    The Minister of Labour (Mr. Isaacs): I have no knowledge of any such arrangements. If the hon. Member will let me have details of the cases he has in mind I will have inquiries made.
    Mr. Bossom: Can the right hon. Gentleman give us an assurance that he will not countenance action of this sort?
    Mr. Isaacs: I can give an assurance that if the facts are such as have been stated I will take action, but I have no information and I do not think this exists at all.

    Industrial Electricity Load
    Mr. Frederick Leeasked the Minister of Labour if he will make a statement about arrangements for spreading the industrial electricity load next winter.
    Mr. Isaacs: Yes, Sir. This matter has been under very careful consideration, and

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    it is clear that steps must be taken next winter to reduce the load on the power stations during the peak periods of the morning and evening. The Electricity Sub-Committee of the National Joint Advisory Council have made certain recommendations which have been accepted by the Government. Copies of the Report have been placed in the Library. I will circulate a fuller statement in the OFFICIAL REPORT.
    Following is the statement:
    This matter has been under very careful consideration, and it is clear that steps must be taken next winter to reduce the load on the power stations during the peak periods in the morning and evening. The risk would otherwise arise of cuts in the supply of electricity on a scale sufficient to cause serious intereference with vital industrial production.
    While this is a problem which concerns all classes of consumers the contribution which industry should be asked to make towards its solution has been considered by the Electricity Sub-Committee of the National Joint Advisory Council. They have recommended that during the months of December, January and February, when there will be, taking the country as a whole, a substantial deficiency of generating plant in relation to the potential peak demands, industry should be asked to reduce its load by 20 per cent. during the peak hours, which are 8 a.m.—12 noon and 4 p.m.—5.30 p.m. As last winter, arrangements to achieve this should again be worked out by the regional boards for industry and their district, town and other local committees with the firms concerned. During the months of October, November and March the problem is not uniform over the whole country. The Committee therefore recommend that as regards these three months the regional boards for industry should examine the problem in the light of the circumstances of their own region and in collaboration with the British Electricity Authority, and should make such arrangements as they consider necessary. Copies of the Electricity Sub-Committee's Report have been placed in the Library.
    The Government have accepted these recommendations and are asking the regional boards for industry to make the
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    necessary arrangements. They are confident that both sides of industry will once again show the same spirit of co-operation which characterised last winter's arrangements, but, as an assurance to the vast majority of public-spirited employers and workpeople that their efforts will not be rendered useless by any selfish minority, the Government have accepted the further recommendation that there should be available, as last winter, powers to secure the observance by firms of their obligation to reduce their load by spreading or other means when requested to do so by a regional board for industry.
    It is not enough to make these arrangements to reduce the consumption of electricity by industry during the peak periods. Other classes of consumers must also make a contribution proportionate to their demand. It has therefore been decided, as announced by my hon. Friend the Parliamentary Secretary to the Ministry of Fuel and Power, to place commercial consumers, including shops, offices, warehouses, hotels and cinemas, within the scope of the arrangements made by the regional boards for industry and they also will be required to reduce their consumption by 20 per cent. during the peak hours on the same basis as industry. Methods of controlling demand by non-industrial consumers have been investigated by a committee under the chairmanship of Sir Andrew Clow, appointed by my right hon. Friend the Minister of Fuel and Power, and I understand its report will shortly be published. I would emphasise that it is essential that domestic consumers who are responsible for a very considerable proportion of the total demands during the peak periods, should play their part in this matter. Only by a combined effort on the part of all consumers can this problem be overcome.

  NATIONAL FINANCE

    Marshall Aid (Quarterly Statements)
    Mr. Bossomasked the Chancellor of the Exchequer whether, during the period of Marshall Aid, he will issue a monthly or quarterly statement of our assets in gold and dollars available for use in the U.S.A.
    The Financial Secretary to the Treasury (Mr. Glenvil Hall): The hon. Member

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    will have heard the statement of my right hon. and learned Friend last Monday. Similar statements will be made at quarterly intervals.

    British Transport Stock (Interest)
    Mr. Keelingasked the Chancellor of the Exchequer why the certificates of deduction of Income Tax from the interest paid on British Transport 3 per cent. guaranteed stock are in some cases signed by the Transport Commission and in others by the Bank of England.
    Mr. Glenvil Hall: For technical reasons associated with the magnitude of the operation interest on a part of the Transport Stock is at present being paid direct by the Commission and part by the Bank of England. This is a temporary measure which will be discontinued so soon as transfer of all the Stock to the Register of the Bank of England has been completed. In both cases the Income Tax certificate will be accepted by the Inland Revenue in respect of claims for exemption or relief from tax.

  CIVIL SERVANTS ABROAD (WAR LOSSES)
  Mr. Collinsasked the Financial Secretary to the Treasury if he is now in a position to announce a decision regarding the date and manner of reimbursement of civil servants for property lost by enemy action whilst on duty overseas.
  Mr. Glenvil Hall: A scheme has been drawn up under which payments are already being made. A few outstanding questions remain to be resolved, but I hope shortly to put the scheme into general operation.
  Mr. Collins: Can my right hon. Friend say whether he is considering the position of those civil servants who were instructed by the Department to make claims from the Enemy Claims Commission, who so far are not receiving payment and who do not know what is their position?
  Mr. Glenvil Hall: Of course, I have no knowledge of the type of claim to which my hon. Friend refers. Perhaps if he feels we are not doing justice to those individuals he will let me have details of any case he has in mind.

  GOVERNMENT DEPARTMENTS (STAFFS)
  Mr. Keelingasked the Financial Secretary to the Treasury if he will state the total number of non-industrial civil servants on 1st July, 1948; and the number by which this total exceeds or falls short of the total on 1st July, 1947 and 1946, respectively.
  Mr. Glenvil Hall: I regret that figures for 1st July, 1948, are not yet available. At 1st April, 1948, the total number of non-industrial civil servants was 693,403, 12,265 fewer than at 1st April, 1947, and 5,032 more than at 1st April, 1946.
  Mr. Keeling: May we take it from that that the promised efforts of the Government to effect a substantial reduction in the number of civil servants have not had the success which it was hoped they would have?
  Mr. Glenvil Hall: I do not think the hon. Member should read that into the figures I have given.
  Mr. Tiffany: Do those figures include civil servants employed in the new social insurance services?
  Mr. Glenvil Hall: Only in so far as they have been appointed.
  Mr. W. R. Williams: Can the right hon. Gentleman give some idea of what proportion of this increase can be definitely attributed to the set-up of the new insurance offices in Newcastle?
  Mr. Glenvil Hall: The statement should be in the Vote Office this afternoon and perhaps it would be better if my hon. Friend waited until he could see the full figures, both for the Department he has in mind and for others.

  COAL INDUSTRY

    Recruitment (Coloured Men)
    Mr. Cooperasked the Minister of Fuel and Power if, in view of the recent incidents of coloured men from the Colonies being turned down in their application for recruitment to the coalmining industry, he will exercise his powers of direction to the National Coal Board to get this policy altered, thus enabling volunteers from the Colonies to be trained as miners.
    The Parliamentary Secretary to the Ministry of Fuel and Power (Mr. Robens): No, Sir. I am informed by the National Coal Board that they raise no objection on racial grounds to the employment of individuals suitable and willing to take underground work.
    Mr. Cooper: Is my hon. Friend aware that although that may be the policy, it is not, in fact, being carried out in practice, and would he look into incidents which have recently been reported to see if, in fact, practical expression cannot be given to the theory that these men are on an equal citizenship basis with ourselves?
    Mr. Robens: From the point of view of the National Coal Board there is no objection at all, but in some parts there is objection by the local mining community and we must take into consideration their views on this matter.
    Mr. Emrys Roberts: Could the Parliamentary Secretary say how many coloured men have been accepted for employment and in what collieries?
    Mr. Robens: Not without notice.
    Mr. J. Lewis: If there is any objection made at any time to these men, is the Parliamentary Secretary aware that they are welcome in the cotton industry in Lancashire, where many of them are employed and where they are doing a good job?
    Mr. Oliver Stanley: When the Parliamentary Secretary says we must take into account the views of the mining community on this matter, surely he is not going to allow a view contrary to every feeling and expression of this House to persist without making some effort to break it down?
    Mr. Robens: It is not a question of what the right hon. Gentleman says. The fact is that in relation to the employment of people underground there is an agreement that the local lodges of the National Union of Mineworkers will be consulted concerning E.V.W's. and other people. There have been one or two objections for various reasons and we have to take into consideration all these factors, but it is not general throughout the whole coalfields. It is gradually being broken down and where we can use our influence we certainly do so.
    Mr. Emrys Roberts: Can the Parliamentary Secretary say on what grounds objection is taken to the employment of coloured people?
    Mr. Sylvester: Is the Parliamentary Secretary aware that if he had been at Doncaster at the Yorkshire miners' demonstration a fortnight ago he would have found a coloured man walking behind his local lodge banner, as he has done for a great many years?
    Mr. Martin Lindsay: Will not the Parliamentary Secretary say, as he has been asked, on what grounds objection is taken?
    Mr. Robens rose—
    Mr. Speaker: Lieut. - Commander Clark Hutchison.
    Mr. Lindsay: On a point of Order. The Parliamentary Secretary rose to reply to my question. Might I not have an answer?
    Mr. Speaker: If the hon. Member will sit down perhaps I will rise, but not until then.
    Mr. Lindsay: Further to that point of Order. I asked you a question, Sir, and I should be very much obliged if I might have an answer.
    Mr. Speaker: The hon. Member remained on his feet and, therefore, I did not get up, but he asked a question, "Should the Minister not reply?", and the Minister has not replied.
    Mr. Lindsay: But, Sir, the Parliamentary Secretary rose to reply.
    Mr. Speaker: And I called the next Question. If the hon. Member wants to question my Ruling he must not do so.

    Statistical Digest
    Colonel J. R. H. Hutchisonasked the Minister of Fuel and Power when he proposes to publish a further Coal Production Statistical Digest as was published for the year to December, 1945.
    Mr. Robens: The Ministry's Statistical Digest covering the years 1946 and 1947 is now with the printer.
    Colonel Hutchison: Will this take the same form as the one referred to—the one covering the period to December, 1945?
    Mr. Robens: I am not able to say without notice.

    Opencast Coal
    Mr. Robinsonasked the Minister of Fuel and Power how many tons of opencast coal were sold during the last 12 months; and what figure was realised for this coal.
    Mr. Robens: The tonnage sold during the twelve months ended 31st March, 1948, the latest date for which figures are available, was approximately 10,511,000; the average price realised was 395. 7d. per ton.
    Mr. Robinson: Can the Parliamentary Secretary say whether the opencast coal was sold at a loss, how much of the coal produced during that period remains unsold and what is the reason for it?
    Mr. Robens: In reply to a question by the hon. Member for South Edinburgh (Sir W. Darling) we indicated that the average cost for that year of the production of this coal was 43s. 2d. a ton. The production for that period was 10,951,000 tons, so a deduction of one figure from the other gives the amount that remains unsold.
    Colonel Gomme-Duncan: Can the hon. Gentleman say what was the relevant loss in the production of food?
    Mr. Robens: Not without notice.
    Mr. Shepherd: Can the Parliamentary Secretary say if the selling cost includes the cost of transportation?
    Mr. Robens: The cost includes all that is applicable to deep-mined coal.
    Mr. Torn Brownasked the Minister of Fuel and Power if he will give the figures of output from opencast coal mining in the North-West Region for the six-monthly periods ended 30th June, 1947, 31st December, 1947, and 30th June, 1948, respectively.
    Mr. Robens: The output from opencast coal mining in the North Western Region in the three 26 week periods ended 2nd July, 1947, 31st December, 1947, and 30th June, 1948, was 429,141 tons, 352,311 tons and 535,737 tons, respectively.
    Mr. Brown: May I put two questions to the Parliamentary Secretary? Is he satisfied that the method of working opencast coal in the North-Western Region will
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    enable us to get the most coal at the lowest cost? This second question is: Is the Parliamentary Secretary satisfied that the restoration of the land after the excavation of the coal is satisfactory and is in keeping with commonsense practice?
    Mr. Robens: Answering the latter part of the supplementary question first, my answer is that reinstatement of the land is done to the requirements of the Ministry of Agriculture and the local committee. The answer to the first part of the supplementary question is that methods of getting opencast coal have improved considerably in later years. The big increase in that particular region is Clue to better machinery and, of course, to the better weather that we have experienced.

    Explosion, Thornhill (Safety Lamps)
    Mr. Sylvesterasked the Minister of Fuel and Power if he has considered the report of the Chief Inspector of Mines on the explosion at Ingham Colliery, Thornhill, Yorkshire in September, 1947; and, in view of the recommendations contained therein relative to the use of flame lamps locked only by a lead rivet, if he will consider making regulations prohibiting that type of lamp being used.
    Mr. Robens: Yes, Sir: but there is no need to make regulations prohibiting the lead rivet type of lock, because the point can better be dealt with under Section 33 of the Coal Mines Act, 1911, which prohibits the use of safety lamps not of a type for the time being approved by my right hon. Friend. It would not, however, be practicable in present circumstances to require all lead rivet locks to be replaced at once, and the Chief Inspector's recommendation contemplates that the changeover will be a gradual one, in the course of reconditioning or replacement.

    Distribution Costs
    Mr. A. Edward Daviesasked the Minister of Fuel and Power what action is being taken to reduce the distribution costs of industrial and domestic coal.
    Mr. Robens: I would refer my hon. Friend to the reply given to my hon. and gallant Friend the Member for North Portsmouth (Major Bruce) on 29th January last, to which I have nothing to add at present.
    Mr. Davies: Is the Minister aware that there is a widespread feeling that some urgent action is called for in this matter?
    Mr. Robens: Yes, Sir. We are well aware of that fact and, indeed, discussions between the National Coal Board and the distributors are at present continuing.

  FUEL AND POWER

    Standard Petrol Ration
    Lieut.-Commander Clark Hutchisonasked the Minister of Fuel and Power if he will increase the standard ration of petrol allocated to motor cycles of over 250 c.c. capacity on a sliding scale as is done in the case of the more powerful motor cars.
    Mr. Robens: No, Sir; in general, motor cyclists are able to travel further on their standard ration than the owners of motor cars, and this advantage extends to the owners of high power motor cycles who are, on the present standard ration, able to cover a greater mileage than the owners of high power cars.
    Lieut.-Commander Hutchison: Does not the Parliamentary Secretary think there should be the same treatment of grading allocations in the case of both motor cycles and motor cars.
    Mr. Robens: There is grading into two groups—under 250 c.c and 250 c.c and over—which is a reasonable division of the cubic capacity of motor cycles.
    Lieut.-Commander Hutchison: Are there not four grades in the case of motor cars?
    Mr. Robens: Yes, but, of course, there is a greater variety of horse power in the case of motor cars.

    Supplementary Petrol Allowances
    Mr. Martin Lindsayasked the Minister of Fuel and Power whether he will reconsider the allocation of petrol for commercial travellers in view of his decision to allow the standard petrol ration to civil servants whose cars are used for their Department's duties.
    Mr. Robens: No, Sir; the arrangements for the issue of bulk allowances do not provide for civil servants to be treated
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    more favourably than other users who draw petrol from a bulk supply administered by their employers. As I advised my hon. Friend the Member for Spen Valley (Mr. Sharp) on 1st July, it is left to the employer to make such arrangements as he can with the individual motorists about the use of their standard ration.
    Mr. Lindsay: Does the Parliamentary Secretary appreciate that commercial travellers are in a unique position in that many of them, with larger areas, find it quite impossible to earn their living with the ration as it is at the present time? Anything he can do to ease the position will be appreciated.
    Mr. Robens: Yes, Sir, I am in touch with the association concerned and will examine any suggestion they offer to me.
    Mr. Jennings: Does not the Parliamentary Secretary realise it is a grossly unfair thing to impose on one section of motorists and not on another?
    Mr. Robens: There is no differentiation in treatment whatever.

  ELECTRICITY SUPPLY (RURAL AREAS)
  Brigadier Raynerasked the Minister of Fuel and Power what degree of priority is being given at the present time to the provision of electricity supplies to farms and farm labourers' cottages in outlying parts of the country.
  Mr. Robens: Connection of supplies to farms and farm workers' cottages likely to assist increased food production was given very high priority in the Electricity Commissioners' circular of 18th February, 1948, which laid down priorities for new non-industrial development. The detailed application of these principles is, of course, a matter for the area electricity board concerned.
  Sir H. Morris-Jones: Is the hon. Gentleman aware that, so far as the rural areas in Wales are concerned, there is virtually no work being done at all in regard to the provision of electricity supplies and will he see to this matter?
  Mr. Robens: Yes, Sir.
  Mr. Collins: Is the hon. Member aware that one difficulty is that where mains

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  exist in the villages the local authorities are unable to get loan sanction for the wiring, and is it possible for him to take the matter up with the right hon. Gentleman the Minister of Health to see if he can get over that difficulty?
  Mr. Robens: If there are particular problems for particular areas the area boards will be glad to look at them.

  PRISONS (CONDITIONS)
  Mr. W. J. Brownasked the Secretary of State for the Home Department whether he is aware of overcrowding, bad sanitary conditions, and the lack of domestic utensils, at present obtaining in His Majesty's Prisons; whether, as a matter of urgency, he will order at once the further erection of hutted accommodation in prison grounds to house first offenders and the aged prisoners; and whether he will review the accommodation position in some of the Borstal Institutions and Brixton Prison in order to ease the dangerous position which has arisen in the prisons.
  The Secretary of State for the Home Department (Mr. Ede): I am well aware that the prisons are at present overcrowded. No substantial extension of the hutted accommodation within the existing prisons is practicable, and no accommodation can be spared from Brixton Prison or the Borstal Institutions, but an additional prison will be opened in August and negotiations are in progress to acquire premises for five others. Increased sanitary facilities have been provided at the prisons where necessary. There is no evidence that existing conditions are having an adverse effect on the health of the prisoners.
  Mr. Benson: Will the Home Secretary press forward with the opening of prison camps based administratively on existing prisons, with the idea of reducing the present appalling congestion in prisons?
  Mr. Ede: I am considering all practicable means of dealing with this situation, but, of course, it is not always possible to find a suitable site for a camp near an existing prison. Where it is possible, and there is a need for a more open type of prison, I should favourably consider the suggestion.
  Mr. McGovern: Can the Home Secretary assure the House that the conditions inside these prisons are not adversely affecting the recruitment of prisoners?

  COUNTY COUNCILS (ROADMEN)
  Squadron Leader Sir Gifford Foxasked the Minister of Transport how many county councils have carried out his instructions for cutting down the number of roadmen and have completed the programme; and whether there is any change in his policy owing to the numerous protests from country districts.
  The Parliamentary Secretary to the Ministry of Transport (Mr. James Callaghan): By 31st May, 45 county councils out of 93 had released the number of roadmen requested. Where councils have found difficulty in complying, and the Minister of Labour advises that in that area men cannot readily be employed on other work, it has been arranged that the councils shall make further releases only as they are notified by the Ministry of Labour that suitable vacancies exist.
  Sir G. Fox: Is the Minister aware that county councils who have carried out his instructions promptly are suffering from this lack of roadmen, and that in consequence many roads are getting overgrown, particularly at blind corners, a state of affairs which may lead to accidents?
  Mr. Callaghan: A number of considerations are involved in that supplementary question. The answer to most of them is, "No," Sir.
  Mr. Robinson: Is the Minister aware that many local authorities in the towns are protesting against the policy of cutting out roadmen from the staff?
  Mr. Callaghan: My right hon. Friend is well aware that this policy is distasteful to everybody concerned, but it is a question of weighing the relative advantages and disadvantages.

  FACTORY, AIRDRIE
  Mrs. Mannasked the Minister of Supply to what extent the completion of the Boots Factory at Airdrie, Lanarkshire, is held up for lack of material; and when this factory is expected to be completed.
  The Joint Parliamentary Secretary to the Ministry of Supply (Mr. Jack Jones): It is expected that this factory will be completed by the autumn of this year. I understand that there has been difficulty in obtaining supplies of roofing glass at the right time, but arrangements have been made to remedy this and work has not otherwise been delayed.
  Mrs. Mann: Will my hon. Friend tell me when Autumn begins and when it ends?
  Mr. Jones: The usual conception of Autumn is from the end of September to December.

  VETERINARY TRAINING (UNIVERSITY OF WALES)
  Mr. Peter Freemanasked the Minister of Agriculture whether he will see that the University of Wales be granted the same status as those of Cambridge and Bristol in regard to veterinary training, particularly in view of the large agricultural interests in Wales.
  The Joint Parliamentary Secretary to the Ministry of Agriculture (Mr. George Brown): The Question presumably relates to the Veterinary Surgeons Bill now before the House. I would refer my hon. Friend to the discussion on this question both on the Second Reading of the Bill on 4th June, and in Standing Committee A on 29th June.
  Mr. Freeman: Will my hon. Friend give sympathetic consideration to the matter when it comes up tomorrow?
  Mr. Brown: The matter has been very fully ventilated, I think, and I have nothing to add to what has already been said.
  Mr. Emrys Roberts: Is the Minister aware that the matter will be ventilated again and that he will not get away with it as easily as that?

  LEASEHOLD SYSTEM (COMMITTEE)
  Mr. Ronald Chamberlainasked Mr. Attorney-General when the report of the committee on the leasehold system and allied matters, set up in February under the chairmanship of Lord Uthwatt, can be expected.
  The Attorney-General (Sir Hartley Shawcross): It is not yet possible to estimate when the Leasehold Committee will be in a position to make a report.
  Mr. Chamberlain: Does my right hon. and learned Friend realise that during the time this committee is sitting there is an increasing number of people, particularly small business people, who are suffering under this system? Would he therefore tell the committee to do everything possible to expedite the matter, even if it is only by issuing an interim report?
  The Attorney-General: My hon. Friend will appreciate that the matters which are being taken under review by the committee are difficult and complicated. The committee appreciate fully the necessity for pressing on with their deliberations and of being able to report in either a final or interim manner as soon as may be.

  HYDERABAD (ARMS TRAFFIC)
  Mr. Wilson Harris(by Private Notice) asked the Secretary of State for Commonwealth Relations what steps he is taking to prevent British subjects from the United Kingdom, or United Kingdom aircraft, from taking part in illicit traffic in arms into Hyderabad.
  Mr. P. Noel-Baker: The Government of India have told us that they have reason to believe that arms are being smuggled Ly air over Indian Territory into Hyderabad. They believe that aircraft registered in the United Kingdom, manned by United Kingdom personnel and supplied by a United Kingdom company, are engaged in the traffic. Such traffic would be a violation of an Indian regulation. This regulation requires all aircraft which fly over Indian territory to land for customs examination at specified Indian airfields. Such traffic would also contravene provisions of the Chicago Convention, and of the United Kingdom Air Navigation (Consolidation) Order.
  In response to the representations of the Indian Government I have caused urgent inquiries to be made. I need hardly say that the Government strongly disapprove of the smuggling of arms, and that they will take any action in their power against persons found to have

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  engaged in it. They are satisfied that no such arms or ammunition have been carried by air from this country. They will continue to do everything they can to ensure that no illicit export of arms or ammunition shall occur.
  Mr. Wilson Harris: Satisfactory as it is to know that His Majesty's Government deprecate this traffic very strongly, can the Minister say, at the same time, whether he is able to use his influence to persuade the Government of India to abolish the drastic boycott existing between the two territories?
  Mr. Noel-Baker: The hon. Member will, of course, realise that the Government of India and the Nizam each say that the standstill agreement between them has been violated by the other in various ways; but I can answer for neither.
  Mr. Lennox-Boyd: The right hon. Gentleman mentioned some of the things which the United Kingdom felt. Did not the United Kingdom also say that the question of the accession of Hyderabad to India should be left to the free unfettered choice of the Nizam?
  Mr. Noel-Baker: I have already referred the House quite recently to the full statement made by the Prime Minister on that subject, and I cannot usefully add anything now.
  Mr. Gallacher: Is there any possibility that arms could be sent from this country to some more convenient place and picked up there? Is there any danger of that? Will the right hon. Gentleman see that nothing of that kind happens?
  Mr. Noel-Baker: I think not. I think the licensing system of this country ensures that we know what the ultimate destination will be.
  Mr. Gammans: Will the right hon. Gentleman sort this out a bit? What is illegal? Surely it is not illegal to sell arms to Hyderabad? What is illegal, if anything, is crossing Indian territory without landing, but surely it is not illegal to sell arms to Hyderabad?
  Mr. Noel-Baker: What I am dealing with and what the Question is about is the carriage of arms by air over Indian territory in violation of Indian and international regulations. That was all I was speaking about.
  Colonel Gomme-Duncan: Is not the crux of this matter the threat of military action by a much stronger Power against the much smaller State of Hyderabad? Will the right hon. Gentleman use his influence to get Pandit Nehru to realise that he should not do the things which he used to accuse us of doing?
  Mr. Sydney Silverman: Will my right hon. Friend say whether his last answer meant that it was no offence to export arms from this country without a licence?
  Mr. Noel-Baker: No, Sir. Certainly not. I have already said that no arms can be exported without a licence, and we do not give a licence unless we know what the final destination is to be.
  Mr. Granville: In view of the fact that his statement will be read in India and Pakistan, will the right hon. Gentleman make it absolutely clear that it refers only to the carrying of arms and not to the carrying of food and other necessities of life, the shortage of which is a serious matter in Hyderabad?
  Mr. Noel-Baker: That is a different question. The Question I answered was about the carriage of arms.

BUSINESS OF THE HOUSE
Mr. Oliver Stanley: May I ask the Leader of the House if he can tell us the Business for next week?
The Lord President of the Council (Mr. Herbert Morrison): Yes, Sir. The Business for next week will be as follows:
Monday, 12th July—Supply (21st allotted day)—Committee. A Debate will take place on Food.
Tuesday, 13th July—Committee stage of the British Nationality Bill [Lords].
Wednesday, 14th July—Supply (22nd allotted day)—Committee. A Debate will take place on Housing.
Consideration of the Motion to approve the Leather Charges (No. 3) Order.
Thursday, 15th July—Consideration of the Lords Amendments to the Criminal Justice Bill.
Friday, 16th July—Consideration of the Lords Amendments to the Nurseries and Child Minders Regulation Bill.

587
Report and Third Reading of the Development of Inventions Bill [Lords].
Concluding stages of the Factories Bill [Lords] if not previously obtained.
Second Reading of the Statute Law Revision Bill which is expected to be received from another place today.
Second Reading of the Agricultural Holdings Bill which is a consolidation Measure and is expected to be received from another place on Monday.
Mr. Driberg: For the convenience of the House, could my right hon. Friend indicate whether Monday's Debate on Food is intended to cover such matters as the groundnuts scheme and so on or whether it is intended to be purely domestic?
Mr. Morrison: I had the impression that it was domestic. I suppose that in so far as the groundnuts scheme would have a relationship to the domestic food position, it might be relevant. It is for the Opposition mainly, but I thought it was intended to be in relation to the British internal food situation.
Mr. J. S. C. Reid: Is it not the case that the Food Estimates cover the groundnuts scheme? If the whole Food Estimates are put down, that will cover food imported from all places.
Mr. Morrison: I think that is so. I was only careful not to take liberties at the expense of the rights of the Opposition, but I think that is so.
Mr. Stanley: I wonder if the right hon. Gentleman, who is in a very unaccustomed mood, is aware that the Ministry of Food Vote is down today with the Colonial Office Vote in order that any one who wishes to raise the groundnuts scheme in
588
connection with colonial development will be able to do so?
Mr. Morrison: That is so. It has been put down for that purpose.
Sir Henry Morris-Jones: On a point of Order. May I ask a question in regard to tomorrow's Business? A large number of Members of Parliament from Wales of all parties are particularly interested in an Amendment on the Order Paper to the Veterinary Surgeons Bill which will be debated tomorrow. I would ask you, Mr. Speaker, whether you will be kind enough to indicate, in view of the engagements many of those hon. Members have in their constituencies, whether it is your intention to accept the Amendment in their names.
Mr. Speaker: The hon. Member is probably referring to a new Clause which appeared on the Order Paper for the first time this morning—(Docking of Tails). Quite frankly, I saw it on the Order Paper but did not give it any consideration as to whether or not it was in order. I am afraid that the answer is that the hon. Member must wait and see.
Sir H. Morris-Jones: I am sorry; I could not have made myself very clear. I was referring to two Amendments in the names of many hon. Members from Wales of all parties in regard to the inclusion of Wales in that Bill.
Mr. Speaker: I mistook the Amendment. I am afraid I have not been through the Amendments yet. I did not know until this morning what Amendments might be put down. One cannot look over things weeks or days beforehand. I am sorry that I cannot say. My first impression quite frankly was that it would probably be in Order, but I should not like that to be definite.

ORDERS OF THE DAY
  SUPPLY
  [20TH ALLOTTED DAY]

  CIVIL ESTIMATES, 1948–49
  Considered in Committee.
  [Major MILNER in the Chair]
  Motion made, and Question proposed:
  "That a further sum, not exceeding £50, be granted to His Majesty towards defraying the charges for the following services connected with Colonial Affairs for the year ending on the 31st day of March, 1949, namely:

  £

  Class II., Vote 10, Colonial Office

  10

  Class II., Vote 11, Colonial and Middle Eastern Services

  10

  Class II., Vote 12, West African Produce Control Board

  10

  Class II., Vote 13, Development and Welfare (Colonies, &c.)

  10

  Class X., Vote 2, Ministry of Food

  10

  Total

  £50"

  —[Mr. Glenvil Hall.]

  COLONIAL AFFAIRS
  3.38 p.m.
  The Secretary of State for the Colonies (Mr. Creech Jones): The Debate today follows a number of discussions in this House this week intimately concerned with colonial affairs. The place of American Aid in regard to colonial development and the status of colonial subjects under the new Nationality Bill have been discussed. The Committee have before them today a number of reports which set out the work which has been done in our Colonies during the past year and an account of the activities of the Colonial Office itself. There is a report on the administration of the Colonial Development and Welfare Acts of 1940 and 1945, and during the year a number of White Papers have been issued dealing with various aspects of colonial policy and certain problems in various colonial areas. I feel, in view of the fact that these reports are in the hands of hon. Members, that it is scarcely necessary I should go into much detail in regard to the respective fields covered by these reports and statements.
  It has been a crowded year of activity, both in the Colonies and in the Colonial Office. The work has been done in a world settling down from the repercussions of war—territories full of economic
  590
  uncertainties, sometimes of great disturbance, and Colonies where a great deal of rehabilitation and reconstruction work was imperative. As we all recognise, the range of interest of the House extends not only to the considerable territories in the Continent of Africa but to the more far-flung territories as well—the West Indies and the Far East. It is the responsibility of the Colonial Office to concern itself, too, with such small Colonies as the Falklands and their dependencies, the Seychelles, small groups in the Pacific, St. Helena, Turks Island in the West Indies. The smaller territories, of course, claim almost as much attention as some of the larger ones in the Continent of Africa.
  I will not this afternoon review the past year, except to say that it was a notable year for a number of reasons. That year has seen important constitutional changes; the recognition of full self-government in Ceylon, the granting of internal self-government to Malta, and the ending of the Mandate in Palestine and the independence of that country. In addition, a federation has been created of the Malay States and the settlements in the Peninsula, a move has been made towards federation in the West Indies, and in East Africa an inter-territorial organisation has been created in order that the common economic interests of Tanganyika, Uganda and Kenya can be better served.
  We have, of course, had a great deal of trouble in certain parts of the Empire. I shall have something to say in a few minutes about the present difficulties in Malaya. The House has discussed the problems, the disturbances, the outrages which occurred in Palestine. There has also been trouble in the Gold Coast. I regret that it was not possible for the report of the Commission on the disturbances in the Gold Coast to be available in time for the Debate today, but I hope that report will be available to hon. Members by the end of the month, together with a statement of Government policy in regard to the recommendations made by the Commission.
  During the year, too, the Colonial Development Corporation has been established, and a large number of bold economic projects have been originated and many new arrangements made in regard to orderly marketing arrangements for colonial products. At the same time, there have been substantial developments

  591
  in social policy. In the field of higher education, a policy initiated by the right hon. Member for West Bristol (Mr. Stanley), universities are coming into being in the West Indies, in West Africa and in Malaya, and a change in Makerere to the status of a university college is being brought about.
  There have been developments in the field of mass education and labour legislation; campaigns have been conducted with great success against pests and locusts in Africa; there have been campaigns against diseases of all kinds; the working unit in Gambia has been doing very good work in the field of nutrition; a panel has been set up for improving the medical services by the sending of consultants from this country to examine medical arrangements and work in conjunction with the medical services in Africa—all these things have been done, besides a vigorous housing policy and welfare policy pursued in the various territories of the Empire. Therefore, I submit there is, as revealed in the report before the Committee, a considerable record of work, and I should like to pay tribute to the servants of the Colonial Governments as well as the Colonial Office itself, the Civil Service there, for the considerable work they have accomplished and the devotion which they have shown in the discharge of their duties.
  Before dealing with certain broad aspects of policy, I should like to make a passing reference to one or two matters of some interest in the problems concerned with the Colonies. We have during the last two and a half years recruited for the Colonial Service no fewer than 3,300 men and women, which has meant an enormous task in examining applicants, sorting them according to qualifications and experience, and in drawing on a very wide range of experience as well. On the administrative side of the Colonial Services, the number of persons taken during the last two years represents no fewer than 11 years' normal intake. There are still large numbers of vacancies in the respective services to be filled, and it is one of our difficulties in the technical service to find men available to undertake these important responsibilities in the Colonies.
  592
  I should like to say what excellent reports we have received as to the quality of the men and women who have been recruited during the past few years. They have been undergoing training in the universities, the tutors there have had the opportunity of discovering their quality, and those men going through the first and second courses are reported as of excellent calibre, men who will undoubtedly do well in the Services to which they go. I should at the same time like to thank the Universities of Oxford, Cambridge, London and elsewhere for the magnificent co-operation they have given us in the training of the men for the Colonial Services.
  It should be remembered that no fewer than 96 per cent. of the men recruited for the Colonial Services throughout the Colonial Empire do not come from this country or the Dominions. They are recruited locally and form part of the local services. We are now trying to create new facilities for training some of these men who are recruited locally for higher responsibility and the more qualified positions. Some of them have already come to this country and we set aside £ million for such training. Meantime, the principles and recommendations propounded in the Colonial Office Paper (197) on the organisation of the Colonial Service are being applied. There has also been an effort to improve the amenities of the Colonial Services, to improve salaries and allowances and generally to ease the hardships which many of its servants suffer because of their complete isolation from this country and their sometimes serving in very unhealthy climates.
  New facilities have been created for these men to enjoy refresher opportunities, so that they can come together after a period of service to learn more of their own particular profession or skill. We are also trying to organise a series of conferences so that the men may get a wider view of the responsibilities they are discharging in their territories. In this work of refreshing, developing and building up the post-war Colonial Services we have had, as the Committee well knows, the assistance of Sir Ralph Furse. As he leaves our service as a full-time permanent official, I should like to pay tribute to him for the enormous work and considerable achievement which the Colonial

  593
  Service at present represents as a result of his endeavours.
  Last Autumn we held a conference of African Governors. It was singularly successful in the sense that we were able to bring into review the pressing problems of African administration—the relation of local governments to the home Government, the position of the Colonial Office in relation to the local administrations, and the larger constitutional and economic problems which are developing over that Continent. We have arranged for September of this year a further conference of unofficial representatives of the legislative councils of Africa. That conference will again bring into review the large questions of economic, constitutional and local government development. Above all, the conference will serve the great purpose of building up regional views in Africa in regard to colonial problems and the even greater purpose of binding the representatives who come here in loyalty to this country.
  Mr. Scollan: Will that conference consider the application of American capital and capital projects to our Colonies?
  Mr. Creech Jones: There is very little which the conference will not consider. Certainly the whole problem of economic developments in the Colonial territories in Africa will be on the agenda. One of the great advantages of such a conference is the building up of close contacts between these representatives from Africa and the people of this country and assisting to a better understanding and closer friendship.
  It was suggested that I should say a word about the colonial persons who are in London for study and for work. There are some 3,000 students and, as the Committee knows, the Welfare Department of the Colonial Office is very attentive to the welfare requirements of these men and women. That department is responsible for hostels and a reasonably good life for these people when they are in our country; if necessary, the finding of work for them; helping them to find places in technical colleges and universities; and bringing them, as far as possible, into touch with constructive influences in this country. The universities are anxious that in their hostels the colonial students should mix freely with
  594
  people who attend the universities from this country and that every facility should be opened out so that the students shall see something of British social life and get, as far as can be arranged, into the homes of our people.
  I now come to certain general considerations regarding Colonial policy. The aim of British policy is set out in the report which is before the Committee. It cannot be too often repeated, for the information of our critics abroad as well as of the peoples in the Colonial Empire, that we are in these territories to guide them as quickly as circumstances permit to responsible government within the Commonwealth, in conditions that ensure to the peoples fair standards of living and freedom from oppression from any quarter.
  Mr. Gallacher: An old story, that.
  Mr. Creech Jones: In regard to political developments, I would repeat what I said last year on this subject. I said then:
  "I am convinced that in this modern age, with its forces of nationalism and freedom, its economic changes, its spread of education, and the political and social awakening which is going on, we must adjust ourselves to a much quicker tempo of constitutional development than would have seemed practicable a few years ago. We have to experiment boldly, though not necessarily rashly, and to recognise that while the transfer of power to people not fully trained or with adequate experience or traditions to exercise it will lead to mistakes being made, it is only through actual experience in the exercise of responsibility that people can acquire a sense of duty and of service. The process may be a painful one, but the alternative of increasing bitterness and tension in the relationship of the people to the Government would be disastrous."—[OFFICIAL REPORT, 29th July, 1947; Vol. 441, c. 266–7.]
  In pursuit of these broad purposes in constitutional and political change, we have overhauled a number of constitutions or territories in the past year; we have improved the basis of representation to the legislative councils and on the executive councils of the governors; we have increased responsibility by the people in their own affairs; in some cases we have introduced the Ministerial system; we have proceeded a long way in various territories towards reorganising local governments, and we have brought about groupings of territories for regional needs.
  But obviously it is not easy in a brief period to transfer political institutions

  595
  which have grown up under the conditions of Western Europe into territories where social development is not nearly so forward. It is increasingly obvious that we must pay perhaps less attention to the problems of central government in those territories and much more attention to aspects of local government. That means that we must examine afresh some of the problems of indirect rule in the case of Africa. We must be more forthcoming in the creation of municipalities in other parts of the Empire and try to build up responsibility in government amongst all classes in all neighbourhoods if later responsibility is to be wisely exercised at the centre of government.
  With that in mind, during the past year we have given much attention to this problem of local government. Lord Hailey has visited both East and West Africa and has examined again the problems of native administration and the steps which can be taken to secure a stronger system of representation and local government. Last year, we summoned a conference to this country of members of administrative staffs engaged very largely in work alongside native administrations. That conference formulated certain recommendations which we were able to make the basis of discussion with the African Governors when they were here last Autumn. It is clear that much more attention must be given to the growth of responsibility in local government.
  We are improving and extending municipal powers, we are training local people for service under the local authorities, some scholarship holders are in this country at present, and we are also modernising native administration wherever possible and introducing more younger and educated men for service on the native councils. We are increasing their powers in respect of finance and the care of certain services such as sanitation, health, roads and education and completing the process of breaking away the judiciary from these councils and also giving them separate financial responsibilities.
  It is also important that we should do everything in our power to create a sense of personal responsibility for social needs by encouraging the creation of voluntary organisations, by stimulating the work of
  596
  voluntary societies and helping the people to form organisations which do not necessarily need Government support, but which, in the field of welfare and co-operation, can make their contribution to the common social life. Accordingly, we are extending our interest and activities in the fields of welfare, co-operation and trade unionism, as well as in local government in order that the spirit of self-help can be fostered and greater opportunities afforded for social responsibility.
  The past year has seen an enormous drive forward in economic organisation in the territories overseas. The idea of economic development is, of course, not new. It did not arise because of the shortages experienced in this country, or because of the conditions of Western Europe, or because of our difficulties in regard to dollars. The 1945 Colonial Development and Welfare Act was very much concerned with economic as well as social growth. Accordingly, in the 10-year programmes which have been submitted to us by the respective Governments of the Empire considerable provision was made for agricultural development, for roads, public works and utilities of various kinds which are basic in the growth of any community.
  During the past few years there has been a remarkable advance in the provision of public works and utilities which are essential for the other economic activities of a growing society and for good social living. I emphasise this, because too often it is assumed that at long last we are waking up to the imperative importance of developing the Empire. The truth is that under both the 1940 and 1945 Acts certain of the economic requirements of colonial development were foreseen and plans were laid accordingly.
  The Colonial Development Council has come into being largely for the purposes of seeing that social and economic planning is soundly conceived, that expenditure is wisely incurred, that sound principles of development are adopted in the Colonies and that there is a wise balance as between social and economic expenditure. As will be seen from the White Paper on the Colonial Development and Welfare Acts published recently that Council has had before it in the past year a number of important 10-year programmes which

  597
  have come forward from the territories themselves.
  There has also been created the two Corporations concerned with enterprise in territories overseas. There is the Colonial Development Corporation, which is now getting down to its work, as well as the Overseas Food Corporation, which comes under the Ministry of Food. The primary purpose of the Colonial Development Corporation is to encourage public and private enterprise in our territories in order to buttress the economies of those territories, increase economic activities and strengthen the economic foundations on which the whole of the social life of the peoples of those territories depends.
  We have set out in paragraph 13 of the report some account of the principal developments of the past year, and again in chapter IV of part II of that report further evidence is given of the work going forward. The Colonial Development Corporation has now finished planning its London machine and its overseas machine. It has gathered together a number of experts in order that the work may be wisely and suitably developed. It has been in touch with all the Colonial Governments and it is now engaged in discussing various projects, some of which it hopes to launch very shortly indeed. The responsibility of the Colonial Office is not to interfere with the day to day management of the Corporation but to facilitate its work, to see that it can obtain the supplies that are necessary and to help to maintain the liaison with the Colonial Governments. It brings under review the various schemes that are adopted and the principles on which the projects are based and it generally assists in securing the necessary priorities for the proper implementation of the schemes.
  The Corporation has received from the Colonial Governments and from commercial sources a total of approximately Too projects in various stages of preparation. These emanate from almost every part of the Colonial Empire. There is a considerable number of proposals for small or medium size secondary industries and a small number of much larger projects dealing with primary products. Some of them are being investigated by the Corporation in association with commercial firms. The Chairman informs me that he is gratified by the spirit of co-operation and enterprise
  598
  shown by the majority of commercial concerns in the Colonies. The Corporation intends to devolve upon a number of subsidiary regional companies large powers of management of the projects within their territories. They will receive policy guidance and technical guidance and be provided with common services from a headquarters organisation.
  I regret that it has not been possible to make all the progress one had wished in regard to some of the schemes adopted under the 10-year programmes. There continues, of course, to be the difficulty of obtaining the necessary capital goods and steel, the difficulty of finding the right personnel for some of these projects, and incidentally the difficulty of providing suitable incentives to African or other Colonial labour because of the shortage of consumer goods.
  I should like to make one or two points in regard to economic policy generally. We must recognise that the results of all this work of the past year cannot be unduly hurried, that we must not expect any big dramatic results as the result of our efforts in this field. The physical conditions of the world do not permit of such dramatic results. It must also be remembered that in the expansion of crops it often takes some years before those crops reached yielding point. Further, it is important to keep in mind that we cannot hope for any vigorous colonial development unless we are able to associate the peoples of the Colonies with the projects which we hope can be established in their midst. Too often, in talking of colonial development we forget this essential requirement of understanding and co-operation from the colonial peoples themselves. It must be made clear to the colonial peoples that these development plans are primarily concerned with the improvement of their trade and economic status and with the strengthening of the economies of their territories.
  Many of the schemes are concerned with improving their economic life in such a way that their own demands for food can be met and their demands for better social living in the way of education and health can also be supplied. Unless that economic basis is sound the various territories will not be able to sustain the standards of social living which the people are today demanding. Therefore, there is a considerable

  599
  advantage to the colonial peoples themselves from the schemes which are being launched, and it is hoped that in this very bold effort we shall obtain the good will of the local governments and the co-operation of the colonial peoples. Unless it is freely given I fear that colonial development will not go far.
  The third point I desire to make in this connection is that during the past year we have also tried to secure a genuine measure of international co-operation in wide areas in regard to some of the problems which we seek to solve. We have had a series of conferences with the French, Belgian and Portugese Governments, and in all cases we have found a very willing and co-operative response from those Powers. They have their responsibilities overseas and also have the task of solving many of the difficulties which we experience in our own territories. A series of technical conferences has already taken place and many more are planned on problems of technical development, communications, health, etc. We have also entered into discussions with the French Government and the other associated Governments as to the possibilities of further co-operation in regard to development schemes. It is obvious that in vast areas such as West Africa and Central Africa the greater the degree of co-operation between the Powers that can be achieved in tackling these fundamental problems of colonial development the greater will be the result. I am glad to say that that co-operation has been willingly forthcoming and the three or four Governments concerned are working in a most friendly spirit on the problems that confront them in various parts of the world.
  I wish now to say a few words about certain geographical areas of the Empire because recently those areas have attracted a great deal of attention. First I would refer to the West Indies. The arrival the other day of some hundreds of men, some from Jamaica, some from Trinidad, attracted considerable public attention as to the conditions operating in the territories from which those men came. The story of the economic difficulties of the West Indies is one with which this House is familiar. Over a long period Commission after Commission has gone to the West Indies to examine and to investigate the problems with a view to making
  600
  sound recommendations for the social and economic development of those islands. But it must be confessed that, in spite of the recommendations which have been made and the actions of the Government which have followed on those recommendations, many of the human problems of the West Indies still remain. The difficulties associated with disease, squalor, unemployment and poverty are there.
  We must reckon, of course, with the fact that agriculture remains the basis of the economy of the West Indies. There is oil in Trinidad and bauxite and possibly other minerals in British Guiana, but broadly speaking the whole economic structure of the majority of the territories in the West Indies must be built up on agriculture. A great deal has been done in the past two years to expand and to improve the quality of production, to find new markets and to secure, by fair contracts, reasonable prices for the products which are grown there. As is well known, in the case of Jamaica there has been the disease of bananas which has occasioned considerable distress and considerably reduced the production of that fruit in Jamaica.
  An economic adviser to the Government has been at work now over a period of some years. There has been a series of conferences on trade and agricultural development, but I confess that, as yet, our fundamental economic problems remain unsolved. The problem is complicated by the fact that there is an increasing population for which there is no satisfactory outlet outside the West Indies themselves. Several outlets formerly available are now closed to West Indian labour, and it is sometimes difficult to come to arrangements with the United States in regard to the use of some of that surplus labour. Consequently, we have a festering problem of unemployment and under-employment in many of the West Indian Islands.
  We have also tried to foster a number of new small industries. We have met with a great deal of difficulty because of shortages of the necessary raw materials, but the problem of founding new industries is one which is receiving our active consideration as well as that of the local governments themselves. The Caribbean Commission has conducted an economic survey of the whole of the islands, not only

  601
  the British, but all the islands and the whole of the Caribbean territories, and we hope to have before us in the next few months a considered view on the possibilities of industrial development as well as other forms of economic development.
  Mr. W. J. Brown: That Commission came back last January. Is its report not yet available to the Ministry?
  Mr. Creech Jones: I am talking of the economic report which has been prepared by the Caribbean Commission. I think the hon. Member is confusing the Caribbean Commission with the Commission which was sent to British Guiana and British Honduras, and about which I shall have a word to say in a moment. I stress now the great difficulty that confronts us in regard to finding new avenues of employment for the surplus population, the underemployed and unemployed workers of most of the territories in the West Indies.
  We sent a Commission to British Guiana and British Honduras last year for the purpose of examining the possibilities of those territories, whether new settlement was possible, whether certain lands could be opened up and whether new projects in regard to mining and industries could be established. The report of the Commission on British Guiana, has now been delivered to the Colonial Office, but we still await the report on British Honduras. Immediately that report comes to hand it is hoped that the two reports can be published together. The recommendations of the Commission in regard to British Guiana are already being studied in the Colonial Office and by the local Colonial Government and no time is being lost in the implementation of certain of the recommendations I hope that a full report may be made available to the House within a month or so.
  I now turn to Malaya. The nation has lost a great and distinguished public servant by the tragic death of Sir Edward Gent on his journey to consult with me on Malayan affairs. No man in recent years has contributed more generously and devotedly to the rehabilitation and the reconstruction of Malaya, to its political settlement and operations for its progressive advance. He had a distinguished record, both at home and overseas, in war and in peace. He possessed not only courage and high integrity, but
  602
  also rare administrative qualities and a deep sense of disinterested service. The Committee will not expect me to be in a position today to announce his successor
  We are confronted with a difficult and grave situation in Malaya which the Government do not minimise. I can add little today to the statements which have been made in this House by the Under-Secretary and by myself, or to the broadcast and other speeches made by the Governor-General. We are mobilising in all possible ways to defeat and to destroy this menace in Malaya, and I think that we are acting with firmness, with decision and with sternness. This is an attempt by murder and violence to destroy authority and order in Malaya, to reduce the economic life of that country to chaos by murder of the managements on the estates, both European and Chinese, and to impede Malayan recovery and create some other control over Malaya. In the past few years, we have tried in that country to overcome the difficulties which the war left us, to prevent famine, to remove the economic uncertainties and to rehabilitate the common life of the people.
  It has been not an easy task to get some measure of economic stability in that territory and to obtain something like a settled economic order. It was on that background of uncertainty and of food shortage that a great deal of the present disorder developed. During the past few years we have tried to create political institutions and government based in the consent of the people of Malaya, to create a good public service, an effective police force and also to encourage sound trade unionism. We have sought to secure the conditions of orderly life by clearing up the arms dumps, or attempting to, and by stopping wherever was possible recourse to violence, intimidation and extortion.
  The figures will show that in our efforts to secure the conditions of good order in that territory the courts have not been lenient in the administration of the law. There have been a considerable number of deportations of persons who have been guilty of stirring up trouble and encouraging violence. It is worth while putting on record that Malaya, after all, is the only colonial area in South-East Asia where no genuinely anti-European movement has emerged since the

  603
  war. Today in the Peninsula the three Asiatic peoples are themselves behind the Government in their effort to establish orderly life and to secure the progressive recovery of the country. Figures of violence, of murder, robbery and gang robberies have already been given. I can assure the Committee that the local government in consultation with ourselves are acting with full vigour and already have been able to effect a considerable number of arrests of those who appear guilty of instigating the disorders and attacks on human life.
  I would say emphatically, particularly in view of the vilification of Britain—the wilful lies in regard to the Malayan situation which have been put across from Moscow—that we have not here at all the emergence of a nationalist movement which Britain is engaged in putting down. This is not a movement of the people in Malaya. It is the conduct of gangsters who are out to destroy the very foundations of human society—orderly life. We have no desire to create in Malaya a police state, nor are we doing so. What we are doing is to arm the necessary authorities with the requisite powers in order to cope with this situation of violence which has become too formidable a feature in the life of that territory.
  Mr. Rankin: Can my right hon. Friend say if there is any reproduction in Malaya of the political strife in China.
  Mr. Creech Jones: It is true that you see in Malaya today a conflict which is not unlike the conflict which is going on in China. It would appear that the same kind of interests are involved as in China itself. I think that one can say that the strong action taken by the Government has increased and fortified public confidence. In the actions of the local government, the Services are co-operating to the full in the work which is necessary to squash this menace.
  Mr. George Wigg: Can my right hon. Friend define the extent to which the local government have liberty of action?
  Mr. Creech Jones: The local government may proceed under certain ordinances and emergency powers. As I shall show, certain of these ordinances
  604
  have been amended and certain powers have been increased after consultation with the Colonial Office; but there is the fullest consultation with the Colonial Office in regard to all new developments and the demand for new powers, and there is the closest association with the Services as well.
  Mr. Wigg: I am extremely interested in this matter. My right hon. Friend in his speech constantly says, "we." He gives the impression that the local government and the Colonial Office are working in the closest possible association, but one feels that, should a sudden emergency arise, the local government must refer back to the Colonial Office. It is on that point that I want to get an answer.
  Mr. Creech Jones: The local government are armed with the fullest powers to cope with any emergency now. There has been no withholding—
  Mr. Oliver Stanley: Can they use them without reference?
  Mr. Creech Jones: Yes, but obviously—
  Mr. Walter Fletcher: The right hon. Gentleman says, "now." By that "now" does he mean only ordinances recently introduced, or does he mean that they can do it on the spot by immediate action? That is rather important.
  Mr. Creech Jones: Recently certain ordinances have been amended as a result of consultation with the Colonial Office, but already before that consultation the local government enjoyed very considerable powers indeed. It was in cases where they were asking for certain exceptional powers that consultation with the Colonial Office and myself became necessary.
  The Committee already know that we have strengthened the deportation and detention ordinances. We have tried to check the carrying of arms and to increase the facilities of search. We have powers to control the movement of vehicles and persons, to check seditious propaganda and subversive agitation, and we have adjusted the trade union regulations in order that the trade unions shall be protected from certain subversive influences from outside. The police, too, have been strengthened, and special constabulary organised. We have sent out a fair amount

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  of the equipment demanded, and in every way possible we have acted to help the local government. I would say again to the Committee that we do not take this challenge lightly. We are determined that this evil in Malaya shall be eradicated, and every step possible will be taken to destroy the gangsters and discover their sources of supply.
  I conclude by saying again that, in presenting this review of our colonial territories and of the work of the past year, none of us are self-satisfied as to the quality and character of the work we have done. We are conscious of our limitations, the difficulties in our way, but I do want to say emphatically that Britain has nothing for which to apologise in respect of her colonial policy and her activities overseas in this connection. The effort made has been a very considerable one, and I have already paid tribute to the staffs of the Colonial Governments and of the Colonial Office. I feel that I should add that it has seldom been the privilege of a Secretary of State to place on record such a volume of change and achievement. I am the vehicle for carrying through certain changes at the wish of this House, and a great opportunity has been given us to carry through vast reforms and projects.
  I am conscious that, in the furthering of this policy, all parties in the House are determined that this work shall be done. I, therefore, submit this report with every confidence that we are proceeding along the right lines, that our policy is soundly conceived and that our work is already achieving considerable results, and I believe, too, that we are gaining increasingly the confidence and good will of the peoples with whom we have to work. I repeat that it is of fundamental importance that, in all our tasks we have the full co-operation and understanding of the colonial peoples.
  Mr. W. J. Brown: Before the right hon. Gentleman sits down and for the information of the Committee, will he give us a little information, first, as to the present number of unemployed in Jamaica, what proportion it bears to the total working population in Jamaica; and, secondly, when we can expect to receive the report of the committee which went out there last year and surveyed the situation in Jamaica, Trinidad, British Guiana and Ceylon? That report ought to have been
  606
  available a long time ago. The committee came back in January, and it is time that we knew something of what they have to say.
  Mr. Creech Jones: It must be admitted that the report has been a long time coming, but the British Guiana report was submitted, as I said earlier, a month or so ago, and is already being worked upon. Immediately the report on British Honduras comes to hand, it will be made available for the information of the House. Delay has occurred owing to the illness of one of the members of the Commission, but I can assure the Committee that, immediately the report comes to hand, it will be published, probably during the Recess. In regard to the volume of unemployment in Jamaica, I should say that there are no reliable statistics on which one can base a firm judgment, but it is probably in the neighbourhod of 30,000, and that would probably include a large number of seasonal workers and a large number of under-employed workers.
  Colonel Ponsonby: The right hon. Gentleman mentioned Africa, in passing, only once in this speech. Has the right hon. Gentleman arranged with the Lord President of the Council that we should have a day devoted entirely to Africa or will African questions form part of today's discussion?
  Mr. Creech Jones: Africa is obviously within the terms of the Vote before the Committee this afternoon. When one talks about colonial policy, too often one talks about Africa and nowhere else. I personally feel some regret that we have in the past devoted most of our attention to the affairs of Africa, and not sufficient to the affairs of other parts of the Colonial Empire.
  4.47 p.m.
  Mr. Gammans: The Colonial Secretary covered a great many subjects in the course of his speech, and I should like to refer to some of them. I think my main criticism of his speech would be that he devoted a very large part of it to what I would call the machinery of government and did not say very much about actual events or human beings.
  I hope we shall agree on one thing, and that is that we spend far too little time in this House in discussing colonial matters. During the past year, apart from the

  607
  Ceylon Independence Bill and the Overseas Resources Bill, which also dealt with the food supplies of this country, we have spent only seven hours in discussing the affairs of 60 millions of our fellow British subjects. When it is remembered that this House spent 95 hours over the Representation of the People Bill, which, incidentally, took away the university representation of colonial graduates, and 111 hours in discussing the Town and Country Planning Bill, I do seriously and earnestly suggest that there is something wrong in our sense of proportion and in our sense of responsibility.
  I hope that whoever winds up the Debate for the Government will give us an assurance, for which my hon. Friend behind me has asked, that next year we shall have more than one day to discuss colonial matters, and that we shall be able to devote a single day to discussing either a particular part of the world, like Africa, the West Indies or the Far East, or else deal with some specific subject, like education, health, economic development and so on. In the space of time between now and 10 o'clock tonight, we have to roam all over the world and will be able to deal with nothing adequately.
  I want to discuss four particular subjects this afternoon, though there are many other matters which I should have liked to raise if I had had more time. I would have liked to comment in more detail on what the right hon. Gentleman said about the West Indies. I would have liked to ask him why he did not say something about the recent strikes in British Guiana, and I would certainly have challenged his diagnosis of the unemployment situation in Jamaica. To my mind, the primary reason for unemployment in the West Indies is overpopulation. When we consider that, in Barbadoes, we have an island only the size of the Isle of Wight but with twice the number of people, we have an indication of the importance of the population problem. I should have liked to hear more about the Colonial Development Council, how often it has met and whether it publishes reports. I would have liked to ask why it is that so many of the members with actual knowledge and experience of economic and financial problems appear to have left it. I notice that, apart from the technical and official
  608
  members, almost all the rest of the Council are people with Left Wing views and members of the Fabian Society. There is not a single Member of the opposite political party on the Council. Surely it is not necessary to take this principle of "jobs for the boys," and in this case "for the girls" as well—and unpaid jobs, too—quite so far.
  The Under-Secretary of State for the Colonies (Mr. Rees-Williams): The reason why there are no representatives from the other side on this body is that the hon. Member who would, in our view, be very well suited to be a member of it, refused to take a seat on it. His reason was that it might inconvenience him in any criticism he might have to make of our policy.
  Mr. Stanley: On a point of Order, Major Milner. I do not know whether it is usual for hon. Gentlemen to disclose what apparently were confidential communications, without asking the permission of the Member referred to. If that is going to be the practice, it certainly makes any confidential communication between Members of our party and Ministers extremely difficult. Secondly, I suggest that if these confidences are to be broken without prior communication, then it follows that the full terms of any communication should be given to the Committee. This document now having been referred to, should I be in Order in asking for it to be laid on the Table?
  Mr. Rees-Williams: In the first place, I was rebutting an attack by the hon. Member for Hornsey (Mr. Gammans) who said that there was only one side of the House represented on the Council. That, surely, was perfectly in Order, and I take it that one is entitled, even if he is a Member of the Government, to defend himself.
  Mr. Edgar Granville: Not that way.
  Mr. Rees-Williams: I was not aware that any confidential information had been given to me. It was given personally, and I took it that that reason—there was nothing disgraceful about it—was given to me under no seal of confidence. I do not see at all why I should be precluded from giving the reason.
  The Chairman (Major Milner): The Rule is that if a State document is quoted, it

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  must be laid. I gather, however, that this was not such a document, and, therefore, the Rule does not apply.
  Mr. Gammans: I do not wish to spend too much time arguing about this point. All I suggest is that hon. Members should look at paragraph 302 of this Report, see who is on that Council, and ask themselves whether there is any unofficial member there who has not got Left Wing views.
  The other point I wish to raise concerns the very unsatisfactory and potentially dangerous situation which is developing in the Seychelles, where a pocket Hitler seems to be working out his colour prejudice. I want to know whether the Government propose to send a Parliamentary mission or any other sort of mission to investigate the conditions in this very seldom-visited island.
  Mr. Creech Jones: Would the hon. Member be a little more explicit? When he refers to some pocket Hitler, against whom is his charge directed?
  Mr. Gammans: I am referring to the Attorney-General, Mr. Collet, whose conduct would bear closer investigation than the Colonial Office appear to have given to it.
  I was hoping the right hon. Gentleman would have said something more about the progress of getting a common currency for these Colonies which are linked on a fixed parity with sterling. There is nothing to be proud of in the fact that we have got this vast jumble of dollars, local pounds, rupees and piastres. I am hoping that one day we may have some time to discuss the Co-operative Movement. It is a part of the Colonial administration in which I am particularly interested, as for seven years I was Registrar of Co-operative Societies.
  I am glad that the right hon. Gentleman mentioned those interesting discussions which have been going on with the other European Colonial Powers. I think these discussions are desirable on public health grounds, because after all the tsetse fly and the malaria mosquito do not recognise frontiers. I think, too, that if we are hoping to get any sort of economic co-operation in Europe, we must equally aim at co-operation in the Colonies of European Powers. There is another direction in which the Colonial Powers might with advantage co-operate, and that is in defending themselves against the malicious
  610
  attacks which have been made on Colonial development in different parts of the world. The only other general question to which I want to refer briefly concerns broadcasting. I am glad to see in this Report that the Government are now allowing commercial broadcasting in different Colonies, but there is a vast leeway to be made up if this most useful medium of instruction is to be made available to the Colonial Empire as a whole.
  The first important topic with which I want to deal is with regard to Malaya, and—I will be quite frank—I am not in the least satisfied with what the right hon. Gentleman said this afternoon. He does not seem to realise that both the Colonial Office and the Malayan Administration are under a grave charge of dereliction of duty, and he has got to put up a better defence than that which he has already made if he is to satisfy public opinion here and in Malaya. I would like to associate myself with what the right hon. Gentleman said about the late Sir Edward Gent. He was a personal friend of mine for nearly 30 years, and the Colonial Empire has certainly never had a more able or devoted servant, nor has Malaya ever had a more faithful friend. [HON. MEMBERS: "Hear, hear."]
  I am extremely glad that the right hon. Gentleman put these events in their right perspective and made it perfectly clear that this is not a nationalistic uprising in any sense of the word. It is not a claim for a greater degree of self-government; it is primarily a terrorist organisation, Moscow-inspired, Communist in origin, and I do not see why the right hon. Gentleman should not say so, considering that Mr. Malcolm MacDonald has said it. This is part of a worldwide attack against Great Britain, of which another part is what is going on in Berlin at this moment. The murders are not only of Europeans; they are of Chinese as well, and I think the main object is to try to disrupt the production of tin and rubber which are, of course, the main dollar earners of the sterling area.
  I would like to ask the Government a few questions, and I shall be quite happy to give way as I go along if the right hon. Gentleman would like to answer them. The first is: did not the Government know from their military and police intelligence of the possibilities of

  611
  an outbreak of this order? On page 31 of this Report we find this statement, which sounds rather hollow at the moment:
  "Despite some particularly brutal outrages in the Autumn of 1947, the country continues its steady return to the peaceful and secure conditions which obtained before the war."
  What is the meaning of that in a Report which only came out a few days ago? I suggest that the first charge which the Government have got to answer is that they were caught completely napping. If they had any sort of police or military intelligence, they would have known that this was going to happen.
  The next question is: can they satisfy this Committee that the local administration has been really energetic in searching for arms during the past year? Have the police been given sufficient military weapons? If so, why was it that I heard on the news two days ago that radio equipment and arms were being flown out to Malaya? Is it true that the training battalion of the police in Malaya have no weapons at all? Why were not the reserves of the Malaya Regiment, which were called up yesterday, called up two months ago? These are the men who have jungle knowledge and experience. Is it true that the planters were told to form groups to defend themselves and were told that they must provide their arms at their own expense? Why was it that the special constables were not mobilised at least two months ago?
  These are the questions which the right hon. Gentleman has got to answer, and I do not think he will get away with the string of platitudes to which we listened earlier this afternoon. What steps took place in regard to enforcing the banishment of gangsters? Why was Singapore allowed to banish gangsters several weeks before the Mayalan Federation? What steps have been taken to recruit more police personnel—in the case of officers from the disbanded Palestine police, and in the case of other ranks from Malays? These are charges which are being made against the Government both in Malaya and by people here who know the local situation. When the Under-Secretary replies, I hope he will deal with those specific points and try to give the Committee a better answer than did his right hon. Friend just now.
  612
  The second point with which I want to deal is one to which the right hon. Gentleman has already referred—the Colonial Service, in which I personally spent 14 very happy years of my life. I am very distressed to read in the Annual Report that the number of outstanding vacancies today is larger than it was a year ago. A curious expression is used, "The recruitment drive goes on." That is odd jargon to use about the Colonial Empire. I sincerely hope it does not mean that one of the most interesting and responsible services of the Crown no longer attracts the best of the British race. If that is what it means, it is a sad day for the British Empire. In the old days we Cid not have to talk about recruiting drives for the Colonial Service.
  Dr. Morgan: We always did.
  Mr. Gammans: There are one or two points which I should like to raise about the Colonial Service, and the first is whether the Colonial Secretary is satisfied that the rate of salary being offered is adequate to attract and keep really good people? We must remember that in most of our Colonies the European Civil Service is the steel framework upon which the whole administration is built. What we want is not quantities of people but people of first-class quality. I think that some of the Colonies tend to recruit European officers, when locally recruited officers would do equally well, but the officers which we get from this country must be first-class men and they will only be recruited by proper salaries and good conditions. I have always believed that all European officers, whether technical or administrative officers, should be compelled to learn the local language as a condition of continued employment and promotion. I am wondering whether the hon. Gentleman will tell us to what extent that is now a condition of service.
  It would help recruitment, I believe, if there were better facilities for earlier retirement on a proportionate pension or gratuity at 10, 15 or 20 years' service, because there are so many cases where officers, for family reasons or may be for some other reason, feel that they must leave the tropics. They can only do so now by forfeiting their pension. It would be a very useful reform, too, if an officer earned his maximum pension after 25 years' service. There would not be the

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  same inducement and temptation by an officer to hang on when he could not expect promotion. I should also like to see the Colonial Secretary stress far more than he did what I think today is almost as important as efficiency, and that is to make it perfectly clear that promotion does not only depend on efficiency and keenness, but also on the willingness of officers to mix socially with the people of a Colony.
  My last point with regard to the Colonial Service is that I am sorry that the Government have not been a bit more generous over Colonial pensioners. They are in a different category from the home Civil Service. They retire earlier and it is almost impossible for them to fit in to home economic life after 30 years in the tropics. They have to set up a home and buy their furniture, which is something the home civil servant has not to do when he retires. The shabby means test for the colonial civil servant is a poor way of treating men who have served the Crown so well.
  Mr. W. J. Brown: Is the hon. Gentleman aware that when I protested against the application of that means test both to the home civil servant and the colonial civil servant, both sides of this House insisted on retaining it?
  Mr. Gammans: I am very sorry that the hon. Gentleman was not more successful, and if he cares to protest again, I shall be only too glad to join him in that protest. There is one final point with regard to the Colonial Service which I should like to mention; I should like to congratulate the Government on the setting up of these training courses—I believe they are to be known as Devonshire courses—for the senior officers. I hope this is the beginning of a staff college for the Colonial Service to which people of all races in the Empire can come for study and also to meet together.
  The right hon. Gentleman mentioned something about colonial students, and I am not a bit happy about their condition here in London. They number some 3,000. I am hoping that the tendency more and more will be for students to take their graduate courses in their own local universities and only come here for post-graduate courses. It is a very great strain on a young man suddenly to be dropped into London at an impressionable
  614
  age, and there is a danger that he will not see the best of our life, but the worst.
  Is it true what the right hon. Gentleman said about hostels? Are our students in London being looked after in the way they ought to be? I feel a lot more might be done not only to look after their physical welfare but also to give them the chance to see a little more of the best of our social and family life. How many students, when they come to London, see anything of England except the wastes of Bloomsbury? I remember an Indian friend of mine telling me that he lived in this country for six years and that after he left it the only person in England to whom he wrote at Christmas was the landlady of the place where he stayed. He had never seen the inside of an English home. There are many well-disposed people who would willingly welcome overseas students into their homes if only the means of introducing them to each other could be devised. Let the right hon. Gentleman be under no illusion—if the Colonial Office will not look after these students then the Communist Party will. I was interested to read in the "Daily Worker" a short time ago that so many of the West Indians who had come over on the "Empire Windrush" were already happily placed in Communist homes.
  My last point is about constitutional development. I read these words in page 1 of the Annual Report:
  "The central purpose of British colonial policy is simple. It is to guide the colonial territories to responsible self-government within the Empire."
  There must be another aim as well as that one, and that is to hold the Empire together as a world force. If we just talk about responsible self-government within the Empire, we are in danger merely of voicing a platitude, because self-government within the Empire—
  Mr. Wigg: The hon. Gentleman will recollect that that offer was first made by the right hon. Gentleman the Member for West Bristol (Mr. Stanley).
  Mr. Gammans: I am quite aware that that has been the aim of all political parties in this country for a long time, and I am not dissenting from it. All I am saying is that there must be another aim as well, and that is to hold the Empire together.
  Mr. Creech Jones: The hon. Gentleman has quoted from a paragraph in the Report and if he does so correctly he will see that it says nothing about Empire but speaks about the Commonwealth.
  Mr. Gammans: Yes, it is "Commonwealth." I am sorry. However, I would suggest to the right hon. Gentleman that responsible self-government within the Commonwealth carries with it the unchallengeable right to leave the Commonwealth, and that unless we find a better formula than that, the Empire will disappear bit by bit. What we want today is some great idea, some underlying moral force, some dynamic leadership which will hold together this great association of peoples. This particular phrase by itself is merely a dissolvent. What is wanted today is some cement.
  Let us be clear about two things. The first is that Great Britain is either a great imperial Power or she is a lonely, friendless island in the North Sea, unable to feed herself and unable to defend herself. I am very glad that many of the hon. Gentlemen who sit behind the Treasury Bench have recently discovered the Colonial Empire, though I gather some of them are not particularly proud of it. They remind me rather of Robinson Crusoes fascinated for the first time by the waving of tropical palms. I also am very glad that the right hon. Gentleman did not follow what the Foreign Secretary said a short time ago in trying to pretend that all our Colonial development started under Socialism. Any hon. Member who thinks that, can very quickly be put right by the President of the Board of Trade, who will tell him that the exports of Malayan rubber alone—all of it, of course, coming from private enterprise—are greater in value than the exports of all products from this country to the United States put together. The human race may have started from monkeys, but the British Empire did not start with monkey nuts.
  The other thing we must realise is that if Great Britain cannot exist without the Empire, it is equally true that the Colonies cannot exist without us. Independence without security is meaningless. Not one single Colony today in the British Empire could stand alone without the backing of the Empire and this country. The alternative to the British connection
  616
  is not some "airy-fairy" Utopia, but anarchy. The alternative to the Union Jack in most parts of the world today is the Hammer and Sickle. I read in yesterday's paper, as I am sure many hon. Members did, the following paragraph about Burma:
  "Army and other communications between Rangoon and the major towns are now only by radio. Telegraph lines lie smashed by the insurgents. Railway bridges have been dynamited, and long-distance transport is practically at a standstill."
  Dr. Morgan: Is this in Order in a Debate on a Colonial Estimate?
  Mr. Gammans: I am using that quotation as an illustration of the point I am trying to make, that when the Union Jack comes down, anarchy of that sort takes place.
  Dr. Morgan: Purely hypothetical.
  Mr. Gammans: I do not think the hon. Member would think it so hypothetical if he had been in one of the trains that was blown up. I suggest to the Government that their main aim should be not merely to grant self-government within the Commonwealth: their aim also must be to hold the Empire together. We shall not do it merely by doling out copies of the British Constitution tied up in pink ribbon; and we shall not do it merely by pandering to extremists and abandoning our friends; and we shall not do it merely by washing our hands of our responsibilities as we did in Burma.
  What is it we must do? I think we have to do three things. I believe that the conception of self-government that we envisaged in the Statute of Westminster may be getting a little out of date, and that when we talk about self-government within the Commonwealth we must make it clear it is self-government on these terms, and on no other. In other words, I think we may have to face up to two limitations of self-government. The first is that no territory can leave the British Empire when by so doing, it imperils Imperial strategy and Imperial communications. I do not see why we should have any diffidence whatsoever in enunciating that as a principle. The Russians certainly have not. It is on the principle of security that they have spread half way across Europe. The Americans have held on to Panama, bases in the Philippines, and our bases in the West Indies

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  only on the ground of their security. We who are very much more vulnerable than they are, need have no hesitation whatsoever in putting that limitation to any further grant of self-government. I suggest, too, that only this Imperial Parliament should decide the pace of constitutional advance, and not a politically conscious and vocal minority avid for the spoils of office. Unless we are definite on these two points, we shall lay ourselves open to agitation and also to blackmail.
  The second principle we ought to consider is that we must get away from the idea that our only conception of self-government is one necessarily based on the ballot box. The ballot box, which implies the counting of heads—and very often illiterate heads at that—is very strong vintage. We have seen democracy disappear from many countries of Europe and Central and South America, not because anything was wrong with the constitution, but simply because the very essence of democracy was not there. If we go on doling out constitutions based on universal suffrage, literate or illiterate, without any qualifications whatever, then we are not going to get democracy: we are going to get demagogy. I heard the other day of a member of one of our overseas legislatures who, when asked for his ideas about higher education, suggested putting a second floor on all the schools. We have the genius for constitutional improvisation, and I think we might start to exercise it in dealing with the constitutional problems of our own Colonies.
  My last point is this. There must be a positive as well as a negative side to our constitutional developments. If membership of the British Empire is to be something really permanent it must be anchored in the hearts of the Colonial peoples. If we want it to be a permanent association and not something with a connotation of inferiority, we have to get rid of any implication of colour bars. The King cannot have two sorts of subjects, first class and second class. How are we to get a greater sense of Empire unity? It can only be done, in my opinion, through closer association, not only on the spot but here in London. Is it possible to develop an Empire defence policy? Is there any attempt being made to create some sort of council, some sort
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  of meeting here in London which will make the peoples of the Colonial Empire realise that they share with us the strategic defence of the Empire? Do we need something more by way of an economic council here in London? Our real problem, surely, is that we have to create a sense of Empire citizenship, so that a man from Nigeria will talk about his status as a British subject permanently and with pride, just as a man would who was born in Yorkshire, or in Scotland, or in any other part of Britain.
  That is the task, the creative task that faces the right hon. Gentleman today. It is a task that requires more than just woolly idealism on the part of any of us, or even a kindly disposition. It requires courage and leadership. It requires a sense of imperial statesmanship which appears far too seldom. But it also demands a belief in ourselves, and a belief in our imperial destiny. If we cannot produce those qualities, we shall have to try to fight a series of constitutional rearguard actions, without enthusiasm and without hope. All our plans for education, social betterment, and better health would disappear overnight in the darkness which would follow the fall of Imperial Britain. To hold the Empire together is the real task of the Colonial Office today. If they succeed in that task, they will not only be helping to maintain the standard of living of the people of this country, but also maintaining over a large part of the earth's surface the rule of law, of justice, and the moral influence of the only league of nations which has ever worked.
  5.41 p.m.
  Mr. Harrison: I would suggest to the hon. Member for Hornsey (Mr. Gammans), who likened Members on this side to a number of Robinson Crusoes, that that simile is also applicable to the Opposition. Some of us are terrified when we see the footprints on the sand, which the hon. Member's party have made as our predecessors in office, regarding the Colonial Empire. We accept the simile in the particular sense that we are appalled by some of the conditions which we see in our Colonies all over the world.
  It is not my intention however to follow the hon. Gentleman very far in his constitutional speech. I want to direct the attention of the House

  619
  to the condition of Hong Kong, and its relationship not only with this country but also with China. I read in the report with considerable interest that it was the intention of the Colonial Office to impress on our administrators in Hong Kong the necessity of a clear understanding of the conditions that prevail in China. It is along those lines that I wish to speak for a few minutes.
  I remember quite clearly that when we were in Hong Kong a few months ago, a considerable body of local opinion, which was shared by a good many people in this country, held the view that the only conceivable policy for the future of the Colony was that we should, as quickly as possible, reorganise that territory in the manner in which it was organised before the last war. I feel that that particular idea which is widely held both in Hong Kong and in this country, is an impossibility under the present changed circumstances. If that idea were followed through, it would increase considerably the difficulties of the Hong Kong administration and also the difficulties of our Colonial Office. I suggest to the Colonial Secretary that there are several important new factors in the picture concerning this Far Eastern country. I think that one of the first new factors that should be brought to his notice is that since the voluntary relinquishing of the extrality rights in nearly every other part of China, Hong Kong is in a far different position from what it was before the last war. The willingness to relinquish our extrality rights in other parts of China alters considerably the status of Hong Kong in the Far East.
  Hong Kong today is to a considerable extent isolated in the China seas. That is an important factor in considering the future policy of the Colony. I think that this one fact alone will necessitate all the care that we can give to future planning, not only in our relationship with the island itself, but also in our relationship with Kowloon, the territory across the harbour. I have a particularly vivid recollection of an embarrassing moment when speaking in Nottingham on the need for the fullest co-operation and understanding between this country and China. I was describing the friendly regard that most of the Chinese have for us in Great Britain, and, while I was speaking a Chinese mob was almost simultaneously storming the Shameen
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  Bridge of Canton and succeeded in burning down the consulate. A few weeks before, as members of the Parliamentary Good Will Mission to China, we were sleeping in that consulate. [Laughter.] We were not sleeping there at the time of the fire, or it would have been most unpleasant.
  I suggest to hon. Members opposite, who seemed rather amused by that reference, that if they followed me a little more closely they would find that I mentioned a rather serious incident in the relationship of this country and China. It was a coincidence that only a few weeks after that Good Will Mission the consulate was burned down by a mob in the Shameen territory. The disturbances were very serious. I am quite convinced that they were stimulated by certain elements in Canton who used the incident of the evacuation of the Chinese squatters from Kowloon as an excuse deliberately to attack and embitter Sino-British relations.
  I suggest to the Colonial Secretary that that particular incident reflected a very serious feeling within China concerning our possession of Hong Kong and our occupation of the Kowloon mainland strip of territory. I feel that while the future of Hong Kong may not be planned at the moment, every care must be taken by the people of this country and the people in Hong Kong to recognise the strong feeling that exists among the Chinese just over the water from the Colony. Another aspect of the recent happenings in Hong Kong to which I wish to refer is the recently increased trade of the Colony, for it is a fact, according to the reports, that during the last three or four months the trade of the Colony has increased by leaps and bounds.
  Mr. W. Fletcher: Would the hon. Gentleman explain what he means when he refers to the trade of the Colony? Is he looking at Hong Kong as an entrepôt for the distribution of goods in the rest of China, or merely as a trading entity inside its own boundaries?
  Mr. Harrison: For the moment I am looking at Hong Kong as a trading entity; and when I speak about the trade of the Colony I am speaking of the exports, imports and re-exports of the Colony, and treating it as an entity within itself. I will quote the United Kingdom trading figures for the last two years, to illustrate the

  621
  vastly increased trade which Hong Kong is at present enjoying. For three months in 1947, the trade of Hong Kong with the United Kingdom was £2,834,000.
  Mr. Fletcher: I am sorry to interrupt the hon. Gentleman again, but it is very important to get this clear. Is he talking about trade for local consumption in Hong Kong, or trade for distribution elsewhere?
  Mr. Harrison: I am speaking about the exports, imports and re-exports of the Colony generally.
  Mr. Fletcher: I give up.
  Mr. Harrison: I am treating Hong Kong as a trading entity, and that trading entity has certain import and export trades, and together they constitute a good indication of the whole trade which the Colony enjoys at the present time; in other words, the whole trade that is passing through the various channels centred in the Colony.
  For three months in 1947, trade with the United Kingdom amounted to £2,384,000. For the same period in 1948, trade between the United Kingdom and Hong Kong totalled £5,457,000—an increase of over 100 per cent. in a very short time. In the minds of some of us, and of the Chinese also, those figures raise a very knotty problem. The terrible conditions prevailing in China at present are, I think, well known to everybody, as is the importance of the government of China restricting and controlling, as far as they possibly can, any expenditure by the Chinese on non-essential imports. I wonder whether in this phenomenal increase in trade there is any element of trade which might have been encouraged by smuggling between Hong Kong and the mainland and up the river to Canton? I feel that for the future of Hong Kong this Government must encourage our Hong Kong officers to co-operate in every way possible to prohibit, or to restrict as far as they possibly can, smuggling between the Colony and the mainland of China. I say that because at this juncture in Chinese history it is important that there shall be as little leakage as possible in the shape of nonessential imports.
  Another factor connected with the Colony itself, which will have a bearing on its future, is this: whilst we in this
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  country, and in our Colonies, desire to preserve our traditional policy of giving asylum to persecuted people, it would be advisable for our administration in Hong Kong to be very careful to avoid making the Colony a headquarters for all plotters against the authorities on the mainland. That will be a very important factor in the future of Hong Kong. They should not be suspected of offering asylum to or giving facilities for plotting by, subversive elements which arise from time to time in China.
  There are aspects of these increased trading figures enjoyed by Hong Kong at the present time which should be of great comfort to the Chinese people themselves, for I believe that in the chaotic conditions existing on the mainland the facilities offered by Hong Kong would be of great benefit to the present Government in China. The Chinese themselves should recognise that the steady Hong Kong currency, and the shipping facilities of the Colony, can be used by the Government very advantageously during the present chaos on the mainland. It seems to me that that side of the trading position of Hong Kong has not been given sufficiently careful consideration by the present authorities in China. Anyone who knows anything of the position there would accept the possibility of a still greater drive towards reducing the amount of smuggling through the Colony on to the Chinese mainland.
  I turn now to the position of Kowloon and the strip of territory across the water. I believe it to be true to say that it was leased to this country under the Convention of Pekin in 1898. To our Colonial Office I would point out that since that Convention was signed, there have been several revolutions in the country. However, with care on our part, and understanding on the part of the Chinese, that lease will be of credit and advantage, not only to this country but to the Chinese. Whilst the Kowloon evictions and the rioting over the eviction of the squatters reflect a feeling which has recently grown, that feeling can be overcome and a better understanding created between the two countries if care and consideration are shown to the old question of the lease of the Kowloon strip of the mainland.
  As everyone knows, there has been a phenomenal rise in the population. The population figure is roughly 1,800,000,

  623
  and most of these people are Chinese. With this massive population in so small an area, it is right and proper that the authorities there should take every precaution to see that the present standards of hygiene are maintained. Everything must be done to persuade the Chinese Government and the Chinese within the Colony that these regulations are essential for the health of the community. If the question of the future development of Hong Kong is handled with some degree of care on both sides, I am sure that the future status of Hong Kong will not only be an asset to this country but also to the Chinese people. I believe that there is a great future for Hong Kong if only our people will do everything possible to overcome these varying irritants, which if they are not treated very carefully may mar the whole future of the Colony.
  5.52 p.m.
  Mr. Walter Fletcher: I hope that the hon. Member for East Nottingham (Mr. Harrison) will excuse me if I do not comment on his highly individualistic presentation of a totally erroneous description of the trade of Hong Kong. I am fortified in this view by the reply given to me yesterday by the Under-Secretary of State, when I asked whether any change in status was contemplated in Hong Kong, because he replied with an emphatic, "No." As to the question of smuggling, let me suggest to the hon. Member's mind, which is not so matured as mine, because I have been a resident in China, that it is not so much that smuggling is carried on in the Colony as that a little door is being left open by the Chinese, particularly in Canton.
  Last year we were asked by the Colonial Secretary not to comment on what was going on in Malaya because the new Constitution was just being instituted, and it was obviously the desire of everyone that it should be given a fair chance. Since then, on repeated occasions during the ensuing year when I have asked the Lord President of the Council whether he would give an opportunity—Government time, because this is a question of Government failure—for the Malayan question to be discussed, I have been met by him in that characteristic way of his of trying to pass over a question with almost an air of buffoonery. What is the result?
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  We now find ourselves with a first-class crisis of immense magnitude which might have been avoided had the Government acceded to that request.
  The Government stand fairly and squarely condemned for their policy of too late and too little. If further proof is wanted, I invite Members to recall the Question I asked on 30th June of the Under-Secretary who is to wind up this Debate. I asked whether anything was being done to augment our police force in Malaya, and I was told that
  "steps were being taken to recruit 20 additional police officers and the further expansion of the police force is being studied."—[OFFICIAL REPORT, 30th June, 1948; Vol. 452, c. 209.]
  "Is being studied"—that puts the finger on the whole trouble, and it shows that the Government both here and in Malaya, are not taking this matter seriously enough and are not taking action in time. Is this the moment to talk about 20 additional police officers? This is not the time for a study, but the time for action.
  I was in Malaya in the early part of last year, and I pay great tribute to Sir Edward Gent whose tragic death has deprived the country of his wonderful services. No man gave more time, thought and personality to pursuing the end he considered right. There was no finer man, and we all mourn his loss. But that does not necessarily mean I agree with everything he did, although any criticisms I have to make are not personal criticisms.
  Let me give a description of what is the real problem in Malaya. What we are seeing now is not due to the Communists, although they are a large element in the situation and will certainly use it to their own purposes. It is not in essence a Communist movement, and we are throwing dust in our own eyes to use the word "Communist." I do not think I am likely to be accused of excusing the Communist Party of crimes of which they are obviously guilty, and I am certainly not qualifying to stand in the queue to become the Member for West Fife. As I was saying, we are blinding ourselves and throwing dust in our eyes if we call this a "Communist" movement. It is a manifestation of the local feeling that there is so much weakness in the centre, both here and in the Colony, that crime will pay.

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  The present set-up under the Constitution provides an opportunity for lawlessness to reign. It is not an ideological movement as yet, and it is not as yet a nationalist movement, but it is very unsafe to pretend that a nationalist movement cannot arise from it. It is the preliminary notice before we get the final notice "Quit Asia." We have had the notice to quit India, and we have done that, and in Malaya, for anyone who can read the signs, this is the beginning of a "quit Asia" movement. That is why it has to be regarded with the utmost seriousness.
  This is a four-pronged attack. There is the Pan-Malayan movement from the Dutch Indies, where there is no war and yet no peace. There is the Pan-Asiatic movement playing on the Indian community, to which Pandit Nehru gave considerable impetus when he was in Malaya. Then there is the Chinese movement, which is a dual one, for the Kuomintang and the Communist are fighting out their battles in Malaya. Finally, from across the border in the north there is the Communist impulse coming almost direct from Moscow. These four elements have one thing in common. The have a common link in feeling that reprisals against them have hitherto not been of such a nature as to discourage their efforts.
  In all these elements there is a proportion of bad men. We must be very careful in talking of the Chinese as being the element from which most of this lawlessness and banditry comes. Ninety-five per cent. of the Chinese are law-abiding citizens. Some have been very long established, in Malaya for 100 or 200 years, and others fit loyally into the new-citizen clause of the Constitution. In every one of these elements there is a proportion of bad men. It must be remembered that the bandits and thugs we speak of are not permanently bandits and thugs, because today a man is a rubber tapper, tomorrow, if it is a better prospect, he is a bandit, and the following day, if the game is not worth while, he returns to his ordinary avocation. That is the light in which this movement has to be regarded—organised banditry hiding under Communist cover. The quantity of arms and the number of bad people in the country have been the same since the end of the war.
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  Why, therefore, is it only recently that these manifestations of lawlessness have shown themselves? It is clearly for one reason, and one reason only: they have felt, with that great sensitiveness which they get from the bush telegraph or "grapevine," that crime would not be punished. They have felt that crime would not be punished even when it was committed for the second or third times. Once that happens, terrorism is established as a paying proposition, drawing more and more people to it, and becoming more and more dangerous to the general community. It is not murder that gets the headlines, or the spotlight; it is the terrorism, which makes daily life in huge areas of the country, in villages and towns, unlivable, that is the main trouble. We are offering the people of Malaya at present the inestimable benefits of "democracy," but one thing of which these people are certain is that they are being put under tribute in their daily lives, as the people of Chicago were in the days of Al Capone, and they want to be rid of that first. When they have seen the benefits of a strong, beneficient, just rule we may get on with the very important question of plans for introducing democracy of the utility export pattern.
  There is the fatal weakness that it is only now that action is being taken. The Colonial Secretary used the word "now." This has affected police and others who are responsible for law and order. Let us put ourselves in the position of a police officer in charge of a district. What is the question that is in his mind? This holds good in every part of the Empire, in East or West Africa and the Far East. He has to take the difficult decision, on the spot, before the trouble actually starts, whether, in any action which he may take—and which may result in the deaths of innocent people; I am willing to admit that—he will receive absolute and unqualified backing. That is the root of the trouble, and that springs from something that comes from here from the Colonial Secretary. Behind all this is the feeling that the Government's system of Empire "load shedding" may well apply to Malaya and other parts of the Empire. It is load shedding and nothing else. There is this desire to get out of responsibility by introducing these manifestations of

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  democracy to immature people, to shed the load which we should have shouldered. That feeling passes from the centre out to the perimeter, and unless it is arrested, and visible authority is vested in one authority, which it is known will exercise it without fear or favour without some "fellow travellers," Left-Wingers, making a fuss because accidents have happened, we shall not get pax Britannica again in any part of the Empire.
  Between the local authorities and the authorities here, we must fasten the responsibility for the present state of affairs in Malaya. It is a tragic state of affairs, and I am not yet satisfied that the means which will be used to put it right will be sufficiently powerful, or will be used sufficiently strongly. Let me say to His Majesty's Government that they will be doing a much greater service to the man in the street in Malaya, and taking a quicker step to make him fit for the next step forward in his own self-government, if they do two things: First, if they show clearly that they mean business, and that there are no strings attached to what local governments may feel they have to do to stamp out ruthlessly this daily terrorism. Second, let them examine again the working of the Constitution which they introduced. That was one of the wisest and best worked out things during the period of the Coalition Government which was carried on during the war, and in it Sir Edward Gent had a considerable hand. After the war it had to be modified, because nobody could guess the conditions in which it would be introduced; now, it has to be further modified. So long as there is no visible authority, with full executive authority, so long as there is firstly a Governor-General in Singapore, secondly a High Commissioner in Kuala Lumpur and thirdly Mr. MacDonald—I cannot remember his title—with no executive authority, the set-up will not, and cannot, work, and calls for modification at once.
  What will be the economic effect of the present trouble in Malaya? My hon. Friend the Member for Hornsey (Mr. Gammans) pointed out, as I did recently, that the value of rubber exported from Malaya is fully equal to the total exports directly to the United States. Tin is equally important. It is obvious that this is a great dollar-earning arsenal of the
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  Commonwealth which is of special importance at present. We are already feeling the effects of the present situation in not getting the production of tin that we should get. The small Chinese producer will not buy the amount of machinery which he requires for surface tin work—small, but necessary, machinery—because he is in daily fear of being held to ransom, and made to pay tribute which will make his activities of no value. Until law and order are firmly established we shall lose every day a considerable amount of tin. As to rubber, we have not found a falling off yet but we shall, so long as managers of estates are living as they have to do now—half a dozen of them together in one bungalow, and having to go 40 or 50 miles to their estates. There will be the disintegration of the labour force on these estates and on the small Chinese holdings. That is the inevitable effect until law and order have been restored by visible, effective action.
  One point of stability in the Far East at the moment is Malaya. Take a look around. Burma is in a chaotic condition, with tribesmen there at the mercy of the Central Government, which is no friend of theirs. India is not in a state of peace. Siam is gradually—and I say it openly—coming under strong Communist pressure. In Indonesia there is no war, but there is not peace; there is a long drawn out struggle, without arms being fired. In Indo-China the conditions are chaotic, and, again, the struggle is continuing. In China there is great chaos, both economically and racially; the anti-Communist forces are at present losing, and there is the possibility of China splitting. These are the chaotic conditions in the Pacific and the Far East. The one place to which everyone has turned, up to now, for stability has been Malaya. If we do not preserve stability, and restore law and order, we shall do the greatest possible disservice to the whole Empire. New Zealand and Australia are watching the situation most carefully. The Americans, who are giving us aid, will wonder if we are still capable of carrying out the functions we assumed in the past.
  I was ashamed today when I heard the Colonial Secretary's pedestrian gallop as he took us around the Commonwealth. He spoke with no sense of the magnitude of the crisis. He showed no realisation of

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  what was at stake and what he was possibly going to throw away by weakness and inactivity. I was thinking of the people who for decades and almost centuries, have built up Malaya which, before the war, was a peaceful and prosperous area with the native population well in hand. I was wondering in my mind whether those people who spent their lives and gave of their best—those people of whom Sir Edward Gent was a typical example—will not haunt him one of these days.
  Here, once again, we have an opportunity to do the right thing and to show that, by firmness and authority, we will not necessarily cut across the ideal of democratic progress but will build a firm foundation for it in the future. I say to this Committee, after many years of living in the Empire and the Commonwealth and with considerable knowledge of what has gone on locally, that the Government have brought us very close indeed to the brink not only of losing the economic advantages of Malaya but of disrupting the whole of the Far East and accepting the challenge "Quit Asia." If they do that, the unrest will not remain in Asia; it will penetrate from East to West. It will be a vital blow from sources from which it need never have come.
  The Government can strike a blow at Communism, which is trying out the ground everywhere and seeing what is fertile ground for its efforts. Do not let the Government deceive themselves by saying this is Communism; it is not. This is lawlessness due to a disrespect of the law which is not being sufficiently firmly or effectively administered, and the cause of that I place fairly and squarely on the shoulders of the Government. I condemn them for their dilatory methods in the past and their inability to realise the magnitude of the crisis of today. Let us hope that in the future we shall be able to withdraw that condemnation and congratulate them on taking the necessary steps, even at the last moment. They will have every support from this side of the House. Let them take their minds a little off the ideologies, and a little off democratic forms and voting, and do what is much better for the man in the street in that country—see he can live a decent orderly life without interference such as ought never to have arisen.
  6.2 p.m.
  Mr. Thomas Macpherson: I want to confine my remarks mainly to colonial policy in connection with food production and especially food production in Africa. The Debate has been going for 2½ hours and, apart from a facetious remark by the hon. Member for Hornsey (Mr. Gammans), there has been no mention of the groundnuts scheme at all. I want to say something about that.
  I was in Dar es Salaam, Tanganyika, recently and I took the opportunity to fly up to Kongwa to make an inspection of the Government's groundnuts scheme. During my visit I was able to see the various stages of the work and to have discussions with the management and the executives on the spot. After the adverse criticism and forebodings which I had heard both in Africa and at home about this scheme, emanating from hon. Members opposite and particularly from the right hon. Member for Southport (Mr. R. S. Hudson), I was agreeably surprised and pleased by what I saw and learned during my visit. I agree with that well-known British farmer and agriculturist, Mr. Clive Higgs, who has also been out there, that the Government's groundnuts scheme in Tanganyika was one of the greatest conceptions of all time and deserves the good wishes and support of us all. That is my view, too, after having been there myself to see what is being done.
  This scheme, with the methods which have been employed there, is the only way by which the great Continent of Africa can make any substantial contribution towards providing for the food needs of her own people and the general food supply of the world. In addition to groundnuts, large quantities of other much-needed foodstuffs will be grown from the rotation crops which are a necessary adjunct to groundnut cultivation. Since I returned people have said to me, "Did you actually see any groundnuts being harvested?" Yes, I did. I saw the first fruits—the first harvest from the 7,500 acres which were being harvested while I was there. I saw these groundnuts being put into sacks and sent down to the coast. This is the forerunner of a great scheme of production for oils and fats for the people of this country and for other countries, too, which will eventually, and as soon as possible, reach an acreage of no less than 3¼ million.
  Brigadier Prior-Palmer: Did the hon. Member say that the groundnuts were being sent to the coast in sacks?
  Mr. Macpherson: I saw groundnuts in sacks going off, presumably to the coast.
  Brigadier Prior-Palmer: Was not the whole of that crop intended for use as seed next year, and not for this country?
  Mr. Macpherson: Possibly some was being kept for seed, too. [HON. MEMBERS: "All of it."] I saw it going off, anyhow. What is more important, I saw groundnuts being harvested and I was very encouraged, because that harvest was the forerunner of the tremendous quantities which will be produced in years to come. Bearing in mind the fact that this scheme is being developed in vast tracts of tropical Africa and in virgin bush where there are no houses, buildings, roads or railways, and bearing in mind that the first tractors went into work only in July last year, I think a wonderful job has been done. The production of foodstuffs in Africa on the scale envisaged and by these new and untried methods is—
  Sir John Barlow: Before the hon. Member leaves that point, could he tell us what is the average crop of groundnuts per acre?
  Mr. Macpherson: Not without notice. But I should imagine it will vary from area to area. There are two different kinds of soil, as the hon. Member probably knows, and there are also different tracts of country embraced in the scheme. In every stage of the work in Tanganyika our men our there are faced with new difficulties and new problems, many of which could not be foreseen—problems of native labour, of housing, transport, of erosion and of water—and I should like to assure the House that in my view all those problems are being tackled by a keen, loyal and able body of men in the employment of the managing agent and of the Corporation in a manner which, I think, deserves the thanks and appreciation of the country.
  May I remind the Committee that one of the greatest problems facing the world today is the existence of a world shortage of food? That has been said so often that
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  it has almost become a commonplace, but unless within the next few years some very extensive and new sources of supplies of food are found, and are planned to be brought into production, in my view we shall very soon have a shortage of food in this country, and in other parts of the world as well, which will be worse than anything we ever experienced during the war years. Familiarity breeds contempt, and this coming food shortage has been referred to so often that we are in danger of being complacent about it. There is more to be feared from a food famine than from the atomic bomb.
  Where are these new and increased supplies of food to come from? In my opinion, after a lifetime's experience of food-producing countries and their possibilities, I doubt very much if we can expect greatly increased supplies through our normal and traditional sources of supply abroad. There are only two places where greatly increased supplies of food can be obtained. They are from this country and from our British Colonies, and particularly Africa. The great Continent of Africa with its teeming millions of native people, and its white and coloured races, is short of food now. Unless something is done about it the position will get worse. This may seem an extraordinary situation, when we think of the boundless possibilities for food production in Africa. Nevertheless it is a fact. It is a situation which, I am glad to say, is having the serious attention of the Colonial Office and of other Government Departments concerned.
  Over the greater part of Africa the native population is still cultivating the soil, growing its mealies and other foods, by the same methods as were practised in Biblical times. A small patch is cultivated this year, another patch next year, and the year after, and so on. No regard is paid to impoverishment of the soil, fertilisers, crop rotation, or anything like that. Nevertheless, the African native, like people in other parts of the world, is gradually and progressively acquiring a higher standard of living. He is gradually, year by year forming the habit of eating more and better food. In addition the population is increasing. Native people, especially under British rule, are no longer decimated by war, pestilence and famine. We frequantly

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  find, as has been referred to by the Governor of Kenya in that well-known despatch of his, that the little patch of mealies and the occasional feed of meat is not sufficient today to maintain him. Outside sources have to be drawn upon.
  Today, Africa cannot feed herself let alone make any substantial contribution to the general world food-supply problem. It will be within the memory of the Committee that two or three months ago the Union of South Africa appeared as applicant before the World Emergency Food Council with a request to be supplied with two million bags of wheat. That, I think, represents a shocking state of affairs. South Africa should be able to grow all the bread grains she needs, in addition to making a substantial export contribution to the needs of other countries less favourably endowed by nature. We are also open to criticism for our neglect of our Colonies and Dependencies.
  It is true that the policy of the present Labour Government of support for colonial development puts previous Tory Administrations to shame, but I hope that the Government will not be content with the Tanganyika scheme. There is much more to be done, and there are tremendous possibilities for the development of production, especially in Africa. I am glad to see that the Prime Minister is arranging to have talks with Empire statesmen, and I am also glad to hear from the Colonial Secretary that he himself is arranging an important conference this Autumn. May I express the hope that the food needs of the Empire and Empire food production will occupy a prominent place on the agenda?
  So far as Africa is concerned, no large-scale increase in agricultural production can take place without Government planning and help. In East Africa and Rhodesia there are matters like water supply, disease and transport, which are outside the realm of private individuals to deal with. Especially would I urge on the Minister and on the Colonial Office the importance of transport. I travelled in Africa from Cairo to the Cape. Everywhere I found the same problem. Development and progress everywhere were being hamstrung owing to lack of transport facilities by road and rail, and at the ports. It is useless to plan any large-scale Colonial development unless
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  transport facilities are planned and provided at the same time. It ought to be a condition precedent of all development in those Colonies. The most important case of all is Rhodesia, where foodstuffs of every kind can be grown in abundance and where there is mineral wealth, including coal, in great quantity. Further development is almost at a standstill for lack of outlet to the sea and suitable transport facilities.
  I commend the Government's policy of making a start on these matters with the Tanganyika scheme. If my right hon. Friend the Minister of Food did nothing else during his period of office he would be deserving of lasting credit for the support he has given to the project. One great point about the scheme is not only the oils and fats which will be produced for this country and Africa as well, but its great experimental value, and the lessons we shall learn there in large-scale agricultural production in tropical countries. The value of that experience cannot be measured in pounds, shillings and pence. In Africa, owing to the nature of the country, much of the agricultural development will have to be on a large scale, and all new kinds of scientific methods of production will require to be employed. As in Tanganyika, the use of machinery will be essential, but bulldozers and tractors are not enough.
  These vast, undeveloped, and of ten unpopulated lands need men and women, not just between the ages of 20 and 30 as has generally, and I think wrongly, been prescribed for emigration, but men and women of all ages. Knowledge and experience in Colonial Development are just as important as youth. There are matters like land clearance and large-scale cropping to be dealt with. It will be possible, especially in the African Colonies which I visited, to maintain large quantities of cattle, sheep and pigs for milk, meat, and other processed foods. That development will not be possible without the co-operation, the technical skill and technical resources of the white man.
  The part which the British people can play in the development of these vast natural resources will not only make an effective contribution to our world food supply, but, in the process of opening up these countries, equipping them for production and settling people on the land, we shall help to solve some of the major

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  economic ills which perplex us today in this country.
  6.20 p.m.
  Brigadier Prior-Palmer: I should like to start by registering a strong protest against the inadequate time given to Debates on colonial affairs. It is quite impossible to cover this wide field in one day's Debate. How you, Mr. Beaumont, are able to control a Debate of this nature I do not know. More than ever it was in the past, it is necessary for the Empire and the world that our colonial territories should be given every minute of consideration we can afford. To give them only one day is at best a very poor compliment to them.
  I propose to confine my remarks to East Africa. I will follow the hon. Member for Romford (Mr. T. Macpherson) in some of his points during the course of what I have to say. I do not by any means pose as an authority. All I can say is that I burned a considerable amount of midnight oil for six weeks reading all the reports I could lay my hands on and all the pamphlets that were available, and I have taken an interest in most of the Colonial Empire during the course of my service. I have motored in this part of the world from 6 o'clock in the morning until 8 o'clock at night for several weeks, and I will give my impressions of what I have seen.
  As far as food is concerned, I agree with the hon. Member for Romford. One of the things that strikes one immediately, particularly when flying over that territory, is the vast areas which are given up to haphazard higgledy-piggledy cultivation on the tribal or small-holding scale of two to three acres, growing a little millet or a few bananas for the subsistence of the family but with no thought of assisting the territory economically and of adding in some way to the supplies of food which are so necessary in the world at this moment. It is very serious in cases where tribes are static, and it is even more serious in cases where they are nomadic.
  I am not unmindful or ignorant of what is being done by the magnificent men in the Colonial Service. They work extremely hard, and a very high proportion of them—over 95 per cent. of those whom we met—were of the highest calibre. How-
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  ever, one is impressed by the lack of backing they get from the top. That is my chief criticism in this matter. There are the most excellent experimental farms and agricultural colleges, and the knowledge gained from them is invaluable, but one finds that that knowledge is not being disseminated down to the tribal areas or even to the local agricultural officers. Large numbers of agricultural officers had no knowledge of things we had seen 24 hours earlier at an experimental farm or an agricultural college. That is something which could be put right.
  There must be better organisation and a greater feeling of urgency for getting detail down to the agricultural officers and also to the extremely intelligent African tribal leaders, who are prepared to learn anything and to try to teach their tribes, but they do not get an opportunity of learning what is being done. That is one of my chief criticisms. Until food is grown in those vast areas on more modern lines, those people will not reap the benefit which they could for themselves and the world will still be lacking a very large potential source of food.
  Dr. Haden Guest: Is the hon. and gallant Gentleman referring exclusively to East Africa or also to West Africa?
  Brigadier Prior-Palmer: I am confining my remarks to East Africa. I have been there recently. I have not as yet been to West Africa. One of the finest examples of what can be done in this way is the sugar plantation near Entebbe in Uganda. That was done under the stress of war but it has been carried on since and there are now 7,000 or 8,000 acres beautifully cleared and properly cultivated with satisfactory results.
  Parallel with that problem—it is fundamental and it may seem elementary to say so—is the problem of the tsetse fly. One sees vast areas completely uninhabited except by game, particularly round Lake Albert. There is mile after mile of land growing most beautiful grass with little tree or bush on it, and yet there is not a soul there. There is probably a very good reason, but I should like to know why the groundnuts experimental scheme was not placed there where no bush clearing was necessary. I am informed that the climate and the rainfall are admirable for it. It seems extra-

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  ordinary. I know what is being done in regard to tsetse clearance, but there is not that sense of urgency which is necessary. The situation has changed completely since the war. This is a vital matter and if the amount of money now being spent is not adequate to produce results immediately, more money must be provided. This should be treated in the same way as the magnetic and acoustic mines were treated during the war.
  Again, there is little dissemination of information. We found agricultural officers who had not heard of the I.C.I. drug. Admittedly it is in the experimental stage, but people whose job it is to study the tsetse fly should have heard of it. It is embarrassing for one to be talking to an agricultural officer and to mention the I.C.I. drug and to discover that one is talking to a blank wall because the man has no idea what one is talking about. Something must be done and it must be done very quickly. There should be greater co-ordination between the three territories in relation to this menace. One has great confidence that the new Central Assembly will see to that as one of its first jobs.
  To go from food to mineral wealth, what is the position with regard to the geological survey of Tanganyika? Has it been completed? One is informed by responsible officers that there are vast potentialities of mineral wealth in Tanganyika in copper, bauxite, lead, tin, aluminium, gold and coal. What is the plan for the development of that wealth? I feel very sincerely that unless we develop it on a very big scale, we are asking for trouble. It is a temptation to somebody else to say. "All right, if they do not, we will." The initial step must be to deal with communications. If communications are improved the whole problem will be simplified. There is a shortage of steel, and on that a wide view must be taken. I believe that the problem is too big for average private capital. I should like to see something like £400 million sunk in that country. I should like to see the initial steps of communications and so on being undertaken by the Government, and the project run as a private enterprise concern on the same basis as the Sudan plantations scheme which has been such a great success.
  Mr. Rankin: Will the hon. and gallant Gentleman face up to one question? When he is dealing with that aspect, what does he think the African reaction would be to that proposition?
  Brigadier Prior-Palmer: If the hon. Member will bear with me in patience for a few minutes, and if I have the time, I have a few remarks to make on education which will cover that point. When, and if, there are to be any large new schemes launched, in heaven's name do not let the Government make the same mistakes as they have made in the groundnut scheme in Tanganyika. I am not one who considers that the groundnut scheme was a bad idea; I think it was a good idea and that it is the way in which the whole of those African territories can be developed; but, in order to produce a political effect in the country, it was far too rushed. There is a lot of moonshine and political ballyhoo, and the way in which it was started was not a practical proposition. It is beginning to go now, but 7,000 acres as against 120,000 acres!
  Dr. Haden Guest rose—
  Brigadier Prior-Palmer: I think I had better be allowed to continue by speech for I have given way already no fewer than three times. I will point out exactly what I mean. I had experience of armour during the war and precisely the same mistakes were made in this enterprise as were made at the beginning of the war in regard to armour. There is not a single really well trained staff officer who could not have told the Government the way in which to start the scheme, and the lines on which they could have been a year ahead of where they are now. The first priority is workshops, the second priority is spare parts, and the third priority is training establishments, before one starts to pull a single tree or plough a single bit of ground. Had that been done, they would have been farther ahead than they are at the moment, and they would not have had to spend the year which they are about to spend on reconstruction.
  That is my great criticism. That hon. Members opposite should go round the country boasting that this is one of the great Socialist achievements, is just sheer bunkum. The thing has been very badly handled to start with. In the

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  future it will reap dividends, but at what a cost and with what a waste of time. As an experiment, I repeat, it is a good thing it has been tried and, as the hon. Member has just said, I hope that the lessons learned will be carried into effect in any new scheme.
  One word in regard to the white settler in the East African Colonies. I was horrified at the amount of ignorance that exists at both ends: on their part, of the situation in Europe and in the world and in this country; on our part, among the people of this country, what the white settler is doing in those East African territories, or what he has done in the past in the area which he populates. Will hon. Members please remember for one moment, when they talk about the "white highlands" of Kenya, that some of the best highlands are occupied by native tribes? The whole of that wonderful country east of Mount Kenya is a native reserve in the so-called "white highlands," and there is a great deal of hot air and nonsense talked about this question.
  As I said at Question Time the other day, it is vital that something should be done about air mail newspapers to those countries. "The Times" air mail copy costs 3s. 4d., and nobody can afford to have it except the odd club and firm. The other daily papers are never seen at all. As to broadcasting, it was deplorable. A rehash of the B.B.C. was put out at a most inconvenient time in the evening by the local wireless station. That was all they had from which to choose, and it is not in the least surprising that they are ignorant of the state of affairs at home. As, however, the right hon. Gentleman gave a reasonably satisfactory answer to my Question, I hope he will see that in the near future something will be done about those postal arrangements.
  There is this other point. I implore the right hon. Gentleman to let the white settler know in some way or other at an early date exactly where he stands for the future, because not one of the men to whom I spoke know. They are suspicious, they are worried, and they have a sense not only of frustration but a lack of security of tenure. They do not know what to do with their children, they do not know what to advise their children to do, and
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  they are desperately worried. If the intention of His Majesty's Government is to see that the white settler eventually disappears from Africa, they should say so honestly and give him a period in which to get out.
  Mr. Creech Jones: May I interrupt the hon. and gallant Member? If he will recollect, a reassuring statement on that aspect of policy has already been made by myself on several occasions in this House, and also in East Africa.
  Brigadier Prior-Palmer: I am obliged to the right hon. Gentleman. I hope I am not accusing him unjustly of anything, but is it published in the form of a pamphlet, or is it merely that one has to rely on what is said in the House being published in the newspapers in East Africa? If the latter is the case, very few people will see it, and the matter wants wide publicity in some way because there is that feeling of insecurity in the minds of a large number of the white settlers.
  My third point on this is the education of their children—again, a subject which I raised at Question time one day with regard to assisted passages to England for their children. Any advantages that they may have from low Income Tax are completely nullified by the fact that they have round their necks this enormous millstone of the expense of their children's education. Apart from that, it is unhealthy for children to remain in that climate for any protracted length of time.
  I must say one word about the health services. I am unable to comprehend why it is that in one area one finds a quite magnificent hospital serving a small area and a few people and, in another area, either no hospital or else a dressing station. In Mombasa there is a state of affairs which I would not have believed existed in the civilised world. The hospital was old, and so overcrowded as to be fantastic. There were two patients sleeping in every bed, with one man sleeping between each bed on the floor. I think I am right in saying that there was accommodation in the African wing of that hospital for 100. I think the figure is even lower than that, but I will put it at its maximum, and I think that the African population of Mombasa is something like 100,000.
  Mr. Skeffington: I think the whole area is about 90,000.
  Brigadier Prior-Palmer: That is a disgraceful state of affairs, having regard to the fact that a vast amount of money has been spent on welfare centres and beer halls, together with quite excellent housing schemes. It seems to me, however, that the list of priorities has gone completely wrong somewhere. Why anybody should consider spending a large amount of money on a beer hall when the hospital is in such a condition as that is to me incredible. It may be that the beer hall shows a profit to the local rates whereas the hospital does not, but that wants looking into carefully.
  I have spoken long enough and must draw my remarks to a close. But I would say that the right hon. Gentleman has one of the greatest opportunities any Colonial Secretary has ever been given. I subscribe to the idea of an Under-Secretary of State for African territories, not because I consider that the right hon. Gentleman is not capable of dealing with the whole thing, but, with the stress that there is in our colonial territories I do not think that any man could deal with it effectively and in detail—and it is in detail that it must be dealt with—unless he has somebody whose sole task it is to assist him in that matter. We want new ideas—big, vast, new ideas. Some of these old "Do not let us do it now" people, and the sort of outlook which they represent, are completely out of date as far as our colonial territories are concerned. I hope that the right hon. Gentleman will do everything in his power to see that some of the criticisms levelled during this Debate are looked into and that something is done about them. Then, possibly, some of our "Paget M.P.s" will not altogether have wasted their time.
  6.40 p.m.
  Dr. Haden Guest: I am very glad to have the opportunity of speaking today and of following the hon. and gallant Member for Worthing (Brigadier Prior-Palmer), who talked about East Africa. I asked him a question across the Floor because the situation in West Africa is so very different from that in East Africa and equally important, if not more so, and West Africa has a very much larger population. It would be impossible to generalise from East to West Africa or
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  vice versa—the problems are different. I admit that my experience of East Africa is confined to Northern Rhodesia, but I am told that that land is fairly typical and, like the hon. and gallant Member for Worthing. I have read all the documents.
  I join with the hon. and gallant Gentleman and other hon. Members in making my protest that we are to have only one day for a Colonial Affairs Debate. There is not the slightest doubt in the world that we need two. The hon. Member who spoke with so much knowledge about Malaya tempts me to follow him, because of its very great importance. But the question of tropical Africa is of equal—and in some ways greater—importance. It is quite impossible, therefore, to cover both sides of the two main questions under discussion unless we individually confine ourselves to one or other, and not for lack of interest in the other one.
  I propose to confine myself to the question of the development of tropical Africa. That is by far and away the largest problem, and I believe the biggest and the most important problem, that confronts the administration of the whole Colonial Empire. To put the position into figures, in East and Central Africa there are 46,750,000 Africans, whereas in the Eastern Dependencies—Malaya and so on—there are only 8,500,000; in the Mediterranean Dependencies the number is very small; there are only three millions in the West Indies; and in the other parts of the Colonies very small numbers indeed. It will be seen that the overwhelmingly most important numerically and as far as population is concerned, and also economically because of its natural resources, is undoubtedly that belt of tropical Africa extending from West to East, which includes parts of Central Africa and has very close liaison with South Africa and the adjoining territories belonging to Portugal, France and Belgium, with whom we are now fortunately in very good liaison because the development of all that great tropical area is bound to react from one part on to another. Every part reacts on to every other part. It really should be considered economically as one great new world, open to conquest by our new methods and new technique.
  I realise that the importance of this problem is fully appreciated by the

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  Government. I would say further, and partly in answer to what the hon. and gallant Member for Worthing said about the groundnut scheme being gone into without sufficient and adequate staff work in the beginning, that one of the most efficient and most experienced men in the whole Colonial Service—Mr. Wakefield—was sent out to do the preliminary exploration for this scheme. The matter had been surveyed by Mr. Samuel of the United Africa Company, who originally thought they would carry out the development themselves on a smaller scale but found it was too big for a purely commercial enterprise and then brought it to the notice of the Government.
  Since then, step after step has been taken. If the hon. and gallant Member has not already read it, I beg him to get a copy of the speech made by Mr. Wakefield on 20th April to the Royal Society of Arts, in which he gives the history and the present condition of the East and Central African groundnuts scheme, which completely refutes his idea that there was any lack of preparation. It has, in fact, been very well done. I admit that it has been quickly done, and I venture to think it is time that things in Africa were done quickly and we did not wait too long—
  Brigadier Prior-Palmer: I really cannot allow the hon. Member to get away with all that. What I said—a fact about which there is no supposition at all—is that there was no question of erecting workshops before any cultivation took place; there was no question of erecting schools for teaching, and, at one point, there was no water. That is what I call bad planning. Civilians may think otherwise, but I consider it extremely bad.
  Dr. Guest: The whole development of Africa which is now proceeding was, in fact, referred to in the speech made by the former Colonial Secretary—now Lord Hall—in the first peace-time statement, in 1946, with regard to the development of the Colonies. He then referred to the groundnut scheme. The hon. and gallant Member may consider that that has not been a sufficiently long period of preparation, but that is because he does not understand or appreciate the really extreme urgency of getting on with the job.
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  If it had been purely a military operation, he would have understood it. This is not a military operation. I venture to think it is even more urgent than some of the military operations in which we were engaged during the war.
  Brigadier Prior-Palmer: Why was it not carried out as a military operation?
  Dr. Guest: I must point out that the policy now being carried out is that laid down by the Colonial Secretary in 1946, when he said that it was:
  "… to develop the Colonies and all their resources so as to enable their peoples …"
  —and I emphasise that—
  "speedily and substantially to improve their economic and social conditions, and, as soon as may be practicable, to attain responsible self-government."
  He went on to say that that policy was
  "… wholeheartedly endorsed by the great mass of public opinion in this country."—[OFFICIAL REPORT, 9th July, 1946; Vol. 425, c. 238.]
  There was a reference to the special question of Ceylon. That has now become a Dominion. Perhaps the hon. and gallant Member thinks that is too quick? We on this side do not think so. We think the world needs rapid action. There was a reference also to the investigation of the production of groundnuts and to the rehabilitation of the industries of tin and rubber in Malaya. But the Colonial Secretary emphasised that the Colonies were poor and said that the problem must be attacked mainly by improving the productivity of the Colonial people themselves.
  I urge the necessity of looking at the problems from this point of view, because we need to get into the habit of taking this long-term view and of working it out, although it is necessary from time to time to take action quickly and on a very large scale. I must point out that what this policy means, and what is now being carried out, is a very large-scale improvement of road, rail, water and land transport, development of power and water resources, education of a comprehensive kind, including technical, agricultural, forestry and mining, and the establishment of new industries. I mention the establishment of new industries particularly because I believe we are proceeding into an age in the Colonial Empire, especially in tropical Africa, of industrialisation and it will revolutionise

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  that part of the world. The Colonial Secretary went on to say that our aim was
  "the expanding prosperity … of the 60 million of our Colonial peoples."—[OFFICIAL REPORT, 9th July, 1946, Vol. 425, c. 261.]
  which would be an advantage to the wealth of the world. In the same Debate the right hon. Member for West Bristol (Mr. Stanley) largely agreed with the Colonial Secretary, but said that in the next few years the development should be not on the political but on the economic and social side and added that
  "for the vast majority of these 60 million people it means agriculture."—[OFFICIAL REPORT, 9th July, 1946, Vol. 425, c. 269.]
  The progress made and the rate at which it has been made since 1946 is certainly greater than at any previous time in the Colonial Empire, and greater than many people thought possible. Probably it has been greater than the hon. and gallant Member for Worthing thinks desirable. But this will surprise members of the Labour Party less than others, because a deliberate policy of large-scale planned development of the Colonies, running parallel with increases of political freedom, has been the policy of the Labour Party for many years. At the Labour Party Conference so long ago as 1925 a detailed policy, covering the Dominions and Colonies, and stressing the need for large-scale social and economic development, was adopted. The details can be found in the annual report of the Conference for that year and they will be found to embody many of the proposals now being carried out.
  Mr. Lennox-Boyd: As it happens, that was exactly the year when one of the present occupants of the Government Front Bench said that the best thing that could be done about the Empire was to liquidate it.
  Dr. Guest: But a great many spoke differently. I do not know what the hon. Member for Mid-Bedford (Mr. Lennox-Boyd) was saying at that date. Perhaps he was talking Fascism at that date. I do not think much good is to be got by digging too far into the past.
  Mr. Lennox-Boyd: The hon. Member quoted that year.
  Dr. Guest: What one man says does not necessarily involve everyone else. I do
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  not agree with the suggestion that is sometimes made that all good things necessarily come from this side of the Committee. In the past hon. Members opposite have had a great history of interest and energy in colonial affairs. Personally I welcome that co-operation and hope that it will continue. In the Colonial Empire we have a new world of our own which we can develop and from which we can create a great deal of new wealth. If we had not made these plans we should have been compelled by the hard necessities of the economic situation and by the very great dangers that confront our economic life to carry out this development in the Colonial Empire.
  Changes, political and economic, of the kind now being undertaken on so large a scale in Africa have been proceeding more slowly over a very long period of time. We are only accelerating the tempo of change. The gold mines on the Rand and diamond mines in Kimberley have been with us a very long time and have made great demands on labour forces in Africa and from the tropics. They have made consequent changes of great significance in the African economy. In recent years we have had the development of the great copper mines area of Northern Rhodesia and lately the gold development in the Orange Free State. Over the whole period of this century the demands for labour in all parts of Africa down to the Cape have exercised a profoundly disturbing influence on African life. Now all the great plans for the development of tropical Africa West and East and Central Africa will make still further demands and will further change and disturb African life. In its main aspects the process is not one to be deplored, but is a process which needs control and management, and it should be watched with care.
  What is the wealth of Africa? It is not gold, copper or diamonds, forests nor even the essential fats which only the tropics can grow in abundance—not even the great secondary industries which may develop. Its greatest wealth is in the people themselves, and the plans of development now proceeding and likely to be intensified are bringing the Africans to an industrial revolution such as we had in the early days of the 19th century. I have had experience of Africa for more than 40 years and I hold the view that industrial revolution must come in Africa. For many years I

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  have seen it coming and now its coming is being rapidly speeded up. I think the Government should realise the dangers of its coming. The acceleration of development increases those dangers. I will mention one. It is probable that Africa is now on the eve of a great increase in population, an increase such as happened in this country at the time of the industrial revolution about 150 years ago and in India in the 1920's. It is the opinion of Mr. Wakefield, who was the architect of the groundnut scheme and other authorities on Africa that that great increase in population will follow there. If it occurs it will bring about many difficult problems for Africa. Mr. Wakefield goes so far as to say in the lecture he gave to the Society of Arts in April this year—and I venture to underline his words:
  "I consider that Africa is on the verge of catastrophe."
  He went on to quote the opinion of the late Director of Medical Services in Kenya who spoke of the probably gigantic increase of population and the fact that under existing circumstances that population could not be fed. He said that unless great changes were made we should
  "be left with pestilence or war as remedies for over-population and starvation."
  Those are facts which I think should be taken into consideration. They are facts which show clearly how this industrial revolution is sweeping through Africa. Anyone who has any acquaintance with the industrial progress in various parts of Africa, which I regret to say is more often found in financial newspapers than in Government statements—and I wish it were equally found in Government statements—must realise the very great dangers which may come in its train.
  Mr. W. Fletcher: The hon. Member has used the words "industrial revolution." Will he back that up by saying what industries in Central, West or East Africa are progressing on anything like a scale which justifies that?
  Dr. Guest: Certainly, I will endeavour to do that, and I think I can. As the hon. Member knows, in the Rand gold mines and Kimberley, labour has been recruited from the tropical areas of Africa very largely. In the 1930's we had the opening up of the great industry of copper mining in Northern Rhodesia. I visited the place
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  when it was opening up and there also large numbers of people were being drawn in. In West Africa there are gold mines, diamond mines, iron mines and many other kinds of mines and large industrial undertakings and railways, and this is all industrial organisation which is growing up.
  Mr. Dumpleton: Surely, when the hon. Gentleman speaks of the industrial revolution and mentions gold mines and industrial development in West Africa, he should speak of them in proportion to the whole agricultural economy. Surely, what he is saying is complete rubbish.
  Dr. Guest: I am very glad to be criticised from this side of the Committee as well as the other side; it gives me a feeling of security, and I know where I stand. What is happening is that the form of native labour in Africa is being revolutionised and broken up by the demands of these great industries in different parts of Africa. They are destroying the natural and primitive communal land economy, and that is an industrial revolution which is proceeding very rapidly, whether my hon. Friend likes it or not.
  Sir William Darling: Only 200,000 men are to be employed.
  Dr. Guest: If the hon. Gentleman will examine the large number of industries which are scattered about in West, East and Central Africa, and others which will undoubtedly develop as a result of this great groundnut scheme, he will see that there will be a great industrialisation. Incidentally, the groundnut scheme itself, which is intended to feed and help the Africans as well as the people in Europe, means the industrialisation of agriculture. It means departing altogether from the old primitive method of agriculture, and adopting the new method, and that is the only way in which large populations in Africa can possibly be provided for in the future, by a new form of agriculture.
  Mr. W. Fletcher: The figure given for the employment in the groundnut scheme was 30,000 natives. I do not think that can be taken as a sign of industrial revolution. If one takes agriculture, which is the only example given by the hon. Gentleman, and subtracts that—it has

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  not attracted many more people—it makes the hon. Gentleman's argument completely wrong.
  Dr. Guest: If the hon. Gentleman studies the question, he will find that I am not wrong. I am looking a few years ahead.
  Mr. W. Fletcher: The Einstein theory!
  Dr. Guest: I am looking four, five or perhaps 10 years ahead, and I think it is highly desirable that any Government should—I am sure that this Government will—look ahead that far in order to see what changes should be brought about. I have seen in South Africa the complete demoralisation of African life created by industrial conditions. I know a certain number of hon. Members opposite laugh at this. They are insensitive to African conditions. They regard the degradation of Africans in South Africa as a matter of amusement.
  Mr. Lennox-Boyd: Who are they?
  Dr. Guest: Anyone who knows the conditions of the Africans, who lives in association with the towns in South Africa, as I have—I have worked in them, I have been a doctor there and I have seen what they do; the conditions are worse now than they were—will know that they are so utterly bad that they are a degradation of the whole of the African people in those areas. What we are in danger of in this development of tropical Africa if we do not take adequate steps in advance, is producing the same kind of demoralisation among the Africans in the tropics as already exists in the locations, as they are called, where the Africans live around Cape Town, Bloemfontein or in the Transvaal. Those are conditions of demoralisation, and that is the result of industrialisation in the economic sense of the word.
  I hope—and I am not addressing myself to hon. Members opposite because I do not think they would sympathise—that the Government will not allow the native African in tropical Africa to be alienated from the land which, to a very large extent, is still under some form of communal ownership. I hope the Government will decide that no land at present held in communal ownership in any part of Africa shall be alienated from the people, and that they will bring back to
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  common ownership any land which they can and which has recently been alienated. I hope they will also undertake a great programme of food production by Africa on the lines of modernised and mechanically equipped agriculture wherever it is possible, because I believe that the prophecy of Mr. Wakefield, who considers that Africa is in great danger at the present time, and the prophecies of the competent medical authorities are true, and that Africa is in danger of increasing its population enormously and of having inadequate food to support that population.
  We ought to keep the majority of Africans on the land, and we ought to improve their conditions and amenities and add secondary industries. We cannot get away from the fact that we shall have to add considerable secondary industries, and we shall have to proceed on this path of industrialisation. In any large-scale projects which are brought forward, I want the Government to bear in mind the necessity of making the least disturbance in the African way of life, and to exercise rigid controls over conditions in the recruitment of labour, both as to time of absence from their homes and rates and conditions of remuneration in their place of work. To make Africa safe for the Africans and avoid a disaster which some observers fear, the plan should be to bring a democratic Socialism to the Africans and build it up on the basis of of the Africans' own institutions. We should guard the common ownership of land in Africa, and vest it in the Africans, and on that structure a great civilisation can be built.
  If hon. Members opposite think that I have exaggerated, I suggest that they get hold of a book which has been published recently in South Africa under the title of "When Smuts Goes." It is a book written by a lecturer of history at the Witwatersrand University. He points out what will happen when Smuts goes, which he thought would be 1952 and not 1948, when the reactionary Government came into office and they proceeded to go on with their reactionary policy—how by accentuating the present degree of debasement of the industrialisation system in South Africa and its effect on the natives, they would bring about a complete wiping out of the white civilization—
  Dr. Morgan: On a point of Order. I would like to know whether it is really in Order for the affairs of a Dominion like South Africa to be discussed in a Colonial Debate, when so many of us are trying to get a few words in about the Colonies?
  Dr. Guest: I am sorry if I have disturbed my hon. Friend about this subject longer than I should have done, but he has done the same to me in the past. I want to end by saying that bold Socialist planning now will make Africa a place of peace. If we do not have that we shall get disturbances such as are now going on in the Far East. By bold Socialist planning we can have peace and prosperity; we can make a great contribution to the stabilisation and improvement of the world and create a great deal of new wealth in the world which is urgently needed.
  7.9 p.m.
  Mr. Henderson Stewart: In view of the exceptional number of hon. Members who obviously wish to speak in this Debate, I propose to confine myself to a single subject and to occupy only a few moments. I hope the hon. Member for North Islington (Dr. Guest) will excuse me if I do not attempt to follow him in his rather unconvincing argument. All I would say about his speech is that if the bold Socialist plans such as he suggested and such as we have seen in the past few years are carried out in the future with as much calamity as they bring now, it is a bad look-out for the Colonies.
  I want to speak about British Guiana, about which the Under-Secretary made a statement yesterday—or, rather, he was prevented by the Lord President from making a statement which certainly ought to have been made public to the House It is apparent from that statement, as we have seen it recorded in HANSARD today, that a serious situation still exists in that British Colony. A strike of considerable dimensions has been going on for three months, and apparently it is still continuing. Attaching to the strike, and surrounding it are very difficult and disturbing social and political features. The strike started at the end of April. From the start it was clearly a political agitation organised by Communists, fellow travellers and other good-for-nothings who
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  hang about the roads and bridges on the coast. The agitation was designed not to improve the social conditions of the workers at all, but to incite a revolutionary spirit among all those who labour on the sugar estates, and to cause chaos on those estates.
  That I am right in so describing the source of the trouble is proved by the fact that even by the middle of June on the seven affected estates the great majority of workers were quite content to go on working, showing in that way that they had no sympathy with the organisers of the trouble and that they were generally satisfied with the conditions agreed upon between their own established union and the sugar estate managers. As I say, the agitation was obviously political from the start: if there is any doubt about that, the terms put forward by the representative of the agitators in the Assembly of British Guiana is proof of it. Yet, though that was so, and though it continued, with growing intimidation of the workers and with outrages in different parts of the Colony, no effective action was taken by the local government until the 16th June, nearly eight weeks after the trouble had started, when at that time the area was what is called "declared," and armed protection provided for some of the estates.
  What had happened up to that time? The Communist agitators were allowed to hold meetings, and I believe are still allowed to hold meetings in the eastern part of the Colony, quite freely along the coast roads, where they incite anybody and everybody with whom they come into contact. They issue the most poisonous propaganda which I have seen—newspapers which I believe might be banned even in this country—with apparently the greatest freedom. These journals are being issued inciting people to all kinds of trouble, to withdraw their labour, to demonstrate against the estate managers and in every possible way to cause disturbance. Telephone lines were cut—I have letters and messages here from residents—lights were put out, European overseers were beaten up, often with considerable damage to their bodies and some of them may still be in hospital. Estate headquarters were threatened. Ultimately on 16th June the trouble culminated in a mass attack by a crowd armed with sticks, missiles and other

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  weapons, who sought to attack the sugar estate at Enmore. They were prevented by a small body of police, who ultimately had to fire to protect their own lives, and a number of the crowd were killed.
  Dr. Morgan: Which particular estate is this to which the hon. Member is referring?
  Mr. Stewart: The hon. Member will find it all in the statement of the Under-Secretary yesterday, and that of the right hon. Gentleman on 23rd June.
  It was only then, after all this trouble had been going on for eight weeks, that the area was "declared" which is to say, I suppose, that a state of emergency was proclaimed, and some armed protection was given to the estate. I must ask the Under-Secretary why did he delay, why did the local government delay for so long? They had been well warned of these dangers. Those responsible in British Guiana have time and and again approached the Governor and begged him to take the necessary protective action, and yet nothing whatever was done. Did the local Governor make contact with the Colonial Office? Did the Secretary of State know about this? Was he responsible for no action being taken, or is the local Governor responsible? We ought to know, because the lives and property of British citizens were, and still are, in peril. The hon. Member for North Islington spoke of the need for rapid action. I am asking for that. I am complaining that in this case no rapid action was taken.
  I will put another question. Was the action taken on 16th June adequate? Is it adequate yet? Ten days later, on 26th June the same poisonous propaganda was still circulating. Decent workers on the estates—I have full particulars here—were so intimidated that the management had to stop operating on the estate at all. I understand that on one estate six armed policemen have been provided to look after and protect a rum store worth almost a million pounds, and on that estate five thousand people live. That cannot be described as provocation—six armed men responsible for guarding all that.
  According to my latest information white women and children are in terror of their lives. I have a letter from one woman, the wife of an estate manager,
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  who writes that for ten weeks she has been unable to leave her house because of the danger of attack from this lawless element in the country. According to the statement of the Under-Secretary yesterday the strike goes on, the same strike on the same estates continues. I have been there and I saw a little of it, and I ask the Colonial Secretary seriously to consider that if this situation is not dealt with, the trouble may spread all over British Guiana. It may indeed spread to the whole of the West Indies. We know the difficult and explosive material to be found in other parts of the West Indies, particularly Trinidad and Jamaica.
  I beg the right hon. Gentleman to watch what is happening. We have seen what happened in Malaya. Strong action has been taken there and I warn the right hon. Gentleman that unless strong action is taken to the same extent in British Guiana we are in for serious trouble. Apparently a commission of inquiry was set up by the local Governor, but that was three weeks ago and this is a matter of urgency. Why has the Commission not reported? The Government surely ought to know the result of that inquiry when so much hangs upon it I want to insist upon the seriousness of this matter. It is just another case and another example of the truth that is dawning on the whole country and on members of the whole Colonial Empire, that this Government is making a poor job of its responsibilities, because it is failing in its elementary duty of preserving peace and security for the peoples of the Colonies. The only thing I can hope for is that an early opportunity may be given to the British people to change this Government.
  7.18 p.m.
  General Sir George Jeffreys: If I do not follow the hon. Member for East Fife (Mr. Henderson Stewart), it is not because I do not very strongly sympathise with the case he has made. It is because I wish to lay a little fresh emphasis on a case already made, that is the case of Malaya, and what I believe to be the most urgent and most dangerous situation existing at the present time in our Colonial possessions. The situation is very serious, and that has been admitted by the right hon. Gentleman. It is not a case of sporadic disturbances but of an

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  organised system of extortion, murder and outrage. The planters and their families, especially on the remote rubber estates, go in daily fear of their lives, as also do their Malayan employees.
  The perpetrators of these outrages are not Malays. That cannot be sufficiently rubbed into the people of this country. Some in this country still believe—I hope and think that no hon. Members ate among them—that these people are Malays who are in revolt against foreign occupation of their country. They are nothing of the kind. The enormous majority of them are Chinese who came to Malaya originally in order to work there and who have taken to terrorism and banditry. As we have heard, the whole system of terrorism is Communist-organised. I believe that is acknowledged, though it has never been said by the Government. It is part of the general organisation of Communism which is worldwide and very dangerous—
  Mr. Sorensen rose—
  Sir G. Jeffreys: I cannot give way. I intend to be very brief. I believe what I have stated, to be the case. I need not stress the value to this country and to the Empire of Malaya, with its tin and rubber both for home supply and also as a great earner of dollars, which are so necessary for this country. That, I would say, is only a selfish reason, from our point of view, for insisting on law and order being restored and maintained in Malaya. Apart from that, I stress the duty of the Government to protect the lives, the liberties and the property of British subjects. That is their absolute duty. It cannot be shelved or put off. It is also the duty of the Government to maintain law and order throughout the country and, indeed, in the first place, to restore law and order. As was said by my hon. Friend the Member for Bury (Mr. W. Fletcher), there is the evil example before the people of Malaya of our attitude and our surrender in Burma and elsewhere. There is the evil example of lawlessness which has been condoned by their governments and which has gained the upper hand in Siam and in other parts of the East. The story has got about that we are weak and that crimes can be committed in British territories without being dealt with adequately. Weakness and indecision are
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  hopeless qualities with which to exercise government anywhere.
  I was very glad indeed to see in the Press this morning the report of the broadcast by Mr. Malcolm MacDonald describing the measures taken. He said that more than 1,000 arrests had been made in the last three weeks and that the Commander-in-Chief was satisfied that, with few exceptions, the forces on the spot were adequate. I stress the words "with few exceptions." He also said that London had been advised of a possible call for more troops. I very much hope that no chances will be taken. We cannot afford to take chances. I hope that the forces will be adequate and that there will be no exceptions. If there are any exceptions, I hope that they will be made good at the earliest possible moment. It is certainly not fair either to the authorities or to the people on the spot that there should be a shortage of necessary troops.
  The Government of Malaya were very slow in appreciating the seriousness of this situation. As my hon. Friend the Member for Hornsey (Mr. Gammans) asked, were they not caught napping? Were they not far too slow in taking strong and effective action to deal with terrorism, outrage and murder? Was that slowness to take action due to the reluctance of the Colonial Secretary and the Colonial Office to authorise the strongest measures? Is it, in fact, a repetition of the weakness and irresolution which characterised the policy of the Government over Palestine? However that may be, it is certain that the only thing that can be done now to save the situation is to take definite and very strong action, to take it at once, and to continue that action without any relaxation whatever over a period until law, order and security have been definitely re-established. I emphasise the words "without relaxation" because the cat-and-mouse business—severity and martial law for a short period followed by some relaxation, which was the policy followed in Palestine in the hope that conditions would improve—is quite hopeless and useless. In fact, it is worse than useless.
  I should like to know, whether, apart from emergency laws, full effect is being given to the existing laws of Malaya. There is a banishment law which was referred to by the Minister. Is that

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  banishment, or deportation, law being made full use of and put into full effect? Even if there is no direct evidence to convict them, bad characters suspected of being involved in subversive activities should be deported. If they can be deported, the country will be very much better and safer as a result of that action. Perhaps the Under-Secretary will tell us how many deportations have been authorised and carried out during the past year. I should like also to ask whether the police force in Malaya is sufficiently strong, and adequately trained and equipped to deal with this serious situation, bearing in mind that the force had to be entirely reconstituted and rebuilt following the Japanese occupation.
  It should also be borne in mind that, as a result of the occupation, the country is full of illegal arms. The right hon. Gentleman mentioned that some of these arms dumps had been cleared and others were being cleared; but very many of them were raided and the arms spread all over the country before anything was done about it. Further, it should be remembered that there are armed bands who are more than mere bandits, who during the Japanese occupation were encouraged and instructed by us to carry out guerilla warfare all over the country. These bands are now operating against us. We have to tackle not merely bandits but guerilla bands armed with automatic weapons and with more than a little training in the use of those weapons, with a knowledge, too, of the country which is fairly intimate, and with all their native Asiatic cunning and ferocity. Let us make no mistake. It is a very different nature from a European nature with which we have to contend, and it is no good thinking that what appeals to Europeans will necessarily appeal to Asiatics. It will not. They have different standards, different ideas, a different sense of right and wrong and of civilisation itself.
  Mr. Sorensen: Worse than the Nazis?
  Sir G. Jeffreys: It is very difficult to compare them with Nazis, but they have very different ideas from our own. The Germans undoubtedly had different standards and different ways, but they were, possibly, of a standard to which we could make some appeal as Europeans. That standard the Asiatics most emphatically do not possess.
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  It is very necessary, in dealing with these people, that we should have not only armed forces but a very efficient, numerous and well-trained police force. I hope the hon. Gentleman who is to reply will be able to say that we have such a police force, more especially as it has been suggested by my hon. Friend the Member for Bury that a reinforcement has been asked for by the police and that 20 men have been sent. Something very much more than that is necessary; both adequate arms and police are required. I suggest that the first duty of this Government, which has apparently realised something of the seriousness of the situation—which on the face of it they did not realise to begin with—is to impress on the local government that they must at all costs suppress terrorism, restore law and order and take strong and sustained measures to that end, and that no reference to this country and the Colonial Office is necessary before such measures are taken.
  Again I urge that there should be no weakness. We are getting a reputation for weakness, and for having neither a strong policy nor a strong force behind that policy. Weakness and irresolution were stated by Lord Palmerston, towards the end of his career, to be the worst faults in a statesman, but weakness and irresolution, more than anything else, have characterised this Government's dealings with all our overseas affairs since it came to power.
  7.32 p.m.
  Mr. Thomas Reid: We are discussing today the affairs of some 50 Colonies, and we have only a few hours in which to do it. I join with other hon. Members in suggesting that the Colonies should receive more Parliamentary time. In each of these Colonies, there is a Government, and in that Government there are officers of very high quality who are equipped with a knowledge of the problems of those Colonies which can only come from long years of work on the spot. I do not propose to give these Colonies advice about their local administration and political problems. I prefer to make a few remarks about what can be done for them at this end. Speaking from experience, I know that, in a Crown Colony, even if there is a Legislature with certain powers, there is a bureaucratic form of government, and it is absolutely

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  essential to have at the top, as Chief Secretary or Governor, or both, as the case may be, men of outstanding ability, of tried and tested ability, and not people selected by chance. If we have these leaders at the top, they can inspire the whole administration, but if not, the whole administration may be marred.
  Some hon. Members have referred to the salary scales of the staffs. I know that there is a Commission investigating salaries in the Colonial Service, but in my opinion the high standard which has been reached in the past will not be maintained without increases in salary. In this country, the cost of living has gone up enormously, but in the Colonies it has increased much more, and it is absolutely essential to get first-class men, and in order to do that the scales of salaries must be revised. I know there are difficulties, and that questions arise between the local officers and the European officers; the difficulty has to be got over by expatriation allowances or otherwise. These men have to maintain two households, if they are married, and they also have extra expenses connected with travelling and charges of abode even though their passages home are paid for them. Because of these things, a revision of the scales of salaries and also of their pensions must be undertaken.
  It has been an excellent principle in British colonial administrations to go in for decentralisation as far as possible, and much more so than in the case of other colonial Powers. At the same time, the Secretary of State is responsible to Parliament. Another excellent system is that which has now been adopted on a large scale of having advisory committees here which are composed of people with great Colonial experience, or with non-Colonial experience, who can give the Secretary of State the benefit of their knowledge.
  Some hon. Members have referred to various disorders in the Colonies at present. I do not propose to follow them, because I do not feel that it is a subject on which I have that complete knowledge which could only be gained on the spot after full investigation, but, if there ever was a case which showed the need for decentralisation, it is this. The people on the spot must have the necessary powers in advance for dealing with emergencies,
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  and I think that since the war they have had those powers; if not, it was a mistake. The decentralisation of power and responsibility should be placed on the people on the spot, except in matters of high policy.
  Since the war, there has been an upheaval all over the world, and it has had a tremendous impact on the colonial peoples. They have seen India, Pakistan, Burma and Ceylon getting independence, and that has incited colonial peoples, who are human beings like ourselves, to aspire to independence. That is a constitutional subject in which the House is vitally interested, because in the last resort it is the House which decides what should be done. The policy of Britain has been the gradual extension of self-government so as to train the local people gradually in politics and administration, and the final aim has been complete self-government.
  This has not been the way with other colonial Powers. We see around us at present other colonial Powers trying out some form of political union to tie up their colonies with the metropolitan country. Are they right, or are we? It is an important question to ask, because we are at the parting of the ways. In my opinion, we are absolutely right. Our policy is to give the people of the Colonies what they want, and what they want is not some sort of political union with us, but self-government in their own country. If, on the other hand, we adopted the other system of trying to build a political union between ourselves and our Colonies, we should attach 60 million people to the 50 million in these islands, and completely confuse our own politics and theirs.
  In this country, we are very fortunate in having a profound unity without uniformity. It is based on an outlook on life which is common to practically all the people in this country of every class. Associated with us in the Colonies are people of totally different outlook; united with them politically that unity without uniformity could no longer exist. It is that unity which makes democracy possible in this country. I ask the Committee to consider what would happen if the political parties in this country tried to attach to themselves tens of millions of people from the Colonies. Our party system would break down, and to kill the party system is to kill democracy. I suggest that our instincts are wise—to give the colonial peoples what they want

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  and to let them develop complete self-government gradually in their own territory.
  Earlier in the Debate the hon. Member for Hornsey (Mr. Gammans) suggested that we should not have done this in the case of Burma. Then he pointed to the disorders which have since occurred there. I, for one, anticipated those disorders. I anticipated disorders in India and Pakistan, but I was 100 per cent. behind Government policy in both cases. I would have liked to ask the hon. Member, had he been here, what would have happened if we had tried to carry on ruling Burma? Would the disorders have been five times greater? Would we have been the people to be shot at? And if we had finally re-conquered Burma, and that is what it would have meant, what should we then do? Give them self-government or not?
  The hon. Member for Hornsey seemed to indicate that what we should work for is a limited form of self-government, that there should be a form of self-government without the power of quitting the Commonwealth and Empire. If we wanted to exasperate colonial people politically, we could not find a better way of doing it. There is not the slightest use in keeping them in the Empire or Commonwealth unless they wish to stay. It is an old maxim of Liberalism, and a good one, that you cannot rule people except by their consent. In India and the Colonies we had for decades the tacit consent of the people, though there was no ballot box because there was no democratic form of government. We had to quit India, Burma and Pakistan when we had lost that tacit consent. I totally disagree with the views put forward by the hon. Member for Hornsey. It is necessary to criticise them because, as everyone knows, he has considerable knowledge of colonial peoples.
  So far as I am concerned—and I think that I could say so far as every Member on this side of the Committee and probably so far as a great many on the other side are concerned—I wish that these Colonies were prosperous, enlightened, free. I believe that to be the view of my party. On the other hand, if my words go overseas, and words spoken in this House do get to the Colonies, I would point out—and I do so as a friend of theirs
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  who wants them to be self-governing as soon as possible—that we live in an interdependent world, and a very dangerous world at that. Sometimes in these Colonies—I have worked in several—people take a very parish-pump point of view. They think only of their Colony and they apply to it quite glibly the theories of democratic Liberalism, in the case of countries which are often not nations but plural societies, which have little political cohesion and where there is little education and oftentimes appalling illiteracy and poverty, and where those theories do not fit in with actual conditions at the moment.
  Then, again, a Colony may not be very wealthy from an economic point of view but it might be valuable because of its strategic importance. Colonial peoples have to consider this and their self-defence. Even the big nations of the world today are joining together for the purpose of regional collective security. We see that in the Western Union principle, and I believe that the Colonies must realise that this idea of "ourselves alone" is simply fantastic in the modern world. For strategic reasons they have to throw in their lot with other people; otherwise they perish. Again, from the economic point of view the whole world is inter-dependent as never before. For the most part the Colonies produce, and for a long time will have to rely upon, agricultural produce. They do not need to consume it all and are able to export the products of farm, mine and forest which are surplus to their own needs. They depend for their existence on overseas markets. It is useless for them to take a parish-pump point of view. They must regard themselves as citizens of the world.
  Hon. Members on both sides of the Committee talk about the enormous development needs of the Colonies. They are enormous. One hon. Member opposite said that we must have revolutionary big ideas. I entirely agree with him. We have now set aside £120 million, a very generous gift from this country to the Colonies, but it is a mere bagatelle. We have to think in terms of thousands of millions. The capital required to implement material projects alone is enormous, and that is not enough unless we can educate the people and improve their health so that they can co-operate with us as only healthy, educated citizens can. So I would again tell my colonial friends who

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  naturally, like every human being, want self-government, want the power to rule themselves, and want posts—there is nothing wrong in that—that for many years, they will need the help of European technicians and administrators.
  At the present time a fight against famine is going on in the tropics. Several hon. Members have referred to it. In parts of Africa the population doubles itself in 25 years. In other parts it does so in 35 years; and the production of wealth does not keep pace with that increase of population. Since the war the population of the world has increased by about 200 million and most of that increase has taken place in the tropics The population problem in the Colonies is fundamental. It is appalling to contemplate. Those of us who have lived and worked in India and the Colonies and have seen the enormous growth of population look to the future with trepidation. The only way to meet this problem, as several hon. Members have pointed out, is development on a huge scale of the latent wealth and possibilities of the Colonies. Can we do it as regards our vast areas of Colonies? We have poured out money for many years. Long before we passed the legislation for the £120 million gift, we gave help of various kinds to the Colonies. Since the war we have also given several million pounds as food subsidies; we have even given them money to help to run their administration. That cannot go on.
  In my opinion, this country cannot afford to give these gifts on this lavish scale when we are at present burdened with appalling taxation and war debts, and various other difficulties. Even if we set up wealth-producing projects in the Colonies, as we have been doing with the local development funds, even if we established social services in the Colonies and completed big projects there, a period would follow when those social services would have to be maintained. They can only be maintained, unless the British taxpayer has to provide social services indefinitely for 60 million people outside these islands, by the Colonies themselves having taxable capacity. The taxable capacity can only be there when the Colonies have been developed on an enormous scale.
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  Ceylon has been referred to in the Debate. There, when independence was granted, there was almost universal literacy, there was great trained technical ability, trained administrative officers, Ceylonese and European, were on the spot. Above all, the politicians in Ceylon had had long experience and training because of our policy of gradually expanding self-government, which is the wise system of British Governments of every political complexion. Other Colonies say, "Ceylon is independent; it is only a small place, and if it can be independent why cannot we?" I should like to give some figures in that connection. The revenue of Ceylon, an area which would not be missed if taken out of Nigeria, is bigger than the revenue of Nigeria. The revenue of Nigeria at the present time, although it has expanded since the war, is about 18s. per head, whereas the revenue of this country is £60 per head. The people in the Colonies sometimes say they want the same system of education and social services as we have in England. Can that be with an income of 18s. a head?
  I ask my colonial friends to consider these things and to realise that in the Colonies political, social and educational advance must all go together. In the long run it can only be achieved by hard work. I know what this doctrine means in the tropical Colonies where the sun advises a man to go slow and not to strive. On the other hand, the rewards for well-directed hard work are enormous. It is only hard work in the Colonies which can lift the people to a stage of cultural education and comfort which only wealth can supply.
  Mr. Rankin: Can my hon. Friend explain for my information why in the Rhodesian mines hard work on the part of the native produces an income of £5 per year, while hard work on the part of the white man produces an income of up to and over £500 a year?
  Mr. Reid: All I can say is I do not own the Rhodesian mines. I am not responsible for the salaries paid in those mines, but what my hon. Friend says does not interfere in the least with what I am saying. We in this country say that there is no remedy for our ills except hard work, and it is the same in the Colonies unless the British taxpayer is to finance them, and I say that he will not do so in-

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  definitely. The people of this country will not allow it to happen, because we are hard pressed as it is.
  South-East Asia has been referred to in this Debate. That is potentially one of the richest areas in the world, and several countries are involved. There are water and all sorts of natural resources yet it is well-known that for the next 10 years it is doubtful whether famine can be avoided and whether a toll of the population will not be taken. It is only after 10 years or so, with luck, that these countries may become free from the fear of famine. That is an appalling state of affairs. In that part of the world, as in others—for instance, the Caribbean area—there is an international organisation. I suggest that that international organisation must get busy and plan the development of South-East Asia and there must be international funds to do the job. Britain cannot find the capital and adopt the enormous risks which are involved in the development of these areas.
  There are similar risks in the groundnut scheme, and when there are risks in such schemes international funds are required to do the job to which the hon. and gallant Member for Worthing (Brigadier Prior-Palmer) referred. I have already said that Britain cannot finance such schemes and the people of this country will not allow it to be done on the huge scale on which the hon. and gallant Member and I are agreed it should be done. There must be a revolution in ideas. These Colonies cannot unaided develop their countries, to keep themselves alive and raise their standards of living in their own interests and the interests of the world. If the Colonies are to be developed, it is for the good of the Colonies and for the good of the whole world. That being so, the whole world must take the risk and find the funds for developing the Colonies properly. I throw out that suggestion, for what it is worth.
  Brigadier Prior-Palmer: Would the hon. Gentleman be prepared to accept American capital if it were offered?
  Mr. Reid: I was not thinking of that, but rather of State enterprises. There are various international bodies connected with the United Nations, the International Bank and so on. In dealing with the Colonies, owing to the difficulties that might arise, this kind of work should not
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  be undertaken only by one country, which would be accused of exploitation. It would be much better if it were done by an international agency which is above political suspicion.
  As a final word, I want to say something about propaganda in the Colonies. We are now making a gigantic attempt to develop the Colonies. We are straining our resources to do it, but there are propagandists in the Colonies who are decrying our efforts. They are assuring their people, who are often ignorant and easily misled, that this is simply imperialistic exploitation, which is done not in the interests of the natives but in the interests of this country. There is a spate of propaganda going out in most of the Colonies. I hope my voice will carry to the friendly, decent people in the Colonics, when I urge them not to be misled by false prophets, but to take this propaganda with a grain of salt. I ask them, as far as the Colonies are concerned, to co-operate with Britain in trying to stave off famine and starvation, and to develop their own countries for their own good and for that of the rest of the world.
  7.57 p.m.
  Mr. Wingfield Digby: The Committee will be interested in the speech made by the hon. Member for Swindon (Mr. T. Reid). He had the advantage of speaking from a personal experience of the Colonies and on both sides of the Committee Members will be found who can agree with much of what he said. He rather put his finger on the most important points as regards that part of the world about which I intend to speak, namely Africa, when he pointed out, firstly, that in some parts of Africa the native population has doubled in size in a very short time; and, secondly, that this country was no longer in the position economically to give gifts in quite the same generous way as she has been in a position hitherto to give gifts. The fact that the population is increasing so rapidly means that the old methods are no longer likely in the future to support the population, so that development by new methods to support these people, involving a lot of capital, of which we in this country are very short, must be given serious consideration.
  I intend to speak about East and Central Africa. I had the good fortune to

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  go on an Empire Parliamentary Association mission to East Africa, and I went on later to Central Africa, Southern Rhodesia and the Union of South Africa where I was able to see different stages of African development. From a personal point of view I got some benefit from the contrasts between the conducted tour of the delegation and the more unrehearsed performance which I saw in the later trip down south. I found very much to admire in the colonial administration, though I did find at least three points which caused me some concern.
  In the first place, I found a considerable amount of misunderstanding about our long-term policy for the future. There seemed to be no clear idea of what that policy was. In one territory it was one thing and in the next territory it seemed to be totally different, and, quite frankly, seen at a distance, the co-ordination of Whitehall was lacking. Secondly, I wondered whether some of the development projects were not proposed for the wrong places; and, thirdly, I was very disappointed at what I considered to be the failure to make use of the influx of European settlers, whose skill is so badly needed in those territories.
  I formed the most favourable impression of the efficiency of the Colonial Office servants on the spot. I thought they knew their job very well and were most hard working. However, I am bound to say I thought there was considerable evidence that they were apt to be somewhat estranged from the settlers; and when I went further south, to Southern Rhodesia, a country which has secured self-government, I did not notice the same thing at all. I could not but make unfavourable comparisons of that kind.
  It seems to me that there has been some failure to face up to the political future of these various territories. I was very glad to hear the Secretary of State intervene when my hon. and gallant Friend the Member for Worthing (Brigadier Prior-Palmer) was speaking, to say he had given assurances about the position of the white settlers in Kenya, because I am quite certain that what the hon. and gallant Member said is correct, and that is that there is a great deal of misunderstanding on the point amongst all races. That misunderstanding is not for the benefit of the future development of
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  those territories, if the various races are to work together harmoniously to carry out the development which is so necessary.
  It is a pity, in a way, that there is not a clear distinction drawn between the contributions which are likely to be made by the various territories of East and Central Africa to this development. I referred just now to the question of how much capital Great Britain can now afford to spend. I think very few would disagree when I say that the amount of capital we have to spend on the Colonies is now somewhat limited. Wherever we spend that capital, Europeans will have to go to be the technical people responsible for carrying projects into effect. It is not very long ago since we had an Adjournment Debate on development in Africa. When the Under-Secretary of State was in East Africa he made some fine, airy statements about how European technicians would be welcome out there, and how it was desired that there should be a flow of them to East Africa. A Question was asked about it in the House, and the Secretary of State was very quick to pour cold water on the whole thing.
  Mr. Rees-Williams: Will the hon. Gentleman allow me? On the contrary, my right hon. Friend confirmed everything I said. It may be of interest to the hon. Gentleman to know that a number of technicians are already going out as a result of my statement in East Africa.
  Mr. Digby: I think the Secretary of State denied there was any new policy. The Under-Secretary of State implied that there was a new policy, and that was denied. If there is not a new policy I cannot see what the Under-Secretary is taking credit for—except, perhaps, for the work of his predecessors. In the Adjournment Debate the Under-Secretary of State agreed with what has been the sense of the House tonight, that that development is necessary, and he said:
  "I am certain that we must have for East Africa a bold and imaginative plan."—[OFFICIAL REPORT, 14th June, 1948; Vol. 452, c. 215.]
  He went on to say that it should consist of four different features—heavy industries round Jinja; development of secondary industries, particularly in Kenya; an improvement in agriculture and animal

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  husbandry; and development of the tsetse fly areas. I should like to say a word or two about those four matters.
  First, with regard to the development of heavy industries around Jinja. As hon. Members will know, there is not an awful lot there at the moment on which to found heavy industries. There is the White Nile River and the Owen Falls and the project of the barrage. That was suggested some 40 years ago by my right hon. Friend the Member for Woodford (Mr. Churchill).
  Mr. Rees-Williams: He did nothing about it.
  Mr. Digby: As hon. Members know, Uganda up to now has been a country where there have been few Europeans at all. There will be no suitable Europeans on the spot. It is a country in which Europeans have not owned land—or even houses—privately. If we wish to set up heavy industries there we shall have to introduce a very large European element. It is true we shall have the power from the barrage scheme. It is true that out by Mbale there is a hill which is supposed to be a mass of iron ore, but there is iron ore in Tanganyika. I can see few advantages in thus bringing many Europeans into Uganda, which at the moment, with the possible exception of Nyasaland, is the least Europeanised of those countries.
  The Under-Secretary of State spoke next about secondary industries in Kenya. Does he mean development in Nairobi district? Presumably not, as he was talking of the power scheme, and that power can be transmitted only a limited distance. I should have assumed that there would be some idea of development of secondary industries at Kisumu or in the Kavirondo district where the land is so thickly populated. But I understand that nothing whatever of the kind has been projected or even thought out yet. If he is really serious about these development plans, it is about time he was able to tell us what they are, and what concrete steps have been taken to consult the people on the spot with the object of obtaining their point of view.
  With regard to the next matter, improvement in agriculture and animal husbandry, I think few would disagree with the Under-Secretary of State. We have a number of agricultural officers out
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  there. I found them, on the whole, of a pretty high standard. They were overworked and there were not nearly enough of them. They were doing all they could to check erosion, which is a very serious problem in Africa. However, I do not see how the hon. Gentleman proposes suddenly to solve this problem of soil erosion. Is it proposed to appoint far more agricultural officers? Is it proposed to do what, I understand, is under contemplation further south, to take very much stronger measures against cultivators who refuse to cultivate the land properly? If he intends to go along in the present way, I do not think the results will be very considerable, either in cultivation or in the improvement of animal husbandry.
  I think the hon. Gentleman ought to have mentioned forestry, too. I had an opportunity of looking over a number of forest areas out there. There, again, one came up against this tremendous problem of the shortage of staff. I thought that in the appointment of staff the standard aimed at was far too high. They were, I believe, refusing to accept Europeans for forestry work who had not university degrees. That is aiming very high. I should have thought far better results would be achieved if they were to appoint more people, and were not quite so fussy about university degrees. The same thing applies to agriculture. There are many farmers' sons in this country who know plenty about farming but who have not been to universities. Why the Colonial Office refuses to use them when so many are willing to go out there, I fail to understand.
  Lastly, I come to the question of the fly areas. The Under-Secretary spoke as though he had the cure up his sleeve. I hope to goodness that he has, because I talked to a lot of people about this and have come to the conclusion that he is a very long way from reaching any satisfactory solution.
  Mr. Rees-Williams: As the hon. Member seems to be making a series of attacks on me, or on my ideas, will he kindly inform the Committee and myself what authority he has for saying that I said that I have the answer to the tsetse fly up my sleeve?
  Mr. Digby: I did not say the Under-Secretary "had" the answer, but that I hoped he had the answer. What I do

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  say is that he spoke in a very optimistic way in his statements about the whole problem. If he was referring to bush clearance, that is a very large project indeed, when enormous areas are involved, but if he has some new kind of spray, we shall be delighted to hear about it. This is a large problem which cannot be laughed off. I am not attacking the Under-Secretary, but offering a few suggestions about these ideas of his which are on the right lines, and which I should like to see put in practice, or at any rate put into plans at a fairly early date.
  It seems to me that in the whole of these territories there is still lacking a sufficient sense of the economic urgency of the position in the Mother Country. Things are very difficult here for us, as we all know, but it is not sufficiently known or realised by the officials on the spot. For example, it was two and a half weeks before we found an official in East Africa who used a British car, and this at a time when we are doing our best to sell British cars to the African Continent.
  We found that an important diamond mine had been deprived of four vital miles of railway track in order, it was said, to supply them for the groundnut scheme. Again, a goldmine in Tanganyika, which was making a valuable contribution towards earning vital dollars, did not seem to be getting that co-operation from the Tanganyika Government, which I should have thought was in our interests, and was being put into a very difficult financial position. It was found, when inquiring from officials and others about the capital needs of these territories, that the replies were extraordinarily vague and varied from the "Colonial Development Fund" to the somewhat different answer of "unlimited."
  I believe there are several ways in which, if the Secretary of State will really approach the problem from the economic point of view, great assistance can be given in meeting the problems of the sterling area and at the same time in helping these territories. For instance, there is the question of growing more cotton in the Lake Provinces of Tanganyika. The present output of 35,000 bales a year could, in the opinion of many experts, be increased very rapidly, thereby replacing American cotton for which
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  we are paying dollars. Similarly, could not more of the Uganda cotton which is going to India be used in Lancashire in order to save dollars? These are questions which are extremely vital to this country, and I believe it is part of the work of the Colonial Office to consider them as a matter of urgency.
  Africa, it is true, has been the last Continent to be developed by man. It is also true that she has very many disadvantages. She has the disadvantages of poor soil and lack of water, and she is infested with disease. I think there is a tendency to under-estimate these difficulties, but nevertheless the possibilities are there, and I hope that the Government will address their mind to these difficulties, not only in words but in deeds, and will not think that the groundnut scheme in Tanganyika is enough for this enormous undeveloped territory. There is plenty more work to be done. It is about 2,000 years since a Roman poet—I will not attempt to quote him in Latin—[HON. MEMBERS: "Why not?"] Because my pronunciation might shock Old Etonians opposite. He wrote: "There is always something new from Africa." I do not see why there should not be many new things from Africa, and I hope that the Government, who have indulged in a good deal of verbiage on this subject, will now get down to it and let us have some more detailed plans.
  8.16 p.m.
  Mr. Skeffington: I also wish to say a few words about the East African Territories. Like the hon. Member for West Dorset (Mr. Digby), I also had the opportunity of visiting them a few months ago. I realise that that does not constitute me an expert and I cannot be dogmatic or speak with any authority, but at least I am a little less ignorant than I was before. I think I know something of the problems, and at any rate visits of this kind do arouse intense personal interest, which I think is all to the good. I only hope that there can be a much greater exchange of visitors between the Motherland and territories beyond the sea. It is sometimes said that we are living in the age of the "iron curtain," but I hope there will be no iron curtains between the Motherland and her Colonies.

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  It is very clear to me that the East African territories have reached a very important phase in their history. I believe that there will be large developments, for three reasons. First, there is the strategic importance of the territories, although this may be a subject which is mostly outside the scope of this Debate. Nevertheless, with the changed conditions in the Mediterranean it is quite clear that East Africa occupies a key position in any security arrangements. Whatever happens in the future, we cannot afford to run the appalling risks of 1939. Not even until this day is it possible to understand why the Italian army stopped on the frontier of Kenya when there was literally nothing to stop them going right through to South Africa except a few local troops and, I think, four "Hurricanes." I am not certain about these, and believe they came from South Africa, anyway. These risks cannot be taken in the future and some rapid development, for this reason alone is inevitable.
  Secondly, there is the very rapid increase in the African population. Dr. Patterson, whose name has been mentioned in the Debate, has been collecting material for a good many years. He has had unique opportunities for gathering it, as he has had a most distinguished career in the African Medical Service. He estimates that in the next ten years the African population of the three main territories will double. One does not know what the African population is in these areas—a census is being taken at the present time—but it cannot be less than 10 million; therefore, the territories will have to support within the next 10 to 15 years, a population of at least 20 million, and already the food position is quite acute. Obviously, therefore, a great expansion of agricultural production is essential.
  Most Members who have seen the problem at first hand will agree that it is unlikely that we can look for any substantial increase in agricultural production from the African farms. They are usually much too small and without adequate implements, and although there has been an improvement in some districts, they have not even compensated for the great amount of soil erosion which is taking place in many areas. Flying over parts of Kenya and Tanganyika, I saw large
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  areas of horrible red scars where the soil had been removed from the surface, leaving only hard rock underneath. These areas have now been lost to cultivation for all time. Little assistance, therefore, can be expected from the African farmer individually, although I hope we shall continue to expand the advice system which is working well in some areas.
  As the hon. and gallant Member for Worthing (Brigadier Prior-Palmer) said, I do not think we shall get any substantial increase either from the general European farmer. The scale of operations needed to effect a substantial improvement is usually so large as to be beyond the capital resources, at any rate, of the European. There are, however, some areas where European farming could be expanded, and I think the Colonial Secretary might investigate the possibilities of irrigation schemes in the lower courses of the Tana River. I believe, therefore, generally speaking, that large improvements in food conditions can only be secured by some form of community undertaking, financed by the Government, even though other agents are used to carry it out.
  Thirdly developments are essential because the African and the European, and many others throughout the world, are hoping that we may be able to get some relief for our fats deficiency and for other shortages of raw materials. There are three immediate problems to be tackled if there is to be successful development. First, there is the health of the African. I did not know and I doubt whether it is realised here, that in East Africa the native is a sick person. We are sometimes told by the older but by no means representative settler that the African is lazy. Apart from the problem of incentives and the lack of them, and the need to induce the habit of hard work—a habit which I do not take kindly to myself—the average African is often a diseased person. I asked medical officer after medical officer what was the incidence of hookworm or other intestinal diseases, and I never got a figure lower than 90 per cent. Sometimes it was as high as 95 per cent.
  Similarly, with venereal disease. It was rare to find a district in which less than 50 per cent. of the population were not afflicted by this disease, either congenitally or by contagion. There were

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  whole areas in which malaria attacks were the constant condition of a very large number of inhabitants. Although it is possible to work under these conditions for a long time, they have an enormous effect on the vigour and energy of the individual. This is a problem to which we and the African authorities must pay great attention.
  I want to emphasise, in passing, that I have the highest praise for our existing health services, inadequate as they are. The European doctor, working with his bush dispensaries, is doing an excellent job, but there are not enough of them, or of medical assistants, and I hope we shall find ways and means of extending medical training at Makerere College and elsewhere, so that more assistants can be forthcoming, and so that we shall be able to extend further into the bush. Distances in this matter, as in others, are enormous, and there is no easy or quick solution.
  The second problem, education, is no less fundamental. The work which has been done by many of the mission schools has been first-class, but they are the first to admit that their resources are strained to the limit, that they can take on no more, and that the community must step in with assistance. The same kind of difficulties confront the educational services as the medical services. Nearly all primary education has to be organised on boarding school lines. There is, for instance, no going home to lunch in the bush for many. I was struck by the very small proportion of girls who get any schooling at all. Many schools have no girl pupils, or perhaps one out of 400.
  I personally welcomed very much the opening of the Alliance High School in March, 1948, which is the first State secondary school in Kenya for Africans. It will provide a four-year course of secondary education for girls, and although there are only nine pupils there now, a beginning has been made which might be the start of a profound social revolution. We all know of the unfortunate status of the African woman, and if something can be done to give her further opportunities we shall be doing something of the utmost value. In passing I am glad to say that I saw, in Uganda, women on two local native councils, who are playing their part very well.
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  Without criticising any of the arrangements—because I can visualise the immense difficulties in Kenya—it is true we are only touching the fringe of the problem. There are about two million children in Kenya, and only 200,000 in primary schools and 4,000 in secondary schools. If we are to see any great development of the territories we must work much faster than that. This is very true of technical education. I think it is regrettable that Italian technicians are now being brought into these territories. What I have seen convinces me that the African, if selected properly, can perform most of the skilled jobs. Both Uganda and Tanganyika have training schemes which have been open to those leaving the African Forces. They were trained in bricklaying, carpentry, tailoring and metal work. Unfortunately, the records of those who left the centres after training were disappointing. Few stuck to the job for which they had been trained. With all respect to hon. and gallant Members in the Committee, it may be that soldiers are the wrong people to train for this sort of work and that we must be more careful in selection in future.
  In the railway workshops at Nairobi we saw samples of machine work, carpentry, upholstery and iron foundry work—all being performed excellently by Africans. There were also men working in engineering shops at the sisal estates. There must be the right selection of men, careful supervision and a great deal of patience. I hope much more emphasis will be given to the provision of opportunities for technical education for the African. I was struck by the fact that although the Indian community are building a number of schools in different parts of the territories, I did not see any attempt to provide any sort of technical education for them, which is regrettable.
  The third great problem in the tsetse fly. In Uganda and Tanganyika two-thirds of the territory is controlled not by the Colonial Office, but by the tsetse fly. About one-third of Kenya is always subject to its domain. Recently the fly was gaining; at one time many hundreds of square miles of land were becoming unfit for cultivation and cattle rearing. It seems to me that we have been very mean in this problem. In the last 10 years the sums of money spent on a work which could clear away a menace and provide

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  millions of acres for cultivation, has been all too small. I am very glad to know that the veterinary and the tsetse services are to be united and that there will be a common attack and exchange of information in all three territories. I believe only £40,000 is to be provided even now to deal with this menace. It seems to me to be all too small and I should like to hear from the Under-Secretary whether there are any further plans in store.
  There are three ways of dealing with the menace. I visited one of the forward stations in the front line of attack between Gulu and Niva in Uganda where Scott, who is a very considerable naturalist in his own right, has established his headquarters. There, by burning the bush, keeping the game within a prescribed limit and by other methods he is pushing back the tsetse menace. I asked him if he were keeping abreast of the tsetse pressure, and he said, "Oh, yes, we are slowly pushing it back." He pointed out, however, that he had been there only six months, and that is appalling. That is the type of operation which should have been carried on in our territories years ago.
  Secondly, I am glad to know that the new drug 7555 is really effective as an inoculation. In the past many owners of cattle on the fringe of the tsetse area preferred to run the risk from the tsetse fly than the certainty of having their cattle killed by inoculation. I understand that this new drug is giving very satisfactory results, and if so it may be a very formidable weapon in our battle. The most satisfactory way of dealing with the menace is, of course, by settlement, and that is why I believe schemes like the groundnut scheme will be the most successful, because they mean vast settlements in the heart of tsetse areas, which provides the most effective way of dealing with it as it cleans the jungle and makes it impossible for the fly to breed.
  I close with the hope that the Colonial Governments themselves will consider methods of raising additional revenue. Some Africans and some Europeans seem to regard this country as having an unlimited supply of cash for these developments. On both sides of the Committee we will do what we can to spend even larger sums and we will agree to measures even depriving our-
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  selves, for the development of these areas which is so essential. It is true, however, as the Attorney-General in the Kenya Legislative Council said when I was there and there was a debate on the crime wave, that in the past Kenya itself tried to do things on the cheap. It was pointed out that 25 years ago the foundation stone of the new police station was laid. The foundation stone is still there, but the rest of the area is occupied by a garage. That kind of attitude is not big enough. We have to be big, but so also have our colonial territories. I hope that the new constitutional arrangements for East Africa in the East African Legislative Assembly will be the prelude to an era of prosperity for the Africans, for the Europeans and indeed for the whole world.
  8.34 p.m.
  Mr. Edgar Granville: The more I listen to these Colonial Debates the more I am convinced that what is needed almost is a special Session to discuss these colonial questions. If His Majesty's Government are looking for a subject for the special Session in the Autumn, I am sure that the large question of colonial affairs would fill the bill. What I am going to say at this late hour I shall telescope into a few sentences and a series of questions to the Secretary of State for the Colonies.
  In his speech the right hon. Gentleman referred briefly to the disturbances on the Gold Coast, nd he said that the report of the Commission of inquiry under Mr. Watson, K.C., which is now in his hands, would be published at the end of the month, and at the same time there would be a Government announcement of policy upon the findings. That is reasonable and we can wait until then. It is not my intention or desire to say anything which will interfere with those arrangements, but I should like to ask the right hon. Gentleman what is the position meanwhile of the six men who have been detained in connection with the Gold Coast disturbances.
  As he has said, we have to wait until the end of the month before we have the Commission's Report and the statement from the right hon. Gentleman as to what is the attitude of His Majesty's Government to this whole question. But what about the arrested men? I should like to know if they are under house arrest at the present time or

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  are they under close arrest; have they been released, or where have they been removed to since first arrested? My information was that they were under socalled house arrest, which confined them completely to a building beyond which they were unable to go at all. In effect, it was a form of imprisonment. If not, can the right hon. Gentleman say where they are at the present time, and also are they able to communicate with their relatives and friends? What is the position? It seems very unsatisfactory.
  My hon. Friend the Member for North Dorset (Mr. Byers) on 21st March asked the Secretary of State for the Colonies
  "whether an application has been made to the courts in the Gold Coast, on behalf of the six men recently arrested under the Government's Emergency Powers, for a writ of habeas corpus."
  The right hon. Gentleman replied,
  "According to information received from the Governor, no application had been made to the court for a writ of habeas corpus …"—[OFFICIAL REPORT, 24th March, 1948; Vol. 448; c. 3015.]
  I understand that no application was made to the court, but can the Under-Secretary say whether an application was made to the registrar on the spot, and if the registrar, when the application was made, replied that under the emergency powers this was not possible, which, in fact, was what the right hon. Gentleman said on 21st March at the end of the questions addressed to him by my hon. Friend the Member for North Dorset? Is this not misleading the House? I have in my hand a copy of these emergency powers and the Orders in Council issued by Sir Gerald Creasy and I find that Section I (5) says:
  "No action, prosecution or other legal proceeding calling in question the legality of anything done under or by virtue, or in pursuance, of this regulation or any Order of direction made or issued thereunder shall be brought, instituted or maintained, or shall be entertained by any court at any time."
  That is a regulation far more drastic than anything we had under Regulation 18(B) in this country during the war.
  This is, I think, the most formidable regulation that I have ever read. Here during the war, under Regulation 18(B), we had the Sir Norman Birkett Committee to which persons could appeal and submit their cases. Under this document
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  there is no appeal or redress for these people under these emergency powers, unless to this House. There is no legal right of appeal to the courts there or here or to any judiciary committee of any sort or kind. I cannot believe that the right hon. Gentleman with his great record, particularly as regards civil liberties on Colonial territories, can mean that these emergency regulations shall be operated against these six men without limitation. There is no charge against them, but they are incarcerated under conditions concerning which we have no real information.
  I do not want to enter into a discussion on the general policy of the Government on these Gold Coast disturbances and I am prepared to await the statement together with the reports which are to be issued at the end of the month. At the same time, I should like to ask whether it is the intention of His Majesty's Government to extend some kind of monopoly measure to control monopolies on the Gold Coast similar to the Bill introduced into this House at the present time; otherwise the Monopoly Bill will be absolutely supreme. I ask the right hon. Gentleman if he will be good enough to give us some sort of assurance on that point.
  In a very interesting speech, with which I did not agree in many respects, the hon. Member for Hornsey (Mr. Gammans) referred to the future policy, plan or clear pattern of Empire development. I ask what has been done in regard to the area development scheme, which was first discussed and suggested by Field-Marshal Smuts. It was to be a new policy in which the Dominions were to co-operate with regard to the development economically and in relation to strategical questions, of certain Colonies on a geographical basis. A great deal was said about this matter at the time. I am convinced that we shall never be able to deal with the massive Colonial development problems which confront us—Malaya has shown us the truth of this statement—unless we decentralise and call in the Dominions to co-operate in developing the grouping or area scheme. I hope that the matter has not been lost sight of and that in a future Debate, the right hon. Gentleman will tell us what is going on and whether representations have been made to him that

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  the Dominions are prepared to come into a geographical and strategic area scheme of this sort.
  8.42 p.m.
  Mr. Dumpleton: At the outset of my speech I would echo what has been said on both sides of the Committee about the inadequacy of the time that has been given to this discussion of colonial affairs. We should all like to deal with many of the subjects which have come tinder review. Many of them have been dealt with, and we are all tempted to follow up the points which have been raised. I am conscious, as most of us are, that many other hon. Members wish to take part in the Debate and so I can only concentrate in the few minutes at my disposal on one aspect of one particular territory in the vast range of territories and places which must be covered in a Debate upon colonial affairs.
  I want to deal with a subject which was touched upon by the Secretary of State in his opening speech and which has been dealt with in the Annual Report upon the Colonial Empire. Hon. Members will have read that report. The subject is the development of local government, particularly in Africa. This is a very important subject to which the Committee is right to give some attention. The development of local government organs must progress alongside economic development, about which we have been talking. The success or failure of many development schemes under the Colonial Development and Welfare Act, or schemes which are envisaged in the formation of the Colonial Development Corporations, will depend to a very great extent upon the active co-operation of the African people themselves, in their own villages and towns. There can be little doubt that the most effective means of encouraging and harnessing such co-operation is through the leadership of the African local authorities.
  The growth of responsible democratic local government has, therefore, become a matter of considerable importance and urgency in the African territory. I am glad that my right hon. Friend gave it that place in his opening speech and in the policy which he has been developing over the last year or two. In African territories and particularly, in my experience, in West Africa, there is an increasing
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  number of educated Africans who, by their membership of a variety of boards, committees and councils, are taking a share in creating and shaping policy for the government of their own country. There is a danger that this process will tend to produce from the educated minority a separate class of politicians preoccupied with affairs at the centre in each territory, separate from and out of real touch with the mass of their own people.
  As I understand it, the development of which the Secretary of State spoke is proceeding, as it must, along two parallel lines. There is the development of local government and the formation of municipal councils in the urban areas and the bigger towns. In passing, I would say that I am glad that an end has at last been reached of the deadlock which existed for so long in regard to the municipal ordinance in Freetown. When I was in Freetown last year, I discussed this matter with some of the Africans who were interested in that municipal ordinance. I found that some of them have a conception of autonomy and freedom from control from the central Government, which went far beyond anything that a local authority in this country would claim. There did seem to be a lack of understanding of what municipal government should be.
  I am glad to know that the municipal council is being set up in Port Harcourt. It is necessary to continue this development in the rural areas, of which these territories are predominantly formed. They are predominantly agricultural rural areas. It is of tremendous importance to develop rural councils on the foundation of the traditional native organisation. The democratic native system need not necessarily conflict with the traditional tribal institutions which exist in nearly all areas, in varying degrees of strength and influence.
  The traditional elements have an important part to play and can be integrated with the new system provided proper representation of all elements is secured. Possibly the process of political development will best be aided by the increasing acquisition of executive power by representative elements of the various local councils, without any change necessarily taking place in the formal constitutional position of the chiefs. In many areas it is the experience that the establishment

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  of functional committees to deal with particular subjects such as health, education and finance on the English local government pattern is proving a valuable means in that direction. I hope it will be extended. It is interesting and significant to note that in the Eastern Provinces of Uganda where notable progress in the development of this system of village, district and county councils has taken place, it was at first anticipated by the British officials on the spot that there would be a good deal of opposition on the part of the chiefs to the introduction of this kind of council, but instead of opposing them and fearing that the councils might eventually supersede them, the chiefs had in almost every instance welcomed them and used them.
  This policy of stimulating and guiding the growth of democratic local self-government in the British African territories—I particularly wish to underline this point—depends for its success on a number of essential requirements, the first of which is a clear recognition by all concerned that the method of democracy can most effectively be learnt by its practice. That means that even at the risk of some initial inefficiency and frequent disappointments, an increasing measure of responsibility must be entrusted to these organs of local government so that by practical experience their members may acquire those qualities which are necessary for effective and reliable administration.
  Linked with that need is the need for greater attention to be given to the recruitment and training of local government staffs. The importance of attracting the best Africans to the service of their own local governing bodies requires that the rates of pay and conditions of service must be at least as good as those under the central government service of each territory. Many native administrations have hitherto been unable to offer such terms owing to lack of funds. Hence the need for placing local government bodies on a sound financial basis. At present men trained at Achimota, Makerere and other higher educational centres are proving of great worth, but their numbers are far too small.
  The higher educational colleges now being developed will need to give the maximum possible attention to the needs of local government, but in the interim
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  until they are able to meet the need, special measures ought to be taken even to the extent of bringing over to this country selected individuals for periods of training with English local authorities and sending out there experienced local government personnel from this country to conduct training courses for Africans. Probably the key to the successful furtherance of the policy of developing local self-government, at any rate in the initial stages, lies in the enthusiasm and loyal response and wholehearted application of that policy by the British administrative and specialist officers in the field. They need to be helped a great deal. The Cambridge Summer School last August demonstrated the value of such conferences and courses. They need to be extended, and greater facilities are required for the circulation and exchange of information. The field is so vast and varied that every area has some experience from which others may profit.
  The direction in which the field staffs most urgently need relief is in the reduction of the great volume of detailed routine duties and in the provision of better office equipment and facilities. I found this to a great extent when I was in Nigeria and the Gold Coast. To this end there should be increasing employment of sufficiently skilled and trained Africans to serve in such subsidiary positions as office managers or accountants or licensing officers. This is being tried out in Uganda, where district accountants are being appointed, and I think that is a step in the right direction.
  Finally, the pace of the development of efficient Government organs in Africa, and their ability to assume increasing executive and financial responsibility, depends more than anything else, as the Governor of Uganda has very rightly said, not only upon their representative and democratic character but, in the last resort, upon the quality of the human material available. Where the human limiting factor is fundamental lack of character, it is far more serious and difficult to remedy than lack of education. The progress of Africans, as of ourselves and all other people, in local government or any other social sphere must necessarily be slow wherever there is lack of a sense of public responsibility, of social service and of standards of common honesty.

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  Something was said this afternoon about the need for developing voluntary organisations with which I fully agree. We, with our thousand years of development, have much we can give, and possibly there is much we can learn from these new, growing communities. We should avoid the mistake of attempting too rigidly to impose our own patterns of local government. We can show them the form of the democratic way of life, but it must be the African way of life, and Africans alone can make it democratic and alive.
  8.58 p.m.
  Mr. J. H. Hare: In the very few minutes at my disposal I should like to associate myself with other hon. Members who regret that there has been so little time given for the discussion of this all-important subject. It has really been quite impossible for us to cover a large portion of the Empire, and when people in many colonial territories read their papers tomorrow morning they will think it peculiar that in a Debate in the House of Commons so much should be left out.
  Dr. Morgan: This is a Supply Debate.
  Mr. Hare: I should like to concentrate on one or two matters affecting the development of Africa because this Debate has concentrated more on the development of the African Continent than perhaps on any other aspect of the Empire. Most hon. Members on both sides of the House are unanimous in their opinion that on the proper, efficient and rapid development of the resources of both minerals and agriculture in the African Continent depends the future welfare of the rapidly growing African population, as well as the future welfare of other large portions of the world, which cannot hope to maintain a reasonable standard of living unless the great benefits of increased production from Africa are available to them.
  Therefore we must consider the main elements which are preventing and delaying the development we all want to see. Many hon. Members on both sides of the Committee have suggested that we should be spending more money on our development schemes than we are now. I think that is nonsense. It is not a question of the amount of money we are prepared to spend, but of how much in the form of capital goods we are prepared to allot to
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  development in these African territories. Quite clearly, faulty communications are the first stumbling block in the way of obtaining the results which we require. We must build up a railroad system, we must build up a port system and also road systems before we can begin to get industrial or agricultural production really going strongly.
  Lack of capital goods also is preventing the agricultural land already being farmed from producing the extra food we need. Members of the Committee who visit these African territories will get the universal complaint from all the farming community that, if they had another tractor, could get an extra plough, more wire, and some cement, they could increase their production. It may not be altogether our fault that we are not able to produce them, but these things must be included amongst our objectives. I ask the right hon. Gentleman whether we are making the best use of the capital goods available for export to these countries. I think it was the President of the Board of Trade who made a very true remark, with which I entirely agree, in the Debate on the Economic Survey; he said that we had so much to do in 1948 and so little with which to do it.
  There are various indications that we are not making the best use of the capital goods available for export to the African Continent. Three examples come to my mind. I cannot believe that with good management and a proper allocation of priorities we would be faced with the fact that last year 100,000 tons of groundnuts were piled up in the interior of Nigeria. It is not right that with this harvest—a very heavy harvest, which I am told this year will fortunately amount to some 300,000 tons—should be allowed to pile up in Nigeria. I know that locomotives and railway trucks are on the way to that Colony. I am glad they are going. But, if my information is correct—and I believe it is—I feel that if there had been ten extra locomotives and 240 extra trucks last year the whole of that backlog of 100,000 tons could have been brought down to the ports. If that is true, it is something the Government should have dealt with.
  My second point concerns the sisal industry. When I was in Tanganyika this year, I was assured by members of that industry that if they had been granted a

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  slightly larger allocation of labour and given twenty extra heavy tractors they would probably have produced an extra £2½ million worth of dollars by cutting extra sisal leaf which the Americans wanted. A small extra allocation would have made a great difference in reducing the dollar drain which is crippling this country.
  My third example is perhaps not such a strong one. It is well known that in Northern Rhodesia the copper mines are under-producing. That is because the Northern and Southern Rhodesian railway systems are short of rolling stock and coal. In addition, there is congestion in the port of Beira. I know that this latter point is to be dealt with, but it is a serious matter when we realise that in electrolite copper last year we spent some £24 million in importing copper, of which £14 million was in the form of dollar purchases from hard currency areas. That our own sterling area should be under-producing copper, and at the same time we are having to pour forth our precious dollars in buying this commodity, indicates that this is a matter which should be urgently dealt with and put right.
  The second question I would ask is how much extra assistance in the development of these Colonies, Marshall Aid will give us. My right hon. Friend the Member for West Bristol (Mr. Stanley), in the final words of his speech on Tuesday of this week, made the point on which I want to question the Government: How are we going to use the four years which American generosity has given us? That is the vital question. We have four years in which to concentrate on the colonial development of Africa. Decisions have to be made now—there can be no delay. It has to be decided where the new railway systems are to be built.
  There has been enough planning; action is now required. Are we to develop the railways from the Rhodesias to the West Coast of Africa or link up Central Africa with the Tanganyika and Kenya railway systems? These decisions should be made rapidly because they will take a great deal of time to implement. It is my dream that within a decade, if we really get down to the job, we can be exporting sufficient coal, copper and chrome through
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  a West Coast port in Africa to the Argentine and other South American countries to pay our total meat bill by such an operation. These dreams must be made to come true and I feel the right hon. Gentleman has a very heavy responsibility, because, unless they come true, our very standard of living and existence is drastically threatened.
  Mr. Rankin: On a point of Order. Must this Debate terminate at 10 o'clock? If so, how can the Committee express its sense of frustration and disappointment at the completely inadequate amount of time devoted to colonial affairs?
  The Chairman (Major Milner): The Debate, in accordance with the Standing Order, must finish at 10 o'clock. In regard to the time available, that is not a matter for the Chair, although I may remark that there have been a number of lengthy speeches whereas in Committee where many wish to speak, something of a self-denying ordinance on the part of hon. Members who do speak is required. That is the only suggestion and consolation which I can give the hon. Member.
  Dr. Morgan: I wonder, Major Milner, whether you could make representations to the Government that they should give a further Supply Day in view of the fact that the Opposition are giving us this opportunity of having a colonial affairs Debate on their own day? Surely the Government should also give an opportunity for a Debate on Colonial affairs?
  The Chairman: I am afraid such a course would not be in accord with the normal functions of the Chair.
  9.7 p.m.
  Mr. Oliver Stanley: To one who, like myself, has listened in the past to a number of Debates on Colonial Estimates, the remarkable thing about the Debate today has been the number of hon. Members participating who have recently been in the areas about which they have been talking. Indeed, at one time the Committee was rather reminiscent of an East African "old home week." Among such bronzed pioneers I feel conscious of my own defects because it is now, I regret to say, three years since I have been able to visit any of the colonial territories. I frankly recognise what a handicap that is. We live in a time of rapid change

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  both in facts and, even more important, in opinions and however great may be one's interest, however much one may read, it does require personal contact really to keep in touch. I am sure the Secretary of State for the Colonies welcomes as much as I do the increased opportunities which have recently been afforded to hon. Members for visits abroad.
  I must in fairness make one point on this Annual Report upon which the right hon. Gentleman hung his remarks. I criticised it last year, but this year I find it immensely improved both in form and in presentation. I have only one suggestion to make. It may be quite impossible, but from the point of view of Parliamentary procedure it would be an immense gain if we could have this report rather earlier. The difficulty is that it would be obviously absurd for the Opposition to ask for a Supply Day for the discussion of colonial questions until this report was issued and until hon. Members had time to study it. The result is that we do not even get our first day until well on to the middle of July, and that may well deprive us of opportunities which might otherwise occur of having a second day for discussion.
  Dr. Haden Guest: The Report of the Committee on Estimates is being published tomorrow morning at 10 o'clock.
  Mr. Stanley: I do not see how that affects the question.
  Dr. Morgan: He has had his chance; you go on.
  Mr. Stanley: I am sure we all understand the difficulties, but if the right hon. Gentleman could do something to help, it would meet a real need.
  A great deal of this Debate has turned upon the question of Malaya, and not unnaturally because it is the part of the Colonial Empire which must be giving to the right hon. Gentleman, and to all of us who take an interest in it, the greatest anxiety at the moment. There have been many questions and many criticisms. I do not intend to go over ground which has already been adequately covered by people who have greater personal knowledge of that country. It is always easy for us sitting here in London to criticise the action of Governments in far parts of the Colonies, faced on the
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  spot with these dangers, but it is only fair to say that in this case, from all I learn—and I think probably from anything that hon. Members who have correspondents in Malaya have learned also—there is widespread criticism in Malaya itself of the delay on the part of the Government in taking the action which they are now taking. I hope that the hon. Gentleman will be able to reply to the specific questions which were put to him and give us an assurance that the stern measures which we see are now to be taken will be carried through to the end.
  I wish to speak about this matter on a much more general line. Malaya, and indeed also the riots in the Gold Coast, show a new danger which British administration is facing in the Colonial Empire today. The risk to security, to public order, to governmental authority, does not now depend, as it did in the past, on the feeling of political grievance or the resentment of economic conditions. It may often be, of course, that those political grievances or economic conditions are made use of, but this new movement can and does subsist independently of their existence. The old idea that a movement of this kind cannot arise without the sympathy of the population is now quite out of date. These movements can work on the local population as much by fear as by sympathy. Let us face the fact that this kind of movement cannot be met by concessions because it does not rely on grievances. It is a challenge to authority, a challenge to our whole idea of colonial progress, a challenge that has to be met and fought by the Government on the spot with the support of the Government here, and the support, which I am sure they will have, of the whole House.
  What worries me both about Malaya and the Gold Coast is the fact that the Government appear to have been taken by surprise. That seems to point to the need for better information, for the need to act more promptly on that information and for the necessity of acting not only promptly but decisively. Certainly we on this side of the Committee can give the right hon. Gentleman an assurance of support when he has to act in that way.
  I wish to say a few words about the West Indies. The right hon. Gentleman referred to them and said, quite rightly, that

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  West Indian problems were apt today to be forgotten in the greater interest which has been aroused in immediate African possibilities. I think that that is quite true and that there is a danger, which has been rather evidenced in this Debate, that we are beginning to think of the Colonial Empire as being African. The right hon. Gentleman did us a service by making some reference to the West Indian problem, but I wish he had been able to be a little more specific. I regard the situation in the West Indies as fraught with greater danger than the situation today in Africa.
  It may well be that we cannot expect, as partners, to get as much out of the West Indies as we might get out of Africa, but, as trustees, we may find a much bigger collapse of our obligations in the West Indies than we are likely to find in Africa. In my view the position there is grave. Unemployment is growing, and I should like to have heard, not an exchange of arguments between the Secretary of State for the Colonies and the hon. Member for Rugby (Mr. W. J. Brown) as to when some report was going to be published, but a statement that some plan was to be put into execution.
  I am making no party political capital out of the West Indian problem. It is a problem which has faced all Governments in turn. A great deal has been done and a great deal of money has been spent. The problem is, of course, the increase in population in the West Indies which always outstrips the increased aid given. If the conditions of 1948 were dealing with the population of 1938, the position in the West Indies today would not look too bad. The trouble is that, by the time we reach the conditions of 1948, the population has gone right ahead of the assistance we are supplying. I feel that in our new preoccupation with Africa we must not let the grave problem of the West Indies be obscured. I hope that if there is another opportunity for a colonial discussion, the right hon. Gentleman will be able to give some more detailed account of what he has in view. I should like to say one word on the political angle. The right hon. Gentleman talked about constitutional development at a greater tempo and the danger of delay. I agree that that is a side
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  that we must not forget. But also do not let us forget the other side—the danger of going too fast. At times when I was responsible, I stressed, because I thought it was the thing most to stress at the time, the danger of going too slowly. I believe we are reaching the position today when the greater danger is the danger of going too fast, when, in fact, we have extended constitutional development considerably beyond the economic and social development on which any sound constitutional advance has to be based.
  I hope we are not going to think that, just in order to be progressive, we must continually be making constitutional advances. The right hon. Gentleman said that the pressure of constitutional advance is a painful thing. I do not know for whom he meant it was painful, but overhasty constitutional advance can be most painful for the people whom we are most obliged to protect. Too hurried transfer of responsibility to the intelligentsia of the Colonies may well mean a lessening of the protection now provided to the least educated and those lower in the economic scale.
  I feel that the right hon. Gentleman was quite right on this matter to put emphasis on local government. I should have liked to follow the interesting speech of the hon. Member for St. Albans (Mr. Dumpleton). I think we are facing here a very great problem, not the breakdown, I hope—because it is too valuable to be allowed to break down—but the great strain which in Africa is being put on the system of indirect rule. Indirect rule is a thing of which we had every reason in the past to be proud. It enabled us, when we first went into Africa, immediately to give some degree of responsibility to people to whom otherwise, it would have been very difficult to give any share of control.
  It is quite clear that with the march of events, with the experience brought back from the war, with the whole process of organisation, that the strain on the traditions and conventions by which indirect rule exercised authority becomes greater and greater. The greatest problem we have to face in Africa in the next few years is not this so-called extension of power at the centre or this so-called new responsibility given to executive councils or to quasi-ministerial posts. The greatest problem is how we are to reconcile the traditional respect for the old form of

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  tribal government with a new generation which has not inherited all these traditions, which sees newer problems, and which has no effective machinery to substitute for that which in the past served us so well.
  I should like to say a few words on the economic side of this question. I, in common with everybody who has spoken, only wish that I had longer in which to develop those matters in which I am interested. I thought that on this subject the right hon. Gentleman was extremely fair. He made it plain that he did not claim that economic development of the Colonial Empire had started with this Government. It did not start with them. It did not start with the Colonial Welfare and Development Acts of the war. There have been three phases. There was a phase of large-scale economic development before the war under private enterprise; a phase, started during the war, of the Colonial Welfare and Development Acts, and now the new phase initiated by the Government of further economic development by public corporations.
  All those forms of development are not mutually exclusive but mutually complementary. All three have their place in the conditions which now exist. Though we hotly deny claims, made not by the right hon. Gentleman but on political platforms, that now and now only has any economic development taken place in the Colonies, we do not try to deny the Government credit for the fact that, faced with wholly new conditions and therefore with a wholly new opportunity, they have shown themselves willing to take the opportunity presented to them. But I would point out that at the moment we are talking only in terms of plans. Do not let us talk as if in fact, by some miraculous event of the last year or two, there have been some great-scale economic changes in the colonial territories. There have not. The mere fact that the Government make a plan, and today the mere fact that the Government allocate money, does not mean that development has taken place.
  The most significant point the right hon. Gentleman made is the fact that the very large sums of money, which have been available for the last few years under the Colonial Welfare and Development Acts and which form part of the 10-year
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  development plan independent of these corporations, have not been spent. Why? Not because they were not available, not because people did not want to spend them, but because there were not available the capital goods, the raw materials, the labour and the skill required. Therefore, just by adding more money to the money we are already enabled to spend, does not really by itself get us anywhere.
  I was impressed by the way the right hon. Gentleman told us that the Colonial Development Corporation was approaching its problems. Frankly, I thought it seemed a very great improvement on the way that the Overseas Food Corporation—or rather the Ministry of Food—have approached their side of the problem. The right hon. Gentleman warned us against having too great immediate expectations from these developments. He was quite right. Large-scale developments of this kind cannot produce immediate results. The main criticism we have about the groundnut scheme is not against the idea or against the way the people on the spot have been carrying it out. It is that the Minister of Food, in order to save face, because he raised such wholly unjustifiable immediate expectations, has been putting pressure on the people on the spot to produce results far before any ordinary sensible man could expect results to be produced. Frankly, the result is that we have had, in the groundnuts scheme, and shall still have, a great deal of waste, which is still waste even if it occurs in colonial development, and at the present time this country cannot afford waste. This is not just wasting money; no doubt, everybody in a good cause would be prepared to advocate higher taxation. It is not just money, but skill, raw materials and capital goods which we are wasting.
  The only other point I should like to develop on the economic side is one which I will put shortly and with which, perhaps, the hon. Gentleman will deal in his reply. We must not, in all these ideas which the new Corporation is developing, just think of what we are going to take out of Africa. We must think of what we are going to put in, and this on the most commonplace business lines. We cannot spend in these Colonies a great deal of money, much of which goes on wages to indigenous labour, unless we are going to put in a proportionate amount of consumption goods

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  upon which that new money can be spent. Unless we are prepared to do that—and there are signs that we are not doing it adequately—we shall have inflation in these territories which will wreck the chances of the scheme succeeding and bring misery instead of benefit to the people. It is no good our thinking that we can undertake developments in the Colonies unless we are prepared to make the necessary sacrifices to give them the consumption goods.
  In conclusion may I say I have noted the very evident desire expressed on both sides of the Committee, for further opportunities to be provided for the discussion of these matters. Certainly, I will consult with my colleagues to see if there is any way in which such a thing can be facilitated. This is a matter on which the Committee now takes a deeper interest than it ever did before. I am not averse to controversy, and I speak in the House quite often on controversial matters—
  Dr. Morgan: The right hon. Gentleman is fairly good at that.
  Mr. Stanley: It is my hope, and I think the hope of nearly everybody in the Committee, not that we should keep colonial matters out of controversy, because controversy is the breath of progress, but that we should keep them out of party squabbles. Though, of course, we are going to disagree with a lot of things which the right hon. Gentleman does or is going to do, and we are going to be among those who criticise, just as hon. Members opposite did when I was sitting where the right hon. Gentleman now is, yet, at the same time, there is today a deep, underlying unity of purpose and a unity of method. I hope that is so.
  In the possibility of putting the colonial administration above the chances—and they are great chances—of British elections, rests the only chance of a sane administration and a stable policy, something which will solve the greatest of all the problems facing this country today. That is the problem of how 40-odd million people in this country can adjust their relations with 60-odd million people spread all over the world, and pass from the original benevolent autocracy, through all those stages of greater responsibility, until there is reached finally a stage
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  where the political aspirations of the Colonies can be satisfied within the bounds of that Commonwealth to which we are attached, so that they and we can continue to work together for our benefit, for their benefit and for the benefit of the whole world.
  9.30 p.m.
  The Under-Secretary of State for the Colonies (Mr. Rees-Williams): We have had an interesting Debate in which many speeches have been made raising various points, with some of which I shall try to deal. I sincerely regret that a large number of other speeches were not made, which I am sure would have been equally interesting, and I sympathise with those who were unable to make them. The last speech I found most interesting, and if the right hon. Gentleman the Member for West Bristol (Mr. Stanley), as an old Parliamentarian, will permit me, as a very new one, to compliment him on it and to say how much I appreciated it and what a service it will be to the Colonial Office, I shall be grateful. The right hon. Gentleman is one to whom I always listen with pleasure, and whenever I see his name on the tape, I hurry into the Chamber to hear him. I have never heard a speech of his which I appreciated more than his speech tonight. There are other speeches which were helpful and important. I should particularly like to mention the speeches by my hon. Friends the Members- for West Lewisham (Mr. Skeffington) and St. Albans (Mr. Dumpleton), who discussed the most important subject of local government. Those speeches with which I am unable to deal tonight, and those questions which I am unable to answer because of lack of time, I will try to deal with by correspondence.
  The year's work, which has been presented to the Committee both in the report which has been mentioned so many times and also in my right hon. Friend's speech, has been one of hard work. Much solid groundwork has had to be done during the year, and all who have been concerned with it realise that they would like to have done much more and gone much further with development than has been possible with the resources available.
  Before I deal with the development in more detail, following the right hon. Gentleman the Member for West Bristol,

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  there are some points I wish to answer in various speeches. The first one is about the Seychelles. The hon. Member for Hornsey (Mr. Gammans) described an officer, the Attorney-General of the Seychelles, as a "pocket Hitler." I feel that to be an attack on an officer of the Colonial Service which is quite unjustified, and which should never have been made in this Committee. I understand and believe it is the custom of the House that we do not attack people who are not in a position to defend themselves.
  Mr. Gammans: Will the hon. Member arrange that I should have time in some subsequent Debate to elaborate what I said in detail, because I think the Committee would then agree with me?
  Dr. Haden Guest: Why not apologise now?
  Mr. Rees-Williams: The hon. Member alleged that this officer was a pocket Hitler. I consider that to be one of the worst affronts anyone can make—when we realise that the hon. Member described him as Hitler, the man who sent the Jews to the gas chamber, the man who destroyed family life in his own country, the man who convulsed humanity and rendered most of Europe a shambles. That is the man to whom the hon. Member has likened this unfortunate officer. And what has this officer done whom he has likened to Hitler? I will tell the Committee. What he has done has been to press the landlords of the Seychelles to pay their arrears of Income Tax.
  Mr. Gammans: Will the hon. Member give way?
  Mr. Rees-Williams: I cannot give way. The hon. Member for Hornsey has questioned the supply of officers into the Colonial Service. I can give him the assurance that never in the whole history of the Colonial Service has there been a higher standard of cadets than we are getting today, and anyone who saw them at the schools we have set up and in the courses we run would be most impressed. My right hon. Friend and I spent some hours with them at these courses, and came away stimulated by the enthusiasm and devotion to duty of these young men. I quite agree with the hon. Member for Hornsey on this point, that we must not let that enthusiasm die. It is important that these young men, when
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  they get into the field, should not have the same experience as befell most of then predecessors—having their ideas turned down so that they became apathetic. We must see that their enthusiasm is kept at the highest possible pitch.
  Mr. Geoffrey Cooper: Other Government Departments are using a new process of selection which seems to have certain definite advantages. Can my right hon. Friend say why the Colonial Office have not used this method?
  Mr. Rees-Williams: Our people go through a proper sifting process, and we are quite satisfied with it. We have a series of post-graduate courses, refresher courses, for those who are returning from overseas territories, and who wish to rub up their knowledge in various ways. These courses are being much appreciated by those who attend them. The hon. Member for Hornsey also referred to arrangements for overseas students. While we are not entirely satisfied that everything possible is being done—we are short of hostel accommodation, which we are trying to remedy—there are associations like the Victoria League and the W.E.A. which are working in close harmony with us in trying to achieve the object of the committee.
  On the question of Malaya, on which several Members have enlarged today, I wish to say this: the trouble there, as my right hon. Friend said, is, to some extent, a reflection of the trouble in China. Even during the Japanese occupation a certain amount of fighting was going on between the two opposing forces which, at that time, were quiescent in China and which, since then, have come into open conflict. There have always been some guerillas and gangsters in Malaya. In my days there I remember a man called "The Panther" who had quite a big guerilla gang, which used at times to operate on a large scale. On one occasion, in Province Wellesley, they actually raided and held up a whole town, and got away with various bank and post office deposits. There has always been some sporadic trouble in Malaya, but on nothing like the scale it is now.
  During the campaign in and occupation of Malaya arms were dropped to, and hidden by, members of the resistance movement when it was presumed that we would fight a second campaign for the

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  reoccupation of Malaya. These have since come to light in the hands of these gangsters. As the hon. Member for Bury (Mr. W. Fletcher) said, these gangsters are very difficult people to catch and segregate. The rubber tapper becomes a bandit at one moment and the next he is back again as a rubber tapper, before he can be isolated or identified.
  The first threat was through the trade unions. They tried to make use of the trade union movement for their own ends. The Government in Malaya fought that, and that threat was foiled. Then there was the second threat of open violence which has now occurred. In my view, it was not possible for this to be completely foreseen, because it is only lately that there has been violence on anything like the present scale. This is shown by the figures for trade in Malaya. Yesterday, I said that 100,000 tons more rubber was produced last year than in 1940. Tin also is coming back very rapidly. There have been planted since the war 156,000 acres of rice in addition to that which was under paddy in 1945 when we went back. This immense recovery could not have taken place if the whole of the country were in a state of disruption. Of course, that has not been the case. The hon. Member for Hornsey and I toured the country pretty well, and at that time there was no sign of any large-scale violence from gangsters. I agree with the right hon. Gentleman the Member for West Bristol that this is an entirely new trouble which is not confined to Malaya. It has flared up in other places and it may flare up elsewhere in the future. We have to adjust ourselves to the new conditions.
  As to the future, I can give the right hon. Gentleman the Member for West Bristol and the other hon. Members who raised this question of Malaya a complete assurance on behalf of His Majesty's Government that we will take every possible step to achieve stability in Malaya. We will do all we can to protect the lives of innocent and law-abiding citizens. All the necessary powers for which we have been asked have been given to the Government of Malaya. If they need any more which can be given them, we shall give them those powers and take all steps possible to support them. In fact, we will not engage in what was described by
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  one hon. Member opposite as a cat-and-mouse act. We are going right through with it, and we are going to stamp the disorder out. On our part and on the part of the Government of Malaya there will be no sheathing of the sword until we have completed our task.
  Before I conclude my comments on the Malayan situation, tribute ought to be paid to the Malayan police—European, Chinese and Malay. I was particularly impressed by one report about some of the Malay police. They were surrounded by Chinese gangsters in a little police station miles away from anywhere in a Malayan village and when called upon to surrender not only by the gangsters but by one of their own N.C.Os. under duress, they refused and continued firing until all their ammunition was gone, when they rendered their weapons unusable—in fact, they threw them down the well and recovered them later—and took themselves into the jungle to be ready to fight again when the gangsters had gone. In such circumstances the police who act in that way are deserving of the highest possible commendation.
  I should like to turn in the few minutes which are left to me to the last subject raised by the right hon. Member for West Bristol, and which has been touched upon by many hon. Members on both sides of the Committee—the economic development of the Colonial Empire. The physical condition of most of the countries in the Empire is that of under-development, and very great work has to be done before any development can be started, farming undertaken or industries set up. This is not always realised by people in metropolitan countries, who are not used to conditions in countries in Africa or in the Far East. In Borneo, for example, there is mostly swamp and no roads are there. Very much constructional work has to be done before development can be started. Swamps have to be drained and bush cleared before roads and bridges are erected. There are one hundred and one tasks to be done of which people in metropolitan countries do not always realise the necessity. Here it is a relatively simple matter for a man to erect his factory, if he can get the necessary licence, and go ahead.
  On top of the other difficulties in undeveloped places, the age-old enemies of mankind have to be destroyed. This

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  is particularly the case in Borneo, or, for example, in Africa where we have to deal with the tsetse fly. I have been asked questions about this matter by the hon. and gallant Member for Worthing (Brigadier Prior-Palmer) and my hon. Friend the Member for West Lewisham. The tsetse fly occupies an area which has been computed to be 75 times the size of Great Britain. I cannot vouch for that computation, but a vast area of Africa is controlled by that pest. When it is there, neither man nor animal can live.
  I was asked what success we had had against it as yet. The success is small because we are only in the planning stage. We hope to get started in September. We have a team in West Africa to try out the effect of aircraft spraying. We have certain types of spray which we hope will kill the tsetse fly. We have two aircraft available for the work, and we have ordered a helicopter which I hope will come into use some time next year. We are trying to tackle this task on a really big scale. In addition, we are trying the old methods of bush clearance, research on the type of bush that the tsetse feeds on, and other approaches. There is a new drug called 7555 which has been invented and of which we are not as yet quite confident. It is still having its field tests. I am not able to say yet whether it will be a success, but it may well be. At any rate, I hope so.
  In regard to locusts, I am happy to say that we have conquered the locust menace for the time being. That menace has been very great in Africa. The last time the migratory locusts swarmed they did £20 million of damage, it is computed. This is one of those age-old enemies of mankind which at the moment we have brought completely under control, at some expense to the British taxpayer, and with international co-operation under the direction of Dr. Uvarov, who works under the direction of the Colonial Office. We have, in fact, conquered the locusts to a rather embarrassing extent. We had hoped to try out aircraft sprays on locusts in flight, but although we have searched all over Africa we cannot find any locusts in flight. That is possibly a fault on the good side.
  Finally, with regard to the rinderpest virus, we believe we now have a
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  serum which will render cattle immune. The veterinary officers of the Ministry of Agriculture are not fully satisfied of that claim, so we are undertaking tests in East Africa and in Kenya which we hope will prove that we have an antidote, and that the rinderpest virus will not travel to other countries. In the semi-developed areas there is need for continual vigilance. It is perhaps a natural result of plantation growth in tea, cocoa, coffee, cloves, and many other types of tree and plant, that some killing disease attacks them sooner or later, and takes toll of them. No one seems to know why. We are doing a good deal of research into it, but it is a very worrying feature of the agricultural problem today in practically all colonial territories that the tree and plant life is subject to these killing diseases. It is just as important to try to find an antidote to the tree and plant killing diseases as it is to the animal killing pests.
  Mr. Stanley: Is there any relationship between the different sudden deaths, such as in the case of the cocoa tree and cloves?
  Mr. Rees-Williams: No, the viruses are altogether different; there seems to be a revolt of nature, so to speak, when we introduce into a new country such as Africa a tree like the cocoa tree and develop it on a big scale. Nature begins to kill off the trees. As will be seen in the case of the Gold Coast, that is a very serious problem. We have already lost roughly 10 per cent. of the trees on the Gold Coast. Twenty-five million of these trees have gone. Unless the inhabitants of the Gold Coast will agree, which they have not as yet done, to a big cutting-out campaign, there is no doubt in my mind and in the minds of my right hon. Friend's advisers that most of the trees on the Gold Coast will go, and possibly those in Nigeria also. As more than 50 per cent. of the cocoa of the world comes from this region, one can imagine what a bar of chocolate will cost in future if that happens. We are trying to introduce the cocoa tree into Malaya, but the cocoa tree takes seven years to grow, so it will be some years before any great production can result.
  As the right hon. Gentleman the Member for West Bristol knows very well, in the Empire there are four main regions: the West Indian region, the West African region, the East African region and the

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  Malayan region. In the three regions of the West Indies, West Africa and Malaya, the pattern of development is fairly clear. Although there is a tremendous amount of work to be done, we know what we have to do when we get the machinery and other capital goods, and we know how to do it. However, in East Africa there is no pattern at all. That is the region where we must have a bold and imaginative plan based on the four main features mentioned by the hon. Member for West Dorset (Mr. Digby). I will not repeat them because I have on a previous occasion given them to the Committee, but I would like to say, in regard to the two organisations in East Africa, how much we are indebted to the labour and enthusiasm of the people on the spot. First, our debt of gratitude is due to those workers on the groundnuts scheme who have done a most magnificent job under most trying conditions. We should be deeply indebted to them for their work. The second is to those who toil in the Empire Cotton Growers' Association Scheme in East Africa. The work they are doing will yield untold benefit to this country, and particularly to Lancashire.
  What we need in the Empire, first of all, is more information. We do not know what resources we have, and therefore we are undertaking aerial and other surveys on a considerable scale. If any hon. Members would like to see the work of our survey department, I should be only too pleased to make the necessary arrangements. They can see the type of work carried out in many parts of the Empire, and the result of it, in maps and plans. It is necessary to do this because even we in the Colonial Office have very little knowledge, as I have said, of what we have got in these undeveloped lands. Some years ago a licence to develop two islands was given to a trading company.
  As soon as it was announced, there was a heated protest from a foreign Government, which said that one of the islands belonged to it, and there was another caustic letter from the Royal Geographical Society to say that 20 years before it was proved conclusively that the other island had never existed. So it is necessary, as hon. Members can see, to have up-to-date knowledge of what we have got.
  704
  Then we must have the necessary physical resources, as the right hon. Member for West Bristol has said, both capital goods and incentive goods, and the right type of incentive goods; the type of incentive goods that the people of the particular locality need, and not incentive goods of a type for which the manufacturer of this country cannot get a market elsewhere. Then we need to have the best possible public relations in the broadest sense—I do not just mean public relations departments—so as to explain to the people of the colonial territories what we are doing and why we are doing it, so that we will carry them with us in whatever we are doing rightly and properly for their benefit.
  Then, too, we need to increase the mass education projects which have only as yet started on quite a small scale. In other words, what we want are boldness and imagination in planning, and determination and energy in execution. And it is not merely His Majesty's Government, and particularly the Colonial Office, which have to show this imagination and determination; it is every Colonial Government, too, and the municipalities which, in some cases, are getting quite powerful organs of government, and the private firms and individuals. We have a young Commando colonel in East Africa doing a magnificent job for us on contract. He has taken a lot of his Commandos out with him and is doing a magnificent job under most difficult conditions. Among other things, he is surveying the Katanga River which runs from Lake Victoria to the Mountains of the Moon. The men have no comforts, they are working under tremendous difficulties, but he told me that he can get no end of people to go with him; in fact, he would have lost most of his staff in this country if he had not undertaken something of this kind because, he said, it appeals to the imagination of the young Briton of today. That is the type of man we want in East Africa.
  Finally, I would say that we must have in these schemes—particularly in Africa, but in other countries as well, in Borneo, possibly, for example—international co-operation. Pests and diseases do not acknowledge or recognise frontiers, and we are continually meeting the representatives of other Powers which have African responsibilities. As yet it is

  705
  mostly on a technical level, dealing with pest control and so on, but eventually we shall proceed to deal not merely with matters of that kind but also with the big developments that must take place.
  Mr. Henderson Stewart: Does not the hon. Gentleman intend to deal with the serious situation in British Guiana to which I drew attention?
  Dr. Morgan: Come to me afterwards and I will tell you about it.
  Mr. Rees-Williams: No, I shall not attempt to deal with it tonight. To return to what I was saying, there are, for instance, the great lakes in the centre of Africa which provide a magnificent waterway which can be used to develop a great hinterland to the benefit of both the Belgian territories and our own. And there are the Central and East African railways which, again, need to be developed, which would open up vast territories, and would enable practically all the people of that vast area to enjoy the advantages of communications, rail and road.
  The hon. Member for Woodbridge (Mr. Hare) asked me whether our dreams would come true. Well, that is a big order. All I can say is that we in the Colonial Office, provided we get the support of the people of this country, and the full co-operation of the people of the Colonial Empire, can do a great deal to make those dreams come true.
  Committee report Progress; to sit again Tomorrow.—[Mr. Snow.]

  CAPITAL GOODS (EXPORT PRICES)
  Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Snow.]
  10.1 p.m.
  Mr. Stokes: I wish to raise tonight a matter of some considerable importance and urgency. I want to make it quite clear from the outset that my quarrel is not with the President of the Board of Trade, the Secretary of the Department for Overseas Trade, the Economic Secretary to the Treasury or the Financial Secretary, but with the Chancellor of the Exchequer himself. Whilst I appreciate that it may not be
  706
  possible for him to be here tonight, I wish to make it quite plain that I propose to continue this bombardment until I get a statement from him either in this House or in the country. It seems perfectly futile for him to continue to try to close what appears to a great many people to be an unclosable gap if he will not pay attention to some of the essentials which stand out a mile. I want to explain tonight exactly how I view this situation.
  My claim is simply this: that we are paying a great deal too much for many of our imports and we are getting far too little for many of our exports, particularly the exports of capital goods. When millions of people have empty bellies those with food to sell can comparatively easily put up the price because people are more uncomfortable with empty bellies than with anything else; but equally it is true, the world over, that administrative organisations—the companies, the Governments, the people who organise the production of goods—are starving for want of capital goods. It is astonishing that we appear to continue to tolerate this exploitation—I would even call it fleecing—of our own pockets by those who sell food and continue to sell cheaply to them the capital goods which they desire to keep their economy going.
  The Chancellor has told me in correspondence—correspondence running over many months, as mine has a habit of doing—that Ministers have repeatedly made statements agreeing with the view which I hold. That is an extraordinary statement, but it is very welcome and I do not cavil at it. But the only evidence I have been able to find is that to which the Chancellor refers in his letter of 29th May last—a speech by the President of the Board of Trade on 19th April. In a Debate which had been opened by the hon. Member for Devizes (Mr. Hollis) and in reply particularly to some points which I had raised about the prices for capital goods, the President said:
  "I agree with what he—"
  the hon. Member for Ipswich—
  "said. But we must leave this to the manufacturers. We do not fix prices for capital goods. We must leave it to the manufacturers, in present conditions, to get what they can, subject to any protection in the matter of keeping their markets. We do not want them to try to fleece the foreigner."

  707
  Incidentally, let us be quite frank with our American and Canadian friends and others that they have been busy for a long time fleecing us. I do not make any bones about that when I talk to them. This was what the President said:
  "We do not want them to try to fleece the foreigner. That would lose markets …"
  —it always tends to lose markets, of course, except when bellies are con-cerned—
  "… and we would suffer in the long term for what we had done in the short term."—[OFFICIAL REPORT, 19th April, 1948; Vol. 449, c. 1580.]
  I do not entirely disagree with what the President said but my grouse is that, whilst the Chancellor says this has been broadcast to manufacturers up and down the land, I cannot find any manufacturers who have heard it. I certainly have not. I have been in touch with one or two hon. and right hon. Members in the House and they have not. None of them was present in the Debate and they do not read HANSARD every day, although they should. It is no use leaving it to a casual answer to a back bencher by the President of the Board of Trade. What wants doing is the making of some announcement which the people mainly concerned can hear. That is why after all these months of unsatisfactory replies I am raising the matter tonight.
  I made a very severe accusation against some of our friends overseas, be they of the Dominion or of our Allies, about the amount which is being charged to us on the import of food in particular, compared with prices of what we send abroad. I wish to support that by some figures. I refer particularly to the United States of America. In 1947 compared with 1938, and taking the index figure for 1938 as 100, for fresh fruit and vegetables imported from the United States, of which there was a very considerable quantity—something like 85,000 tons or 1,744,000-odd cwt.—the index figure was 293, three times as much.
  The whole burden of my argument tonight is that whereas food costs us anything from three to four times as much as in 1938, we are getting only about twice as much for the capital goods we export. Perhaps hon. Gentlemen will keep that in mind as I quote these figures. It is not always useful to quote figures for 1948
  708
  because, owing to restrictions, the amounts involved are so slight, but take another food figure, fruit juices. In 1947 as compared with the figure of 100 in 1938—and incidentally the imports in quantity were nearly three times as much as in 1938—the figure is 517—five times as much. I agree that it was a much less quantity in the first five months of 1948. We then come to wheat, and although in statistics it is described as wheat, I am not quite sure that an amount of it is not barley, which has an important bearing on what I am going to say about whisky. Wheat, or grain, in 1947 was more than three times as expensive as in 1938. The quantity was half, I agree, and for a less quantity in 1948 the price has gone up quite considerably again.
  Compare this with our capital goods exports, first to the United States of America. It is extremely difficult to get detailed figures for different countries, but I have done my best, and the figures I give are endorsed by my own experience, and I do not think they are far strained. In 1938 the average price of our exports of capital goods—I am speaking particularly of machinery and heavy engineering Goods—to the United States of America, Cost £200 a ton. In 1947 they cost £430, which is only about 115 per cent. up compared with food which is 300 or 200 per cent. up on 1938. The iron and steel average in 1938 was £10 a ton and in 1947 about £25 a ton. Generally speaking heavy tools and machinery exported as far as one can extract from the statistical data available was just about twice as expensive to the United States of America in 1947 as in 1938.
  As I say that compares with food being three times, four times and in some cases five times as much. Taking capital goods, the astonishing thing, when one looks at the position in reverse, is that whereas one would expect on the figures I have given to find the United States figures corresponding with our own, nothing of the kind is the case. Goods similar to those which cost £100 per ton when imported from the United States to this country in 1938 cost £307 per ton in 1947, almost three times as much. Even in a direct exchange of capital goods for capital goods we were disadvantaged.
  I do not want anyone to feel that I am "taking a crack" at the United States. I am "taking a crack" at our own

  709
  Government's policy. As a commercial man I do not blame the other chap for getting as much as he can if he is given every encouragement to do so. My complaint is that we are giving it. Take Canada, one of our Great Dominions. In 1938 we paid about 7s. per cwt. for wheat and in 1947 20s. per cwt., three times more than in 1938. In the ordinary iron and steel trade we paid £10 per ton for imports from Canada in 1938; in 1947 we paid £30 per ton, again three times as much.
  When one looks at the position the other way round what does one find? Machinery from this country to Canada cost £150 per ton in 1938 and £330 per ton in 1947 which is only just over twice as much. I am sorry to give so many figures as I know how much this House dislikes that, but there is no way of comparing the figures except by explaining how the figures do not balance. That can only be done by giving details. My hon. Friend will agree with me that that is fundamental.
  I come to rather a different issue, or rather a different kind of case, concerning what I would call semi-luxury goods. Here the comparison is even more startling. I refer to whisky. Everybody in this country except the hon. Member for West Ealing (Mr. J. Hudson) who is not here tonight, complains that they have not enough whisky to drink. What are the figures? In 1938 we exported to the United States 4 million gallons of whisky at approximately 28s. a gallon, at any rate the total figure was £5,600,000. In 1947 we sent practically the same amount—4 million gallons—and the price was 40s. per gallon or £8 million, an increase of approximately 40 per cent. Yet we have been importing wheat, grain and barley to make the whisky at up to about four times the value of what they were in 1938. I cannot understand why the Government put up with the nonsense which the distillers tell them, but that is a different issue and I do not want to do more than call attention to it.
  Even if the argument about whisky is that we should not sell as much if we put up the price, the majority of non-teetotal public of this country would be extremely glad if we sold half the quantity at double the price and kept the remaining half here. Incidentally it would be a
  710
  good revenue bearing commodity for the Government and the Exchequer. The same applies to Canada except that extraordinarily the price to Canada seems to be quite different from the price to the United States which perhaps the great pundits of the distillers would explain. So far as I remember, their argument in this House, as put forward by some one else, is that one cannot sell things at different prices in different countries. May I explode that at once? That is absolute unadulterated rubbish.
  I have been in business for 25 years. I do not sit down and say "Here is my price, and this rules everywhere from Timbuctoo to the north of South America or the south of North America," or where-ever it may be. I study the markets. I do not find people are upset if I charge what I can get out of them. It is, with great respect, unadulterated bunk that these people put over, and it is done in order to safeguard their own markets, which I quite understand. But the Government in my view, should take a firmer line.
  I do not wish to bore the House with an increasing number of detailed figures, but I do want to suggest this as a possible line of consideration. In 1947 our exports from this country in volume were, at the 1938 level plus 10 per cent. The value was 226 in 1947, taking the index or 1938 as 100. In other words, 125 per cent. above what they were in 1938. The imports, on the other hand, very interestingly, were, in volume, practically identical, but the value has gone up to 267. In other words, we were paying about 40 per cent. more for the same volume of imports in 1947 as in 1938 than we were getting for the same volume of exports.
  It is no use the Chancellor of the Exchequer sitting back and being complacent about the situation today, because it is getting steadily worse. I do not understand why the public are not beginning to understand this. Quite seriously, but for Marshall Aid we are going steadily and absolutely bankrupt. Unless people do understand it they will not pull up their socks and do something. I know my own countrymen fairly well, I have lived among them all my life. I know that when they understand what they are up against they do things.
  But now we get miserable Ministers trying to make a case for their own

  711
  Departments and giving wrong facts to the public. I think that somebody—the Lord President of the Council, or the Chancellor of the Exchequer, or the Prime Minister—ought to go down with a hammer and slam them on the head and say, "You must not do that, you are misleading the public." They all want to make a case for their own Department. It is like a fifth form school boy who wishes to make out that he is doing a good job. But if in the process the public is misled so that they do not make the extra effort required, it is going to be absolutely disastrous.
  I should like in the few minutes which the Economic Secretary does not want to occupy to say a few words about some of the fallacies which I think are indulged in. The first is that it is time we abandoned this silly slogan of "too much money chasing too few goods." It raises the impression that it is the fault of the money. It is not the fault of money at all. Money is an absolute humbug. Any Government can "make" money. It is just a matter of operating a printing press to make it. It has no real value at all. It is not linked to anything at all. To tell them that too much money is chasing too few goods is like saying that if we put a pile of money in the middle of the floor and set fire to it, things would get better. The situation is not going to get better at all. We are not going to get more goods that way. What we should say is, "Too few goods—let's have more." What we have to explain is that we have to produce more goods otherwise we are not going to have more. It does not matter twopence how much money we have if there are no goods. We have to produce more.
  Fallacy No. 2 is this. I have heard several very competent senior Ministers say this, and I am surprised at their ignorance. They urge manufacturers to have a bigger turnover and make less profit. Quite frankly, as an industrialist who has not yet been in the bankruptcy court, I fail to see how we are to follow that policy, unless we are determined to get into the bankruptcy court. If we want to get there that is precisely the way to do it. If you have a bigger turnover, if you are a competent person, you must make more profit though it may be at a less rate. There should be no stigma
  712
  attached to so doing. That ought to be made clear to the ordinary rank and file up and down the country.
  I come to the question of exports. I do not know how you are to get the export manufacturer, particularly of capital goods for export, to charge more for his goods and get a higher output if he is told at the same time that it is a cardinal crime to make more money. Again, I do not think that you can do it. The businesses with which I am concerned—and this is over about 20 to 25 years with the two concerns—have been engaged in the export trade up to not more than half, but about that, of their capacity. Before the war we always examined our markets and, unlike these ridiculous people who make whisky and sell it abroad, we do not sell the same goods at the same price everywhere. We find out what we can get and we get as much as we darned well can.
  As a rule, we cannot get more than we can get at home. The situation today is quite different. The world is crying out for capital goods. I have carried out a survey of each of the countries with which we deal in both companies and with one small exception, everybody wants capital goods and, as far as we can see, they will continue to want them. In fact, we get as much if not more—I do not say more than that—for the capital goods we export compared with what we get on the home market. No exporter will do more than that so long as the stigma attaches to making too much money. He will not do it. He is looking at his export market and saying, "Obviously, all I need to do is to charge as much as I need in order to keep a balanced picture for my shareholders. I must not make too much money because I shall get kicked in the pants if I do. Therefore, although I could get more, I will not take it. I know that by not taking too much I am cultivating goodwill and that is good for me."
  I agree that it is not the responsibility of the Government to lay down the law to the manufacturers as to what they should charge. I agree that would be absolutely silly. The markets differ everywhere, even with capital goods, and nobody knows it better than I do myself. The matter must be left to the manufacturers to a very large extent. The Government ought to encourage them to charge as much as they can get, especially in hard currency areas. That ought to be

  713
  made widely known. The way to make them do it, having regard to this huge demand which exists for capital goods today, is not to put out a great publicity statement. I do not want that. I would be content if I could find out any of the statements which either the Chancellor of the Exchequer, the President of the Board of Trade, the Secretary for the Department of Overseas Trade, the Financial Secretary to the Treasury or my hon. Friend the Economic Secretary to the Treasury has made to any of the manufacturers. The only one I can find is the one made by the President of the Board of Trade, which I quoted. I consider that that is entirely inadequate.
  All that the manufacturers need to be told is that no stigma attaches to making profits. [HON. MEMBERS: "Hear, hear."] Wait a minute. I have not finished yet. Let us be frank about it, because they will have to do it. It is quite time that the national corporations realised that no stigma attaches to making profits. One cannot run businesses at a loss or on a balance. There must be a margin on the right side. I beg both my hon. Friend and the Lord President of the Council, whom I am glad to see here on this celebrated occasion, to emphasise to the Cabinet that what matters is not the making of profits but the way in which they are distributed. Obviously, it must benefit the people as a whole if we can get 15 or 20 per cent. more for a proportion of our capital goods exported. That must reflect itself on the balance sheets. We will not get manufacturers to do it unless they realise that they do it without stigma, and that the stigma attaches not to making more but to the wrongful distribution of what they have made. I hope that, after this Debate tonight, in the few minutes which I have left to the Economic Secretary to reply, there will be at least some assurance from him that he will bring the matter to the attention of the Chancellor and ask him to go to it.
  10.26 p.m.
  The Economic Secretary to the Treasury (Mr. Douglas Jay): The hon. Member for Ipswich (Mr. Stokes) told us that his quarrel was with the Chancellor of the Exchequer, and that he really did not care in the least what I said.
  Mr. Stokes: Oh, no.
  Mr. Jay: I assure him that I will bring this matter to the attention of my right
  714
  hon. and learned Friend. I do not expect that the hon. Member will pay any attention to what I have not now got the time to say. I think there was a great deal of horse sense in what he said, and I hope his speech will be widely read by his fellow manufacturers. I hope he himself will do all he can to broadcast his speech to other members of industry.
  The hon. Member's main point was that we are paying very much more for the goods we buy from abroad in relation to before the war, and I said that myself in a Debate two days ago on the European Recovery Programme, when my hon. Friend was not here, and it was not so well received by hon. Members opposite as my hon. Friend's speech tonight. I quite agree that it is all too true, and it is a very important truth, and one of our main economic problems today. It is one thing to say that we are paying too much and quite a different matter to do something about it. In the case of export prices, which is what the hon. Member was talking about, it really is not mainly a matter for the Government to decide. I will make one pronouncement on behalf of the Government, and that is that we would like everybody in industry to read his speech. I will go as far as that.
  There are two views on this question of export prices. The first and simple view is that, since the higher the price charged the more foreign exchange is earned, we should charge prices as high as the traffic will bear; this was the hon. Member's point of view. The other point of view is that if the prices charged are too high, they will have an impact on what we can sell, and we might rose valuable export markets in the long run. Our view is that the manufacturer is better fitted than the Government to look after that. It seems to us, that, since 80 per cent. of industry will still be run by the private manufacturer, this is really a matter for him to decide.
  My hon. Friend mentioned whisky, and he reminded me of the couplet:
  "I often wonder what the Vintners buy,
  One half so precious as the goods they sell."
  Whisky is an interesting case in which the Government, since the war, have been encouraging the manufacturers to charge more for their goods in foreign markets, and in which the manufacturers have been very disinclined to do so. Who was right

  715
  in that particular controversy I would not like, at the moment, to say. Obviously, we do want to see the highest prices charged for exports and the highest amounts of foreign exchange earned consistent with retaining our markets in the long run. I think that that, briefly, is the Government's attitude in this matter. We think that in particular cases it is for the
  716
  manufacturers to decide, and we shall be very ready to see it decided in that way, after having given due weight to what the hon. Member has said.
  Question put, and agreed to.
  Adjourned accordingly at Twenty-Nine Minutes past Ten o'Clock.

  ROYAL COMMISSION ON POPULATION (REPORT)
  ROYAL COMMISSION ON POPULATION (REPORT)
  SMALLPOX STATISTICS
  SMALLPOX STATISTICS
NATIONAL HEALTH SERVICE
  Hearing Aids
  Hearing Aids
  Hospital Management Committee (Wirral)
  Hospital Management Committee (Wirral)
HOUSING
  Programme
  Programme
  Royston Camp, Hertfordshire
  Royston Camp, Hertfordshire
  ENBORNE RESERVOIR SCHEME
  ENBORNE RESERVOIR SCHEME
EDUCATION
  School Meals
  School Meals
  Pupils (Statistics)
  Pupils (Statistics)
  Teachers
  Teachers
  Teachers' Emergency Training Grants
  Teachers' Emergency Training Grants
  Youth Leaders
  Youth Leaders
TRADE AND COMMERCE
  Jute Industry (Working Party's Report)
  Jute Industry (Working Party's Report)
  Cigarettes (Distribution)
  Cigarettes (Distribution)
  Prohibited Exports (U.S. List)
  Prohibited Exports (U.S. List)
  Weed Killers (Supplies)
  Weed Killers (Supplies)
  Daily Newspapers (Paper Allocation)
  Daily Newspapers (Paper Allocation)
  SUPPLEMENTARY PETROL ALLOWANCES
  SUPPLEMENTARY PETROL ALLOWANCES
  WORLD YOUTH FEDERATION (VISAS)
  WORLD YOUTH FEDERATION (VISAS)
  CELLULOID STORAGE (FIRE RISK)
  CELLULOID STORAGE (FIRE RISK)
  YOUNG PERSONS (EMPLOYMENT)
  YOUNG PERSONS (EMPLOYMENT)
  POLICE (NATIONAL HEALTH SERVICE)
  POLICE (NATIONAL HEALTH SERVICE)
  PROBATION OFFICERS (TRAINING)
  PROBATION OFFICERS (TRAINING)
  FIRE SERVICE (EXPENDITURE)
  FIRE SERVICE (EXPENDITURE)
  CRUELTY TO ANIMALS
  CRUELTY TO ANIMALS
  ARTIFICIAL LIMBS
  ARTIFICIAL LIMBS
  TRAINING GRANTS, WALES
  TRAINING GRANTS, WALES
MINISTRY OF WORKS
  Building Research
  Building Research
  Building Costs
  Building Costs
  House of Commons (Rebuilding)
  House of Commons (Rebuilding)
  BRITISH ARMY (PERSONAL CASE)
  BRITISH ARMY (PERSONAL CASE)
  MR. JOE LOUIS (EARNINGS)
  MR. JOE LOUIS (EARNINGS)
  MEAT DISTRIBUTION, ABERSOCH
  MEAT DISTRIBUTION, ABERSOCH
  STATIONERY OFFICE (HANDBOOKS)
  STATIONERY OFFICE (HANDBOOKS)
  HOSTEL, MALVERN (CHARGES)
  HOSTEL, MALVERN (CHARGES)
Preamble
The House met at two of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers.

  LAYING OF DOCUMENTS BEFORE PARLIAMENT (INTERPRETATION) BILL. [H.L.]
  2.4 p.m.
  THE LORD CHANCELLOR (VISCOUNT JOWITT): My Lords, I beg leave to introduce a Bill to declare the meaning of references in Acts of Parliament to the laying of instruments or other documents before Parliament or before either House of Parliament and the effect during a vacancy in the office of the Lord Chancellor or of the Speaker of the House of Commons of the requirement in Section four of the Statutory Instruments Act, 1946, to send notification forthwith to each of them of an instrument's being made so as to operate before it has been laid before Parliament. I beg to move that it be read a first time.
  Moved, That the Bill be now read 1a.—(The Lord Chancellor.)
  On Question, Bill read 1a, and to be printed.

  DARLINGTON CORPORATION TROLLEY VEHICLES (ADDITIONAL ROUTES) PROVISIONAL ORDER CONFIRMATION BILL.
  PIER AND HARBOUR PROVISIONAL ORDER CONFIRMATION (REDCAR) BILL.
  PIER AND HARBOUR PROVISIONAL ORDER CONFIRMATION. (SWAN-AGE) BILL.
  PORTSMOUTH CORPORATION (TROLLEY VEHICLES) PROVISIONAL ORDER CONFIRMATION BILL.
  Read 2a (according to Order), and committed.

  MERCHANT SHIPPING BILL. [H.L.]
  Order of the Day read for the consideration of Commons Amendments.
  LORD WALKDEN: My Lords, I beg to move that these Amendments be now considered.
  Moved, that the Commons Amendments be now considered.—(Lord Walkden.)
  On Question, Motion agreed to.

  COMMONS AMENDMENT.
  [The references are to Bill No. 55.]
  Clause 3, page 5, line 35, leave out ("at sea").
  LORD WALKDEN: My Lords, the Commons have made two very small Amendments to this Bill, and I do not think your Lordships will be detained for long. The first one is at page 5, line 35. It has been pointed out in another place that inspection might have to be done in dock or harbour, and that therefore not only are the words "at sea" unnecessary but it is undesirable that they should be retained. I beg to move that the House do agree with the Commons in the said Amendment.
  Moved, That this House do agree with the Commons in the said Amendment.—(Lord Walkden.)
  On Question, Motion agreed to.

  COMMONS AMENDMENT.
  Clause 4, page 6, line 16, leave out ("are applied") and insert ("apply").
  LORD WALKDEN: My Lords, this is purely a drafting Amendment to rectify a slight grammatical error. I beg to move that the House do agree with the Commons in the said Amendment.
  Moved, That this House do agree with the Commons in the said Amendment.—(Lord Walkden.)
  On Question, Motion agreed to.

AGRICULTURAL HOLDINGS BILL. [H.L.]
Amendments reported (according to Order).
STATUTE LAW REVISION BILL. [H.L.]
Read 3a (according to Order), and passed, and sent to the Commons.

PUBLIC REGISTERS AND RECORDS (SCOTLAND) BILL. [H.L.]
Read 3a (according to Order).
LORD MORRISON: My Lords, I beg to move a drafting Amendment which was overlooked on the Committee stage. I beg to move.
Page 4, line 6, leave out ("search sheets").
Amendment moved—
—(Lord Morrison.)
LORD CLYDESMUIR: My Lords, we understand from the noble Lord that this is a drafting Amendment, and have no observations to make upon it.
On Question, Amendment agreed to.
An Amendment (Privilege) made: Bill passed, and sent to the Commons.

GAS BILL.
2.12 p.m.
House again in Committee (according to Order).
[The EARL OF DROGHEDA in the Chair.]
Clause 25:
(2) Where securities of any class were quoted in the Stock Exchange Official Daily List on all six of the following dates, that is to say, the thirteenth, fourteenth, fifteenth, sixteenth, seventeenth and twentieth days of October, nineteen hundred and forty-seven, and were also quoted in the said list or in the Stock Exchange Daily Supplementary List on any of the following dates, that is to say, the fifteenth day of February, the fifteenth day of March, the sixteenth day of April, the fifteenth day of May, the fifteenth day of June and the sixteenth day of July, nineteen hundred and forty-five, the value of securities of that class for the purposes of this section shall, subject to the provisions of this section and the next following section, be deemed to be either—

(a) the average of the mean of the quotations for securities of that class appearing in the said Stock Exchange Official Daily List on the said dates in the year nineteen hundred and forty-seven, or

(b) the average of the mean of the quotations for securities of that class appearing in the said Stock Exchange Official Daily List or the said Stock Exchange Daily Supplementary List on the said dates in the year nineteen hundred and forty-five on which a quotation therefore so appeared,

whichever is the higher, such addition, if any, being made to the higher average as is necessary to make it a complete multiple of one penny:
Provided that a quotation appearing in the Stock Exchange Daily Supplementary List on the said dates in the year nineteen hundred and
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forty-five shall be disregarded for the purposes of this section unless business is recorded in that list as having been done at any time during the period beginning with the fifteenth day of February and ending with the sixteenth day of July, nineteen hundred and forty-five.
VISCOUNT SWINTON VISCOUNT SWINTON moved to omit subsection (2) and to insert:
"(2) In the case of any class of securities of a company being a statutory or non-statutory undertaker or a gas holding company the value of securities of that class for the purposes of this section shall be deemed to be the amount of the reasonably maintainable annual income which could have been expected from those securities, if this Act had not been passed, multiplied by such number of years purchase as may be appropriate in order to secure the payment of fair compensation to the holders of those securities. The amount of the reasonably maintainable annual income and the number of years purchase shall be such as may be agreed between the Minister and the stockholders' representative or, in default of such agreement, as may be determined by arbitration under this Act."
The noble Viscount said: We now come to an Amendment of considerable consequence, an Amendment dealing with the whole basis of compensation. I hope that it is common ground between us all that in this matter we ought to do what is fair and just. What your Lordships have to consider here is how compensation should be assessed. It will be paid in Gas Stock of equivalent value to whatever is the assessed value. It will be paid out in as near to the equivalent value as the combined intelligence of the noble Lord, Lord Rennell, and the noble and learned Viscount, the Lord Chancellor, with the approval of the Chancellor of the Exchequer, can make it. But I want to make it plain that we are not here concerned with the issue which was before us last night, as to whether it should be paid in Gas Stock or what amount of Gas Stock should be issued. Here we are concerned only with what is the real value of the things which are to be transfered.
There are two alternatives before us. One is to take the artificial—and in this case the peculiarly artificial—alternative of Stock Exchange value, or, where Stock Exchange value does not exist, some hypothetical equivalent to what would be the Stock Exchange value if it had existed. The other alternative is to take the real value. I know I shall be told that there is the precedent of the Transport Act and the Electricity Act, and

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that what we ought to take is the Stock Exchange value. But precedents are valid and valuable subject to two conditions. First: Have they worked well? If they have not worked well, then we ought not to be bound by precedent but should create a new one. Secondly: Is the precedent applicable? That is to say, are we dealing with circumstances directly comparable with the circumstances to which the precedent has been applied before? Neither of those tests is valid here to establish an argument in favour of precedent.
Let us see how taking the Stock Exchange value has worked. There is no doubt at all that in the Electricity Act it has not worked well. What has happened there is that the Stock Exchange value has been taken and that has worked least favourably, or most disadvantageously, in the case of the most conservatively managed companies. Those who have managed their undertakings best have fared worst; the people who have distributed up to the hilt have come off best. I remember someone once saying of stockbrokers that they were people who knew the price of everything and the value of nothing. I would not pass quite such a severe stricture on them as that, but certainly Stock Exchange values do not at all necessarily represent the real value where a company has been conservative-minded and has not declared high dividends, or has declared in dividend only a comparatively small part of what it has earned and has ploughed back into its business and therefore made into capital a large proportion of what it carried to reserve. The tendency in the Stock Exchange is always to over-value that which declares high dividends and under-value the concern that has undisclosed reserves.
In the Companies Act we have said—I think wisely—that, subject to certain reservations made in the national interest, companies shall, broad and large, in future disclose their real reserves. What was the object of doing that? The object was that the shareholder might know the real value of his security; we did it because that value was not necessarily reflected in the quoted Stock Exchange value; there might be something behind, large reserves which were not reflected in the Stock Exchange price. That was the argument advanced by the Government
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in the Companies Bill, and we all thought it was very reasonable. We said, "Let us have, in future, full disclosure of reserves, so that people may know what is the real value of the asset and not be tempted to sell at the Stock Exchange value, if that is considerably below the real value of their possession."
But that very argument which the Government advanced so cogently on the Companies Act is surely a complete answer to the theory that the Stock Exchange value, and not the real value, should be taken. In this case there is not even a specious argument in favour of taking Stock Exchange value. In the case of transport and of electricity there was the specious argument that what the Government were buying were quoted shares in an undertaking, and that therefore if they gave the quoted price they were giving something which, if not altogether reasonable, was the price which would have been given if ordinary transactions had gone on. But the only justification for that argument, as your Lordships will appreciate, was that what was being bought was something for which there was a quotation. That is not the position here. In the case of electricity and transport that was true because, by and large, the great majority of the undertakings were undertakings whose shares had a Stock Exchange quotation. But here that is not in the least true. I am told that the shares of something like 2,500 of these gas undertakings are not quoted at all, and in fact the shares of only just under 100 are quoted. Obviously in a business like gas, the values must vary enormously.
In another place it was argued that it would be quite unfair to take hypothetical Stock Exchange values, and that what was fair in this case (and nobody, even on behalf of the Government, denied the obvious fairness of this) was to take the net maintainable revenue of the undertakings, varying, as it must and as it should, with the length of the franchise—as a matter of fact, I think they are all freehold—and with the successful management of the undertaking, the value of its assets and so on. As I reminded the House on Second Reading, the Financial Secretary to the Treasury who was, I think, the right person to answer, gave the most extraordinary argument in resisting. He did not say, "That is unjust"; on the

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contrary, he admitted that it would be a very reasonable thing to do. He said, "There is not time." Are we to put time in the scales against injustice? That would be a most immoral thing to do. As a matter of fact, even that argument is unsound upon the facts, because, as I shall show your Lordships, you have to go to arbitration if there is a dispute in these cases, and the arbitration is to ascertain what the value is or what the Stock Exchange equivalent is. Therefore, in fact, you are not going to save the few months' time which the Minister grudges to do justice to the owners of these undertakings. As a matter of fact, the time will be neither more nor less, one way or the other. As is admitted, the fair basis is the net maintainable revenue.
I appreciate that on one side, at any rate, politics enter into this business. I admit they enter into it on my side, because I oppose nationalisation. I am opposed to the principle of this Bill. However, I do not think that politics ought to enter into it when you accept the principle of nationalisation and come to do what is fair and just to the people with whom you are concerned and whose undertakings you are going to nationalise. But, even if politics have to be taken into account, and even if the Government must have something which is politically acceptable as well as morally just, I suggest to them, with confidence, that they can accept this proposal as being both politically expedient as well as just, as they admit it to be. Let me cite in favour, I will not say their "master's voice," but at any rate a most authoritative opinion which will weigh with them, and that is the opinion of the Trades Union Congress. The Trades Union Congress considered very fully what ought to be done about nationalisation and what ought to be the basis of nationalisation. They have been considering this question for a long time. They began considering it, I believe, in 1932, and they published a report on Public Control and Regulation of Industry and Trade. The first thing that that Report said (from which I do not dissent) was this.
"It appears to be generally agreed in the Labour Movement that fair compensation should be paid."
We are all agreed upon that as a principle. Then it went on to consider how the compensation should be assessed.
They reconsidered the matter again, much more recently, in 1944. They considered the various possibilities, and, in particular, the two which are before your Lordships to-day. They considered the market value of stocks and shares and in their Report they said this:
"The basis "—
that is, the basis of the Stock Exchange valuation—
"has the superficial advantage of providing easily ascertained figures whether taken as the quotation on one particular day or as an average of the quotations on a number of days. It has, however, serious objections. No quotations are available for private companies, municipal undertakings…"
and so on. Of course, that has a tremendous bearing here, because, as I say, no quotations of any sort or kind are available for the great bulk of the undertakings. Then they went on to consider the other alternative which is the one I am putting to your Lordships to-day. It is what they call—and I think it is the best expression—"reasonably maintainable revenue." They said about that that:
"By this method the purchase price of the acquired undertaking is related directly to its earning powers."
Then the Interim Report went on to express the view that:
"…in general the most satisfactory basis of valuation was reasonable net maintainable revenue. Compensation would be based on the actual earnings over a period of years adjusted in the light of existing circumstances."
That is quite right, because you want to know whether the revenue is likely to be maintained—not what the concern has paid out in dividends but what in fact it has earned and what it is likely to be able to go on earning.
"Regard would also be paid to the probability of the continuance of those earnings."
I must say that that is eminently fair and reasonable. If you are to have nationalisation at all, then I entirely agree with those who framed that Report on behalf of the trade unions that that is the right and fair way of doing it.
That is the proposal. I need not read to your Lordships the whole of the Amendment which is down upon the Marshalled List. Your Lordships have had time to study it. The value as to be:
"the amount of the reasonably maintainable annual income which could have been expected from those securities, if this Act had not been passed, multiplied by such number of years

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purchase as may be appropriate in order to secure the payment of fair compensation to the holders of those securities."
Then we say—and in this, we follow the Bill—that the assessment of the fair value on the basis of net maintainable revenue shall be settled by the stockholders' representative and the Minister
"or, in default of such agreement, as may be determined by arbitration under this Act."
Let me add this, from my experience of arbitration. It is very important to set the arbitrator a common-sense job to do. No arbitrator will have the least difficulty in finding out and assessing on the basis of facts—because every fact can be produced here—what is the net maintainable revenue and the number of years' purchase by which it ought to be multiplied. That is a fact which any practical arbitrator can decide, and in 99 cases out of a 100 the facts will not even be in dispute. It is a perfectly simple case to put to the arbitrator. But if theoretical, abstract sums of this sort are put to him which he has to do, then I do not know how an arbitrator is to do his job. The Amendment is simple; it is just; it is practical. Therefore I commend it to your Lordships and to His Majesty's Government as one which is both politically safe and financially sound. I beg to move.
Amendment moved—
Page 29, line 14, leave out subsection (2) and insert the said new subsection.—(Viscount Swinton.)
LORD RENNELL: My Lords, I would like to support a great deal of what the noble Viscount has said, but I would point out that there are a variety of ways in which the valuation of assets can be made. We know from experience of nationalisation Bills that a variety of ways have been adopted for valuing assets. We have had the net maintainable revenue as a basis for the coal mines, we have had another type of valuation for Bank of England stock—namely, the existing dividend obtaining, and contributable to the holders of Bank of England stock for a very long period, inasmuch as they were given a stock which would produce them the same revenue as they had had before, without any date within which the obligation to pay that revenue was to cease. In the case of Transport Stock and Electricity Stock, a departure was made from that basis to that of the Stock Exchange quotation which, whether
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fair or not—and that is not relevant to this argument—was adopted. But it had this logic in it, in that the bulk of the transport securities were, in fact, quoted. It was stock that was freely traded in and might be said to have a market quotation. As your Lordships well know, a market quotation is one decided as a result of competition between many buyers and many sellers. There is no market when there is only one buyer and twenty sellers, or no seller and twenty buyers. In other words, a market is a common meeting ground where many people wish to buy and sell. That applies, or applied, in the case of transport stocks, and therefore that basis of valuation had that logic.
That train of argument applied less in the case of electricity stocks and applies perhaps scarcely at all in the case of gas stock, inasmuch as most of the stocks, in value and in number, with which this clause in the Bill is concerned are not traded in in a market at all but are a matter of negotiation on each individual account and case. When, in the case of transport stocks, the representatives of His Majesty's Government were taxed with having adopted a different principle from that adopted for the coal-mining industry, they very logically and properly said: "There are different methods of arriving at valuations, according to the commodity in which you deal. We have chosen one method for the coal mine properties, and we propose to choose another method which we think is justified for the transport stocks. They implied that on future occasions when compensation was to be paid to holders of property that was nationalised, the principle which would be adopted in the future would not necessarily be that applied in the past.
Here we have an example, in gas stocks, which the noble Viscount has shown is of a different nature and quality from either the transport or the electricity valuation schemes. My first inquiry is why it has been found necessary to adopt a form of valuation for compensation in the case of gas stocks which appears to have little justification when compared with the compensation issued to holders of transport stock. It is said that if it is logical in one case, it should be logical in the other. But I think the noble Viscount has shown that it would not be logical, and the same arguments cannot be used in this case as were used for the last two cases. So

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I wonder why this particular method has been adopted. Further, I wonder why it should have been found necessary to adopt a system which, frankly, is very difficult to apply. In this clause we have applied a system of valuation for compensation which makes a notional assumption that there is a market price when we know there is not; and, where the stock has not been quoted, seeks, by a very devious process which is not applicable in ordinary life, to arrive at what would have been the value of the stock if it had been quoted. To pick up what I was trying to explain last night, I would point out that you do not say, "I will assess the value of this sheep by considering it in terms of so many cows"; you take the value of a sheep when it is bought and sold in the market. You do not translate the value of a sheep through a third factor into a Stock Exchange quotation which does not exist. So I wonder why there has been adopted this particular method of valuation, which is complicated and calculated to cause difficulties and uncertainties, when an accepted method of valuation adopted in another case is available but has been turned down.
My next point on this scheme of valuation is that I am not sure how fairly it is going to operate, either in regard to the person who is being compensated or to the community as a whole which is taking over these assets. Your Lordships will know that there are in the country a large number of gas undertakings the quality of which leaves a great deal to be desired. A great number of small, country undertakings are, to your Lordships' knowledge, scarcely worth the scrap value of the material out of which they are composed. They have nothing except a franchise to do something which, in many cases, they do extremely badly. There are also, on the other hand, the most modern gas undertakings in the world. A valuation arrived at by the method suggested in this clause seems to indicate that certain undertakings which have little, if any, value (and which may, indeed, be a liability on account of the obligations that they have towards the public), will receive more than they should, while undertakings operating as going concerns with a maintainable revenue will receive less, because their stocks are not readily marketable.
For my part—and I do not know whether noble Lords on the Opposition
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Benches would agree with me—where an undertaking which has no tangible value, or indeed has possibly a liability which it cannot meet out of its assets, is taken over, I feel that no compensation should be paid at all. And the way of arriving at that nil result is to value those undertakings on the basis of net maintainable revenue. We do not want the community to pay more than it ought. But I feel that this method will, in fact, result in the better undertakings getting less than they ought by reason of their stocks not being readily marketable, while the worse undertakings will get more than they ought by reason of an arbitrary calculation which is to be applied to the valuation of their assets. For these reasons, and without going into details which would no doubt bore your Lordships, I feel that the basis for a valuation here should not follow the precedents which have been adopted for transport and electricity stocks. For the sake of the community, the holders and everyone else, I feel that it would be advisable that His Majesty's Government should enter into the question of valuation with an entirely open mind. They should not say that because they have done this in the past they ought to do it in this case, more especially when, in order to do it here, they have to go through an entirely arbitrary calculation to arrive at a valuation. I therefore beg to support the Amendment which has been moved by my noble friend Lord Swinton.
2.40 p.m.
VISCOUNT BUCKMASTER: I have much pleasure in supporting the Amendment which has been moved by my noble friend Lord Swinton. I have said before—and I believe it is a proposition which cannot easily be controverted—that in the case of an unwilling seller (and I stress the term "unwilling seller"), there can be only two bases on which the matter can, with justice be composed. The first is by mutual agreement, and the second is by arbitration. To my mind any other system is fundamentally unjust. I will add further—your Lordships will correct me if I am at fault—that the system which is proposed here is a new one, devised by His Majesty's Government. It has not been applied before, to my knowledge, in any major matter. If we cast our minds back to the years before the war—and I am sorry to say that mine goes

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back to 1911—we remember the case of the National Telephone Company. Never for one moment would it have been suggested that the stock of that concern should be taken over on a Stock Exchange price basis. It was taken over, as the noble Viscount well knows, on a basis of arbitration, because agreement could not be reached.
I venture to suggest that there are three fundamental reasons why Stock Exchange prices as a basis must be unjust. Whilst I now have no connection with the City, I have had the privilege, as your Lordships may perhaps know, of serving on the Council of the Stock Exchange, so I think that I may claim to have some slight knowledge of the matter. These prices are not fixed by the Stock Exchange at all. They are prices which express the caprices, the hopes and fears, and the idiosyncrasies of the individual investor. They do not reflect, nor do they purport to reflect, the value of the assets of the company concerned. Again, these prices, particularly under present conditions, are susceptible to extreme fluctuation for relatively minor transactions. Let us take the vast capital of a company like the Gas Light and Coke Company—I prefer to speak of one with which I have no connection, either direct or indirect. If we take the capital of a vast company like that, a company whose shares enjoy a free market, it is none the less true to say that any transactions which bore a real relation to the size of the capital of the company would have an altogether disproportionate effect on the shares in question. The third point is that by adopting Stock Exchange prices as a basis, you must perpetuate injustice, because you get anomalies.
Let us consider the case of a small imaginary company. Someone dies who owns a lot of shares in that company. The executors have got to sell them. They have to force them on the market. At the moment, the insurance companies and the investment trusts are not anxious, for technical reasons, to enter the market. Many of your Lordships must have had to act as executors, and I am sure will agree that this is true. One may often be forced to take a sacrificial price for a holding because the sale cannot be indefinitely delayed. There you get at once the case of this imaginary company of which I am speaking, whose shares
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are unduly depressed by the influx of the holding of a deceased's estate; and yet they are to be dealt with on the basis of Stock Exchange price valuation.
I hold strongly that Stock Exchange prices are unfair as a basis, and I would say that in this case they are particularly unfair—and for two reasons. As your Lordships know, the holder of gas securities is given in this Bill a choice of two dates; or, to put it rather more precisely, he is given certain dates and given a choice whether he will have the mean of one period or the mean of the other period. The first period is the pre-election period and the second is the period just prior to nationalisation. May I say that both these periods appear to me to be fundamentally unjust to the holder of these stocks? In regard to the first period, dividends were reduced because of the war. Share prices were in many cases reduced—particularly in the case of gas companies—through fear of enemy action. Moreover, the Report of the Heyworth Committee, while it did not recommend nationalisation, envisaged compulsory acquisition, and that tended to depress the market. Then, if we turn to your second choice of dates, we find that it is the period before nationalisation. But prices are lower than they should be; the victim is usually not in very good shape when the axe is poised above his neck! One has therefore the choice of two periods, both of which are unjust, and so there is added a further injustice to a principle which in itself is fundamentally unsound.
If I may, through the courtesy of your Lordships, I will, as shortly as possible, try to explain how this thing operates in the case of such a concern as the great company to which I have referred, the Gas Light and Coke Company. That company has paid, on an average, 5 per cent. for 100 years. My noble friend Lord Rennell will correct me if I make any mistake in what I am now saying. The company is a statutory company, and is incorporated under Royal Charter. In the ten years before the war it paid, with one exception—when it paid more—5½ per cent. I do not think the noble Lord would suggest that a share of that kind, with a record over 100 years and with such standing, should be valued on a lower basis than 4 per cent. I do not think anyone would suggest that. But,

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Of course, these shares are to be taken at 23s. 3d. whereas on a 4 per cent. basis they would stand at 25s. Even if we took them at 25s. on a 4 per cent. basis—which none of your Lordships has ventured to reject—we have allowed nothing at all for the possibility of increase of dividend and nothing for the assets of the company. When we consider that for ten years before the war, the company paid 5 per cent., when we think that, as it is a basic price company and not a sliding-scale company, it may reduce the price of gas by increased sales, or that it may reasonably expect a revision of its own basic price, either of which would entitle it to increase the dividend, we realise that these factors are by no means reflected in the price. Nor are the hidden assets given any value whatsoever.
The principle which my noble friend Lord Swinton has proposed is clearly fair and, to my mind, is one which cannot be resisted. If any noble Lords opposite think it unfair, I would remind them that it is not applied only to road hauliers under the Transport Act but, as stated in the White Paper relating to the Coal Act, it applied in certain cases there as well. So the Government themselves have admitted the principle to be a sound one. I have tried within a short compass to put before your Lordships the injustices of the present proposals, as I see them, and I hope that I have satisfied your Lordships that the suggestions made by the noble Viscount are eminently sound, and such as have in other cases commended themselves to His Majesty's Government. I urge your Lordships to support this Amendment.
THE LORD CHANCELLOR: I do not suppose that even if I had the gifts of Demosthenes I could convince your Lordships that the Stock Exchange method of valuation is the right one.
SEVERAL NOBLE LORDS: Hear, hear.
THE LORD CHANCELLOR: I must confess that, having had three debates on this matter, and having advanced such arguments as I could, I am wholly unconvinced that there is anything whatever unjust in having a Stock Exchange valuation. Generally, when arguments are raised from the opposite side of the House, though I do not often agree with
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them, I do, at least, realise that there is some substance in them. But I really am at a loss to understand why it is said that there is anything unjust in taking the Stock Exchange valuation as a method of compensating for shares. There may be other methods equally good. But, after all, what is a thing worth? It is worth what you can get for it. If you sell these shares—I am assuming, of course, that there is a real market quotation—as between a willing buyer and a willing seller, there is recorded the price which you can get. If you are unlucky enough to die and death duties have to be paid, on what basis are they paid? They are paid on the Stock Exchange valuation. Does anybody suggest that that is unfair? Does anybody come along and say that more ought to be paid, because the Stock Exchange valuation has not taken account of the value of the assets, or something of that sort? No. With the greatest respect—I do not want to argue this at length again—I see nothing in any way wrong, as a general proposition, in taking the market quotation as being a fair method of compensation.
I am not saying for a moment that a fair method of compensation may not be arrived at by taking net maintainable revenue, and multiplying it by some factor. But in one respect I must venture to differ from the noble Viscount, Lord Swinton. On all these questions of finance and Stock Exchange he knows vastly more than I do, but when it comes to arbitrations and the fixation of values at arbitrations, perhaps I know as much as he does. When he says that all the facts are ascertainable and clear, and, therefore, the matter is quite easy and everybody will agree on a figure, I tell him that he is quite wrong. Let us look at the Amendment which he has moved, in order to make my point plain. His Amendment says:
"the value…shall be deemed to be the amount of the reasonably maintainable annual income which could have been expected from those securities.…"
That consideration alone is a consideration from which two perfectly honest and competent men might derive very different conclusions. Then, when you have that figure, you must multiply
"by such number of years' purchase as may be appropriate"

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in order to do what?—
"in order to secure the payment of fair compensation.…"
This sum is to arrive at what is fair compensation. If I am told that I have to multiply by such a number of years' purchase as will secure fair compensation, do I not find myself in great difficulties?
I know exactly what happens, because I have done things of this sort, I suppose I might say, hundreds of times. You will get two distinguished experts, both completely competent and completely honest, who will put forward two sets of figures, which will differ widely. You will have two, or sometimes three, arbitrators. They will apply their minds to those figures, and their conclusions will differ widely. I am not going to say that what they do is to add the three figures together and divide by three; but I have suspected that some operation rather like that is sometimes carried out in these valuation cases. All of us who have had to deal with these matters have occasionally wondered whether, in some rather disguised and polite form, something of that sort is not done. With the greatest respect to the noble Viscount, however theoretically justified his proposal may be, to say that this method is a perfectly simple thing, that all the figures and the facts are there and that a figure will be agreed, is entirely wrong. It will not. There will be widely different views as to what the figure ought to be.
As opposed to that, to take the Stock Exchange value—which is what a man would get if he were minded to sell—is, I suggest, perfectly fair. The only argument I have heard against it is this—I am not thinking only of to-day, but of the last three occasions on which this matter has been debated. It is said that the Stock Exchange value reflects unduly the payment of dividends, and has no regard for the fact that the shareholders are just as well served in the case of a company which, instead of distributing large dividends, puts money to reserve. It is further said that the people who invest money in the City of London are such simpletons that they do not know that simple fact. With the greatest respect, I would say to your Lordships—if I may borrow a phrase which is now hallowed in this House—that anybody who says that is humbugging himself. It is not the fact.
VISCOUNT SWINTON: May I ask the Lord Chancellor why it was that he insisted so firmly, when piloting the Companies Bill through this House, that we should disclose the whole of the reserves, so that people should know the real value as distinct from the Stock Exchange quotation?
THE LORD CHANCELLOR: Certainly. I think that provision is admirable. So long as people do not know the real reserves, they must make a guess at them. They may be bears, they may be bulls, they may be optimists or they may be pessimists. But why should people assume that, because in certain cases the reserves are not known, there are no reserves? I say merely that I cannot believe that any competent person, having lived in the City for more than a fortnight, would not realise that the strength of a company does not depend merely upon the dividends which it pays, but on the policy which it pursues in distributing the money, in ploughing back the profits and building up a strong reserve position. Every child knows that. Therefore, I cannot, as a matter of general principle, accept for one moment that there is anything unfair in taking the Stock Exchange valuation.
Let me come to the particular question of the gas industry. It is said that there is something peculiar relating to it. It is quite true that a large number of gas securities are not quoted on the London Stock Exchange—and the Stock Exchange Lists we are taking here are those only of the London Stock Exchange, as your Lordships know. But the stocks that are quoted cover the bulk of the industry. These are the actual figures—I am dealing in nominal values. The stocks which are quoted on the London Stock Exchange bear the nominal value of £111,000,000, as compared with unquoted stocks of £58,000,000. So that, on that basis, two-thirds of the nominal value are quoted on the London Stock Exchange. With regard to the one-third that is not quoted there are a goodly number of quotations on the provincial Stock Exchanges. I am not taking any account of them for the moment, but we believe that if you accept this Stock Exchange valuation it will not be difficult to apply a similar basis to the one-third which is not quoted on the London Stock Exchange, so that you will be able to equate one with the other.

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May I remind your Lordships that the Bill provides that all the liabilities of the companies, except liabilities with regard to the companies' securities, are to be taken over by the new Boards. Therefore, it is the whole of those securities which have to be compensated. The loss to each of those holders is the value of his security; and the value of that security is the true measure of compensation. The value which he would have received had he sold these securities—which is reflected in the Stock Exchange valuation—is, in our opinion, a fair valuation to give. If it were possible, by a lengthy and elaborate procedure, to arrive at a precise figure in order to make quite certain that justice was done to everybody, I certainly should not say that the mere factor of delay, trouble or difficulty was any argument against taking that course. As I have already pointed out, the method suggested by this Amendment is an exceedingly difficult and uncertain one to apply. You do not know that you do justice by this method, and by taking this Stock Exchange valuation you have the satisfaction of knowing that at any rate you are giving every man that which he would have received had he wanted to sell his stocks.
I know that I shall not convince your Lordships, and I confess that your Lordships will not convince me. This is the third time we have had this argument, and I think that I can best serve the convenience of your Lordships if I do not continue this argument ad nauseam. Realising, as I do, that this is a very important matter, a fundamental matter, and a matter which must be decided by the House on a Division, I must submit to the House that they should support the Government in this.
VISCOUNT MAUGHAM: Will your Lordships allow me a few minutes to say something upon the dexterous argument to which we have just listened? The noble and learned Viscount, with his usual skill has dealt with the arguments which have been raised and, amongst other things, has given his own view of what is the fair valuation, speaking generally, of property which is taken over by the State or is purchased, I suppose, under an agreement. His principle is that the proper value is what one can get for the property. Now I venture to say that that is absolutely unsound. For one hundred
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years past, this country has been dealing with property acquired on a valuation. Since the year 1845, when the Lands Clauses (Consolidation) Act was passed, there have been, I suppose, thousands of cases where the principles applicable to a valuation have been discussed, and there are many case in which the matter has gone to the courts. Without taking up much time, I do wish to state that there are two principles applicable in valuation which you will find in a book with an honoured name, Cripps on Compensation, and you will also find other works relating to that matter.
The two principles which I wish to commend to your Lordships in place of the argument that the value ought to be whatever can be obtained for the property—which means what can be obtained under what may be quite temporary values—are as follows. First, the value to be ascertained is the value to the owners, and not its value to the purchaser—in this case the State. It is the value to the owners here that we have to consider—these numerous people all over the country who have invested their money in gas undertakings. The second proposition is even more relevant as answering the tests suggested by the Lord Chancellor, The market price is not a conclusive test of real value. You will find that in Cripps on Compensation, and you will find an authority for it in the case of the South Eastern Railway v the London County Council, reported in 1915, 2 Chancery Division, at page 252. Those are the principles laid down in the Law Courts over a long series of years. They have been followed in hundreds of cases, and they are all absolutely different from the doctrine that one should apply simply the market value, if it can be ascertained.
I will add only that, in this particular case, we are not going to ascertain the market value by taking, in a small number of cases, what happens to be the quoted figure in the Stock Exchange List, the Official Daily List, or the Daily Supplementary List. Those Lists do not disclose what people have given for property, and for how much people have sold their shares. Often they' are purely nominal quotations, which have no connection whatever with real transactions. I have not been engaged in many Stock Exchange transactions but I know well that

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you cannot meet any broker on the Stock Exchange who will not tell you that those quotations are nominal—not all of them, of course, but a large number. That is an absolutely fatal comment on the view of the Lord Chancellor, that what should be paid as compensation is what can be obtained for the property. There are, in a small number of cases, some real valuations, but it is clear that under Clause 25 you will not get real transactions in a
Resolved in the negative, and Amendment agreed to accordingly.
VISCOUNT SWINTON VISCOUNT SWINTON moved to omit subsections (3), (4) and (5). The noble Viscount said: This Amendment is consequential. I beg to move.
Amendment moved—
Page 30, line I, leave out from the beginning to the end of line 41.—(Viscount Swinton.)
THE LORD CHANCELLOR: I shall not trouble the House to divide on this Amendment. The noble Viscount will indicate, and I will check so far as I can those of his Amendments which he thinks are consequential. It is not to be thought, of course, that because I do not oppose the Amendments now, I am not opposed to them in principle; but it would be inconvenient to have a series of Divisions.
vast number of cases. I cannot help saying that, whatever criticisms may be made on this particular Amendment, it represents something perfectly fair between the parties, and that is not the case under the Bill as it stands.
On Question, Whether the words proposed to be left out shall stand part of the clause?
Their Lordships divided: Contents, 20; Not-Contents, 48.

CONTENTS

Jowitt, V. (L. Chancellor.)

Ammon, L. [Teller.]

Lucas of Chilworth, L.

Addison, V. (L. Privy Seal.)

Amwell, L.

Marley, L.

Chorley, L.

Milverton, L.

Huntingdon, E.

Crook, L.

Pakenham, L.

Henderson, L.

Pethick-Lawrence, L.

Hall, V.

Holden, L.

Rochester, L.

St. Davids, V.

Kershaw, L.

Strabolgi, L.

Walkden, L.[Teller.]

NOT-CONTENTS

Cholmondeley, M.

Ridley, V.

Hampton, L.

Salisbury, M.

Swinton, V.

Hawke, L.

Townshend, M.

Howard of Glossop, L.

Amulree, L.

Hylton, L.

Albemarle, E.

Balfour of Inchrye, L.

Llewellin, L.

Dundonald, E.

Belstead, L.

Lloyd, L.

Fortescue, E. [Teller.]

Braye, L.

Mancroft, L.

Graham, E. (D. Montrose)

Carrington, L. [Teller.]

Monkswell, L.

Lindsay, E.

Cherwell, L.

Moyne, L.

Lucan, E.

Clanwilliam, L. (E. Clanwilliam.)

Queenborough, L.

Manvers, E.

Rankeillour, L.

Perth, E.

Clydesmuir, L.

Rennell, L.

Selkirk, E.

De L'Isle and Dudley, L.

Rochdale, L.

Denham, L.

Schuster, L.

Buckmaster, V.

Dorchester, L.

Templemore, L.

Hailsham, V.

Fairlie, L. (E. Glasgow.)

Teynham, L.

Maugham, V.

Forteviot, L.

Tweedsmuir, L.

Wolverton, L.

VISCOUNT SWINTON: I am much obliged to the noble and learned Viscount. I have gone carefully into the matter and I think I can indicate to your Lordships exactly which Amendments are consequential. They can be checked between now and the Report stage.
On Question, Amendment agreed to.
VISCOUNT SWINTON: I beg to move this consequential Amendment.
Amendment moved—
Page 30, line 42, leave out ("subsections (2), (3) and (5)") and insert ("subsection (2)").—(Viscount Swinton.)
On Question, Amendment agreed to.
VISCOUNT SWINTON: I beg to move this Amendment which is also consequential.
Amendment moved—
Page 31, leave out lines 3 and 4.—(Viscount Swinton.)
On Question, Amendment agreed to.
LORD CHORLEY LORD CHORLEY moved, in subsection (7), to leave out "of any class" The noble Lord said: This is a drafting Amendment. The words proposed to be left out are quite unnecessary. I beg to move.
Amendment moved—
Page 31, line 5, leave out ("of any class").—(Lord Chorley.)
On Question, Amendment agreed to.
VISCOUNT SWINTON VISCOUNT SWINTON had given Notice to move, in subsection (7), to leave out "either of" and insert "two." The noble Viscount said: With your Lordships' permission I should like to move this Amendment in a more convenient form—namely, to leave out "either of the two last preceding subsections" and insert "the last preceding subsection." I beg to move.
Amendment moved—
Page 31, line 5, leave out ("either of the two last preceding subsections") and insert ("the last preceding subsection").—(Viscount Swinton.)
On Question, Amendment agreed to.
VISCOUNT SWINTON: I beg to move this consequential Amendment.
Amendment moved—
Page 31, line 6, leave out ("subsections") and insert ("subsection").—(Viscount Swinton.)
On Question, Amendment agreed to.
3.20 p.m.
LORD CHORLEY LORD CHORLEY moved, after subsection (7) to insert:
"(8) If all the securities of any issue were originally disposed of to a person who did not become the registered holder of those securities, the price of issue of each of those securities shall for the purposes of this section be deemed to be either—

(a) the price paid for that security by the first registered holder thereof; or

(b) the price received by the company for the security plus an amount equal to two and a half per cent. of that price;

whichever is the lower"
The noble Lord said: This Amendment has been put down in order to implement an assurance which was given in another place by the Solicitor-General. The clause deals with cases where there have been new issues, and it is concerned with the price. In the case of new issues it is, of
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course, not uncommon for the shares not to be sold directly to the public; they are placed with a firm of stockbrokers or an issuing house who sell them to the public and make a profit. Obviously, it would be unfair if the original price of issue were based on the price which was paid by the stockbroker. Therefore it is necessary to have this Amendment, which provides that the price of issue is the price paid for that security by the first registered holder, or the price received by the company for the security plus an amount equal to 2½ per cent. of that price, whichever is the lower. Inquiries which have been made show that the sum of 2½ per cent. is a fair remuneration to the stockbroker. Therefore, that alternative has been put in. On that basis, I am sure that your Lordships will think that this carries out the assurance which was given, and will accept it. I 'beg to move.
Amendment moved—
Page 31, line 15, at end insert the said subsection.—(Lord Chorley.)
VISCOUNT SWINTON: I am much obliged. It is a little hard to follow, but I understand that it carries out in the most convenient form what was undertaken.
On Question, Amendment agreed to.
VISCOUNT SWINTON: I have one alteration to make in the next Amendment on the List. The word "two" ought to be "three" Therefore, I beg to move, to leave out "six" and insert "three"
Amendment moved—
Page 31, line 16, leave out ("six") and insert ("three").—(Viscount Swinton.)
On Question, Amendment agreed to.
VISCOUNT SWINTON: This Amendment is consequential. I beg to move.
Amendment moved—
Page 31, line 22, leave out from the beginning to the end of line 46.—(Viscount Swinton.)
On Question, Amendment agreed to.
VISCOUNT SWINTON: This Amendment is also consequential. I beg to move.
Amendment moved—
Page 32, line 1, leave out from the beginning to the end of line 26.—(Viscount Swinton.)
On Question, Amendment agreed to.
Clause 25, as amended, agreed to.
Clause 26 [Increase of value of securities of companies suffering loss of revenue from war causes]:
VISCOUNT SWINTON VISCOUNT SWINTON moved to leave out Clause 26 and insert the following new clause:
As to loss of income from war causes.
"In agreeing or determining under the last preceding section of this Act the amount of the reasonably maintainable annual income which could have been expected from any class of securities an allowance shall be made to offset any loss or diminution of income arising from any war damage (within the meaning of section two of the War Damage Act, 1943) suffered by the undertaker or any subsidiary of the gas holding company concerned or by reason of any transfer of population, industry, trade or business from any part of the area supplied by the undertaker or any subsidiary of the gas holding company concerned caused by circumstances arising out of the war."
The noble Viscount said: Your Lordships will see that Clause 26 is intended to give a measure of compensation or allowance in increased value to those undertakings which suffered by reason of the Second World War. Obviously, that is a just and proper principle and ought to be applied, whether we take the Stock Exchange value or whether we take the value which the House has adopted. It is a perfectly right and proper principle and ought in either case to be brought into consideration in the assessment of value. I think this clause is rightly drafted, and I have taken the principle which the Government put forward in their Clause 26. But, of course, with the simpler method of valuation that the House has now adopted, that enables us to make it a much simpler clause. I think that it correctly translates the Government's Clause 26 into what ought now to apply. I ought in fairness to say, however, that there is one small alteration in the clause as I am moving it. Five lines from the end of my Amendment, your Lordships will see these words:
"the gas holding company concerned or by reason of any transfer of population, industry, trade or business from any part of the area supplied."
The Government's clause, I think, merely mentions the transfer of population. I understand that there is really nothing between us on this question. Obviously we want the compensation to be paid if there has been a loss of business either because an industry has been transferred
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or because the population has been transferred. It was assumed that "population" covered also the transfer of industry. It has been suggested to me that, that being the common intention, it is proper to put in the words: "population, industry, trade or business" Therefore, I am moving it in that form. I thought I would draw your Lordships' attention to that point. Otherwise, I think that this clause is, as nearly as may be, the equivalent of the old one. I beg to move.
Amendment moved—
Leave out Clause 26 and insert the said new clause.—(Viscount Swinton.)
THE LORD CHANCELLOR: That is quite right. We will accept it. It seems to follow. I do not think that there is any point about the words "population, industry, trade or business."
On Question, Amendment agreed to.
Clauses 27 to 29 agreed to.
Clause 30:
Compensation to composite companies.
(6) Regulations may provide for conferring a right on the holder of any debentures, debenture stock or preference stock of a composite company, or on the company, by notice given within the prescribed period to the other party, to require the transfer to the holder of such amount of the British. Gas Stock issued to the company under this section as is attributable to the value of the said securities held by him, and for the cancellation of those securities to a proportionate extent and may also provide for the protection of mortgagees and encumbrance in cases where the debt secured by the mortgage or encumbrance does not vest in an Area Board or is apportioned as between an Area Board and the undertaker, and the debt or, as the case may be, the part thereof not apportioned to the Area Board was, immediately before the vesting date, secured on property which vests in the Board.
LORD HAMPTON LORD HAMPTON moved, after subsection (4) to insert as a new subsection:
"(5) Notwithstanding the provisions of any enactment a composite company shall have power to hold any British Gas Stock issued to them under the provisions of this section, and, at their discretion, to sell the same or any part thereof, and reinvest some or all of the proceeds of any such sale."
The noble Lord said: Since this Amendment was put down, I see that the point has been covered by an Amendment put down to page 38, line 44, by the noble

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and learned Viscount. I do not think I need say any more about it. I beg to move.
Amendment moved—
Page 38, line 9, at end insert the said subsection.—(Lord Hampton.)
LORD CHORLEY: This matter is covered by an Amendment to page 38, line 44, put down in the name of my noble and learned friend. While we accept the principle of the noble Lord's Amendment, we would prefer him to withdraw it and accept the Government's Amendment.
LORD HAMPTON: I agree. I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
LORD CHORLEY: The three following Amendments go together, and with your Lordships' permission, I will speak to them together. The composite companies will receive British Gas Stock in compensation for the transfer of their gas undertakings. Under the Bill as it is now drafted, a debenture holder or a preference stockholder may require the company to exchange for British Gas Stock such part of his holding as was attributable to the gas undertaking. The company are given a similar option. There have, however, been discussions with the representatives of the composite companies, and, as a result of those discussions it seems that it is preferable to limit this arrangement to debentures and to leave the problem of the reductions of share capital, which would have been involved with the proposal as it is at the present time, to be dealt with by the courts in the normal manner. Secondly, if debenture holders are willing to exchange the whole of their holdings for British Gas Stock we are quite content that they should do so, and that would be a sensible and useful arrangement. It does, however, involve an alteration in the proposals in the Bill, and the Amendment has been tabled in order to help that to be brought about. I beg to move.
Amendment moved—
Page 38, line 31, after ("debentures") insert ("or").—(Lord Chorley.)
On Question, Amendment agreed to.
LORD CHORLEY: I beg to move the next Amendment.
Amendment moved—
Page 38, line 31, leave out ("for preference stock").—(Lord Chorley.)
On Question, Amendment agreed to.
LORD CHORLEY LORD CHORLEY moved, in subsection (6), to omit "and may also provide" and to insert:
"(b) for enabling a composite company, notwithstanding anything in any enactment, by agreement with the holder of any debentures or debenture stock of the company, to redeem them by means of the transfer to the holder of such amount of British Gas Stock issued to the company under this section as may be agreed with the holder; and
(C)"
The noble Lord said: I beg to move this Amendment.
Amendment moved—
Page 38, line 37, leave out ("and may also provide") and insert the said new paragraph.—(Lord Chorley.)
On Question, Amendment agreed to.
LORD CHORLEY: This is a drafting Amendment. I beg to move.
Amendment moved—
Page 38, line 41, leave out ("undertaker") and insert ("company").—(Lord Chorley.)
On Question, Amendment agreed to.
LORD CHORLEY LORD CHORLEY moved to add to the clause:
"(7) A composite company, notwithstanding any limitation imposed by any enactment on their powers of investment, may hold any British Gas Stock issued to them under this section, and, for the purposes of any enactment limiting the amount of investments that may be held by the company, any such stock shall be disregarded, and the company may sell any such stock and apply the proceeds of sale for any purpose for which they are authorised to apply capital moneys."
The noble Lord said: My Lords, this is the Amendment which was referred to a moment ago by the noble Lord, Lord Hampton, and it has been put down to, meet the point in respect of which an assurance was given by the Minister on the recommitment stage in another place. There, an Opposition Amendment had been tabled, much in the same terms as that standing in the name of the noble Lord, Lord Hampton, and designed to, enable a composite company to hold compensation stock and, at their discretion, to sell all or part and to reinvest some or all of the proceeds of such sale. It was doubtful whether that could be permitted to a statutory company. The

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Minister agreed that it would be useful if they had power to do that, but said it was necessary that there should be consultations with the Ministry of Health, who are obviously interested in this type of point. However, I am glad to inform your Lordships that an agreement has been reached. The Amendment which is now tabled is rather wider than the one previously suggested, and will enable the proceeds to be used for any purpose for which the companies in question are authorised to use their capital monies. I beg to move.
Amendment moved—
Page 38, line 44, at end, insert the said subsection.—(Lord Chorley.)
LORD HAMPTON: I am grateful to His Majesty's Government for meeting this point.
On Question, Amendment agreed to.
Clause 30, as amended, agreed to.
Clauses 31 and 32 agreed to.
Clause 33:
Control of dividends, interest and other payments.
33.—(1) Where any company, being an undertaker to whom this Part of this Act applies but not an ancillary gas undertaker, have paid pursuant to a resolution passed after the twenty-third day of January, nineteen hundred and forty-eight, interest or a dividend on any of their securities in respect of the last complete financial year before the said day or any subsequent period, being payments which, regard being had to any interest or interim dividend paid before the said day in respect of that year or period, are in excess of the payments of interest or dividend permitted under this section, all persons who were directors of the company at the time when the resolution of the directors was passed authorising or recommending the payments shall, subject to the provisions of this section, be liable to pay to the appropriate Board an amount equal to the total amount of the excess:
(2) The payments of interest or dividend permitted under this section are as follows:—
(c) in the case of any other class of securities, payments of dividend at a rate not exceeding four per cent. per annum or the rate, calculated as a rate per annum, paid on that class of securities in respect of the last complete financial year in respect of which a final dividend was paid before the said twenty-third day of January, nineteen hundred and forty-eight, whichever is the higher;
Provided that:

(i) where any local enactment applicable to any such company restricts the dividends
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payable by the company in respect of the last complete financial year before the said day or any subsequent period to amounts less than the payments permitted under paragraph (c) hereof, those amounts shall be deemed to be the payments of dividend permitted under this section in respect of that year or period;

(ii) the payments permitted under this section shall only be made out of the net revenue of the company for the period in respect of which the payment is made, or out of any funds applicable in accordance with the normal practice for the purpose of maintaining interest payments and equalising rates of dividend, and any payment shall, so far as it is made otherwise than out of that revenue, or out of those funds, not be permitted under this section;

3.35 p.m.
VISCOUNT BUCKMASTER VISCOUNT BUCKMASTER moved, in subsection (1), after the first "not" to insert "a statutory undertaker or." The noble Viscount said: This is a short and simple Amendment which seeks to remove an injustice, and, I trust that as such it may appeal to your Lordships. The Bill provides a new control on non-statutory companies, and on statutory companies there will now, of course, be a double control—namely, the control imposed by the Bill and the control imposed by their own statutory restrictions. The result of this will be that the controls will operate downwards, but never upwards. That appears to me to be an injustice and, without elaborating the point in any way—although I will do so if the noble and learned Viscount wishes—I hope this Amendment will appeal to him. I beg to move.
Amendment moved—
Page 39, line 38, after ("not") insert ("a statutory undertaker or").—(Viscount Back-master.)
THE LORD CHANCELLOR: Statutory control of dividends at the present time is, I think, of three kinds. There is, first, the standard price system, under which a standard dividend, with a rate varying between 3½ and 10 per cent., is laid down in relation to a standard price. If I understand it aright, the dividends may rise above the standard if the selling price falls below the standard price. About 180 undertakers are concerned in this system. Then there is a basic price system, under which a basic price and a basic dividend are laid down in the Statute. The basic dividend may always be paid, if earned, irrespective of the actual basic price level. If the price level is below the

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basic price, a part of the difference between the actual revenue from the sale of gas and the theoretical revenue at the basic price may be used—so far as the actual net profits allow—to increase the basic dividend. Normally, a sum equal to the extra dividend must be devoted to the employees (usually as a co-partnership bonus). Here there are about fifty large undertakings concerned.
There is also the maximum price system, under which a maximum price and a maximum dividend are prescribed. The maximum dividend (often 10 per cent.), may be paid whenever it is earned, and there are about 150 undertakings concerned in that. I can see a possible hardship in subjecting those companies which are always subject to one statutory control to a further statutory control and therefore I will suggest this compromise to the noble Viscount and see whether he is prepared to accept it. I think I can meet him with regard to the standard price system and the basic price system. I will go into it between now and Report stage, and I anticipate that I shall be able to do that. I do not think I can meet him on the maximum price system, however. If the noble Viscount accepts that offer, perhaps he will be willing to withdraw his Amendment now, and allow me to see whether, between now and Report stage, I can find some form of words on the lines I have suggested which will meet the substance of the difficulty that he has outlined.
VISCOUNT BUCKMASTER: I appreciate the manner in which the noble and learned Viscount has met me in this matter. I accept that a case can be made out for excluding the maximum dividend companies, and I gladly accept the proposal he has made. Therefore I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
3 39 p.m.
LORD LLOYD LORD LLOYD moved, in subsection (1), after the first "resolution" to insert "of the directors of the company" The noble Lord said: On behalf of my noble friend and myself I beg to move this Amendment. In case the noble and learned Viscount should make me regret that I had moved it in its present form, I would like to say straight away that I do not attach any great sanctity to the words I have used; indeed I think they may probably be wrong. I am not at all sure that
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it is the right Amendment, but I wanted to raise the matter because I believe that as this clause stands now there is a possibility of injustice being done to directors. If your Lordships will look at the clause as it stands at present, you will see that it says: "if pursuant to a resolution passed after the 23rd day of January, 1948, a dividend is declared in excess of the rate permitted, the directors may be liable to certain penalties." The first point I would like to make is, that there is a certain ambiguity about the word "resolution." It might be a resolution of the directors or it might be a resolution of the shareholders in general meeting. The Bill does not say. But there is, I suggest, by inference, a possibility that it means a resolution passed by the shareholder
If your Lordships will look at line 9, on page 40, you will see that where directors are concerned in a recommendation they are specifically mentioned. Therefore, in the case of this resolution the inference, may well be that it is a resolution of the shareholders. This point was raised in another place during the Committee stage and it was pointed out that it was possible that this referred to a resolution of the shareholders; that the directors, in perfectly good faith, might have recommended a dividend exceeding the rates permitted just before the operative date and that the general melting and the publication of the Bill might come so closely together that the dividend could be passed in perfect good faith by both directors and shareholders, without them having any knowledge that they had committed an offence. There was an actual example, I believe, of a company which sent out a recommendation to the shareholders on January 15. The Bill was published on Friday, January 23, and the dividend was declared at the general meeting of the company on Wednesday, January 28. I am sure your Lordships will appreciate that the Bill could not possibly have reached any of the directors—as it came out over the week-end—before Monday, and it is more than possible that it would not reach them in time for the general meeting. In that case, obviously, the shareholders and directors might well, in perfectly good faith, have passed a dividend in excess of that permitted.
An attempt was made by the Government to meet this point on the Report

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stage in another place. That attempt—which I welcome—is represented on page 40 at line 36 and the following lines of the paragraph. It is there provided that if the directors consulted the Minister and obtained his consent, then the clause would not apply to them. Clearly, that does not cover the sort of case to which I am referring. While I do not say that there are likely to be many cases of that kind, I feel that there may possibly be cases of genuine injustice being done to some directors by this retrospective legislation. Therefore, while, as I have said, I do not set great store by the actual wording of the Amendment, and I am quite prepared to accept some alternative wording, I hope that the noble and learned Viscount, the Lord Chancellor, will be able to give us some assurance upon this kind of case. I am sure that he would no more wish to see any injustice done than would any of us. I beg to move.
Amendment moved—
Page 39, line 39, after ("resolution") insert ("of the directors of the company").—(Lord Lloyd.)
LORD AMMON: I think that this would be a suitable moment at which to adjourn until 5.30 p.m.
[The Sitting was suspended at a quarter before four o'clock and resumed at half-past five.]
THE LORD CHANCELLOR: I have now had an opportunity of thinking out a suitable answer to the noble Lord. I was asked, first of all, what is meant by a "resolution" It means an effective resolution which declares a dividend. As the noble Lord knows, in the normal course of events an interim dividend is declared by a resolution of the directors. A final dividend is declared on the recommendation of the directors by a general meeting of the company. That is the normal course, and that, of course, is provided by Table A. The resolution herein referred to is an effective resolution. I would say at once that the Amendment the noble Lord has moved would be no good at all, and would defeat his own purpose. He wants to make the clause refer only to a resolution of the directors. The final dividend, of course, is declared by a resolution of the company. As the noble Lord himself said, he did not guarantee that his Amendment is perfect for what
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he has in mind. It was to deal with this very matter that we put in the proviso. It is quite true that the proviso makes the payment subject to the approval of the Minister. I think from the noble Lord's point of view that that is desirable, because if we have in the Bill the words "subject to the approval of the Minister," we can obviously allow greater latitude. If, on the other hand, there is no provision for ministerial approval, we have to tie the matter up very strictly with regard to dates and times. We all want to deal with the case where the dividend was in train before the directors knew what the Bill was going to contain. Yet the proposition is obviously a different one when they did know and, notwithstanding that knowledge, acted. The proviso refers to a payment
"being a payment made in pursuance of a recommendation of the directors of the company made on or before the said twenty-third day of January."
The instance which the noble Lord gave, if I followed his dates aright, was that the recommendation of the directors was made on January 15——
LORD LLOYD: It was posted to the shareholders on January 15.
THE LORD CHANCELLOR: That was the date of the recommendation of the directors to the shareholders. The date of the Bill was January 23, and the general meeting was on January 28. Therefore, the proviso is apt to cover that case. It comes within the proviso, because the recommendation of the directors communicated to the shareholders was made before January 23. I can conceive of cases where you might want a wider proviso. Take the imaginary case of a company at Stornoway. The directors' recommendation, let us say, was made on January 24, before they had heard about this clause of the Bill. The general meeting then and there approves of the recommendation of January 24. That would not be within the proviso. If there is any case of that sort, I will gladly consider putting in appropriate words to deal with it. But this matter was all threshed out on the Committee stage and the Report stage in another place. We have put in a proviso which is appropriate to cover every case of which we have heard. If there is any other case not covered by the proviso of which the noble Lord knows—the one which he cited is covered

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by the proviso—and he will give me the details of that case, I will gladly consider amending the terms of the proviso to meet it. But at the present moment, so far as we know and believe, the proviso is appropriate to deal with every case. We have not come across any case where the recommendation of the directors on which the company approved a dividend was made after January 23. As I say, if there is such a case, I will look into it. The Minister invited all such cases to be sent to him, if there were any, and we have heard of none. I am certain that if there had been one we should have heard of it by now. If you wanted to deal with it in the way the noble Lord suggests, you would have to consider the extension of the terms of the proviso, and I should not consider the extension of the terms of the proviso unless I was satisfied that there was a case which was not protected by the proviso at the present time and which ought to be protected.
LORD LLOYD: I am grateful to the noble and learned Viscount for what he has said. I think it almost entirely meets my point. However, there is just one thing which he said on which I am not quite sure that I agree with him. It is that the case I cited is covered by the proviso. Technically, you might say it was, but it is a very close thing. May I remind the noble and learned Viscount again that the Bill happened to be published on a Friday, which was January23, and this meeting was on the following Wednesday. It is just conceivable in a case like that, I submit, that the Bill may not have been in the hands of the directors in time; and certainly there would have been very little time to consider the matter. I do not want to split hairs, after the noble and learned Viscount's assurance, but I think that that is a close case. If there is any trouble over that case—particulars of which I shall be glad to give to the noble and learned Viscount afterwards—I hope he will give special consideration to it.
THE LORD CHANCELLOR: May I interrupt the noble Lord? If he looks at page 40, line 8, he will see the words:
"being a payment made in pursuance of a recommendation of the directors of the company made"
before January 23. The recommendation of the directors in this case was made
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on January 15. Therefore his case, beyond any argument, comes into the proviso.
LORD LLOYD: I am grateful to the noble and learned Viscount and, with that assurance, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD ROCHDALE LORD ROCHDALE moved, in subsection (2), to leave out sub-paragraph (1). The noble Lord said: This Amendment is similar to one moved by my noble friend Lord Buckmaster on page 39, line, 38, on which the Lord Chancellor gave some assurance that he would look into the matter with a view to reaching a compromise. This Amendment deals with exactly the same problem, but seeks to deal with it in a somewhat different way, by relieving the statutory companies referred to of their limitations as regards dividends under their own existing local enactments. I rather think, therefore, that this is consequential to my noble friend's Amendment, and I hope that me noble and learned Viscount may be prepared to accept it. I beg to move.
Amendment moved—
Page 40, line 27, leave out sub-paragraph (1)—(Lord Rochdale.)
THE LORD CHANCELLOR: I am not prepared to accept the Amendment, but it obviously comes within the topic which I have undertaken to consider. The consideration which I give to Lord Buckmaster's Amendment will also apply to this.
LORD ROCHDALE: I am grateful to the noble and learned Viscount, and beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 33 agreed to.
Clause 34:
Final payment of dividends and interest.
(3) The stockholders' representative shall apply the sums paid to him under the preceding provisions of this section (so far as they will go) for the following purposes and in the following order of priority:
(a) in making insert payments on any debentures or debenture stock of the undertaker, which have accrued up to the vesting date and have not been paid, at the rates permitted under the last preceding section;
(11) In this section the expression "final financial period" means such part of the

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financial year of the undertaker during which the vesting date occurs as precedes that date:
Provided that, where any undertaker has not made the payments of interest or dividends permitted under section thirty-two of this Act in respect of the last complete financial year or years ending after the first day of January, nineteen hundred and forty-eight, and before the vesting date, the said expression means that year or those years together with such part of the financial year during which the vesting date occurs as precedes the vesting date.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, in subsection (1), to leave out "Minister" (where that word first occurs) and insert "President of the Institute of Chartered Accountants in England and Wales" The noble and learned Viscount said: Clause 34 as drafted provides that the auditor for the purpose of ascertaining the revenue for the final period shall be appointed by the Minister, after consultation with the appropriate Board and the stockholders' representative. The representative bodies of the accountancy profession—for whom, if I may say so, I have a most profound regard—have suggested that the precedent of the Transport Act, Section 20, should be followed, and that the auditor should be appointed by the President of the Institute of Chartered Accountants. That is the purpose of this Amendment, and I feel sure that it will commend itself to all noble Lords. I beg to move.
Amendment moved—
Page 43, line 30, leave out ("Minister") and insert ("President of the Institute of Chartered Accountants in England and Wales").—(The Lord Chancellor.)
On Question, Amendment agreed to.
LORD HAWKE LORD HAWKE moved, in subsection (3), after paragraph (a) to insert:
"(b) in paying such sums, if any, as may be authorised by the Minister to be paid to any person as compensation for loss of office or employment or in recognition of past services rendered to the undertaker."
The noble Lord said: Clause 59 of this Bill provides that the Minister shall by regulations require the early Area Boards to pay compensation to officers who suffer loss of employment and so on. We are proposing an Amendment here which takes the initiative from the Minister and puts it in the hands of the stockholders' representative. He is to make suggestions to the Minister as to the compensation that should be paid, and the Minister says "Yes" or "No"
The reasons for this are that we feel that the very essence of compensation for past services is a swift recognition of those services; if things are left for any length of time, rewards tend to go sour and stale. We are giving the Minister the services of the stockholders' representative in putting before him at a comparatively early date a list of the persons who should be compensated. I submit that that is a far better procedure, and will save the Minister a great deal of botheration, as compared with the method used in the Bill which, as your Lordships who have had anything to do with similar problems will be aware, will result in interminable "tribal warfare" in Whitehall before some standard scale is evolved. This will take a considerable time and I may remind your Lordships that, meanwhile, some of the men will have lost their jobs and will be without any means of livelihood. It is a method of achieving justice as simply and as quickly as possible. The only argument which I feel the Government can advance is that it may not achieve exact equality. I submit, however, that no scale can ever achieve final equality between men, because men are not equal. In fact, equality is the enemy of egality. I do not know whether Karl Marx wrote that: he may well have done so. I beg to move.
Amendment moved—
Page 44, line 12, at end insert the said paragraph.—(Lord Hawke.)
THE LORD CHANCELLOR: Clause 34, subsection (3), lays down the manner in which the stockholders' representative is to dispose of the sums he receives from the appropriate Area Boards; that is to say, the net revenue of the undertaker, for the final financial period, less the gross amounts (if any) already paid out by the undertaker by way of debenture interest or interim dividends in respect of that period. The order which is prescribed is as follows: (a) outstanding debenture interests; (b) other interest payments and dividends due up to the vesting date according to the rights of security holders and statutory limitations; and, (c) repayment of the balance (if any) to the appropriate Area Board. This Amendment seeks to interpose between (a) and (b) compensation for loss of office or gratuities to directors or employees authorised by the Minister.

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Similar Amendments were moved in another place, but it was then proposed that payment could be authorised by a general meeting of the company, or by a meeting of the holders of securities of the company, as well as by the Minister. It was claimed that that was on the lines of the provisions of the Transport Act. We did not accept that contention then, even in that form, because we maintained that the position in gas is radically different from that in transport, because in transport any sums so voted by the shareholders would automatically reduce the sums available for dividend, whereas in gas they could be paid out of funds which were surplus to dividend requirements and which were properly, therefore, assets of the Area Boards. It is true that this Amendment meets this objection by limiting payment to sums authorised by the Minister, but it is still not acceptable to the Minister—for this reason. Compensation for loss of office and recognition of past services are adequately covered by the provision in Clauses 57 (Pension Rights) and 59 (Compensation to Officers). Clause 59 says:
"The Minister shall by regulations require every Area Board and the Gas Council to pay, in such cases and to such extent as may be specified in the regulations, compensation to officers of any undertaker.…"
But it does not extend to payment to directors as such. Of course, if a director is an officer of the company, then he receives his compensation as an officer.
LORD HAWKE: May I interrupt? Where does the question of "directors" come in? It is not mentioned in my Amendment. I did not mention the word "directors."
THE LORD CHANCELLOR: That is the whole operation—"any person." All persons are covered by Clauses 57 and 59.
LORD HAWKE: I do not think the noble and learned Viscount heard me correctly. If I had expressed myself currently, he would have heard me say that it is a substitute for Clause 59, as providing a quicker and simpler procedure. I never mentioned "directors" and I do not know how that crept in.
THE LORD CHANCELLOR: It creeps in this way. A director, whatever his other failings may be, is a "person."
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The Amendment which the noble Lord is moving authorises payment of compensation to "any person" whereas Clause 59 authorises payment of compensation to "any officer" I therefore thought that that was the real point of the Amendment, to extend the payment of compensation to directors who were not officers. If it is that, I am certainly not prepared to accept it, because I think we ought to confine compensation to officers of the company, and pension rights to those who have served the company. If there are exceptional cases which are not covered by Clauses 57 and 59, it is open to the companies, under he Bill as now drafted, to approach the Minister for approval to make appropriate payments. And the Minister can approve payment under Clause 36 (1), proviso (iv), or under agreements under Clause 22, subsection (7). We are not prepared to delete Clause 59; we think Clause 59 is a matter of great importance, and we prefer the code which we have in Clauses 57 and 59, which amply safeguard the rights of officers and employees.
VISCOUNT SWINTON: I respectfully agree with the Lord Chancellor about this, that this is not the appropriate way of doing what my noble friend is seeking to do. I am not it all interested in getting payment for a director who is not an executive officer. But I want to be clear about this. It is important that in the right place we should be able to discuss and safeguard the position of what the Lord Chancellor has called customary obligations and what I call customary practices. What I had in mind is that wanted to be sure that a man in the employment of a company, who would have received payment if he had stayed on with the company, should be covered by Clause 57 or Clause 59—whichever is the appropriate clause—not as a matter of grace, but as a matter of right. Providing I am satisfied that that is covered by Clause 57 or Clause 59, I do not think there is anything between us.
THE LORD CHANCELLOR: That is quite right. Whether we call them customary obligations or customary practices I do not think makes any difference. I quite agree with the noble Viscount that the matter should be discussed, to safeguard it. I want to safeguard it as much as he does.
LORD HAWKE: The noble Viscount, Lord Swinton, has dealt with the question of the persons to be covered. Could the noble and learned Viscount give me some assurance on the question of speed? That is a very important element and, as I understand, in the existing nationalised industries there is considerable disgruntlement over the delay in producing these regulations. Perhaps when we come to the clause involving regulations the Lord Chancellor will be able to give us some assurance on that point.
THE LORD CHANCELLOR: I think we are accepting some Amendment on that point, but I entirely agree with the desirability for speed in this matter. Of course, the regulation has to be laid—the noble Lord knows that, and probably desires it—but I entirely agree that we should do this thing speedily. "He gives twice who gives quickly."
LORD HAWKE: My point has been met, and I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
LORD CHORLEY: The next three Amendments, which really go together, are drafting Amendments in order to make quite clear the meaning of the expression "complete financial year." I beg to move.
Amendment moved—
Page 47, line 9, leave out from ("year") to ("before") in line II.—(Lord Chorley.)
On Question, Amendment agreed to.
Amendment moved—
Page 47, line 11, after ("date") insert ("or has not made those payments in respect of either that year or the immediately preceding financial year, being a year ending after the first day of January, nineteen hundred and forty-eight").—(Lord Chorley.)
On Question, Amendment agreed to.
Amendment moved—
Page 47, line 12, after ("or") insert ("as the case may be").—(Lord Chorley.)
On Question, Amendment agreed to.
Clause 34, as amended, agreed to.
Clause 35 agreed to.
Clause 36 [Reopening of transactions resulting in dissipation of assets]:
LORD WOLVERTON: This Amendment is a drafting Amendment. We think
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there is a mistake in the wording, and that where it says "where the arbitration tribunal is satisfied" the last two words ought to read "are satisfied." I beg to move.
Amendment moved—
Page 49, line 20, leave out ("is") and insert ("are").—(Lord Wolverton.)
LORD CHORLEY: It is true that practically throughout the Bill the phrase "arbitration tribunal" is treated as a plural noun. Therefore, I think the noble Lord is quite right and I accept his Amendment.
On Question, Amendment agreed to.
LORD WOLVERTON: This Amendment is to make the clause consistent with the Amendment just accepted, and to make it clear that the onus of proof has to be proved to the satisfaction of the tribunal. We think these words ought to come out and the words on the Order Paper inserted. I beg to move.
Amendment moved—
Page 49, line 22, leave out from ("is") to ("that") in line 23 and insert ("also satisfied").—(Lord Wolverton.)
LORD CHORLEY: My noble and learned friend thinks that these two Amendments may in fact disturb the harmony——
VISCOUNT SWINTON: Of the proceedings?
LORD CHORLEY: No. The noble Viscount will agree that nothing could disturb the harmony of the proceedings—the harmony of the drafting. It may mean that we may have to look at this matter again. If your Lordships will allow me to accept it on that principle, I shall be very glad to do so.
THE LORD CHANCELLOR: May I point out to the noble Lord that what we have now done is this? By accepting this most unhappy first Amendment, if I may call it so, we have made the clause read:
"Where the arbitration tribunal are satisfied that the transaction in respect of which an application is made is a transaction to which this section applies"—
and then
"unless it is also satisfied."
I do not know quite what to do about it, because we have not been consistent. I think this is what we used to call, if

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I remember, the nomen collectivum, which can be either plural or singular. If we are to put the "is's" and the "are's" right all through this Bill, we shall have hundreds of Amendments, which does not make for speed. I think it is very difficult to say, "Where the arbitration tribunal are satisfied," and then "unless it is satisfied." We had better accept it in this form for now, and see whether we can induce the noble Lord to withdraw his first Amendment at a later stage.
VISCOUNT SWINTON: I do not trust the Government about much, but I do trust them over drafting, because they have very competent assistants. I think we should shorten business and produce a less bad Bill if we let them correct the drafting, on the clear understanding that they will not correct anything else.
On Question, Amendment agreed to.
Clause 36, as amended, agreed to.
Clause 37 agreed to.
Clause 38:
Provisions as to foreign investments.
(2) Every such company shall, within such period as may be prescribed, supply to the Minister and the appropriate Board particulars in the prescribed form of all foreign investments of the company, and shall dispose of those investments in such manner and within such period as may be prescribed.
5.58 p.m.
LORD HAWKE LORD HAWKE moved, in subsection (2), after "investments" to insert "or such of them as may be prescribed." The noble Lord said: This is a small and technical Amendment, and for the life of me I do not know whether it is strictly necessary. Clause 38 (2) requires every company to dispose of its foreign investments within such a period as the Minister may prescribe. Clause 38 (5) describes foreign investments as "any assets," and I understand that that description covers patents. There is a possibility that foreign law may not recognise this vesting, and that a transfer in this country to a nominee may be necessary before the vesting. On the other hand, there are certain countries where, apparently, such an act of despoliation as this vesting will be recognised and the transfer will not be necessary. Certain people are disquieted that there seems to be no provision in Clause 38 (2) to let out for transfer such assets on the instructions of the Minister. I beg to move.
Amendment moved—
Page 50, line 38, at end insert ("or such of them as may be prescribed").—(Lord Hawke.).
LORD CHORLEY: I am advised that the noble Lord's doubts as to whether it was in fact necessary or useful to move this Amendment are more than justified, and that the Amendment is, in fact, quire unnecessary. Therefore I hope he will withdraw it.
LORD HAWKE: With that assurance I readily beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
LORD BALFOUR OF INCHRYE LORD BALFOUR OF INCHRYE moved, after Clause 38, to insert the following new clause:
National Associations.
".—(1) All property rights liabilities and obligations which immediately before the vesting date were property rights liabilities and obligations of any National Association shall on the vesting date (notwithstanding any other provision of this Act) vest by virtue of this Act and without further assurance in the Gas Council.
(2) The following provisions of this Act, that is to say, section seventeen (except subsections (1) and (9) thereof) section fifty-seven and section fifty-nine shall with any necessary modifications apply to each National Association and officers of and persons who have been in the employment of that National Association as if that Association were an undertaker to whom Part II of this Act applies and any such officer who suffers loss of employment or loss or diminution of emoluments or pension rights in consequence of the passing of this Act shall be deemed to be an officer who suffers loss of employment or loss or diminution of emoluments or pension rights in consequence of the vesting.
(3) In this Act the expression "National Association" means the British Gas Council, the Federation of Gas Employers, the National Federation of Coke Associations, every constituent Association of the last-named Federation and the Association of Gas Corporations."
The noble Lord said: The purpose of this new clause is to provide that employees of national associations serving the gas industry shall receive compensation for loss of employment or loss or diminution of emoluments or pension rights to the same extent as the employees of gas undertakings which are being acquired under this Bill. The employees of these associations really serve the gas industry in exactly the same way as if they were in the employment of gas undertakings. Indeed, many of these

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employees come from or are seconded from the gas undertakings for duty with the associations. As noble Lords know, these gas associations integrate the activities of all gas undertakings in matters where any co-ordinated or co-operative action is desirable to maintain the supply of gas to the community.
This Amendment provides that the assets and the liabilities of the gas associations shall be taken over by the Gas Council to be set up under the Bill. In another place a somewhat similar Amendment was moved. It did not find favour because it did not contain what I hope will now be an acceptable provision, that the assets of the associations should be taken over by the Gas Council. The Parliamentary Secretary to the Ministry of Fuel and Power said that the Minister would see whether he could not meet the situation in some way or other. He said:
"We are most anxious that the people who have served the industry so well should not be left out on a limb and so not have the advantages which their contributions to the industry generally so richly deserve."
Therefore it is quite clear that the Government are sympathetic to protection being afforded to these men. If they found it difficult in another place to provide that protection, we hope that an Amendment in this form for taking over the assets of these associations will remove that difficulty. I sincerely hope that the Government will feel able, if not to accept this Amendment in its exact words, at any rate to accept it in principle. I beg to move.
Amendment moved—
After Clause 38 insert the said new clause.—(Lord Balfour of Inchrye.)
THE LORD CHANCELLOR: I think the noble Lord has a point here and I believe I can meet him. I will accept this Amendment in principle but I must consider the drafting, which is not quite right. In particular, we shall have to have some provision equivalent to a disclaimer of contracts applying here as in the other cases. If the noble Lord will withdraw his Amendment, I will put down a suitable clause on the Report stage.
LORD BALFOUR OF INCHRYE: I am grateful to the noble and learned Viscount. I am sure that the action of the Government will bring a feeling of relief
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and satisfaction to many of these employees. On the assurance which the noble and learned Viscount has given, I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
Clause 39 agreed to.
6.7 p.m.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, after Clause 39 to insert the following new clause:
Modification of enactments in relation to undertakers pending transfer.
"(1) Section 150 of the Companies Act, 1948 (which requires that, in the case of a company having subsidiaries at the end of its financial year, group accounts within the meaning of that section shall be laid before the company) shall not apply in the case of a company which is a gas holding company, a statutory undertaker or a non-statutory undertaker; and the group accounts of a holding company, not being an undertaker to whom Part II of this Act applies, need not deal with a subsidiary which is a gas holding company, a statutory undertaker or a non-statutory undertaker.
(2) The Minister may by order provide for the modification of any local enactment which—

(a) requires the number of directors of any company, being an undertaker to whom Part II of this Act applies, to be not less than a specified number;

(b) specifies the number of directors of any such company required to constitute a quorum; or

(c) requires a director of any such company to hold securities of the company."

The noble and learned Viscount said: We have recently passed a Companies Act containing new and rather drastic provisions and requirements with regard, among other things, to the form of accounts. The accounts of gas companies have, I understand, always been rather peculiar—at any rate sui generis—and it seems a pity that in order simply to deal with the last period they should have to go through all the trouble and formality of recasting their previous practice. Therefore the object of this clause is to exempt them from the requirements of Section 150 of the Companies Act. There is another section of that Act—Section 149—which deals with the form of accounts. Section 149, however, has its own escape clause. That is to say, the President of the Board of Trade may:
"…on the application or with the consent of a company's directors, modify in relation to that company any requirements of this Act as to the matters to be stated in a company's balance sheet or profit and loss account…"

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Companies having subsidiaries are similarly required to see that the balance sheet and profit and loss account give a free and fair picture of the companies concerned. Therefore we need not put it in Section 149, which has its own escape clause; but we do want to put it in Section 150. Section 150 requires that any company having subsidiaries should prepare group accounts, and so on; and, as I have said, we think that that would be too severe an obligation to place on these companies at this time. I beg to move.
Amendment moved—
After Clause 39, insert the said new clause.—(The Lord Chancellor.)
VISCOUNT SWINTON: This is certainly a very sensible provision. I wonder, however, whether it would not be better to put in Section 149, which puts an obligation upon companies; then, if they want to keep out, they would have to make application to the Board of Trade. Surely, what we want here is that the gas companies will sing their "swan song" in the way they have been accustomed to singing their song in the past. I should have thought the simple thing was to say that neither of these clauses was to apply to them; then the existing law which governs them will enable them to produce their accounts in the form in which they have always produced them. Otherwise, it is possible that all of them—perhaps 2,500—will be writing to the Board of Trade for a permit to escape from Section 149, which they could get automatically. If the Lord Chancellor will look at this between now and Report stage he may be able to make it a little simpler.
THE LORD CHANCELLOR: I will certainly look at it.
LORD RENNELL: In the case of a company that is continuing, I suppose the provisions of the Companies Act will be applicable to their case.
THE LORD CHANCELLOR: I will look at that also.
On Question, Amendment agreed to.
Clause 40:
Revenues of Area Boards and Gas Council to be sufficient to meet outgoings.
40.—(1) It shall be the duty of each Area Board so to exercise and perform their functions under this Act as to secure that the
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revenues of the Board are not less than sufficient to meet their outgoings properly chargeable to revenue account, taking one year with another.
LORD TEYNHAM LORD TEYNHAM moved to add to subsection (1)
"and if and so long as they exercise their powers to manufacture plant, gas fittings or coke fittings, they shall so exercise those powers as to secure that the, revenues arising from such exercise are not less than sufficient to meet their outgoings in respect thereof properly chargeable to revenue account, taking one year with another."
The noble Lord said: If your Lordships will turn to Clause 1, subsection (2) (d) you will see that it says that the Area Board can supply gas fittings and coke fittings; and paragraph (e) says that they may do so after consultation with the Gas Council. They may also manufacture gas plants. The object of this Amendment is to ensure that in cases where Area Boards do exercise these powers they shall do so only on a financially economic basis, so that the revenue obtained covers expenditure.
I think it will be clear to your Lordships that, if the business of manufacturing these fittings and plant and so on by an Area Board is run at a loss, this loss would have to be subsidised from a sale of gas. I think that this would impose a further burden upon the gas consumers. I suggest that the Bill should be so drafted, wherever possible, as to ensure that the obligation of Area Boards to provide a cheap and plentiful supply of gas is made of first importance. This Amendment will prevent Area Boards from subsidising their manufacture of fittings and thereby perhaps wasting money which might be applied to the provision of gas. I beg to move.
Amendment moved—
Page 52, line 45, at end insert the said words.—(Lord Teynham.)
THE LORD CHANCELLOR: I think that this Amendment is right. If the Area Boards are going in for manufacture, they ought not to subsidise it out of the price of gas. I will accept this Amendment.
LORD TEYNHAM: I am grateful to the noble and learned Viscount for accepting it.
On Question, Amendment agreed to.
Clause 40, as amended, agreed to.
Clauses 41 to 44 agreed to.
Clause 45:
Central guarantee fund.
(4) All moneys in the central guarantee fund which are not for the time being required to be applied for the purposes of the fund shall be invested in such, securities of the Government of the United Kingdom or such securities guaranteed by the Treasury as may be determined by the Gas Council with the approval of the Minister and the Treasury.
LORD HAWKE LORD HAWKE moved, in subsection (4) to omit all words after and including "such securities" and to insert "Trustee Securities." The noble Lord said: I beg to move the Amendment standing in the name of my noble friend Lord Bridgeman and myself. This is a very simple Amendment, and I hope the Government will see fit to accept it. As the Bill stands, the central guarantee fund has to be invested
"in such securities of the Government of the United Kingdom or such securities guaranteed by the Treasury as may be determined by the Gas Council with the approval of the Minister and the Treasury."
We seek merely to substitute for this the bald statement that it should be put into trustee securities. The Government, rightly, are proceeding on the principle of decentralisation and autonomy in these matters. I think that this authority ought to be allowed to have control of its own financial affairs. If by wise investment it can make a little money, let it do so. If, on the other hand, through bad management it succeeds in losing money, let it do so, and get rid of the management. Above all, let it be as free as possible from the Minister and the Treasury. I beg to move.
Amendment moved—
Page 57, line 46, leave out from ("in") to the end of the subsection, and insert ("Trustee Securities").—(Lord Hawke.)
THE LORD CHANCELLOR: I am sorry that I cannot meet the noble Lord in this matter. Of course, we are dealing here with the central guarantee fund which is to be established by the Gas Council and which is to be supported and maintained by the Area Boards and by such profits as the Gas Council may make—if any—out of their manufacturing activities, if they do manufacture. The money is to be there to serve as a first line of defence in support of the guarantee which the Treasury are giving, so
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that, if the Treasury do have to pay up under their guarantee, there shall be a fund available to which they can look for reimbursement. That being so, it seems to us that it is only reasonable to limit the field of investment to Government securities and Government-guaranteed securities. That is exactly what we had in Section 24 (4) of the Coal Act of 1938. It was not the wicked machinations of a Socialist Government in those days. That strictly limited the investment of the Coal Commission Reserve Fund to Government securities and Government-guaranteed securities. We feel that as the guarantee fund is to provide backing for payment of interest on stock guaranteed by the Treasury, it is essential to have the field of investment limited as it is in the Bill. I am sorry that we cannot accept this Amendment.
VISCOUNT SWINTON: I do not feel at all happy about that answer. It is not as if the Area Boards or the Gas Council are being encouraged to invest in gambling ventures at all. The proposition is that this trust fund must be invested in trustee securities. What the noble and learned Viscount the Lord Chancellor has said is: "Because the Treasury are guaranteeing it, therefore it must be invested in Government securities." I cannot see that that fund will necessarily be safer if it is invested in Government securities than if it is invested in other trustee securities. I do not think that it would have been a profoundly wise investment, either in the interests of the benficiaries under the fund or the Treasury who may be called to guarantee it, for a trust fund to have been invested in "Daltons." It certainly would have been very much reduced in value. It would have been much wiser to say: "Let this trust fund be treated like other trust funds, like the other reserve funds of these undertakings." It is right that it should be limited to trustee securities—but within limits. As I understand it, the Gas Council have the management of this fund. It is not the Treasury who are to manage it. Is that not right?
THE LORD CHANCELLOR: That is right.
VISCOUNT SWINTON: It seems to me that it is an elementary function of the

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management to handle this reserve fund—because this is a reserve fund for a special purpose. I cannot see why providing that the investment is in approved trustee securities, they should in this case be limited to Government stocks. I believe that there is an erroneous principle here. I am rather anxious about this being cited as a precedent. Perhaps it was done in 1938, and we may have been responsible for it. But that is not a reason for doing it for all time. After all, there are many other things which were done in 1938 which the Government do not necessarily follow. We did not get a great deal of help from them over some of the things which were done or undone. However, on this rather limited clause, I am not going to debate that that precedent is one which we ought necessarily to follow.
This is a question of principle, and I think three points are involved. It is the function of management of the Boards and the Gas Council to manage their own funds. I do not think that we ought to go into this question of whether the Treasury, directly or through the hands of the Minister, or through their created Boards, can lay their hands on the money and say "All the money so affected has
Resolved in the negative, and Amendment agreed to accordingly.
LORD HAWKE LORD HAWKE moved, in subsection (6) to leave out "at least." The noble Lord said: This is very simple Amend-
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got to go into Government funds in order to bolster up Government funds." There ought to be a discretion. I do not think the clause as drafted is reasonable, because this system may be followed with much wider funds. I do not think that it is reasonable vis-à-vis other borrowers on trustee securities. All those Corporations are having their undertakings taken away from them. Many of the Corporations are sound financially, and I do not see why the stocks of a good Corporation should not be invested in the way now proposed. It may be a wise move to invest this fund or part of it in securities which have an early, or relatively early or varying date of maturity, but why should it be limited to Government funds? I think there is a good deal in this, and that the right thing, the normal thing, ought to be done—namely, that a trust fund should be invested in trustee securities, and that those who have the management of the fund should have a discretion as to what trustee security they invest in.
On Question, Whether the words proposed to be omitted shall stand part of the clause?
Their Lordships divided: Contents, 14; Not-Contents, 40.

CONTENTS

Jowitt, V. (L. Chancellor.)

Ammon, L. [Teller.]

Henderson, L.

Amwell, L.

Holden, L.

Huntingdon, E.

Chorley, L.

Kershaw, L.

Crook, L.

Lucas of Chilworth, L.

Hall, V.

Darwen, L.

Marley, L.

Walkden, L. [Teller.]

NOT-CONTENTS

Cholmondeley, M.

Aberconway, L.

Llewellin, L.

Salisbury, M.

Altrincham, L.

Lloyd, L.

Balfour of Inchrye, L.

Montagu of Beaulieu, L.

Fortescue, E. [Teller]

Belstead, L.

Moyne, L.

Lindsay, E.

Carrington, L. [Teller.]

Newall, L.

Onslow, E.

Clanwilliam, L. (E. Clanwilliam.)

O'Hagan, L.

Selkirk, E.

Oxenfoord, L.(E. Stair.)

Clydesmuir, L.

Rochdale, L

Buckmaster, V.

Courtauld-Thomson, L.

Shute, L.(V. Barrington.)

Cecil of Chelwood, V.

Denham, L.

Strathcona and Mount Royal, L.

FitzAlan of Derwent, V.

Fairlie, L. (E. Glasgow.)

Monsell, V.

Hacking, L.

Templemore, L.

Ridley, V.

Hampton, L.

Teynham, L.

Swinton, V.

Hawke, L.

Wardington, L.

Hylton, L.

Wolverton, L.

ment. The Bill provides that if an Area Board fail to meet the interest charges on their share of Gas Stock, the Minister puts the brokers in; and he can put them in for a period at least until the Area

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Board is fulfilling its obligations again. We are seeking to exclude the words "at least," so that as soon as the Area Board have become solvent and can meet their proper obligations the Minister's control should be lifted. I beg to move.
Amendment moved—
Page 58, line 18, leave out ("at least").—(Lord Hawke.)
THE LORD CHANCELLOR: I am afraid that I cannot accept this Amendment; I think it would be a bad one. The clause as drafted provides not a maximum period but a minimum period. I might point out to your Lordships that if an Area Board were to default on their capital obligations it would be a very serious thing. In all probability they would have had to resort to all sorts of expedients, some wise and some foolish, before actually admitting a default. I am all in favour of removing the control as soon as possible, but it does not necessarily follow that the moment to remove the control is the moment when a Board have put themselves right again. They may require some little control for a time after that, in order to make sure that they keep to the straight and narrow path to which, on this hypothesis, they would have just got back. You may want to see that thereafter they are advancing in the right direction. I do not say that you will, but you may want to do so. This Amendment proceeds to fix the maximum period of control. Directly the auditor said things were all right again, all controls would have to be removed. I do not think that would be wise. A Board that have fallen into this grave position would probably have something badly the matter with them. I am not prepared to say that the moment an auditor gives his certificate all leading strings should go. It should be left to the discretion of the Gas Council to decide whether or not the time has come when they can remove all control. It is undoubtedly desirable to remove control as soon as it is reasonably safe to do so.
VISCOUNT SWINTON: I think there is reason in what the noble and learned Viscount the Lord Chancellor has said, but I should draw rather a different conclusion as to what should be done when one of these bodies had fallen into grievous sin. My idea would be to remove the management and put in a better one,
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giving them directions as to how they should conduct their business. I see a certain difficulty about that, however, because I suppose persons are to be appointed to these bodies for a term of years. It may be said that, with this kind of Government control, unless people are given an appointment for a term of years they are given no security and that if a man may be removed at the will of the Minister you will not get good people to act on these Boards. That is one of the dangers of going in for this kind of business. The ordinary principle in private enterprise, which is so much looked down upon in some quarters, is that the directors of a concern have to be elected by the shareholders. Some of them, it is true, are elected for a term of years, but always some directors come up for re-election every year. If a receiver has been appointed to take over a business, the directors who are responsible for so conducting their affairs that that receiver has been put in are apt not to be re-elected. I confess that I find myself in a dilemma here. I am inclined to agree with the Lord Chancellor, but I do not think that he has produced the right remedy. I think he would agree that you do not want to put in the Treasury as receivers; what is really wanted, if the management proves incompetent, is to get competent management. What I would like to know is, how is that going to be done in a case like this?
I would venture to make a suggestion. I do not know whether what I am going to suggest can be done under this clause, but I suggest that it is worth considering in this connection before the Report stage. When the affairs of a Board have got into the state described, the position is that the business has gone bankrupt. As I have said, I would agree, in the first instance, that you must appoint members of the Boards for a term of years—whatever term is regarded as necessary. But if they prove grossly incompetent, and get their business into this kind of mess, I think there ought to be power for the Minister, or whoever is responsible for making these appointments, to step in and get rid of all or any of the Board, and appoint a new lot. I do not believe that such a power would deter good men from taking appointments on these bodies. What would deter good men would be the prospect of a Minister

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coming into office who did not like the look of them, who regarded them as vermin, and said, "Out you go." That is a possibility against which business men want to be safeguarded. They do not mind the word "vermin" being used as a term of abuse—in fact, coming from certain quarters they probably regard it as a compliment. But if that abuse can be translated into action, and people can be removed because a Minister does not like the colour of their politics, or the colour of their complexions, then you will not get good men. They must have security of tenure. But it could be laid down that the Minister Should be able to say to them: "If you conduct the business so badly that it goes bankrupt, I am going to get rid of you and put in someone else who will run it properly." I think we ought to consider whether the Minister should have that power to act in that way if a business goes bankrupt.
THE LORD CHANCELLOR: I have always understood that the trouble with vermin is that if you say to them "Out you go," they do not go.
The question of the tenure of office of directors will be dealt with by regulations made under the Bill. I quite see that there is force in what the noble Viscount has said. On the one hand, it must be made clear that we do not so frame our regulations as to make any director think he may be dismissed at the mere arbitrary whim of the Minister. If directors were led to think that, you would never get good people to join at all. On the other hand, it should be possible so to frame regulations as to have a different standard altogether, if directors should fall down in this way. A falling down of this kind would be a very bad one, and I think that, if it did happen, it would probably be a matter to be dealt with by regulation made under the Bill.
LORD RENNELL: I think a distinction should be made here. I agree that the terms of the appointment and termination of office of directors on a Board should be laid down in the regulations. They are the appropriate place in which to define how the appointments are made, and how the terms of office come to an end. But the removal of directors is not a subject which, in my submission, ought to be dealt with in regulations. I feel strongly, as Lord Swinton has said, that where a
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Board have been so derelict in their duties as to allow their enterprise to fall into bankruptcy, the Minister should have the statutory power to get rid of them and to appoint a new Board. As I have said, I quite agree that regulations should be drawn setting out the normal conditions for appointment and termination of office, but the removal of directors for the reasons mentioned is not a normal matter.
LORD HAWKE: Our discussion has certainly ranged over a far more important subject than the one which I raised. I realise that my Amendment is probably not appropriate, and I beg leave to withdraw it.
Amendment, by leave, withdrawn.
Clause 45, as amended, agreed to.
Clause 46:
Reserve funds of Area Boards and Gas Council.
(2) The Area Board or the Gas Council, as the case may be, shall contribute to the said fund to such extent as they may determine, and the management of the said fund and the application of the moneys comprised therein shall be such as they may determine:
Provided that—
LORD HAWKE LORD HAWKE moved, in subsection (2), at the beginning of the proviso to insert:
"(a) the amount which, may be transferred to the reserve fund of any Area Board, or of the Gas Council, as the case may be, shall not in any financial year exceed one per centum of the revenue of that Board, or the Gas Council, during the previous financial year, and the amount of any such reserve fund shall not at any time exceed five per centum of the amount of British Gas Stock for which the responsibility is for the time being allocated to that Board or the Gas Council."
The noble Lord said: The gas industry is somewhat peculiar in that it is largely based on structures devised by our grandfathers who were very solicitous of the interests of the consumer. The result is that in its framework protection for the consumer bulks extremely large. In the matter of reserve funds, as a general rule the statutory undertakings had limitations placed on what they could put to those funds, because it was known that such funds came out of the price of gas. Now in the Bill as it is drafted at present there is no limit, so far as I can see, to the amount which the Area Boards can screw out of the public on gas, coke or anything else, and put to their reserve funds. That may be a sound business principle,

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but when one comes to examine who has control over the reserve funds certain objections tend to arise. It is the Minister who really controls the reserve funds, because he can tell the Area Boards precisely what they can put to reserve, and how they are to spend the money.
We live in an age of a planned economy. I think on both sides of the House we are committed to some form of a planned economy, greater or smaller. In that planned economy the Budget is the main instrument. I submit that if it is desirable to budget for deficits or surpluses, as it may well be, the proper way to do it is openly and squarely in the Budget, disclosing to the world what you are doing. These nationalisation Bills, with their various reserve funds, and so on, give the Chancellor of the Exchequer a magnificent opportunity for manipulating what is, in effect, his central Budget, by instructions to his agencies in these areas. Our Amendment seeks to guard against such an eventuality in the case of the gas industry by laying down a limit to the amount which can be taken out of the consumers' pockets for gas and put into the area reserve funds on instructions from the Minister. I beg to move.
Amendment moved—
Page 58, line 32, at end, insert the said paragraph.—(Lord Hawke.)
THE LORD CHANCELLOR: I must say I am entirely opposed to this Amendment. I think it is essential that these Area Boards should have the sense of responsibility that comes from being able to manage their own affairs. I want them to be independent; I want them to be able to stand on their own feet. I welcome the fact that they will decide what reserve funds they may put by. I am not myself frightened that they will put by too much in that way. I am much more frightened that they will put by too little for reserve, because I think public pressure will be brought to bear upon them, through the consumers' council, and all that sort of thing, and they may not pursue a wise or what is called a conservative policy in this regard, which would be a pity. On the other hand, the risk is there, I agree, that they might build up colossal funds and continue to charge the consumers high prices for their gas.
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For this very reason it was felt that the Minister should have a power to intervene. In Clause 46 (2) (b), the Minister is given power in regard to this matter to give a direction, even though it is a specific and not a general direction, in order to guard against these people treating their consumers unfairly and disregarding the wishes of their consumers' council. But, subject to that qualification upon their powers, I am entirely opposed to subjecting these Area Boards to this rigidity. The 1 per cent., the 5 per cent., and all the rest of it, are, after all, purely arbitrary figures. I am sure the noble Lord will agree with that. I think this is departing from the principle of the Bill, to which I attach great importance—namely, the making of these Boards really autonomous units. Therefore I am opposed in principle to this Amendment.
VISCOUNT SWINTON: I am afraid that for once I find myself more in agreement with the Lord Chancellor than with my noble friend. Perhaps, therefore, I am wrong. The Boards could not, as I understand it, pile up undisclosed reserves. Under some clause in the Bill (which is a good clause in the form in which we settled it) accounts have to be kept in accordance with the best commercial standards. That means, by implication, that all the provisions we have put into the company law will apply. As I understand it, that means that the reserves will have to be completely disclosed and the public will know exactly what the reserves are. In view of that, and the fact that there will be pressure for gas to be supplied as cheaply as possible, I think we ought to let these bodies have that discretion. We have been pressing a great deal in other clauses for their discretion and their independence in management. Although consistency is not the test of all English policies, yet sometimes one should be consistent.
LORD HAWKE: Nobody wishes more than I do to see the Area Boards autonomous and independent. In fact, His Majesty's Government have adopted the principle of an Amendment which I moved to the Electricity Bill on this very subject, on which I received great support from my noble friend Lord Ridley, but, I think, from no one else. My chief quarrel here is that the Boards are not autonomous. It is the Minister who runs the reserve funds. I maintain that the

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Minister can, if he wishes to do so, on instructions from his colleague the Chancellor of the Exchequer, pile up a very considerable Budget surplus. However, the opinion of the Committee is against me, and I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
VISCOUNT SWINTON: The next Amendment in the names of my noble friends Lord Hawke and Lord Bridgeman is consequential on a principle which we have already adopted. I beg to move.
Amendment moved—
Page 58, line 48, at end insert—
"(3) All moneys in the general reserve fund of each Area Board and the Gas Council which are not for the time required to be applied for the purposes of the fund shall be invested in Trustee Securities."—(Viscount Swinton.)
THE LORD CHANCELLOR: I do not treat this at all as a consequential Amendment. It seems to me to deal with a very different matter. The fund with which we were dealing before is the contingency fund under the control of the Gas Council, which is met by contributions from the Area Boards; it has to be built up to the tune of £5,000,000, and is available to meet the Treasury if the Treasury are called upon under the guarantee. That is the previous fund with which we dealt. This is a wholly different fund. This is the ordinary general reserve fund of each Area Board. The Amendment as drawn would be absolutely unworkable. The Area Board want to keep some liquid cash with their bankers. They could not do that. This, again, departs entirely from the principle of giving the Area Boards autonomy in their own concerns. They have complete discretion to do what they like with their general reserve fund. We really cannot accept this Amendment. This is quite a different fund from the last one, and it is quite a different principle. Do give the Area Boards discretion to do what they like in regard to this reserve fund. Whether you do that or not, at any rate, do not do anything so foolish as to prevent them from keeping even sixpence at the bank. This Amendment is absolutely impossible.
VISCOUNT SWINTON: I am convinced by the Lord Chancellor on that last point. I will indicate where I had some anxiety about this matter—anxiety which I think
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the noble and learned Viscount has now allayed by what he has said. Your Lordships will see that as regards this reserve fund the Minister can give complete directions if he wishes. The Bill says that the power to give direction shall extend
"to any matter relating to the establishment of a reserve fund…the management thereof, the carrying of sums to the credit thereof, or the application thereof, notwithstanding the directions may be of a specific character."
Frankly under that provision the Minister would have power to say to every one of these Boards, "You shall invest the whole of your reserve fund (less, of course, the money that you wish to keep liquid in the bank) in Government securities." It was for that reason that I said the Amendment was in a sense consequential. The Lord Chancellor has said it is the intention that these Boards shall be perfectly free to invest their funds as they please, and from that I take it that there will be no specific direction to them as to how they shall invest their reserve funds.
THE LORD CHANCELLOR: The noble Viscount will observe subsection (3) at the top of page 59, which has regard to provision for replacements for other purposes. That makes them free from the Minister's control.
LORD RENNELL: There is one point which is not quite clear to me. I think it is perfectly right that this Amendment has nothing whatever to do with the previous one which was not pressed. What we are talking about here is a reserve fund in the area and the purposes for which the fund may be used, which are defined in the first part of Clause 46. In fact, the Area Board can do what they like within the limits of subsection (1) which deals with the use of some of their funds to manufacture plant, gas fittings or coke fittings; and the other matters are laid down in subsection (2). The object of making this reserve fund, as I see it, is to have a fund of money out of which to make payments in certain eventualities. If complete discretion were given to the Area Boards to invest the monies they have, not only in the manufacture of plant, gas fittings or coke fittings, but, for instance (as does happen), in more gas works or mains, that would not provide a liquid fund. What I think is intended here is that, broadly speaking, each fund should be maintained in negotiable securities or cash but should not be used

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otherwise than as laid down in subsection (1); it should not be used in such a form as would not make funds available in cash for the purposes for which the fund was created. In other words, there should be a fund of money in securities and not a reserve invested in the Board's own business.
THE LORD CHANCELLOR: I should have thought that that is a matter for business-men who understand the industry, and I do not. Of course, there must be considerable liquid reserves, but I suppose you should be able to build up your reserves and use a substantial part of those reserves by ploughing them back into the business, building new gas works or retorts or whatever has to be built. It obviously is a matter of sense that you would wish to build up considerable liquid resources. But your Lordships will see the words "appropriate replacements or other purposes" on page 59. That provision obviously contemplates liquid reserves because you cannot deal with replacements unless you have liquid reserves.
LORD RENNELL: I thought it only proper for the Board not to use this reserve fund by ploughing it back into the business. The whole object of a reserve fund is to keep it in liquid form.
LORD HAWKE: I think the main object of the Amendment is to secure that the Area Boards are not ordered by the Minister under Clause 56 (b) to put their funds into some specific Government stock. If the noble Lord would be prepared to accept some Amendment like "shall be held in Trustee Securities and cash," I think that would be sufficient.
THE LORD CHANCELLOR: No, certainly not. We are going to have good business men to manage this fund, not lawyers, and they know far more about it than I do.
LORD HAWKE: I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
Clause 46 agreed to.
6.57 p.m.
LORD TEYNHAM LORD TEYNHAM moved, after Clause 46, to insert the following new clause:
"Any surplus income of an Area Board after meeting outgoings properly chargeable to
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revenue account, taking one year with another, and after maintaining a general reserve in accordance with the provisions of this Act shall be applied in reduction of the price of gas charged to consumers within the area of such Area Board."
The noble Lord said: I venture to draw your attenton to the great importance of setting out in this Bill the obligation of Area Boards to produce a cheap and plentiful supply of gas. This Amendment is very simple, and has been put down to ensure that the surplus income of an Area Board, after meeting proper outgoings, will be applied to reduce the price of gas. It is not intended that a small surplus should be applied to this end, but it would obviously be improper for an Area Board to build up a large surplus without reducing the price of gas. For this reason I am not entirely satisfied with the wording of the Amendment and propose, if His Majesty's Government agree to the principle of the Amendment, formally to move the Amendment so that, if the principle is agreed, the Amendment can be withdrawn and redrafted at a later stage. I beg to move.
Amendment moved—
After Clause 46 insert the said new clause.—(Lord Teynham.)
LORD CHORLEY: I am afraid that we cannot agree to this in principle. The argument against it is exactly the same as that which my noble and learned friend has just been putting before your Lordships in respect of the last Amendment. In other words, this unduly fetters the discretion of the Area Boards. The Area Boards have to conduct their business like business men; no business men should be tied down in the way that this Amendment would tie them down and, as I understand it, is aimed to tie them down. I am rather surprised to see the name of the noble Viscount associated with this particular Amendment because he is on our side, so to speak, in respect of the cardinal principle of preserving the autonomy of Area Boards. If the Amendment were accepted, the Area Boards would be obliged to apply any surplus remaining after satisfying previous deficiencies to price reduction. I am sure that your Lordships will agree that the proper business policy requires the matter to be looked at over a period of time. It might well be that after a period of lean years the Area Board would, properly and

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sensibly, come to the conclusion that one "fat" year did not in fact justify an immediate reduction. It would lead them into difficulties which, I am sure your Lordships would agree, a competent board of business men would not expect to have placed upon them by any Amendment of this kind.
VISCOUNT SWINTON: I think there are two principles here. The first principle, which the Government have already accepted, and which has been put in as one of the duties of the Area Board—I think the Lord Chancellor is to recast it, and put it into more satisfactory form—was a positive direction upon the Area Board that they had to sell gas as cheaply as they could. That is good. That which comes at the beginning is the overriding direction, the binding provision. I am bound to say that if they created either an excessive reserve—they have to have a prudent reserve—or they have an enormous carry-forward, which is unnecessary, then I think they would be guilty of a breach of the main directive to them. I admit that I do not think I have drafted this clause very happily, because, taken literally, it would mean that if an Area Board ended up with a balance of £500, they would have to apply that to reducing the cost of gas. I do not know quite how they would do it. They may end up with a balance of £50,000 or a balance of £5. Obviously, if they end up with £they will carry it forward, but if they end up with £50,000 they ought to apply that to reducing the price of gas. The Government having agreed at the beginning that these Boards have to sell gas as cheaply as they can, I am inclined to agree that this is unnecessary.
LORD CHORLEY: I am obliged to the noble Viscount. I might add that if the Area Board did pursue the absurd policy which this Amendment envisages, then when they presented their accounts to Parliament a considerable amount of criticism would soon be brought to bear upon them, which I think it most unlikely they would be able to withstand.
LORD TEYNHAM: I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
Clause 47 agreed to.
Clause 48:
Sums which are to be chargeable to revenue account.
48. Each Area Board and the Gas Council shall charge to revenue account in every year all charges which are proper to be mace to revenue account, including, in particular, proper allocations to the central guarantee fund and to any reserve fund kept by the Board or Council under section forty-six of this Act, proper provision for the redemption of capital and proper provision for depreciation of assets or for renewal of assets, and all payments (including the payments which al.?, by the relevant provisions of this Act, or by any other relevant enactment, to be deemed to be capital payments) which fall to be mace in that year to any local authority under Part II of this Act in respect of any loan or advance of that local authority, and references in this Act to outgoings properly chargeable to revenue account shall be construed accordingly.
Loran LLOYD Loran LLOYD moved to omit "including, in particular, proper allocations to the central guarantee fund and to any reserve fund kept by the Board or Council under section forty-six of this Act" and to insert:
"as respects each of the main activities of the Board or of the Council including."
The noble Lord said: This is quite a simple Amendment, but it is not unimportant. One of the things which I am sure noble Lords on all sides of the House would desire is that, once these industries are nationalised, the public as a whole should be able to see every year exactly how their nationalised industry is doing, and that the accounts and records available should be perfectly clear. All this Amendment seeks to put into the Bill is that, when we are dealing—as we are in this clause—with revenue, the way the revenue is charged to the various activities of the Board should be clearly shown in the accounts. That is the object of this Amendment, and it seems to me a worthy one. I hope the noble Lord will be ready to accept it. I beg to move.
Amendment moved—
Page 59, line 22, leave out from ("account") to ("proper") in line 25, and insert ("as respects each of the main activities of the Board or of the Council including").—(Lord Lloyd.)
LORD CHORLEY: I think this Amendment is unnecessary. It does not add anything to what is there already. In the circumstances, I hope the noble Lord will not press the Amendment.
LORD HAWKE: Would the noble Lord say exactly where it is there already? I

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hoped that at long last the well-known stone-wailer was going to open his shoulders and let us have one.
VISCOUNT SWINTON: May I suggest to the noble Lord that if he would look a little further ahead—perhaps he has not got so far in his homework—he will see in Clause 49 the provision that the accounts are to be kept in the best commercial manner, and the form of the statement shall be such as to secure the approval of the Treasury.
LORD CHORLEY: Yes, that is it.
LORD LLOYD: I am grateful to the noble Viscount for having read his homework better than I have. I had not got so far last night. In the circumstances, I beg leave to withdraw my Amendment.
Amendment, by leave withdrawn.
LORD LLOYD: This Amendment is a drafting Amendment. If your Lordships will look at Clause 46 (1) you will see that the Gas Council or the Area Board can establish only one general reserve fund. Therefore, it obviously does not make any sense to say that they should charge things to "any reserve fund." I beg to move.
Amendment moved—
Page 59, line 23, leave out ("any") and insert ("the").—(Lord Lloyd.)
LORD CHORLEY: This Amendment is misconceived, if the noble Lord will allow me to say so. It is in fact correct to use the phrase, "any reserve fund," because it is referring not only to the Board but also to the Council. The Council will not have a fund unless they actually embark upon the process of manufacture or something of that kind. In the circumstances, I think the noble Lord will see that the word "any" is the right word.
LORD LLOYD: Perhaps the noble Lord has read it rather better than I. As I read the Bill it says:
"…all charges which are proper to be made to revenue account, including, in particular, proper allocations to the central guarantee fund…
which I understood was the fund for the Gas Council—
"and to any reserve fund…"
When I look at Clause 46 I see:
"…the Gas Council shall establish and maintain a general reserve fund for the
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purposes of the Area Board or the Gas Council as the case may be."
I do not quite follow the noble Lord.
LORD CHORLEY: "As the case may be." They might not have to. Therefore, the noble Lord will see that the word "any" is correct.
LORD LLOYD: It is a small drafting point which, if the noble Lord feels strongly about it, I do not think we should pursue. I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
7.8 p.m.
LORD TEYNHAM LORD TEYNHAM moved, after "assets" (where that word first occurs) to insert:
"in accordance with a uniform scale prescribed by the Minister after consultation with the Gas Council."
The noble Lord said: The object of this Amendment is to ensure that the Area Boards should make use of a uniform scale of depreciation. Otherwise, of course, it might be possible for Area Boards to adjust their depreciation and perhaps balance their budgets. We, on this side, are in favour of having Area Boards as little controlled as possible, but we think that the Bill should be drafted to prevent any misuse of depreciation. I beg to move.
Amendment moved—
Page 59, line 26, after ("assets") insert ("in accordance with a uniform scale prescribed by the Minister after consultation with the Gas Council").—(Lord Teynham.)
LORD CHORLEY: The only point here is whether there should be a uniform scale prescribed by the Minister. I think it is agreed by everybody that there should be uniformity in this matter. Indeed, when this particular point was brought up in another place, the Minister agreed that uniformity was desirable, and that the only question was whether the method should be prescribed or whether it would not be better to leave it to the Gas Council. The Minister gave a promise that he would discuss it with the Chairman designate of the Council. As your Lordships are aware, Mr. Sylvester, who for many years was associated with the Gas Light and Coke Company, has been designated. He is, I believe, an accountant by profession. He has been consulted about this matter, and he of course agrees

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that a reasonable degree of uniformity is very necessary and proper in respect of this particular matter. On the other hand, in the existing gas industry there are considerable divergencies, and it would obviously entail a lengthy and technical inquiry in order to establish a uniform system. Mr. Sylvester's view is that the matter would be much better left to the Council to deal with. I hope that the noble Lord will think that that is a sensible view, and not press his Amendment.
LORD TEYNHAM: In view of the noble Lord's explanation and assurance, I beg leave withdraw my Amendment.
Amendment, by leave, withdrawn.
Clause 48 agreed to.
Clauses 49 and 50 agreed to
Clause 51:
Provisions as to supply of gas by persons other than Area Boards.
(5) Any question arising under this section as to whether, or as to the extent to which, it is reasonably practicable and economical for an Area Board to buy a supply of gas, or as to the terms and conditions on which the supply is to be given, shall be referred for inquiry and report to a person appointed by the Minister after consultation with the Lord Chancellor or, in the case of the Scottish Gas Board, after consultation with the Secretary of State, and shall be determined by the Minister after considering the report of the said person.
7.12 p.m.
LORD CHORLEY LORD CHORLEY moved, after subsection (4) to insert:
"(5) Where any requirement is made under subsection (2) or subsection (3) of this section, any pipes or other plant or gas fittings which the person who is to sell gas to the Area Board uses or holds for the purpose of the supply of gas manufactured by him and which will, in consequence of the said requirement, no longer be required by him, but not including any pipes, plant or fittings which it is not reasonably practicable and economical for the Area Board to take over, shall, if either the Area Board or the said person so requires, be transferred to the Area Board."
The noble Lord said: There are two Amendments to this clause which go together. Subsections (2) and (3) of Clause 51 deal with the disposal of gas manufactured at works—for example, iron and steel works which are not nationalised under the Bill—which is surplus to the needs of that works. Under subsection (2) the owners of the works can require the Area Board to take their surplus gas
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if it is reasonably practical and economical for the Area Board to do so; and under subsection (3) the Area Board can require the surplus gas to be supplied to them.
The new subsection proposed in the first Amendment deals with the disposal of the pipes and fittings which have been previously used for the supply of the surplus gas—for example, in the case of a railway gas works, for supplying gas to railwaymen's cottages, and things of that sort. The Amendment enables either the previous supplier of the surplus gas or the Area Board to require the handing over of those pipes, other than those which it is not reasonably practicable and economical for them to take over. In the event of a dispute on a point of that sort, or about the price at which they should be taken over, the matter is, by the second of these two Amendments, to be decided by an independent referee under subsection (5).
The Amendment also fills in a small gap in the Bill. It is reasonable that an Area Board should be able to require an outside supplier of gas to hand over his distribution system at a fair price in a case where that outside supplier requires the Area Board to buy his surplus gas under subsection (2). Conversely, it is reasonable that if the Area Board requisition surplus gas under subsection (3), the previous supplier should not be left unreasonably with the old distribution system on his hands. The "plant" referred to might include, for example, gasholders or pressure governors which are associated with distribution systems. "Gas fittings" refers to cookers and things of that kind hired by the previous supplier of gas to con Burners who are now to be supplied by the Area Board. An Amendment to deal with this point was suggested by the Transport Commission, who own several railway gas works. I think your Lordships will agree that it is a sensible thing to repair this small gap. I beg to move.
Amendment moved—
Page 62, line 39, at end, insert the said new subsection.—(Lord Chorley.)
LORD TEYNHAM: I find a little difficulty in following what these two Amendments do. They seem to some extent to meet a point raised by the Opposition in another place. Where surplus gas is taken compulsorily by the Area Board

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from independent coke ovens or steel works, the suppliers, we feel, should not have their capital tied up in the necessary trunk mains. I think that the object of the Amendments is desirable but that the drafting might be slightly different, otherwise, certain unintended effects may result. When gas is manufactured by A, who uses the trunk main owned by B to supply the Board, the Amendment would enable the property of B to be transferred to the Board if the Board or A so requires. The second Amendment, of course, provides for inquiry into any question arising; but since B is not brought into the picture at all, he might not have the chance to raise the question.
VISCOUNT RIDLEY: I think there may be some difficulties about this question, not so much perhaps in the Amendment itself, but in the remainder of the clause. I think it is a far more complicated matter than would appear at first sight. At the end of this clause there is what seems to be the only definition in the Bill of what we are dealing with:
"This section shall not affect the supply of gas by any person otherwise than through pipes."
There is no definition of "gas" in the Bill—and I should not like to suggest what it should be if there were. I imagine that subsection (1) of Clause 51 is the subsection in the Bill which in fact keeps the industry nationalised when it has once been nationalised. As to the possible results following on the definition to which I have referred—the supply of gas through pipes—that means that any gas which is supplied or even transported through pipes on the way to being supplied, becomes forbidden so far as supply to anybody but the Area Board is concerned. It might well apply to certain products of the petroleum industry which are handled in a gaseous form and taken from one works to another nearby for further processing.
In those circumstances, it is possible—and I believe there are such cases in existence—that it is not a question of selling for the use of a subsidiary or holding company such as is referred to in subsection (6), paragraph (a). Clause 51 is dealing with a whole range of products, not only of the gas industry itself but of such things as small gas works owned by the Transport Commission; and it is quite
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possible that there may be great difficulty for steel works under this clause, if gas is supplied from coke ovens or blast furnaces for the use of subsidiaries; but it is perfectly possible that the gas might be used by a neighbour who is not a subsidiary. It seems to me that under Clause 51 of this Bill the possibility of such a supply is prohibited. Subsection (1) of Clause 51 says:
"No person shall, after the vesting date, commence to supply gas…"
So far, I think that is quite clear; any of the sale or purchase of gas between producer and user which is now going on is to be allowed to continue. Then it says in subsection (3)—and this seems to me to be contradictory; I would like to know whether I am right:
"The Area Board…may require that person to sell to the Board all or part of the gas manufactured by him which he does not require for his own use.…"
That is not said to refer to a person who, after the vesting date, wants to start supplying gas off his premises. So, although permission is given in subsection (1) to an existing seller of gas to go on doing it, it appears to me to be taken away by subsection (3). Possibly I have misunderstood it; I hope I have. I do not think that that can be intended.
Following on that, there arises the importance of the Amendment which is being moved. One must agree that on a transfer of gas supplies the gas equipment, fittings and so on should follow. Those who have had to put in the plant for their use are no longer allowed to use it and would naturally wish to transfer it. But there is a difficulty, I think, because subsection (5) of this same clause says:
"Any question arising under this section as to whether, or as to the extent to which, it is reasonably practicable and economical for an Area Board to buy a supply of gas…"—
and also, under the Amendment proposed by the noble and learned Viscount the Lord Chancellor, any question
"…as to the extent to which, pipes, plant or gas fittings are be transferred to an Area Board…"
is to be dealt with by the Minister. Any such question, says subsection (5):
"shall be referred for inquiry…after consultation…and shall be determined by the Minister after considering the report of the said person."
That is a familiar sequence of events which, in this particular connection, is

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unfortunate. The Minister gives the authority to the Area Board to acquire both the right to supply gas and also the apparatus for so doing, and, on appeal to the independent arbitrator, the Minister is in a position to override any decision that he has made. I do not want to oppose this Amendment, because I see the sense, force and usefulness of it, but I want to raise the question as to the apparent inconsistency between subsections (1) and (3) of Clause 51. It seems to me that they are contradictory. I did not want to put an Amendment down, because it seemed easier to raise the question on this Amendment.
LORD CHORLEY: I think that the noble Lord, Lord Teynham, and the noble Viscount, Lord Ridley, are dealing with rather different points. Lord Teynham, raised the question as to whether the wording of the proposed Amendment covers sufficiently accurately the matter at which it is aimed. I will gladly have that matter looked at. If the point which he has made is one of substance, we will have it put right at Report stage. With regard to the point made by the noble Viscount, I think he welcomed the Amendment and I am obliged to him for his support. He raised two points of substance, one of which was in respect of the definition of "gas," and whether the supply of gas which was not coal gas by one works to a neighbouring works would be hit.
The question of the definition of "gas" is certainly a difficult one. It is one which, I confess, has been looked at and we have not so far succeeded in dealing with it effectively. I can assure the noble Viscount that we will look at it between now and Report stage in the light of his observations, to see whether we can do something to deal with the point which he raised on that particular matter. With regard to the apparent discrepancy between subsection (1) and subsection (3), I do not think that there is such a discrepancy. Subsection (1) deals with the point in the absence of a direction by an Area Board. Subsection (3) is concerned with the position when the Area Board does in fact give a direction in respect of the use of the gas, or part of the gas, manufactured by an independent manufacturer who is continuing to make it. There again, I shall be glad to have these two subsections looked at. If the point
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which the noble Viscount has made is a good one, I will get in touch with him, and we can discuss the matter later.
VISCOUNT RIDLEY: What I am concerned about is this. I understood that it meant that any concern which is now selling surplus gas for industrial purposes is expected to be able to continue to do so. I understand that subsection (1) means that. I am afraid that subsection (3) gives the Area Board the complete power to require that such as undertaking should sell to the Board all the surplus gas not wanted for their own purposes. It seems to me that the two subsections must be contradictory.
LORD CHORLEY: Not necessarily. For instance, in the event of a war emergency, or something of that kind, it might be necessary that there should be such a direction in respect of the use of the gas. It is surely a question of what the best use might be.
VISCOUNT SWINTON: Of course, in war all sorts of things have to happen, and everybody has to submit to whatever directions are necessary. What the noble Viscount and I wart to be clear about is this. What is the intention of this in peace? I quite understand that anybody who is manufacturing gas to-day for his own use will be able to go on manufacturing it, and use all he requires for his own purposes. He will also be selling to somebody that not the position?—gas which he does not require. It is one thing to say that he shall be able to go on doing that and carry on those domestic arrangements for the sale which he has already made, and that he will not be interfered with by the Area Board except in some important cases of emergency. If it is the intention that the status quo should be maintained, as regards both what he produces for his own use and what he sells, then I do not think that subsection (3) is happily phrased to express that, It says:
"The Area Board…may require that person to sell to the Board all or part of the gas manufactured by him which he does not require for his own use, and the said person shall comply with that requirement."
There is nothing there about a national emergency or Defence requirements.
LORD CHORLEY: I gave that merely as an example of the sort of case.
VISCOUNT SWINTON: That is not giving the Committee the information we want. What we want to know is this. Is it the policy that the status quo shall be maintained, and that if "A" is manufacturing gas for his own purposes and for sale to somebody else, in the absence of something quite abnormal he will be able to go on doing that? As I understand it, that is what subsection (1) intends. Then subsection (3) comes in and says that, if the Area Board want to take any part of or all of the gas which he does not require for his own purposes, they can so require. It is no good the noble Lord saying that that is to meet a national emergency. If what is intended is that the Board should be able to do that if they find it convenient and suitable to them, that is one thing. I am not saying whether that is right or wrong; it may be right. But if it means that, then let the Committee be told quite frankly that the Board are going to have that right, and can put it into operation at any moment. Then the man knows that, except for his own purposes, he will be put out of business in that respect. But if, on the other hand, what is intended is that that power shall be exercised only in some exceptional circumstances of overriding national importance, then the clause ought to be re-cast and it ought to be so stated. What its purpose is ought to be put clearly. If the clause is to have the wider interpretation, then I think the Minister must justify it. Perhaps after dinner the noble Lord will tell us what it means, and, if it has the wider significance, why he thinks it necessary that it should have that significance.
VISCOUNT RIDLEY: I am most concerned about this matter, because of the importance of arriving at a definition of the word "gas." I am not asking the noble Lord to arrive at that definition; I am not going to try to do it myself. The definition that has been used, for practical purposes, is "that which is supplied through pipes." That means that every sort of gas, whether coal gas or any other, which goes through a pipe and is sold, becomes subject to this clause. That is a matter of great importance in relation to a whole range of products which are used throughout industry. It might be said that oxygen which one buys in cylinders would be subject to this clause, because it is put through a pipe in order to get it into the
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cylinder. That is rather splitting hairs; nevertheless I think it should be made perfectly clear that subsection (3) operates only in the case of an emergency, and I would prefer it left out if it means that., After all, in a war Ministers have power to requisition this, that and the other, and anything of that sort can be arranged for. I think we want to be perfectly clear throughout the whole range of these industrial products as to exactly how things stand in this regard. We want to be careful that the Bill is very precise in stating that it is not possible to interfere with those very necessary things which have nothing to do with coal gas as we know it
VISCOUNT SWINTON: May I make a suggestion to the Leader of the House? We have got into a muddle over this matter. It may be that Lord Ridley and I are not very clever at understanding what is in the Bill. But obviously here is an important matter. It will not be at all satisfactory, if the noble Viscount will allow me to say so, for him to say, "Let us have a look at this and, if there is any trouble about it, we can put down something on Report." What we want to know is the meaning of what is written here, and what is the intention of the Government. It is only when we know that that we shall be able to decide whether we want to pursue the matter on Report. I venture to suggest that the noble Lord who is in charge of this particular clause should give us that explanation when we reassemble, and then we shall see how far we must pursue it.
[The Sitting was suspended at twenty-six minutes before eight o'clock, and resumed at nine o'clock.]
LORD CHORLEY: Before we adjourned I was asked a number of questions by the noble Viscount, Lord Swinton, and by the noble Viscount, Lord Ridley. The first point which I would like to make in answer to the noble Viscount, Lord Ridley—on the question of what sort of gases the Bill applies to—is that in our view it is sufficiently clear from the general tenor of the Bill that it applies to coal gas and not to the various types of industrial gases which the noble Viscount had in mind. As I had already said to him, I am ready to have that looked at again, and if any words can be provided to make that clear, by definition or otherwise, we shall be glad to

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insert them. The second point is that it should be sufficiently clear from the clause that persons who make gas for their own use are not to be regarded as gas suppliers for the purpose of this particular clause. Subsection (6) makes it clear that that applies not only to companies which manufacture gas for their own purposes, but also to holding companies of such companies, or to subsidiaries of holding companies. In other words, we want it to be perfectly clear that people making gas for the purpose of the industry in which they are occupied are not to be subjected to the requirements of this clause.
Then we come to subsection (3) on which a question was raised. I think the point there is that where a manufacturer of gas is already supplying a third party then, prima facie, he is entitled to go on supplying such a third party. But there is power in subsection (3) for the Area Board to stop him, by requiring him to put his surplus gas at the disposal of the Area Board. I have been trying to make that clear. I took as an example—and it was purely chosen as an example—the sort of case where gas might be needed in the national interest, perhaps for war purposes or something of that kind. I think the noble Viscount, Lord Swinton, was perfectly correct when he pointed out that the subsection is not limited to a case of that kind. That is so. It might be used for the purpose of rationalising the gas supply in a particular district: for example, where a grid had been introduced it might clearly be to the advantage of the neighbourhood to take the gas and bring it into the grid system, thereby making it available as part of the rationalised supply system for a whole neighbourhood. The noble Viscount, Lord Swinton, asked me almost for a declaration of policy as to how far this subsection will be used. I am not in a position to give him any declaration of policy of that kind. Obviously there are a number of cases where it might reasonably be used. I am not provided with the necessary material, nor am I authorised to make a declaration of policy. Obviously it is the sort of thing which might be the subject matter of a general direction by the Minister under the powers which he has of giving general directions. Beyond that, I am afraid I am unable to go.
LORD TEYNHAM: I am sure my noble friend Lord Swinton would be grateful for the explanation given by the noble Lord, especially in relation to the fact that subsection (3) is not limited necessarily to what might happen in relation to war.
VISCOUNT RIDLEY: What the noble Lord, Lord Chorley, has said is very helpful. I also have the difficulty of defining the commodity about which we are talking. I appreciate that what it is intended to be is coal gas. I refer to that point only as illustrating the danger that might arise through the difficulty of drafting. It might at some date mean that this Act will be used for purposes for which it is not now intended. It seems to me, on thinking it over, that what would prevent that would be some modification of subsection (3). I think I understand what the noble Lord has in mind about the position of the person who is now making and selling his surplus gas, and I do not quarrel with the intention in that regard. But I do not feel at all happy about subsection (3). It seems to me that if it is necessary, as it may be, for overriding powers to be taken in a state of war or emergency, it would be better to take them under war-time Legislation or under Defence Regulations. I do not feel altogether happy about taking them under this subjection. I appreciate that the intention of the Minister, and probably the policy of the Area Boards, would not be in the direction of doing things which would interfere with the industrial arrangements which are for the good of the country, but I would have felt happier if that power had not been so specific. I appreciate that what we are now discussing is not actually covered by the Amendment before us, but it does derive from it. I would like, if I may, to endeavour to suggest an Amendment on the Report stage which will bring subsection (3) more into line with what some of us have in mind. Apart from that modification, I would support the Amendment as it has been moved.
On Question, Amendment agreed to.
LORD CHORLEY LORD CHORLEY moved, in subsection (5), after "given" to insert:
"or as to whether, or as to the extent to which, pipes, plant or gas fittings are to be transferred to an Area Board, or as to the terms and conditions on which they a re to be transferred."

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The noble Lord said: This Amendment goes with the earlier one which I moved before the adjournment. The explanation which I then gave covers this Amendment. I beg to move.
Amendment moved—
Page 62, line 43, after ("given") insert the said words.—(Lord Chorley.)
On Question, Amendment agreed to.
Clause 51, as amended, agreed to.
Clause 52:
Methods of charge and tariffs.
(5) A tariff fixed by an Area Board under the last preceding subsection may include a standing charge in addition to the charge for the actual gas supplied and may also include a rent or other charge in respect of any gas meter or gas fittings provided by the Board on the premises of the consumer.
9.10 p.m.
LORD LLOYD LORD LLOYD moved, in subsection (4) (b), to leave out "special" and insert "written." The noble Lord said: The object of this Amendment is to bring the provision as regards agreements for the supply of gas in line with similar provisions in the Electricity Act. If noble Lords will look at this paragraph they will see that
"nothing in this subsection shall affect any special agreement for the supply of gas in force immediately before the vesting date."
I do not think any of us knows what any of these special agreements may be but, quite frankly, what we wish to do is to provide in this Bill exactly the same as was provided in the Electricity Act; that is to say, that the Area Boards may not alter any existing written agreement and that consumers who have already made written agreements shall be protected in this way. In another place, when this matter was discussed, the Parliamentary Secretary stated that this Bill was on all fours with the Electricity Act. I do not think that is so. We think it would be better if, instead of the words "special agreement" the words "written agreement" were substituted. That would cover all the existing agreements which do not appear under this term "special." I beg to move.
Amendment moved—
Page 64, line 26, leave out ("special") and insert ("written").—(Lord Lloyd.)
LORD CHORLEY: I am afraid that we cannot accept this Amendment. It is true that the provision is similar to the corresponding provision in the Electricity Act—Section 37, subsection (3)—but it is not on all fours with it, because the two situations are not identical. Clause 52, subsection (4), allows the Area Board complete discretion to vary tariffs, which they obviously must have; but by proviso (b) it safeguards a person who is getting the supply of gas under a special agreement. The noble Lord's Amendment seeks to substitute for the term "special agreement" the term "written agreement"; but the two are not the same thing. To substitute "written" agreement for "special" agreement would, in effect, deprive the Area Board of the power to vary the tariffs which it is the main object of the clause to confer upon them. In the first place, it would obviously cause doubt as to how far the power goes; and, secondly, it would exclude a whole lot of people who have special agreements, because those special agreements may not be in writing. The ordinary practice of the gas companies is to supply gas under written agreements. It might well be argued, therefore, that if the noble Lord's Amendment were accepted there would be no power to vary the terms on which the gas is supplied under those agreements. What the clause is aiming at is the supply of gas to, industrial consumers under special agreement as to quantities, price and that sort of thing. Those agreements may not be in writing, but they are valuable agreements, entered into with the intention that possibly they should continue for a substantial period of time. There is another type, the domestic two-part tariff, which is also a special agreement. It is this type which it is desired to preserve. I think, in the circumstances, the noble Lord would agree that his Amendment is one that ought not to be pressed and I hope that he will withdraw it.
LORD LLOYD: I cannot pretend, even after the noble Lord's explanation, that I understand exactly what a special agreement is, and I should be grateful if he could enlighten us on that point.
LORD CHORLEY: A special agreement is one which is not an ordinary agreement. The agreement under which the noble Lord secures his gas is an ordinary agreement, but if he were a large

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industrial consumer—as he may be—he might very well have with the gas producers a special agreement, lasting possibly over a number of years, for the supply of large quantities of gas at a special tariff.
LORD RENNELL: Is it open to the Area Boards to make a special agreement with anybody they choose, or is there a limitation upon the type of person with whom a special agreement can be made?
LORD CHORLEY: The object of this clause is the preservation of existing agreements.
LORD RENNELL: That is not quite an answer to the question I asked. The noble Lord sad that the Area Boards must have the faculty of entering into special agreements. Is it open to Area Boards to make a special agreement with any person, or are there restrictions? The words "special agreement" have no definition in the Bill, so far as I know.
VISCOUNT RIDLEY: In the next subsection it says that special agreements can be made only where the tariffs are not appropriate. It is difficult to understand, because there are tariffs which are appropriate to a wide range of industrial users of gas, but even those in the ordinary course of business of the gas company are, in fact, varied from one to the other. It depends upon the rate of use, the hours of use, the extension of the works, and so on. I do not think you can say that any industrial use is "special."
LORD LLOYD: May I put another point before the noble Lord' replies? He said that the conditions are quite different from those dealt with in the Electricity Act. I say again that I think he ought to get together with the Parliamentary Secretary in another place to see that the conditions are exactly the same. That is my first point. The second point I have to make is that I should have thought that in this Bill we have conceded more to His Majesty's Government than they themselves demanded in the Electricity Act. May I read the relevant subsection:
"nothing in this subsection shall affect any written agreement"—
note, "any written agreement"—
"in force immediately before the vesting date."
I do not pretend to understand what a special agreement is, except that it is not
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ordinary. I would like to ask the noble Lord for his definition of an ordinary agreement, and then perhaps we can get the matter clear.
VISCOUNT SIMON: In view of the fact that there is no definition anywhere, will not the Government consider whether this phrase—which may be quite right—cought not to be in some way defined? Looking at it, I should have thought it almost impossible for a court to determine what is a special agreement. I think I see the noble Lord's general point, but is it right to put in a provision of this sort which really has no particular meaning? The word "special" is used in all sorts of ways—"special train," "special pleading," and all kinds of things. Ought there not to be a definition?
LORD CHORLEY:I am obliged to the noble and learned Viscount. I will certainly Look at the matter between now and Report stage.
On Question, Amendment negatived.
VISCOUNT BUCKMASTER VISCOUNT BUCKMASTER moved, in subsection (5), after "charge" (where that word last occurs) to insert:
"Which may be a charge calculated according to the number of therms supplied in the form of gas."
The noble Viscount said: I trust that this Amendment will cause the noble Lord less embarrassment than did the preceding one. If the noble Lord would look at Clause 52 for a moment he will see that the Area Board in charges may include a rent or other charge in respect of a gas meter or other fittings provided by the Board. The purpose of this Amendment is to ensure that the "other charge" may be one based on the thermal consumption of gas. Orders or the statutory companies normally provide, in the case of prepayment meters, that this should be so, and the prepayment meter—by which I mean a slot meter—is adjusted to cover this increased charge. This is a great convenience to the user of the meter and also saves a considerable amount of work for the companies. If this Amendment were accepted, not only would the consumer be helped but the companies would be relieved of a good deal of work, and an old-established practice would be maintained. I beg to move.
Amendment moved—
Page 64, line 32, after ("charge") insert the said words.—(Viscount Buckmaster.)
LORD CHORLEY: I am sorry that the noble Lord thought that I was embarrassed by the last Amendment. In fact, I enjoyed the little badinage by the noble Lord, Lord Lloyd. This Amendment is quite unnecessary. The powers conferred on the Area Boards are perfectly general in their terms and, I am advised, clearly cover the substance of the Amendment. Indeed, when there is a discretion of this kind, I think it is a general principle of draftsmanship that it is unwise to throw doubts on the generality by the insertion of special words. I therefore hope the noble Viscount will not insist on the Amendment.
VISCOUNT SWINTON: I am a little puzzled about this. What I think is absolutely essential is that everybody should pay for gas by the therm. Gas is not defined in this Bill; I daresay you could not define it. But formerly people were able to sell gas on any or no calorific value. Later, an admirable reform was introduced—I am not sure that I did not introduce it!—under which there was established the thermal unit, and everybody had to charge, if I may so put it, for the whisky in the water and not for the water: and the whisky had to be maintained (which was rather unusual) at a proper strength. It is very important that that should be preserved.
As I understand it, Clause 52 seems to me the important clause in this matter. Subsection (1) says:
"Subject to the following provisions of this section, every Area Board shall charge for the gas supplied by them according to the number of therms supplied, such number to be calculated in the prescribed manner on the basis of the declared calorific value of the gas."
If that is right, then what people buy, whether they put a penny or a shilling in the slot, or pay a quarterly bill, is gas of a thermal calorific value. So long as that is absolutely established, and nothing else can be done, this does not seem to me to matter very much. As I understand it, this deals not with how much you pay for the gas but what you pay for the meter, or for the meter plus the gas.
VISCOUNT BUCKMASTER: The meter and the fittings.
VISCOUNT SWINTON: Then, provided the man is paying for the gas, what I
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should have thought was the right thing to do is to make him pay a reasonable charge for his meter.
THE LORD CHANCELLOR: That is right.
VISCOUNT SWINTON: The idea of the meter charge is that he pays and gradually buys it. I do not see why he should pay a higher meter rent because he puts more pennies into the slot and buys more gas. If that is really the proposition, then we must do two things. First, we must see that everybody gets gas of the right calorific value and pays for it as such—which I gather we do under the main direction of Clause 52. The second point is that we must see that everybody pays an equitable meter rent. If the Bill does that, it is all right; but if it does something else, I suggest that it is not right.
THE LORD CHANCELLOR: I agree with everything that the noble Viscount has said. In the first place, I object to the Amendment because the words are wholly unnecessary. The introduction of the words is a mere signpost; and I think it is an undesirable signpost, because it points in the wrong direction. So far as charging for gas is concerned, as the noble Viscount has pointed out, it should be based on a thermal unit. So far as charging for the meter is concerned, it is grossly unfair to charge two people different prices in accordance with the amount of gas that they use. On that basis, the meter is a signpost pointing in the wrong direction. It is unfair to base the charge for the meter on the amount of gas that is used. For the gas itself, apart from the meter, obviously a thermal unit charge is right.
VISCOUNT RIDLEY: Could I see how the meter comes into this business? It is the usual practice, in the case of the slot meter, that there is a charge for the use of the meter. It is more logical and a little fairer than the noble and learned Viscount the Lord Chancellor is suggesting, because the more gas that goes through the meter, the more it costs to maintain. It is not inequitable in that respect. It is also a great convenience to the customer that, instead of having to save up for quarterly bills, he pays as he goes. It is a very extensive practice. I think it is universally recognised to be a reasonable way of dealing with the matter. On the other hand, surely,

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as I suggested, there is nothing in the Bill to stop the Area Boards using this method of charging for meters, so that possibly this Amendment is not necessary. It would be a great inconvenience not only to the Area Boards but also, I suggest, to the consumers if it were not in fact possible for the Area Boards to charge in this way.
VISCOUNT BUCKMASTER: I am obliged to the noble and learned Viscount for what he has said. In regard to his interpretation of the clause, I will accept his wide legal knowledge that the words "or other charge" leave it open to the Area Board to make a charge in the manner which I propose. I do not at all accept his suggestion of unfairness. I have no intention of proposing anything unfair. I venture to suggest, with great respect to the noble and learned Viscount, that, when this Bill becomes an Act, the Area Boards will charge in this very way, which is the only way in which they can charge. On that understanding, I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
Clause 52 agreed to.
Clauses 53 and 54 agreed to.
Clause 55 [Application of gas supply code and enactments to Area Boards]:
9.30 p.m.
LORD CHORLEY LORD CHORLEY moved to add to the proviso to subsection (2): "and is not rendered redundant by the provisions of this Act." The noble Lord said: In this clause the problem of local enactments governing statutory undertakers is dealt with, and those obligations which are enacted on the undertakers are now transferred to the appropriate Area Boards. Under the proviso the local enactments which are inconsistent with, or rendered redundant by, the Act cease to have effect. But the proviso does not affect any local enactments which contain some special provision for the protection of individuals or of certain classes of individual. The words of the Amendment are inserted for the purpose of making it quite clear that the exception does not keep in force any local enactments which, though they do in fact contain protective provisions of this kind, are in fact rendered redundant by the provisions of the Act itself. I beg to move.
Amendment moved—
Page 68, line 39, at end insert the said words.—(Lord Chorley.)
On Question, Amendment agreed to.
Clause 55, as amended, agreed to.
Clause 56:
Machinery for settling terms and conditions of employment of staff, etc.
56.—(1) Except so far as they are satisfied that adequate machinery exists for achieving the purposes of this section—
(a) it shall be the duty of the Gas Council to seek consultation with any organisation appearing to them to be appropriate with a view to the conclusion between the Gas Council and that organisation of such agreements as appear -to the parties to be desirable with respect to the establishment and maintenance of machinery for the settlement by negotiation of terms and conditions of employment of persons employed by Area Boards and the Gas Council, with provision for reference to arbitration in default of such settlement in such cases as may be determined by or under the agreements; and
LORD BALFOUR OF INCHRYE LORD BALFOUR OF INCHRYE moved, in subsection (1) (a), to omit "any" and insert:
"all organisations representing persons employed in the industry which before the vesting date were recognised in the gas industry for national negotiations me, with any other."
The noble Lord said: The Bill provides that the Gas Council should consult with any organisations appearing to them to be appropriate with regard to the establishment of machinery for settling; the terms and conditions of employment. The Amendment seeks to ensure that ail the bodies which at present are recognised for national negotiation should be consulted by the Gas Council for the purposes of this clause. The Amendment also leaves the Gas Council free to consult any other bodies they may wish. I do not think any further explanation is needed from me, and I beg to move.
Amendment moved—
Page 69, line 30, leave out ("any") and insert the said new words.—(Lord Balfour of Inchrye.)
THE FIRST LORD OF THE ADMIRALTY (VISCOUNT HALL): During the course of the proceedings on this Bill in your Lordships' House, tribute has been paid to the relationship between the employers and the organisations representing the persons employed in this industry, and I am sure your Lordships desire that that relationship should be continued as between the representatives of the trade

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unions and the Gas Council. This Amendment, moved as it is, will make it obligatory upon the Gas Council to consult all organisations representing employees in national negotiations before the vesting date, as well as any other organisation appearing to them to be appropriate, for the purposes of the establishment and maintenance of machinery for the settlement by negotiation of terms and conditions of employment. This limits the discretion of the Gas Council, by requiring them to seek consultation with the existing organisations recognised in the gas industry for national negotiation. No doubt the Gas Council will do that. At the same time I would like to point out, as one who has had some experience in negotiating, not only as a leader of a trade union but also as representing a large Government Department, that there is a great deal of sensitiveness between the various trade unions as to who should really be consulted in relation to wages and wage conditions. Now in the gas industry some of the organisations representing employees in national negotiations are not concerned with the terms and conditions of employment. That being so, there is no point in requiring the Council to consult with such organisations as, say, the Institution of Gas Engineers. This professional body does not normally negotiate terms and conditions of service, though it may be concerned with national negotiations concerning technical matters in the industry and technical training of the employees.
In the interests of the relationship between one side and the other, I think it would be very much better to leave this matter as it is in the Bill, in view of the fact that not only have the trade unions themselves been consulted but that this clause was framed as the result of consultations with the Ministry of Labour who are themselves, of course, responsible for the good relations between both sides of the industry. There does not appear to be much in this, but I think that there is sufficient in it to bring about some suspicion among trade unions which, after all, will represent, 95, 96 or even 97 per cent. of those employed in the industry. For those reasons, I beg noble Lords opposite not to press this Amendment.
VISCOUNT SWINTON: May I say just a word or two upon this, because I agree
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so much with the spirit of what the noble Viscount has just said? We were closely in agreement in that fruitful discussion which we had yesterday on labour relations. I agree with the noble Viscount, looking at this Amendment again, that it is not exactly designed to fulfill the purpose which it has in view. I agree that technical organisations, which are naturally consulted, are not necessarily the proper people to bring into wage negotiations. I also conceive that it would be a pity to put into the Bill—a Bill which after all, deals with the general structure of wage investigations and labour negotiations which are to go on through the lifetime of this industry—words which would stereotype this matter completely, as this would do. But that is not the intention, I think. What was at the back of the minds of those who framed this Amendment—and what I believe is very present to the mind of the noble Viscount the First Lord of the Admiralty—was this. Here we have an industry in which, as everyone agrees, relations between the parties concerned have been extraordinarily good. We want to make quite sure that those relations should continue to be good. They have depended, both at the national level and the local level, on the extraordinarily successful personal contact. This applies, for instance, to the trade unions, notably the great union over which the late Lord Dukeston presided. I only wish that he could have been with us now. He would have contributed a great deal to our discussions in this House on matters like these. He would have been as valuable to the House as he was in his own movement.
As I was saying, it was anxiety to preserve that good relationship, while letting it develop in the future, that was at the back of the minds of those who framed the Amendment. If, as I understand, from the noble Viscount, the intention of the clause is to promote that, while as a matter of course continuity will be given to the system of organisation which exists at present, and which will be developed as the needs of the industry require, then I think the clause is adequate as it stands.
VISCOUNT HALL: It is mainly a question of having confidence in the Gas Council. I have no doubt that, sensible men as they are, they will want to have continuity in the relationship between

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themselves and the representatives of their workpeople. That is why I stress the point that it would be difficult if there appeared to be any change in that relationship. I have no doubt that they will continue, as did their predecessors, in the very human relationship which has always existed in this industry.
LORD BALFOUR OF INCHRYE: I cannot disagree with one word that has fallen from the noble Viscount. The last thing that I wished to do in moving this Amendment was to impair those good relations, which are an example in industrial co-operation. Indeed, my purpose was to ensure their continuance. The noble Lord has explained how he thinks the continuance of those good relations will be effected, and has pointed out how my Amendment might endanger them. Therefore, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
9.42 p.m.
VISCOUNT CECIL OF CHELWOOD VISCOUNT CECIL OF CHELWOOD moved, in subsection (1) (b), after "Council" where that word first occurs, to insert "subject to the provisions of section fifty-eight of this Act." The noble Viscount said: I apologise to the Committee for having put down this Amendment. It was put down only through excessive caution. I am anxious that nothing should be done that could possibly interfere with the operation of Clause 58. If there is any possibility of that, I would suggest to the noble and learned Viscount that lie might think it worth while to put in some such words as I propose. I move the Amendment only in that sense.
Amendment moved—
Page 69, line 42, after ("Council") insert the said words.—(Viscount Cecil of Chelwood.)
THE LORD CHANCELLOR: I oppose this Amendment only because, as I see it, there is no provision in Clause 58 which in any way conflicts with this provision in Clause 56. If, however, after we have discussed Clause 58, there should come into it any provision which does conflict, I shall be happy to reconsider this mater on the Report stage.
VISCOUNT CECIL OF CHELWOOD: In the circumstances, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 56 agreed to.
Clause 57:
Provisions as to pension rights.
(5) Subject to any regulations made under this section the provisions of this Act under which liabilities and obligations of an undertaker to whom Part II of this Act applies are vested in an Area Board or the Gas Council shall apply in relation to customary obligations of the undertaker in respect of pensions, notwithstanding that the undertaker was under no legal obligation in respect of those pensions, and if any question arises as to the existence or extent of any such customary obligation the question shall, in default; of agreement, be referred to a referee or board of referees appointed by the Minister of Labour and National Service, after consultation with the Lord Chancellor, or where the proceedings are to ho held in Scotland, after consultation with the Secretary of Stale, and the decision of that referee or board shall be final and the Area Board or the Gas Council shall give effect to that decision.
(8) Regulations made for the purposes of this sect on may be made so as to have affect from a date prior to the making thereof, so, however, that so much of any regulations as provides that any provision thereof is to have effect from a date prim to the making thereof shall not place any person other than an Area Board or the Gas Council in a worse position than he would have been if the regulations had been made to have effect only as from the date of the making thereof.
LORD BALFOUR or INCHRYE LORD BALFOUR or INCHRYE moved, in subsection (2), after "scheme" (where that word last occurs) to insert "whether such rights have actually accrued or not and," The noble Lord said: The purpose of this Amendment is to ensure that employees shall be entitled to receive benefits when pension schemes are reorganised, notwithstanding that their right to a pension might not technically have accrued by reason of their not having reached the pensionable age. I beg to move.
Amendment moved—
Page 71, line 14, after ("scheme") insert the said words.—(Lord Balfour of Inchrye.)
THE LORD CHANCELLOR: This Amendment, if I understand it aright, would make the subsection read:
"…to secure that persons having pension rights under the scheme whether such rights have actually accrued or not…"
My answer to the Amendment is this The noble Lord will find at the bottom of page 85 these words:
"'pension rights' includes, in relation to any person, all forms of right to or eligibility for the present or future payment of: a pension to or in respect of that person, and any

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expectation of the accruer of a pension to or in respect of that person under any customary practice…"
That being so, "pension rights" by its very definition (and "pension rights" appears in line 14) means that it includes rights which lie in expectation. We do not want the words twice over.
LORD BALFOUR OF INCHRYE: I thank the noble and learned Viscount for the explanation, and beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD BALFOUR OF INCHRYE LORD BALFOUR OF INCHRYE moved, in subsection (5), to delete "Subject to any regulations made under this section." The noble Lord said: This Amendment is, I think, of somewhat greater importance than the last one. Its purpose is to remove the power which the Minister will have, under the Bill as now drafted, to negative the passing to the new Boards of the customary pension obligations of the existing companies. The Bill says, in subsection (5), that customary pension obligations of existing undertakers are to vest in the Area Boards, in the same way as legal obligations. Then we come to what we consider is the bad point of subsection (5)—that the whole of it is made subject to any regulations made. Therefore, the provision that the pension obligations should vest in the Area Boards could, as I read it, be negatived at any time the Minister might think fit. The purpose of this Amendment is to remove that power of the Minister to nullify the subsection. The matter was touched on in another place when the Solicitor-General said that if a person with a customary right is taken over, he will look to the Board to implement that customary right. The statement of the Solicitor-General in another place ignored that power which is now given to the Minister to negative by regulation. The Amendment which I move would make statutory the undertaking, or the submission, which the Solicitor-General gave in another place. I therefore beg to move.
Amendment moved—
Page 72, line 6, leave out from the beginning to end of line.—(Lord Balfour of Inchrye.)
THE LORD CHANCELLOR: I have great sympathy with the noble Lord's desire, but I suggest that if he left out
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these words he would defeat that desire. Let us see what this clause does. This whole clause makes it plain that persons having pension rights are not to be
"placed in a worse position by reason of amendment, repeal, revocation, transfer, extinguishment or winding-up."
That is the foundation of this subsection. You may often get pension rights which are conditional, for instance, upon the man continuing to serve a particular firm. The analogous case in wills is to a servant "if in my employment at the time of my death." This unfortunate man might at the critical time be serving in an Area Board. The last thing the noble Lord wants to do is to say that, by reason of the fact that he is no longer serving John Jones Limited, he should be deprived of his customary rights; that is the sort of thing the Minister must have power to deal with by regulation. He must be able to say, "I eliminate that fact from my consideration, and I shall not make that in any sense a barrier to him." If we do not have those words there may be that difficulty. I think the noble Lord will find that these words, so far from being in any way hostile to his desire, are designed for the very purpose of giving effect to his desire.
LORD BALFOUR OF INCHRYE: I thank the noble and learned Viscount for his clear statement. I see that my Amendment as drafted might have the opposite effect, but, nevertheless, the power still exists that the Minister might by regulation negative the transfer of perfectly ordinary and straightforward pension rights. If we could have an assurance—if not now, at a later stage—that the Minister had nothing of that kind in mind, it would give greater confidence to those people who are being transferred.
THE LORD CHANCELLOR: I will give that assurance now. The intention of this power is to preserve the right of the Minister to remove the sort of artificial barriers which otherwise might stand in the way.
LORD BALFOUR OF INCHRYE: I thank the noble and learned Viscount for his assurance and beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
9.50 p.m.
VISCOUNT SWINTON VISCOUNT SWINTON moved, in subsection (5), to omit "obligations" (where

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that word occurs a second time) and insert "practices" The noble Viscount said: This is, I hope, merely a matter of language, because from what has been said in this House and from the discussions which I have had with the Lord Chancellor, I think that he and I are in complete agreement as to what is intended. What I am anxious about is that not only shall these Area Boards or the Gas Council—I think it will generally be the Area Boards—take over the legal obligations of the gas companies to their employees, but shall also take over the customary practices. It is the usual thing for companies, as a regularly established practice which they have followed over years, to reward a person who has given thirty or forty years' service by some bonus gift or allowance. I agree that that varies from company to company, exactly as the legal obligations vary from company to company.
I am quite sure that we should all agree that ii would be very wrong for the State, which has always regarded itself, and has been directed by Parliamentary Resolution to regard itself, as a model employer, to take over an enterprise and give less good terms than the employer under private or regulated enterprise had been giving before. All I want to do is to make perfectly sure that where there is in one of these undertakings which is taken over a regular practice and custom by which certain payments in the way of gratuity, or whatever it may be, are made, that obligation will be fully honoured by the Boards who succeed the companies. I gather from the assent the Lord Chancellor has indicated that that is what we all want to do and, therefore, I am glad to think that it becomes a matter only of what is the right language to use.
I have suggested that we should not use the word "obligations" but should use the word "practices," because to me, as a layman—I dare say I am wrong—"obligations" suggests a binding obligation, a legal obligation upon which an action could be brought, whereas "practices" is what I may call the custom of the trade—something which has regularly been done. I have had this point looked up for me, and I believe that both words have been used in the past. I must admit that in the Railway Act, 1921, when the railways were amalgamated, the word "obligations"
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was used, although I understand that it was construed as covering practices. On the other hand, the London Passenger Transport Act—for which the Lord President of the Council was responsible in the first instance, and I, curiously enough, was responsible for tarrying to fraction under the succeeding Government—the word "practices" was used. As that is the later Act, I would have thought that "practices" was the right word. On ' the assumption—indeed on the assertion—that we both mean the same thing, I will gladly submit to the Lord Chancellor's judgment of what is the right word to give legal effect to what I hope and believe is our common intention. I beg to move.
Amendment moved—
Page 72, line to, leave out ("obligations") and insert ("practices").—(Viscount Swinton.)
THE LORD CHANCELLOR: I agree with every word the noble Viscount has said as to our intention in this clause. It adds nothing to the paint to say whether the man has any legal obligation which he can enforce in a court of law—that has nothing to do with it at all. If a company has habitually, after, say, a man has served them for forty year; or reached the age of sixty-five, given some gift of cash to that officer on retirement, that is what I call a customary obligation or a customary practice. The fact that the man has no legal right to sue for it in a court of law adds nothing to the point at all. It is plainly right that the Minister should address himself to this question. It is not a question of whether there is an obligation to do it. The question is, What have the company done? If the Minister finds that that is what the company have done, then that is what he has got to do. That is the intention.
As to the use of the words, the phrase "customary obligation" has been used in all these nationalisation Acts. If we departed from the words "customary obligation" we might give a nasty backhander to the electricity officers; it might be said that some wider principle was being accepted here than was accepted with electricity. So I suggest that we should continue to use the phrase "customary obligation." With regard to the construction of that phrase I hope that if there has been any controversy in the past my words will carry to those who will have to deal with this matter

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in the future. My understanding is quite plain that the noble Viscount is fully right in the observations he has made.
VISCOUNT SWINTON: I am very grateful to the noble and learned Viscount. I am sure we are absolutely at one in our intention, and I gladly accept the noble and learned Viscount's advice as to the best words to give effect to the matter. I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
LORD BALFOUR OF INCHRYE LORD BALFOUR OF INCHRYE moved to insert at the beginning of subsection (8) "The original." The noble Lord said: This Amendment and the next go together. They are designed to ensure that the regulations which the Minister will issue concerning pension rights under Clause 57 shall be made within twelve months of the vesting date. I do not think there can be any argument as to the desirability from all points of view, and particularly from the point of view of those who wish to know where they stand tinder the new conditions, that the regulations should be made in the shortest possible time. Therefore we have suggested a maximum period of twelve months. The position is complicated by the fact that under subsection (3) of this clause it may be necessary to bring in amending regulations. Therefore our first Amendment says that the time limit shall apply to the original regulations. I sincerely hope that, having regard to the need for employees to know where they stand, the Government will look sympathetically at this Amendment. I beg to move.
Amendment moved—
Page 72, line 34, after ("(8)") insert ("The original").—(Lord Balfour of Inchrye.)
VISCOUNT HALL: It was always the intention of the Minister to make the original pension regulations as soon as possible and the period suggested is reasonable. Therefore I will accept this Amendment.
On Question, Amendment agreed to.
LORD BALFOUR OF INCHRYE: This Amendment is consequential. I beg to move.
Amendment moved—
Page 72, line 34, after ("section") insert ("shall be made within twelve months after
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the vesting date and the original regulations and any amending regulations.")—(Lord Balfour of Inchrye.)
VISCOUNT HALL: I am glad to accept this Amendment.
On Question, Amendment agreed to.
Clause 57, as amended, agreed to.
Clause 58:
Co-partnership schemes.
58.—(1) Where any scheme in force immediately before the vesting date provides for enabling persons employed by any undertaker to whom Part II of this Act applies, other than an undertaker to whom section eighteen of this Act applies, or any class of persons so employed, to participate in the profits of the undertaking, provision shall be made by regulations for continuing the scheme for such period after the vesting date as may be specified in the regulations, with such adaptations and modifications as appear to the Minister to be necessary or expedient.
9.59 p.m.
VISCOUNT CECIL OF CHELWOOD VISCOUNT CECIL OF CHELWOOD moved, in subsection (1), after "profits" to insert "or management." The noble Viscount said: I believe I am right in saying that this clause was inserted in the other place after the Bill had been introduced. The object of the clause is to give power by regulation to extend what is called in the side note "Co-partnership schemes." It differs from Clause 56, which merely gives power to the Gas Council, on one side, and the Area Boards, on the other, to make fresh agreements on, at any rate, many of the subjects which are dealt with by co-partnership arrangements at the present time. As I understand it, this differs from Clause 56 in that it does not depend upon any fresh agreements, though it contemplates them. But, in the meantime, it gives the power by regulations to prolong co-partnership arrangements. I need not say that I welcome that, because, although it does not go so far as I should like it to go, it goes some distance in the direction which I have ventured to advocate before your Lordships on more than one occasion. My only object is to see that the clause embraces all those arrangements which may properly be called co-partnership arrangements, and particularly the most important part of them—namely, those which bring the workers into a genuine management and (although I admit this is no longer possible) ownership of the

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concern and undertaking. I regard that as by far the most important result of co-partnership arrangements.
My difficulty about this clause is that it is in terms applied only to cases where there is an arrangement to share profits. I think that sharing profits is a useful way of determining the reasonable and proper remuneration of those who work, but it does not amount to co-partnership. In my view, it does little more than lay the foundation for a subsequent direction of a co-partnership scheme. Therefore, I am anxious that those parts of the co-partnership theory which do not depend merely upon sharing profits should not be left out of this clause. To take my first Amendment first, I propose to add the words "or management" after the word "profits" in line 2, on page 73. I am not wedded to the word "management," but it indicates the kind of process that I have in view. The practice of the old days, when workers sat on the boards of directors, is now very difficult of achievement. Still more, I believe that the creation in each works of those co-partnership committees to which the noble Viscount, Lord Buckmaster, has referred and to which I also have referred, has been of the first importance in maintaining really good relations between parties, because it brings man-to-man discussions of these matters. It is a question not merely of rules, regulations and officials, but of the promotion of really human relations. Therefore, I hope the Government will consent to the insertion of these words, so that the clause will read:
"Where any scheme in force immediately before the vesting date provides for enabling persons employed by any undertaker…or any class of persons so employed, to participate in"—
I have left out those words which do not affect my particular point—
"the profits or management of the undertaking…"—
and so on. I should like to add "where such an undertaking exists"—then it would be possible to prolong the scheme by regulation. I need not develop the argument which I ventured to address to your Lordships yesterday in favour of the general principle of co-partnership, because that has all been said. I beg to move.
Amendment moved—
Page 73, line 2, after ("profits") insert ("or management").—(Viscount Cecil of Chelwood.)
THE MARQUESS Or SALISBURY: I should like to support the Amendment which has been moved by the liable Viscount, Lord Cecil, but in doing so I should like to make a suggestion to the Government. It appears to me that there are here a number of Amendments which deal with much the same subject, and it might perhaps be convenient if we had something in the nature of a general discussion which would be based upon the Amendment itself but which might extend beyond the limits of the actual wording. If I might deal first of all with the Amendment, I would beg the Government if it is practically possible to do so, to consider accepting it. As I am sure they will agree, it is certainly not a revolutionary Amendment; it is not even very far-reaching. All it seeks to do, as I understand it, is to enable the existing machinery to continue for only a limited period—
VISCOUNT CECIL OF CHELWOOD: And subject to regulation.
THE MARQUESS OF SALISBURY:—beyond such period from the vesting date, which will be specified in the regulations. Therefore, the Government retain complete control of the situation. All they are required to do is not to bring this system, which has produced great benefit w the industry, suddenly and drastically to an end. I would not have thought that: there could be any proposal much more moderate than that. The attitude which the Government adopted last night with regard to a rather similar proposal, I am afraid—and I do not say this from any controversial point of view—could not help but give ground for a certain suspicion that they do not really want industrial democracy. I do not wish to misinterpret them in any way, and no doubt: the Lord Chancellor will be able to completely controvert what I say, but their attitude does give a slight impression that what they have in mind is something in the nature of a strictly limited oligarchy—not the same oligarchy as has existed in the industry of the past, but an oligarchy composed of the State and the great trade unions, and not what I call strictly an industrial democracy.

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I thought that was clear from a very remarkable speech which was made by the noble Lord, Lord Lucas, to which I listened, as I have no doubt many of your Lordships did, with great interest and a certain amount of surprise. The noble Lord said:
"Suppose that you started representation upon these Boards by popular vote. I need not say much upon some of the evils of popular voting, and mandated representations."
That is an argument, I should have thought, against any form of democracy, either political or industrial. He went on to say:
"I wonder what would have happened if a fortnight ago had been the period for electing two or three dockers' representatives upon the dock authority."
I do not know, but I cannot believe that the fact that there have been one or two dockers' representatives upon the dock authority would have made the situation much worse than it was, because we all know that 157 ships were held up for a fortnight; that the military had to be called in to clear the ships; and that for far too long a time a complete deadlock existed. I cannot believe that the representation of workers upon that Board would have made the situation very much worse than we found it to be.
LORD LUCAS OF CHILWORTH: If I may intervene, I would point out that there are representatives upon the dock authority to-day. The point was not the presence of workers' representatives upon the dock authority. But they have been put there in a direct manner, a manner which has been agreed by the employers. What I was saying was that if the system of electing the dockers' representatives to that authority had been open to the unruly elements which were so evident there, the representatives elected would not perhaps have been of the calibre which we have seen in the past.
THE MARQUESS OF SALISBURY: That does not seem to me to make the situation any better. Applying that principle to political elections, would the noble Lord say that the British people would have no right, in a moment of popular excitement when a General Election took place, to elect the majority from whom the Government was formed?
LORD LUCAS OF CHILWORTH: No. I draw a distinction between industrial
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organisation and national political organisation.
THE MARQUESS OF SALISBURY: I am very glad the noble Lord said that. That is just the point with which I am going to deal. I do not accept that differentiation at all and I hope to show that it is not a valid one. The noble Lord went on to say
"Surely the members of these Boards have to run this concern in the national interest, and not to look over their shoulders all the time they are on the Boards to appease and collect the votes of the people who put them there."
That is an example of what he means. I expect he says that there is a differentiation. I do not accept that differentiation. I know that this idea of industrial democracy, this idea of co-partnership which is another form of it, has had what may be called a very bad Press in the past. It has been disliked both by the employers and by trade unionists. It has been disliked by old-fashioned employers because they thought that it fettered their freedom of action. I expect it is disliked by a number of employers still for that very reason. It has been disliked by old-fashioned trade unionists because, to them, the whole position of the trade unions was built up on the fundamental antagonism between employers and employed. I wish to make it clear that I am not putting this argument as an attack on trade unions. They came into existence because conditions under which people worked at a certain period were admittedly, according to our present ideas, very unsatisfactory and this led them to gather together into trade unions.
I do not think the noble Lord would deny that there was a section of trade union leaders who felt that the workers could never have a fair deal unless they organised. I am only saying that there was that attitude. They were opposed to co-partnership (I have heard them say so in the old days in the House of Commons) because they believed that there was a fundamental antagonism between employers and employed, and they thought the only remedy for it was the existence of trade unions. They also thought that if there was a proper system of co-partnership which was intended to do away with that fundamental antagonism and replace it with a spirit of partnership, trade unions would become unnecessary and gradually

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disappear. They did not like that and the noble Lord may dislike it. That is the impression which I have had. I have, I hope, stated the case fairly about employers. I have also, I think, stated quite fairly the case of a certain section of old-fashioned trade unionists. I am not pressing this point about co-partner-ship with the view to embarrassing the Government. My noble relative has for many years been preaching this doctrine for private industries, just as much as he has for State industries. Personally I have for long taken the same view.
I believe—and this is where I come up against Lord Lucas—that the only way in an unrestricted democracy is to balance political power with economic responsibility. Where you have a political democracy you should allow an element of what I should call economic democracy as well. One must balance the other. Just as you have an unrestricted vote for adult persons to Parliament, so you ought to have representatives of the working people elected in order to take their share in the control of industry. Without that, I do not think that you will ever get a sense of responsibility in those who belong to the working class. Moreover, the lack of that spirit of partnership—the lack of the spirit which I have tried to describe—is, I believe, much more dangerous now that we have State-owned industry than it was when we merely had privately owned industry. After all, under privately owned industry, if there was a dispute between employers and employed there was always in the hack-ground the impartial State who could act as an arbitrator, But in a State-owned industry, the State is itself the principal; it is the employer. 4f there is a conflict between the employers and the employed in a State-owned industry, there is no impartial power in the background to arbitrate between the two sides. Therefore, you might very easily get that spirit of antagonism between the employer and the employed which all your Lordships know exists at the present time; it is one of the greatest tragedies at the present moment. Unless you can do away with that, you may easily get a revolutionary deadlock in the State-owned industries.
As I understand it, the only way to avoid that is to alter the whole spirit of industry and do away with or reduce the antagonism between employers and
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employed by an action of co-partnership. I think that that can be done only by bringing in—equally in private industry and in State-owned industry—representatives of the working people upon the boards of the various firms in industry, so that those who have lent their manual labour will feel that they are on absolute equality with those who have lent their money. I have believed that for a long time. It is not a Party matter; I think it is one which ought to be accepted by all Parties. That is the principle which underlies the Amendment of my noble relative. It is a principle which, as I say, I believe to be absolutely vital to this country. Therefore, whether in its present form this Amendment is applicable to the changed conditions of industry or not—and of that I am not certain—I do hope that the Government will give the matter which the noble Viscount has raised most careful consideration before the Report stage; and, if they find they cannot accept it in its present form, I hope they will consider benevolently and sympathetically whether some amended form cannot he produced to give effect to what the noble Viscount and so many of us want.
THE LORD CHANCELLOR: The fact that the noble Viscount who moved the Amendment and the noble Marquess who has just spoken have both spoken with the conviction which they have on this matter is in itself complete and absolute justification for giving the matter further consideration. I will gladly look into it and see whether anything can be done. My difficulty at the present time is that I do not see how it is possible. I will gut it quite frankly to the noble Marquess and the noble Viscount. Let me assume that everything they have said about the merits of co-partnership is right. Let me assume—and I have nothing to acid to the contrary—that it is an important principle which has worked well in the past. I will not say a word against it. What we are doing in this Bit, for better or for worse, is this: we are destroying the old companies, which are ceasing to exist, and we are having them all merged in some great new Area Board.
The South Metropolitan Gas Company is a very good illustration of one of the most important. On the vesting day, the South Metropolitan will cease to exist; it will become merely a part of—I do not know what Area Board it will be, but

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probably the Southern or South-Eastern Area Board. What is the scheme of the Bill? The scheme of the Bill is contained in these two clauses, Clauses 56 and 58. Clause 56 says, broadly speaking—I am not quoting it textually—that you must get together with your operative organisations and try to hammer out suitable agreements. Clause 58 says that until you have hammered out those agreements the existing agreements in certain respects shall continue, or may be continued by regulations. I think that is a fair, though not an entirely accurate, summary of the position.
VISCOUNT CECIL OF CHELWOOD: That is sufficient.
THE LORD CHANCELLOR: When the agreement is made under Clause 56, then by Clause 58, subsection (2), the existing scheme is to give way to the new scheme. The noble Viscount wants to put in here after the word "profits" the words "and management"—management of the undertaking. Be it observed that any such scheme is to be continued by regulations. I do not see how it can be done—I say this with some reluctance. I see, with some difficulty, how the profits scheme can continue because, although the South Metropolitan Gas Company is merged in this large area, I suppose it is possible for an accountant to pick out of the composite profits that share which may fairly be said to be attributable to the South Metropolitan Company. I assume that that is possible, and that the scheme can be continued with such adaptations and modifications as appear to the Minister to be necessary or desirable—and he will have to make some modifications to make that possible. But I do not see how you can go on with the "management" of the South Metropolitan Gas Company. I think the noble Marquess realises that I am not seeking to raise difficulties; I am trying to face up to the problem. But I do not see how that can be done, because the South Metropolitan Company ceases to exit on the vesting date.
VISCOUNT CECIL OF CHELWOOD: I do not want to interrupt the Lord Chancellor, but I am satisfied that it could be done.
THE LORD CHANCELLOR: I am perfectly willing to discuss it with the
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noble Viscount (I have no authority to agree anything) but so far as I am concerned, I do not at the present moment see how it can be done. The noble Viscount may convince me; he has convinced me on many matters before, and he may do so again; but at the present moment I do not see how it can be done.
VISCOUNT CECIL OF CHELWOOD: If it will facilitate the debate, I will shortly explain. One particular point in this I quite agree. I said just now that you cannot continue the device of having elected workers on a board of directors because there will be no board of directors. That I can see. We did not go quite so far as I wanted to go with reference to the Area Boards, but that matter must be dealt with on that line, and can be dealt with only on that line. There is one particular system to which my noble and learned friend has been good enough to refer, which exists now—and I know exists in many other companies—and that is the system of what is called the co-partnership committee. That is a committee jointly representing the employers and the workmen. Their main business is to talk things over, to come to agreement if there is any dispute, to promote further advantages for the workers and so on. I cannot see why that system cannot continue.
The Area Board could still nominate to the undertakings—to such undertakings as the South Metropolitan Gas—and the workers could go on electing their own representatives on those boards without any difficulty, and with the same admirable results. I speak perhaps a little too definitely, but I speak in the presence of people who know the system from the point of view of its working, and I do not think any other scheme has been devised which has been so successful in avoiding all disputes and in promoting every kind of amenity and advantage for the workers. I see no reason in the world why that should not continue to be used. In a sense it is quite voluntary, and it should be continued on a voluntary basis—subject, of course, to the regulations. I will not say anything to approve of government by regulation, but I admit that in this case the whole of the clause proceeds on the theory that whatever must be done must be done by regulation.
THE LORD CHANCELLOR: I am obliged to the noble Viscount. I quite follow him. That is what I should call—I think I am using the right phrase—a production committee, a works committee, or something of that sort. But it does not concern the management of the undertaking; that is the dilemma.
VISCOUNT CECIL OF CHELWOOD: These are merely words, and, of course, I am ready to modify the words. I do not pretend to be a draftsman, but in point of fact the management of a business is largely dealt with in such discussions. I have not actually sat on such committees, but see the noble Viscount, Lord Buckmaster, who has. Some difficulty may arise in the way of working a particular arrangement of labour, or a particular machine, or something of that kind. Is that not a matter of management? It may come before the co-partnership committee, before whom men who know about it can be heard, either themselves or through their representatives—this is quite a common thing—as to how work could be better carried on. And those actually engaged in that work can put their views before the management. It is up to the co-partnership committee. That is what I intended by using the word "management"
THE LORD CHANCELLOR: I still do not think that the word "management" is appropriate. Those are the things which this production committee could bring before the management for their consideration, but I should not include them in the phrase "management of the undertaking." I should have thought that "management of the undertaking" meant, in the last resort, that all these ideas had been put up, and that you were dealing with a man who had to give authority.
LORD LUCAS OF CHILWORTH: Executive committees.
THE LORD CHANCELLOR: Yes. That is what I understand by that. Therefore, whilst not disputing the beneficial idea lying behind this Amendment, I honestly think that, having set our hands to this particular plough of taking over all these concerns, merging them into Area Boards and bringing them all to an end on the vesting day, this particular Amendment is impossible. But as I say, if anybody can convince me that these words are
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possible or that other words are possible—I do not mind which words you have, so long as I am convinced they are possible—I will gladly go into this matter and take it up with the Minister to see whether I can get authority to accept an Amendment. I do not believe that as things are to-day, under the scheme of this Bill, it is possible to have the words "the profits or management of the undertaking"
VISCOUNT CECIL OF CHELWOOD: May I just explain? The drafting is this: They shall "participate in the profits or management"—
THE LORD CHANCELLOR: Management of the undertaking?
VISCOUNT CECIL OF CHELWOOD: Yes, certainly. "Undertaking" applies to profits too. I do not see that you can say that the participation in the management did not exist before the vesting date. It certainly did, and that is the only thing that is necessary.
THE LORD CHANCELLOR: The noble Viscount should read on—
"…provision shall be made by regulations for continuing the scheme…"
VISCOUNT CECIL OF CHELWOOD: Yes, for providing such modification as is necessary. But it cannot be continued with regard to profits. Everything that the Lord Chancellor has said applies to profits. The question is, are you to take this clause beyond profits? Surely we can find the right phrase.
THE LORD CHANCELLOR: You have obviously got to have such adaptation and modification as is necessary, and the only way you can have adaptation and modification is to isolate from the whole mass of profits of the Area Board those particular profits which are attributable to these particular works. I conceive that that may be possible, but I do not see how it is possible to continue a scheme of management of the undertaking. At the present moment, with the best will in the world, it seems to me impossible.
10.32 p.m.
VISCOUNT RIDLEY: I feel that in the way it is put here it is wrong. This is quite different from the point about management which we discussed yesterday. There, if your Lordships remember, it was a question of the appointment of

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members to the Boards. This is a question of the people taking part in the management of the undertaking. Those two things, are, I think, rather different. You may have a man who is working part of his time as a stoker, but who shares with the manager the job of appointing the foreman who supervises him when he is stoking. It is a contradiction in terms. I go as far as any noble Lord in thinking along the lines of what has been referred to as industrial democracy, but I want to see it run in a way in which it can work. It seemed to me, from our discussions yesterday, that what we are seeking is a means for people starting in the industry at any level to train themselves to become experienced and skilled work-people, to rise gradually from one position to another, to qualify themselves by training and experience for increased responsibility and for taking an important share in the conduct of the industry. There is a parallel in the Army, where everybody now starts as a private soldier and the Army selects the men it thinks most suitable and trains them up and sends them to an Officer Cadet Training Unit. That is the way to approach this kind of problem, to achieve the feeling that there is an opening for anybody, wherever he starts, to take the best job he can according to his own abilities.
But I think that, as expressed in this Amendment, the proposal is entirely and absolutely meaningless. I do not see how it can work, either in operating that part of the undertaking which has gone or as being a system which can be extended to cover the whole of the functions of the Area Board. I think that we must be realists in a matter of this sort, and we must also remember that the co-partnership scheme, as it exists in the gas industry, is not at all similar to the two cases which have been quoted by the noble Viscount who moved this Amendment. There are two companies in which part of a co-partnership arrangement is that there are members appointed to the board on behalf of the workers. There are dozens of other companies which have not got any such scheme. I have never heard any evidence to show, either that the results of those two companies are any more successful than even the average run of the rest of the industry, or that they achieve by that means any more
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satisfactory relationship between the men who work in them and the management who run them. Therefore, I think that it would be a mistake for the House to pass this Amendment. I hope that it will be withdrawn.
THE MARQUESS OF SALISBURY: I should like to add one more word, if I may. I personally think that there is a considerable force in what the noble Viscount has said about the difficulty of applying this exact Amendment to the new situation which is created, because formerly the management in certain firms was undertaken by the management, and it has now been taken over by a much larger organisation. We must consider this point. The whole gist of the noble Viscount's argument was that such a partnership for workers was possible in a smaller private firm, but it is practically impossible in a nationalised industry. Really, that was the inevitable conclusion which I drew from his remarks. I hope that that is not the case. I hope that the Labour Party will give attention to this point for, after all, they are the people who set up these great State-owned industries. Though I do not approve of them, I think that, if we are to have them, it is better that they should be successful industries than unsuccessful industries. I do not think that they will be successful unless we get over this appalling difficulty of friction between the employers and the employed. That friction still persists, even when the employer is the State. Therefore, it is a problem which faces the Socialist Government just as much as it faces the private enterprise man.
I suggest that it can be got rid of only by making the employed feel that they are getting a square deal from the State or from the private employer. I know that these things are easy to preach but difficult to put into practice, as many industrialists will no doubt tell me. However, I think that the easiest way of letting the workers know that they are getting a square deal is through somebody whom they can trust, somebody who has the full facts of the business. These people should feel that they are not being "done down" and should know that a contract has been entered into or has not been entered into; they should know that they are not being kept in the dark. That is one of the main

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functions of the members of the board. I agree with what has been said, that that sort of function has nothing to do with management. That is not management, but it is a certain function which directors upon the average board do perform. At present, the people who have lent their labour do not get that; but the shareholders get it. It would lead to a great increase of confidence if the workpeople had the same assurance as the shareholders have. I do not know how that principle can be applied to a nationalised industry, but it is most urgent that some means should be found of applying it. It is very important that it should be applied to private industry as well. Therefore I hope that the noble and learned Viscount and the Leader of the House might perhaps talk with the Minister and see whether any provision could be put into this Bill which would give effect to that principle. I believe if they did that they would do a good day's work, not only for the gas industry but for other industries as well.
THE LORD CHANCELLOR: May I answer one point made by the noble Marquess? I did not mean to say (and I hope I did not say) anything to preclude the possibility of any such arrangement as he has suggested under Clause 56. Whether or not it will be made I do not know, but there the field is perfectly open. What I meant to say is that I do not believe you can continue—and I emphasise that word—into the new situation an agreement which was made under an old and completely different situation. That I do not believe to be possible. But so far as making a de novo agreement is concerned, that is expressly provided for in Clause 56. It is a very wide field, and it may be that an agreement on the lines that the noble Marquess has suggested may be made. Speaking for myself, and I am sure for the Leader of the House, we would be most happy to go into it with the noble Marquess and his noble relative, and see what we can do to help. I am quite certain, however, that this particular Amendment will not work, and it is no good.
VISCOUNT BUCKMASTER: As my noble friend Lord Cecil has been good enough to refer to me, and as I am perhaps the only member of your Lord-
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ships' House who has had the privilege of serving on a co-partnership committee, I feel it incumbent upon me to say something, though I fear what I say will not be regarded by the noble Viscount as altogether helpful. My experience on a co-partnership committee was a very happy one. We never had a strike in my company in a hundred years, and the relationship between the workers, directors and management was as happy as it could be. After a certain probationary period, the workers all held shares in the company; they received the accounts of the company and they knew what was happening. In regard to the point that the noble Viscount has made on this question of management, of coarse they did not manage the company, in the sense of deciding whether we should open a new branch in an adjacent town; that was a province of the board of directors on which they were not represented. On the point of whether they ought or ought not to have been so represented, frankly I have an open mind. Personally I would have liked to see them there. But the system worked with great effect in regard to the settlement of conditions of labour and wages and so on. When it came to the question of working on Christmas Day, and matters of that kind, it was settled by the men themselves, in consultation with the general manager and in the presence of one or two of the directors who were privileged to serve on this committee.
I feel two things on this. I feel I may be considered unhelpful—though I trust I shall not be regarded as provocative, but merely trying to be realistic. The first is that I do not see how it is practicable, as the noble and learned Viscount says, to translate this elementary stage of management (or any wider stage most certainly), into a nationalised industry. I feel that that is not an easy thing to do. The second is this—and here I hope the First Lord particularly will not think I am seeking to be vexatious. The spirit of these co-partnership schemes tends to go when you get trade union recognition. The moment my company was forced to recognise the trade anions we were to a large extent hampered. We always allowed all workers freedom to belong to any union they pleased, but the moment we ourselves were compelled to join the employers' union, from which we had consistently

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abstained, we were forced to settle all conditions of work and wages in London through the union; we could not settle them on the spot, and all the happy spirit of that co-partnership committee disappeared, to the regret of many of the most loyal and the most keen trade unionists who served on it.
I beg noble Lords, with the greatest respect—and again I repeat that in saying this I am in no sense seeking to be provocative—to address themselves to this matter in a spirit of realism, appreciating the probable effect of the opposition which these co-partnership schemes will inevitably encounter in the future. May I, in concluding these remarks, say that I appreciate the spirit of the noble and learned Viscount's statement, that he will seek any method whereby the essence of these schemes can be preserved? I trust that, as a result of his skill, and of consultations with the noble Marquess, something valuable may be achieved.
VISCOUNT CECIL OF CHELWOOD:
I will withdraw anything that I have moved, but in this particular case I have so much confidence in the noble and learned Viscount the Lord Chancellor that when he says he will make an effort to find some way out of this difficulty I am certain he will do so. His statement is a great inducement to me to trust him absolutely, and to hope for the best. I venture, however, respectfully to press upon him the desirability of a continuation of profit-sharing in an undertaking. I do not see any difficulty in providing that these consultative committees—let us call them by some phrase of that kind—shall also be continued in each works as they now exist. There is no reason why they should not continue in works which are subject to the Area Boards' control of the industry. However, I feel that it would be wrong for me to press this Amendment to a Division now, and I am sure that I should be advised not to do so by the noble Marquess the Leader of the Opposition. If that advice were given, I should certainly obey it. I therefore beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
10.48 p.m.
VISCOUNT BRIDGEMAN VISCOUNT BRIDGEMAN moved, in subsection (1), after "undertaking" to insert:
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"or to receive any credit, bonus or bonus share issue according to the price of gas, quantity of gas sold, or otherwise according to the working result of the undertaker"
The noble Viscount said: The last Amendment has led to a discussion which has ranged high and wide, but in this Amendment we come back to what concerns the clause as originally drafted—namely the financial provisions of co-partnership schemes. We are all agreed, I think that the regulations mentioned should carry on for the time being all the financial provisions, particularly in co-partnership schemes, that are in existence at the time of the vesting date. But there is a doubt in our minds as to whether the clause as at present drafted, referring as it does only to profits, really carries out that intention. I understand that there are a number of co-partnership schemes which are based entirely on profits. There are also a certain number of co-partnership schemes not based on profits. Some, I understand, are based wholly on the current price of gas; others again, vary with output. So, if I am right in thinking that the clause is too narrowly drafted, all these schemes not strictly dependent on profit would not be able to be continued by the regulations referred to in this clause. For that reason I think that this Amendment is mainly a matter of drafting. There is really no difference between us. I think that the more because I noted that when this matter was discussed in another place, the Minister in charge said that co-partnership schemes need not be related to the scale of profits. Therefore, I would like to move this Amendment, to ask whether I am right in thinking that the clause as drafted refers only to co-partnership schemes which are strictly based on profits—in which case it seems that the Amendment is necessary—or whether I am wrong, and the clause as drafted allows regulations to continue co-partnership schemes which are based otherwise than strictly on profits. I beg to move.
Amendment moved—
Page 73, line 2, after ("undertaking") insert the said words.—(Viscount Bridgeman.)
10.52 p.m.
THE LORD CHANCELLOR: Our idea and our intention in these words was that the continuance should apply not only to those schemes which are strictly based on profits, but to the sort of

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schemes which the noble Viscount has in mind. We thought that the words we used were wide enough for this purpose. The objection I have to the Amendment is that I think the point is already covered in the Bill. But I am not quite certain that I am right about that, and I have no objection to looking into the matter again, so long as I am not taken as promising to do anything except to look at it and consider it in the light of what the noble Viscount has said. As at present advised, we think the words we have are wide enough. It is difficult to say where co-partnership begins and ends and where mere incentive schemes come in. I would be very hesitant to give any definition. For instance, I think the Gas Light and Coke Company had a bonus scheme which was dependent on the amount of gas sold. Is that co-partnership, or is it a mere incentive wage scheme? I think I should call that an incentive wage scheme. I should be very hesitant to give a definition of where one ends and the other begins. However, there is nothing between me and the noble Viscount on this Amendment. I intend my words to be wide, but I will look into the matter again to see if they are wide enough.
VISCOUNT BRIDGENIAN: I am obliged to the noble and learned Viscount. He has given an assurance that he will look into the matter and, in the light of that assurance, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
VISCOUNT CECIL OF CHELWOOD: I do not know what the Government think about the next Amendment. I do not quite see why it is necessary to say that these schemes shall be continued only for a period. To put an end to them may very likely be the wiser thing. But if they can be continued for a period, why not continue them permanently, if they turn out to be valuable schemes? I beg to move.
Amendment moved—
Page 73, line 3, after ("scheme") insert ("permanently or").—(Viscount Cecil of Chelwood.)
THE LORD CHANCELLOR: I think the only reason is that all these arrangements, and the regulations which continue them, are what are called in law "a
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condition subsequent." If you get an agreement made under Clause 56 with the Area Board or the Gas Council, then that agreement supplants the old arrangement, even though it is in identical terms. It is notionally a new agreement; and the parties to it are, of course, different, because one of the parties will be the Area Board or the Gas Council. Therefore, there can be no permanence about this matter. They can live only unless and until an agreement is made.
VISCOUNT CECIL OF CHELWOOD: Yes.
THE LORD CHANCELLOR: And that is why we cannot say "permanently"
VISCOUNT CECIL OF CHELWOOD: That may be so. If an agreement is made they will perish, but if an agreement is not made (supposing there is a discussion and, for some reason which we do not foresee at this moment, no agreement is arrived at and Clause 56 becomes inoperative) surely these arrangements which were prolonged should go on permanently—possibly qualified by saying "permanently or—"
VISCOUNT SWINTON: If the noble Viscount will look at Clause 56 he will see that it begins:
"Except so far as they are satisfied that adequate machinery exists."
We all agree that the machinery in the trade to-day is extraordinarily good. The only reason why it has to be interrupted and something else put in its place is that the new structure which is being imposed on the industry is inconsistent with some of the plans which are at present in operation. But suppose that something in the nature of what I should call the partnership spirit is made a reality in the organisation that exists. It may well be then that the Gas Council, talking with the organisations, will say, "We have a perfectly good working arrangement for this." Then they will not make anything new; and where that exists, surely the system should become permanent. It cannot do any harm to put in my noble friend's words. I should have thought that if they were not in it would be an indication that all these schemes had to stop when the companies were liquidated.
THE LORD CHANCELLOR: I say frankly that I do not think they can do much harm. But I do not think

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"permanently" can be an appropriate word. Let us look at subsection (2) of Clause 58:
"If an Area Board or the Gas Council enter into an agreement with any organisation with whom they seek consultation under section fifty-six of this Act, for the making of arrangements by the Board or Council in place of any such scheme as aforesaid, regulations shall make such provision (if any) as may be necessary to give effect to those arrangements.…"
What you have here in this Bill is the fact that the continuance of the existing scheme must be subject to any new scheme made under Clause 56. If that is so, I do not see how the Minister by regulation can continue an existing scheme on a permanent basis. I do not see how it can be done, because in the very nature of things the continuance of the existing scheme can be only until the new scheme under Clause 56 is made. The suggestion that it should be "permanently or for such period" is all right, but in the nature of things I do not see how you can possibly say that it is to be permanent when in the very next subsection you say that it will last only until a scheme under Clause 56 comes into operation. However, as I am looking into the matter of the other point we will certainly embrace this point in our considerations.
VISCOUNT BUCKMASTER: The noble Viscount will allow me to point out that there is no obligation to make a scheme under Clause 56. Those schemes may never be made.
VISCOUNT CECIL OF CHELWOOD: I shall accept the offer of the Lord Chancellor to consider it again. But I beg him to observe that the fact that it is stated to be only a period on the face of it leaves an unpleasant aroma of dislike of the whole arrangement. If you say "permanently or for such period" that aroma is destroyed. However, in view of what the Lord Chancellor has said, I will not press it.
Amendment, by leave, withdrawn.
VISCOUNT ADDISON: I think that at this particular point, having reached agreement, it would be convenient that I move that the House do now resume.
Moved, That the House do now resume.—(Viscount Addison.)
On Question, Motion agreed to, and House resumed accordingly.

NATIONAL SERVICE BILL. [H.L.]
VISCOUNT HALL: My Lords, I beg leave to introduce a Bill to consolidate the National Service Acts, 1939 to 1947, and the Reinstatement in Civil Employment Act, 1944, so far as that Act applies to persons called up for National Service after the thirty-first day of December, 1948. I beg to move that the Bill be read a first time.
Moved, That the Bill be now read 1a.—(Viscount Hall.)
On Question, Bill read 1a, and to be printed.

EMPLOYMENT AND TRAINING BILL
Returned from the Commons, with the Amendments agreed to.
DARWEN CORPORATION BILL
Reported, with Amendments.
  EMIGRANTS' FUNDS.
  EMIGRANTS' FUNDS.