Sitting of 17 June 1948

Preamble
The House met at Half-past Two o'Clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  GREAT YARMOUTH PORT AND HAVEN BILL
  Read the Third time, and passed.
ORAL ANSWERS TO QUESTIONS
  TRADE AND COMMERCE

    Station Hotel, Aberdeen (Equipment)
    Mr. Hector Hughesasked the President of the Board of trade if, in view of the fact that the Station Hotel, Aberdeen, has recently been de-requisitioned and is now about to be restored to a condition to house the large numbers of visitors both British and foreign expected this summer, he will grant a special allocation for linen and internal fittings under the priority scheme sufficient to utilise the whole of this hotel.
    The President of the Board of Trade (Mr. Harold Wilson): No application for help with equipment has been received from this hotel, but I should be ready to consider giving some assistance, similar to that normally granted to de-requisitioned establishments, nearer the time of its re-opening. I understand that the building work alone involved in the restoration of this hotel will take about nine months to complete.
    Mr. Hughes: While I thank the Minister for that reply, may I ask him if he is aware that already the building work has been put in hand, that it is hoped to have the hotel completed in time for the very large number of visitors expected this summer and that the licence for restoration will be ineffective unless
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    allocations are made on the lines suggested at the end of the Question?
    Mr. Wilson: When they get nearer to opening, I shall certainly be willing to give the appropriate assistance as I have said.

    Hosiery (Stocks)
    Mr. Osborneasked the President of the Board of Trade whether, in view of the peak textile stocks just shown by the Bank of England monthly statistical return and the high price of wool, he will now permit all hosiery goods to be sold without clothing coupons.
    Mr. H. Wilson: No, Sir. The return mentioned is no doubt that for April, since when steps have been taken which should help to move these stocks.
    Mr. Osborne: Is the President of the Board of Trade aware that wool is now three times higher in price than it was at the end of the war, and that manufacturers are afraid to make big stocks because they may be ruined? Will he therefore take off coupons to encourage manufacturers to go on making stocks.
    Mr. Wilson: Wool, from which we removed all controls some time ago, is undoubtedly above the post-war price, but that is no argument for taking off coupons. The matter was fully debated in this House less than three weeks ago.

    Barrow-in-Furness
    Mr. Monslowasked the President of the Board of Trade whether consideration can now be given to extend the area of operation of the Distribution of Industry Act to include the Borough of Barrow-in-Furness.
    Mr. H. Wilson: This will be carefully considered as part of the general review of the Development Areas which I shall very shortly be making in accordance with Section 7 (1) of the Act.

    Footwear (Coupons)
    Mr. Osborneasked the President of the Board of Trade what data he has received from the footwear trade about the sale of boots and shoes since they were reduced in coupon value; and, in view of such data, if he is now in a position to take all footwear off coupons.
    Mr. H. Wilson: I have received preliminary reports from a large number of manufacturers and distributors of footwear which show that there was at first a sharp increase in the volume of sales of boots and shoes after they were reduced in coupon value. There has, however, not yet been time for the long-term effects of this reduction to show themselves, and I am not, therefore, prepared to take all footwear off coupons.
    Mr. Osborne: In view of the underemployment and the fear of much greater unemployment in the footwear industry, does not the Minister think he might take the risk of doing away with all coupons?
    Mr. Wilson: I am keeping the matter under very close review. What we have to bear in mind is the task of getting enough hide supplies to keep the industry fully employed next year.
    Mr. Gibson: Has my right hon. Friend received any indications of cheaper boots and shoes?
    Mr. Wilson: That is something to which I am very much looking forward now that there is more competition provided between the various manufacturers and distributors.

    Non-Utility Clothing (Scheme)
    Mr. Peter Freemanasked the President of the Board of Trade whether he will make a statement on the half-coupon and half-price scheme recently introduced; whether he is satisfied with the results; whether he is aware that where a Purchase Tax is in operation the sale involves a heavy loss to the retailer; and whether it is his intention to modify, continue or extend the arrangement.
    Mr. H. Wilson: The scheme allows wholesalers and retailers to sell goods at half-coupon rate if the price, including Purchase Tax where paid, is reduced to not more than half the legal maximum price, and there are special arrangements for manufacturers and for the passing on of goods which wholesalers or retailers have bought at half-coupon rate. The details have been fully explained in a Press notice, of which I am sending my hon. Friend a copy.
    The charge of Purchase Tax on non-utility clothing is one among several factors which increase its price above that
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    of utility, and, therefore, increase the amount of the loss which a retailer must incur in selling at half-coupon rate, but I see no reason for giving specially favourable treatment to non-utility clothing on that account. The arrangements were fully discussed in advance with representatives of the principal retail trade associations, and followed the lines of the trade's own proposals. It is too early yet to judge the results of the scheme, but I shall keep the position under review.
    Mr. Freeman: Could my right hon. Friend say how extensive has been its use so far?
    Mr. Wilson: If my hon. Friend will look at the shops in many parts of the country, as I have during the last fortnight, he will see that in many places these half-coupon, half-price sales are being introduced with great benefit to our consuming public.
    Mrs. Jean Mann: Is my right hon. Friend convinced from his perambulations round the shops that there is still too much money chasing too few goods?
    Mr. Wilson: No, Sir. As I said after an abortive meeting with the Dundee housewives yesterday morning, for some time I have been of the opinion that the shortage of money rather than a shortage of clothing coupons is one of the big limiting factors for a large section of our population, but that is no reason for taking everything off coupons and allowing those with money to scoop the lot.

    Canadian Newsprint
    Mr. De la Bèreasked the President of the Board of Trade whether, in view of the fact that our imports from Canada are subject to British Government control, which has compelled the Newsprint Supply Company on more than one occasion to repudiate the agreements entered into for the purchase of newsprint from Canada, he will now prevent a repetition of this enforced repudiation by making a minimum allotment of £3,000,000 worth of dollars for the priority purchase of Canadian paper.
    Mr. H. Wilson: As I informed the House during the Debate on the Board of Trade Vote on 25th May, the question of our future dollar import programme will have to be considered in relation to the whole

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    European Recovery Programme, and at the moment it is impossible to make any allocation of dollars to the purchases of Canadian newsprint beyond the programme which has already been agreed for 1948.
    Mr. De la Bère: Is the Minister aware that this country is only receiving one-third of its prewar supply of newsprint; that there is no real world shortage of newsprint; and that the discrepancy between supply and demand is very small? Why have other European countries a better supply than we have?
    Mr. Wilson: First of all, I am aware that the supply of newsprint is far too small; secondly, I am aware that whether there is or is not a shortage of newsprint there is a world shortage of dollars; and, thirdly, I am aware, in spite of certain statements made by hon. and right hon. Gentlemen opposite, that this country is amongst the highest—it is the tenth highest of 37 countries—in consumption of newsprint per head. I should not be prepared to recommend to this House that we allocate dollars in that way until we can see the whole dollar situation more clearly.
    Mr. Frank Byers: Would the Minister say whether the decision with regard to how much is to be allocated in the way of dollars will be taken before September of this year?
    Mr. Wilson: It is very difficult to say that until the dollar position becomes clearer.
    Mr. Wilson Harris: Has the right hon. Gentleman ascertained whether there is any prospect of a free grant of newsprint or dollars for newsprint under the European Recovery Plan?
    Mr. Wilson: There has been no such offer.
    Brigadier Medlicott: Is the right hon. Gentleman aware of a recent statement to the effect that the Kemsley Mills under a special arrangement are about to make two and a half million dollars' worth of newsprint for the Hearst Press, and could it at least be arranged for earnings of this special character to be used for the purchase of further newsprint and not taken into the general dollar account?
    Mr. Wilson: I am well aware of the arrangement which was made with Board of Trade approval. [An HON. MEMBER: "Shame."] It is not a shame. The particular programme is being carried out with materials, including sulphite, paid for with American dollars by American newsprint interests, and if we had not done it, there would not have been any additional newsprint available in this country. I cannot undertake that the earnings from that programme will be allocated entirely to newsprint and probably the hon. Member for Evesham (Mr. De la Bère) would be the first to complain if I were to cut down the feeding-stuffs programme in order to purchase more newsprint.
    Mr. De la Bère: In view of the utter failure of the Minister to give an assurance of priority in this important matter and the utterly irrelevant matters that have been introduced, I beg to give notice that I shall raise the whole question on the Adjournment.

    Pottery Industry (Building Licences)
    Mr. A. Edward Daviesasked the President of the Board of Trade whether he is aware of the delay which is taking place in dealing with applications for building licences from pottery manufacturers; and if he will take steps to expedite decisions.
    Mr. H. Wilson: I am aware that the examination of individual industrial licence applications takes a considerable time. These applications have to be examined in relation to competing schemes for the limited resources available and there is an unavoidable need for consultation with other Departments concerned; this takes time. As announced by my right hon. and learned Friend, the Chancellor of the Exchequer, on 23rd April, in reply to the hon. Member for Orpington (Sir W. Smithers), Departments are, however, examining how these controls can be simplified and speeded up. I can assure my hon. Friend that the importance and urgency of the modernisation schemes put forward by pottery manufacturers are fully appreciated and that applications are dealt with as speedily as possible.
    Mr. Davies: Does the Minister recognise that at least three months must

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    elapse before we can get a decision one way or the other, and, while recognising the difficulty, could we have some information a little more speedily so that manufacturers will be the better able to plan their future course?
    Mr. Wilson: I recognise that there have been delays due to the introduction of the cuts in the capital investment programme, but I have said that these matters will be speeded up. Of course, the great tragedy is that these very desirable improvements were not brought about before the war when the machinery was available

    Surgical Belts and Corsets
    Mr. Sorensenasked the President of the Board of Trade if he is aware of the hardship caused by the necessity of women who must have special post-confinement belts or abdominal corsets being compelled to give up coupons for this purpose; and whether he will make some concession in this direction.
    Mr. H. Wilson: Surgical belts and corsets of not more than six inches in width specially designed for a number of specified conditions may be purchased without coupons. Coupons are required for other types because they cannot be clearly distinguished from garments made for ordinary wear. I am, however, always prepared to consider sympathetically applications for extra coupons to meet abnormal expenditure on these garments.
    Mr. Sorensen: May I take it from that that there is some hope that it will be possible to purchase these garments without coupons?
    Mr. Wilson: I said that I am always prepared to consider sympathetically individual cases.

    Film Industry
    Mr. H. D. Hughesasked the President of the Board of Trade what steps he proposes to take in the near future to increase the proportion of short films exhibited in British cinemas and to ensure the producers of these films a fair return for their outlay.
    Mr. H. Wilson: I have no power to enforce the substitution of short films for long films in cinema programmes, and as at present advised I see no reason
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    to take any steps to do so. I hope, however, that British producers of worthwhile supporting films, long and short, will derive benefit from October onwards from the operation of the new 10s. cost test. The question of terms for the distribution and exhibition of short films will fall to be reviewed by the committee which I intend to set up before the end of the summer.
    Mr. Hughes: Is my right hon. Friend aware that this important section of the British film industry is in a very difficult situation indeed, and if the committee is not going to start until October the chance of increasing British film production in the supporting programme and making it possible to raise the quota will be very considerably delayed.
    Mr. Wilson: The establishment of a quota for this type of film is the first step in a campaign to increase the proportion of screen time taken by films made by this section of the industry as long as the films are of good quality and are of the kind which our people want to see.
    Mr. Collins: Is my right hon. Friend satisfied that conditions in the industry are such as will permit producers of the short film to fulfil the new 25 per cent. quota of British films?
    Mr. Wilson: I would not have fixed the quota were I not satisfied that the films could be produced and shown. I am not yet satisfied that conditions on the distribution side of the industry are such as to guarantee a right outlet for all films that can be produced.
    Mr. Edgar Granville: Will the right hon. Gentleman repudiate the statement which has appeared in the Press recently that there was the possibility of some of the cinemas in this country boycotting the type of film in question?
    Mr. Wilson: I cannot answer on behalf of the distribution side of the industry, but the settlement of a quota is the best guarantee of showing for the films that can be produced.
    Mr. Henderson Stewart: The right hon. Gentleman says that he is satisfied. Is he aware that the great majority of small cinema owners in the country giving about two shows per week hold the view that the new quota will just about ruin them?
    Mr. Wilson: This Question did not relate to the quota, and the House will have an opportunity of debating the quota provisions this evening. I am not aware of anything of the kind.
    Mr. William Shepherd: In view of the fact that many of the producers of short films will be out of business if they await the full report of the Committee, can the President of the Board of Trade arrange for an interim report on this specific side of the industry to be presented before the main report?
    Mr. Wilson: As I said, the fixing of the quota at 25 per cent. is first-aid treatment for this section of the industry. Consequently I have made it clear to the exhibitors that the whole House, judging from the remarks made during the Debate on the Films Bill, would wish to see distributors make arrangements for showing more of these films ahead of that report.
    Mr. Hughes: Will the right hon. Gentleman bear in mind that this section of the industry feel that if they get a fair return and a fair showing they will be able to supply considerably more than the 25 per cent. quota.
    Mr. Wilson: Yes, Sir, I am well aware of that and I made some remarks to that effect during the Debate on the Films Bill. The first step, however, must be to fulfil the 25 per cent. quota.
    Mr. Wyattasked the President of the Board of Trade what is the definition of an independent film producer accepted by his Department.
    Mr. H. Wilson: None, Sir. Any film producer can call himself independent if he likes, and almost every film producer can have his independence impugned on the ground that, before he can raise his finance, he must get his film accepted by a distributor. Generally speaking, however, I regard a producer as "independent" if he is not financed or controlled by an American company or by a company associated with a circuit.
    Mr. Wyatt: Does my right hon. Friend also include within the ambit of his definition of independent producer people who have links with distributing organisations or controls?
    Mr. Wilson: If my hon. Friend has any specific cases in mind perhaps he will let me know which cases they are.

    Export Trade (Surveys)
    Mr. Skinnardasked the President of the Board of Trade, in view of the great value to British exporters of the Survey for British Consumer Goods in the U.S.A., which "Time and Life" conducted in association with the British Export Trade Research Organisation, whether he will consider the advisability of commissioning B.E.T.R.O. to carry out similar surveys in relation to the consumer capacity of other countries.
    Mr. H. Wilson: B.E.T.R.O. was started by private industry with the support of the Board of Trade, with the object of undertaking the kind of market research exemplified by the survey referred to by my hon. Friend. Such detailed research is considered to be beyond the normal functions of the Government overseas service and I do not think, therefore, that I would be justified in adopting my hon. Friend's suggestion. I am pleased to acknowledge the value of the "Time-Life" survey in the hope that manufacturers and their organisations disposing of market research funds may consider placing commissions with B.E.T.R.O.
    Mr. Skinnard: Will the Minister consider linking the work of the export sections of his own Ministry with that of B.E.T.R.O., in order to see whether in the various countries similar surveys can be carried out?
    Mr. Wilson: The export promotion department and B.E.T.R.O. are very closely linked, both in this country and overseas. There is a very close working arrangement between B.E.T.R.O. and our commercial representatives overseas.
    Mr. Maclay: Is the Minister satisfied that the results of the survey have been brought to the attention of the maximum number of potential British exporters?
    Mr. Wilson: Yes, Sir. My Department are at the present time discussing that survey with each of the industries covered by the survey.

    Industrial Councils (Scottish Interests)
    Colonel J. R. H. Hutchisonasked the President of the Board of Trade whether he is prepared, in cases where a development council or advisory council or advisory or consultative committee is constituted in any industry which has an important Scottish element, to appoint a separate Scottish council or committee.
    Mr. H. Wilson: No, Sir. I cannot give any such general undertaking. Each individual case must be considered on its merits. But, while I fully recognise the importance of providing for Scottish interests, I do not think that the setting up of separate bodies will be found, as a general rule, to be desirable.
    Colonel Hutchison: Is the Minister aware that in many industries the system of operating is very different between Scotland and England? Is he further aware that in the furniture trade and trades of that kind considerable anxiety is expressed at the appointment of a council in which the English method of working will have dominance?
    Mr. Wilson: We have not yet appointed a council for the furniture trade but last night in Edinburgh I had a discussion with a special committee of the Scottish Council for Industry on this matter. While I agree that there are differences in working, in many other cases there are such similarities that everyone will be advantaged if we can have a single council for the whole country.
    Sir William Darling: Does the Minister's answer take any consideration of the knitwear trade and of the difference between the Scottish and the English methods of production?
    Mr. Wilson: Yes, Sir. That point was made in Edinburgh last night, but I have found some difficulty in discussing the matter with the Scottish knitwear and hosiery industry, in the first place because they are opposed to having a development council at all, and, secondly, because they want a separate one for Scotland.
    Mr. Gallacher: Would the Minister reconsider his attitude regarding the setting up of an independent Scottish advisory council for the exhibitors in the film industry, in view of the difficult position in which Scottish exhibitors find themselves under the new quota?
    Mr. Wilson: The question I am answering relates to development councils. There is no development council in the film industry, nor is one in contemplation.

    Utility Furniture
    Mrs. Leah Manningasked the President of the Board of Trade to what extent cardboard is used in the manufacture of utility furniture.
    Mr. H. Wilson: Not at all I am glad to have this opportunity of denying a statement, which has been given considerable publicity, that my Department permitted the use of cardboard in the manufacture of utility furniture. I can only assume that the series of misstatements were based on a mis-hearing or misprint for "hardboard," which is quite a different matter.
    Mrs. Manning: In view of the importance of this statement will my right hon. Friend see that it receives as much publicity as did the previous statement, because many people who bought such furniture are very anxious? They think it may fall to pieces at any moment.
    Mr. Wilson: I have every hope that, for once, the "Daily Express" will give as much newsprint to denying the statement they made as they gave to making it in the first place.

    Tobacco
    Colonel Ropnerasked the President of the Board of Trade whether he will make a statement with regard to the adequacy or otherwise of the supply of tobacco for the next 12 months.
    Mr. H. Wilson: The amount of tobacco leaf which we can expect to get from the United States this year is still uncertain, but it must in any circumstances be small compared with normal requirements. We expect larger supplies from Southern Rhodesia than ever before, and there should be small increases from other non-dollar sources. But, even on the most favourable assumptions, these sources of supply cannot at present or in the immediate future make up for the reduction in supplies from the United States.
    In the circumstances, we must expect the supplies of tobacco goods in the shops to continue to be severely limited. These supplies are already falling below demand, and there have been queues and complaints

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    of shortages. Nevertheless, even these limited supplies are greater than before the war. The shortage is general, and there is every prospect that it will continue for a long time ahead. The fact is that as a nation we are trying to smoke more than we can afford.
    Mr. Henderson Stewart: Is it true that one may go to a tobacco shop and order a large quantity of tobacco and cigarettes, duty free, and send them out to Holland, Denmark and other countries—tobacco for which we have paid dollars?
    Mr. Wilson: I would like to have notice of questions about arrangements for shipping supplies overseas.
    Mr. Harrison: Does the Minister give full consideration to the value of manufactured tobacco, with respect to the possibility of getting the raw tobacco here and manufacturing this tobacco for re-export?
    Mr. Wilson: Yes, Sir, we give a lot of consideration to that matter. There are arguments in favour of importing dollar tobacco and exporting the manufactured tobacco to soft currency countries, but most of the exports go to hard currency countries or to countries which otherwise would be paying sterling-area dollars to buy cigarettes.
    Mr. Lipson: Can the right hon. Gentleman say anything about the reserve supply of tobacco which is already in this country?

    Princess Elizabeth's Wedding Dress (Exhibition)
    Mrs. Middletonasked the President of the Board of Trade why Plymouth has not been included in the list of towns in which Princess Elizabeth's wedding dress is to be exhibited.
    Mr. H. Wilson: The object of the tour is to give satisfaction and encouragement to textile workers by letting them see this unique example of British craftsmanship. The tour will therefore be confined to towns forming the most convenient centres for the industry.
    Mrs. Middleton: Is my right hon. Friend aware that Bristol is no more a textile producing area than is Plymouth, and that women of the West Country ought to have an opportunity equal with that of other
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    women throughout the country of seeing this dress, which is the dress of a decade if not the dress of a generation? May I ask whether he will look at this matter again?
    Mr. Wilson: I recognise that Bristol is not a textile centre but it was chosen as convenient, as being midway between the Stroud valley and South Devon, both of which are textile areas.

    Enemy Debts (Italy)
    Mr. Harold Daviesasked the President of the Board of Trade when the firms in this country who have not yet obtained satisfaction of enemy debts due to them from Italian sources may expect to receive payment.
    Mr. H. Wilson: Arrangements have now been concluded by the Italian Government to give effect to Article 3 of the Anglo-Italian Property and Debt Agreement of the 17th April, 1947, and the payment of debts to British creditors has already begun. It is not possible to say when any particular debts will be paid, although the arrangements contemplate, in general, that the first debts to be paid will be those which have been outstanding longest.
    Mr. Davies: Can my right hon. Friend tell me whether the payment of some £50,000 from Italy to South Wales coal exporters has started?
    Mr. Wilson: I could not answer a question about individual creditors. If my hon. Friend will let me have details of what he has in mind I will look into them.

    War Damage Claims
    Mrs. Ridealghasked the President of the Board of Trade if he can make an announcement as to the date on which claims under Part II of the War Damage Act will be dealt with, having regard to the fact that premiums slightly exceeded total claims, and the desire of traders affected to clear up their accounts under this particular heading.
    Mr. H. Wilson: I would refer my hon. Friend to the answer I gave on 13th November to the right hon. Gentleman the junior Member for the City of London (Mr. Assheton). I would add that the amount of the claims under the business scheme, apart from expenses, exceeded the premiums by about £15 million.
    Mrs. Ridealgh: Is the Minister aware that in the case of one Co-operative society the amount of claim outstanding is £80,000, and would he not agree that capital tied up like this is causing great inconvenience in the carrying on of a business?
    Mr. Wilson: I have already said that where any cases of individual hardship are involved, or where delay in payment is affecting capital development and capital expenditure schemes of a worthwhile character, I am prepared to look at them individually.
    Mr. Boyd-Carpenter: Is it not a fact that the answer of 13th November, to which the right hon. Gentleman referred the hon. Lady, was merely a statement that he was doing nothing whatever about this, and in view of the fact that three years have now elapsed since the end of the war, is it not time to authorise general payments?
    Mr. Walter Fletcher: Will the same principle apply to overseas schemes where the Government are guaranteeing payments?
    Mr. Wilson: I should want notice about questions in regard to overseas claims in individual countries. They are all being treated differently.

    Raw Cotton (Stocks)
    Mr. Walter Fletcherasked the President of the Board of Trade what amount of Egyptian cotton has been bought by the Raw Cotton Commission in 1948; what stocks of cotton were held in this country at the end of May, 1948; how many months consumption this figure represented; and what purchases have been made in the last six months.
    Mr. H. Wilson: Stocks of raw cotton in this country at the end of May are provisionally estimated at 310,000 tons, equivalent to about nine months' consumption. The final figure will be published in due course in the Monthly Digest of Statistics. I cannot give information about purchases or stocks of particular growths.

    Development Councils
    Mr. Edward Daviesasked the President of the Board of Trade whether he is now in a position to announce the
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    progress which is being made with the setting up of Development Councils as provided for in the Industrial Organisation and Development Act, 1947; and in particular what is holding up the formation of a Development Council for the pottery industry.
    Mr. H. Wilson: In reply to the first part of the Question, I have at present nothing to add to the answer which I gave to my hon. Friend the Member for Acton (Mr. Sparks) on 3rd June. With regard to the pottery industry, as I told my hon. Friend in reply to his question on 11th May, the reason for the hold-up in the pottery scheme was that the British Pottery Manufacturers Federation were discussing with the National Society of Pottery Workers an alternative scheme they had formulated. Their proposals were not in fact acceptable to the National Society, but they have now been formally referred to me by the Federation. I have undertaken to consider them, and am at present doing so.
    Mr. Davies: Would not the Minister agree that it is time some decisive action was emerging from the consideration of these councils, and will he tell us from where the opposition is coming? In the case of a pottery council, is it not a fact that many of the more progressive manufacturers are in favour of setting up a council?
    Mr. Wilson: Yes, it is certainly time for decisive action and I can promise that to my hon. Friend before the House adjourns. The delay has been caused, as I think he knows, first by illness on the part of the President of the Pottery Manufacturers Federation, secondly by a rather havering attitude on the part of the trade unions concerned. Certainly I can promise him some action in the near future.
    Mr. Mikardo: Is my right hon. Friend aware that the Trades Union Congress has expressed its disapproval of the attempts made by Tory organisations to persuade trades unions to have an ad hoc non-statutory body in place of a development council? Will he add his discouragement of this practice? Further, does he recall that we worked very hard in the Debates on the Bill, to get him powers of compulsion, and will he use these powers wherever necessary?
    Mr. Wilson: I am well aware of that expression of opinion by the T.U.C., and in all cases where a development council would be appropriate, naturally I should consider it a retrograde step to have any other kind of body.

    Exports to Hyderabad
    Mr. A. R. W. Lowasked the President of the Board of Trade if he will make a statement about the effect upon British trade interests of the present tension between the Government of India and His Highness the Nizam of Hyderabad; in particular to what extent deliveries of machinery manufactured in the United Kingdom on Hyderabad State orders to the value of large sums of money are being held in India; and whether any new orders placed by Hyderabad State in the United Kingdom have been cancelled or threatened with cancellation.
    Mr. H. Wilson: So far as I am aware, relations between India and Hyderabad have not caused any appreciable loss to United Kingdom exporters, nor am I aware of any cancellations or threats of cancellation. Any complaints made about delays in forwarding goods from Indian ports to Hyderabad are a matter for India and Hyderabad, the more so since any financial loss resulting from them has not normally fallen on the United Kingdom exporters.
    Mr. Harold MacMillan: Arising out of that reply, does the right hon. Gentleman realise the deep concern felt in this country over the situation which has developed especially in view of the undertaking given to His Highness the Nizam during the passage of the India Bill?
    Mr. Wilson: That seems to be a very different Question from the one on the Order Paper relating to the commercial consideration, and I have no comment to make outside the commercial aspect.
    Mr. Low: The right hon. Gentleman said there had been no appreciable loss. Will he tell the House what loss there has been, and will he also say whether, in his opinion, if there has been loss already, there is not likely to be further loss?
    Mr. Wilson: I am not in the habit of collecting either daily or weekly returns of losses to traders. There have been no
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    appreciable losses reported to us by the traders concerned, but if the hon. Gentleman has any cases in mind, I hope he will let us have them straight away.
    Mr. Gallacher: There would be nothing lost if we lost the Nizam.
    Colonel Crosthwaite-Eyre: Is the right hon. Gentleman aware that there are considerable losses, particularly since the Hyderabad Bank cannot get rupees from the Reserve Bank of India in order to finance its imports, and cannot obtain exchange facilities to cash the various currencies it receives for its exports, and will he look into it?
    Mr. Wilson: As and when British exporters are prejudicially affected, I have no doubt that they will come to the Board of Trade and tell us about it.
    Brigadier Rayner: Does not the whole unfortunate business justify the anxieties expressed by many of us on this side of the House when we debated the India Independence Act last year?
    Mr. Wilson: No, Sir.

  FUEL AND POWER

    Standard Petrol Ration
    Mr. J. Langford-Holtasked the Minister of Fuel and Power whether he is aware that government servants owning private cars and whose vehicles have been authorised for use on official duties at the request of their respective Departments are denied the right to use the standard petrol ration in the same way as an ordinary citizen drawing petrol for business purposes; and whether he will take steps to allow such persons the standard ration.
    The Minister of Fuel and Power (Mr. Gaitskell): I am considering whether civil servants who use their private cars for official business can be treated in the same way as the employees of large private firms which are given bulk allowances of petrol.
    Mr. Langford-Holt: Will the right hon. Gentleman give some indication of when he will reach this decision, as this matter is particularly applicable during the summer months, of which there are not many more to come.
    Mr. Gaitskell: Shortly, I hope.

    Mineral Development Committee
    Commander Agnewasked the Minister of Fuel and Power how many sittings there have been of the Mineral Development Committee appointed by his predecessor nearly two years ago; and when the Committee is expected to make its report.
    Mr. Gaitskell: The Mineral Development Committee has had 11 meetings and its Technical and Economic Sub-Committees have met 23 and 11 times respectively. A Scottish Sub-Committee has had eight meetings. In addition, members of the Committee have made nine visits to mines and mining districts. I am informed that the Committee has still considerable evidence to collect and that it is likely to be some months yet before its report will be ready.
    Commander Agnew: Does not the Minister think that three years since the Government took office is quite long long enough for them to announce their policy with regard to what is one of the oldest industries in this country, namely, the winning of the metals under its surface? In view of the fact that they visited one of the chief sites of these metals, namely, Cornwall, as long ago as January 1947, would he hurry up the Committee and get them at any rate to produce an interim report?
    Mr. Gaitskell: I am sure the Committee are well aware of the importance of the subject, but their terms of reference are very wide and I think we must give them a little more time.
    Mr. Beechman: Will the Minister bear in mind that there is a considerable body of local opinion which is anxious to see this report as soon as possible, as there are people who have in mind possible developments to suggest.
    Mr. Gaitskell: Yes, I appreciate the local interest in this matter.

    Supplementary Petrol Allowances
    Mr. Gerald Williamsasked the Minister of Fuel and Power if he will give special consideration to owners of cars wishing to use them to help blind people through the Social Club for the Blind, so that the basic ration will not be deducted
    638
    from supplementary coupons allotted for this purpose.
    Mr. Gaitskell: I am afraid I cannot make an exception to the general rule that the amount of the standard ration must be deducted from all individual supplementary allowances but I am asking the Standing Advisory Committee to examine whether any special arrangement can be made with organisations concerned with voluntary work of this kind.
    Mr. Williams: While I thank the Minister for looking into this, I hope he is aware that the blind are desperately in need of cars to take them to social centres, and if there is no supplementary as well as the basic, it is a question of the blind or charitably disposed suffering, and I hope this is not the intention of the Government.
    Mr. Gaitskell: I appreciate the hon. Gentleman's point, but, of course, there are administrative problems here which we have to look into carefully.
    Vice-Admiral Taylor: Will the Minister also give consideration in the case of the disabled ex-Service men at Roehampton?
    Mr. Gaitskell: My answer referred to voluntary organisations of this kind and no doubt that would cover the organisation mentioned.
    Mr. Henderson Stewartasked the Minister of Fuel and Power if he is aware that parking accommodation and petrol was provided for the attendance of 70 cars for the National Agricultural Advisory Service at the Bath and West Show; and since it is the policy of his Department to support such agricultural demonstrations, why he has refused 12 leading firms of agricultural machinery manufacturers the necessary petrol facilities to enable them to demonstrate their machines adequately at the Highland Show at Inverness next week.
    Mr. Gaitskell: Yes, Sir; allowances were granted to certain officials, exhibitors and farmers to attend the Bath and West Show where alternative public transport was not available, and where their normal business allowance was insufficient. I am prepared to grant allowances in similar circumstances for any agricultural show, including the Highland Show at Inverness. The particular cases referred to in

    639
    the second part of the Question were to enable certain exhibitors to take their cars all the way from London and other far-distant places to Inverness. There are adequate rail services between these places and these applications were not supported by the Ministry of Agriculture and Fisheries.
    Mr. Stewart: I think the right hon. Gentleman will agree that not all the cars are from places as far away as London. The real reason why people want the cars at Inverness is the difficulty, almost the impossibility, of getting accommodation there and the necessity for the demonstrators to be in daily contact with the show in Inverness.
    Mr. Gaitskell: We are aware of the difficulty and the Regional Transport Commissioner has, in fact, laid on special local services to meet it.
    Mr. Hurd: Will the Minister again draw the attention of his regional petroleum officers to his undertaking in the House on 6th November that the officials carrying out essential work at agricultural shows would be allowed an allocation of petrol, as many firms are finding it impossible to get petrol?
    Mr. Gaitskell: I am not aware of a new instruction but if the hon. Member will give me particulars I will look into them.
    Mr. Skinnardasked the Minister of Fuel and Power what allocation of petrol was made by his Department to the promoters of the recent midget-car racing at Stamford Bridge.
    Mr. Gaitskell: None, Sir.
    Mr. Niall Macphersonasked the Minister of Fuel and Power why petrol allocation to insurance agents is governed by a rigid maximum without regard to previous consumption; and whether he is aware that as a result the petrol allocation is in some cases less than half what is required in order to enable insurance agents to maintain the commission which formed their livelihood.
    Mr. Gaitskell: It has always been a principle of the petrol rationing scheme, since its introduction in 1939, that a maximum allowance should be fixed for various
    640
    classes of consumers. The maximum for insurance agents has been altered from time to time as the petrol supply position has varied, and is now more than double the level ruling at the end of the European war.
    Mr. Macpherson: Will the right hon. Gentleman reconsider the maximum allowance now, in view of the fact that the livelihood of many insurance agents is at present seriously restricted?
    Mr. Gaitskell: I have no evidence of the suggestion in the last part of that supplementary question, and I must remind the House that we are extremely short of petrol and I cannot afford to increase maximum allowances generally.

    Hire Cars
    Mr. Spearmanasked the Minister of Fuel and Power if he will grant more permits for hire cars than hitherto in those districts which have little or no facilities for public transport.
    Mr. Gaitskell: Allowances of petrol for operating hire cars will be granted where the regional petroleum officer is satisfied that existing services are inadequate to meet the public need.
    Mr. Spearman: Will the right hon. Gentleman consider altering his present method of obtaining the information upon which he grants the permits because it is creating many anomalies. I refer to the employment of the police for this purpose.
    Mr. Gaitskell: I am sure the House would not wish in any way to criticise the help which the police are giving us in this matter. They have been doing this for many years and I must say that I know of no better source from which we may obtain reliable information on this subject.
    Mr. Turton: Will the Minister take into consideration also the opinion of local medical people and ministers of religion, both of whom have a wide knowledge of their rural areas?
    Mr. Gaitskell: Obviously there is a limit to the number of local contacts that must be made but I am always prepared to consider any particular information from hon. Members on the subject.
    Mr. Langford-Holt: Will the right hon. Gentleman tell the House who is consulted, when the police are not consulted? There is a particular case in my own division where this has occurred.
    Mr. Gaitskell: Perhaps the hon. Member will let me have particulars.
    Mr. H. D. Hughesasked the Minister of Fuel and Power how many applications to open new hire car businesses have been granted or refused during the 12 months ended March, 1948; how much petrol was allocated to successful applicants; and how the total number of such businesses at the present time compares with previous comparable periods.
    Mr. Gaitskell: I regret that the information asked for in the first two parts of the question is not readily available and could only be obtained by considerable work in the regional petroleum offices which I could not justify in present circumstances. As regards the last part of the question, allowances for private hire work were made for just over 51,000 vehicles during the period ended 31st May, 1948, compared with 32,000, 39,000 and 42,000, in the corresponding periods of 1945, 1946 and 1947, respectively.
    Mr. Hughes: As these figures show approximately a 50 per cent. increase over the last five years, and in view of the fact that large numbers of these firms are now advertising journeys of several hundred miles, does not the Minister feel that, at a time when economy of petrol is vitally necessary, licences are being granted a little too generously?
    Mr. Gaitskell: No, Sir, I do not think we grant allowances too generously. We keep a very careful watch. It must be remembered that some of these allowances are for disabled ex-Service men and for persons returning from service with the Forces.

    Electricity Act (Compensation Regulations)
    Colonel Clarkeasked the Minister of Fuel and Power, in view of the uncertainty with regard to the compensation regulations which the Minister is required by Section 55 of the Electricity Act to lay before Parliament, which are the trade unions and other employee organisations with which he is now negotiating with regard to the terms of these regulations;
    642
    what is the state of these negotiations; and when it is likely that they will be concluded.
    Mr. Gaitskell: My officials have discussed the basis on which these regulations should be drafted with the Employees' National Committee and other associations. Further consultations are pending and I cannot yet say when they are likely to be concluded. I am circulating in the OFFICIAL REPORT a list of the trade unions and associations concerned.
    Colonel Clarke: Will the Minister bear in mind that this is his personal responsibility and not that of the British Electricity authority; and that this continued absence of regulations, after a period of 10 months, is causing considerable alarm and despondency amongst employees who do not know their future? Does the Minister recollect that during the passage of the Bill through the House the Opposition pressed him to include the regulations in the Bill instead of leaving them to be issued afterwards?
    Mr. Gaitskell: No one has ever suggested that the responsibility is not that of the Minister. A number of associations and trade unions have to be consulted. This is a complicated matter and is bound to take time.
    Following is the list:
    Trade unions and associations represented on the Employees' National Committee

    Amalgamated Engineering Union.

    Associated Municipal Electrical Engineers.

    Clerical and Administrative Workers' Union.

    Electrical Power Engineers' Association.

    Electrical Trades Union.

    National Association of Local Government Officers.

    National Union of Enginemen, Firemen, Mechanics and Electrical Workers.

    National Union of General and Municipal Workers.

    Transport and General Workers' Union.

    Other associations:
    The Association of Officers and Staff Members of Electricity (Power and Supply Companies of Great Britain) and the Incorporated Association of Power Companies (in liquidation).

    Motor Spirit (Sterling Area Demands)
    Mr. William Shepherdasked the Minister of Fuel and Power what reduction in the demand by the sterling area,

    643
    excluding Great Britain, for motor spirit produced from British operated sources has taken place in the last 12 months.
    Mr. Gaitskell: I regret that this information is not available.
    Mr. Shepherd: Is the Minister able to say whether there has been an increase or a decrease in the demands made by the sterling area upon these sources?
    Mr. Gaitskell: As I have said, I have not the information. We have not the figures of consumption in the sterling area and it would take a long time—longer than the time at my disposal—to find out what the total imports have been, but I will see what I can do.
    Mr. Shepherd: In view of the dollar position and the stringency of our rationing, should not the Minister take steps to reduce the demand from the sterling area upon our resources?
    Mr. Gaitskell: I am not responsible for what is done by other Governments.

    National Boards (Ministerial Contact)
    Mr. Henderson Stewartasked the Minister of Fuel and Power what steps he takes to maintain contact with the operations of the National Coal Board and the Electricity Board; whether regular consultations are held with the Boards; and if individual members of the Boards are free to consult him on matters of policy.
    Mr. Gaitskell: Officials of my Department are in constant touch with officials of the National Coal Board and the British Electricity Authority, and I have made a practice of maintaining informal contact personally with the Chairmen at frequent intervals. Consultations with the Boards are held when the occasion demands. Individual members of a Board, other than the Chairman, as representing the Board, would obviously not be "free to consult" me on matters of policy which are the responsibility of the Board as a whole.
    Mr. Stewart: Does the Minister want the House to understand that he does not see individual members of the Boards on matters of policy?
    Mr. Gaitskell: Certainly; that is exactly what I am saying.
    Mr. Stewart: Is the Minister saying that he has never seen members of the Boards on matters of policy?
    Mr. Gaitskell: Yes, Sir. I dare say the hon. Member is referring, as usual, to Sir Charles Reid. I saw Sir Charles Reid when he proposed his resignation but not specifically on matters of policy.

    Commercial Petrol Coupons
    Mr. Lipsonasked the Minister of Fuel and Power if he is aware that by declaring invalid coupons accepted for commercial petrol between 21st May and 31st May he has deprived garage proprietors of the coupons they require now for petrol for private users; and will he take steps to remedy this forthwith.
    Mr. Gaitskell: No instructions to this effect were issued. In certain cases where the instructions which were issued were misunderstood steps have been taken to remedy the matter.

    Electricity Consultative Councils
    Mr. Wilson Harrisasked the Minister of Fuel and Power how many of the consultative councils contemplated under Section 7 of the Electricity Act, 1947, had been appointed by 1st June, 1948.
    Mr. Gaitskell: None, Sir, but I would refer the hon. Member to the reply I gave last week to my hon. Friend, the Member for Enfield (Mr. Ernest Davies).
    Mr. Harris: Is it not extremely unfortunate that two months after the vesting date of the Electricity Act, none of these councils has been appointed? Secondly, in view of the fact that the councils are charged specifically with consideration of any variation of tariffs where the variation of tariffs have taken place without consultation with the Council, can that be held to be in order?
    Mr. Gaitskell: The difficulty is that I have to consult a very large number of different associations and some of those associations have not yet sent in proposals for membership of these councils. I cannot proceed to the final selection until I have those particulars. In the meanwhile, the electricity area boards are I know in various cases consulting with the associations before they make changes.
    Mr. Peter Roberts: Is the right hon. Gentleman aware that this is his responsibility and he cannot ride off by blaming other people, and that either he should have started earlier or he should get on with the job now?
    Mr. Gaitskell: I am not trying to blame other people; I am stating facts.
    Mr. Harris: Is the right hon. Gentleman satisfied that the variation in tariffs is valid in view of the fact that the councils were not consulted?
    Mr. Gaitskell: Oh, yes, there is no doubt about that.

  COAL INDUSTRY

    Miners (Average Age)
    Mr. Hurdasked the Minister of Fuel and Power how the average age of men engaged in coal mining now compares with the average age in 1938.
    Mr. Gaitskell: The average age of wage-earners on colliery books in 1947 was 39.0 years as compared with 36.3 years in 1937. A figure for 1938 is not available.

    OUTPUT OF SALEABLE COAL PER MANSHIFT WORKED OVERALL.

    District.

    13 weeks ended* 27th March, 1948.

    13 weeks ended* 29th March, 1947.

    First 3 months of 1939.*

    Tons

    Tons

    Tons

    Northumberland

    …

    …

    …

    …

    1·05

    1·02

    1·15

    Cumberland

    …

    …

    …

    …

    …

    0·73

    0·78

    0·85

    Durham

    …

    …

    …

    …

    …

    0·92

    0·86

    1·09

    Yorkshire

    …

    …

    …

    …

    …

    1·20

    1·18

    1·32

    North Derbyshire

    …

    …

    …

    …

    1·51

    1·42

    1·36

    Nottinghamshire

    …

    …

    …

    …

    1·57

    1·53

    1·60

    South Derbyshire

    …

    …

    …

    …

    1·69

    1·64

    1·28

    Leicestershire

    …

    …

    …

    1·82

    1·80

    1·53

    Lancashire and Cheshire

    …

    …

    …

    0·95

    0·90

    1·00

    North Wales

    …

    …

    …

    …

    …

    1·00

    0·89

    1·04

    North Staffordshire

    …

    …

    …

    …

    1·34

    1·27

    1·21

    Cannock Chase

    …

    …

    …

    …

    1·05

    1·03

    1·06

    South Staffordshire

    …

    …

    …

    …

    1·03

    0·99

    1·11

    Shropshire

    …

    …

    …

    …

    …

    1·17

    1·13

    0·96

    Warwickshire

    …

    …

    …

    …

    1·36

    1·35

    1·36

    South Wales and Monmouthshire

    …

    …

    0·83

    0·78

    1·01

    Forest of Dean

    …

    …

    …

    …

    0·85

    0·80

    0·98

    Bristol

    …

    …

    …

    …

    0·69

    0·73

    0·79

    Somerset

    …

    …

    …

    …

    Scotland

    …

    …

    …

    …

    …

    1·13

    1·06

    1·16

    Kent

    …

    …

    …

    …

    …

    …

    1·04

    0·96

    1·08

    GREAT BRITAIN

    …

    …

    …

    …

    1·10

    1·06

    1·18

    Mr. Hurd: Can the Minister give separately the comparable ages of those working at the coal face?
    Mr. Gaitskell: If the hon. Member will put down a Question I will see what I can do.

    Output (Statistics)
    Mr. Peter Freemanasked the Minister of Fuel and Power whether he will issue a report showing the output per man-shift in each of the principal coal areas compared with similar figures for last year and before the war.
    Mr. Gaitskell: As the answer involves a number of figures, I will with my hon. Friend's permission, circulate it in the OFFICIAL REPORT.
    Mr. Freeman: Can my hon. Friend say how the total figure of recent date compares with the figure a year ago?
    Mr. Gaitskell: The figure for the first quarter of this year amounts to 1.1 tons against 1.06 tons a year ago.
    Following is the information:

    Domestic Supplies (Sub-tenants)
    Mr. Edward Daviesasked the Minister of Fuel and Power if he is aware of the difficulty which coal merchants in North Staffordshire are experiencing in meeting the requirements of sub-tenants in respect of domestic coal; and if he will make extra allowances to merchants for this purpose.
    Mr. Gaitskell: I am not aware of any particular difficulty in North Staffordshire other than that implied in a resolution of the North Staffordshire Coal Traders Association which is however in very general terms. If my hon. Friend knows of any specific cases of difficulty, perhaps he would send me particulars so that inquiries may be made. With regard to the second part of the Question, I would refer my hon. Friend to the reply I gave to my hon. Friend the Member for West Wolverhampton (Mr. H. D. Hughes), on 10th June.
    Mr. Davies: Is the Minister satisfied that his machinery for adjusting allowances to domestic distributors is satisfactory in the sense that it enables them to provide for alterations in sub-tenancies and for dealing with special licences from time to time?
    Mr. Gaitskell: I have no reason to suppose that anything is wrong in this case, but if my hon. Friend will give me particulars, I will look into them.

    Exports (Value)
    Mr. Shepherdasked the Minister of Fuel and Power the value at current prices of coal exports at 1937 volume.
    Mr. Gaitskell: At the average f.o.b. prices now current for the principal grades of coal, the value of coal exports in 1937 (exclusive of bunkers) would amount to £150 million.
    Mr. Shepherd: In view of the enormous contribution that exports would make to our present position, when does the Minister expect to equate the achievements of the bad old days of private enterprise?
    Mr. Gaitskell: We have made a very good start from the extremely low level to which these exports were allowed to fall under the previous Government.

    Explosion, Sherburn Hill Colliery
    Mr. Greyasked the Minister of Fuel and Power if he has any statement to make on the accident at Sherburn Hill Colliery, Co. Durham, in which four men lost their lives.
    Mr. Gaitskell: An explosion of firedamp occurred on the No. 5 Conveyor Face of the 4th West District in the Busty Seam at Sherburn Hill Colliery, Durham, about 8 p.m. on Friday, 11th June. A shot-firer at work alone on the face was killed, also three cutter men on their way in about 150 yards from the face. The bodies were recovered early the following morning. It was a comparatively mild explosion and there was no propagation by coal dust. The face afterwards filled with firedamp and the igniting cause of the explosion has not yet been clearly established. The seam is worked throughout with safety lamps. The matter continues to be under investigation by one of His Majesty's Deputy Chief Inspectors of Mines. I deeply regret the loss of life involved, and should like to take this opportunity of expressing my sympathy with the relatives of the four men who were killed.
    Mr. Grey: Is the Minister aware that, if this acident had occurred earlier in the day, the loss of life would have been much heavier? Can we be assured that a new set of regulations will be brought into force at an early date in order to avoid these fatal occurrences?
    Mr. Gaitskell: I am sure my hon. Friend will agree it is best to await the report of the Deputy Chief Inspector before deciding on any amendment of the regulations.
    Mr. Murray: Is the Minister aware that accidents such as this have a detrimental effect on recruiting in these particular colliery areas and that, if he can do anything to expedite the question of safety in mines, it will go a long way towards having the desired effect?
    Mr. Gaitskell: I entirely agree with my hon. Friend. I am naturally very much concerned with this matter and he can test assured that we shall do everything possible to improve the safety conditions in the mines.

  MURDERS (STATISTICS)
  Mr. Hector Hughesasked the Secretary of State for the Home Department how many murders have occurred in Great Britain since 1st January, 1948; for these how many persons were tried and convicted and sentenced, respectively; what were the sentences; and how do all these figures compare with the corresponding figures for the years 1945, 1946 and 1947, respectively.
  The Secretary of State to the Home Department (Mr. Ede): As the answer includes a number of figures I will, with permission, circulate it in the OFFICIAL REPORT.
  Mr. Hughes: In the view of the right hon. Gentleman, were this year's figures affected by the recent decision of this House to suspend the death penalty? Will he consider issuing a White Paper for the guidance of Members in the forthcoming Debate?
  Mr. Ede: The latest figures I can give are those for the first three months of the year. Therefore, the consideration mentioned by my hon. and learned Friend would not affect them.
  Mr. Rankin: In his statement will my right hon. Friend give the corresponding figures for Scotland? Is it a fact that since the death penalty was suspended there have been no murders in Scotland at all?

  MURDER—JANUARY TO MARCH—ENGLAND AND WALES.

  —

  1945.

  1946.

  1947.

  1948.

  Murders known to the police

  …

  …

  …

  69

  39

  47

  41

  Persons for Trial

  …

  …

  …

  …

  …

  11

  18

  23

  20

  How Dealt With—

  Insane on arraignment

  …

  …

  …

  …

  1

  4

  5

  4

  Acquitted

  …

  …

  …

  …

  …

  2

  5

  2

  1

  Guilty but insane

  …

  …

  …

  …

  4

  4

  4

  1

  Convicted—

  Detained during His Majesty's Pleasure (Children and Young Persons Act).

  1

  —

  5

  —

  Sentenced to Death

  …

  …

  …

  …

  3

  5

  7

  5

  Executed

  …

  …

  …

  …

  …

  1

  2

  3

  —

  Reprieved and sentence commuted to penal servitude for life.

  1

  3

  2

  5

  Removed to Broadmoor as a criminal lunatic.

  1

  —

  2

  —

  Awaiting trial

  …

  …

  …

  …

  …

  —

  —

  —

  9

  Mr. Ede: The statement I make will include the figures for Scotland.
  Mr. Hughes: In view of the very great importance of this matter in relation to the forthcoming Debate, will my right hon. Friend collect the recent figures and embody them in a White Paper for the guidance of hon. Members?
  Mr. Ede: I doubt if by the time any fresh Debate takes place I shall have the figures for April and May.
  Colonel Gomme-Duncan: Does the right hon. Gentleman agree that in any case this suspension did not apply to Scotland?
  Mr. Ede: I would not agree.
  Colonel Gomme-Duncan: But it did not.
  Mrs. Manning: Are the murders which take place in this country so extensive that my right hon. Friend cannot get the figures? It is not a matter of hundreds and thousands but of perhaps a dozen, is it not?
  Hon. Members: Answer.
  Following are the particulars:
  The returns for April and May of crimes known to the police are not yet available. The tables below give particulars of cases from the period 1st January to 31st March, 1948, with figures for the same three months in 1945, 1946 and 1947.

  MURDER—JANUARY TO MARCH—SCOTLAND.

  —

  1945.

  1946.

  1947.

  1948.

  Murders known to the police

  …

  …

  …

  3*

  4*

  5

  5

  Persons for Trial

  …

  …

  …

  …

  …

  2

  2

  2

  3

  How Dealt With—

  Insane and placed at His Majesty's disposal

  …

  2

  —

  1

  —

  Convicted—

  Sentenced to Death

  …

  …

  …

  …

  —

  2

  1

  —

  Executed

  …

  …

  …

  …

  …

  —

  1

  —

  —

  Reprieved and sentence commuted to penal servitude for life.

  —

  1

  1

  —

  Awaiting trial

  …

  …

  …

  …

  …

  —

  —

  —

  3

  * One committed on the high seas.

  EIRE AND NORTHERN IRELAND
  Mr. John Beattieasked the Prime Minister whether he is prepared to consider the advisability of inaugurating discussions on the subject of Irish unity between the Governments in Belfast and Dublin, especially in view of happenings in Palestine; and if he would be prepared to preside over such a conference.
  The Lord President of the Council (Mr. Herbert Morrison): I have been asked to reply. The policy of His Majesty's Government in the United Kingdom is to maintain and develop by all practicable means the closest relations between Great Britain and both Northern Ireland and Eire. But my right hon. Friend the Prime Minister does not consider that this policy would be assisted by our proceeding as the hon. Member suggests.
  Mr. Beattie: Is it the intention of this Socialist Government to continue this disgraceful and undemocratic principle in the life of the Irish nation during the time they are in control of this House?
  Mr. Morrison: In our view this is a matter which is far better settled by Irishmen themselves than by us starting anything up in this House.
  Sir Ronald Ross: As there appears to be dissatisfaction in Eire with the separation they themselves brought about, would it be possible to offer them return to the United Kingdom on reasonable terms?
  Mr. Morrison: I am trying to keep out of the controversial clutches of my hon. Friend behind me, and equally to keep out of controversial clutches of hon. Members opposite.
  Mr. Delargy: Since the question cannot possibly be solved by Irishmen alone, and since, with great respect, the right hon. Gentleman has not given a direct answer to the Question, are we to conclude that he is not prepared even to consider that it might be advisable to inaugurate such discussions without a priori committing the Government to any hard and fast solution?
  Professor Savory: Does the right hon. Gentleman realise the extreme reluctance of Northern Ireland to unite with a country which protested against the landing of American troops in Northern Ireland at a time of our dire necessity, and maintained a German Minister in Dublin as a centre of active espionage and allowed the brilliantly lighted Dublin—[Interruption].
  Mr. Speaker: A question should be directed to obtaining information. I think both sides have been properly heard.

  NATIONALISED INDUSTRIES
  Mr. Henderson Stewartasked the Prime Minister if he intends to set up an inquiry into the working of the nationalised industries; and what will be the nature and scope of the inquiry.
  Mr. H. Morrison: I have been asked to reply. No, Sir.
  Mr. Churchill: There is then no truth in the rumours that have appeared that the former Chancellor of the Exchequer, the present Chancellor of the Duchy of Lancaster, is to be employed in this investigation? Before answering, I hope the Leader of the House will consider

  653
  whether this, if adopted by the Government, would not be a very good example of Satan investigating sin?
  Mr. Morrison: I do not propose to follow up the rather personal and controversial observations of the right hon. Gentleman at the end of his question, but the rumours to which he has referred do not represent decisions of the Government, but decisions of the Beaverbrook Press, which was inaccurate on this occasion, as it quite often is.
  Mr. Henderson Stewart: Should we assume from the right hon. Gentleman's first answer that no inquiries into individual nationalised industries are in the mind of the Government?
  Mr. Morrison: No, Sir.
  Mr. Osborne: Does the answer mean that the Government are satisfied with the working of nationalised industries so far?
  Mr. Morrison: This is a Government which has virtue on its side—
  Mr. Osborne: Will the right hon. Gentleman answer the question?
  Mr. Morrison: —and always sees possibilities of improvement. Therefore, the assumption in the hon. Member's question would not be accurate.
  Mr. N. Macpherson: The right hon. Gentleman did not say that the statement was wrong, but that it was inaccurate. Will he, therefore, make an accurate statement?
  Mr. Morrison: I said that the announcements of Government policy made in the Beaverbrook Press were inaccurate. I am perfectly willing to add that they are wrong and that they are sometimes somewhat beside the truth as regards the actual reporting of news.

  GOVERNMENT OFFICERS (POLITICAL ACTIVITIES)
  Mr. Churchill(by Private Notice) asked the Prime Minister whether he will state the rules and practice he is maintaining in respect of interventions by speech and vote in controversial party matters by officers holding active commands or employment under His Majesty's Government.
  The Prime Minister (Mr. Attlee): Civil servants are expected to maintain a reserve in political matters and not to put themselves forward prominently on one side or the other. They are required to resign as soon as they issue an address to electors or in any other manner announce themselves as Parliamentary candidates. A committee is at present considering whether any change is necessary in the existing limitations on the political activities of civil servants.
  As regards members of the Armed Forces, paragraph 541 (a) of King's Regulations for the Army, and comparable regulations for the other Services, are relevant to matters of party controversy. Members of the Armed Forces in active command or employment should, of course, refrain from acting in any way command or employment, should of these regulations. Under the House of Commons (Service in His Majesty's Forces) Act, 1939, persons are not disqualified from election to or sitting in the House of Commons by reason only of holding office or place of profit under the Crown as a member of any of His Majesty's Forces. This Act was passed to deal with the position during the war and its appropriateness in present circumstances is under consideration.
  Mr. Churchill: I am much obliged to the right hon. Gentleman for his answer, which I think does require the careful consideration of the Government.

  BURMA GOVERNMENT (POLICY)
  Mr. Churchill(by Private Notice) asked the Secretary of State for Foreign Affairs whether he can make any statement about the position of British interests in Burma; and whether any consultations on them have taken place between His Majesty's Government and the Government of Burma in accordance with the terms of the Anglo-Burmese Treaty of October last?
  The Secretary of State for Foreign Affairs (Mr. Ernest Bevin): The House will be aware from reports in the Press that a programme was recently announced by the Burmese Prime Minister which appeared to herald a change of policy in Burma and the abandonment of the principles of democratic socialism. I have been in consultation with His

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  Majesty's Ambassador in Rangoon; I have also spoken to the Burmese Ambassador on the subject. I have made it clear that in my view future Burmese policy will show how far they sincerely intend to honour the Treaty.
  I have been assured that earlier reports of the Burmese Prime Minister's utterances were somewhat exaggerated and that he is anxious to remain on good terms with this country while at the same time developing friendly relations with Russia and other countries.
  Certain British companies were expropriated by the Burmese Government on 1st June. No agreement was reached between the Government and the companies before that date. But on 31st May terms were offered to the companies which were open to considerable objection. Discussions are continuing and, having regard both to the letter and the spirit of the Treaty, I trust that the Burmese Government will pay due regard to the views we have submitted to them. At the moment I am not satisfied that the degree of consultation to which they have hitherto been willing to agree constitutes satisfactory fulfilment of their Treaty obligations.
  It is our policy to maintain close relations with Burma in all fields, and I feel confident that our two countries have much to contribute to each other. Since her independence Burma has benefited from our assistance in a variety of ways and we are most anxious to continue to help them. But whether we can do so or not must depend on the spirit in which they carry out their Treaty with us.
  Mr. Gammans: Is the right hon. Gentleman satisfied that the Government of Burma have sufficient financial resources in sterling to meet these obligations if they are minded to meet them? Is he also aware that His Majesty's Government were warned from this side of the House, when the Independence of Burma Act was discussed, that this sort of thing was likely to happen?
  Mr. Bevin: I get a lot of warnings from that side of the House—
  Mr. Churchill: And from below the Gangway.
  Mr. Bevin: Those warnings from below the Gangway are at the back of me and
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  the warnings from the other side of the House are in front of me, and I place a correct value on both of them. I cannot at the moment answer the Question with regard to the amount of sterling without looking into it but when a country like Burma, having been controlled by another, seeks her independence and obtains it, I think that a little tolerance and care are essential to get matters working right, and I propose to exercise them. If in the end it is proved that the trust we have placed in them to carry out their obligations is not fulfilled, our policy must accordingly change.
  Mr. Bramall: Will my right hon. Friend make clear that the reports which have appeared, apparently as a co-ordinated campaign in much of the Press, about the recent statement of the Prime Minister of Burma, which are supposed to indicate that Burma has become Communist, are grossly inaccurate in the light of subsequent reports which can be read in "The Times" of today and yesterday.
  Mr. Bevin: These things do get exaggerated and I realise, as I think everyone must realise, that in a country like Burma, which is going through these great difficulties, statements will be made which we have to reduce to their proper proportions by close consultation and examination, and we must try to help them to keep on the rails. That is what I am trying to do.
  Mr. W. Fletcher: Is the right hon. Gentleman satisfied that this new move in Burma will not in any way interfere with the supply of rice from Burma which is so badly needed in Malaya and elsewhere?
  Mr. Bevin: There are no signs of that up to now.
  Mr. Lipson: Can my right hon. Friend say whether the Treaty with Burma provides machinery for the interpretation and settlement of any points of difference in interpretation of the Treaty by either side?
  Mr. Bevin: There is no definite machinery. We are dealing with it in the usual way between the two Governments through their ambassadors.
  Mr. Pickthorn: Could the House be reassured that what the right hon. Gentleman said in his reply about democratic Socialism was not meant to imply that

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  Socialism is any essential part of the contract or treaty or arrangement between this country and Burma?
  Mr. Bevin: They indicated in the discussions on the Treaty that that was the policy they proposed to follow.
  Major Tufton Beamish: Are the military clauses of the Anglo-Burmese Treaty unaffected by the recent change of policy announced by Thakin Nu?
  Mr. Bevin: It is not a change of policy by the Burmese Government; it is a speech by the Prime Minister and there is no indication—[Laughter.]—I have known speeches made that have not always represented me—even in the five years I was in the Coalition. Still, in a Government one exercises tolerance. There has been no collective declaration on the part of the part of the Burmese Government. I am aware that there are great difficulties in Burma from the point of view of the political parties in the evolution of this State, and I have to take that into account.
  Mr. Churchill: Is it not a fact and is there not already evidence that, as was predicted, Burma is descending into a state of anarchy tempered by Communism?
  Mr. Gallacher: Is the Foreign Secretary aware that owners in this country are not too happy at the conditions under which their industries were taken over, and how does he expect them to be happy in Burma? If he is concerned about the owners in Burma, why is he not concerned about the owners here?
  Mr. Pickthorn: May I ask whether the earlier reply to me did or did not mean that Socialism in Burma is a necessary part of the Treaty between that country and this?
  Mr. Bevin: It was made perfectly clear that they were going to nationalise the industries but they agreed to compensation. They indicated quite clearly in all these talks the policy they proposed to pursue, and the speech the other day seemed to indicate that they were departing from that policy. Therefore, I took the matter up. I do not think that this House has ever challenged—and I hope it never will—the right of a State to own their own raw materials, providing they pay compensation in a proper manner.

  LONDON DOCKS STRIKE
  Mr. C. S. Taylor(by Private Notice) asked the Minister of Labour whether he has any statement to make about the strike in the London Docks.
  The Minister of Labour (Mr. Isaacs): Yes, Sir. Certain dockers at the Regent's Canal Dock were dissatisfied with the special rate of 3s. 4d. per ton negotiated between the employers and the trade union in respect of the loading of zinc oxide. The men's refusal on several occasions to undertake the work at this rate was considered by the accredited joint body established under the Dock Labour Scheme, which decided that the men should be suspended for seven days, and that entitlement to attendance money should be withheld for the period 30th May to 5th June and a further period of three months. The men exercised their right of appeal, and consequently these penalties were not put into effect. A tribunal, appointed under the Dock Labour Scheme and consisting of two representatives of the employers and two representatives of the Trade Union, heard the men's appeals on 15th June but failed to reach agreement. A new tribunal, similarly constituted, was accordingly set up under an independent chairman appointed by agreement of the two sides. The tribunal, the decision of which, under the terms of the scheme, is final and binding, met this morning and has, I understand, decided that disentitlement to attendance money should be limited to the period 30th May to 5th June and a further period of two weeks. I would point out that the benefits of the Dock Labour Scheme carry with them obligations on the part of all concerned, and I trust that, realising their obligations, all those now on strike will return to work forthwith.
  Mr. Taylor: While thanking the right hon. Gentleman for that reply, may I ask him whether, in view of the fact that go ships, I understand, are still immobilised, 30 of which contain food and 19 of which contain perishable food, he has any emergency measures in mind to see that the food does not go bad?
  Mr. Isaacs: I dare say that, just at this moment, the men concerned have received

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  the decision of this tribunal. I would urge the House not to say anything that might induce them to take any steps.
  Earl Winterton: Surely, the right hon. Gentleman can state who is responsible in the Government in the event of a more serious situation arising. I do not wish to raise any question now, but who is responsible in the Government, the right hon. Gentleman himself or the Minister of Food? To whom should we address a Private Notice Question tomorrow, in view of the importance of this issue and the number of ships concerned?
  Mr. Isaacs: The noble Lord will recognise that I am most anxious to choose my words carefully. I do not want anybody to get among these men and say, "Now, there you are, they are threatening this action against you." If the right hon. Gentleman wishes to put down a Question it can be addressed either to myself or my right hon. Friend the Minister of Food, whoever is the appropriate Minister.

BUSINESS OF THE HOUSE
Mr. Eden: May I ask the Leader of the House to tell us the Business for next week?
The Lord President of the Council (Mr. Herbert Morrison): Yes, Sir. The Business of the House for next week will be as follows:
Monday, 21st June—Report stage of the Finance Bill.
Tuesday, 22nd June—Conclusion of the Report stage of the Finance Bill.
Wednesday, 23rd June—Third Reading of the Representation of the People Bill; Consideration of Motions to approve the draft Police Pensions Regulations, the draft Police Pensions Regulations (Scotland), and the draft National Health Service Regulations and similar Regulations for Scotland.
Thursday, 24th June—Supply (18th Allotted Day)—Committee. A Debate will take place on coal.
Friday, 25th June—Third Reading of the Finance Bill.
During the week it is hoped that there will he an opportunity to deal with the various draft National Insurance Regulations.
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It may be convenient with your permission, Mr. Speaker, for me to refer to the Motion standing in my name relating to Scottish Estimates. This Motion must be passed without amendment or debate. The House will recall that, on 28th April, Standing Orders were passed dealing with Scottish business. We now propose, after discussions through the usual channels, to refer the four Estimates mentioned in the Motion to the Scottish Grand Committee. The Estimates will give rise to two debates, one on Education in Scotland and the other on Health in Scotland. The Standing Committee is empowered to consider Scottish Estimates on not more than six days in any Session. We are therefore proposing to refer Estimates for discussion on two days and another Motion will be proposed later in regard to the further debates in the Scottish Grand Committee.
Mr. Eden: I wish to ask a question arising out of the request made by myself and several hon. Members yesterday to the Leader of the House on the discussion of the European Recovery Programme. Will he bear in mind that we are most anxious to discuss that Programme as soon as possible in advance of 3rd July, and if circumstances should allow, would he, therefore, make any re-arrangement of the Business at any time which is necessary to make that possible?
Mr. Morrison: I am anxious to protect the rights of the House on this matter as I think was made clear by the Foreign Office yesterday. We will do our best to keep in mind the point mentioned by the right hon. Gentleman, but, obviously, discussion must go forward on the responsibility of the Government until they reach conclusions. What I am anxious about is that thereafter the House shall have its rights before the nation is committed, and we will see that there is effective consultation of the House before the final ratification is carried through.
Mr. Eden: I have one further question on another matter, that is about Malaya. The right hon. Gentleman knows of the considerable concern in all parts of the House. He will also remember that at the end of the last Session there was an undertaking that we should have an opportunity to discuss Malaya at some time. In view of the special interest would he consider, or discuss through the usual

661
channels, whether the Government would assist us to have a discussion on this matter?
Mr. Morrison: Yes, Sir. It probably could be most conveniently taken on the Colonial Office Vote. I am in some dispute with the hon. Gentleman behind the right hon. Gentleman as to what undertaking was given, but we will certainly be willing to discuss the matter.
Mr. Bowles: Is the right hon. Gentleman now in a position or will he be in a position next week, to inform the House when this Session is coming to an end, because many hon. Members are rather concerned that the Government should announce their decision as soon as possible.
Mr. Morrison: We are going into these mysteries at the moment. I quite appreciate the point made by my hon. Friend that it will meet the convenience of the House if an early communication is made, and I expect to be in a position to make a statement sometime next week.
Mr. Anthony Greenwood: In view of the importance that we on this side of the House attach to the National Insurance Regulations, may I ask whether the right hon. Gentleman could fix a time for the discussion so that greater justice could be done to them than was possible last night when we discussed National Assistance Regulations, and when, perhaps, rather more than two Members of the Conservative Party can find it convenient to be present?
Mr. Morrison: I thought there was a fair amount of discussion last night, and I think we shall get through all right.
Mr. Warbey: Can my right hon. Friend say when we can have a Debate on Germany with special reference to the recent Six Power Agreement? I do not wish to urge the claims of a particular Motion which some hon. Members, including myself, have on the Order Paper, but I do urge that we should have an opportunity to Debate the very great issues involved in the new policy in regard to Germany.
Mr. Morrison: I understand that there is agreement between the Opposition and the Government that there shall be a Debate on Germany, and procedure has been arranged. It is a matter of finding a convenient date. I think it would be better to take it that way than on any Motion such as that to which my hon. Friend refers.
Mr. Eden: I would make it clear that we were to have had this discussion earlier, but that it was postponed on the request of the Foreign Secretary. The reason why we need help about a discussion on Malaya is that there are not a great many Supply Days left, and there are many topics which I think the whole House would like to discuss. That is why we want a little help about the one day.
Mr. Edgar Granville: In view of the important constitutional events in the Commonwealth of British Nations which are foreshadowed or which may have taken place, will the right hon. Gentleman consider giving the House an opportunity to discuss these matters before any fresh interpretation is placed on the Statute of Westminster? On to-day's Business, may I ask the right hon. Gentleman whether he thinks he has given enough time for discussion of the film agreement between this country and the United States even if the Front Bench speakers on both sides curtail their remarks, which is most unlikely?
Mr. Morrison: On the first point, I am afraid that I could not find special time for that—
Mr. Granville: Commonwealth relations?
Mr. Morrison: Yes. I am afraid that I cannot find special time. On the second point about the Debate on the Anglo-American Film Agreement, I am sure that the respective Front Benches will take notice of what the hon. Member has said. In my experience, I think it is only fair to say that when the Debates are limited in time both Front Benches try to take that into account and try to assist the back benchers to the maximum of their ability.

CHAIRMAN AND DEPUTY-CHAIRMAN OF WAYS AND MEANS
The Prime Minister (Mr. Attlee): The House will recollect that in the concluding paragraph of the Report of the Select Committee on the Chairman of Ways and Means the point was raised whether or not rules should be laid down governing the conduct of the Deputy-Speaker in his professional or business relationships with any Member of the House. As the Chairman of Ways and Means and Deputy-Speaker is appointed on the nomination of the Government, the House may perhaps consider it appropriate for me to make a statement on this subject. In order that "the Chair should not only be impartial but should also give the appearance of impartiality"—I quote from the Report of the Select Committee—the Government feel that both the Chairman and the Deputy-Chairman should in future refrain from acting in a professional capacity on behalf of or against Members of the House of Commons. I have consulted Mr. Speaker, the Chairman of Ways and Means and the Deputy-Chairman about this proposed new rule, and I am glad to say that they concur in it.
Mr. Churchill: We are in general agreement with the statement which the Prime Minister has made upon this subject. I am glad that this matter has been terminated in a manner which reflects on nobody in any matter of personal honour and, at the same time, fulfils the sagacious recommendations of the Select Committee. It might well be that in the future when a reconsideration of these matters is possible, even stricter regulations might be propounded.

SELECTION OF AMENDMENTS
Colonel Ropner: May I ask for your Ruling, Mr. Speaker, on a matter which arises from the current practice followed by all occupants of the Chair except, I think, yourself, Sir, of disregarding—perhaps even contravening—the provisions of Standing Order No. 28? I do not think that I shall alter the meaning of the Standing Order, but rather that it will help me to make my point clear, if I read only the following extract:
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"… in committee of the Whole House or on report, Mr. Speaker, or in committee the chairman of ways and means and the deputy chairman, shall have power to select the new clauses or amendments to be proposed …"
I would ask you to note that neither Mr. Speaker nor the Chairman of Ways and Means is empowered by the Standing Order to delegate the power of selecting Amendments. There is surely no doubt that the correct or, at any rate, the strict interpretation of this Order, is that, for example, on the Report stage of a Bill, only Mr. Speaker himself or, on the Committee stage, only the Chairman of Ways and Means or the Deputy-Chairman, has the power to select Amendments.
Speaking only for myself, but as a temporary Chairman who has been called upon from time to time to take the Chair when the House is in Committee, I have always been prepared, had I been challenged when exercising the function of selecting Amendments, to assert that the selection had been made previously by the Chairman of Ways and Means and that I was in fact acting on his instructions. That, in truth, is the procedure which is followed. Similarly, Mr. Speaker, if any hon. Member had ever felt inclined to challenge the Chairman of Ways and Means when selecting Amendments on the Report stage of a Bill, I imagine that the Chairman would have claimed that he was acting in accordance with your wishes. But, as I have already said, the Standing Order in fact gives no power to delegate this authority.
I am not suggesting that there should be any change in the current practice but rather that a Ruling from you should regularise it or, if that is beyond your power, that the Standing Order should be amended by the authority of the House.
Finally, I would say that this is no academic matter. It was described to me only this morning rather graphically as a skeleton which has lain in the cupboard of the Table for a number of years. May I, therefore, request the Chair to help the Table to open the cupboard to get rid of the skeleton?
Mr. Speaker: I have—and I hope the House will forgive me—a statement here which I think gives an answer to the hon. and gallant Gentleman. Perhaps it is as well to lay it down quite firmly,

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and then the matter can be considered. I would say that this practice to which the hon. and gallant Gentleman refers is one which, as far as I know—and my experience goes back for some time—has always been the practice of the House. But I would say that by long-standing practice the Speaker has always decided in advance which Amendments he would call and which he would not select. That is a practice which ensures that, through the selection of the most important Amendments, the time at the disposal of the House shall be occupied in the most profitable manner possible. When the Deputy-Speaker is in the Chair he carries out the decisions of the Speaker and passes over the Amendments which the former has not selected. In Committee of the Whole House, similarly, a Temporary-Chairman in the absence of the Chairman of Ways and Means and the Deputy-Chairman, carries out the decisions previously arrived at by the Chairman of Ways and Means.
The Standing Order does not expressly lay down this practice, but it certainly permits it. It does not say "no." Indeed, the practice which I have outlined is the only method of working the Standing Order satisfactorily. If the power of selection had to be exercised in relation to each particular Amendment as it was reached, either I should have to return to the Chair whenever an Amendment was reached which it was proposed to pass over, or every Amendment, however trivial and however covered by previous discussion, would have to be called. The whole balance of Debate would be upset
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and, really, a ridiculous position might be reached. I hope that that puts the matter quite clearly.

BILL PRESENTED
  EXPORT GUARANTEES BILL
  "to amend the Export Guarantees Act, 1939, and the Export Guarantees Act, 1945, by increasing the limits on the liability which may be undertaken by guarantees given under Section one of the first-mentioned Act or Section two of the second-mentioned Act," presented by Mr. Wilson; supported by the Chancellor of the Exchequer, and Mr. Bottomley; to be read a Second time upon Monday next, and to be printed. [Bill 114.]

BUSINESS OF THE HOUSE
Ordered,
"That this day, nothwithstanding anything in Standing Order No. 14, Business other than the Business of Supply may be taken before Ten o'clock."—[Mr. H. Morrison.]

SCOTTISH ESTIMATES
Resolved:
"That the Committee of Supply be discharged from considering the Estimates set out hereunder and that the said Estimates be referred to the Standing Committee on Scottish Bills—

Class IV, Vote 13—Public Education, Scotland;

Class III, Vote 15—Approved Schools, Scotland;

Class V, Vote 13—Department of Health for Scotland;

Class V, Vote 14—National Health Service, Scotland."—[Mr. H. Morrison.]

ORDERS OF THE DAY
  SUPPLY
  [17TH ALLOTTED DAY]
  CIVIL ESTIMATES, 1948–49

    BOARD OF TRADE
    Considered in Committee.
    [Mr. HUBERT BEAUMONT in the Chair]
    Motion made, and Question proposed,
    "That a sum, not exceeding £7,031,730, be granted to His Majesty, to complete the sum necessary to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1949, for the salaries and expenses of the office of the Committee of Privy Council for Trade and subordinate departments, including the cost of certain trading services; assistance and subsidies to certain industries; certain grants in aid; and other services."—[£3,514,000 has been voted on account.]—[Mr. Glenvil Hall.]
    4.1 p.m.

  RAW COTTON PRICES
  Mr. Oliver Lyttelton: Few hon. Members who take a special interest in the cotton industry will think that a Debate on the subject of raw cotton prices is out of place today. I fear that it will be necessary for me to be rather critical, and if hon. Members opposite like to think that this is dictated by party reasons, they are welcome to do so. Actually I would much prefer to enjoy the Parliamentary luxury of silence and to see things being better done. However, this afternoon we have thought it opportune to set aside half a day of Opposition time to discuss raw cotton prices.
  Let me begin at the beginning and go to the source of Fabian wisdom and there drink a cup of clear, pellucid Socialist doctrine. [HON. MEMBERS: "Hear, hear."] It may not be so agreeable when hon. Members hear what it is. The right hon. Gentleman the Member for Bishop Auckland (Mr. Dalton), the former Chancellor of the Exchequer, when acting in the part of Robespierre for which he has cast himself in relation to the Liverpool Cotton Exchange, made some very striking remarks. Here is an extract from them. This is from a speech by the right hon. Gentleman in this House on 28th March, 1946:
  "If we take the so pre-war years and consider the fluctuations "—
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  that is, in the price of cotton—
  "over the yearly periods, we find that in no fewer than five out of these so years there was a fluctuation between the highest and the lowest price in the course of the year of 45 to 65 per cent., and in one year the range was even greater than that—it went up to 66 per cent. I venture to say that that is far beyond any fluctuation that can be justified by the weather or the boll weevil."—[OFFICIAL REPORT, 28th March, 1946; Vol. 421, c. 658.]
  Later in the year we had the right hon. Gentleman the Paymaster-General, that rather mysterious figure. The right hon. oracle from Cardiff added his voice to his friend's thunder. He said that under the assistance of the Raw Cotton Commission:
  "Lancashire spinners will be assured of a long-term stability in the price of their materials unequalled in any other country where their competitors are established."—[OFFICIAL REPORT, 2nd December, 1946; Vol. 431, c. 48.]
  Earlier in the same Debate, he said:
  "Today we are proposing to make permanently available to the industry the modern method of centralised and large-scale buying."—[OFFICIAL REPORT, 2nd December, 1946; Vol. 431, c. 42.]
  I am sure that in reading these remarks I shall have had the attention at least of hon. Members opposite who will be shocked again to be reminded that in five out of 10 years between the wars there were fluctuations of from 40 to 60 per cent. in the price of raw cotton. Of course, the Government, according to the Paymaster-General, and the former Chancellor of the Exchequer were going to stop all that kind of nonsense, but what has happened? In less than four months of 1948 under the Government's system of bulk purchase, some cotton prices, that is, the prices for some important growths of cotton, have already risen by over 100 per cent., and in the case of one important growth by 126½ per cent. If this is the Paymaster-General's idea of stability, I wish he would give us a bit of fluctuation.
  The President of the Board of Trade (Mr. Harold Wilson): I am sorry to interrupt the right hon. Gentleman, but since he is giving these very interesting statistics in relation to the ten years before the war, is he going to give the figures for 1918, 1919, 1920 and 1921?
  Mr. Lyttelton: No, I am certainly not going to do so.
  Mr. Wilson: They were post-war years.
  Mr. Lyttelton: I am only selecting the exact period to which the Chancellor of the Exchequer referred when making his claims about stability. That is all. Of course, at another time I shall be only too glad to go back to 1848 or any other date, but what governs those ten years is that they were the period selected by the former Chancellor of the Exchequer to justify in the cause of stability the abolition of the Liverpool Cotton Exchange.
  On this matter I have a few figures here about these fluctuations. The particular growth which varied by 126½ was Karnak. The price on 22nd February, 1948, was 25.25 pence a lb., and on 10th May it was 57.25, at which price it remained at 31st May. However, there is something more in it than these violent fluctuations in price over four months which I ask the Committee to notice. The point is the fantastic alterations which, under the present system of bulk buying and of Government control took place overnight, and that at the behest of, I think, two men.
  The spinner of Karnak cotton who left his office on the evening of 21st March, 1948, left it with the price of his raw material quoted at 39.25 pence per lb. When he arrived at the office on the 22nd, he found the price was 55.25d. I could give many other instances but I would not like to weary the Committee with them. The same thing has happened, but not in such an exaggerated way, in regard to American Middlings and Ashmouni. The Ashmouni prices are particularly interesting. On 9th May, Ashmouni was at 33.75d. a lb., on 10th May, 44.75d. a lb. and on 31st May it fell again to 39.75d.
  Mr. Sydney Silverman: Are these world prices?
  Mr. Lyttelton: These are the selling price charged by the Raw Cotton Commission to the spinner in Lancashire.
  Mr. Silverman: They are the prices charged to everybody?
  Mr. Lyttelton: Certainly. I will come later to the point whether they are world prices or an attempt—and an ineffective one—to follow the world prices up and down. The point I am making is a more
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  limited one, that instead of these fluctuations for good or bad taking place gradually and enabling everybody in the trade to hedge and protect themselves from day to day, under this system of Government bulk buying and Government selling these changes took place overnight.
  I am not trying to be controversial, but how can a successful industry, and particularly an export industry, be founded on such shifting quicksands as this so that no one knows where they are? How can manufacturers make firm forward prices, particularly for finished articles and woven goods, when the whole foundation of their trade is altered arbitrarily in a single night? I would remind the Committee that when the Liverpool Cotton Exchange was open fluctuations of 1d. per lb. in a day were a very rare occurrence. It is not too much to say that stability of the Paymaster-General's variety leads to overnight fluctuations 12 times as great as the maximum reached except on the rarest occasions in the free market.
  Of course, it is one of those strange and immutable facts that Governments cannot stabilise market prices, particularly of an agricultural crop, without spending vast sums of the taxpayers' money or, alternatively, without supplying the spinners with cotton at above the world price. So far, the Cotton Commission must have made money on their purchases of cotton. Any tom-fool who bought during the world-wide inflation any basic raw material of this kind must have made money. The private speculator would take this opportunity of getting out; the Government, unfortunately, cannot do so, because they have undertaken the obligation of supplying the industry with the cotton that it needs. It therefore must remain an uncovered "bull," unless it is willing to hedge. I ask the Government, not for the first time, and in the hope of receiving a different answer from that which I received on the last occasion, whether they have been "hedging" against any of their "bull" position in cotton. Surely, we are entitled, when so much of the taxpayers' money is at stake, to an unequivocal answer on that subject? Have the Government sold any cotton for future delivery on the New York Cotton Exchange?

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  At least, I know, and I shall be prepared to produce the evidence, that British firms who bought cotton through their branches abroad have been permitted to "hedge" in New York and have had made available to them dollars to pay both the commission and any difference they may have incurred in putting out that "hedge" in New York, at a time when their own domestic facilities were no longer available to them. I know that that is a fact. Are the Government following their example by "hedging"? If they have "hedged," it shows how necessary it is for the proper working of the cotton industry to have a futures market, and, if they have not, I warn them now, and I believe it is for the last time, that the losses incurred when cotton prices turn downwards, as they certainly will, will not only wipe out any of the quite adventitious gains by the Cotton Commission but formidable sums of the taxpayers' money besides. No doubt the present Government hope they will not be there to tidy up this position, and it may be that high cotton prices will last out the present Government. Of that I am not quite sure.
  Following hard upon this record of ridiculous and humiliating failure, the whole intellectual or theoretical foundation for the Government's argument has gone by the board, and it was interesting to note this very afternoon that the President of the Board of Trade was anxious to say so again. Let me explain to the right hon. Gentleman. I challenge anyone to deny that the reason advanced by the Government for the closing of the Liverpool Cotton Exchange was in the main the idea that they wished to have stability of price. That has been repeatedly stated; that was why they were getting rid of the Liverpool Cotton Exchange. I have shown how that has worked out in practice. They said that a wise, skilful and beneficent Government were introducing a Whitehall calm into the troubled seas of cotton prices. A lot of experience has shown that that argument has gone by the board, and that the intellectual basis has also gone, because the Raw Cotton Commission on 23rd February this year announced that in future they would sell cotton at approximately replacement prices; that
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  is, their selling price would be the equivalent of that price at which they would repurchase outside.
  The President of the Board of Trade supported this policy very strongly in his remarks recorded in HANSARD of 12th May. Selling cotton at approximate replacement prices means, in fact, following world prices up or down as nearly as possible. Gone, then, for ever is the argument with which we have been previously regaled that a wise British Government were going to have a stable price of their own. Gone are the arguments which condemn the fluctuating element admittedly inherent in the free market. All these are gone. Now, in their place, we have a plain statement that the Raw Cotton Commission must follow the world price up and down as best it can.
  I would ask hon. Members to remind themselves of the fact that, once upon a time, it was the Liverpool Cotton Exchange which made the world price. Now, it is New York, and perhaps other less important centres. At the end of a couple of years of this experiment, the verdict to be passed on the Government's policy is this: when Liverpool made world prices, we said it was evil that spinners should have to follow the fluctuations of the market, and for that reason we abolished the Liverpool Cotton Exchange, but, once having abolished it as a market, we consider that it was only wise that spinners should follow the fluctuations of the world market fixed outside our shores. If that is not a bankruptcy of policy, I do not know what it is. Having confessed, and having almost gloried in the confession, that the Raw Cotton Commission must follow the world market, let us now examine how they are doing it, and, again, I must go back to the beginning.
  In the past few months, we have been treated to some unctuous and even condescending homilies on the Lancashire industry by the right hon. Gentleman. He has been stressing, and I think rightly, the great part which the Lancashire cotton textile industry is called upon to play in increasing our exports. I quote from a statement which I have selected almost at random from many. It is as reported in the "Financial Times" of 3rd June:
  "If we were to pay our way abroad, all the fextile industries would have to export

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  at a rate considerably above pre-war, and home needs would be far greater than pre-war. Mr. Wilson described the problem of how to reduce costs of production and how to sell textile products abroad as of fundamental importance"
  I do not think there is anybody in the Committee who does not agree with these sentiments, but they sound hollow to the point of hypocrisy when we come to examine what the Government, who have a stranglehold on cotton prices, since all cotton is bought centrally and distributed centrally, is doing to help the export drive which they are so continuously and so rightly urging.
  I must be quite fair in this matter. It is true that over most of the last 2½ years, the cotton spinning industry has bought cotton at below the cost of replacement. This has been happening, that is to say, this subsidy has been given, at a time when the market was entirely a sellers' market, and when it was a matter of production which governed the volume of sales and not a matter of price. Now, when the sellers' market is beginning to fade, and when we are daily told that a buyers' market in textiles is about to supervene, that is the moment which the Government chooses to allow the price of cotton to rise until it has crossed the price at which the foreign competitors of Lancashire spinners are able to buy their raw materials. In all growths, with the exception of some Egyptian and Peruvian styles, the Raw Cotton Commission is charging a differentiation sometimes up to 3d. per lb. above the price at which foreign spinners can secure cotton for immediate shipment.
  Mr. Rhodes: Could I ask the right hon. Gentleman to be quite accurate on the types of cotton which are being charged above and those which are being charged below?
  Mr. Lyttelton: I was coming to this point. I said that the Raw Cotton Commission was charging, in certain growths, up to 3d. a pound to the spinners above the world price, but there is one instance in which they are charging less, and I am going to give the figures. In regard to Egyptian Karnak, on 11th June, and these are the latest figures which I have, the Raw Cotton Commission was selling to spinners at 57.25d. and the market price delivered to the mill was 56,00d. In Ashmouniz, the selling price was
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  40.25d. and the market price 42.50d. In American Middlings, the selling price was 25.50d. and the market price 24.35d. In East Indian, the selling price was 22.80d. and the market price 19.50d. The Brazilian figures were 24.30d. and 21.15d.
  I hope that answers as fully as possible the question raised by the hon. Member. These differentials have to be read in the light of the fact, which we all know, that in the old days merchants would have been' fortunate to secure ¼d. per lb. premium on replacement cost. The stated policy, the new policy of following up or down the world price is not being carried out very effectively and these differentials do make—I do not want to be rude—the President of the Board of Trade's resounding sentiments about the need for increasing the export of Lancashire textiles sound rather hypocritical.
  I now turn to yet another aspect of the subject; I might term it the chaos concerning the differentials between one grade of cotton and another. Many varieties of cotton have fairly similar spinning values and, therefore, in ordinary conditions, are to some extent interchangeable. The relative spinning merits of any two styles and/or growths was reflected before the war in the price differences between them. The recent changes in the prices charged by the Raw Cotton Commission—for reasons I do not attempt to understand—have made chaos of the relative spinning values and, again, I must give instances if I am to satisfy the hon. Member for Ashton-under-Lyme (Mr. Rhodes).
  For instance, for many years low grade Sudan cotton consistently provided an alternative to Egyptian Ashmouni, and the price difference which ruled year in and year out was about ½d. per lb. On this relationship many mills have based their machinery and production plans, but now, suddenly, those using Sudan cotton, which since 1946 had been priced slightly below Ashmouni, have had to pay first 1½d. per lb. more, and then 6½d. a lb. more than equivalent mills using Ashmouni. Another instance occurs in the case of low grade Sudan Sakel, which I think is generally known as Type G.6s, which from October, 1946, to July, 1947, was about ¾d. per lb. below Ashmouni and is today almost 15d. per lb. above Ashmouni. There is no shortage in any of these

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  styles to account for these extraordinary, abnormal fluctuations in the differential.
  Again, the Commission encouraged the trade to use Ashmouni and Zagora instead of American, for reasons which we follow. At the time this request was made it was quite a reasonable one, because prices in February, 1948, were—Ashmouni 22¼d. per lb. and American 23d. per lb. Today, however, Ashmouni is 39¾d. per lb. and American 26d. per lb., so that the mills which took the Commission's requests seriously now find themselves in a hopeless competitive position. These chaotic prices within the general price level reduce production plans to absolute futility. No one knows when or how long present differences will last, or by how much they may be altered, or how quickly, and any attempt to produce, for example, further down the industry, "a cloth at a price" must be the purest guesswork.
  I now turn to the only other part of the subject with which I can deal within the patience of the Committee and that is the inefficiency, often gross inefficiency, with which cotton is bought. Let me take, as an instance, Egyptian cotton. Let us look for a moment at the Alexandria market. The market in Alexandria keeps very elaborate statistics to show what cotton has been bought from Egypt, and what has been shipped, and so forth, and on the other hand they know what the approximate requirements of Great Britain will be in any given year. From this, it is not very hard to work out—because they are dealing with only one buyer—how much His Majesty's Government must buy and how much they have to cover at any given moment. The market naturally is got ready for them.
  I would like to ask His Majesty's Government—and I ask this question as much for their benefit as for mine—is it a fact that, when His Majesty's Government is about to enter the market for Egyptian cotton in Alexandria, that funds are transferred a few days before the purchases are to take place by either the Treasury or the Bank of England to the National Bank of Egypt? Is this widely-believed story true? I would like to know. If it is—and I believe it to be so—would not this transfer advertise in the most unmistakable terms that we were about to buy? If the President of
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  the Board of Trade is not already aware of this fact—and it may be nothing to do with his Department—I suggest that a very speedy investigation should be made. It is widely believed and I believe it to be true, but I cannot be sure.
  Let me mention another instance, the purchase of Peruvian cotton. The Government delayed covering their requirements of Peruvian cotton until very late in the year. I do not think it was until the middle of April that they began to make serious purchases. On 1st April the price was 24.86d. per lb.; by 29th April it had risen to 30.40d.; by the end of May it was 31.71d.; and by 10th June it was 33.52d.—which I believe to be far and away an all-time high for this type of Peruvian cotton. I claim that a large part—and I am not going to over-state it, I do not mean all—of this rise has been due to the late entry of the Government into the market, and to the over purchases during a short period, and hurried and inexpert buying.
  Let me give a final instance, the case of J. & P. Coats. The Chairman in his speech used these words and I must trouble the Committee with quite a long extract from the report of this great cotton spinning firm. It was 20th May when he made these remarks:
  "Last Autumn, when it would have been possible to purchase high grade Karnak of suitable quality for our requirements at about 29d. per lb., we made repeated requests to the Control Authorities to purchase for us approximately two years' requirements. We do not know why they did not do so, but towards the end of last year the supply position was such that it was only with difficulty that the home mills were kept running on this high grade Karnak cotton. … I can offer no explanation as to why we were kept in such short supply."
  Of course, it is not his business to offer an explanation. But it is the business of the President of the Board of Trade to do so, and I hope he will do so later in the day. I hope he is not going to say the reason prices were allowed to go up before the purchase was made was because of the idea that it must be fairly shared out. This most ridiculous reason has been advanced in official circles.
  The Chairman went on:
  "I can say, however, that had we been free agents, we would have made sure of an adequate supply of cotton at a time when market prices were much more favourable than they are now."

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  He implies by that they would have bought when it was 29d. per lb.
  "We have now, it is true, received sufficient cotton to keep us going for the time being but at prices up to 60d. Our experience has undoubtedly strengthened the conviction we already held that hulk buying, at least in the special high grades of cotton, cannot efficiently replace private purchasing."
  To sum up, I claim that I have shown, first, that the idea that bulk purchase made for stability has been publicly demonstrated to be utterly false. Secondly, that the theoretical idea that bulk purchase could replace the machinery of free markets has publicly been confessed to be nonsense both by the Raw Cotton Commission and by the President of the Board of Trade himself. It is now agreed that the correct policy is to follow world prices, but only when they are fixed by markets outside these islands in which we have no participation and only when dealings in those markets take place in currencies other than our own. Thirdly, that production plans are made hazardous always and often impossible by the arbitrary fixing of unheard of and incalculable margins between what used to be considered similar growths of cotton. Fourthly, that bulk buying can be shown to be inefficient by many instances, and the longer it goes on the more instances there will be.
  Of course, it is conceded that during an inflation any buyer or "bull" must make money, but what counts is to cover requirements without unduly raising market prices. In this the Raw Cotton Commission has signally failed, not because of lack of skill or lack of attention to their business on the part of the gentlemen who are on the Raw Cotton Commission, but because, in our submission, they have been entrusted with a task which was impossible from the very outset, because the policy on which all this is founded is unsound nonsense.
  4.30 p.m.
  Mr. Bottomley (Secretary for Overseas Trade): The right hon. Gentleman on an earlier occasion was particularly kind to me. He had great knowledge of the subject he was talking about, and I confess that my own knowledge of it was somewhat limited. For that reason, because of his kindness in the past, I should like to believe him today when he says he has put this case forward without political or party prejudice. However, I really cannot
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  accept that. I cannot accept it because he knows as well as I do that conditions today are extraordinary. Primary products—not only cotton, but all primary products—are at prices out of proportion to what we knew as competitive prices before the war. Indeed, one of the difficulties confronting this country today is that we have to give so many skilled man-hours in exchange for what might be termed unskilled labour in producing primary products.
  I shall tell the right hon. Gentleman in a moment what we propose to do about developing the Empire in such a way that even our cotton supplies will improve. Were it not that I do not want to indulge in party conflict, I should say we can find an example of how we have been miserably led in the past in this very instance of primary products in the Empire that are costing us so much. It is our common purpose to try to organise our society in such a way that we are able once again to have the stability which will enable us to get far bigger returns for the labour and the management put into British industry.
  The right hon. Gentleman talked about fluctuations in prices, particularly cotton prices, and contrasted them with those of five years out of the 10 before the war. He avoided the very pertinent question put by my right hon. Friend, as to why he did not quote the years immediately following 1918. If he had contrasted present conditions with those of the years after the first Great War his case could not have been presented in the way in which he was able to present it. We are, I think, rightly concerned to compare the circumstances following the 1914–18 war with those of an equal period after this last war. If we make that comparison, I am bound to say that if we left the method of buying to the old system, in which in a period of scarcity we had the merchant coming between the grower of the cotton and the manufacturer and the spinner, there would have been gambling of a kind so extreme that prices would have been higher today than they are.
  The dispute between us is really whether it is better or not to allow many individual merchants to carry stock and thus speculate continuously on whether they can continue to get the stock—which is extremely unlikely in view of the fact that there are short supplies of cotton.
  Mr. Walter Fletcher: The hon. Gentleman used a curious expression. He said we should let merchants carry stock and thereby speculate. Does he not realise that what the merchants did was to carry stock and buy ahead, and to avoid speculation?
  Mr. Bottomley: Very often stock was carried, but more often than not merchants failed to carry it and speculation went on whether supplies would be available. We think the merchant should carry stock for the manufacturer and the spinner. That is the difference between our organisation and private enterprise. Instead of having a large number of operators in a competitive manner carrying on business we are trying to organise collective buying by agents, observers and experts throughout the world, and to establish at home an organisation that serves the spinner to the best possible advantage. I know that that is not in accord with the views of the Conservative Party, but we do know that it is primarily as a result of their mismanagement in the past that we are in the awkward position in which we find ourselves today.
  In this connection I may add that, in trying to sell our goods overseas we are meeting precisely the same difficulties that we encountered as a result of leaving cotton to this private enterprise. We have just sent a business man, Mr. Neville Blond, to America, and I see from reports in the Press that he says:
  "One of the difficulties in connection with our exports is that the middleman"—
  that is, the equivalent to the merchants—
  "charges as much as 25 per cent., the retailer marks it up 40 per cent., and the prices are thus too high. It might be worth while considering a central distribution agency."
  Let us look at some of the points the right hon. Gentleman made with regard to stability. Let us examine what are the causes that have led to the increase in prices. Our principal supplies come from the British Colonies, the Sudan, the Belgian Congo, the United States, India, Pakistan, Brazil, Peru, and Egypt. From the British Colonies, the Sudan and the Belgian Congo we buy in bulk. I do not think anybody can say, in the case of bulk buying, that the policy has not been successful, particularly in the Colonies. We buy in bulk in order to stimulate the market, to encourage more growing, not
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  merely for our own needs but in order that the peoples in those territories can, as a result of the labour they put in, get some social services, increased education, better possibilities for development, with ultimate benefit to them and to us because we shall get more cotton supplies in due course. In fact it is only in those countries that we do indulge in the method of bulk contracts.
  With regard to United States of America cotton, I notice there was no criticism. With regard to India and Pakistan we know that one of the causes of the rise in price was the communal strife in the Punjaub where most of the Indian cotton is grown. With regard to Brazil and Peru, we get purchases through staff or agents overseas. If the right hon. Gentleman can show to me that merchants can assist in the buying with advantage I am sure that later on in the Debate my right hon. Friend will be prepared to look at his suggestions, from the point of view of principle, and I know that the Raw Cotton Commission will be similarly influenced. I think it is fair to say that the steepest increase in price is due to three or four causes.
  Mr. Lyttelton: Is the argument the hon. Gentleman is adducing designed to show that the ideas of producing stability in cotton are impossible, and is he now going into the causes which make nonsense of all those arguments previously advanced by his right hon. Friend? Is that the purpose of the present phase of the hon. Gentleman's speech?
  Mr. Bottomley: I should say no. I will go on to give reasons which I think have influenced the tremendous rise in price, particularly in connection with the Egyptian market. I think that the right hon. Gentleman said that stabilisation is possible when conditions remain normal. I tried to show earlier, that we are living in an abnormal period. If that were not so, we should not be in the desperate economic position in which we find ourselves today. I think that the rise in cotton prices is due to several factors. There is a smaller cotton exportable surplus. It only amounts to about two-thirds of that exported before the war. That is due to the fact that the Egyptians themselves are using very much more of their own land for growing foodstuffs. In

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  addition, many European countries, which before the war went to the United States to buy because they were conversant with that cotton, are now making a call upon the Egyptian cotton market, because they are faced with the dollar shortage, as we are.
  There is no doubt that we in the United Kingdom are making a greater demand than hitherto, and perhaps I might recall to hon. Members on the other side of the House that we are also making a greater call on stocks that were accumulated mainly during the war. If the industry had paid proper attention, as it should have done before the war, to this matter, we might have started the last war with greater stocks than we did, and be living today in much better conditions. Russia has also come into the Egyptian market. They are buying cotton in Egypt, and we find that with all these conflicting interests struggling against each other prices rise. The law of supply and demand must operate. I think, however, that I can claim that the Raw Cotton Commission have bought at more reasonable prices than would have been possible had the merchants operated under the old system, as suggested by the right hon. Gentleman.
  With regard to selling prices generally for spinners, the right hon. Gentleman said that the Government had controlled them since the Liverpool market was closed. During the war years, the Government were the chief buyers, and as the right hon. Gentleman had a lot to do with that, I am surprised that he is not claiming more credit for it. During the war, prices were kept down, and after the war the Cotton Control fixed their selling prices roughly at replacement cost. There were discounts for abnormal freight and other costs, but they fixed the prices for individual varieties on the basis of their relative spinning value. During those six and a half years, there were only six changes in price. That was stability. I do not think that the right hon. Gentleman would dispute that.
  The same system that operated during the whole of that time, when there were those few changes, is the system that operates today. There is no change. That fortifies my comment that there are abnormal circumstances. Had it not been for that, no doubt, hon. Members on this side who claimed earlier that it
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  would have brought stability would have been right. I am certain that if hon. Members opposite had had their way, prices would have been higher than we find them at present. We are finding that the selling prices relatively are reasonable in comparison with those of our competitors. The right hon. Gentleman did not make reference to prices elsewhere.
  Mr. Lyttelton: I did.
  Mr. Bottomley: I am prepared to accept that.
  Mr. Lyttelton: I think the hon. Gentleman has forgotten that I read out a list of a number of grades of cotton and the selling prices of the Raw Cotton Commission compared with world market prices.
  Mr. Bottomley: I think that examination will show that the prices are comparable, and that the Raw Cotton Commission have been able to buy at prices which I think are of advantage to the British public, as compared with what might have been possible by other methods. The right hon. Gentleman is, in fact, saying that we should not follow the world price by selling approximately—
  Mr. Lyttelton: I do. I think that we should.
  Mr. Bottomley: Therefore, the right hon. Gentleman accepts the view that to use replacement cost is right. I was not sure whether he did or not. I think that we can say, with regard to the Raw Cotton Commission and its work, that they have as far as possible bought in a way which is of advantage to the community as a whole. I think that the quotation which the right hon. Gentleman gave of the remarks of the chairman of J. P. Coats was perhaps appropriate, and I should like to take an extract from the same gentleman's speech. He said:
  "I welcome the Raw Cotton Commission's announcement that, in future, they intend to sell raw cotton at approximately replacement prices."
  The President of the Board of Trade has strongly supported this policy with sound arguments. If the right hon. Gentleman accepts that, it will be useful for my right hon. Friend to make a note of it, because he was going to take up that point.
  Mr. Lyttelton: We have always claimed that the only way to sell cotton is to sell it every day at the world price. That is entirely different to the principle—
  Mr. S. Silverman: When was that?
  Mr. Lyttelton: That has always been our point of view. The Liverpool Cotton Exchange every day fixed world prices, and those were the prices on which the spinners and weavers as well could cover their requirements.
  Mr. Bottomley: I readily accept that explanation. I was wondering where the right hon. Gentleman was going to take us if the point of view which I thought he had expressed earlier was the one which he follows, but he has now corrected my impression. It would have meant that we should have had to sell cheaper and thus subsidised the cotton industry, or else to increase our selling price, which would, of course, interfere with the export drive.
  I think that I have dealt with some of the points which the right hon. Gentleman mentioned. There are others that I could handle, but in view of the fact that time is short, and that the right hon. Gentleman said that he was making his speech short deliberately to allow as many as possible to take part in the Debate, it would be fitting if I ended at this stage, and left my right hon. Friend, who is to wind up, to answer other points raised.
  Mr. David Eccles: I gather that the policy now is to charge the replacement cost; in other words, to follow the world prices. Does that mean that that is going to be done whenever the world prices change, or at arbitrary intervals when the Raw Cotton Commission feel that a certain movement is likely to show? Surely, the logical thing would be, if stability has been abandoned, to follow the world prices every night?
  Mr. Harrison: The hon. Member for Chippenham (Mr. Eccles) suggested that arbitrary intervals should take place.
  Mr. Eccles: No.
  Mr. Harrison: Is it the policy of the Commission to have reasonable intervals or to rationalise the change of prices according to world prices?
  Mr. Anthony Greenwood: Will my hon. Friend bear in mind the fact that the Raw Cotton Commission was complimented in "The Economist" last week on the fact that the recent reduction in price of Ashmouni cotton was immediately handed on to the consumer?
  Mr. Bottomley: Stability has not been dropped. It is still the Government's policy. I mean that in the sense that if prices rise that will be the charge, and if they come down that will be the charge. With a view to getting stability over a period there is the cover which gives the spinner an opportunity of keeping the charge on a fixed basis. The Raw Cotton Commission is the body which concerns itself with the details, and I have not the least doubt that my right hon. Friend will be able to deal with that matter later in the Debate.
  4.50 p.m.
  Mr. Walter Fletcher: It has been a little difficult to follow the speech of the hon. Gentleman, and I do not want to be in any way unkind to him. He has progressed since the last time he spoke, when he told us that he really did not know much about this, and I compliment him on his wisdom in sticking closely to his brief, rather than relying on his knowledge of the question that we are now discussing. It really is a curious argument to say, "Our target was stability, but we have found that unless there is stability in the rest of the world we cannot achieve it." That is a complete abandonment of the main plank of his argument.
  Mr. S. Silverman: Why?
  Mr. Fletcher: Because it proves that one cannot contract out of world fluctuations in a large commodity of which one is not the main grower.
  Mr. Silverman: Surely the hon. Gentleman is missing the point entirely. In the time that he calls "normal," under the system that we had before the war, and which we abandoned during the war, there was never any attempt to reach stability at all. The manufacturers were at the mercy of the markets whose fluctuations were regarded as the normal, happy and healthy thing. That is one principle. Surely the other principle, of attempting to reach stability, may remain valid even if world conditions prevent one doing it.
  Mr. Fletcher: The manufacturer was not at the mercy of the market in any way; the market, therefore, would allow him to fix the price of the cotton he wished to buy against the contract, and he was able to do it on the day. That is what prevails in those countries where there are open markets which can be used.
  We must try to bring this Debate back to some sense of reality. The points the hon. Gentleman made were rather petty, delving back into the past, trying to show that under the bad old system no Empire cotton could be produced. That is just nonsense. I had something to do with drawing up the Uganda Cotton Rules in 1920, and the Secretary for Overseas Trade ought to be grateful today that under that wicked rule, and in the wicked spirit which prevailed, Uganda cotton was produced in very considerable quantities, which is of great use to us. The only thing we can say about Uganda cotton is that under the system which he and his friends have inauguraed, the position today is that India can buy Uganda cotton £11 cheaper than that supplied by the Cotton Commission to the spinners here; so instead of reviling the system which produced cotton in Uganda in an orderly fashion, with great benefit to the country, he might explain to us how it is that under his beneficent system the spinner here has to pay £ more. I hope that the President of the Board of Trade will take up that point when he replies.
  One thing we have to establish once and for all is that the consideration whether, at the end of big rises in a "bull" market, his scheme has made money or not is not important. If in his reply the President of the Board of Trade says that we have done very well out of it, I can only hope that somebody will later on point out that that is a very poor argument. Anybody who buys shares which go up, so that he makes money, is very apt to pat himself on the back and say: "I am very clever. My shrewdness has brought me this money." Anybody who has bought cotton, or any commodity, and holds a stock, can write it up to a level showing an enormous profit; but he could not take that as being a complete answer as to how well he has bought, as I will try to show. The object of this Debate is to probe this question. Under this new system will all those engaged in the process of the textile
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  industry not only be better off than they would have been under the open market system, but in a position to meet the competition which will come from those who still have the privilege of working in the world cotton markets? That is the hub of this business. I believe that they are in a much worse position.
  Let me take just one aspect. We are now going on the basis of replacement; but are we going on the full basis of replacement? Is the spinner to have—which he is not allowed to have at the present moment—the opportunity to buy cotton forward when there is a forward discount? Spinners in Italy and in every country which can use the open market can buy forward cotton at the discount which prevails in the open market; but that privilege and that essential right is not given to the spinner in this country at the present moment, which is a very heavy handicap.
  We are told by the President of the Board of Trade and by everybody else—and it is accepted—that we are at the end of the sellers' market; anybody who exports textiles, as I do, and knows something about this subject, knows the increasing difficulty of selling. If the spinner is unable to take advantage of the forward discount on cotton, and can buy only on a practically spot basis, then the spinner and everybody the whole way through the industry will be most seriously handicapped. Will the President of the Board of Trade say whether he will restore the right for spinners to take advantage of the forward discount in other markets? Or, if he is going to do it himself, will he pass it on? That is a very important point.
  The reason for the forward discount, of course, gives the clue, to a considerable extent, to the secret of buying almost any commodity. Any commodity which is an annual crop must have two periods: first, when the new crop is overshadowing the price, and people are beginning to try to estimate, as they do through the Bureau of Statements in America, what the crop will be; but when the crop is low the secondary period interests them. The failure of the Government in their Egyptian cotton buying policy is due to a lack of realisation of that factor. That

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  they should revile the Egyptian Government because they have made this calculated £24 million profit out of their selling is the most magnificent answer I have ever heard on the question of bulk buying. Bulk buying produces and provokes bulk selling, and if bulk selling is, as it is to a considerable extent, in the hands of a very strong, solid and well financed body such as the Egyptian Government in various phases, then that form of purchase is foredoomed to failure.
  Mr. Fairhurst: Not necessarily.
  Mr. Fletcher: I have 25 years' experience of buying commodities, and I should have thought that the "not necessarily" part was less than 1 per cent.
  Mr. Fairhurst: Will the hon. Gentleman say that he has had 25 years' experience of the bulk buying of cotton?
  Mr. Fletcher: I am not saying that I am talking about what happens in markets in their various phases.
  Let me turn to one of the reasons why our Egyptian cotton has been so badly bought. I have seen a document, which I have shown to various friends and which gives the secret away. The cotton buying in Germany is done by the Joint Import-Export Agency, for which we are 50 per cent. responsible with America. A letter is sent out—and this is typical of the Government methods of buying—to the Alexandra Cotton Association saying, "Next Wednesday we are going to buy so many thousand bales of cotton. Will you please circulate this letter to all your members so that, on the egalitarian thesis that runs through everything, we may be in the same position as everybody else." Then, to the astonishment of the sender of that letter—and we pay 50 per cent. of the cost—the market goes up about 7d. Of course, that is due to the wicked attitude of those who run cotton in Egypt.
  The failure of bulk buying is that the bulk buyer can be seen coming from miles off; whereas if the buying is spread among the hands of those who really could do it, and are fully qualified to do it, the mere spreading would lessen the impact of the buying.
  Mr. Bottomley: Surely, if there is a scarcity of an important commodity, does not the presence of more potential buyers send up the price?
  Mr. Fletcher: Speaking as one who has dealt quite largely in all these commodities, I can say that that is not the case. Spreading it around a great many people is infinitely less heavy in its impact than having one buyer. That really is so in the experience of anybody who has had to do it.
  To come back to the question of how this trade is being treated, I ask shall we be able to be in as good a position in the textile exports, as our trade revives? That is really the most important thing of all. There are certain signs which make it quite certain that, more and more, Lancashire is becoming a quality producing market; we are being driven into an ever-narrowing band of manufacture, but because of lower forms of manufacture we shall not be able to compete with labour conditions prevailing in India, Egypt, and other countries. More and more we must specialise in quality goods. One of the failures of the Cotton Commission is that they have not provided proper conditions for the processor to have a wide range from which to select.
  What happened in the old days? The spinner went to Liverpool or Manchester to look at the counters of the brokers and merchants; he had a huge range of cotton of every sort and grade from which to make a selection. He was able to say exactly what cotton he wanted, and it was probably from the same producing area as he had had it before. That is not possible now. One of the sins of this business is that the variety offered by the Cotton Commission is too small; it does not begin to fit what the trade wants in any way whatever. Would the President admit that his buying now is not sufficiently wide to provide for all these grades, or that they are bought in such a way that they are no longer sorted out, as in the old days? Will he see that a much wider range is provided for the man who wants to manufacture the goods which will keep up his reputation and market? It is a distinct failure of the Commission that they have not provided a sufficient range of selection. Quality is very important.
  I was in America recently, discussing with the American cotton people their

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  view of the action of the Government in closing the Liverpool Cotton Exchange. This has done America a great disservice, at a time when we are not anxious to do that. They say that because Liverpool was the balance wheel between the producer and the consumer throughout the world it was a market which was absolutely trusted. Now the New York market is considered to be too much under the influence of the textile market, and the Southern market is too much under the influence of the grower. By withdrawing Liverpool we have done a great disservice to the Americans. They say that the selection and shipping of cotton is not carried out nearly so well as it was when the livelihood of those who handled it was directly concerned.
  This runs through every phase of nationalisation. There is a slackening. I have no doubt that I am laying myself open to the charge, "This is the old sordid theme of the profit motive," but as this business is being carried out now the result is nothing like so good. I took a plebiscite in my own constituency, and I found that the claim that the quality of cotton is not fully up to standard was well substantiated. I believe there is a danger that we, who have to compete in the face of the most bitter winds of competition which are blowing around us now, will deprive the spinner of the vital rights of selecting exactly what he wants, of buying his forward cotton at a discount and gradually losing the certainty of getting quality cotton.
  I should like to get replies from the President on these points. Why can Italy buy her cotton so much better than this Government? At present, there are signs that Italy is buying in certain markets at an infinitely cheaper price than we can buy. Why should a country which has not the advantages which we enjoy be able to buy various grades of cotton so much better than we can? Why is Italy selling certain forms of yarn at a noticeably lower price than we are? It is not only due to the lower cost of labour; it is due, I believe, to the fact that they have more rapid access to the open market.
  Mr. Harrison: This is an important point. Would the hon. Gentleman be more specific about the markets in which the Italians are purchasing so advantageously?
  Mr. Fletcher: I cannot give them to the hon. Gentleman now, but I will let him have them with great pleasure. It is a fact that in certain markets the Italians are operating at a figure substantially below ours.
  I believe we are at a turning-point in the cotton industry. The Government have already abandoned stability and have turned to replacement. If we are to work on replacement let us work on the basis that we are getting full advantage in forward purchasing and access to open markets. The set up of the Cotton Commission has forced two men, who are responsible for cotton buying, into being the largest speculators in cotton. For a Socialist Government to create these Napoleons of cotton buying is very curious. They have put into the hands of these two men an impossible task. I do not blame the men so much as the system. Just as the spread of buying produces a much more even price, so concentration of the power of buying must inevitably lead to mistakes which, when they do occur, are so big that there can hardly be a recovery.
  I urge the Government to reconsider this matter. They have shifted their ground; let them shift a little more. Let them say, "We will restore gradually, on an experimental basis, in certain growths at any rate, the ability of the spinner and the buyer to have access to markets through merchants, and we will see, by competition, whether our bulk buying is doing better or not." There is now the end of the sellers' market. There will be a drop in everything including cotton and piece goods values. This is the moment when the Government, if they wish to show real wisdom, and have the real interests of the textile industry at heart, will give it confidence to go ahead. They should abandon replacement and allow the spread of individual buying to take its place.
  Mr. Fairhurst: Will the hon. Gentleman define a stabilised period? Will he say that there has been a stabilised period in the industry since 1944? Will he give the Committee an illustration where present fluctuations have vitally affected any spinning mill or manufacturing company?
  Mr. Fletcher: I do not quite understand what the hon. Gentleman means by "a

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  stabilised period." If he means that a vacuum has been created, which has given a false appearance of stability inside the industry, there has been such a period.
  Mr. Fairhurst: The right hon. Member for Aldershot (Mr. Lyttelton) dealt with fluctuations and referred to a 10-year period. There cannot have been a 10-year period since 1944. How can a stabilised period be defined when the world is upset? We can only look forward to a stabilised period in another three, four or five years.
  Mr. Fletcher: The hon. Gentleman is arguing that it is all nonsense for the Government to say that they would be able to achieve stability, because there is no standardised period and there never has been. There I agree with him.
  5.10 p.m.
  Mr. Rhodes: Up to now the Debate has rather missed the point. As I see it, the Debate should follow the line, first, whether the Raw Cotton Commission and its purchasers have made it possible for Lancashire to sell its products overseas; then, as a second point, whether we are of opinion that in a buyer's market it will succeed in buying cotton at prices which will enable Lancashire to maintain its trade.
  The right hon. Member for Aldershot (Mr. Lyttelton) began his speech by talking about fluctuations in price. He made out that fluctuations in price had only occurred in so far as they applied to the British market. I have in my hand a table showing the ups and downs of the New York market during the month of May—the same period of which he was speaking—and also of the Bombay market, which is rather more speculative than the New York market. It shows daily upward movements of 40 and 45 points and falls of 61 and 54 points. That was in New York, while in Bombay the largest advance was 19½ rupees per kandy and the largest fall was 24 rupees per kandy. This information appears in the "Manchester Guardian," which comments that
  "these are uncomfortably big changes and there is much to be said for an arrangement which makes it unnecessary for the textile industries to make daily adjustments of their prices in conformity with them"
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  That is reasonable. I have a letter from a friend of mine who is a cotton spinner in America, and an extract from his letter, also written in the month of May, says:
  "I sure envy your cotton spinners in Lancashire who are able to buy without much change in price. I have sold on three prices today."
  The right hon. Member for Aldershot mentioned low-grade Sudan cotton, and the differentiation of ½d. per lb. below Ashmouni. These differentiations have their repercussions in the Sudan. I was in the Sudan in the early part of this year, and I had a look at the Report of the Gezira Advisory Committee, one of the minutes of which referred to the visit of a grower to this country. They are only small growers in the Gezira; a grower there has 40 acres and no more. He was expressing his indignation that on a recent visit to Lancashire he went into a cotton mill where he saw his own marks, and he said to the manager of that mill, "Sudan?" to which the manager replied, "No, Egyptian." Of course, the grower was very irate and went back to the Sudan where he made a lot of fuss. Another thing which has irritated the growers in the Sudan was that during September last the Cotton Commission increased the price of Sudan cotton by 6d. per lb., and, naturally enough, the Sudanese said, "You are making a profit of 6d. per lb. at our expense."
  During the last two years we have seen changes in another market—the wool market. In July, 1946, control was taken off wool and the market was organised so that it could get back to a normal system of trading in competition for grade, staple and so on, one country with another. This wool side of the textile trade had huge stocks behind it. In fact, two years ago certain experts were saying that we had 12 years' supplies. Therefore, the United Kingdom and the Dominions were very nervous as to whether they would be able to dispose of the wool stocks of the world at a reasonable price. An organisation was set up—the U.K.Dominions Joint Organisation—to dispose of the stocks. They immediately began to offer stocks by auction—in a free market. What happened? Despite this enormous weight of stocks behind the wool trade, the price began to rise, and it has risen steadily from two years ago until now. These sales reproduced, as near

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  as it is possible to do so, the circumstances under which wool was offered before the war.
  Mr. W. Fletcher: I am certain the hon. Gentleman is trying to be fair, but he should point out that before the war there was a system of free exchange, and that what makes the whole difference to this market is that a great many people have not got and could not have access to markets, owing to the system of exchange control.
  Mr. Rhodes: Exactly. I am very glad the hon. Gentleman made that point, because it strengthens my case. It throws into relief the extraordinary situation existing at present, but it does not alter my case that the Joint Organisation was trying to bring in as near as possible the same type of trading as existed before the war. At present, on high-class Merinos the prices have risen to 2½ times their value in 1946. The price of lower qualities has risen by 55 per cent. Let us see how that compares with the cotton market. The price of American cotton has risen by approximately 55 per cent. compared with the price two years ago, and in the case of Egyptian cotton the figure has practically trebled. Egyptian cotton represents the fine end of the trade and American cotton the medium to the low end. It will be seen that the two sets of price rises are almost synonymous. How can it be claimed, therefore, that the action of the Raw Cotton Commission has made any difference in the increasing of prices?
  Mr. W. Fletcher: What about rubber?
  Mr. Rhodes: I will not take the case of rubber because I do not know anything about it. I am a wool manufacturer, and I have been a student of the cotton trade for some time. With regard to the allegations of the chairman of J. and P. Coats, it may be that in all probability a big organisation like that were able to buy two years ahead before the war. But it is quite unfair to expect the Raw Cotton Commission to buy enough cotton for J. and P. Coats' requirements if there is not enough cotton available to supply all the needs of other spinners as well. What was wrong with that transaction was that the Raw Cotton Commission had not the wit to take advantage of J. and P. Coats' knowledge and buy as much as they could.
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  In regard to selection, if the hon. Member for Bury (Mr. W. Fletcher) reads the Debates which took place during the various stages of the centralised buying Measure, he will find that no one was more concerned than myself about this point. I was aware of what might happen, and I was very much concerned at that time about the possibilities of a buyers' market and our Lancashire spinners not being able to select the cotton they wanted. I put the point to the hon. Member that with the shortage of labour in the cotton trade spinners are continually wanting more and better qualities of cotton to keep their machines going, which is a reasonable thing to do. But we know that spinners of that type do not comprise the whole of the spinners of Lancashire. Let me quote on the other side the case of a very large spinner who is not so concerned about what happens to his workers when working on the cotton he buys. That it is due to the weakness of the present system of cover there is no doubt. Under the present system of cover the price changes take place on a Monday, but the returns are not sent in until Saturday. At the moment it is quite possible for a firm to be paid on shorts, and if it is short of Egyptian cotton, there is nothing to prevent it from substituting Brazilian cotton for Egyptian cotton, and that has been done not once but many times in Lancashire. It shows the defect in the system. The two sets of returns should be correlated.
  On the question of the Raw Cotton Commission, I say quite frankly that I would not have voted for the centralised buying Measure had I known what sort of a job was to be made of the selection of personnel for the Commission. I expected that the best men would be put on the job, and it was on that basis that I voted for the Measure. I am confident that the Commission can serve Lancashire well, and that with the correct personnel it can serve Lancashire even better than the Liverpool Cotton Market did years ago. The Commission operates in the American and Indian cotton markets through Liverpool merchants who receive offers on their behalf. The American cotton is bought by description and samples can be seen but there is no arbitration clause. I suggest that an arbitration clause and purchase by sample should be included very speedily for future transaction. Brazilian cotton

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  is bought by an employee of the Commission and is sold to spinners on description, and samples cannot be seen.
  An agent buys cotton in bulk for the Commission in the Sudan, and it does not need sampling or description to the Lancashire buyer, because the Sudan plantation syndicate has got the grading and stapling of cotton to such perfection that their work can be relied upon throughout the world. Egyptian and Uganda cotton is bought on the spot by an employee of the Commission. Egyptian cotton is bought by description, and sample and if necessary an individual bale can be sampled. Where merchants have been employed as a go-between in the Indian and American markets the results have been fairly satisfactory. True, they have bought on a rigid specification as laid down by the Raw Cotton Commission, but there is room for improvement in the buying of American cotton. Too much rigidity in method has lost us many chances of buying cheap cotton. By and large, Indian cotton has been bought well, and I do not know whether the export tax on Indian cotton was foreseen or not, but contracts on a F.O.B. basis were made, so that the Lancashire spinners had advantage of that purchase.
  fSo much for the buying of American cotton. In Egypt, where merchants are not employed, the picture was not so good. During the war and until last year a very able man bought cotton from the Egyptians. He was withdrawn to take the position of independent member on the Raw Cotton Commission. This is a very serious statement to make, but I am going to make it—between November and January, when the new buyer was taken out, there was nobody in Egypt qualified to buy cotton for the Commission. Indeed, it was during this time that Russia came into the picture. Why on earth this man was withdrawn when prices were beginning to move up a I cannot understand, unless it was that the chairman of the Commission was so lost that he wanted a practical man at home to make decisions for him.
  It must be remembered that there was an excellent man at the Cotton Control who served this country well for two years. He knew his job and when the changeover was made, and, indeed, in the months leading up to the time when
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  the change was going to take place, it was never mentioned to him that he was going to be superseded, nor was he given the opportunity to apply for the job. Whether the appointment of the present chairman of the Raw Cotton Commission was Civil Service nepotism or nepotism of another kind I do not know. Suffice it to say that the position is that the Raw Cotton Commission has a chairman who has no background of cotton at all, one single full-time independent member, whose experience has been mainly on the fine cotton trade and in Egypt—he is an admirable man—and the remaining seven are part-time members who have been drawn from various parts of the industry. The part-time members comprise two cotton mill directors, one cotton manager, one manufacturer, the late cotton controller, and two trade unionists. I am perfectly sure that a few of those seven would be better employed about their own business and in their places people brought in who really know the job. I am sure the two trade unionists would be better employed in spreading the gospel of redeployment in Lancashire. I am not criticising the chairman. I sympathise with him. As a man he is a first-class administrator, but he is out of his element in this job.
  I should like to have answers from the President of the Board of Trade, when he winds up the Debate tonight, to the questions which I am now going to put. Will he see to it that the system which allows a spinner to make money out of the cover scheme will be altered forthwith? I should like to strengthen the arguments of the hon. Member for Bury about the forward discounts on cotton. I do not see why this cannot be arranged. It might need a little thinking out but I think it could be arranged. I ask the President of the Board of Trade to say whether he will see to it that merchants are brought back again into the Egyptian market. If they are and if they do the services they are already doing satisfactorily, within limits, in the Indian and American markets, we can remove quite a lot of the causes for complaint.
  While I am on this subject there is another thing I would suggest. Will the President of the Board of Trade make it quite clear to the Raw Cotton Commission that their action in buying cotton in the Colonies and Dependencies has

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  political repercussions in those countries? That does not apply to Uganda and Tanganyika only but it applies to the condominium of the Sudan as well. If there could be a close relationship between the Foreign Office and the Colonial Office—I do not mean cluttering it up with slow-moving Civil Service meetings—it would be a good thing. I still affirm that the Raw Cotton Commission is necessary and that it can do a good job for Lancashire but if it is to operate to the best advantage we must strengthen the personnel.
  5.34 p.m.
  Sir John Barlow: I am very glad to follow the hon. Member for Ashton-under-Lyne (Mr. Rhodes) because undoubtedly he speaks with some authority on this subject. He referred to the drawbacks and weaknesses of the present Raw Cotton Commission and emphasised the fact that if there is a weak member or a change of membership, it makes for weakness, itself a colossal fact when one organisation is doing the whole of the cotton buying for this country. Undoubtedly our people in Lancashire, who are first-class cotton buyers, are not properly placed in the Cotton Buying Commission. Only the very best buyers in Lancashire at the present time are good enough to serve on this Commission, and where there is a set-up, as in the present case, in which so much emphasis is placed on the independence of members, the expert knowledge which is required in markets of this kind cannot be obtained.
  It is one of the most difficult things to buy raw commodities on the best basis. There are very few skilled people who can buy to the best advantage in any raw commodity markets, whether wool, cotton, rubber, tea or anything else. There is no doubt that the present method of independence means ignorance at the top, I feel sure that the hon. Member for Ashton-under-Lyne would agree with me on that. There is one point where I do not agree with him. He suggested that there had been a tremendous increase in value in the wool market because it has been made a free market.
  Mr. Rhodes: Oh no. It was not because it was made a free market. That was incidental to what I was saying. What I was explaining was that by making it a free market, it could not be made a cheap market.
  Sir J. Barlow: The hon. Member emphasised that it had had some measure of freedom and that the prices had gone up very considerably. I would give an instance of another free market in which prices have remained stationary. The rubber market was mentioned, and the hon. Member quite rightly said that he was not familiar with the commodity. If he looks at the facts I think he will find that the pre-war value of rubber was about 1s. per lb. and that it is now about thirteen pence per lb. This market is one of the freest in the world, and rubber is one of the few commodities which have not gone up substantially with the general post-war increase in values.
  Now I should like to refer briefly to one or two things that were said by the Secretary for Overseas Trade. He made frequent reference to pre-war hedging and he hinted that hedging was usually gambling. There is a great misconception on the part of hon. Members opposite. They think that hedging and gambling are synonymous terms. I am as much against gambling in raw commodities as they are and against people taking undue profits by speculation in raw commodities, but I can assure them that hedging was a very real necessity in order to prevent losses and to prevent speculation. Hedging in itself is not gambling. Hedging prevents gigantic profits or losses and stabilises markets. That is one thing which many hon. Members on the other side do not recognise.
  Mr. Harrison: Would the hon. Member accept this illustration of the facts about hedging? I go to a bookmaker and put upon a horse a considerable sum of money, which is a little bit more than the bookmaker thinks he can stand. What does he do? He hedges. Is that not a form of betting?
  Sir J. Barlow: I do not think that the hon. Member's simile is at all accurate. What I mean by hedging is this. Suppose I were a spinner—which I am not—if I made a contract today to sell a lot of yarn over the period September-December, I should immediately cover that contract. Similarly if I were a weaver and if I made a contract for six months or a year ahead, as is often done, I should immediately cover. That is hedging in the ordinary sense of the word and it is not

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  speculation. It is done in order to prevent high profits or undue losses and to stabilise the position. Undoubtedly there was a little speculation, but it did not amount to anything like as much as hon. Members opposite suppose.
  The Raw Cotton Commission has been working for some time, generally on a rising market when it has been very easy for the Commission to buy, provided that they bought sufficient. If they bought a little too much, they made a very nice unearned profit. The real test of this buying Commission will come when prices begin to go down. Then it will be much more difficult. I do not think that the Commission have acquitted themselves very well up to date. We hear of tremendous increases in prices in the Egyptian market. We have knowledge of Egyptian firms making vast profits because of British Government buying, which profits were in the past quite un-hoped for, unlooked for and unexpected. When a single large buyer comes on to a market, he is like an elephant coming in. Everyone sees him and they all take advantage of the situation. If a large number of small organisations are buying they are not so noticeable, and it is very much easier to keep a steady market. Undoubtedly the Raw Cotton Commission have paid much higher prices than were necessary, because it was known that they were buyers. When the British Government goes in to buy, everyone helps himself as much as he possibly can.
  When the decision was originally made to impose Government buying, no adequate inquiry was made whether it would be beneficial or not to the trade. It will be remembered that Sir George Schuster made a very detailed examination into the cotton industry as a whole, when his fact-finding commission was set up, but it was expressly laid down that the Liverpool Cotton Exchange should not be investigated. That would have been an admirable opportunity for a most experienced outside man to collect evidence and to give what would probably have been a most valuable opinion. I believe that the Raw Cotton Commission was originally imposed because of a political theory which was unsoundly based. Time alone will show what will happen to the Commission, but I believe it was one of the commercial tragedies of this country that
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  the scheme was imposed without adequate investigation. It works very well in theory before it is put into practice, but we already see many signs that its results are most disappointing, to say the least.
  Naturally, the raw cotton merchants of Liverpool were opposed to such a change. I do not attach great importance to that fact. We know that the vast majority of spinners were very much opposed to this change. Some of those who thought it would be a good thing for the trade have changed their opinions since that time. They find that the scheme is not working out very satisfactorily. In many cases it has been impossible for spinners to get the cotton they required. It has already been said in the Debate that our trade in Lancashire is a quality trade. A very big spinner told me not many days ago that he used to make a particular type of yarn from Peruvian cotton. He was suddenly told that no such cotton was available and that he would have to use Egyptian cotton. This cotton became increasingly expensive and less desirable for his purpose. He has no other method of getting exactly what he wants. In the old days he would have gone round from one merchant to another until he got pretty exactly the type of staple he required for his purpose. It is not so easy today.
  In closing, I emphasise what I said at the beginning. The great danger of the present set-up of the cotton Commission is in the inefficient people at the top. This is a specialised trade. There are few first-class people. We cannot afford to have anyone but the very best at the top. According to the Bill, there must be a certain number of independent people. There is no place for them in such an organisation as this. I therefore urge the President of the Board of Trade to look again at the matter. If he insists upon continuing the present method of buying, let him try, at any rate, to achieve greater efficiency.
  5.50 p.m.
  Mr. Harrison: The hon. Member for Bury (Mr. W. Fletcher) gave us a lead as to the best method of approaching this subject today when he said that the touchstone should be the effect on the industry generally of the Cotton Commission's buying policy. I do not think we ought to place our-

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  selves in a position where we could not change our policy completely, as far as the Cotton Commission is concerned, if it could be proved that the Commission was militating against the success—and it has to be an overwhelming success—of the textile industry in the coming months. We ought to keep an open eye on such matters as that, in view of the grave consequences to our future textile industry, and the development and expansion of it which is so urgently needed. That is the note by which we should judge any suggestions made here today.
  We ought also to thank the Opposition for promoting this Debate at this time. The Adjournment Debate on this subject on 12th May was a lucky one because we had one hour and ten minutes for discussion. I made a statement then to the effect that the present phenomenal rise in the cost of cotton fibres since January of this year was so serious that it threatened the very substance of our textile industry throughout the country.
  I want to make a contribution to this Debate not from the angle of the cotton spinners but from the angle of the cotton yarn consumers. It would be well for our people to recognise the vast number of trades coming within that category, such as rubber tyres, gloves, shirts, all forms of clothing, lace, and nearly every kind of textile. They are all affected seriously by that terrific rise in price which took place in cotton fibres between January and a month ago. Before submitting my main argument, I would like to mention two or three things that have happened since the Adjournment Debate on 12th May. These things have happened not because of that Debate but since that date, and they should be of considerable comfort to the textile industry generally. For instance, recently there have been two substantial reductions in price of certain Egyptian types of cotton. While the reductions are nowhere near the amount by which the price had risen previously, nevertheless they are substantial and indicate to some of us that the price ceiling of cotton fibres has definitely been reached.
  A letter appeared in "The Times" of 4th June from an Alexandrian cotton fibre exporter in which the writer mentioned the fact, which was quoted
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  pointedly by the Secretary for Overseas Trade, that the Egyptian cotton surplus for export purposes today has been reduced two-thirds in bulk in comparison with the figure available before the war. That is the dominant factor to be considered in all questions relating to Egyptian price movements at present—the terrific decrease in the amount of export fibre available. The writer mentions also that the recent policy of the Egyptian Government has contributed considerably to the increased price of that commodity on the Alexandria market, and points out that stocks of Ashmouni Egyptian types are non-existent at present in Egypt. That is true, because we have been able to confirm it.
  If we accept that position, we can understand something about the recent price movements. I am quite sure that had the Egyptian Government sent to the market rather larger quantities of the Karnak type, as they could have done, the price would not have risen so spectacularly as it did a month ago because, from what we are told, there are considerable stocks of the Karnak type still to hand in Egypt. I believe that we have there the answer to the recent price rise, and it is unfair to blame the Cotton Commission for any fault in that direction.
  With regard to the mechanism of the Raw Cotton Commission, I think that under the present conditions of the cotton fibre market, that is, under the post-war shortages and the phenomenal remand for this commodity, it would be ruinous to the textile industry of this country if we reverted to the old system of the Liverpool Cotton Exchange. I do not think the cotton yarn consuming industries could stand the additional weight on the present high price that would ensue if we returned to the old practice of the Liverpol brokers buying cotton in a speculative manner, because that would certainly increase the over-all price.
  Another factor which has seriously affected the position in recent months is the increased and substantial buying by countries which have been out of the market for a considerable time. There has been substantial buying by France and the entry into the market of Russia and Switzerland as two big buyers. These are factors for which the Cotton Commission are in no way responsible. The

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  claim is made that, had the cotton brokers in the Liverpool Market continued in existence, they could have straddled the present price fluctuations. From January to the end of May the price has increased to the extent of 4s. 6d. for some of the better class Egyptian types. Before the war the customary rise in price might have been one-eighth of a penny, a farthing or halfpenny. It was extraordinary if it was ever as high as a penny. The Liverpool Cotton Market never could have straddled a price variation of 4s. 6d., even if they were successful in straddling a variation of up to 1d. The position today would be impossible if we had still to depend on the Liverpool Cotton Exchange. What would have happened?
  Mr. W. Fletcher: May I ask what the hon. Member really means? Does he mean a penny a day, or what? Fluctuations before the war were very much more than 1d. Is he talking of the daily fluctuations?
  Mr. Harrison: I am talking of a daily fluctuation or a fluctuation under any circumstances. If, before the war, there had been a halfpenny per lb. fluctuation—
  Mr. Fletcher: In a day?
  Mr. Harrison: Yes, in a day. With such a fluctuation yarn prices would have risen and consumers would have claimed that the rise of a halfpenny was sufficiently high to be ruinous. That was the claim in the cotton yarn consuming industries before the war when a rise of 1d. was phenomenal. Such price variations as that could have been simply and easily straddled by the Liverpool brokers, but with an increase of 4s. 6d. on a continuously rising market the contribution of the Liverpool Cotton Exchange would have tended to increase still further the rising cost of cotton fibres.
  We should consider some of the Government's deliberate contributions towards assisting the trade generally to meet the threatening price levels during the last three months. On 20th May, to ease the position of the textile industry, the Government concluded an agreement with the Argentine to permit cotton piece goods to the extent of £3 million to enter that country. That was a considerable
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  help to textile industries. On 24th May the Government reported the cessation of certain duties on cotton piece goods entering Canada. In addition, the French markets have been reopened for this particular commodity. With those reopened markets, and the present downward indication of prices, we in the cotton consuming yarn sections of the textile trades have some cause for comfort in Government policy. I urge the Government to adhere to the policy of bulk buying for cotton fibre. If any concession is made the yarn consuming trades will suffer considerably from any looseness shown by the Government. If they can follow out their present policy as successfully as they have done in the last three months, we in the trade will be very pleased.
  The Secretary for Overseas Trade quoted from a speech by Mr. Neville Blond, the United Kingdom Trade adviser in Washington. It was stated that after his inquiry into the position of individual and piecemeal selling in America, Mr. Blond felt that the position should be examined; there seemed to be a need for some form of central distribution agency to handle the products of small British manufacturers in the United States. This representative, operating in the U.S.A., is apparently perturbed by the difficulties of some of our small traders in disposing of their products in that country.
  If Press reports are to be accepted, Mr. Blond seems to recommend that the Government should take the necessary steps not only for bulk buying but also for bulk selling, because there appears to be a weakness of policy regarding multiple traders who sell in small quantities. Most of our small manufacturers, who are now compelled by force of circumstances to manufacture for foreign markets, have not the opportunity or the organisation necessary to sell their products. The Government would be well advised to keep to the policy of bulk buying. It is to the advantage of the trade in general. The statement of Mr. Blond should be examined, particularly when he tells us that we are suffering severe disadvantages by the multiple small sellers operating in the American market.
  6.10 p.m.
  Mr. Fairhurst: I was pleased to hear the right hon. Member for Aldershot (Mr. Lyttelton) say that this

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  was a matter which should not be approached in a partisan spirit. All of us must be seriously concerned with the way in which we are to fashion the Lancashire cotton textile industry in the next few years. If we or the trade itself cannot fashion it successfully, the outlook for our future economic prosperity will be a bad one.
  The buying of cotton is obviously a very important factor. When discussing the Cotton (Centralised Buying) Bill, I asked what was the best system on which to buy cotton. The right hon. Member for Aldershot made five points. He said that the Bill would destroy the international market and damage the trading position of Great Britain. Then he said there was no proper consultation with the trade and that we were certain to incur heavy trading losses and could not provide the necessary mechanism to ensure against risks and could not give the industry the exact qualities to suit each individual mill. I suggest that this afternoon we have had the crossing of the t's and dotting of the i's so far as the right hon. Gentleman is concerned.
  We cannot look at the question of buying cotton as altogether a separate matter. It is only one section of the cotton trade. We have established a cotton buying Commission, and charged it with certain responsibilities. It is inadvisable to criticise it, because it has not been in operation long enough, and it is also inadvisable to criticise the personnel at present. It has not had a chance to justify itself. The old system had grown up from the very inception of the cotton industry in Lancashire; it fashioned itself to meet certain conditions in our trade and became part and parcel of the cotton spinning industry. Can we say that that portion of the cotton spinning industry, which is Lancashire's staple industry, as fashioned in those days, was bound to begin with something which was ever changing? No one can deny that the cotton spinning industry in Lancashire has been compelled, and is compelled today, to reorganise itself if it is to be an efficient unit and to meet international competition.
  I well remember the present Chancellor of the Exchequer coming to my constituency and saying that the Government wanted
  "reform of distribution arrangements so as to secure longer runs of production, amalgama-
  706
  tions particularly in the spinning section, and reorganisation of mills."
  The Government were prepared to nurse the industry, but not to nationalise the industry. At that meeting there were representatives of all sections of the cotton industry, and it was a unanimous decision that as far as possible each section would do what it could to try to put the industry back on its feet and give it the preeminent position which it held 40 or 50 years ago. But the fact remains that the industry 40 or 50 years ago was comprised of hundreds of small units and the buying side of the industry fitted in with the building up of the cotton industry in those days.
  What is likely to happen in the industry, if in our amalgamating process we find that in building up economic units we have to say that this shall be done in one section, and something else in another? How is that going to react on the buying and what was formerly the Liverpool side of the industry? Would that fit in at all? I suggest to the right hon. Member for Aldershot that if the cotton brokers who were in the job 10 years ago had tried to fit in with something which has to be built up and which would probably become an effective unit in five years' time, at least half of them would be forced out. New conditions on the other side of the industry would have that effect. What would be the use of 200 brokers in Liverpool buying and selling cotton if they were not required? They would become redundant.
  The industry must face the fact that if it is to become an effective and economic unit and to face American and other competition we must refashion our trade. We should bring in new machinery and new ideas and build up economic units. In years gone by the trade was forcing inefficient units out of existence by amalgamation of progressive factors in the industry throughout its length and breadth. It was bound to react on Liverpool. As a business proposition Liverpool would have had to do what it suggested before we brought in the Cotton (Centralised Buying) Bill. They said, "Leave it to us to reorganise ourselves and to put forward a reasonable proposition." They realised that the new conditions on the other side of the industry would force them to look at the way in which they were buying and selling cotton.

  707
  I believe dollars have had some effect on prices recently. Rising prices in the West have had some effect on the prices at which we have had to buy cotton and circumstances seem to be forcing us to look more to Alexandria than to New York whether we like it or not. In my opinion a buying commission can do a successful job for Lancashire and can do it better than the old Liverpool Board could, especially having in mind the tendency of the future. An inefficient board can bring chaos and that is a factor which the President of the Board of Trade must watch seriously.
  We all recognise that it is not an easy job for the Commission, which is charged with the responsibility of giving cotton to every mill in Lancashire at a price at which it can manufacture and sell in the world market. I remember the time in the industry when a manager would probably sell 100,000 pieces of cloth and the price would be so-and-so. The markets would be closed and on the following day the price of cotton would have changed overnight before he could buy cotton to cover himself. Thus he would find himself unable to fulfil his contract because cotton prices had gone up. [An HON. MEMBER: "He cannot hedge now."] He could not hedge in those days—
  Mr. Lyttelton: Perhaps he could not hedge that day but he could certainly hedge the following morning and his risk was only for 24 hours. Now, if he is a weaver, he cannot cover at all.
  Mr. Fairhurst: I have seen in Lancashire whole sheds stopped with beams in them half woven because of that factor. I have seen beams taken out of the looms because of that factor. I have seen weaving sheds with half of their looms empty because the buying price of cotton and the selling price of cloth have varied so much that those concerned have not known what to do. As a result the work has had to be stopped. That has happened many times in Lancashire.
  The President of the Board of Trade cannot escape his responsibility at the present time, which extends back to the buying Commission responsible for buying cotton. We know that the prices that are obtaining in Lancashire at present and which obtained during the war are not and were not economic prices. Even now,
  708
  when the world is just beginning to make an attempt to get back to normal, we cannot expect prices to stabilise themselves and operate in an ordinary routine as they did in the past. The fact that other countries are coming into the market as bulk buyers would sooner or later compel us to organise ourselves and come into the market as bulk buyers.
  An hon. Member has said that the bulk buyer is like an elephant coming along, and that because a man comes along to buy a tremendous amount of cotton at one time the seller says, "I intend to get my price." It has not always worked out in that way. I can remember the time when the cotton planters were disturbed because they could see ruin facing them. They never knew whether they would be able to sell the cotton that they grew. Today, bulk buying can give to the cotton planters a security which they never had before. After all, that is organisation, it is planning, and hon. Members opposite cannot argue against organisation and planning.
  6.24 p.m.
  Mr. Dryden Brook: I am interested in this Debate because it has brought out three factors which are today uppermost in the minds of most businessmen in all industries. What has been said applies not only to cotton but to all other industries. The three factors I have in mind and to which I should like to address myself briefly are, firstly, the technical efficiency of the machinery of the Cotton Marketing Board and the Commission; secondly, the extraordinary intermingling of politics and economics in most parts of the world at the present time; and, thirdly, the extraordinary rise in prices and the fluctuations which are occurring in respect of the prices of most raw materials.
  With regard to the technical efficiency of the machinery of the Cotton Board, I would like to draw the attention of hon. and right hon. Gentlemen opposite to the fact that there is all the difference in the world between the principle which underlies the organisation of this machinery and the competence and efficiency of the machinery itself. If there is technical inefficiency, as was illustrated by my hon. Friend the Member for Ashton-under-Lyne (Mr. Rhodes), it is the business of the President of the Board of Trade to

  709
  get rid of it. I would like to disagree with my hon. Friend in one instance. I consider that the part-time employment of merchants who are already interested in the industry holds grave dangers for any form of control which is instituted by a Government Department. I speak from a lifelong experience in the kindred industry of wool, in which I have spent the whole of my working life.
  The hon. Member for Eddisbury (Sir J. Barlow), who spoke of the machinery of the organisation of this control, said that hedging does not mean gambling. I agree, so long as it is used in a legitimate way, which is to cover the requirements of those people who are engaged in manufacture and whose income depends upon technical efficiency and organisation. There is no man either in Lancashire or Yorkshire who can state that the futures markets in cotton and wool have been used solely for their legitimate purposes. The condemnation of hedging on the Liverpool futures market as in the wool futures market was that it lent itself to gambling so long as there was no control over the machinery of the organisation. Therefore, I say from experience that there is no alternative to the principle of organised control in the marketing of raw materials if we desire eventually to maintain stability of prices. That does not mean that we will achieve the end we have in view in the short space of time of one, two or three years, particularly if the machinery is to be open to the complaint and criticism, as has been illustrated by arguments of hon. Members opposite and the trade generally, that if the organisation attempts to control and stabilise prices it is thereby engaged in gambling.
  I turn to the extraordinary intermingling of politics and economics at the present time. The right hon. Member for Aldershot (Mr. Lyttelton), the hon. Member for Bury (Mr. W. Fletcher) and the hon. Member for Eddisbury, all spoke of the difficulties in different parts of the world. I wish to put this point of view: surely there is a tendency throughout the world, in those countries which are devoted to the growing and producing of raw materials, towards the organisation of marketing? That means that there is a tendency in the direction of having one seller of those particular commodities. Is
  710
  that not true today in respect of Egyptian cotton? Does the Egyptian Government exert no control over the marketing of Egyptian cotton? It seems to me, therefore, that Members of the Opposition are hamstrung by their own argument. If it be true that one buyer as against a number of sellers is at a disadvantage, surely the converse must be true in the case of one seller as against a number of buyers?
  Mr. Maclay: May I put it to the hon. Member that one of the reasons for single sellers beginning to appear is that they area natural reaction to single buyers?
  Mr. Brook: I do not think there is any point in the hon. Member's intervention, because it is not the case that they represent such a reaction.
  Mr. Maclay: It is as good an argument as the one which the hon. Member was putting forward.
  Mr. Brook: The hon. Member's opinion is as good as mine, and mine is as good as his. In regard to the extraordinary rise in prices which has taken place, the tendency of both the right hon. Member for Aldershot and all other Opposition speakers has been to suggest that there is some peculiarity about the rise in prices which links it up with bulk buying and Government control. The suggestion is that if we had not had bulk buying in the cotton industry, there would have been no extraordinary rise in prices. That is completely at variance with our experience in other industries.
  Mr. Lyttelton: If the hon. Member will forgive me, I am sure he does not wish to misrepresent me. None of us used that argument. We say that fluctuations have been exaggerated and that claims that bulk buying—which I think he admits—would induce stability have been proved to be false. That is quite a different argument from the one he is trying to put into my mouth.
  Mr. Brook: I disagree with the right hon. Member on both the points he raised, because the inevitable inference which an hon. Member would gain from the arguments used was that there was some connection between bulk buying and the extraordinary rise in prices.
  Mr. S. Silverman: If my hon. Friend will permit me, I heard the speech of the right hon. Member for Aldershot, too, and I think he said that not all the increase in prices was due to that, but that the bulk of it was.
  Mr. Lyttelton: Some of it.
  Mr. Silverman: The bulk of it.
  Mr. Brook: If we link industries together, we see there has been the same extraordinary rise in prices in all similar industries which deal in similar raw materials, I think we have done something to undermine the basis of the right hon. Gentleman's argument. As I said earlier, the whole of my life has been spent in the wool textile industry, and the raw material side of that industry. I can remember the control during 1914–1918 and the extraordinary rise in prices at the end of that war. I remember in the business in which I was then engaged wool which cost 6d. per lb. in 1920 being sold at 1s. in 1921. There has been nothing in the control under organised buying which has led to such a catastrophe as that in the industry, and even during recent months there has been the same extraordinary rise in the price of the raw material, wool.
  As was said by my hon. Friend the Member for Ashton-under-Lyne, the control of raw wool was taken off in 1946. We have a free market and the result of that free market has been that although there is an extraordinary surplus of wool in the world at the present time, there has been in some qualities a rise of 250 per cent. The hon. Member for Bury said that although we had a free market in wool that was vitiated to some extent by the fact that we had not freedom of exchanges, but that is an argument which can cut both ways, because if one does not have freedom of exchanges obviously that is a limitation on some countries in respect of their buying ability. It may affect the issue in the other way. They may value raw materials more than they value their own currency. I admit that argument, but the other argument I have used is equally legitimate. The hon. Member for Bury and the hon. Member for Eddisbury tried to vitiate the argument by referring to rubber, although rubber is an entirely different commodity from cotton or wool; but has there been no
  712
  attempt to even out the price of rubber indirectly by organising in America the amount of synthetic rubber which could be used and thereby operating some kind of control over raw material?
  Considering the points which have been raised, in my judgment we come to this—that we have in the most extraordinary circumstances, when the world is mixed up between different motives in respect of politics and economics, built up the machinery of the organisation. There can be no doubt in my mind, from a lifelong experience, that organised buying is more effective than competitive buying, if by competitive buying we mean that a number of individuals will be independently working competitively against one another.
  I ask my right hon. Friend, in his reply to devote some attention at any rate to the technical efficiency of the machinery which is being created, and if he does that, and can build up a technically efficient machine, I believe that the principle on which that machine is based will, in the long run, make for stability in price in the cotton industry from the raw material point of view. Without that stability in raw materials, there is no manufacturing industry which can be run for long on a really technically efficient basis, because once we get to the point where those people who are dependent on manufacturing tend to depend more on fluctuations in the price of raw materials than on their technical efficiency and their technical organisation, it seems to me that we are near the end of prosperity as far as that particular industry is concerned.
  6.35 p.m.
  Mr. Selwyn Lloyd: It is my duty to conclude the Debate as far as this side of the House is concerned, and I beg the indulgence which the House usually gives to a person who is doing something for the first time.
  Might I comment on the versatility of the members of the Government upon this subject? We have had four major Debates on the purchase of raw cotton. The first time the Government spokesmen were the Lord President of the Council and the present Chancellor of the Duchy; on the second occasion the Government spokesman was the present Chancellor of the Exchequer; on the third occasion the

  713
  Government spokesman was the present Paymaster-General; and we are glad to welcome into this Debate tonight the President of the Board of Trade. One possible explanation of these changes may be that when a case is a really bad one it is not fair to put up the same man to argue it twice.
  However that may be, the point we wish to make from this side is that this is not an ideological debate. Attempts have been made to bring into the discussions today wide issues of political principles and political differences. I think it was the present Chancellor of the Exchequer who made a somewhat unfortunate remark in the early stages of the controversy when he said the problem had a political content. I do not accept that for one moment. I think the issue which this Committee has to consider and which the country has to consider is the most efficient method of buying our necessary raw material for one of our great exporting industries. That is the point, and not a wide ideological question.
  In the speeches which have been made we have had from one or two Members the customary abuse of the Liverpool Cotton Market and it was suggested, I think in an interjection, that that market was nothing but a gamble and that nothing but gambling took place upon it. It is obvious that there may be a certain amount of speculation in such a market. But in fact, speculators usually lose money and they help to make a market, but if there is an undue amount of speculation steps can be taken to check it. To put a market down altogether on the grounds that there is some speculation in it, seems to me like sending a boy with a squint to a home for incurables. This is a matter which could easily have been settled, and, as the right hon. Gentleman knows, there were proposals available to deal with the matter.
  The next point which was made was the expression of some sort of hatred of the merchant. I think one speaker from the other benches definitely suggested that in connection with raw cotton the merchant was an evil person. I think he had his complete answer from the hon. Member for Ashton-under-Lyne (Mr. Rhodes), who spoke of the valuable services rendered by the merchants and, in fact, pleaded for greater use of merchants.
  We want to discuss this evening the practical method of helping the textile
  714
  trade. I think it was in that spirit that the hon. Member for East Nottingham (Mr. Harrison), the hon. Member for Oldham (Mr. Fairhurst) and the hon. Member for Ashton - under - Lyne approached this matter. We have had a useful Debate against a rather sombre background of approaching trade difficulties. The object of the Commission as put before the House was to achieve stability and to save the trade money. In answer to hon. Members who have spoken from the opposite side of the Committee, I at once make the point that under stable conditions anybody can achieve stability. The claim which was made for this Commission was that under unstable conditions it could achieve stability. That was really the reason for its advocacy. Mention has been made of the alibi of world shortage. After all, there is a carry-over of 14,250,000 bales which bears the same proportion to consumption as did the carryover in prewar years. Therefore, this factor of world shortage is not so very important as has been suggested.
  It has appeared to me throughout the Debate that almost everything that has been mentioned has forwarded the argument for an international market. The matter of the grower in Uganda not getting enough and the grower in Egypt getting too much, and all the discrepancies and differences—all these have pointed out the necessity for a world market; but that is the one thing which we have not got now Liverpool is shut down. Liverpool had the great advantage, owing to geography and time, that it could fulfil the function of an international market. When the whole desire on all sides is to bring the world closer together, it is a great pity that the only effective world barometer no longer continues to exist.
  Having said that with regard to the general situation, may I attempt to bring back the right hon. Gentleman to the arguments put forward by my right hon. Friend the Member for Aldershot (Mr. Lyttelton)? I should like to ask the right hon. Gentleman certain questions in order that we can see how far we get agreement between the two sides of the Committee as to the facts of this matter. Does the right hon. Gentleman agree that there have been wide fluctuations? The right hon. Member for Aldershot spoke of a range of 125 per cent. Reference was

  715
  made to a rise in one day of 11d. per lb. in Ashmouni Type 4, and a fall on another day of 5d. per lb. in the same type of cotton. Not only is the range of the fluctuations so wide, but also the individual fluctuations themselves are abrupt and violent. The hon. Member for East Nottingham said that he did not consider that the Liverpool market before the war would have straddled a rise of 4s. 6d. He said that the rise in those days would have been 1d. a day at a maximum, and there would have been a great deal of uproar if the rise had been as much as that. That is precisely our case. It is that the Liverpool market before the war evened out the fluctuations and kept them close. That was its main advantage. I agree that a violent fluctuation of this sort would certainly not have been experienced in the past.
  Mr. Harrison: I am sure that the hon. and learned Gentleman would not like to misconstrue the argument which I attempted to put forward. I suggest that before the war the Liverpol figures could straddle 1d. change in price comfortably, but today a 4s. 6d. change in price could not be straddled in those circumstances.
  Mr. Lloyd: If I had not understood the hon. Gentleman, he has not understood me either. My point is that, had the Liverpool market been in existence, we could not have had a variation of 4s. 6d. in a day. I think the hon. Gentleman will agree that a variation in the order of 1d. was a huge variation in the course of a day. Now we get a variation of 11d. a lb. in one night. One would imagine that some pestilence had befallen a part of the world, that there had been some great geographical disaster, or something of that sort, for the spinner to wake up next morning and find that his cotton had risen in price by 11d. a lb. I imagine that all that has happened in fact has been that the accountant of the Raw Cotton Commission has telephoned Mr. Hindley and suggested that the price should go up and a decision has been taken. The whole case for the abolition of the Liverpool market was in order to introduce the smooth orderly working of this science of bulk buying.
  The first question upon which I want the right hon. Gentleman to state his views is whether he agrees as to the range
  716
  of these fluctuations and as to the violence of them. The second matter upon which I want to ask for his opinion is whether he agrees with what my right hon. Friend said about the varieties of cotton with similar spinning values getting out of proportion. I do not want to go through the details again because my right hon. Friend gave full particulars about low grade Sudan, Sakel and Ashmouni, East African Buroga and B.P.52, and Ashmouni and American. He gave figures to show that the relative prices had got into a state of complete disparity. The importance of this is that if one is the purchaser of a raw material and one has available a certain interchangeability one's position is tremendously strengthened. As soon as one loses the capacity to interchange, owing to these wide price variations, then one's position as a buyer immensely deteriorates. We are in the position in this country of having to buy 10 per cent. of the world product of cotton, not producing any of it ourselves. Therefore, to some extent, we are at the mercy of the sellers, particularly if bulk sellers are by our actions set up against us. It is vital that we should preserve parity so far as we can, or a very small margin of difference between interchangeable types of cotton.
  In fact, what has happened about the operations of this Commission is that, suggestions having been made to spinners that they should change from American to Ashmouni, they alter their machinery and then they find three months later that there is a difference of 13d. in the price. In other words, the cotton to which they have been asked to change has gone up in price by 13d. That puts them and the purchasers of the yarn which they spin in a very much worse position. On that matter, may I ask the right hon. Gentleman whether he will agree with these facts, because if we get those facts agreed then it may be possible later to draw certain inferences.
  The next subject which I wish to discuss is the policy of the Commission towards its sales of cotton. Are we quite clear about this matter? I would invite the attention of the right hon. Gentleman to the most interesting speech which he made on 12th May of this year on an Adjournment Debate. He made certain statements then which I asked him to

  717
  clarify this evening. Referring to Egyptian cotton he said:
  "The Commission have so far been able to sell below cost because they have had very large stocks of cotton bought at a period when the price was considerably lower than in the last year or so. It would be most unreasonable to ask the Cotton Commission … to incur heavy trading losses for the sake of subsidising the industries using raw cotton."
  Having said that—in other words, that the Commission is selling below cost—he went on to say that the Commission proposed in the future to follow prices very quickly as they fell. Of course, if it is intended to continue to sell below cost at a time when prices are falling, it really does need the intelligence and the luck of a superman. A great many people who have thought that they could buy below world prices on a falling market have got into very serious trouble.
  The third matter is this. On the same page he says:
  "The Commission are selling at the replacement price and not at the price when it got in before the market rose last Autumn."—[OFFICIAL REPORT, 12th May, 1948; Vol. 150, c. 2255.]
  That would appear to mean that the Commission definitely intends to sell at the replacement price as near as it can. That is what I understood from the speech of the Parliamentary Secretary this afternoon. However, the right hon. Gentleman went on to say:
  "It has been the policy of the Cotton Commission to charge according to replacement price. In other words, if they bought cotton at a certain price and the price has risen in the market since that time, they based the new price on the original buying price."—[OFFICIAL REPORT, 12th May, 1948; Vol. 450, c. 2260.]
  That brings us back to where we were before, and I cannot think that the right hon. Gentleman meant to say that. In view of that statement, it would be helpful if we could have a perfectly clear statement of policy that it is the Commission's intention to endeavour to sell at the present replacement price.
  Mr. H. Wilson: I am sorry to interrupt. That was a point where I regret to say that my regrettable habit of speaking rather quickly defeated the reporters. What I actually said was that they base their price on the replacement price and not on the original buying price.
  Mr. Selwyn Lloyd: I thought that was probably the explanation, but I thought that, in view of the ambiguity, it was right that the right hon. Gentleman should be able to make the matter quite clear. I would point out what has already been pointed out, that if the policy is to sell according to the replacement cost, there is no real stability because the replacement costs are going to fluctuate so that the stability we were told we would have by the smooth orderly science of bulk purchase cannot possibly eventuate.
  Taking the record of the Commission and putting its actions to that test, let us examine for a moment what has happened between 10th May and 31st May this year. So far as Karnak is concerned, the Commission's price to the spinner has remained unchanged but the replacement price has dropped by 7d. As to Ashmouni, the Commission's price to the spinner has dropped by 5d. and the replacement price has dropped 6d. It can be said in that instance that the two prices were following each other reasonably closely. As to Zagora, the Commission's price to the spinner dropped 9d. but the replacement price increased by 1d. It would not appear that within three weeks or so after the right hon. Gentleman's statement of policy his policy was in fact being carried out. My right hon. Friend referred to the three other cases of Karnak, Fine 4F Punjab and San Paulo 5 where at the present time, on 11th June, the Commission have been selling to the spinner at above the replacement cost, with obvious disadvantages to the spinner who feels that his foreign competitor can buy at a cheaper price than he can.
  The lesson to be learnt from these figures is that the Commission cannot follow the market as closely as it thought and that it is quite impossible, whatever its intention is, for the Commission to keep up with the fluctuations of the market. Again, on that matter I should be interested to know whether the right hon. Gentleman agrees or disagrees with what I have been saying.
  The next question is whether it is his contention that the Commission evens out the fluctuations. If that is his contention, may I yet invite his attention to some figures for recent periods because, as I understand it we are discussing the most effective way of enabling this industry to buy raw materials? He should direct his

  719
  attention to what has actually been happening under the operations of the Commission during the past few months. Take the Egyptian example between 5th February and 10th June. The replacement cost varied in the case of Karnak by 19½d., Ashmouni 12d., and Zagora 11½d., but the Commission's price to the spinner varied in the case of Karnak by 33d., Ashmouni 22½d. and Zagora 21½d. Is that smooth orderly bulk buying? In fact, the fluctuations of those selling prices are much greater than the fluctuations of the replacement markets. I would again ask the right hon. Gentleman to say whether or not he agrees with what I have been saying, and, if he agrees, whether he thinks it is satisfactory.
  The plain fact of the matter is that here we are dealing with a natural crop which varies in bulk and quality from country to country and district to district. It has a great number of independent growers. There are also the added complications of embargoes and restrictions, and it is impossible to get protection unless we also have a futures market. A futures market will not prevent variations but it will protect the individual against the effect of variations. I would draw the right hon. Gentleman's attention to what is complete proof of what I have been saying, in the movement of the American Middling prices and the Indian 4F Punjab prices during the equivalent period. In both those instances, futures markets are operating. At the time of the huge variations between the various Egyptian types of which I spoke, the variation in American Middling was only 4½d. and in the Indian only 3d., because a futures market was in operation for both.
  If the right hon. Gentleman concedes that point and agrees with me, which I think he must, that the effect of the futures market has been to narrow the fluctuations, then why not have the futures market in Liverpool? If we are to have a futures market and to rely on it, what is the point of letting futures markets be established outside this country? I ask the right hon. Gentleman to answer a question which he promised me he would answer during the Adjournment Debate. I do not blame him for not answering it then—I should have reminded him at the end of his speech—but I should like him to say whether the
  720
  Commission is hedging these purchases of cotton.
  I suggest that the matters about which I have asked him are matters of fact, and I do not suggest that they are due to the incompetence of the Commission. I heard what has been said and I express no opinion about that at all because I think that the Commission has been asked to operate under impossible circumstances. The result of what I have been saying is price chaos. Price chaos is what the spinners of the Lancashire cotton trade have had over the past four months. What has been the effect of that? Let us take the first case of the spinner. The spinner is temporarily all right on paper because he has the cover scheme and also has his profit margins fixed. He is all right and can go on as long as the sellers' market goes on, but that will not last for ever and he must sell his yarn. I believe that the more far-sighted spinners are already desperately uneasy about the situation.
  We come to the next category, the weavers, the converters and the merchants. They are not covered by the cover scheme. Whereas before the war they could fix the price two years ahead in some cases if they wanted to, now they cannot make a firm offer because, except during the very narrow period of the allocations of yarn, they do not know the price that their yarn will cost. Therefore, for a considerable portion of the time they are unable to make a firm offer to their customers; they have to make an offer which is declared to be subject to the price ruling at the date of the next allocation, or whatever the technical terms are. One could get away with that on a sellers' market, but in the case of a buyers' market it is ridiculous to expect customers overseas to put up with complete uncertainty as to price.
  I suggest that the further effect of what I call this price chaos is that we shall have to pay more for our cotton. My right hon. Friend the Member for Aldershot (Mr. Lyttelton) mentioned the case of J. and P. Coats, which was a classic case. I should like the right hon. Gentleman to say whether or not it is true that the fine spinning section, even at this time, is considering stopping overtime work because they are finding themselves undercut by foreign producers who have bought more cheaply and who are able to sell

  721
  their yarn at between 11d. and 16d. a pound cheaper. If that is so, it should be stated and realised, because it is another warning signal of the commencement of the buyers' market.
  Another point to which reference has been made is that the spinner can get no forecast of prices from the Commission. The Commission gives no forecast of prices, which means that the spinner cannot take advantage of discounts. To give a concrete example, on 11th June the price of American middling for immediate shipment was 24.35d., and for October shipment it was 21.10d. Under the present operation of the Commission the spinner cannot take any advantage of that discount.
  Those are the points with which I would like the right hon. Gentleman to deal. I hope he will appreciate the fact that we desire to focus attention upon that necessity for the efficient working of this machine to purchase the necessary raw materials. Everybody knows where the Opposition stand in this matter, but that is not the point of this Debate. The point of the Debate is to concentrate attention upon the operation of the Raw Cotton Commission, and I ask the right hon. Gentleman to say whether he is satisfied with it. If he says he is satisfied, then I say Heaven help him. If he is not satisfied, what is he going to do about it?
  7.3 p.m.
  The President of the Board of Trade (Mr. Harold Wilson): First, I should like to thank the hon. and learned Member for Wirral (Mr. Selwyn Lloyd) for the welcome he has given to me in entering this series of Debates. I do not contest his view that on this side of the Committee there has been quite a range of speakers on this extremely important subject, although, in thanking him for that welcome, I would remind him that I did speak on this subject on 12th May in the brief Adjournment Debate that we had then. As he knows, I am not entirely new to this subject, as I lived in his constituency for several years before the war. I had the opportunity then of seeing some of the effects—including the less pleasant effects—of the free market in cotton which are not so often quoted from the other side, particularly the undignified form of life to which those who had to work for the Liverpool Cotton Association
  722
  merchants were subjected in the handling of the cotton—a state of affairs which is only too well known to my hon. Friends on this side of the Committee who represent Liverpool constituencies.
  I should like to thank the hon. and learned Gentleman for the very constructive way in which he summed up the Debate for the Opposition. I think this has been an extremely useful Debate. No one would deny either the importance of the subject or the concern which is felt on this subject, especially in the spinning and weaving districts of Lancashire, and also in some of the other districts which use cotton, such as those represented by my hon. Friends who spoke on 12th May. I think that most hon. Members who have listened to the Debate will agree that it has also been the occasion for a most remarkable speech by my hon. Friend the Member for Halifax (Mr. Brook) who approached this subject from his detailed knowledge of the sister industry of wool, but who was able, nevertheless, to bring a very clear Yorkshire common sense into this matter and to sum up the case for bulk buying in a way which leaves very little for me to say of such a general character.
  The right hon. Member for Aldershot (Mr. Lyttelton) began his very fair-minded speech with quotations from a speech made some time ago by my right hon. Friend the Chancellor of the Duchy of Lancaster. The right hon. Gentleman said that on that occasion my right hon. Friend had declared that before the war in the raw cotton market there were fluctuations far wider than could be justified by the boll weevil or by variations in the weather. The right hon. Gentleman went on to say that in the past few months the variations have been considerably wider than in the period of 10 years taken by my right hon. Friend the Chancellor of the Duchy of Lancaster. I do not in any sense attempt to deny the figures quoted by the right hon. Gentleman, but of course, as he well knows, and as my hon. Friend the Member for Halifax said, the conditions now are very different from what they were in the 10 years immediately preceding the war.
  It may be that it is true that to achieve stability in such unstable world conditions is proving extremely difficult. It certainly is. But what the free market

  723
  did, of course, was to achieve instability in a stable world, which, one would have thought, was even more deplorable. It will be interesting to see what the true comparison will be after 10 years of bulk buying in reasonably stable world conditions, and I hope the right hon. Gentleman and I are both in the House to debate this when the time comes. We shall then see whether, in fact, we have had the stability which my right hon. Friend the Chancellor of the Duchy of Lancaster said would be the result of bulk buying.
  I would like to ask the right hon. Gentleman whether he sincerely believes that the Liverpool cotton market, if it had been restored in say 1946 or 1947, would have brought greater stability of prices in the field of Egyptian cotton than has actually been achieved in the course of the last few months. It appears that he does believe that. If so, I think he is capable of believing anything. He gave details of the fluctuations in the figures for certain karnak varieties and other varieties. I do not for a moment attempt to disagree with the figures quoted by the right hon. Gentleman. In fact, I quoted a number of these figures myself in the previous Debate.
  As the right hon. Gentleman said, and as everybody ha, said, the Raw Cotton Commission is at present following a policy of charging the replacement price within broad margins. I will come to that point in a moment. I gather that the right hon. Gentleman does not condemn the Raw Cotton Commission for doing that. He joins with the chairman of J. and P. Coats, Ltd., whom he quoted, in saying that that is a reasonable and realistic policy to follow. Therefore, if he does not condemn the Raw Cotton Commission for its replacement price policy, what he must be saying is not that its price-charging policy is wrong but that its operating policy in buying is wrong. He must be blaming them either for excessive variations in buying or he must be admitting that those wide variations are, in fact, resulting from world conditions in the markets about which we are speaking. He said a few moments ago that before the war Liverpool made world prices, and now it is New York. That is a gross over-simplification of the story. In fact, it is completely wrong. We were debating
  724
  the price principally of Egyptian cotton, and most of the figures quoted by the right hon. Gentleman—certainly all the figures which supported his statement about the wide variations—are Egyptian prices, and not American prices.
  I know the right hon. Gentleman would not suggest that Egyptian prices are made in New York. Egyptian prices are made where one would expect them to be made—Egypt—under conditions such as we have in Egypt at the present time. I do not think there will be much dispute about many of the factors operating in Egypt at the present time. There has been a short crop, particularly in varieties referred to by the right hon. Gentleman, and there has been the policy in Egypt of cutting and withholding supplies and letting them trickle on to the market at the rate the Egyptians desire. There have been the activities of the Egyptian speculators, of whom I had something to say on the last occasion when we debated this matter. But, above all, there has been the pressure or demand of a considerable number of countries who, like ourselves, are short of dollars and have been buying Egyptian cotton to a much greater extent than ever before, many of them almost regardless of the price which they have had to pay.
  I am sure that the right hon. Gentleman would not contend for a moment that the Liverpool Cotton Association, if we had had a free market, could have countered that situation any more successfully, or even as well, as our Cotton Commission. After all, we are living in a different kind of world from the one the right hon. Gentleman used to perform in. We are having to deal at the moment with conditions of bulk selling on the part of many people abroad. We are having to deal with the activities of Governments abroad who themselves flood supplies on to the market at the rate they consider desirable. We cannot send a great mass of unco-ordinated merchants loose into the world bidding the price up against one another like that. The hon. Member for Ashton-under-Lyne and the hon. Member for Halifax have explained very clearly what has happened in the supply and price of wool, where there has been a free market for the last two years, and where there has been far less pressure than we have experienced in the matter of cotton.

  725
  There have been fantastic rises in the price of wool on the free market, even though there were two factors operating in wool that do not operate in cotton. In the first place, there has not been that big swing of demand away from the dollar areas into the non-dollar areas for wool as there has been in the case of cotton. Secondly, we began the period with very large stocks of wool held by the Government. My hon. Friend said that many experts in the trade assessed these stocks as being equivalent to a 12 years' supply. That being so, if there have been such wide variations in wool on a free market with those two favourable stabilising factors, how does the right hon. Gentleman think, if we had a free market in cotton with these much more difficult conditions, we could have prevented even wider variations in price?
  Mr. Lyttelton: The right hon. Gentleman is addressing himself to the argument that we produced, which was that the Government claimed that bulk buying would produce stability. They now confess that it does not. We do not claim that a free market is necessarily stable, but that it is more stable than what we have now.
  Mr. Wilson: I was addressing myself to my argument, and if the right hon. Gentleman would follow it he would see that I was not claiming that we have been securing stability in conditions of world shortage. What I am saying is that we could have had far less stability if we had had a free market.
  Mr. Selwyn Lloyd: May I ask the right hon. Gentleman whether there is a futures market in wool, and, secondly, what proportion of the stocks of wool are held by the Government organisation?
  Mr. Wilson: I should certainly want notice of that question, because we are debating cotton today.
  Mr. W. Fletcher: May I suggest that if the right hon. Gentleman is going to produce arguments based on markets, the least he can do is to come to the Committee with the two essential points within his knowledge, because otherwise it makes complete nonsense. I quoted the case of rubber. Will he devote himself a little to that, or possibly to cocoa, which the Government know a great deal about, in New York.
  Mr. Wilson: I thought we were debating cotton, and not wool. I am sorry, but I do not know the figures of the stocks held, but what I do know and what, I think, is common knowledge, is that the stocks held by the Government at the beginning of this year were far greater in relation to current consumption for wool than for cotton.
  Mr. Dryden Brook: In respect of wool our production now is equal to pre-war production, and in addition to that, it has been estimated that if the control were taken off it would take about 13 years to liquidate the accumulated stock that was built up during the war. In relation to that, we have the normal supply of raw wool coming round every year.
  Mr. Wilson: If the right hon. Gentleman is trying to use an argument against Government control in the matter of wool—
  Mr. Lyttelton: I really must interrupt the right hon. Gentleman. He used the instance of wool, saying there had been a very large rise in the price in the free market. Everybody knows that this stock is held by a Government controlled organisation. Therefore, if in the face of 12 years' supply the price has gone up sharply, it seems to be a poor argument to adduce against a free market.
  Mr. Wilson: The right hon. Gentleman is running right away from the facts. I will ask him to face them. If it is a fact that by the release on to the market by the Government of a large quantity which trade experts put at 12 years' supply, though I do not associate myself with that figure—it has in fact been proved wrong—but if the Government had released on to the market such a large quantity of wool in addition to the large supplies coming forward, and if, nevertheless, there has been a very big increase in the price of wool, as it is suggested, then if we had cotton on a free market, without that favourable factor, we would clearly have had a very much bigger increase in the price.
  Earl Winterton: That is complete nonsense.
  Mr. Wilson: I am always prepared to listen to the noble Lord when he speaks, with his great experience.
  Earl Winterton: I have greater knowledge of production in various parts of the world than the right hon. Gentleman has ever had. His knowledge is purely academic, as is proved by his speech.
  Mr. Wilson: I know that the noble Lord has a very great knowledge of production in various fields. When the noble Lord talks about a free market in wool I would like him to come and see some effects of the free market in wool in the area where I lived for some 15 or 16 years. I think it has been agreed by all sides that the replacement price basis of the Raw Cotton Commission is a reasonable one, and the chairman of J. and P. Coats, quoted by the right hon. Gentleman supported that. I would like to deal with the special case of J. and P. Coats, as quoted. The hon. and learned Member for Wirral said that they came to the Raw Cotton Commission asking to be covered for two years, to be given a contract of supply for two years, and they said that they would have bought this if they had been free agents and there had been a free market so to buy.
  If it is the fact—as it is the fact, in my view—that the relatively limited purchases of cotton in Egypt by this country and other countries in the last two months have pushed up prices so remarkably, how much more does the right hon. Gentleman think prices would have been pushed up if they had been buying for two years ahead? If the Raw Cotton Commission had agreed to this proposition of J. and P. Coats, which was a very reasonable one for Coats to make, then they would have had to do likewise for everybody else who wanted to be covered for as long a, period ahead; and I am certain that on that cover they would have had to pay very much more than two years' prices. In fact, purchases by this country and other countries have pushed up the price to such fantastic heights, and if the Raw Cotton Commission had done what Coats asked, the price rise would have been all the greater.
  The right hon. Gentleman asked one or two questions, and I should like to deal with them as quickly as I can. One was about hedging. He wanted to know whether it is to be the policy of the Raw Cotton Commission to indulge in hedging. I will give him an answer to that quite plainly. Although this is, of course, a matter for the Raw Cotton Commission,
  728
  I am informed by the Commission that it is not to be their policy. The Commission have a very large organisation. A smaller organisation has to cover its risks by hedging. A larger organisation can cover those risks over a period without hedging.
  Mr. Lyttelton: Put it down to the taxpayer.
  Mr. Wilson: It has nothing to do with the taxpayer. The Government, as the right hon. Gentleman well knows, do not undertake fire insurance on their buildings, because the Government have so many buildings that they can assume the risk and spread it over the lot of them. A private householder, however, in all prudence, should undertake fire insurance on his own buildings.
  Mr. W. Fletcher: Does the right hon. Gentleman's argument mean that a small man has to insure his house because he cannot afford to pay the loss? If the Government lose on an infinitely greater scale without hedging, who will bear the loss?
  Mr. Wilson: The case I was taking was the case of Government buildings. The Government, over a long period of time, have abstained from insuring their buildings. They have never suffered a loss on that, because the risk is spread over such a large field that there has not been loss over the whole field. Similarly, the Commission, dealing on such a large scale and over a long period of time, are able to balance the losses of one year against the gains of another, and the Raw Cotton Commission can do this without having to hedge. I understand it to be the fact, though I speak subject to correction on this, that some of the larger organisations in the Lancashire Cotton Association before the war did not hedge their purchases because they were buying on a scale large enough to cover the risk.
  Mr. E. P. Smith: Does the right hon. Gentleman mean to say there is any analogy at all between the risk of fire in buildings and the risk of the market going against one?
  Mr. Wilson: I agree that the analogy is very far from complete, but I do maintain that if one is operating on a sufficiently large scale, and if one has enough capital to cover one's losses or to

  729
  balance against them over a sufficiently long period, one can afford to do without insurance.
  Mr. W. Fletcher: Let us get this quite clear. The right hon. Gentleman and others have talked about a 46d. drop. That is the sort of thing to have in mind. If on the whole Government stock there is over a period of two years a drop of something like 40d. and no reserves are held against it, that will wipe out any reserves they may have and the whole of the capital. Who is going to bear that loss?
  Mr. Wilson: The right hon. Gentleman was speaking of the probability of two years continued high prices. [HON. MEMBERS: "No."] The right hon. Gentleman certainly was, earlier on. Let it not be forgotten that the Commission, and the Control which preceded it, have already made very considerable gains. [HON. MEMBERS: "Answer the question."] These gains are available to cover a risk of that kind.
  Mr. W. Fletcher: If they are wiped out and the capital is wiped out, who bears the loss?
  Earl Winterton: The right hon. Gentleman does not answer the question.
  Mr. Wilson: The noble Lord the Member for Horsham (Earl Winterton) is, no doubt, looking forward to an altercation with his right hon. Friend the Member for Aldershot on films, and is being carried away with excitement.
  Earl Winterton: I much admire the Government's smart habit of banter, but occasionally banter is rather offensive. I take the opportunity of telling the right hon. Gentleman that I have not a scintilla of disagreement with my right hon. Friend. The President had better follow the example of the Lord President of the Council, who recently had to apologise to my right hon. Friend the Leader of the Opposition, and apologise to me.
  Mr. Wilson: As I have not yet heard what the right hon. Gentleman is to say, I do not want to prejudge the forthcoming Debate, but having heard the noble Lord on this subject before, and having some idea of what the right hon. Gentleman will say, I am looking forward to that Debate.
  730
  The right hon. Gentleman also raised the question of the stability of the spinner. He referred—and I agree with him—to the wide variations which must follow a policy of replacement; but, as he well knows, there is for the protection of spinners a "cover scheme" which is operated by the Raw Cotton Commission, and which, in the view of very many people in Lancashire, gives much better protection to the spinner than did the old futures market, which gave that cover on a limited range. The right hon. Gentleman says it does not give protection to the weavers. I agree with him, and I can tell him that the Raw Cotton Commission are willing to examine any scheme the weavers and converters can put up, and are ready to go into discussion with them to give them the same cover that is provided for the spinners. In addition to that, the Commission are working out at the moment and are discussing deferred delivery contracts. That will meet some other criticisms of the right hon. Gentleman.
  The right hon. Gentleman referred to some story circulating in some of the less reputable quarters of Liverpool about the movement of funds to Alexandria and the effect this has on purchase prices. I am quite sure that my hon. Friend the Member for the Exchange Division of Liverpool (Mrs. Braddock) has heard the story in some of the less desirable parts of her Division. If that story gives comfort to anyone, I am quite prepared to let him go on believing it, but I can tell the right hon. Gentleman that that story is not true. The funds are moved after purchase and not before purchase.
  The hon. Member for Bury raised a number of points, many of which I should like to go into, and I should like to get the answers in detail from the Commission and let him have them. He made one point, in particular, that he has made before in this Chamber. He said that the spinners in his constituency—or, at any rate, spinners he has met—complain about the lack of choice of grades, that the range and selection has not been as good as it used to be since the Commission came into being. I accept that criticism right away. It is true. However, the lack of choice and, to some extent, the deterioration in the quality of raw cotton is due not to the activities of the Commission as such, but to the

  731
  effect of Government instructions concerning economy in dollars. It is certainly true that if the L.C.E. had been functioning at the present time, they would have had to be rationed similarly in dollars, and exactly the same result would have applied.
  Mr. W. Fletcher: Is that not a half-truth? Is not there the other side, that it arrives so mixed and muddled up that there can be no proper separation and sampling, and no proper display of samples, and when the spinner asks for these, he is ridden off every time by the Commission?
  Mr. Wilson: I cannot accept that. I accept the proposition that from the end of the war there has been a number of things which the Raw Cotton Commission have been trying to get back to peacetime conditions, and they are not yet complete. The main reason is the one which I have given to the hon. Gentleman.
  Mr. W. Fletcher: Would the right hon. Gentleman answer the question about forward buying? He is aware that the trade has to be given the opportunity of buying forward to take advantage of the discounts. It is agreed on both sides of the House that this is a very vital question.
  Mr. Wilson: I do not think the hon. Gentleman could have heard what I said. The Raw Cotton Commission are at the moment going into the question of deferred contracts to cover that very point. I agree that there are difficulties, but I hope that what is worked out will give the hon. Gentleman every satisfaction. The hon. and learned Member for Wirral, in his concluding remarks, gave some details, the effect of which I do not contest, about replacement prices and the difference charged for individual grades. The right hon. Member for Aldershot also gave some figures about that. He suggested that the margin between them was too wide. That is a question, I would suggest, to be taken up and further discussed in Lancashire. It is now being discussed in Lancashire with the Raw Cotton Commission by the users, and the Commission can then go into the matter. I suggest that if the hon. and learned Gentleman is going to conclude his argument by saying that on one or two grades which he mentioned the price is slightly above replacement costs, that destroys or weakens his argument about narrowing
  732
  the margin between them. If we narrow the margin, we inevitably get away from the policy of exact replacement cost grade by grade.
  In conclusion, he referred to the competition which the Lancashire cotton industry is meeting. I agree with everything that he said on that matter. The Lancashire cotton industry is faced with growing competition abroad. We are entering—and in some markets we have been there for some time—conditions of a buyers' market, but I would put this to the hon. and learned Gentleman, that the competition which we are facing there, so far as the production of European countries is concerned, other than the United States, is not in any sense due to the high prices following purchases by the Raw Cotton Commission. The European countries, like ourselves, are faced with very high costs, because they, like ourselves, are operating in the Egyptian market, driven there by shortage of dollars, and it is the case that the Raw Cotton Commission have been more successful than probably a number of private buyers in other European countries. We have heard nothing from the right hon. Gentleman about the not unsuccessful policy of the Commission in the Sudan, which has put our cotton mills in a position of greater advantage compared with the cotton mills of other European countries.
  Mr. W. Fletcher: What about India and Japan?
  Mr. Wilson: On the question of India, the hon. Gentleman knows only too well the difficulties of getting cotton from that sub-continent at the present time. If we were able to get it much more easily, he knows what the position would be.
  Mr. Selwyn Lloyd: Does the right hon. Gentleman dispute that the Commission are now charging the spinner here something like 12d. per lb. more than the Indian spinner is having to pay for the same type of cotton?
  Mr. Wilson: I would not deny that that is happening for certain grades, but, equally, for other grades our mills have a very strong competitive advantage, not only over the Indian producer but any other producer who is unable to buy all his free cotton supplies on the American market.

  733
  We have had, quite apart from the note that has crept in during the last few minutes, a very useful and constructive Debate, but nothing that has been said from the benches opposite in any way diminishes the feeling which we on this side of the Committee have, and which was expressed so clearly by he hon. Member for Halifax in his speech, that bulk buying, in these unstable conditions particularly, is the only possible policy for this country to follow. I grant willingly the point made by the right hon. Member for Aldershot that we have not achieved stability. We have seen great instability, but that instability, I would put to the
  Committee, has resulted from world conditions, and, above all, from the world dollar shortage. If we had attempted to meet these cataclysmic world conditions with any other system but that of bulk purchase, the position of our Lancashire cotton industry would have been very much worse than it is today.
  Mr. Selwyn Lloyd: I beg to move, "That Item Subhead A.1 be reduced by £1,000."
  Question put
  The Committee divided: Ayes, 105; Noes, 239.

  Division No. 228.]

  AYES.

  [7.38 p.m.

  Astor, Hon. M.

  Grimston, R. V.

  Orr-Ewing, I. L.

  Baldwin, A. E.

  Hare, Hon. J. H. (Woodbridge)

  Peto, Brig, C. H. M.

  Beechman, N. A.

  Harris, F. W. (Croydon, N.)

  Pitman, I. J.

  Bennett, Sir P.

  Henderson, John (Cathcart)

  Ponsonby, Col. C. E.

  Birch, Nigel

  Hogg, Hon. Q.

  Prescott, Stanley

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

  Hollis, M. C.

  Prior-Palmer, Brig. O.

  Bossom, A. C.

  Holmes, Sir J. Stanley (Harwich)

  Raikes, H. V.

  Bower, N.

  Howard, Hon. A.

  Ramsay, Maj. S.

  Boyd-Carpenter, J. A.

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

  Robinson, Roland

  Braithwaite, Lt.-Comdr. J. G.

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

  Ropner, Col. L.

  Buchan-Hepburn, P. G. T.

  Jeffreys, General Sir G.

  Sanderson, Sir F.

  Bullock, Capt. M.

  Jennings, R.

  Savory, Prof. D. L.

  Butcher, H. W.

  Langford-Holt, J.

  Scott, Lord W.

  Byers, Frank

  Lennox-Boyd, A. T.

  Shepherd, W. S. (Bucklow)

  Challen, C.

  Lindsay, M. (Solihull)

  Smith, E. P. (Ashford)

  Clifton-Brown, Lt.-Col. G.

  Linstead, H. N.

  Snadden, W. M.

  Conant, Maj. R. J. E.

  Lloyd, Selwyn (Wirral)

  Spearman, A. C. M.

  Cooper-Key, E. M.

  Lyttelton, Rt. Hon. O.

  Stanley, Rt. Hon. O.

  Crosthwaite-Eyre, Col. O. E.

  McCallum, Maj. D.

  Strauss, H. G. (English Universities)

  Crowder, Capt. John E.

  Macdonald, Sir P. (I. of Wight)

  Sutcliffe, H.

  Darling, Sir W. Y.

  McFarlane, C. S.

  Taylor, C. S. (Eastbourne)

  Davidson, Viscountess

  Mackeson, Brig. H. R.

  Teeling, William

  Davies, Rt. Hn. Clement (Montgomery)

  Maclay, Hon. J. S.

  Thomas, J. P. L. (Hereford)

  Dodds-Parker, A. D.

  Maclean, F. H. R. (Lancaster)

  Turton, R. H.

  Donner, P. W.

  Macmillan, Rt. Hon. Harold (Bromley)

  Vane, W. M. F.

  Drewe, C.

  Macpherson., N. (Dumfries)

  Wakefield., Sir W. W.

  Dugdale, Maj. Sir T. (Richmond)

  Maitland, Comdr. J. W.

  Walker-Smith, D.

  Duthie, W. S.

  Manningham-Buller, R. E.

  Watt, Sir G. S. Harvie

  Eden, Rt. Hon. A.

  Marlowe, A. A. H.

  Wheatley, Colonel M. J. (Dorset, E.)

  Elliot, Lieut.-Col. Rt. Hon. W.

  Marples, A. E.

  White, J. B. (Canterbury)

  Fletcher, W. (Bury)

  Marshall, S. H. (Sutton)

  Williams, C. (Torquay)

  Foster, J. G. (Northwich)

  Maude, J. C.

  Winterton, Rt. Hon. Earl

  Fraser, Sir I. (Lonsdale)

  Molson, A. H. E.

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

  Galbraith, Cmdr. T. D.

  Morris-Jones, Sir H.

  Gammans, L. D.

  Neven-Spence, Sir B.

  TELLERS FOR THE AYES:

  Gomme-Duncan, Col. A.

  Odey, G. W.

  Commander Agnew and

  Mr. Studholme.

  NOES.

  Acland, Sir Richard

  Beswick, F.

  Castle, Mrs. B. A.

  Adams, Richard (Balham)

  Binns, J.

  Champion, A. J.

  Adams, W. T. (Hammersmith, South)

  Blackburn, A. R.

  Chater, D.

  Anderson, A. (Motherwell)

  Blenkinsop, A.

  Chetwynd, G. R.

  Anderson, F. (Whitehaven)

  Blyton, W. R.

  Cocks, F. S.

  Attewell, H. C.

  Bottomley, A. G.

  Collins, V. J.

  Austin, H. Lewis

  Bowles, F. C. (Nuneaton)

  Colman, Miss G. M.

  Awbery, S. S.

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

  Comyns, Dr. L.

  Ayles, W. H.

  Braddock, T. (Mitcham)

  Cooper, Wing-Comdr. G.

  Ayrton Gould, Mrs. B.

  Bramall, E. A.

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

  Bacon, Miss A.

  Brook, D. (Halifax)

  Daines, P.

  Barstow, P. G.

  Brooks, T. J. (Rothwell)

  Dalton, Rt. Hon. H.

  Barton, C.

  Brown, George (Belper)

  Davies, Edward (Burslem)

  Battley, J. R.

  Brown, T. J. (Ince)

  Davies, Harold (Leek)

  Beattie, J. (Belfast, W.)

  Bruce, Maj. D. W. T.

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

  Bechervaise, A. E.

  Buchanan, Rt. Hon. G.

  Davies, R. J. (Westhoughton)

  Bellenger, Rt. Hon. F. J.

  Burden, T. W.

  Davies, S. O. (Merthyr)

  Benson, G.

  Burke, W. A.

  de Freitas, Geoffrey

  Delargy, H. J.

  Jones, P. Asterley (Hitchin)

  Roberts, Emrys (Merioneth)

  Diamond, J.

  King, E. M.

  Roberts, Goronwy (Caernarvonshire)

  Dobbie, W.

  Kinley, J.

  Robertson, J. J. (Berwick)

  Dodds, N. N.

  Lawson, Rt. Hon. J. J.

  Rogers, G. H. R.

  Donovan, T.

  Lee, F. (Hulme)

  Royle, C.

  Driberg, T. E. N.

  Lee, Miss J. (Cannock)

  Segal, Dr. S.

  Dumpleton, C. W.

  Leslie, J. R.

  Sharp, Granville

  Durbin, E. F. M.

  Levy, B. W.

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

  Ede, Rt. Hon. J. C.

  Lipton, Lt.-Col. M.

  Silkin, Rt. Hon. L.

  Edelman, M.

  McAdam, W.

  Silverman, J. (Erdington)

  Edwards, N. (Caerphilly)

  McAllister, G.

  Silverman, S. S. (Nelson)

  Evans, Albert (Islington, W.)

  McEntee, V. La T.

  Simmons, C. J.

  Evans, E. (Lowestoft)

  McGhee, H. G.

  Skeffington, A. M.

  Evans, John (Ogmore)

  McKay, J. (Wallsend)

  Skeffington-Lodge, T. C.

  Evans, S. N. (Wednesbury)

  McKinlay, A. S.

  Skinnard, F. W.

  Ewart, R.

  Maclean, N. (Govan)

  Smith, C. (Colchester)

  Fairhurst, F.

  McLeavy, F.

  Smith, Ellis (Stoke)

  Farthing, W. J.

  Macpherson, T. (Romford)

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

  Fernyhough, E.

  Mallalieu, J. P. W. (Huddersfield)

  Snow, J. W.

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

  Mann, Mrs. J.

  Sorensen, R. W.

  Follick, M.

  Manning, C. (Camberwell, N.)

  Soskice, Sir Frank

  Foot, M. M.

  Marquand, H. A.

  Sparks, J. A.

  Forman, J. C.

  Mathers, Rt. Hon. George

  Steele, T.

  Fraser, T. (Hamilton)

  Medland, H. M.

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

  Freeman, J. (Watford)

  Mellish, R. J.

  Sylvester, G. O.

  Gaitskell, Rt. Hon. H. T. N.

  Middleton, Mrs. L.

  Taylor, H. B. (Mansfield)

  Gallacher, W.

  Millington, Wing-Comdr. E. R.

  Taylor, Dr. S. (Barnet)

  Ganley, Mrs. C. S.

  Monslow, W.

  Thomas, I. O. (Wrekin)

  Gibson, C. W.

  Morgan, Dr. H. B.

  Thorneycroft, Harry (Clayton)

  Gilzean, A.

  Morris, P. (Swansea, W.)

  Thurtle, Ernest

  Glanville, J. E. (Consett)

  Moyle, A.

  Tiffany, S.

  Goodrich, H. E.

  Murray, J. D.

  Timmons, J.

  Granville, E. (Eye)

  Nally, W.

  Titterington, M. F.

  Greenwood, A. W. J. (Heywood)

  Naylor, T. E.

  Ungoed-Thomas, L.

  Grey, C. F.

  Neal, H. (Claycross)

  Vernon, Maj. W. F.

  Griffiths, W. D. (Moss Side)

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

  Viant, S. P.

  Guest, Dr. L. Haden

  Nicholls, H. R. (Stratford)

  Walkden, E.

  Gunter, R. J.

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

  Walker, G. H.

  Guy, W. H.

  Noel-Buxton, Lady

  Wallace, G. D. (Chislehurst)

  Haire, John E. (Wycombe)

  O'Brien, T.

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

  Hall, Rt. Hon. Glenvil

  Orbach, M.

  Warbey, W. N.

  Hamilton, Lieut.-Col. R.

  Paling, Rt. Hon. Wilfred (Wentworth)

  Watson, W. M.

  Hannan, W. (Maryhill)

  Palmer, A. M. F.

  Westwood, Rt. Hon. J.

  Harrison, J.

  Parkin, B. T.

  Whiteley, Rt. Hon. W.

  Hastings, Dr. Somerville

  Paton, Mrs. F. (Rushcliffe)

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

  Henderson, Rt. Hn. A. (Kingswinford)

  Paton, J. (Norwich)

  Wilkes, L.

  Henderson, Joseph (Ardwick)

  Pearson, A.

  Willey, F. T. (Sunderland)

  Herbison, Miss M.

  Peart, T. F.

  Willey, O. G. (Cleveland)

  Holman, P.

  Perrins, W.

  Williams, R. W. (Wigan)

  Holmes, H. E. (Hemsworth)

  Platts-Mills, J. F. F.

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

  Hughes, Emrys (S. Ayr)

  Poole, Cecil (Lichfield)

  Williams, W. R. (Heston)

  Hughes, Hector (Aberdeen, N.)

  Popplewell, E.

  Willis, E.

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

  Porter, E. (Warrington)

  Wills, Mrs. E. A.

  Hynd, H. (Hackney, C.)

  Price, M. Philips

  Wilson, Rt. Hon. J. H.

  Hynd, J. B. (Attercliffe)

  Pritt, D. N.

  Woodburn, Rt. Hon A.

  Irving, W. J. (Tottenham, N.)

  Pursey, Cmdr. H.

  Woods, G. S.

  Janner, B.

  Randall, H. E.

  Wyatt, W.

  Jay, D. P. T.

  Ranger, J.

  Yates, V. F.

  Jeger, G. (Winchester)

  Rankin, J.

  Jenkins, R. H.

  Rees-Williams, D. R.

  TELLERS FOR THE NOES:

  Johnston, Douglas

  Reid, T. (Swindon)

  Mr. Collindridge and

  Jones, D. T. (Hartlepool)

  Rhodes, H.

  Mr. Wilkins.

  Jones, J. H. (Bolton)

  Richards, R.

  Resolution reported:
  "That, for the purposes of any Act of the present Session to establish a national corporation for securing the development and exploitation of inventions it is expedient to authorise—

  (a) the payment out of moneys provided by Parliament of amounts paid by any Minister to the said corporation in respect of any loss or estimated loss from the carrying out by the corporation of any project in response to representations made by a Government department;

  (b) the issue out of the Consolidated Fund of sums required to enable the Board of Trade to make advances to the said corporation within the following limit, namely that the aggregate amount outstanding in respect of such advances shall not at any time exceed five million pounds.

  (c) the waiver by the Board of Trade of interest on advances made to the said corporation;

  809

  (d) the raising under the National Loans Act, 1939, of any money required for the purpose of providing any sums to be issued as aforesaid or for the replacement thereof;

  (e) the payment into the Exchequer of sums received by the Board of Trade in respect of advances made to the said corporation, and the issue of such sums out of the Consolidated Fund and the application of such sums, in so far as they represent principal in redemption or repayment of debt, and in so far as they represent interest in payment of interest otherwise falling to be paid out of the permanent annual charge for the National Debt."

  Resolution agreed to.

  ANGLO-AMERICAN FILMS AGREEMENT
  Original Question again proposed.
  7.48 p.m.
  Mr. Lyttelton: I apologise to the Committee for inflicting upon them two speeches in one afternoon. If it be true that absence makes the heart grow fonder, I very much hope that the reverse of that old adage is not equally true. I think, however, that it is opportune to have a discussion on the Anglo-American Films Agreement which has been reached by the right hon. Gentleman with the American film interests, represented in this country by Mr. Eric Johnston. For one thing, the subject has a close bearing on the matter of the quota which we shall discuss later in the evening.
  Before I go any further, I must condemn wholeheartedly the delay which has occurred in making the terms of the Agreement known to this Committee, and the manner in which the information has been dribbled out. It has certainly been unfortunate from the Government point of view that they have given the impression that they are thoroughly ashamed of the terms. Upon this occasion it would be ungenerous to criticise this or that part of the Agreement—as I shall have to do—without recognising as fully and frankly as I can that the situation in which the President of the Board of Trade and his Department found themselves was not an easy one. The background against which he had to carry on his negotiations might have been described in this way—that Great Britain feels that it cannot afford to do without American films, but cannot afford to pay for them.
  The situation had arisen where the American film companies had stopped sending films to Britain because of the penal tax which had been imposed upon these exports. The production of British films in this country was not sufficient to make up the gap, and a deadlock, which was doing no good to the industry on either side of the Atlantic, was gripping the whole trade. I consider that the right hon. Gentleman under-rated the negotiating position in which the British industry and His Majesty's Government found themselves. If we could not afford to do without American films it is quite certain that the American industry could not afford to do without the British market
  738
  for the American companies. I believe it is a fact that the profit margin—if I may introduce so sordid a subject, the mention of which is so universally despised on the other side of the Committee; some American companies are actually in the business to make profits—was equivalent only to about the gross takings of those companies in this country.
  I must say frankly that the Agreement bears many signs of imprecision and unnecessary haste. I think a better Agreement could have been made if it had been a little less hurried, and if there had been a great deal more precision. In the Debate on 21st January, I think it was, on the Cinematograph Films Bill, I touched on this subject, and assuming—which we have no right to do—that this country can afford to change £4½ million sterling into dollars to pay for American films, I suggested that the American companies should have the right to remit sums over this £4½ million equivalent to the extra dollar earnings of British films in the United States above the present level.
  It will be quite obvious to the Committee that even such an arrangement is open to serious objection. First, there is something frustrating in the industry knowing that on no account can it earn one net dollar for the country, which is so sadly in need of dollars. I should find it a very depressing provision in my daily life, when we are striving in industry to work up the export of British capital goods. Nevertheless, for a limited period, at least, to proceed on these lines would have been sound.
  There are some arguments which may not at once present themselves, but which have to be taken into consideration. I think we are all agreed that there must be, if possible, strong financial inducements at first to make the American exhibitor willing to accept British films. One of the reasons why these inducements are necessary—and I hope the Committee will not think I am making a joke, because I am not—is language. The British film public have now become accustomed to American phraseology and turn of phrase. Everyone here knows that "homely" is a term of disparagement in America, whereas it is used as a term of praise in this country. Everyone knows what can be obtained in a drug store, and of the various metamorphoses through which drug stores have

  739
  passed in America since they were originally instituted.
  The other day I happened to make what I thought a very good shot at golf. I turned to a fisherman, whom I have known for many years, who wore a blue jersey and sea boots, and said to him, "That is a good shot," and he replied, "I'll say that is a good shot." That shows how much the American turn of phrase has got into the minds of our own people. I believe that any British audience would recognise the New York water front or even Wall Street, especially when it is showered with ticker tape, but I doubt whether any American audience would recognise Lombard Street, any more than the hon. Lady the Member for the Exchange Division of Liverpool (Mrs. Braddock) likes to recognise it, or the Surrey Docks.
  In America, a great many people cannot understand the language of British films. I sometimes find it difficult to understand them myself. It is not only the Oxford accent, which is "so refined"; the accent of British actors and actresses is often far above my head. It is quite possible that the American public will one day have a clear knowledge of British phraseology, just as we have now of American phraseology, but the dead centre must be overcome. Again, the showing of foreign films in any country is bound to meet with a good deal of resistance from the domestic producer, for obvious reasons. I think we should all agree that inducements to American exhibitors to show British films and spend time in spreading the knowledge of our vocabulary are necessary if the British film is to gain a place in the American market. To the extent that the President based his agreement on the idea of increasing the amount which can be remitted by American companies—the amount of dollars earned by British companies in the United States—I think he was on sound ground. But I think that many of the other provisions put a gloss on the main Agreement which are unfortunate, and which bear no sign of skilful or expert negotiation.
  What are my objections? First, there is no reason to suppose that the net outgoings from this country will be confined to the small value of 17 million dollars—and I am not ignoring any extra dollars earned by British films in America. I
  740
  think it is undeniable that part of the permitted investments by American companies in this country will lead to deferred dollar claims. I do not want to spend much time on that part of the Agreement, or any time at all in pointing a way to anybody who wishes to find loopholes in the agreement on this point. But when we see that blocked sterling held for American film companies may be used to buy requisites for the production and distribution of films, for travel and transport; that American companies can acquire, with their blocked sterling, literary, dramatic and musical properties and rights; and that it would not be outside the spirit or the letter of the Agreement for American companies to pay very high retainers to British artists, some disadvantages begin to emerge. I consider that nearly all the permitted uses of the blocked sterling will have the effect of saving the American companies dollars which they would otherwise feel obliged to spend. These savings of dollars by the American companies are equivalent to invisible imports in this country, and I say without hesitation that very large sums must be added to the £4½ million sterling which, on the face of it, is the cost of American films to this country.
  Now I turn to the effect on the British producer. We are agreed on all sides of the Committee that in this country, at least, film production carries most of the risk and film exhibition most of the profits. I believe we are all prepared to agree that the independent producer was finding it extremely difficult to finance his production. The situation got worse during the deadlock which took place over the import of American films, because it was destroying and undermining confidence and prosperity in the industry. The independent producer was always finding it difficult to get finance for his production, and this situation made it much worse. If there is to be a large fund of blocked sterling in this country, for which one of the permitted uses is financing independently produced films, it is clear that some independent producers may benefit and that some good may emerge from this Agreement on that score.
  I ask the Committee to consider the other side of the question. The American film companies will be very keen competitors—I think it would be churlish to say they will be unfair competitors—but

  741
  very keen competitors, within the meaning of the clause of the agreement, and they will be keen buyers of talent, studio space, technical improvements and so forth. We have to offset that against any advantage, perhaps temporary, which the independent producers may get from having access to this fund of blocked sterling.
  The next point I want to make is that, under the present Cinematograph Films Act, it will be easily possible for British companies of which the shareholders are entirely American to qualify as British film producers in the quota for British films in this country and export the films as British to foreign markets. I think that here we come up against a question which is not financial or commercial, but which transcends both the commercial and financial aspects. One of the things which we expect and hope to get from British films is to keep the British mode before the eyes and ears of the world, to depict our way of life in a realistic and favourable light, and to show, for example, how kindly and courteous a people the British are when going about their lawful obligations, although not to be provoked beyond a certain point; that, although they are an extremely kindly and courteous people, one must not run into the back of a taxicab without expecting to be told something. It is a good thing that the world should be told about the way we live, about our full democracy in this country, how some of our institutions work, of the impartiality of British justice, and so forth.
  So I say that it is not enough just to change Mr. Gary Cooper's name on a film to that of Sir Ralph Richardson, not enough that the cameraman, the scene-shifters and the carpenters should be British, but that Great Britain should get full value from British films. I remember a friend of mine seeing an advertisement in Hollywood about "Antony and Cleopatra" which read like this: "Antony and Cleopatra, by William Shakespeare; extra dialogue by Joe P. Dixon." That, to our eyes, is not the way to put a great British masterpiece in front of the world. The fact that some of this blocked sterling is to be used for British films may obscure the fact that many of them will be merely American transpositions, unless we are very careful. It is quite possible to make a
  742
  Western in Ealing which will satisfy the hon. Member below the Gangway and be quite indistinguishable from the same article produced in Hollywood, but, having done that, I doubt whether we should regard cattle rustling and shooting the pip off the ace of spades as illustrating our way of life in Devonshire any more than it probably is of that in Arizona. It is probably a long way from both.
  To return to my main argument, so long as the President bases his policy on giving inducements to American exhibitors to show British films by saying that American companies may withdraw from Britain £4,500,000 worth of dollars, plus such dollar earnings as American films make in Britain, he is on sound ground for at least the next two years. I think there might be an awkward period and some shortages on the circuits while the position of British films in America is being built up. I think the President would be on sound ground if he specified a certain sum which may be invested in British film production, in studio space or retention of artistes in this country, but I feel critical about an agreement which is so imprecise, the interpretation of which is still under discussion, which leaves so many loopholes for the withdrawal of sterling, and, while it gives the appearance of limiting the cost of American films to this country to the equivalent of £4,500,000 sterling, does not really do so at all, because the agreement saves the American companies dollars and permits them to spend sterling which they would otherwise have had to buy, those savings being exactly the equivalent of outgoings from this country.
  Again, it is not really in our interests for American film companies to make films which are American in idea, presentation and character and label them as British films, and put them on the open market. On the other hand, to the extent that the Americans use blocked sterling to promote further genuine types of films by independent British producers, good will emerge from this part of the agreement. I am frankly concerned about the competition the British film industry may have to meet in this country from the purchase of literary, dramatic and musical properties and rights, to say nothing of the purchase of technical developments in the film world which we may achieve in this country.

  743
  To sum up, I give the Government the facts of the situation as it is, but I cannot regard the settlement as very businesslike or as promoting British interests sufficiently. I fear the inflation of British costs by the carefree spending by American companies of sterling balances and I think the dollars spent on American films will be excessive. I must say, in conclusion, that I do not put very much trust in the Clause which talks about unfair competition and legitimate British interests. I do not think we can gain by that, and I fear that the leakage of dollars will be very great, and that conflicts and disputes will arise upon what is unfair competition and what is a legitimate British interest. I think there are these dangers to the industry both here and in the United States, and it is as well that we should be alive to these dangers in the hope of working for a new agreement by which they may be, if not overcome, at least mitigated.
  8.8 p.m.
  Mr. O'Brien: Those of us who are aware of the difficulties within the film industry, particularly the difficulty to which the right hon. Gentleman the Member for Aldershot (Mr. Lyttelton) referred, during the period of deadlock, will appreciate that this agreement which was reached between the Government and the Motion Picture Corporation of the United States represents a first-class job, and my right hon. Friend the President of the Board of Trade is to be congratulated on such an achievement.
  What was the position of the industry in this country in the midsummer of last year? This is an aspect of the problem which is apt to be confused, and which will be confused in the near future. It requires about 450 feature films a year to keep our cinemas going in their present way. Of that number, we are making ourselves, or did make in 1946 and 1947, an average of about 50 pictures. This year, it is estimated that the British film industry will be able to make 60 or 70 feature films—the others do not matter from the point of view of economics—but the industry requires 450 features a year to keep the cinemas going on their present pattern. Out of that number we were making about 50, and next year it is esti-
  744
  mated that we may be able to make go or 100.
  In these circumstances, it was necessary for something to be done. The Americans were not sending their pictures here, and independent production was at a standstill. As a matter of fact, towards the end of last year the British film-producing industry was reaching collapse. Not only did this Agreement settle the dollar problem involved, but it saved the British film industry. It restored stability and confidence in the industry. The negotiations which my right hon. Friend had with Mr. Eric Johnston were by no means easy. The Americans were pressing. It has been suggested that the Americans won the day but that is not the case—as a matter of fact, they have the sticky end of the stick. The Agreement admirably satisfies the safeguards required, which have been touched upon by the right hon. Gentleman the Member for Aldershot. The Agreement is adequate in every way, and the majority of those in the industry know that a first-class job of work has been done by the President of the Board of Trade.
  I hope that this Agreement will be looked upon ill a constructive light. It is all right to shoot at it, but it would be the end of the British film industry without it, and cinemas would have to close. If the Agreement had not been negotiated, by today we should have at least one-half of the cinemas in the country shut down and the mass of the workers and their families deprived of their main form of amusement and relaxation. I wish it to be recorded publicly that the industry as a whole is grateful for this Agreement and satisfied that it is a fair agreement, protecting the interests of the British producers and exhibitors as well as giving a quid pro quo to the American interests. I hope that it will be given a fair trial. I hope that the Americans will realise our position here and will not try to abuse their position under the Agreement, although we in the industry feel that they will not and cannot do that. Eighty per cent. of the film studios in this country are owned by large British concerns, and it is not, therefore, possible for the Americans to gain control of British film production and use or misuse our studio space. Other Members will wish to deal with other aspects of this matter, but I wish to express our thanks for the admir-

  745
  able piece of work which has been done under very difficult conditions.
  8.14 p.m.
  Mr. Edgar Granville: I agree with what the hon. Member for West Nottingham (Mr. O'Brien) has said. He speaks with great knowledge and a good deal of authority, and he certainly knows the film industry of this country. I agree with him that the President of the Board of Trade has made a good job of these negotiations. We on these benches must wish this Agreement well and hope that the right hon. Gentleman will achieve the success he desires. I do not think, however, that he escaped from the recent disputes with the U.S.A. film industry entirely scot-free. He undoubtedly found Mr. Eric Johnson tough, and it must have been a very interesting conference which took place between the redoubtable Yorkshireman and the tough American. As I see it, the 75 per cent. ad valorem duty was not imposed by the Chancellor of the Exchequer for the protection of the home industry, but to prevent the drain in dollars. Before then we were losing something like 50 million dollars a year on the balance of payments, whereas this Agreement will reduce the amount to 17 million dollars a year. But as the right hon. Member for Aldershot (Mr. Lyttelton) has said, the American companies can finance their production here out of their dollar receipts, and more important still can buy British film rights in our American distribution from their surplus dollars, which may be another loss of dollar revenue to the Exchequer
  The Board of Trade and the Treasury have never to my knowledge published the "Rank" dollar receipts against expenditure; in other words, the dollars we get from the Americans against the dollars granted by the Treasury for the so-called Rank prestige American experiment. I think the right hon. Gentleman has said that we were getting something like 4 million dollars per year gross receipts from the showing of British films in the American market. I believe that the figure is reduced finally to one million gross, and that most of that was invested in the United States. So that it is clear that we have to accept the fact that the Rank experiment for prestige films in America has failed, and I for one recognise this agreement and the increased quota as a new deal and policy for the film industry.
  746
  It is an extraordinary thing, as has been said, that during the period of that dispute the production in British studios fell to an all-time record low level. It indicates that we have to work together with the United States, and we have to export films to the United States just as we have to export textiles and other commodities. As the right hon. Gentleman said, the American market is a specialised market. The Americans start off with a tremendous advantage, because they have a population of 120 million against our population of roughly 50 million, which means that they can produce a picture for £500,000 and break even on the American market, making their profits on the British market. They start off with a tremendous market, therefore, in the amount of money they can spend on their feature films, whereas we can spend about £150,000 on our feature films.
  Therefore, we must concentrate on producing special films which take into account the taste of the American public. We have to produce films which will not only succeed in New York but in America's great provincial areas, and these films must compete with the American productions. The advice of the experts of the Board of Trade in the past has been that the thing to do is to produce films depicting the British way of life and the British countryside in the hope that the United States would like them and buy sufficient of them, but the right hon. Gentleman must realise, in view of the small receipts that policy has given us in dollar earnings, that it cannot succeed. We have to consider the customer, whether it is films, textiles or anything else, and produce films under this Agreement which will not only satisfy the tastes of our own people, but will satisfy the tastes of the great public in the United States.
  8.20 p.m.
  Mr. E. P. Smith: It sincerely grieves me that I cannot agree with my hon. Friend the Member for West Nottingham (Mr. O'Brien), although to some extent we work together in the same industry. I notice that he is looking peculiarly rosy this evening, which is probably due to the fact that he has been in the open air all day whereas I have been listening to cotton and am in consequence a little more jaundiced than usual. The views I am going to put

  747
  before the Committee are not unnaturally my own views, though in some respects they coincide with the views of the British Screen-writers Association of which I happen to be a humble member. That body is unique because it represents a professional combination of those who are primary producers and without whom the cinema industry would not exist. They ought to have an honoured place in the counsels of the industry, and it is very greatly to the discredit of the right hon. Gentleman the President of the Board of Trade that he has never seen fit to call in the Screen-writers Association to his Department's deliberations, whereas many minor branches of the industry have been most tenderly solicited.
  Mr. H. Wilson: I have seen every section of the industry which asked to see me and a good many of the sections to which he referred are not by any means minor sections. They have given me most valuable advice, and if the screen-writers desire to offer me valuable advice I shall be only too glad to receive it.
  Mr. McGhee: The right hon. Gentleman should let them keep their advice for a change.
  Mr. Smith: I am glad to hear the remarks of the right hon. Gentleman. The screen-writers have had little encouragement from him hitherto, and I hope this means a change of heart. The screenwriters do not approach their industry from a political or purely commercial angle but from an ethical standpoint; and in the various memoranda which we have submitted to the Board of Trade—perhaps that was what the right hon. Gentleman was thinking about—we have always insisted, first of all, on the necessity for the encouragement of the independent producer; and, secondly, that British films should be British in character and not solely conditioned by the requirements of a foreign market. In that respect I disagree with what has fallen from my hon. Friend the Member for Eye (Mr. Granville). In this connection it is the stated view of the American Government, through the Film Division of the United States Chamber of Commerce, that the export of American films should not be regarded purely as a question of the internal industrial economy of the United States, but as an important factor for
  748
  the publicising abroad of the American way of life.
  I want to turn to the famous Agreement of 11th March between the right hon. Gentleman and Mr. Eric Johnston That Agreement had much favourable preliminary publicity, probably Governmentally inspired. [HON. MEMBERS: "No."] Yes, undoubtedly it was, because when the Agreement actually fell into our hands it turned out not to be so good as we had been led to believe. The right hon. Gentleman not very long ago publicly boasted—I think it was in rather questionable taste—that he had succeeded in drinking a Soviet Minister under the table. We were led to believe by this publicity that he had drunk Mr. Johnston under the table, but a labour far beyond the capacity of the right hon. Gentleman is to drink any hard-headed American businessman under the table. I am disposed to think that it was the right hon. Gentleman who was carried home to bed, and not Mr. Johnston.
  If we turn to paragraph 4 of the Agree ment, what do we see? We find that the Treasury will afford facilities for remittance of 17 million dollars per annum payable as a fixed amount in equal monthly instalments; a sum in dollars equal to the British film revenues in the U.S.A., computed and payable quarterly.
  Paragraph 5 states:
  "American film revenues accruing during the two-year period referred to above will be dealt with "
  under the Schedules of permitted uses.
  "Schedule A encompasses uses within the sterling area without limit as to amount: Schedule B encompasses uses outside the film industry"—
  I regard this as very important—
  "within the United Kingdom and is limited to £2,500,000 sterling during the first two years of the Agreement."
  That money can be invested in
  "the acquisition of real estate, the con struction or renovation of buildings, participation in approved industrial or commercial enterprises, construction, acquisition and operation of hotels and related enterprises designed to foster tourist travel to the British Isles, and participation in travel and transportation agencies designed to facilitate and encourage tourist travel."
  I maintain that that will result in violent competition with indigenous British interests in what I submit should be a purely British province.

  749
  In addition to that, the owners of American film revenues are entitled to apply at any time to the control committee to use such revenues for other purposes and, if approved, the revenues may be used for such additional purposes. One can hardly doubt that such applications will be granted; and, therefore, it is bound to lead to a very considerable commercial infiltration. I regard this Memorandum of Agreement as no small step towards our becoming the 49th State of the American Union; and for those reasons this Agreement seems to be pusillanimous and highly undesirable. This Agreement must lead, it is true, to American film production in this country.
  Mr. Granville: I have no particular interest in the film industry but in fairness to the President of the Board of Trade I should like to ask the hon. Gentleman whether he is aware that a statement has been made that there will be no unfair discrimination in the use of this money against the people of these islands, and that no extra building licences will be granted other than the licences which would normally be granted to our own building trade.
  Mr. Smith: I am resting on the terms of the Agreement and not on any statement by the Government. It is true that this Agreement must lead to American film production in this country; and, of course, I welcome that; but will it be American capital backing British-conceived and British-executed films, or will it be American capital backing American films produced through an economic accident in an alien territory? Personally, I think it will be the latter. I think, too, that the right hon. Gentleman, however unwittingly, has sold other British interests unrelated to this matter down the river. Let us take the case of the British studios of M.G.M., which have been closed for so long. They are re-opening to make a film of that splendid and characteristically British play, "Edward, My Son." Does anybody suppose that any but minor British screen-writers or technicians will be employed? Of course, the key jobs will all go to the Americans. Mr. Spencer Tracy—
  Mr. Wyatt: Does the hon. Member for Ashford (Mr. E. P. Smith) know what is the nationality of
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  Miss Deborah Kerr who is taking one of the leading parts?
  Mr. Smith: She is certainly British, but Mr. Spencer Tracy, who is playing the lead, happens to be American. What is the tendency of the film going to be? Will it display the British viewpoint, the British way of life, or the British irony of the original? I do not think that it will. I think that it will display some caricature of British life such as we are accustomed to see in Hollywood importations. It must do so because it will be designed to sell in America to audiences who are already synthetised and allergic to anything beyond a particular approach.
  That is a deplorable state of affairs, but we shall see under the Agreement that it will be multiplied many times over. With the best will in the world I cannot acquit the right hon. Gentleman of having brought about a situation which the British cinematograph industry and British public will live to regret. In war time, and without American influence, British films won a reputation for quality derived from a characteristic British tyle. That is now in danger of being sacrificed to an alien market. The employment of British producers, directors, actors and writers without American dictation is the main safeguard. I can see nothing whatever in the Memorandum of Agreement whereby that essential defensive system is retained intact.
  In order to sell American-financed films in America and so get the major return for their investments, Hollywood will send American executives and creative film artists, writers and technicians over here. It stands to reason that these will not be the best or the pick of the bunch. What protection are we to have against Hollywood dead wood, shelved scripts and second-rate material? According to this agreement, none, apparently. We shall see a burgeoning into life of the petrified forest which is now static in Hollywood pigeonholes.
  I must not say a word, I gather, Mr. Mathers, about the new quota arrangements. If I had been allowed to do so, I should have thrown some bouquets at the right hon. Gentleman as compensation for the brickbats which I have been throwing hitherto. Some people have criticised the British film producers for not seizing a golden opportunity during

  751
  the recent imported-film shortage. That is a most unfair criticism. The blame must rest, if blame there be, on the Government for the state of uncertainty into which their manoeuvres threw the industry. For instance, a British producer dared not make a first-feature film for, say, £100,000 when he knew that if the Government came to terms with the American industry, or it has done, that first-feature film would become a second feature, and the £120,000 he had expected to net would drop to £50,000, thereby landing him with a loss of 50 per cent. The misery and unemployment which has overtaken so many precariously-situated workers in the industry must be laid at the right hon. Gentleman's door.
  Now, coming to the subject which I must not mention, let me add that the right hon. Gentleman has done his best, sincerely and honestly, I believe, to deal with the future of this industry. If he will listen more to well-informed and disinterested criticism and less to interested criticism, however well-informed, he has a unique chance of rescuing and recreating an industry which is of value to our internal economy and is of immense potential importance to our international prestige and well-being.
  8.35 p.m.
  Mr. Wyatt: I do not think that either the right hon. Member for Aldershot (Mr. Lyttelton) or the hon. Member for Ashford (Mr. E. P. Smith) explained to the Committee what they would have done other than make this Films Agreement if they wanted still to keep the cinemas in this country open. They both offered criticism of detail. I felt that the hon. Member for Ashford had not read the Agreement very carefully because there were certain things he said which are fully covered in it and, in fact, could not happen. With the last part of his speech about the dangers which arise to the film industry from the agreement I fully agree, and I would like to say something about that subject in a moment.
  Unless we had had this Agreement, the British film industry would have come to a dead halt and would have finished altogether. The cinemas would have had to close down. Suppose we had spent
  752
  £4,500,000 a year on American films; it might have brought us 50 films a year. If we could have made 60 films in this country, that would have been a total of 110. We must have at least 170 films to keep the cinemas open upon a once-a-week basis. In this Agreement, by spending £4,500,000 we get something like £15 million of films. We must expect in return to have to make one or two concessions, in order to obtain £11 million worth of films for nothing. It would be a remarkable Agreement if it made no concessions at all. That is precisely what has happened. We are going to benefit by £11 million a year for no money at all in return. [An HON. MEMBER: No dollars."] Precisely. I am talking about the external basis.
  In such an Agreement there are bound to be dangers. There clearly are some in this Agreement. Some wangling will be done under it, but the President of the Board of Trade has done a very remarkable job in covering the various loopholes in the Agreement. The schedules, such as that which deals with the uses permitted within the sterling area of unremitted sterling balances, very carefully cover the three principles which are set out at the top of page 5. The second of those principles deals with the subject of unfair competition and says that nothing shall be done which shall be unfair to the British film industry. That is an adequate safeguard when it is taken in relation with the fact that most of the things which can be done under the schedules are only by permission and with the approval of the Joint Control Committee. That committee is composed equally of British and of American representatives. Its approval will not be given unless the two British members approve, which means in effect the President of the Board of Trade. Consequently, most of those things cannot be done under the schedules unless the Joint Control Committee agree in the first instance. That is a real and adequate safeguard.
  The British film industry are entitled to know a little more about what the President of the Board of Trade will consider to be unfair competition. The right hon. Member for Aldershot was on a very strong point here. Would it be unfair if Americans were to come to this country, put money into a film, pay more for techni-

  753
  cians, writers and actors than their British rivals can, and yet, because they might be more efficient, produce their films in the end more cheaply than could their British rivals? Would that be unfair competition? There are all sorts of problems of that kind which come up.
  As I see it, one of the main objects of this agreement is to persuade Americans that if they want to get more than their 17 million dollars a year out of the country, they have to do it by buying British films for showing in America. It is not quite clear in the schedules, however, whether or not the deals by which the distribution rights of British films are bought in America will be subject to the approval of the President of the Board of Trade and/or the Control Committee. I think this is rather an important point because we have just had some important agreements made between Sir Alexander Korda and Mr. Selznick of Metro-Goldwyn-Meyer, by which Sir Alexander Korda will get money from America in advance before he makes a film, the distribution rights of which will be sold to America, as the hon. Member for Ashford pointed out.
  Of course, it is right that some cognisance should be taken of the requirements of the American market when those films are being made, and it is fair to assume that someone with Sir Alexander Korda's reputation will make a film that will be characteristically British and worthy of this country when exported. However, I agree with the hon. Member opposite when he feels that many other people would not be so scrupulous or careful of the honour of the country in which they were producing films, and it would be interesting to know how the Minister proposes to keep an eye on that sort of deal. Otherwise, as the hon. Member for Ashford said, we shall get a lot of shoddy imitation Hollywood products made which will be damaging to us.
  Another danger which nobody has pointed out so far is that in this country those American companies which already have big tie-ups with A.B.C. or Rank for showing their films will be able to get a share of the 17 million dollars. A company like Paramount or Columbia, however, which is not mentioned as owning cinemas in this country, will have a much bigger fight to get a share of that
  754
  money at the end of each year It has already been suggested to me—and this is beginning to happen—that some of these companies are considering financing British companies to turn out quota "quickies "very cheaply. They are making them with unremitted sterling which is quoted in America at 25 cents to the dollar; it is quite worthless to them, and they are prepared to spend unremitted amounts of it provided they can get a few dollars out by doing so.
  They will finance the British company who make these quota "quickies "and will say to the independent exhibitor who has difficulty in fulfilling his quota a little later, "If you will take my American film, I will give you to go with it a film which has been made in Britain, which complies with all the quota requirements, and nominally you will be paid more for the British film in order to comply with the regulations than you are paying for the American film which you will call the second feature for the purpose of this arrangement, and you will show the second feature, which is really the big film "—it could be "Gone with the Wind" or something like that. It would not matter that they were paying a slightly less price, because in that way the independent American company would become entitled to a share of the 17 million dollars which otherwise they would not get.
  That is the kind of thing the President of the Board of Trade must look out for the whole time. I think the hon. Member for Bury (Mr. W. Fletcher) understands that point from his own experience as an independent exhibitor. These difficulties are bound to crop up in such an Agreement, and it is wrong to attack the right hon. Gentleman on the ground that he made a bad deal, because it would be remarkable if, in dealing with business men from Hollywood, there were not a few apparent loopholes to begin with in such an Agreement, and I doubt whether there are many people who have secured so much from Hollywood as the President of the Board of Trade has in this Agreement. Provided it is watched, it should be all right.
  The next point he must make clear is exactly what will be the extent of the American film production programme in this country. When I raised the matter last on the Adjournment on 30th April,

  755
  the Minister said it would be agreed that they would not produce more than 12 films a year. We have still not heard any more details about that, and it is rather important for the British industry, because those 12 films will count towards the British quota and will secure studio space here and all the rest of it. The next thing he must see is that the Control Committee, or he and his officials, keep their eyes open the whole time to watch for deals, perhaps of the sort I was describing earlier, and other deals which could dodge this Agreement. Obviously the British company or association which will make a deal which is a disadvantage to this country will not go along to the Board of Trade and report to the President that they have just managed to diddle this country out of so many dollars, so he must keep a sharp lookout for it.
  The fourth thing to be emphasised—apart from the predominant way by which the Americans will get their money out of this country, which is to buy the distribution rights of British films in America—is that there are many ways, which will not make a great deal of money, but by which the good relations between America and England can be vastly improved by the use of unremitted sterling under this Agreement. At the moment there is some serious danger that relations between this country and America may become damaged by this Agreement, because there will be some £12–14 million worth of money lying about at the end of the next two years which must be spent somehow. It is really hot money, and it must be spent or they will feel they are cheated.
  If they feel they have not had any value for this in any way, there is bound to be bitterness. One does not want bitterness set up in an arena like the film world, because, after all, the film is one of the biggest propaganda media in the world. It is important to keep the thing on the highest level of statesmanship by saying: "You were kind to make this Agreement to help us in this way. Now let us try to keep it on something more than a purely commercial level. Why not, for instance, use some of your unremitted sterling to encourage British documentaries which can be made here and shown in America, or to make British
  756
  newsreels which can be made here and shown in America?" After all, the American newsreels, and certainly the American newspapers, although America is well supplied with newsprint, are some of the worst informed of all, and it would be a good thing if one could have a newsreel shown in America which would really give the European scene. It could also be used to encourage international or Anglo-American cultural chairs at universities and institutes, and perhaps the best British magazines and periodicals of a cultural type in America.
  Another thing which I hope the right hon. Gentleman can suggest to the right people in this trade is that in 1900, at the beginning of this century, one-third of all the books sold in America had British titles, and today only 2½ per cent. have British titles. I think my figures are right.
  Mr. Harold Macmillan: Does the hon. Member mean "made"?
  Mr. Wyatt: No, originated in Britain. It has been suggested to me that perhaps a British bookstall set up in New York by the use of this unremitted sterling would have a big trade. The last thing I want to mention is the question of providing finance for the British independent producers. This Agreement will, of course, open the doors to serious dangers to the British film industry if it is not adequately checked. We have the quota but we must also have with it the provision of finance for the independent producer. On 30th April, in the House, the President of the Board of Trade said this in answer to the case I had made to him:
  "I can tell the House that our investigation of this financial problem is now nearly complete, and I am now in a position to say that the arrangements I am making, details of which I hope to be able to announce in a few days, using existing financial and distribution facilities in the industry so as to strengthen them and put them on a sound financial basis, will be such as to provide a means of guaranteeing to every independent producer that if he has a reasonable project and a reasonable budget … he will not be prevented from going on by lack of finance."—[OFFICIAL REPORT, 30th April, 1948; Vol. 450, c. 881.]
  It is seven weeks since the President said he would make the announcement within a few days.
  I know it is difficult to try to persuade private enterprise to take a risk.

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  We have seen that over a long period. The film industry, of course, is a trifle risky; private enterprise does not like the look of it at the moment, despite the fact that the quota and the Films Agreement have been arranged. If the President cannot persuade private sources to produce the money which is essential, the industry will fall completely into the hands of Mr. Rank and A.B.C., who will be turning out their own films very cheaply. Mr. Rank says that he will be making 60 films in the year beginning next October. His organisation can fulfil their own quota and not bother about finance for independent producers. They need not worry, for they know they can show any film which they make. If we do not provide finance for the independent producer there will be a serious threat to the quality of British films. It is, in fact, already beginning to take shape. It is essential that the President should use the power under the Borrowing and Control Act to raise this money for the reconstruction of the industry if he cannot get it from private sources.
  Mr. Granville: In view of the fact that it was stated recently in "The Times" that the President of the Board of Trade has said there would be no subsidy, can the hon. Gentleman tell us where the money is to come from?
  Mr. Wyatt: Under the Borrowing and Control Act, the Minister can have the money raised from private sources, but will guarantee it in case anything should go wrong. I have read what he said and I do not think it precludes the possibility of using that Act. At the moment many substantial and important deals which could be made with America by the British film industry are being held up because of the lack of the initial impetus of money which is required from independent sources.
  8.53 p.m.
  Mr. William Shepherd: Many hon. Members are waiting, as the hon. Member for Aston (Mr. Wyatt) has said, to hear details of the means by which the President proposes to finance the film industry. If he succeeds in devising a system which will stimulate efficient, economic production, at the same time safeguarding the public purse, he will need to display a good deal of ingenuity and will have succeeded where his predecessors have failed.
  758
  This Agreement has had too satisfactory a reception. Whilst it may give a certain amount of satisfaction in some quarters—in the immediate sense—it is contrary to the long-term interest of this country and the industry. The best thing that can be said about the Agreement is that all sides are dissatisfied with some part of it; obviously therefore, it cannot be completely one-sided. We are accustomed now in Parliament to Ministers making agreements which are not in the best interests of the country. The best thing we can say is that on this occasion there was not an expensive perambulation to some distant part of the world to secure it: it was arranged in this country.
  Mr. Wyatt: Perhaps the hon. Member will tell us exactly what other agreement he would have made which would preserve the British film industry?
  Mr. Shepherd: The hon. Member for Aston is too impetuous, for I was obviously coming to that point. I did not expect for one moment that the President of the Board of Trade would get the better of Mr. Eric Johnston. It is difficult, of course, for Ministers of a British Socialist Government to deal efficiently and confidently with their ministerial counterparts, but when they have to deal with some of the toughest of American business men we hardly expect that to end with Mr. Eric Johnston being under the table. Mr. Eric Johnston is by no means under the table.
  It is true that if we are to preserve the exhibiting side of the film industry in its present state and to have the same number of programmes and cinemas, an agreement something like the one entered into was inevitable. But I suggest that the time has arrived when we cannot afford to spend £17 million upon films from abroad. This afternoon the President of the Board of Trade said that we are spending too much money on tobacco, and of course we are. But there is some sort of revenue justification there. It is certainly true that we are spending too much money on films, and the whole country at the moment is living in a fool's paradise which must shortly come to an abrupt and perhaps a tragic end. We are living beyond our means and sooner or later the storm will break. The Government should have taken a stronger line over the whole issue. Before the war we were sending to America roughly £4

  759
  million a year in film revenue. Now we are proposing—
  Mr. Benn Levy: Before this Film Agreement we were spending at the rate of £11 million.
  Mr. Shepherd: I said before the war. The hon. Member is correct, but I was pointing out that there has been an alarming increase in the amount of American films which we bought. If we took £4 million worth as the average before the war, during the war it went up to nearly £17 million, and the time has arrived when this country cannot afford to pay such sums of money. We have to face the fact, whether we like it or not, that there has to be some radical alteration in the amount of money we are prepared to spend. I do not think the method proposed by the right hon. Gentleman is a good one. It is dishonest to say we are going to have the films on some sort of "tick" and hope that it will work out, and then to place on the Americans a lot of irritating restrictions. When the Americans sell us films they expect to be paid for them, and if we cannot pay for them it is better not to buy them, or to make some more satisfactory arrangements.
  I believe the time has come to abolish the double-feature programme which is a sheer waste of our money and resources and to get down to a lower standard of one feature-film for each performance. It should be appreciated that we are not dealing with a temporary situation. So long as most of us will be living we shall be facing a shortage of dollars in overseas currency, and therefore it is no good acting as though we were tiding over a temporary period. If we are prejudicing our ultimate position by taking this temporary advantage it is not the right course to pursue.
  We are to allow the Americans to invest money in all kinds of ventures. The President of the Board of Trade has said that they can invest money in hotels, and very rightly he got into trouble for saying that. What is more ridiculous than to tell the Americans that they can invest money in hotels in this country? In the first place, they cannot build hotels. We have not the resources with which to build them, and they will not send the materials
  760
  over for us to do so. What hotels need are furniture, furnishings, cutlery, carpets, crockery, linen, all the things that America cannot or does not supply.
  It is sheer nonsense to say that the Americans should invest money in hotels, because what we are doing under this Agreement is to say that we will transfer our valuable fixed assets to America in return for useless second-feature films which people ought to be paid to look at instead of having to pay to look at. We are transferring valuable fixed assets to America for something which has no value whatever. What is more, we are saying as a consequence that next year and the year after we shall pay to the Americans interest in dollars on the investments they are to make in consequence of taking a share of our fixed assets. I can see no merit at all in encouraging the Americans to take our fixed assets and for us in return to take the trashy second-feature films which they send over to us which are an insult to the intelligence of anybody and a prostitution of the art of film production.
  I wish to turn to what are really the bad features of this Agreement. Under the Agreement the Americans are allowed to buy an awful lot of things and they will have an awful lot of money in their pockets. In fact, they will have approximately £12 million in their pockets to spend each year. It is no use saying that we are to have agreements to ensure fair competition.
  Mr. Eric Fletcher: How does the hon. Member arrive at the figure of £12 million?
  Mr. Shepherd: I am assuming that the amount of dollars which they are to be allowed to take out is of the order of £4 million, and I am assuming that they will send films which will yield them a revenue of £17 million. Therefore, I was assuming that £12 million would be the amount which they would have available.
  Mr. Fletcher: Should not the hon. Member make an allowance for the new quota provisions which have recently been announced?
  Mr. Shepherd: I did make an allowance by reducing the balance by £1 million. It may be that the figure I have quoted will be reduced to fro million. Let us

  761
  say that the amount will be £10 million which they will have to buy something they want. Is that indulging in unfair competition? Who is to say that it is unfair and who is to prove it? They will have the money. They will be able to buy our stars and our producers, and export the resulting films produced by America to the United States, thereby getting a good many dollars out of this country. The drain from this country will not be limited merely to the £4 million which we are supposed to pay them under the initial Agreement. Indeed, the American companies in this country will be the spivs of the business. They will be rolling around with their pockets full of pound notes with which to buy anything they can. It is no use saying that it is unfair competition if a man has the money and wants to engage a film star, a producer or buy a story. It would be extraordinarily difficult to say that it is unfair to buy something if he pays us with his own money.
  As a consequence of this Agreement we shall have an enormous amount of money chasing the film resources of this country. It is true that we are entering into a deflationary situation so far as the normal economy of the country is concerned, but we are not entering a deflationary situation in relation to films. I suggest that the effect of this Agreement will be to do the very thing which we do not want to do at the present time, that is, to force up the cost of film production in Great Britain. The solution of our problem as film producers does not lie in the President of the Board of Trade shovelling out public money to support the Government. It lies in getting film production on an economic basis so that every man who wants to put finance into it can do so with the prospect of a reasonable return and with reasonable security.
  I suggest that the whole effect of this Agreement will be to destroy the chance of getting economic productions in Great Britain. What do we want to do at the present time? We want to get productions of first-feature films at a cost of about £50,000. We can do that if we do net get enormous pressure from people with money to burn. What we are going to get, I suggest, as a consequence of this Agreement is a very large number of people running around this country with money to burn, and the prospects of our getting economic productions, which will
  762
  give us a return here and in the foreign markets, will disappear.
  For these reasons I do not think that this Agreement can be commended. It is an Agreement which, admittedly, eased a situation which was difficult and perhaps, in the immediate sense, desperate. But the whole effect of it, so far as the long-term policy and success of the industry is concerned, must be damaging. I regret to see that the Government have bought a temporary advantage at the cost of what must be a permanent injury to the film industry in this country.
  9.7 p.m.
  Mr. Butcher: I regret to say that on this occasion I do not find myself in agreement with the hon. Member for Bucklow (Mr. Shepherd). I agree with him that we must carefully consider whether at the present time we can afford a substantial dollar expenditure for films. But that is a matter of high policy with which the Government are concerned. I believe that this limited expenditure on this form of popular amusement can be made at the present time.
  During this Debate the Committee has often been referred to the negotiations between the President of the Board of Trade and Mr. Eric Johnston. I think it is a mistake to regard those negotiations as being carried on in too tough a spirit. I believe that we and the American people are so closely wrapped up together in the future of the world that it is right that in all matters we should attempt to come to some form of understanding. The observations that have been made as to the hard bargaining which has gone on between those two parties has not made it any easier to negotiate any agreement we may have to negotiate with America in the future. I regard this Agreement as the best that could be negotiated in the circumstances. It is all very well for the hon. Member for Bucklow to attack the American films as not being worth looking at—
  Mr. Shepherd: I must protest against that statement, because I specifically referred to the second-feature films or supporting films, the vast majority of which I say are not worth looking at. I did not say that America produced no good

  763
  films. I referred specifically to the intolerable second-feature films.
  Mr. Butcher: The hon. Gentleman is quite entitled to say what he regards as intolerable, but so is every little boy and girl who goes to the box office. They are perfectly entitled to decide whether they are going to spend their 1s. 3d. on the films which the hon. Member regards as intolerable, or whether they would prefer to see some of the highbrow productions which I have had the misfortune to sit through. The great consolation in most of the highbrow productions is that we receive complimentary tickets, which is a great satisfaction to everybody.
  I believe that we must regard the interchange of films between this country and America as a real and positive advantage to both of the nations and it is on those lines that I would wish the problem of film production and display in the country to be faced—not as a case of tough bargaining between the Minister on one side and the businessman on the other, but as a co-operation of two communities, having in common an interest in a new form of art with, at the moment, many crudities, but steadily progressing as it goes forward. It is on those lines that I would wish to see development.
  I listened with the greatest possible interest to the speech of the hon. Member for Aston (Mr. Wyatt). I agreed with much of it. The only part with which I did not agree was when he spoke on the question of who is to back the independent producer. I believe that no man is entitled to say, "I will make a film and you shall have the pleasure of taking the risk whether your money shall be lost or whether there shall be a profit." The risks should be taken in exactly the same way as they are taken by Mr. Rank, who has backed his judgment and put his money behind films.
  The last point to which I wish to refer concerns the American money which may be used in this country. I do not regard it at all as the hon. Member for Bucklow regards it. He seems to think that it is a misfortune that American money should be invested over here. I believe that one of the few ways in which this country can come through the difficult period with which it is faced is by the permanent
  764
  investment in this country of dollars in the form of capital investment. I think that these things will move together and make it easier for England and America to go forward into a period of prosperity in which we can co-operate with one another in art, commerce and international understanding.
  9.12 p.m.
  Mr. W. Fletcher: This Debate has been conducted in such an atmosphere of good humour and desire for factual information, in some contrast to the Debate which went before, that I think it would be right for me to start by trying to show why the President of the Board of Trade in his negotiations had to make certain concessions which probably he would not have had to make in other circumstances. The difficult situation created goes right back, as so many difficulties in this country do, to the Chancellor of the Duchy of Lancaster. When he was Chancellor of the Exchequer he was wildly optimistic about the way in which the dollars in the Loan would last. When people on this side of the Committee and others opposite made reference to tobacco and films, which he soon found himself in the position of having to cut down, he waived them aside in that famous sonorous voice of his and made it quite clear that nobody who criticised him knew anything about it at all. He was in a state of no dubiety.
  At the last moment, he got into a panic. He cut down with the guillotine which not only put the exhibition side of the film industry into the greatest possible difficulty from which they are hardly emerging now, but also created the atmosphere of extreme annoyance on the part of the American film world which he then passed on as an inheritance to the President of the Board of Trade. It was in that atmosphere that the President of the Board of Trade had to negotiate. I think it is only fair to the right hon. Gentleman to say that these handicaps were there. But in exonerating him I am by no means exonerating His Majesty's Government, because the right hon. Gentleman whom I have just been quoting was the architect of the difficulty. I believe that what was said by my hon. Friend the Member for Buck-low (Mr. W. Shepherd) about this difficulty was perfectly right. Taking it by and large, the path has been chosen by

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  the Government of taking a short-term advantage which is a relief to the exhibiting side of the industry, which is a relief to the producing side to some extent, but which makes very great long-term sacrifices. I believe that there can be no sort of doubt about that.
  I once tried to impress on hon. Members the fact that the film industry runs in swings of about 10 years. During 10 years there is an insufficiency of products and then the man who has a film to sell has a free hand and can, more or less, dictate the terms on which he sells his films throughout the world. Then we pass over the divide, and on the other side we come to the 10 years where there is too much demand. The exhibitor comes into his own again and finds himself in a position where he can more or less dictate to the producer the terms which he will pay. I have seen fluctuations of such an order that a type of film which one could get at a 20 to 25 per cent. cut even with a flat rate could a few years later be got with a 50 per cent. cut.
  What I am afraid of in this Agreement is that during the next few years advantages will be given in the permissible use of funds for the American film industry which would from their point of view be quite reasonable and legitimate. Incidentally, it is a little dangerous to talk all the time about the Americans doing this, that and the other. We should narrow it down very much more. It is not the Americans. It is the American film industry which is concerned and which will have the handling of that money. It is natural to think that they will be very much less tempted to buy hotels than to devote that money to the proper pursuit of their own line of business, which is the film industry.
  Therefore, the pressure of this money for permissible uses—it is one of the most dangerous sides of the Agreement—will undoubtedly lead to the buying up gradually in every sort of way of the brains and the beauty and the bodies which are needed to produce films. The danger which has been pointed out is summed up in this way: Is this going to be a hot-house for hybrids? Are we going to have produced under the cover of the permissible use of this money a curious hybrid of film which is neither British nor American and will probably have the
  766
  disadvantages of both? It really is a danger—it has been pointed out by others before, but I am not ashamed to emphasise it again—that if we lose the character of the British film through the pressure of money buying up the essentials which go to make it, we shall have lost something of the greatest possible value. I hope that the safeguards which the President of the Board of Trade has tried to introduce and suggested in the various joint councils will be very real.
  There are certain dangers to which his attention should be called. At the present moment in America there is under way a big attack on the American film corporation under the Sherman Anti-Trust Act, and there is quite a considerable possibility that the big trusts, if we like to call them that, may be broken up into their integral parts. The President of the Board of Trade should be aware that there is some danger that the guarantee of those clauses which refer to the exhibition of British films in America may not be quite so easy if the breaking up of the American film trusts actually takes place after the attack which has already been announced. It is rather a curious commentary that it is a Socialist Government which has made this Agreement with the large American trusts—the monopolists in this line—but necessity makes strange bed fellows, as probably all of us know.
  There is another danger in this and that is that the independent producer will lose his independence in a very short while. I can see it happening. There must be delight in the minds of the exhibitors who can begin to fill their houses again by having something to put on their screens, but there is the danger that the independents, who have gone through a very difficult and precarious period, will in the first flush of being able again to carry out the functions for which they are there, be blinded by the fact that they are coming shortly to a very different period, a period when it is quite probable that—we have the figures today—not only here but in every country in the world the production of films will be catching up on the demands. That is the time when it will be more than ever necessary to see that the independents do really remain independent, and that goes for the exhibitors just as much as for the producers. There are certain influences in this country, and I am not going to criticise them because

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  they have been doing extremely good work producing very fine films, but, certainly, the very large circuits, which are getting larger every day, do constitute a possibility, though not by their own will and desire to do harm to anybody else, of very great danger, and what is most English in films is very often produced by the independent studios.
  There is another side of this question which needs to be taken into consideration. The hon. Member for Bucklow thought that the real criticism which can be levelled against this Agreement was not so much in the details of it as from this angle. It is quite possible that, in a very short time, the value of the dollar and the need for dollars may be even more apparent and greater than it is today. We are to some extent being numbed into insensibility on the dollar question. So often we hear everybody saying that we must have dollars, and that dollars are our great problem. If one repeats a thing sufficiently long enough, even if it is a note or cry of warning, it deadens the sensibility of those who hear it. I doubt very much, from the study of the economic situation as it is today, whether we are justified in any way at all in expending this amount of money on films. The position is acute and difficult, and we may have load-shedding in whole industries before we get through, but we ought to remember that the vital industries which we have to keep going to buy food and raw materials should have greater precedence than has been given to them by this Agreement. I am not certain that, in six months' or a year's time, the money we are willing to spend will not look very improvident and give rise to attacks very much more severe than the mild suggestions and almost kindly criticisms which we are putting forward at the present moment.
  The other point that needs driving home again is that the dollars this industry is going to earn are not free dollars. We talk about blocked sterling, but these are blocked dollars. They cannot be used for the urgent needs which the Government put before us daily. They are simply there in order to bring into this country more films from America. That may have a snowball effect in due course, and it may produce exactly the state of affairs which I am putting before the
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  President as constituting a grave danger. I do urge the right hon. Gentleman to consider very carefully whether this Agreement will not have to be revised at a very early date. I hope he will be able to tell us later on how far he thinks the rather vague safeguards which he has put in will really go. What I am quite certain, from past history, we shall find is that there is a possibility that the whole effect of this will depend on idle capital. It may be the beginning of a bad situation which, in the past, produced the "quota quickie" and all the evils which arose from it in the interval.
  On the other hand, it may be, as has been suggested, that it is the beginning of an era in which both sides, desiring the essence of what they think right in the film, will have a proper interchange of films between America and this country, with more British films going there than we have seen before. That will depend to a great extent on how this is administered, and how it is administered will depend on how certain phrases are to be translated. How are we going to say what is fair and what is not fair? When we go into negotiations with people, I think that the times the expression "This is not quite fair" is used must be something like 100 per cent. We cannot define it. There is no means by which we say what is a fair practice and what is not.
  As a final note of warning to the Minister, I feel he must take this into consideration. The myth of the tough American business man has been enormously over-stressed. I do not believe that American businessmen are any tougher than British, French or Chinese—or even those who come from Birmingham.
  Sir Patrick Hannon: Does my hon. Friend make any aspersion on Birmingham?
  Mr. Fletcher: I was praising them as being hard-headed businessmen, quite capable of holding their own in the House or in business.
  Sir P. Hannon: Hear, hear.
  Mr. Fletcher: When the next election comes, we may have an even better selection than we have now—[HON. MEMBERS: "Oh."] I was looking straight in front of me.
  The Deputy-Chairman (Mr. Hubert Beaumont): I think we had better get back to the Debate.
  Mr. Fletcher: Will the President of the Board of Trade tell us how he believes the- safeguards which he has put in the Agreement, regarding the permissible use of this money, will ward off the danger that this is a means by which the essence of the British film industry will in a few years time pass out of the hands of British ownership; and will he tell us how he thinks this Agreement, as it is continued in years to come, will get more films shown in America and the use of the dollars received from those films, no longer walled in in the very narrow sense constructed by this Agreement, but available for general purposes which arc much more important?
  9.28 p.m.
  Mr. H. Wilson: The short Debate which we have had on this Films Agreement has been characterised by very great fairness on the part of everyone who has taken part in it. The right hon. Member for Aldershot (Mr. Lyttelton), in his comments, was very fair indeed, and I hope that he will not mind my saying that his remarks were in marked contrast with the rather ill-conditioned attack on the Agreement made in certain sections of the Press, for purely political motives, by persons not concerned with the merits or demerits of the Agreement. The right hon. Gentleman, on the other hand, praised the Agreement in one or two respects. He certainly understood the background against which it was negotiated, and, where he criticised, I think that his criticisms were at least not unfair.
  He began by condemning the very long delay before the Agreement was published. He said that it seemed rather as though His Majesty's Government were ashamed of the Agreement in holding it up for so long from the light of day. I have explained to the House, and I will gladly explain to the right hon. Gentleman, that the reason for the delay was the fact that this Agreement was signed and made with a somewhat scattered industry in the United States, and there were many points of interpretation, not as between us and the motion picture industry of America, but as between the individual constituents of the motion picture industry of America. Therefore it was some time, and I agree
  770
  with him an unduly tong time before these points were cleared up and the Agreement was published.
  The right hon. Gentleman described the background of the negotiations. He summed it up very fairly by saying that this country wanted American films but was unable to pay for them at American prices. He then went on to describe what the Agreement does. What does the Agreement do? In the first place, as the hon. Member for Eye (Mr. Granville) said, it reduces the dollar drain on film earnings from 50 million dollars a year to 17 million dollars a year. We were, in fact, still paying until this week, when the Agreement came into effect, some one million dollars a week for the privilege of showing, not new American films, but the old American films which had been in this country for many months and perhaps years. We were paying this huge sum of dollars for the privilege of seeing "Ben Hur" for the twenty-third time.
  The point has been made by some of those who have attacked the Agreement that we should not be spending such a figure as 17 million dollars on American films but should be spending it on food and raw materials—it is said that we ought to be spending it on bacon or something else we could import from the United States. But, as I have pointed out, we shall from this time on be paying only 17 million dollars instead of 50 million dollars, and therefore there is a considerable dollar saving. We could not have reduced that drain of 50 million dollars a year in any other way except by compulsorily closing down cinemas showing "Ben Hur" and other films to which I have referred. I know that the right hon. Gentleman never suggested, and never would have suggested, closing cinemas in order to cut down that dollar drain, but it is a fair question to ask those sections of the Press, chiefly the "Financial Times," which I think the right hon. Gentleman the Member for Bournemouth (Mr. Bracken) reads now and again, and the Beaverbrook Press, whether it was their considered policy that our cinemas ought to have been closed down in order to put an end to this dollar drain on films. If those who have attacked this Agreement feel that that was the right thing to have done, then they should have the courage to come out clearly and say so.

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  There was no other way of reducing the dollar drain. It would have continued at that figure until finally the cinemas were closed down by sheer consumer resistance on the part of the public who would refuse to go on seeing these films again and again. We could, it is true, have imposed an import duty on newly-imported films, which is what we did a year ago, but there was no way of reducing the earnings running at 50 million dollars a year on films already in this country. We could not do that unless we imposed the same tax on the earnings of our own film producers, and that would have meant the final death blow to our film-producing industry. We were prevented from going in for any discrimination of that kind because of our obligations in regard to non-discrimination by international treaty with the United States—by Article 3 of the Bilateral Agreement negotiated by the right hon. Gentleman the Member for West Bristol (Mr. Stanley).
  I think that the worst effect—and the right hon. Gentleman said this earlier—of the state of affairs before the Agreement was signed was on our own film-producing industry. What might in theory have been a great opportunity for our producers and our film-producing industry was, in fact, a period of great unsettlement, because finance was becoming more and more difficult, and the financial condition of this industry has never been satisfactory. As my hon. Friend the Member for Aston (Mr. Wyatt) well knows, I am trying still to deal with that situation and get it in a balanced basis. The already deficient finances of the industry would have dwindled away completely if the boycott had continued and those who had to find the finance were faced with the prospect, with which they were faced, of the cinemas closing down one after another. In fact, although one or two journals have suggested that the phase of unsettlement in which the industry was placed in April and May was due to the Agreement, it was due to a hangover, particularly in financial terms, from the period which immediately preceded the Films Agreement.
  The right hon. Gentleman and other hon. Members have pointed out that the total cost is not limited to the 17 million dollars set out in the Agreement itself.
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  As the right hon. Gentleman pointed out, it is open to the American film industry to buy up the services of stars, technicians and screen-writers and also to acquire studio space. He pointed out that a very real danger was that this money might be used to an undue extent for the purpose of making imitation British films, which would count in the quota under the Cinematograph Films Act and also be exported all over the world as British films. I certainly agree that this is a danger and is something to be watched.
  The Agreement is, of course, subject in all its workings to the three general principles which have been referred to in the Debate tonight, one of which is that
  "The expenditures for any of the purposes in Schedule A shall not be such as to go beyond the limits of fair competition or be otherwise harmful to the legitimate interests of the British film industry."
  The hon. Member for Bury (Mr. W. Fletcher) described that as rather vague. I cannot disagree with him. It is vague. He asked what was meant by the word "fair," on which it is possible to place different interpretations. As he knows, the operations of the Agreement are subject to the guidance and control of the Control Committee on which the Board of Trade and the Treasury are represented. That Committee has to see that the basic principles of the Agreement are not, in fact, defeated during the period of the operation of the Agreement. The word "fair" is one which can only be interpreted, so far as this industry is concerned, in the matter of the number of films to be made here with this blocked sterling.
  As I have already told the Committee, the figure of 12 films in the year was freely discussed in the negotiations, and I find that that figure was quoted by Mr. Johnston in the United States after his return. It is a fact that I said on 30th April that studio space is the key to the situation. Unless the American producers have studio space they cannot do so much direct damage to the interests of British film production. I also said on that occasion that we were prepared to take steps to prevent individual American producers trying to book up and hire studio space before the Agreement came into force and before the Control Committee was set up. That matter is subject to control.

  773
  I agree with the right hon. Member for Aldershot that the best use of the blocked sterling is to promote the showing of genuine British films in the United States. That is how the Agreement was intended to operate, and is, indeed, already operating. Already, as a result of this Agreement and the blocked sterling available, our films are getting far better bookings in the United States than they have had over a very long period in the past. I agree that that does not earn us a single additional dollar at the present time. The right hon. Gentleman is right in that, but it does help our balance of payments position in the future. As the hon. Member for Bury said, our dollar problem is not one that is going to disappear in the next two years, and certainly anything we can do to help the position of our film industry to increase its productive power, and, above all, to strengthen its foothold in the American market is something which can give us direct and lasting dollar benefits.
  It is a fact, as the hon. Member for Eye said, that recent experiments in getting British films shown in the United States have not been as successful as their promoters had hoped, but many difficulties have had to be faced. Not the least of them were those referred to by the hon. Gentleman, and not merely the language difficulty but difficulties of getting acceptance of our films in the United States. We have had the Rank experiment and other experiments, which were very successful in a limited sphere, with some of our best productions sent over to the United States under capable sponsorship. We have had films made by Sir Alexander Korda, which have been pushed in the United States by yet a different technique of exhibition. I am certain, and I am sure that the Committee will agree with me, that we would never have succeeded in getting admittance of our films to the United States on a satisfactory basis as long as it was being done against the atmosphere of hostility and mistrust which was generated by the Import Duty and the boycott.
  Another point, which takes up one of the matters mentioned by the right hon. Gentleman, is that to get our films established in the United States would involve a considerable cost, a cost, moreover, in terms of dollars. From now on, following the agreement, although we do not gain a single dollar from the showing of British
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  films in America, that cost will be borne by the American motion picture industry. Indeed, the full earnings, over and above the 17 million dollars referred to in the Agreement, will depend directly on the energy and success achieved in pushing British films in North America.
  Mr. Granville: Does that mean capital exploitation?
  Mr. Wilson: Yes, indeed. There have been many comments in the American Press on this Agreement. The American Press have taken a very different view from that taken by the sections of the British Press to which I have referred. One of the significant comments by one of the American motion picture papers shortly after the signature of the Agreement was that the British—and here I quote—
  "have taken an exceedingly long-range viewpoint of the whole matter and are using the Americans to build up their industry. One executive declared: The only way we can build up the 17 million dollars which we are assured is in direct proportion to the extent to which we build up the British industry'."
  That is a fair comment on the part of one of the American journals on this Agreement.
  My hon. Friend the Member for West Nottingham (Mr. O'Brien) and the hon. Member for Eye, in their brief comments, on the whole praised the Agreement, and I would like to thank them for what they said. I entirely agree with the hon. Member for Eye that this Agreement is not all that we should have liked. If we had written the Agreement ourselves and had not had to negotiate it with anybody else we could have got off scot-free, but these agreements are not made in that way. The hon. Member for Ashford (Mr. E. P. Smith) made a speech of slightly different tone. He complained that I had never seen the screen-writers. I have never been asked to do so. If the screen-writers had asked to see me I should have been only too glad to have met them at an appropriate time and to have listened to their views on how I ought to carry out my job. I might possibly in the course of the discussions add a few words on how they ought to carry out their job, but I am quite sure that my remarks on that subject would not be as helpful as their remarks on my performance.
  Mr. E. P. Smith: Can I say to the right hon. Gentleman that we are quite ready to receive any amount of advice?
  Mr. Wilson: Yes, I think as a matter of fact that they need it. Speaking now as an ordinary cinema goer, and in a purely private capacity, I think some of us are a little bit tired of some of the stuff they have been turning out recently—this is no reflection on the hon. Member for Ashford (Mr. E. P. Smith) about whom I want to say something in a moment. We are getting tired of some of the gangster, sadistic and psychological films of which we seem to have so many, of diseased minds, schizophrenia, amnesia and diseases which occupy so much of our screen time. I should like to see more films which genuinely show our way of life, and I am not aware, apart from some of the pronouncements of the leading members of the Opposition, that amnesia and schizophrenia are stock parts of our social life. I should like the screen writers to go up to the North of England, Scotland, Wales and the rest of the country, and to all the parts of London which are not so frequently portrayed in our films. They would indeed be making films which could be made nowhere else in the world, and which not only our own cinemagoers but the cinemagoers of the whole world would be anxious to see. The right hon. Gentleman was on good ground when he said what British films exported ought to be.
  I am not commenting on the film of the hon. Member for Ashford. In that connection may I say that I never set out to drink Mr. Johnston under the table but, equally, I was never carried home from any of the negotiations as he suggested. To correct any misapprehension, let me say that the fact that Mr. Johnston spent two days in bed in the course of the negotiations was entirely due to the effects of our intemperate March climate on a Hollywood constitution. However, I am sure the hon. Gentleman will wish to know that there have been some preliminary negotiations with the Russian Government on an exchange of films. Here again I am sure the right hon. Gentleman will agree that it would be valuable if some films showing our way of life could be imported into Russia, even if we did not make very great financial gain out of them—because I am not quite
  776
  certain what we would do with blocked roubles.
  Mr. E. P. Smith: I could make a suggestion.
  Mr. Wilson: The hon. Gentleman may like to know that one of the ten films of ours that have been asked for is his own "Shop at Sly Corner." I congratulate the Russians on their taste, even if I cannot pretend that the "Shop at Sly Corner"—which I personally enjoyed—really shows our way of life very fully.
  Mr. Smith: Is the right hon. Gentleman aware that I think it is a shocking film?
  Mr. Wilson: To be quite honest, I have only seen the play, and I was judging from that, and I think the hon. Gentleman has some responsibility for the play, at least.
  The hon. Member for Bury (Mr. W. Fletcher), whose speech was so different from the speech he made earlier in the afternoon on cotton—[An HON. MEMBER: "What did the right hon. Gentleman expect?"]—It was made in a very different tone. He expressed anxiety which many of my hon. Friends have expressed, and which I myself have expressed at various times, about the pressure on our film production facilities through the permissible and allowed uses coming under the schedule in the Agreement. As I have said, studio space is the key to the situation, and as long as we control studio space that puts a definite limit to the amount of unfair pressure on our own legitimate film interests. However, I agree with the hon. Gentleman that we have to use this period to get our own film producing industry into proper shape.
  We have to get costs down, and even though there will be a certain inflationary pressure from the expenditure of the blocked sterling, there is no more urgent need for the film industry now than to reduce its production costs to increase its efficiency. That will be one of the duties of the production committee which has been referred to and of the joint production committees which are being set up at the studio level.
  We must also solve—although I cannot go into it tonight—the problems of finance and distribution outlets for independent producers. When that is done,

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  when the industry is really tackling the problem of costs, we shall see some hope for the future of the industry. One of the most powerful aids in this matter will be the new quota, which we shall be debating presently.
  Perhaps I might sum up the position. The Agreement—which I do not pretend is perfect—pulls out both our own cinema-going public and our dollar expenditure on the one hand, and Hollywood on the other hand, from a very difficult situation which, quite frankly, was harming both. The right hon. Gentleman was absolutely right—the fundamental situation is that we want American films. We do not want them as badly as that, but a lot of our people want to see them. In any case, we must have them if we are to keep our cinemas open, for we must keep our cinemas open if we are to build up our own industry. On the other hand, we cannot afford to pay for the films. It is true, therefore, that we are not in a position to dictate terms in such negotiations as those which resulted in this Agreement. That is why I admit the Agreement is not all we would like it to have been. That is perhaps one reason why it is vague, indefinite and imprecise in its drafting. In addition, there is the language difficulty to which the right hon. Gentleman referred.
  The Agreement provides a short breathing space for our film industry. It has introduced into it a greater degree of settlement and a greater possibility of increased production. Since the Agreement was signed, we have now something like 300 more technicians employed in film production, even though many studios, in an attempt to increase efficiency and to reduce costs, are now carrying out their productions with a smaller number of technicians. The industry is working at a greatly increased rate of activity, compared with the position before the Agreement was signed. With this Agreement, which settles the position for two years and, in some respects, for four years, we have provided a breathing space for our own industry. For reasons mainly outside its control the industry failed to make full use of the period of boycott, when it could have greatly increased its production and occupied a greater proportion of our screen time. During this
  778
  breathing space—the period of the Agreement—with the assistance from the financial arrangements I am making—
  Mr. Wyatt: The right hon. Gentleman will remember saying on 30th April that he hoped to be able to announce the financial arrangements within a few days. I do not know whether that justifies the suggestion that amnesia is a national characteristic. Can he say how long will be "a few days," as some seven weeks have now elapsed. It is very important that, if he cannot get the money from private sources, the President should use his power under the Borrowing and Control Act.
  Mr. Wilson: I am anxious to avoid solving this problem through the medium of public money of any kind, even if it were to be self-repaying public money. We are all anxious to find some other way of doing it. The "few days" has been rather a long time because financial circles in this country have unhappy memories about film production. It is not easy for me, even with all the shotguns in the world, to bring about the marriage I want to see between finance and the film industry. The shotguns are still pointed at both parties and I hope the marriage will be carried out in the relatively near future, although I will not commit myself to a time.
  But, with the assistance provided by these financial arrangements when they are complete, with the much greater financial settlement in the industry following the film Agreement, with the assistance given by the quota, and with the active demand for British films, I know the whole Committee will hope and expect that the British film industry will now put itself on a sound economic basis and go all out for maximum production at the minimum cost, and, at the same time, not only maintain the high standard of quality reached a year or two ago, but improve continually upon it. If that can be achieved, this Agreement will not have failed in its main purpose, which is to build up our own production industry and to enable it to play a real and valuable part in the battle of the balance of payments a year or two from now.
  Committee report Progress; to sit again Tomorrow.

  FILMS QUOTAS
  9.57 p.m.
  The President of the Board of Trade (Mr. Harold Wilson): I beg to move,
  "That the Cinematograph Films (Quotas) Order, 1948, dated 11th June, 1948, a copy of which was presented on 14th June, be approved."
  This order fills in what I think is the principal gap in the Cinematograph Films Act, 1948. The House will recall that in the two previous Films Acts the quotas were set actually in the legislation, but this year it was left for the Board of Trade to fix in each period, subject to six months' notice, the quota which would operate during that period. During Debates on the Films Bill, I gave an undertaking that I would fix the quota at such a level as would provide a distribution outlet to all British films of reasonable quality, and I think that in the order which is at present before the House I have carried out that pledge to the full.
  The order provides a quota of 45 per cent. of screen time for first-feature films and 25 per cent. for the supporting programme, excluding newsreels and advertisements, and, as laid down in the Act, both figures have been fixed after consultation with the Cinematograph Films Council. That consultation was not of very great value as things turned out. When they considered this matter a week ago the Films Council were faced with a very wide divergence of view between producers and exhibitors and by a slight majority a high figure was recommended by the Council, but a not inconsiderable minority wanted a quota of only half that figure. That left a very wide margin within which I had to settle the quota.
  The fixing of the first-feature quota placed me in considerable difficulty. In recent years there have been a large number of defaults on the quota most of which were due to the fact that the quota figures laid down in the 1938 Act could not be realised as a result of war conditions. This Act will become a much less useful instrument if we are to face the prospect of a large number of defaults, particularly on the part of independent exhibitors. They are, of course, given an additional measure of protection by the provisions in the Act providing for special treatment if they are faced with exceptionally heavy competition from the circuits.
  780
  I had the choice either of fixing the quota so low that there would be no danger of defaults on the part of any independent exhibitors, which would have meant that the quota would have no bite at all for the big circuits, or a figure which was realistic for the big circuits and which gave them a job of work to do but which placed the independent exhibitor in greater danger of defaults. Faced with that dilemma, my decision was to fix a quota which is well within the power of the big circuits to carry out but which does provide some difficulties for the independent exhibitors. I hope that the House will agree that that was the right course for me to take, even though it means difficulty for the independent exhibitors, although of course, as the House knows, any independent exhibitor who really tries and then fails receives somewhat lenient treatment.
  There are two things I wish to make clear about this order because there has been some ill-informed criticism of it in the United States. The first is that this is not a fantastic quota as has been suggested. It is based on a sober calculation of the supply of films available. It is based on the number of British films likely to become available this year, even allowing a proportion for failure of programmes to be achieved and even allowing a certain discount for films of poor quality to which we are most anxious not to give a quota guarantee. There has been some suggestion in the United States that this quota is an unfair act on our part following the Agreement. If I had fixed any other figure, I should have been failing in the duty placed upon me by this House under the Films Act, namely, the fixing of a quota which could be achieved by our film industry. This Films Act is a protective measure for the film industry, and it is no use getting away from that.
  The job of the Act, and my job in fixing the quota, was to give a measure of protection to the film industry. If I had fixed a lower figure I should not have been carrying out what I feel sure was the wish of the House. There has been criticism of the fact that in nominating the members of the Films Council I did not appoint any American members to it. In the past there was an American renter on the Council. I took the view

  781
  that now that the renters' quota had disappeared and we were dealing with exhibitors' quotas, the need and the case for an American renter member disappeared with it. I have to inform the House that this has caused some ill-feeling in certain places across the Atlantic. I must equally tell the House that I have said in reply that since this is a protective measure, and since the Films Council is charged with the consideration of many problems affecting the development of the British film industry, it is appropriate that it should consist of British members only. In fact it is a protective measure, and I said that when the American Tariff Commission includes a British business man, I will reconsider the matter.
  Mrs. Jean Mann: When my right hon. Friend says "British representatives only," does that expression include any Scots?
  Mr. Wilson: Yes, I did include the Scottish members in the general phrase "British." in fact, the Council has more Scottish members on it than it has ever had before—certainly more than were provided for in the Act.
  Mr. Maclay: Are the Scottish independent producers represented?
  Mr. Wilson: Yes, the Scottish exhibitors outside the circuits are represented. It depends how one defines "independent exhibitor." These were some questions upon that earlier today. These particular members come under my definition of "independent exhibitor." There are also two independent Scottish members, one of whom has just been appointed.
  The second feature quota was an even more difficult problem because it was not clear what production would be available. The production of short and documentary films is very much a function of the finances available for them, and is affected, in my view, by the very inadequate rentals paid by exhibitors for the short and documentary films. On the other hand, it is true so far, the cinema-going public has not shown a strong demand to see more of these films. It is certainly true that no very important dollar problem is involved here. After considering the views of the Film Council, and after considering such figures as were available of prospective production of
  782
  short and documentary films, I fixed the figure for the supporting programme at 25 per cent.
  I hope that the House will consider those figures to be realistic and reasonable. They are certainly within the capacity of the productive side of the industry. I do not need to say anything about the position of the quotas in relation to the film industry as a whole. Our discussion on the Films Agreement ended on the note of the position of this quota legislation and the importance of fixing the right quota in the interests of British film productions. I trust that the House will approve this order and the quotas which have been fixed.
  10.7 p.m.
  Mr. Oliver Lyttelton: We on these benches do not intend to oppose the quota at this figure. The President of the Board of Trade has spoken on the subject with almost surprising frankness. It was all the more surprising to me because I had a sort of idea that I made some very sagacious remarks on what the quota should be on 31st January when we debated this subject before. Unfortunately, owing to a technical hitch, I have left those sagacious remarks behind, and I rely on the good will of the House in asserting that they were very sagacious.
  Mr. Wilson: We all regret this technical hitch. On behalf of everyone I should like to confirm that the right hon. Gentleman's remarks were highly sagacious, but I think they were based on an Amendment that the quota should be not lower than 35 per cent. Therefore, I am sure that the right hon. Gentleman will agree that we have fully met the suggestion enshrined in his sagacious remarks.
  Mr. Lyttelton: That is very liberal and generous. I do not want to appear ungracious in receiving this unaccustomed tribute but, at the same time, within my own memory are the very cogent remarks made by the President in resisting any suggestion that the quota should be fixed at 35 per cent. As happens increasingly often, I have turned out to be right in this subject. I hope that this record of unbroken successes will continue in the future, but one never knows, and I am beginning to get a little nervous.
  We must express some anxiety, which has not been entirely removed by the

  783
  right hon. Gentleman, about the size of these quotas. One of the frankest parts of his remarks related to the discussion with the Films Council. For one moment, he opened the door of that council room and showed the House that there were wide differences of opinion inside it. That was, indeed, very frank and most unlike the usual Ministerial reply one gets when one asks what advice has been received from a committee looking into a technical question. I think that on this occasion it suited the Minister so to do. I have anxieties about 45 per cent. One of them is that the quota is so full that very little competition will be left and there will be no consumer choice at all. The President did something to try to relieve our minds by saying he was quite sure that the 45 per cent. was within the capacity of the industry. One must accept that, but when one is talking about artistic production, the word "capacity" is a little ambiguous.
  I am rather afraid that in fixing the quota as high as this, the last 10 per cent. between my sagacious 35 per cent. and the President's 45 per cent. may be filled in by what the Americans are pleased to call merchandise in the sense that they are not films of any artistic merit but merchandise designed merely to fill up the time left over. In seeing this quota of 45 per cent. we feel anxiety that the supply may be far short of the requirements of the exhibitors, and I think that they feel that too. One's feeling about that is reinforced by the fact mentioned by the President of the Board of Trade that there are a great many defaulters on the quota against whom no proceedings have been taken, because they would have the very good defence that during the period of default the British films in the required quantities were not available. In the light of that, I am anxious that either the supply will be far short of the requirements or, on the other hand, that if supply is brought up to the requirements it will be brought up in celluloid and not in films.
  I am afraid that the endeavour to reach the 45 per cent. quota will lead to a lot of rubbish being put out in the last 10 or 15 per cent. which will do damage to the British film industry. I intend to match the President's frankness with equal frankness. I do not feel that
  784
  the technical advice available to the Opposition on the matter of the possible capacity of the industry in regard to first-class films is such as to enable us to oppose something which he is advised is within the capacity of the industry. For that reason, I should like to record anxiety about the consumer's choice and about the quota being filled up by merchandise, but to stop short and not to oppose, by any hostile vote, the proposals which he has put in front of the House.
  10.13 p.m.
  Mr. J. P. W. Mallalieu: There is real point in at least one of the fears expressed by the right hon. Gentleman the Member for Aldershot (Mr. Lyttelton). The difficulty which some cinemas will find in fulfilling the 45 per cent. quota is obvious. The President of the Board of Trade saw that himself. The cinemas which face difficulty are those which are independent and in competition with one or other of the big circuits. The reason why they will find this difficulty in fulfilling their quota is that not all but the bulk of the films will be produced through the Rank organisation. Inevitably, the Rank organisation will feed its own films into its own cinemas first. Anybody who is outside will have to take the leavings.
  That does not matter very much to the independent exhibitors who cannot get British films. Probably they will be able to get American films in place of English films; but it matters very much from the point of view of the British industry. It means that we shall not get the fullest possible production of British films. There will be British screens waiting for British films and no films available to go on those screens. In addition to fixing this quota, the President should therefore try to have something else to run alongside it. He should try to persuade a considerable number of these independent exhibitors to come together in an association, if possible forming yet another circuit but, at any rate, in a working association He should try to do that first.
  Mr. Lyttelton: Monopoly.
  Mr. Mallalieu: It is by no means a monopoly. It is providing additional competition for the large circuits. Besides doing that, he should try to get the independent producers working together in an agree-

  785
  ment and then marry the independent producers with this new association of the independent exhibitors. If he can do that, he will kill two birds with one stone. He will make it very much easier for an independent producer to make a film because the independent producer will have a chance of getting a market for his film in the new circuit, quite apart from any chance he might have in the Rank or A.B.C. organisation. Therefore, it will be possible to increase the production of British films. Secondly it will make it more possible for the independent exhibitors to fulfil their quota. I should be most grateful if the right hon. Gentleman would have a look at these ideas and see if he can put them into effect.
  10.16 p.m.
  Major McCallum: I was hoping that in his opening remarks the President of the Board of Trade would tell us that when he was in Scotland yesterday he had the advantage of a discussion with the Scottish film industry or at any rate with the Scottish exhibitors. In Scotland, particularly in the rural parts, the cinemas owned by the big circuits are not nearly so numerous as the independent cinemas. When it was known that the President was fixing a quota, most Scottish hon. Members received complaints and urgent messages asking them to try to evoke from the President some explanation of what would be the position of the independent exhibitors if they were unable—I do not see how they will be able—to fulfil the quota, particularly the first feature quota of 45.
  I quote the case of a burgh in my constituency with a population of 6,000 to 8,000 which has two cinemas within 25 yards of each other. Those two cinemas change their programmes three times a week. It is impossible to see how they can maintain the quota. Just now the right hon. Gentleman said that in special circumstances independent producers might not be proceeded against if they were unable to fulfil their quota. Can he tell us before the Debate is over if they will receive special leniency in this regard?
  The right hon. Gentleman said just now that the new Films Council included more Scotsmen than the previous one. My information is that the new Films Council has only one Scottish exhibitors' repre-
  786
  sentative, a gentleman who, I am told, has no knowledge of the film industry. I do not therefore understand how it is that the Minister says there are more Scotsmen than there were before.
  Mr. H. Wilson: Surely in talking about the representation of the independent exhibitors in Scotland the hon. and gallant Gentleman would not suggest that Sir Alexander King has no knowledge of the industry?
  Major McCallum: I was referring to Mr. Hardie. I wanted to make sure that the President was quite correct in his statement just now in view of the complaints we have received, particularly from the independent exhibitors in our constituencies.
  10.20 p.m.
  Mr. H. D. Hughes: The fears expressed by the Opposition speakers in this Debate are not shared by the major film producers. Mr. Rank has already gone so far as to say that he expects to supply 60 to 65 per cent. first features in the major circuits this year, and I congratulate my right hon. Friend for fixing the first feature quota at a figure like this, which will give substantial protection and encouragement to the major firms of the British film producing industry.
  Having said that, I want to make it clear that I cannot extend the congratulations to the quota for the supporting programme, which is at the lower level of 25 per cent. The supporting programme is not financially, at present, an important part of the industry, but, aesthetically and in terms of entertainment, it is an important part, taking something just under one-half of the showing time. I fear the result of this low quota of 25 per cent. will be that less than half of our screen time is going to be open to American second feature and short productions which may be of a very low quality indeed. In fact, it seems to me that there is a danger in the difference between these two quotas that American production, diverted from first feature showing by the comparatively high first feature quota, will, in order to occupy surplus capital and to keep its name on the market, be forcibly diverted into the second feature and supporting programme, and will, in that way, arti-

  787
  facially be induced to compete with a section of the industry which, on many occasions, the right hon. Gentleman and his predecessor at the Board of Trade have expressed their wish to encourage and promote.
  It is clear from what he has said that he was not advised by the Films Council to fix this figure at 25 per cent. I do not know on what basis that calculation has been made, but it is, presumably, on advice from within the Board of Trade which, I am bound to say, appears to the producers of supporting films to be quite off the mark. What, in fact, is required to produce a 25 per cent. quota in the supporting programmes? Let us take the three main circuits and allow one hour per week per circuit. That comes to something like 150 hours a year. The Board of Trade apparently estimate that something in the neighbourhood of 1,750,000 feet are required to meet the need, but my advice is that far less than half that would be required to meet a quota, not of 25 per cent., but rather of 50 per cent., which, I understand, was the advice given to the Board of Trade by the producers of supporting film material.
  There are now in this country going in for the supporting film production side of the industry something like 100 companies, who state that they can produce about 750,000 feet in 12 months. That largely consists of short and new supporting film production. There is, in addition, the whole question of re-issues, I am myself keen on the development of both these types of supporting film production, and I want to see both the short and the documentary producers encouraged. At the same time, in the last few months, I have found out the great value and interest of seeing again magnificent British films like "The Way Ahead" and "Brief Encounter," which were originally first features and have, in the last few months, in the temporary state of the industry, become second features and so on.
  There is no doubt at all that the short and documentary industry, plus re-issues of former first feature films, can at the present time support a 50 per cent. quota, or, at any rate, a quota on the same level as the first feature production. Even at the present time, this section of the industry is in a position to maintain a 45
  788
  per cent. quota, but I would urge on my right hon. Friend that, even if this were not the case, there is a strong argument for putting what he called a "bite" into the supporting film quota—a target for the supporting film producers to aim at. This is not a problem, as in the case of the first feature films, where we have to be able to plan months or almost years ahead in order to get the films produced. It is possible to produce short and documentary films of great value and quality in a relatively short time, and, therefore, if a 45 per cent. quota had been fixed and proved to be immediately a little ahead of the present capacity of the industry, it would have set a target which in a short time they would be able to fulfil.
  It is the advice of the producers concerned, and the advice of the technicians, that the production capacity would have been available to meet a much higher quota. I recognise that it is probably now too late to alter the quota figure, but I want to register the disappointment of this section of the industry that the hopes which have been held out to it have not been fulfilled. This section of the industry is in the doldrums, and it has had, so far, no assistance in getting a larger proportion of screen time, and no assistance in getting a fair return for its production. We have magnificent films like Paul Rotha's "The World is Rich" which can only be shown in 100 cinemas in this country at the present time. That is a scandalous situation which has to be put right.
  This quota does nothing to assist this section of the industry and leaves it far more exposed than the first feature section of the industry to American competition. It means that much of our cinema time will still be spent in looking at the kind of trash that Hollywood has produced to back up the first features, and I personally regret that my right hon. Friend has not found it possible to fix a much higher quota.
  10.28 p.m.
  Colonel Gomme-Duncan: The hon. Member for West Wolverhampton (Mr. H. D. Hughes) will forgive me if I do not follow him on the particular line on which he was speaking, because in view of the approaching hour for my departure to the northern Kingdom I must be very brief. I

  789
  emphasise what the hon. and gallant Member for Argyll (Major McCallum) has said in relation to the industry in Scotland. It is no good anyone suggesting that this 45 per cent. figure can be considered as anything but deplorable so far as Scotland is concerned. Twenty-five per cent. is the very utmost, according to the experts in the business, that can possibly he absorbed in Scotland. Twenty per cent., so far, has been laid down, and they think that they can boost it up to 25 per cent., but with the greatest difficulty.
  It is a fact that there are 400, and it may be up to 500, cinemas in Scotland, which change their programmes twice or three times in a week. That, as my hon. and gallant Friend has said, means, in the case of three times a week, approximately 142 British films per annum, which do not exist. In the case of twice a week, it means 90 to 95 films. I hope that the President of the Board of Trade will answer this particular difficulty in the Scottish industry. It is not imagination but very genuine alarm which is felt at the prospect. Speaking broadly, the English producers lay down the law on what Scottish exhibitors will show. There are Scottish representatives on the Council. One, I understand, is independent. He is one of the greatest industrialists in this country, a magnificent example of what Scotland can do, but, frankly, I do not think he ever goes to the "flicks."
  Mr. Skeffington-Lodge: He is very wise.
  Colonel Gomme-Duncan: The hon. Member for Bedford (Mr. Skeffington-Lodge), in his stage whisper, voices my own opinion, but that is not what I wanted to say. He is a brilliant industrialist, but he does not know anything about motion pictures. The other representative is an exhibitors' representative. And these are the only two men who have any say in what is to be shown in Scotland. A 45 per cent, quota of British films, in the circumstances, is an intolerable burden on Scottish exhibitors. It will mean that the independent exhibitor will be pushed out of business. I am sure nobody wants that to take place, certainly not the President of the Board of Trade, who, I freely admit, has done a very great deal to get the film industry in this country going strongly. I hope the right hon.
  790
  Gentleman is going to tell us something of how he proposes to get over this tremendous difficulty about cinemas in Scotland which show a change of programme two or three times a week.
  10.32 p.m.
  Mr. Wyatt: I think it is unreasonable to ask the President of the Board of Trade to do something for cinemas which change their programmes three times a week. A change twice a week is understandable in country and provincial districts where perhaps consumer demand is not sufficient to fill the cinema if there is only one film put on during the week, but it is impossible to supply audiences who have to go three times a week to the cinema if they will not be satisfied with less than that. It is a very real problem with cinemas which have to show films twice a week or close down, because of population difficulties. It is not merely a question of being close by a circuit cinema. It may be the only cinema, and it must change twice a week, because otherwise there is not enough audience to keep it going. Out of 5,000 cinemas in this country, as many as 3,000 change their programmes twice a week. I have been told this today by an independent exhibitor connected with a chain of about 30 cinemas, and he is probably right about it, as he has made an investigation into it. I hope the President of the Board of Trade will make some arrangements, will lay down some yardstick, about what is to be done with regard to cinemas which change twice a week.
  If one assumes that the amount of films needed in this country is enough to provide for the three circuits acting in competition with one another, provided that they change their films only once a week, 156 films a year is needed in all to do the job. That does not meet the needs of cinemas which change programmes twice a week. If the industry is to provide a quota of 45 per cent. of 156 films, it means that after next October at least 70 first feature films a year have to be made in Britain. Last year only 50 first features were made, and now 20 more will have to be made—more, I believe, than has ever been made before in this country in a year. I have been a very strong supporter of a high quota and have urged it on the President of the Board of Trade, and I am not going

  791
  suddenly to turn round on him and say it is a bad idea.
  I always assumed, and I am sure that he assumed also, that when he created this high quota he was also going to create the financial instrument which would provide finance for the independent producer. If that is not done, we are going to have Mr. Rank, who has already said that he proposes to make 60 first feature films in the year beginning in October, churning out films quite cheaply which will fulfil pleasure requirements, but which will be a curse to the British film industry and will bring us no prestige. Mr. Rank will be in the position of being able to dictate to the independent exhibitor, and to say to him that he will have to take Mr. Rank's films as well. It will not be fair for the Government to leave this whole business in the hands of Rank and A.B.C., and not to provide this instrument for the independent producer. It must be done, whether out of private resources or under Section (2) of the Borrowing (Control and Guarantees) Act.
  The other thing is that more than 70 films are going to be needed, and to make this quota work properly we must always have more films available to meet it than the exact minimum number necessary. Otherwise we are going to have always some 30 or 40 films out of the 70 which are quite useless but which the wretched exhibitor has to take, or he will not be able to fulfil his quota. If the margin is 30 or 40 above the minimum, the number required to give competition and fair choice to the consumer will necessitate the making of too first feature films in this country in a year. I believe that can be done if the Government Make that provision, if costs are brought down and efficiency is increased. But at the same time I understand that, as studios are constructed at present and with regard to the number in the country, it is going to be difficult to make more than 70 first feature films in a year.
  If this quota is going to work, my right hon. Friend must say what he is going to do about building more studios. There must be more studio space if this quota is to be made to work on a reasonable basis, and not on that bare minimum which will mean that the exhibitor has to take films which perhaps are no good to
  792
  him in order to meet his quota. It is important, if we are to support this quota, to know that my right hon. Friend is going to do something about the independent producers' finance, and that he is going to do something about more studio space—perhaps even building a Government studio or requisitioning a studio which may become empty and letting it out at a low rental. Otherwise, this quota is going to be a snare and a delusion. It is going to create a situation in which Rank, making 60 films, all of a cheap and rubbishy kind—
  Mr. Collins: Has the hon. Member any justification for suggesting that the films which the Rank organisation will make will be cheap and rubbishy, in view of the films which have already been produced? In view of what the Rank organisation proposes, he should have some justification for saying that it proposes to make 60 films and that the rest of the film producing units cannot produce more than 60 or 70 first feature films. It is to be deprecated that the suggestion should be made—although I support all that the hon. Member has said about the independent producer—that the Rank films will be cheap and rubbishy
  Mr. Wyatt: I quite agree with my hon. Friend. I think it is disgraceful that they should be cheap and rubbishy. Mr. Rank recently made a film called "Good Time Girl" and everyone in the industry, including the people who work for Mr. Rank, knew what sort of a film that was going to be. In regard to the 60 films a year there is not the studio space to make them all well. The studios are not available for independent producers to make as many as 60 in the year. Sir Alexander Korda hopes for 12 and that is all the studio space he will get. In any case, Mr. Rank will not make 60. He has been optimistic in the past and he may be wrong again. The danger is that unless the finance is provided for the independent producers they will not get the studio space. The order is very good if these two things can be provided.
  10.41 p.m.
  Mr. Maclay: There is very little I want to add to what has already been said because one is tempted to be repetitive on this Scottish problem. However, I should like the

  793
  President of the Board of Trade to clear up the point in regard to the independent producer producing sufficient films to cover even a change of twice a week in local cinemas. In reply to the hon. Member for Aston (Mr. Wyatt) I would say that there are places where if there are not three changes a week, the house is empty every other night.
  Sir William Darling: Does my hon. Friend infer that no Scottish film-goer will look at the same film twice?
  Mr. Maclay: I do not think any Scottish film-goer would go to see the same film twice. The point I am very anxious to put is that the President of the Board of Trade should make clear how he expects to get sufficient first feature films for the cinemas of this country. There cannot be enough on the figures available even for two changes per week. I should like to know if this escape clause is really going to be operative and if it is going to be reasonably easy to administer it, so that a house which changes its programme twice a week will not be rigidly held to this 45 per cent. quota. Will the right hon. Gentleman give an assurance that it will not be tortuous and difficult to get exemption? If the right hon. Gentleman makes that clear we shall be able to make some headway.
  10.44 p.m.
  Mr. Rankin: In the minute or two at my disposal I want to indicate my general agreement with the speeches of two hon. Gentlemen opposite—the hon. and gallant Member for Argyll (Major McCallum) and the hon. and gallant Member for Perth (Colonel Gomme-Duncan)—with regard to the position of Scottish independent exhibitors. My right hon. Friend in presenting the order to the House recognised very clearly that the quota of 45 per cent. was going to create difficulties for the independent exhibitors. In my opinion his statement that difficulties would be created was a slight understatement as the Scottish people see it. They feel that more than difficulties will be created; that a grave outlook will face the exhibitors in Scotland.
  It would be fair to say that the major feeling in the Debate so far has been one of disquiet over the 45 per cent. quota. Last year the independent exhibitors found it impossible to meet a
  794
  20 per cent. quota. Now that the exhibitors in Scotland are faced with a 45 per cent. quota they are obviously in a position of extreme gravity and as my right hon. Friend recognised that fact, I would ask him if it is possible to treat Scotland—and naturally I am putting the Scottish position here as a Scottish Member—in the same way as Northern Ireland has been treated, and exempt Scotland altogether from this order? Or, if that is impossible, in view of the fact that 45 per cent. is high, would he consider, as an alternative, making a lower quota? My right hon. Friend said he was faced with the difficulty of deciding whether the quota was too high or too low. But he might consider a quota of 25 per cent. in order to make the way a little easier for those halls faced with two or three changes during the week. I put these two propositions to him and I am sure that he will give consideration to them and, if possible, will help the industry by accepting, at least, the second of the suggestions I have made.
  10.47 p.m.
  Mr. William Shepherd: I take this opportunity to congratulate the Minister on the step he has taken in putting this quota at 45 per cent. Everybody knows that there is an element of risk in this percentage, but that element is justified because we must—and this is agreed, I think—develop the producing side of the industry. There is no secret in the film industry that there is a direct conflict of interest between the exhibitors and the producers. The exhibitors have paid too little regard to the matter of producing films which are a credit to our country, and films which would earn money elsewhere. I am glad that the President of the Board of Trade has not been affected by the "ballyhoo" which the producers have struck up.
  Colonel Gomme-Duncan: Does my hon. Friend think that it is "ballyhoo" that many Scottish exhibitors should go out of business?
  Mr. Shepherd: If exhibitors on the whole are troublesome, the Scots are by far the most troublesome of the exhibitors, and we might remember what we have heard tonight, that England is an appendage of Scotland.
  Sir W. Darling: So it is.
  Mr. Shepherd: What matters is the production side of the industry and there should be no break in this basis because some wretched little cinema in Scotland—
  Mr. Maclay: It is one of the arch heresies of modern days. Surely production is only important in so far as it affects consumption?
  Mr. Shepherd: I am sorry I cannot follow tonight my hon. Friend, for whose opinions normally I have a very high regard, into these abstractions. What we are faced with today is a balance of payments difficulty, and it is perfectly useless for hon. Members from north of the Tweed to imagine they are not going to prejudice the chance of producing the maximum number of films because they want them to be shown three times a week. The sooner those who come from Scotland realise that essential proposition the sooner they will have a more reasonable attitude to this problem. I do not know what the Scottish people want. They do not like English films, they do not like American films, and they have a complete distaste for French films. What I would like to see is Scottish people making their own films, and then this House would have less trouble from Scottish Members who are goaded by representations from every conceivable interest in Scotland.
  Colonel Gomme-Duncan: Does not the hon. Gentleman really think that we are here as representatives, and that when representations are made they should be attended to?
  Mr. Shepherd: I think they are here as representatives, and I feel sometimes they are in danger of being superseded by the Nationalists, and the pressure they exert in this House in some domains is so great as to outdo its usefulness.
  I feel this quota as such will not be satisfactory unless we can get the President of the Board of Trade behind the industry and reduce the time that films take on the floor. It is true that we cannot cause studios to spring up overnight, but it is ridiculous to take as much as three, four, five and six months when by careful planning in advance—a thing which hon. Members opposite should
  796
  know something about but unfortunately do not—it is possible materially to reduce the time on the floor. If we can get that time on the average down to 28 days—by no means impossible—we can produce the films. I congratulate the right hon. Gentleman on the courage he has shown on this occasion, and I hope that the industry generally will respond to the lead and give us the films of the quality and quantity we want.
  10.53 p.m.
  Mr. Collins: A number of speeches have been made which appear to suggest that the President of the Board of Trade has fixed the quotas too high. He is to be congratulated on at least fixing a target for British films to aim at. I agree with the hon. Member for Buck-low (Mr. Shepherd) that we cannot for one moment entertain the suggestion made by Scottish members—and I say this in full consciousness of the fact that for the moment they are in the majority in the House—that the home film producing industry should accommodate themselves to the peculiarities of Scottish cinemas, some of which appear to want to change their programmes three times a week.
  Mr. Willis: Surely the hon. Member realises that the arguments about the changes twice a week came not only from hon. Members representing Scottish constituencies, but from the hon. Member for Aston (Mr. Wyatt) who spoke on behalf of 3,000 cinemas out of 5,000.
  Mr. Collins: My hon. Friend the Member for Aston was at least moderate. He referred only to changes twice a week, but changes in Scotland are apparently three times a week, which is a little more than somewhat.
  Sir W. Darling: Does the hon. Member object to the Scots appreciating the cinema? Does he deprecate that?
  Mr. Collins: If I object to anything it is to the apparent lack of discrimination among the Scots. We cannot allow this peculiarity to be used as a weapon against the British film industry while the President of the Board of Trade is trying to assist it by fixing a quota as high as possible.
  The other thing I deprecate is the suggestion which the hon. Member for

  797
  Aston appeared to make that the proposed production of 60 films by one organisation would lead to very poor quality films. I am not suggesting for one moment that all the films to be produced would be of high quality or even moderate quality, but I do say that some of them will be of very high quality indeed and that but for that particular organisation we should not really have any worth-while production at all. In the interests of the British film industry, it is wrong that it should go out from this House that there is a possibility, or even a probability, that the increased production of British films will lead to a decrease in quality.
  Mr. Wyatt: The suggestion I made was that an increase in production could and probably would lead to a decrease in quality if no facilities are made available for independent producers to compete with the monopoly. Otherwise, the monopoly will be able to make any kind of film it likes, in the full knowledge that that kind of film can be shown in its own cinemas. The independent producer must be able to raise the monopoly.
  Mr. Collins: I am not suggesting, and I am not in a position to say, whether the Rank Organisation or any other organisation can produce what they hope to produce, but I do deprecate the suggestion that because they are going all out to fulfil this quota, these products will be necessarily cheap and nasty. I think it is quite wrong to suggest that for one moment.
  My main point is to support, as I always have supported, the position of the independent film producer and to reinforce, as far as I can, the remarks made by the hon. Member for West Wolverhampton (Mr. H. D. Hughes). He quoted evidence, of which I was unaware, to the effect that the independent film producers have the technicians and voluntary access to the necessary stages to produce a number of films which would justify a quota in excess of 25 per cent. I regard long-term production by the independent film producers as possibly the most important section of the film industry. I think they are going to produce what is perhaps the most worth-while part of British film production. I had hoped, therefore, that the President of the Board of Trade would investigate the possibilities of this section of the industry in
  798
  the hope that they might be granted a bigger target, if the facilities are there, in order to produce a larger proportion of the total output of British films. In so doing, they will make a really worthwhile contribution to the future of the industry.
  10.59 p.m.
  Mr. Edgar Granville: I agree with the hon. Member for Taunton (Mr. Collins). I hold no brief for Rank or indeed anyone in the film industry, but I think it would be unfortunate if there went out from the House an impression that Rank was a maker of rubbishy films. He is a monopolist and I criticise him as such; but the film industry has owed him a lot. He has great courage and it would have been unfortunate for the industry in this country if it had got into other hands than Mr. Rank's. I congratulate the hon. Member for Bucklow (Mr. Shepherd), who, I think, showed even greater courage than the President of the Board of Trade on his recent visit to Dundee, in dealing with the Scottish members. I think that he made the best suggestion of the lot when he asked why they did not set about making a Scottish Hollywood. They have men of the calibre of Sir Alexander King. Some of the really great pioneers in the industry have come from among the shrewd Scots. Scotland has every opportunity and facility to produce a Scottish Hollywood. That is the real solution; it is not to be found through quotas or representation upon the Films Council.
  I understood that the Government view was that they hoped to give the best assistance to the film industry by the Agreement with America rather than by the quotas. Now, however, we have both. The industry has every reason to thank the Government. I believe that this is the highest quota we have ever had. We have had several quota enactments, but this is the highest quota which the British film industry has ever been asked to produce. My only anxiety—and it is a very real one—is that notwithstanding the fact that there has been unemployment among technicians, camera men, lighting experts and so on, there may not he enough technicians, artists, directors and other studio workers, to enable us to produce the high quota. That we have had unemployment is part of the problem. Because we have not been producing, we

  799
  have not got the technicians. A large number of them, including stars, have already gone to Hollywood.
  Last year there were 300 defaulters of the quota obligations, and during the last ten years or so there has been a large number. There have been penalties in every Measure concerning quotas, as there are in this, but they have never been imposed, because the films were not available. That is the real problem. I hope that the right hon. Gentleman will realise that unless we have an industry able to produce the films it is not much good having a high percentage quota. We are setting the "highest ever" production target, and I am glad to see that the right hon. Gentleman has been discussing the matter with the technicians.
  We shall not get any help from the Films Council. I do not believe that Films Councils have ever made any really vital contribution to this industry. One of the curses of the industry is found in the number of people who think they know all about film production and find themselves on the council where they greatly delay and obstruct production. The right hon. Gentleman is on the right track when he talks to the cinema technicians. We have the joint consultative committees. I should like to ask the right hon. Gentleman whether he is satisfied that there is a joint production committee working effectively in each film studio. The technicians are the people who understand film production—not the super Films Council.
  I have always understood that it is not the right hon. Gentleman's policy to nationalise this industry. I am given to understand tonight that there will be no films bank available. If that is not the policy, I hope that the policy will be to liberalise this industry for the first time, giving the studio workers the opportunity to say how films should be produced through the joint production committees. If the right hon. Gentleman does that, he will get his quota.
  11.4 p.m.
  Mr. E. P. Smith: I have already spoken tonight, and I do not want to keep the House for more than about a minute and a half. I entirely agree with what fell from the lips of the hon. Member for Taunton (Mr. Collins). Coming down to brass tacks, the whole
  800
  film producing industry welcomes the new quota system. I was a little hard perhaps on the right hon. Gentleman when I spoke before; I had intended to throw him some bouquets about this and I was precluded under the Rules of Order. I should like to throw them now. The hon. Member for Bucklow (Mr. Shepherd) spoke about producing first-feature films in 28 days. It cannot be done. But I do welcome this quota system, the whole producing side of the industry will welcome it, and I congratulate the right hon. Gentleman on having arrived at this conclusion.
  11.5 p.m.
  Lieut.-Colonel Elliot: We have had a very interesting Debate, not the least interesting in that it has shown no sign of division on party lines. The Minister has received his most enthusiastic encomiums from this side, and some vigorous criticism from hon. Members opposite. It is true that a certain Northern bias has shown itself, but that is not to be wondered at, because some vigorous things have been said on the other side by the hon. Member for Buck-low (Mr. Shepherd), who must expect a fairly warm reception the next time he crosses the Border. The hon. Member for Taunton (Mr. Collins) and others talked as if this was purely a Scottish problem. It is nothing of the sort. They spoke as if the suggestion that a cinema changed its programme more than twice a week was a phenomenon absolutely unknown except in the northern Kingdom.
  Mr. Collins: What really shocked me in working out this problem of changing three times a week was the knowledge that they respected the Sabbath, and I wondered how they got three changes.
  Lieut.-Colonel Elliot: There are 1,000 cinemas who change their programmes three times a week, and not more than 100 are in Scotland. The hon. Member shows gross ignorance of the matter. There are 5,012 active cinemas in England, Scotland and Wales, and only 800 have regular six-day bookings. The majority—3,300—have three-day bookings, and 1,000 have two-day bookings. There are 600 cinemas in Scotland, and although hon. Members have presented the Scottish case vigorously, it is a case that is common throughout the land. Hon. Members will find there are corn-plaints from the cinemas in their own con-

  801
  stituencies where, as I have shown, far and away the majority change their programmes every three days.
  The task of the President of the Board of Trade is to find a balance between the exhibitors and the distributors. The difficulty is that the Board of Trade does not believe in the Board of Trade quota. That can be proved by the facts of the case. When the Board of Trade had a 15 per cent. quota the defaulters were 681, not some 300 as the hon. Member for Eye (Mr. Granville) said. How many did they prosecute? Five.
  Mr. Granville: I said 300 last year.
  Lieut.-Colonel Elliot: Then the hon. Member was still further wrong, because last year it was 959. That is to say nearly 1,000 out of 5,000 cinemas were in default. What we fear is that an illusory figures is to be fixed and may be enforced, that will bring the whole thing into disrepute. That is a real danger, and I hope that the President of the Board of Trade will be able to enlighten us further on that matter.
  It is true that the industry—and, indeed, the whole country—are greatly indebted to Mr. Rank and to the Rank Organisation. They have produced many magnificent films. I do not believe for a moment they would turn out a lot of cheap and nasty films. I do not believe that the number of films which will have to be produced under this quota will mean that every one has to be a winner, that every one has to be a first-class film. Everyone who is acquainted with any kind of creative work, whether scientific or artistic, knows that a considerable wastage is inevitable. One cannot expect to hit the bull's-eye every time. The President of the Board of Trade himself estimated recently the maximum production from British studios at something like 75 feature films in the year. In the 12 months ended May, 1948, the three big circuits showed about 48 first-feature films, and that was nearly the total production; the total production was something of the order of 50. To double or more than double that figure will be a very considerable strain, and will require not merely a remarkable artistic achievement but a substantial amount of good luck. I am not quite sure that the President of the Board of Trade is justified in counting upon that amount of good luck.
  802
  Surely in these circumstances the Presisident of the Board of Trade will be able to give us some further information as to how he means to deal with this problem of the defaulters. He said he was putting up a figure which would put a considerable strain on the big circuits. He thought the great circuits could meet it. He said it would need to have—to use his own graphic words—"a bite in it" for the big circuits. He admitted that to fix it at that would, perhaps, bear heavily on the smaller people—on the independent people; but he said any independent exhibitor who tries and fails gets fairly lenient treatment. I think there are appeal tribunals and committees being set up to which the people in difficulties may go. I wonder if it would not be possible to have, so to speak, the trial before the conviction instead of after—I know that that is a rather revolutionary suggestion, but it might be a good idea—whether the President of the Board of Trade could in some way review the output himself, "vet," or indicate in some way or another that he really thought a sufficient number of first-rate films had been achieved or was in process of being achieved, to justify this very high figure. For it will be rather anomalous if, first, he fixes a high figure, and, second, the exhibitors' fail to meet the high figure, and third, the President exonerates them because, in the absence of an adequate number of them, it is impossible for them to meet it. That seems a reversal of the usual process, and it should be possible for him to find some other way of solving the problem.
  I have every sympathy with my hon. Friends the Member for Bucklow and the hon. Member for Ashford (Mr. E. P. Smith), but it is true that to put too sudden and too high a demand upon a creative art is to run the risk of stultifying the thing for which one seeks. Nothing could do more harm than a series of ambitious half failures.
  Mr. Benn Levy: Is the right hon. and gallant Gentleman aware that the film producers have stated that their production would be in the nature of 95 films, which is considerably more than 70?
  Lieut.-Colonel Elliot: Considerably more than 70, but considerably under the number needed. [Interruption.] Indeed, yes. I sympathise with the hon. Member,

  803
  but this is a matter of which, believe me, every one of us will hear more from our constituents. This is the sort of thing which touches an audience of 15,000,000 people a week. The President of the Board of Trade is about to regulate the entertainment of a very great number of persons. It may be a good idea or a bad idea, but it is certainly one in which a large number of people do take a great deal of interest. I am not interested at all in the problem of the exhibitors; I am not interested at all in the problem of the producers; I am concerned with the interests of the cinema-going public. After all, they are the consumers; they are the people who are right; they are the people who must be considered, who in the long run pay for all this and keep the whole thing going. Unless they are satisfied, then I fear our best intentions may well go completely astray. The President of the Board of Trade was pleased to be a little severe on what he called the "schizophrenic and sadistic" type of films now being produced. I wonder what he would have said of the Elizabethan drama some hundreds of years ago. There is no film at its most extreme which reaches the depths of schizophrenia and sadism which is reached by Shakespeare, and when it comes down to—[Interruption.] Believe me, "No Orchids for Miss Blandish" is a Saturday afternoon tea party compared with some of the works and some of the sayings of the great Elizabethan poets.
  Mr. Driberg: The English is better.
  Lieut.-Colonel Elliot: The English is better, but the morals are worse, and it was to the morals that the President of the Board of Trade was objecting. There is a certain danger in having too high a tariff. The Russian films were one of the great glories of the artistic world. The Russian films under protection have gone downhill and downhill and nobody pretends that the Russian film industry is putting out films today in any way like "The Cruiser Potemkin" or "The Good Earth" or like any other films it produced before it went in for the closed shop and the propaganda mind to which it is now hopelessly committed.
  Mr. Driberg: "The Good Earth" was American; does the right hon. Gentleman mean "The General Line?".
  Lieut.-Colonel Elliot: Not "The General Line"—I have not got the name. At any rate, "The Cruiser Potemkin" was one of the best films ever seen. I certainly have not seen any modern Russian films to compare with it. We are afraid that, in this search for the very rapid expansion of the British film industry, we may not succeed in doing what we wish to produce—an adequate number of first-rate films. We are afraid that straining the matter might do more harm than good. Some of us are a little unhappy about the high quota brought into operation at such very short notice by the President of the Board of Trade.
  11.19 p.m.
  Mr. H. Wilson: I can speak again only by leave of the House. If I have that permission, I should like to reply to one or two of the points raised. I think the Debate has shown that the House is almost as sharply divided as was the Films Council. This division, as the right hon. Gentleman said, has cut right across party lines. I shall deal with the point raised by the right hon. Member for Aldershot (Mr. Lyttelton), though he is not here now; I hope he will read it. I did not resist the figure of 35. What I did resist was the fixing of any figure at that date, because we could not at that time measure the likely supply of films. If I had accepted a figure, it would have had to be on the safe side, and this lower figure would have been regarded by the industry as the maximum as well as the minimum figure. I think it would have been a disservice if I had accepted his suggestion.
  The right hon. Gentleman has suggested that the figure of 45 per cent. is too high and, like the right hon. and gallant Member for the Scottish Universities (Lieut.-Colonel Elliot) he expressed anxiety about it, and particularly about whether the supply will be available and whether the quality will deteriorate. We all have this point in mind, but I must remind the House that it has been said by Mr. Rank that production will be sufficient for a 60 per cent. quota, and that therefore 45 per cent. is not unrealistic. The hon. Member for Huddersfield (Mr. J. P. W. Mallalieu) raised the question of the independent exhibitors. I must remind the House that there is provision in the Act for special treatment for those who face com-

  805
  petition from two other cinemas in the district.
  The right hon. and gallant Gentleman has just said that he thought I would like to see the trial before the conviction. That is our principle. That is what is happening, except that we are having the trial before the commission of the offence. That is even better, because when the effect of the trial is to fix a lower sentence than would otherwise be the case, it is a good thing to do it as early as we are doing.
  What we are doing, in fact, is to allow cinemas which are in a highly competitive position to apply for relief before the quota year begins. The Board of Trade is empowered under the Act to fix a lower quota for such cinemas if they can prove their case. In actual fact, a good number of them are proving their case, and are getting the lower quota fixed at this time. That is, I think, what the House wanted when the Act was passed. What I cannot promise to do, and what in fact it would be wrong of me to promise to do, is to grant automatic relief to these smaller cinemas, many of which are monopolies. They do not have to face competition at all, but provide a rather rapid change of programme. I certainly cannot guarantee any relief to them in advance.
  The hon. Member for West Wolverhampton (Mr. H. D. Hughes), raised the question of the short documentary film producer. I will keep an eye on his situation, and watch the point carefully, because we shall have more experience when we come to fix the quota for the next period. I am anxious to help this section of the industry, but they will depend for finance upon the rentals which will be paid to the distributors, and upon the arrangements for distribution. It might be a disservice to this section if I were to fix too high a quota now. It might result in the production of a lot of inferior films which would meet with considerable consumer resistance. The hon. Member suggested that 25 per cent. was too low. I agree with him. But I must tell him that the exhibitors thought that figure too high.
  The hon. and gallant Member for Perth and Kinross (Colonel Gomme-Duncan), made a number of remarks which went a little beyond the facts of the situation. It is certainly not the fact that this figure was dictated by the English producers
  806
  against the interests of the Scottish producers. I thought I had made it quite clear that the Films Council disagreed on the figure. This figure was fixed by myself, and I am neither a producer nor an exhibitor. There has been a misunderstanding about the position of the Scottish independent members of the Council, though I may have misled the House in what I said. It is a fact that there are more Scottish members now than there were before, even though the size of the Council has been reduced. But in addition to the Scottish exhibitors' representative, and the Mr. Hardie referred to by the right hon. Gentleman, the vacant—position that of the seventh independent member—is also being filled by a Scottish representative. It would be misleading to suggest that the place was filled in time for him to be present at the discussions last week.
  I cannot accept the view expressed that Scotland cannot take these films. I cannot accept the suggestion that we should spend more dollars directly or indirectly in order to meet the apparently strange cinema going habits of the Scots. I do not see why they should have any more privileges than anybody else. Some of the claims made for them are a little extravagant, especially the degree of variety that they want to see in the course of a week. I entirely agree with the hon. Member for Bucklow (Mr. Shepherd) that if the Scots have these desires they ought to begin a film producing industry in Scotland. They have had one or two attempts at it and have failed badly. They have got the technicians, they have the setting and scenery, and now and again they have got the weather. They have certainly got the money, and to judge from some of the performances here tonight they have got the stars. They should have no difficulty in finding enough people to man any film they make.
  I must defend my hon. Friend the Member for Aston (Mr. Wyatt) from a statement made in an interruption that he was speaking for 3,000 out of 5,000 cinemas in this country. My hon. Friend is not a circuit owner in any sense, and he was misrepresented because I know—in fact, he himself said so—that he supports the quota. He said it in a very strange way, but I know he supports it. In public he has pressed most eloquently in writing for a quota as high

  807
  as 50 per cent., and in view of that I find it difficult to understand why he now produces the argument that owing to the lack of studio space in the year commencing October, the film industry will be unable to produce a quota which is five per cent. lower than the one he publicly advocated.
  Mr. Wyatt: My right hon. Friend will allow me to say it was conditional on his providing the finance for the independent producer, otherwise this quota would not work. I have never written that a 50 per cent. quota was possible without providing the finance for the independent producer.
  Mr. Wilson: One of the arguments which my hon. Friend put in writing and which I had in mind was that a high quota would produce the finance for these producers. With that I entirely agree. When my hon. Friend suggested the figure of 50 per cent. as a quota he must have thought that the studio space was available. That was last March. If he was right in March he must be wrong now, and if he is right now he must have been wrong in March. He cannot have it both ways.
  The hon. Member for Montrose Burghs (Mr. Maclay), my hon. Friend the Member for Tradeston (Mr. Rankin) and the right hon. Gentleman referred to the large number of defaults that occurred in the past. The right hon. Gentleman suggested that the Board of Trade did not believe in a better quota because of their failure to enforce the quotas in the past. As he is well aware, the system has been changed under the new Act in that the cinemas that are in the most difficult situation are now afforded the special treatment to which I have referred. That was done in Committee to enable me to fix a higher quota for the remaining cinemas in the country. I am sorry that I missed the earlier speech of the hon. Member for Bucklow for my hon. Friends tell me that it was rather a fitful performance. In spite of that, the speech he made on this order is one with which I agree wholeheartedly almost to every word. I agree most strongly with him that the industry must plan itself more efficiently and particularly that it must get down to the question of actual time for the production of films. That is one
  808
  way in which costs can be brought down in this high cost industry. It has been said that we shall all hear from the exhibitors in our constituencies—
  Lieut.-Colonel Elliot: I said that we should hear from the public.
  Mr. Wilson: Well, whether it is the public or the exhibitors, it is a pity that I could not have signed this Agreement on 12th March because at that time both would have been so glad to see an end of the boycott that they would have been prepared to have an even higher quota. Reference has been made to the Elizabethan drama and its morals—with which I am not concerned—and to some of the things seen in the unfolding of the Elizabethan plots. But it will be agreed that the Elizabethan drama was robust, hearty, and real, and not tawdry and cheap as are some of the things seen in films which hon. Members may have seen recently. I do not think that there is any further point to which I have to reply, and although the hon. Members have expressed certain anxieties, and have put differing views, I hope that the House will give this order an uninterrupted passage.
  Resolved:
  "That the Cinematograph Films (Quotas) Order, 1948, dated 11th June 1948, a copy of which was presented on 14th June, be approved."

  MIDDLE EAST CHRISTIAN COMMUNITIES
  Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Joseph Henderson.]
  11.34 p.m.
  Mr. Skeftington-Ledge: After many weeks of balloting for this opportunity, I am very glad to be able to raise the matter tonight of the Christian communities in the Middle East, a matter which closely concerns British honour, and has important political and economic considerations in that part of the world. These age-old Christian minorities live among the Muslim populations of Syria, Persia, Iraq, and the Levant, and if I have most to say about the Assyrians it is because we are more deeply involved in their present position, and, indeed, their future—more involved than in the case of the other communities I have mentioned.
  The Christians of today in the older cities of the Middle East present a varied picture. They live dangerously. They live almost as the Christians of the pre-Christian Roman Empire lived. They follow cults and rituals of considerable perplexity. Some of them are Catholic, some Orthodox, and many of them most certainly heretical. Massacres live in their memory, and they are very much on the look-out at the present time for protectors. I think that it is quite natural that they should be critical of the Muslims among whom they live. There are the Syrian Jacobites, the Syrian Catholics, the Greek and Armenian Orthodox, the Latin and Armenian Catholics, the Maronites, whose figurehead is his Beatitude Arida, a man nearly 90 years of age, and many others. Most of their venerable leaders seem to
  810
  combine holiness with political cunning, and they bear titles which indicate in many cases their far-flung spiritual jurisdiction. Recently, for instance, there died the Melkite Patriach, Cyril the Ninth, who, expiring at the ripe age of 91, was known as Patriach of Alexandria, Antioch, Jerusalem and all the East of the Melkites, 13th Apostle, Bishop of Bishops, and Father of Fathers.
  The Assyrian Patriach whose proper title, dating from the Third Century, is, '"Patriach of the East," is, I believe, one of those attending the forthcoming Lambeth conference. I hope that he will impress on the Bishops there assembled the really tragic plight of the flock which I gather he, to some extent, looks after from a vantage point in the U.S.A. It seems to me there is very little he can do except pray for his compatriots, and use his influence to stop or at least curtail some of the absurd pronouncements which emanate from time to time from those Assyrians who are settled in America.
  The position of many Christian communities in the Middle East is especially precarious in these days. The traditional tolerance of the Arabs towards minorities in their midst has been very much strained, and has not lessened since the recent developments in Palestine, or since the announcement of the withdrawal of British troops from that country and Egypt and Iraq. Even though these people are perforce siding at the present time with the Arabs among whom they are living, this country, and I hope my right hon. Friend recognises it, should use its utmost influences to check all hostile tendencies towards them and remind the Arab States that we should view the actual persecution of all minorities in their midst with the gravest disfavour.
  No section is in greater risk and danger at the present time than that body known as the Assyrian Christians. They arc, as far as this country is concerned, in a unique position among minorities. We are indebted to them in a very special way and we have an overwhelming moral obligation towards them. Let me remind the House that they have for over 26 years been British Levy troops and their present rootless and homeless position dates back to the First World War when they left Turkish Kurdistan, and they were never re-incorporated there under the Peace Treaty as they really should have been.

  811
  No body of people in the Middle East of today has been more loyal to this country and if their disbandment from the Iraq Levy Force of the R.A.F. Regiment should take place, they will be left disarmed and unsupported to a dangerous extent. Abandoned at Habbaniyah, just on the main line of communication for the Iraq forces operating in Palestine, their situation would be serious indeed. The ill-feeling towards them is quite understandable because as British troops we have used the Assyrians during the years I have mentioned to quell rebellions and coups d'état during our occupation of Iraq.
  Do not let us forget that their record in the last war was magnificent. I have already mentioned Habbaniyah. It was there in May, 1941, during the Nazi-inspired Rashid Ali revolt and the attack on our R.A.F. station, that they held and ultimately defeated a much superior force of enemy troops. Their brilliant victory resulted in the recapture of Baghdad and it smashed all German and Japanese designs for a linkage via the Persian Gulf. At a really critical juncture during the war they made a major contribution, I contend, to the Allied cause. The fact is that a mere 1,200 ground troops and a score of our brave and daring airmen defeated a well-equipped modern Army 20 times as strong. Nazi influence in Syria, Iraq and Persia collapsed as a result of this victory and with it the possibilities of a German attack on our new Ally, Russia. The world's largest oil-belt, stretching from Maikop in Russia to Bahrein in the Persian Gulf was thenceforward safely in Allied hands. Thus, I maintain, we owe a really big debt of honour to the Assyrian Christians, as our comrades and as soldiers.
  What is their position today? In a hostile country they are facing virtual annihilation unless we do something to help. Iraq today is in chaos. Governmental authority has completely disintegrated and I am sorry to say, so far as my judgment of the position is concerned, that there is a profound anti-British mood throughout that area of the Middle East. In a letter I received the other day from a friend in Baghdad, he tells me that discipline has completely collapsed. It is considered quite normal for ordinary school children to go on deputations to
  812
  Cabinet Ministers who are so afraid of them that they not only pat them on the back but they grant all their whims and fancies in a policy of continuous appeasement. Discontent, hunger and starvation, combined with abysmal poverty, are the order of the day. What is the outcome? It is revolutionary discontent. At the present that revolutionary discontent—and we should be thankful for this—is of a negative character. But in these conditions Muslims are denouncing and speaking of Christians, who are their neighbours, in terms which the German Nazis reserved only for the Jews.
  No wonder that the morale of our co-religionists is at a very low ebb. I do not know, of course, whether the Portsmouth Treaty, which was so rashly entered upon, ever took care of the future of the Assyrian Christians. The fact remains that a new treaty seems unlikely under present conditions, as also seems the hope of the present Iraq Government, providing any security whatever, or even livable conditions, for these old soldiers of ours. I ask my right hon. Friend to explore every avenue of relief for the plight of these people. The number of men is not very large. I compute it roughly at 15,000, and I suggest to my right hon. Friend that fresh approaches should be made to the Dominions as well as to the United States of America with the object of resettling this body of Assyrian Christians. I know that some approaches have already been made—
  Mr. George Thomas: Would they leave?
  Mr. Skeffington-Lodge: They have already expressed their great desire to leave Iraq and to be settled elsewhere. Could they not be used in connection with the African groundnuts scheme? Could they not be given a new home in some part of East Africa, say in Eritrea; or what about the Broome or Darwin region of Australia where, in my judgment, they would make admirable settlers? Prejudice against them as Asiatics could, and should, be easily overcome by proper publicity as to their great qualities. I am told that it is very hard indeed to distinguish them from the best type of Greek or from similar people in South-East Europe as a whole. They are very good mechanics. During the war they were said to be the best drivers in the Orient. They are used to hard climatic

  813
  conditions. They know a great deal about agriculture and I consider that they would be a valuable asset in any country which could absorb them in its wide open spaces. The fact is that their present position is fraught with acute danger for them and also, I would add, for this country. In letters which I have seen they still express their deep though rapidly fading loyalty to Great Britain. Do not let us overlook the high strategic value of Iraq, and the need for treating properly our few remaining friends in that country. Hahbeneyeh is a key air base in that region of the world.
  I recognise our own great economic difficulties at the present time in approaching and solving this problem, and I also recognise the high cost that would be involved in resettling these people; but I contend that our good faith and honour is definitely at stake. Will my right hon. Friend at least consider making a sympathetic statement on this very human affair? Perhaps the Foreign Office would even invite three or four representative Assyrians to come over here for a talk, and to explain the position to them. Where there is a will there is a way in these matters. Pious exhortations asking them to be good Iraqis are simply useless in the circumstances in which they are placed. Only real action, which takes account of all the facts, will help them, and I look for this, and I hope not in vain, from my right hon. Friend.
  Dr. Segal: I am sure the whole House will re-echo the sentiments so movingly expressed by the hon. Member. We must all, regardless of party, have the deepest sympathy for the plight of these Assyrian Christians, who form a historic sect with roots in the remote past dating back to the earliest days of the Christian Church. Their welfare must always be a real concern to this House. At the same time, it is just as well to consider the accuracy of some of the statements which have just been made. While we all acknowledge the outstanding services of the Assyrian Christians in the R.A.F. levies during the war, the fact remains that the greater part of the burden in the Habbeneyeh revolt fell on the small English units of the R.A.F. Let us acknowledge that the members of the Assyrian community who served in the R.A.F. levies did perform outstanding services to the Allied cause. They were skilled mechanics, and devoted workers
  814
  in the R.A.F., and I think the Government did recognise that by the fact that they were not disarmed, as the hon. Member stated. When they ceased service with the R.A.F. they were all allowed to retain their arms, they were granted a generous amount of compensation, and were given extensive help from the R.A.F. in welfare and medical treatment.
  While the plight of this small community remains perhaps even greater today than it was during the war, the danger lies not simply from the surrounding Arab units, the Iraqis and Syrians, but perhaps even more from the Kurdish tribes. A plea has often been made on their behalf by the exiled leaders of the Nestorian Christians. Bishop Mar Shimun, who is exiled in New York, made an appeal which has evoked a sympathetic response from the United States. A real duty falls on this House to urge on the Minister who is to reply that H.M. Ambassador in Baghdad should keep a watchful eye on their welfare and safety, and do everything in his power to solve this age-long tragedy, which will remain—until their plight is remedied—a lasting reflection on the charity and sympathy of all communities in this country, and on the whole Christian Church the wide world over.
  11.55 p.m.
  The Minister of State (Mr. McNeil): I am sure the House is indebted to my two hon. Friends for pleading this cause with such zeal and such marked sincerity. My hon. Friend the Member for Bedford (Mr. Skeffington-Lodge) was good enough to give me some notice of what he was going to say. I must plead, however, that I did not know that he was going to attack the Portsmouth Treaty, criticise our general Middle East policy, and offer us some erudite ecclesiastical history—for which I am very grateful but on which I am completely uninformed. But on the question of this unfortunate minority of Christian Assyrians, who number about 30,000, not 15,000, I am moderately well informed. This is a question that has occupied the House at various times and the Foreign Office continuously. The Government have since 1916 attempted to address themselves to this problem, and even in my short term at the Foreign Office the Government have had a persistent flow of suggestions and of pleading on their behalf.

  815
  The question is, meantime, mainly hypothetical. These people are still in the employment of the Royal Air Force, and the Royal Air Force is responsible for their payment and for their conditions. Various schemes have been examined in an attempt to find some other place for their resettlement. Almost always the proposals have come back to the same point. It is easy to consider all the desirable places where these people might be settled, but all, because of their language and their associations, are found to be unsuitable. In the Colonies where these qualifications would not embarrass them, we come up against the second problem, that local legislatures contend that the introduction of such a number as 30,000 would prejudice the rights of the natives, and when we come to lands which are undeveloped we come up against the very substantial financial factor to which my hon. Friend has already drawn attention.
  In 1936 a scheme was worked out for resettling these men in North Borneo. A careful estimate was made of the cost, and it ran to some £400,000. I therefore imagine that today a similar calculation would prove to be about £1,500,000. I had some experience of this kind of calculation and of this type of problem when I was associated with the International Organisation for Refugees. One other suggestion has been made by my hon. Friend, that they should be absorbed into the groundnuts scheme in Tanganyika. This does not rate at all, because the Tanganyika authorities laid it down as a condition that the workers should depart on the completion of that scheme. Therefore, there can be no question of settling these Assyrians under this scheme.
  I regret to have to be, if not pessimistic, so cautious, but I do not want to mislead this unfortunate minority or any of their friends in the House. It is, perhaps, rather easy advice to say they should attempt to become good Iraqis. It is quite relevant to point out that they have attempted to do that for rather more than 30 years, not always with complete success. Nevertheless, when we have upon our hands so many desperate problems of resettlement of victims whose
  816
  state is even more precarious and desperate, it is obvious to everyone in the House it would be rash, and even dishonest, to say that I see any obvious opportunity of resettlement. Naturally, His Majesty's Government will be anxious to take time to consider any practical scheme directed towards that end. What I should say with firmness is this. Both my hon. Friends asked that the Government should exert themselves to protect these people. I ought to say that one of the few good byproducts in the Palestinian situation is that the traditionally tolerant attitude the Arabs have manifested towards these Christian minorities has been intensified and not, as my hon. Friend suggests, diminished during this unfortunate period. However, if there were any indications that these Christian minorities, or any other minority, in the Middle East countries were threatened or any protection was not being afforded to them, my hon. Friends can be assured that His Majesty's Government will use any instrument lying legitimately to their hand to impress upon the Governments of the Middle East their obligations as members of the United Nations and our expectations of them in this matter. But I would be most careful to conclude by saying that these people economically are still a charge on the R.A.F. Regiment. All our information goes to show that the traditional tolerance of the Iraqi Government towards these people is being maintained and I see them meantime in no danger.
  Mr. Driberg: If Mar Shimun, or any other responsible spokesman of the Assyrians, comes over for the Lambeth Conference in a few weeks, will my right hon. Friend see him and talk over the problem with him?
  Mr. McNeil: I see no reason why I should not.
  The Question having been proposed after Ten o'Clock on Thursday evening and the Debate having continued for half an hour, Mr. DEPUTY-SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at Four Minutes past Twelve o'Clock a.m.

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Preamble
The House met at four of the clock, The EARL OF DROGHEDA on the Woolsack.
Prayers.
  UNIVERSITY OF SHEFFIELD(LANDS) BILL.
  Read 3a, with the Amendments, and passed, and returned to the Commons.
  ASCOT RACE COURSE BILL.
  Read 3a, with the Amendments, and passed, and returned to the Commons.
  WILLIAM BROWN NIMMO CHARITABLE TRUST (AMENDMENT)ORDER CONFIRMATION BILL.
  Read 3a, and passed.
  CHURCH OF SCOTLAND TRUST (AMENDMENT) ORDER CONFIRMATION BILL.
  Read 3a, and passed.

  NATIONAL ASSISTANCE (DETERMINATION OF NEED) REGULATIONS.
  4.5 p.m.
  LORD CHORLEY: My Lords, I beg to move that the Special Order, as reported from the Special Orders Committee yesterday, be approved. These regulations are all of some importance and perhaps I ought to say a word in support of them; I assure your Lordships it will be a very brief one. Your Lordships will recollect that on April 29 last, you gave a Third Reading to and passed the National Assistance Bill. That measure provides for a comprehensive State service of financial assistance according to need, and it replaces a variety of existing services. The new service is to be administered by the National Assistance Board, and in deciding whether a person is or is not in need
  932
  and as to the extent of his need, the Board, acting through their local officers, must give effect to regulations made by the Minister of National Insurance. But before the Minister can make those regulations, he has to submit them in draft to both Houses of Parliament and obtain approval by an affirmative Resolution. The draft before your Lordships is the draft of the regulations which were debated last evening in another place, found acceptable and approved. I ask your Lordships to adopt this Motion, and substantive regulations in the terms of the draft will then be made to come into operation on July 5. That is the day which is also appointed for the commencement of the National Insurance schemes, the National Health Services Act and the Children Act. So it will become—I am sure your Lordships will agree—a red letter day in the history of social legislation in this country. I beg to move.
  Moved, That the Special Order, as reported from the Special Orders Committee yesterday, be approved.—(Lord Chorley.)
  LORD LLEWELLIN: My Lords, so far as I know, these regulations are quite acceptable. I believe that they have been worked out very carefully, and I know some of the people who have been concerned in working them out. Certainly we, on this side of the House, have no objection to them.
  On Question, Motion agreed to.

  PENSIONS (INCREASE) ACT(EXTENSION) ORDER, 1948.
  LORD WALKDEN: My Lords, I beg to move that an humble Address be presented to His Majesty praying that the Pensions (Increase) Act (Extension) Order, 1948, as reported from the Special Orders Committee yesterday be made in the form of the draft laid before Parliament.
  Moved, That an humble Address be presented to His Majesty, praying that the Pensions (Increase) Act (Extension) Order, 1948, as reported from the Special Orders Committee yesterday, be made in the form of the draft laid before Parliament.—(Lord Walkden.)
  On Question, Motion agreed to: the said Address to be presented by the Lords with White Staves.

  AGRICULTURE (SCOTLAND) BILL.
  4.8 p.m.
  Order of the Day for receiving the Report of Amendments read.
  LORD MORRISON: My Lords, I beg to move that this Report be now received.
  Moved, That the Report be now received.—(Lord Morrison.)
  THE EARL OF SELKIRK: My Lords, may I, at the outset, make one general statement? On page 7 of this Bill an amendment to the draft has been made without authority of the House. From line 24 on that page "subsection (1)" has been removed before the words "section thirty-seven" I would like confirmation from His Majesty's Government that that amendment is correct.
  LORD MORRISON: My Lords, the answer to the noble Earl is that Clause 37 of the Bill as originally introduced contained two subsections. Subsection (2) was deleted by Amendment in the House of Commons. Consequently, what had been subsection (1) of Clause 37 became the whole context of Clause 37. The deletion of the words "subsection (1)" was therefore carried out as a matter of consequential printing correction in exactly the same way as subsections in a clause are re-numbered when a subsection is added or dropped out or clauses in a Bill are re-numbered when a new clause is inserted. As an illustration, may I point out that the noble Earl has an Amendment in the form of a new clause on the Paper to-day. I am not going to say now whether it will be accepted or not, but if it were accepted the whole of the numbers of the clauses subsequent to that would have to be amended. Those alterations would not require any special notice; such things are done as a matter of form. It is, indeed, a matter of everyday use. The making of such corrections takes place in nearly all Bills, and it is a necessary practice if the sense of a Bill is to be preserved following Amendments.
  On Question, Motion agreed to.
  Clause 5 [Compensation for disturbance]:
  LORD MORRISON LORD MORRISON moved, in subsection (7), to omit "six" and insert "nine" The noble Lord said: My Lords, this is in the nature of a drafting
  934
  Amendment, designed to give effect to a suggestion made in Committee by the noble Earl, Lord Selkirk, that the period of six months stipulated in subsection (7) of Clause 5 should be altered to nine months to bring it into line with the period of nine months stipulated in subsection (1) (a) of the clause. I am grateful to the noble Earl for having drawn attention to the point.
  Amendment moved—
  Page 7, line 12, leave out ("six") and insert ("nine").—(Lord Morrison.)
  THE EARL OF SELKIRK: My Lords, I thank the noble Lord for this Amendment.
  On Question, Amendment agreed to.
  Clause 7 [Restrictions on termination by notice of tenancies of holdings]:
  7.—(1) Where notice to quit a holding or part of a holding is given to the tenant there of, and not later than one month from the giving of the notice to quit the tenant serves on the landlord notice in writing requiring that this subsection shall apply to the notice to quit, then, subject to the provisions of the next following subsection, the notice to quit shall not have effect unless the Secretary of State consents to the operation thereof.
  (2) The last foregoing subsection shall not apply—
  (c) where permanent pasture has been let so that subsection (5) of section five of this Act applies to the lease;
  LORD POLWARTH LORD POLWARTH moved, in subsection (2) after paragraph (c) to insert:
  (d) Where the notice to quit relates to the garden of a dwelling house which garden was immediately prior to being let in one occupation with such dwelling house and such dwelling house has not been let to the tenant of the garden."
  The noble Lord said: I beg to move this Amendment on behalf of my noble friends, Lord Kinnaird and the Earl of Arlie, who have both asked me to say how much they regret that they are unable to be present to-day owing to important public business in Scotland. Your Lordships will remember that in Committee we moved an Amendment to this clause with the object of excluding gardens and private policies from the security of tenure provisions of the Bill. The noble Lord, Lord Morrison, was able to come some way to meet us on the question of policies, for which we are duly grateful. He also showed some sympathy on the matte of gardens, but

  935
  explained that there were certain difficulties in making a provision to cover them. I do not intend to go over the whole ground again and repeat the reasons for excluding gardens from the security of tenure provisions. This Amendment is a straightforward attempt to meet the case. The noble Lord, Lord Morrison, said on Committee stage that he would look into the matter again to see if there were any possibility of meeting a straightforward case, and I hope that this Amendment may be able to supply that possibility. I beg to move.
  Amendment moved—
  Page 8, line 41, at end insert the said new paragraph.—(Lord Polwarth.)
  LORD MORRISON: My Lords, the noble Lord has given a perfectly accurate account of what happened at a previous stage. For reasons which I will now explain and which I hope will satisfy the noble Lord, I am sorry I am unable to accept the Amendment. We discussed in Committee an Amendment put down by the noble Earl, Lord Airlie, and I said that any cases of gardens should be considered on their merits within the general framework of the clause. It is true that I undertook to consider further what I described as the case of the "straightforward" garden, to see whether it were possible to achieve a definition of such a garden which could not, as I put it, open the door too wide to a whole variety of questions that might arise. I am grateful to the noble Lord for moving the present Amendment, which I appreciate has been prepared in a sincere endeavour to meet the suggestion I made in Committee.
  I have carefully considered this matter, in conjunction with my right honourable friend, the Secretary of State, and I should like to give one or two reasons why the Amendment cannot be accepted. It must be kept in mind that Clause 7, as a whole, represents a careful definition of Government policy, applicable both to England and to Scotland, on this very vexed question of the measure of increased security of tenure which should be given to our tenant farmers in the wider context of the Government's agricultural policy as a whole. From this point of view, a garden, once let on lease for agricultural purposes, becomes just as much an agricultural holding as would ten acres
  936
  of land or a whole farm. That being so, and keeping in mind the general layout of the clause, there is no reason why resumption as of right should be allowed in the case of a garden let on lease any more than in the case of any other agricultural subject. The Secretary of State, after consideration of the views expressed in your Lordships' House, is not inclined for his part to agree to any exception being made in the clause in the case of garden ground, and he is satisfied that in another place a very firm stand would be taken on this question. He is not disposed to agree to any whittling away from the general principles of the clause by the inclusion of further exceptions to its provisions.
  Your Lordships will recognise, I hope, that the clause as it stands permits all the circumstances of each individual case to be brought to the Secretary of State for investigation, and that the Secretary of State may be relied upon to exercise the discretion accorded to him under the clause in a fair and equitable manner. Moreover, when the decision of the Secretary of State is not acceptable to either party concerned, there is a right of appeal to the Land Court, a body which, as your Lordships have assured me in another connection, possesses the confidence and respect of owners of land throughout Scotland. Under the clause, the Land Court will be in a position to examine the the facts of the case de novo and to reach an independent and binding decision in the matter. In view of the fact that the clause as it stands is specially designed to ensure that full opportunity should exist for a proper consideration of any application by an owner for consent to a notice to quit where a tenant objects to its becoming effective; in view of the fact that there is full scope for appeal to the Land Court if the decision of the Secretary of State is not acceptable to either of the parties; and in view of the fact that the clause as a whole represents firm Government policy on this question, I hope that the noble Lord will be willing not to press his Amendment further.
  LORD POLWARTH: My Lords, I should like to thank the noble Lord for his extremely detailed reply. I cannot say we were particularly optimistic that the Government would budge on this point, and we certainly do not intend to press it. I can only say that we will put

  937
  the situation on record. We feel that owners in future will not be well advised to let their private gardens on lease, but will be well advised to take every possible step to keep their gardens in hand and, if necessary, have the cultivation, and so on, carried out on contract rather than to enter into a lease. I beg leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  THE EARL OF SELKIRK THE EARL OF SELKIRK moved, after subsection (2) to insert:
  "(3) Subsection (1) of this section shall not apply with respect to any part of a holding which part of a holding is temporarily in the occupation of and worked by the tenant or occupier of an adjoining holding where the landlord on the termination of the agreement under which the said part of a holding is so occupied is desirous in the interests of efficient farming that it should revert to the holding of which it previously formed part."
  The noble Earl said: My Lords, I have put down this Amendment with slight variations in order to meet the minor request which the noble Lord made on Committee stage. This again deals with the much vexed question of Clause 7. I particularly regret that the noble Lord should say that it represents Government policy. If this was covered in the English Bill, it means that we are discussing something which has already been decided when we come to the Scottish Bill. Was this matter already decided? If that is the case, why were we not told? I took no part in the discussions on the English Bill, but had I known this I would then have advanced the argument. It is most unfair to have a Bill decided before it comes to this House, and then for it to be said that we cannot amend it.
  The point is that a tenant farmer would be allowed to let a field to a neighbouring farmer if he does not want to farm it himself. It allows a certain amount of mobility and prevents fixity on a certain type of farm. Clause 7 applies only to sub-tenants or to owner-occupiers; it does not strictly apply to the landlord at all. There are two grounds on which the owner-occupier is able to regain his farm under Clause 7. One is that he can show that it is in the interests of efficient farming, and the other that he can show hardship. If those are the only reasons for which he can get back his field, he will let it in circumstances where he can show quite definitely that he is a
  938
  more efficient farmer than the other man, and where he is sure that the other man cannot claim hardship. In other words, he will let it to a man who is a bad farmer and comparatively well off. It is much harder to tell a "hard luck" story against some one who is not so well off than it is to tell one against somebody who is well off. I suggest that in the interests of efficient farming there should not be this fixity of tenure, which will prevent farmers who, through age or other circumstances, desire to let their own field to their neighbour, from so doing. I submit that this is not an incursion even into the policy of Clause 7; it is simply an extension of what I have described as neighbourliness, which has been going on all the time.
  The noble Lord, Lord Morrison, has said that he has great experience in dealing with hardship in relation to houses. With, great respect, hardship in land has nothing to do with hardship in houses. Everybody should have a house, and it is one of the hardships in this country that they have not. But one car not possibly say that because a man has not got a farm, that in itself is a hardship. I mention that matter only in passing. The real issue is that farms will not be let, except in conditions where the man who is to farm them is not efficient, and where he cannot tell a "hard luck" story. I beg to move.
  Amendment moved—
  Page 8, line 49, at end insert the said subsection.—(The Earl of Selkirk)
  LORD MORRISON: My Lords, to begin with, I must say that I do not accept the noble Earl's statement with regard to what I said on the previous Amendment, that Government policy merely means slavishly following the English Act. The sense in which I used the term "Government policy," as I think he will appreciate if he reflects for a moment, does not mean English Government policy but the policy of the Government as a whole, in which Scotland, as well as England, is included. It was to the policy of the Government as a whole, and not to the English section alone, to which I was referring. The noble Earl is correct in saying that, when I spoke on the Amendment in the Committee stage of this Bill, I assumed—erroneously as it turned out, and I admitted it immediately afterwards

  939
  —that the noble Earl might not have subtenancies in mind. I now understand that that was, in fact, what he intended, although he is also concerned about the letting of parts of their holdings by owner-occupiers. So far as owner-occupiers are concerned, there can be no question of sub-letting. If an owner-occupier lets his land, he creates not a sub-tenancy but a tenancy. I am afraid the termination of such a tenancy will have to be left to be dealt with under the provisions of the clause. On this footing, if the basis of an application for the Secretary of State's consent to a notice to quit is to secure more efficient farming, and the owner-occupier can establish the point, he need have no apprehension as to the decision. Moreover, if he has let the land for a fixed and definite period, he can found his application on hardship as well as on efficient farming.
  On the question of hardship, I should like to take this opportunity of emphasising that hardship is not confined to financial hardship. I appreciate the argument of the noble Earl, that there is a substantial difference between hardship in a person not having a house in which to live and hardship in regard to land. But when hardship is pleaded in regard to houses, it is not financial considerations that are important. I would emphasise that in cases such as the noble Earl has mentioned, hardship is not confined to financial hardship.
  Sub-letting is a matter between tenants and their sub-tenants, and except where, in sub-letting, a tenant is in breach of the terms of his lease, the landlord does not normally come into the picture until the termination of the lease he has granted to his own tenant. It has been recognised that the question of sub-tenancies requires special consideration and exceptional treatment. Noble Lords will be aware that in subsection (8) (e) of the clause the Secretary of State is empowered to make regulations, on the one hand, for excluding the application of subsection (1) in relation to sub-tenancies in such cases as may be prescribed and, on the other hand, for safeguarding the interests of sub-tenants. In view of what I have said on the previous Amendment, and repeated in my first sentence in regard to this one, about the careful manner in which this clause has been framed to
  940
  reflect the Government policy on this important question, and for the reasons which I have stated, I am afraid that I cannot accept this Amendment.
  THE EARL OF SELKIRK: The noble Lord has not in any way met my point that tenants will be reluctant to let their farms to neighbours, because they have no assurance of getting them back; and that if they do so it will be in circumstances not desired by this Bill. However, I do not propose to press the matter, and I beg leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  4.20 p.m.
  Clause 11 [Variation of rent of holdings]:
  LORD MORRISON LORD MORRISON moved to omit "of an arbiter." The noble Lord said: My Lords, this Amendment, which is of a drafting character, has been put down following consideration of a suggestion made by the noble Earl, Lord Selkirk, in Committee. He suggested that it should be made clear that in cases where arbitration as to the rent of a holding is undertaken by the Land Court instead of by an arbiter, the date of any direction by the Court that the rent of the holding should continue unchanged should rank as the commencement of the five years' period which must elapse before it is competent for the tenant to apply again for revision of his rent. The deletion of the words "of an arbiter" will, it is hoped, give effect to the noble Earl's suggestion. I beg to move.
  Amendment moved—
  Page 14, line 5, leave out ("of an arbiter").—(Lord Morrison.)
  THE EARL OF SELKIRK: I should like to thank the noble Lord for this Amendment.
  On Question, Amendment agreed to.
  Clause 25:
  Construction, citation and application of Part I.
  (2) Without prejudice to section forty of the Act of 1923 (which relates to land belonging to His Majesty in right of the Crown) it is hereby declared that the provisions of the Agricultural Holdings (Scotland) Acts, 1923 and 1931, and this Part of this Act and the Schedules therein referred to apply to land notwithstanding that the interest of the landlord or the tenant thereof belongs to a government department or is held on behalf of His

  941
  Majesty for the purposes of any government department; but in the application thereof to any land belonging, or an interest in which is held, as aforesaid the said provisions shall have effect subject to such modifications as may be prescribed.
  4.30 p.m.
  LORD POLWARTH LORD POLWARTH moved, in subsection (2), after "such" to insert "necessary" The noble Lord said: My Lords, some of your Lordships will remember that we moved a similar Amendment to this on Committee stage. The object was to ensure that the last words of Clause 25 did not, in fact, enable the Government or a Government Department to evade their responsibilities as an owner or occupier of land. Those are the responsibilities laid down in the first Part of this Bill with regard to good estate management, good husbandry, the provisions of security of tenure and so on. On both the Second Reading and on Committee stage the noble Lord, Lord Morrison, gave; us assurances that any modifications which were intended to be made in the case of Government Departments would be modifications of procedure only. I should like to make it quite clear to the noble Lord that I have complete faith in his assurances as such, but I am certain that most of us would agree that assurances are not a satisfactory substitute for something in the Bill. We have seen before how assurances have not been kept. In fact, I always feel that it is a little unfair to allow Government spokesmen to offer assurances, because they themselves can give no guarantee that those assurances will not subsequently be departed from.
  When I moved the Amendment on Committee stage, the noble Lord said that it was not sufficiently wide in its terms to cover all the matters which it might be necessary to deal with by way of regulation. This Amendment is an effort to meet that case. We propose to say "such necessary modifications" I hope that that is a suitable phrase. It occurs in at least two other places in this Bill. If your Lordships would look at Clause 72, with regard to proceedings of the Land Court, it says:
  "The provisions of the Small Landholders (Scotland) Acts, 1886 to 1931, with regard to the Land Court shall, with any necessary modifications, apply.…"
  942
  Again in Clause 77 (3):
  "Regulations shall be made by the Secretary of State—
  (d) for applying, subject to any necessary modifications.…"
  and so on. I think both those cases are close parallels to the ones we are considering, and they are modifications as regards procedure. Therefore, I hope the noble Lord will accept this Amendment. I beg to move.
  Amendment moved—
  Page 23, line 20, alter ("such") insert ("necessary").—(Lord Polwarth.)
  LORD MORRISON: My Lords, it might be as well if I dealt with the noble Lord's last point first, and admit at once that the words "necessary modifications" do appear elsewhere in the Bill. In Clause 72 there is no question of prescription by regulations, and the reference is to such minimum, modifications as are necessary to reconcile the differing codes covered by the Small Landholders and the Agricultural Holdings Acts respectively. Reference is also made in Clause 77 to "necessary modifications" and in Clause 78 to "such modifications as may be required." But, as I have already said, the circumstances are not strictly comparable with those affecting procedure only in Clause 25, with which we are dealing now.
  The noble Lord is perfectly correct when he says that I gave an assurance, and I am a little surprised that he does not accept the assurance but has put down the Amendment again. The assurance that I gave was, broadly speaking, that any modifications to be made will be modifications as to procedure. But I would remind the noble Lord that, apart from my assurance—which may not be worth much in his opinion—prescription will be by way of statutory instrument and Parliament, which will have the opportunity of approving or disapproving any proposed modifications. In view of the fact that Parliament will have the opportunity of approving or disapproving any modifications, I am sure that the noble Lord will not expect Parliament to be called upon to consider modifications which are not necessary. In the light of that fact, perhaps the noble Lord would not wish to pursue his Amendment further.
  THE EARL OF SELKIRK: My Lords, does the noble Lord really think that there would be no unnecessary modifications? If so, why not put the word in? It would not in any way restrict the power the noble Lord wishes to use.
  LORD MORRISON: I think the answer to that question is that it is most undesirable that the way should be left open for anybody to question in the courts the need for any modifications Parliament has approved.
  EARL DE LA WARR: My Lords, the noble Lord has rather let the cat out of the bag. The real anxiety is that these modifications—which I think I am right in saying require only negative approval —should in any way be questioned by the courts. We all know that the one anxiety of a bureaucrat to-day is to see that his decision shall not be questioned by the courts. This is a question of principle, and I hope that the noble Lord will say that he feels strongly upon this matter. It certainly is a point of principle and is not a small matter.
  LORD MORRISON: My Lords, if I may be permitted to address your Lordships again, I would like to welcome the intervention of the noble Earl into our Scottish affairs. I hope it will continue and that we may hear from him frequently in these debates, because I am sure that his excellent knowledge of agriculture would do Scotland a great deal of good. May I say that I am advised—when I get into legal matters, as the noble Lord said, I am completely out of my depth and, therefore, I use the term "I am advised"—that the regulations might, for example, prescribe that a particular type of case should be dealt with by the Land Court instead of by the Secretary of State. But it is not "necessary"—that is the noble Lord's word—that the Court should deal with the case, although it might be desirable in the view of the Secretary of State. Any other body or person might act equally well—the sheriff's court, an arbiter or even a local policeman. If, therefore, the Amendment should restrict the modification to what is necessary, it might prove to be impossible to make desirable modifications in procedure.
  VISCOUNT ELIBANK: Does that mean that unnecessary modifications may be put in the Bill? The converse to restricting
  944
  the Bill to modifications which are necessary, is to allow unnecessary modifications to be made under the Bill. I cannot understand why this word "necessary" should not be inserted. Personally, I welcome the intervention, of my noble friend Lord De La Warr in this discussion, because he has a wide knowledge of these things, and I hope that he will often intervene on behalf of Scotland. I believe the whole body of opinion is in favour of this word "necessary" which, as my noble friend has said, already appears in two other clauses of the Bill. Therefore, I would ask the noble Lord to accept the Amendment.
  LORD MORRISON: My Lords, I am sorry, but I am unable to accept this Amendment. I am advised that if the modifications must be contained in regulations which have to be approved by both Houses of Parliament, it is unnecessary to put in that they shall be necessary modifications. No one would imagine that both Houses of Parliament are going to pass modifications which are unnecessary.
  LORD POLWARTH: My Lords, I should like first to thank the noble Lords who have supported me on this point. I cannot say that I am entirely satisfied with the reply. I never for a moment doubted the sincerity of the noble Lord's assurance—I hope he does not think that. I merely pointed out that these assurances are not always lived up to in the future. I do not intend to press this point, but I would point out that so long as the Government take this attitude there is bound to be considerable suspicion about their intentions. I should have thought that if they wished the country to regard their actions without suspicion they would have included this word in the Bill. However, I beg leave to withdraw my Amendment.
  Amendment, by leave, withdrawn.
  THE EARL OF SELKIRK THE EARL OF SELKIRK moved, after Clause 25 to insert the following new clause:
  "The provisions of this Part of this Act shall not apply to any holding to which the provisions of the Small Landholders (Scotland) Acts, 1886 to 1931, respectively apply."
  The noble Earl said: My Lords, with your Lordships' permission I should like to move this Amendment, omitting the last

  945
  word but one—the word "respectively." There is in this no question of principle, I think, except that I believe it is a principle in your Lordships' House—and, indeed, it is our duty—to see that legislation, which affects the man in the street, is clear, comprehensible and such as to enable him to comply with the law without undue difficulty.
  What I seek in this Amendment is to make quite clear that Part I of this Bill, which deals with tenancies, does not apply to small holders. In Scotland, there are two entirely separate systems of land holding: the landlord and tenant system and the small holder system. They bear no relation to each other whatsoever, and they are dealt with by separate Acts of Parliament. It appears to me that the first Part of this Bill is construed as being one with the 1923 Act, and the noble Lord appears to imagine that that confines application of Part I to agricultural holdings. "Agricultural holdings" means, every single form of agricultural land in the country. I have already ventured to read to your Lordships the relevant passage in the 1923 Act, and that leaves no doubt whatsoever that it covers every form of agriculture, from market gardening upwards.
  I do not think the Government wish to upset the small holder system. It started with the crofters in 1886, and was a simple solution of an extremely difficult problem which arose after 1745 and the big changes in the structure of life in the Eighteenth Century. I am certain that the Government do not intend to upset that, but large passages in Part I of the Bill are directly contrary to the whole principle on which those Acts proceed. It should be made quite clear to the crofter and the small holder that that Part of the Bill does not apply to them. With great respect, I think it falls to the noble Lord, Lord Morrison, to explain the matter in simple and concise language. I raised this point on the Committee stage, and the noble Lord replied:
  "My information is that they are excluded, except in so far as other Acts of Parliament may apply to them."
  I do not know what that means, but even if it meant anything—and it might —all I can say is that the Amendment which I am moving does not refer to other Acts of Parliament; it refers only
  946
  to this Part of this Bill. Therefore, it appears to be exactly what the noble Lord had in mind. As I have said, there is nothing in principle between us, except that I feel very much more strongly than the noble Lord does the need of making the Statute abundantly clear. It is utterly inexcusable that there should be made a Statute in which there is any dubiety about the intention of the Government. We are shortly to have a consolidation of agricultural Acts. Now is the lime to see that the meaning is clear, and that there is no dubiety as to the intention. I beg to move.
  Amendment moved—
  After Clause 25, insert the following new clause—
  ("The provisions of this Part of this Act shall not apply to any holding to which the provisions of the Small Landholders (Scotland) Acts, 1886 to 1931, apply.")—(The Earl of Selkirk.)
  4.45 p.m.
  LORD MORRISON: My Lords, it is certainly correct that the noble Earl has been persistent, both in your Lordships' House and in the discussions we have had on the subject in the precincts of the House, in his endeavour to secure amendment in the sense now proposed. I do not blame him for being persistent, because I recognise that he feels strongly that something is lacking. But as a layman—and I frankly acknowledge my extreme reluctance and complete unfitness to embark on the discussion of and tenure in Scotland, a system of tenure which is unique, which has been evolved for many generations, and which is full of legal and other intricacies—I cannot help feeling that the noble Earl is attempting to do something that might have been done equally well in 1886, in 1911, in 1923 or in 1931—all milestones in the relevant legislation. It may be, as the noble Earl has just indicated, that there is room for clarification and codification of the long series of Acts that relate to land tenure in Scotland. But I am satisfied that this stage of the present Bill is not the appropriate occasion for attempting something that is not so simple and straightforward as the noble Earl appears to imagine. I hope the noble Earl will be prepared to withdraw his Amendment if I outline some reasons—in my opinion good reasons—for which, as I am advised, it is unacceptable.

  947
  It is suggested that because small holdings and agricultural holdings have in common the feature that they are both holdings of agricultural land, and are held by a tenant from a landlord, any enactment relating to an agricultural holding will apply to a small holding. That is not so. The position is that small holdings are a special class within the general class of agricultural holdings, and are subject to a separate statutory code differing in many respects from the agricultural holdings code. Let me give a few examples. First, certain categories of land can be the subject of a lease under the Agricultural Holdings Acts but cannot be small holdings within the Landholders Acts; secondly, the landholder is subject to special requirements in relation to the use and cultivation of his holding; thirdly, special provisions apply in relation to the fixing of the rent of a small holding; fourthly, a landholder has, subject to statutory conditions, complete security of tenure; fifthly, there is a special right of succession to a small holding; sixthly, there are special provisions with respect to a landholder's right to compensation for improvements made by him. There are other specialities, but the foregoing should suffice to show that the holding within the Landholders Acts is the subject of a distinctive code of law.
  The landholders code and the agricultural holdings code have existed side by fide for a very long period. It does not, however, appear ever to have been suggested before that it is legitimate to apply to small holdings the law relating to agricultural holdings, except in so far as Parliament has expressly so directed. The indications, in fact, point the other way. The fact that there are two codes under different names shows that the Legislature intended to give different treatment to the two types of holding, and to treat them separately. It is further evidence of the intention to keep the codes separate that where Parliament has desired to incorporate any part of the agricultural holdings code into the landholders code, Parliament has made express provision to that end. There is, moreover, the well-known rule of statutory construction, that where Parliament has passed special legislation for a special class, that special legislation is not to be regarded as varied or derogated from by general legislation, unless Parliament expressly so provides.
  948
  In the present case, Part I of the Bill is to be construed along with the Agricultural Holdings Acts of 1923 and 1931. It has never been suggested that the provisions of those Acts are applicable to small holdings in lieu of the provisions of the Landholders Acts, and there is therefore no ground for suggesting that Part I of the Bill can be applied to small holdings in lieu of the landholders code. I realise that the noble Earl, Lord Selkirk, has given much close study to this point. I am sure he will realise from the lengthy and considered reply which I have given that the Secretary of State and his advisers have not treated my noble friend's Amendment lightly but, on the contrary, have given it long and detailed consideration. Therefore I hope that the noble Earl may now be more satisfied in his mind, at least to a sufficient extent that he may not wish to press this matter further.
  LORD SALTOUN: My Lords, in the interests of clarity I should like to say that there are two types of tenant. There is the landholder and there is the small holder. We always keep them quite apart, because they sit under entirely different codes. I take it that, when the noble Lord was replying and he referred to small holdings, he meant landholdings, which are held by landholders' tenure. I want to ask the noble Lord to make it perfectly clear because there are those two types of tenant.
  VISCOUNT SIMON: My Lords, may I venture to intervene for a moment? I realise that it is most unusual for anybody other than a Scotsman or an agriculturist to intervene in a discussion of this sort, but I do so because I have followed the discussion. Although I am neither a Scotsman nor an agriculturist, and I do not make the smallest claim to have any special intimacy with the land codes of Scotland, I have followed with attention what the noble Lord opposite has said. If the noble Lord will excuse my saying so—and I hope he will accept it as a compliment—I should like to say that, if he makes many more speeches like the one which he last delivered, he will be well on the way to becoming an accomplished expert on the subject of Scots land law, which I am not. But with great respect to the noble Lord, it seems to me that to a large extent he was addressing himself to the wrong point. He gave abundant reasons—I followed

  949
  them clearly—for saying: "The Government do not intend Part I of the Bill to apply to these small holdings, these crofts." I am quite convinced that they do not because, even with my small knowledge of this subject, I can see clauses in Part I which would be quite inapplicable to such cases. That is clear to me. But that was not the point of the noble Earl, Lord Selkirk. His point was: "Ought not this Bill to make the position quite clear, so that the ordinary people, the crofters, can understand it?"
  The way in which I should have thought it would present itself was this. Of course, there are in Scotland, not two systems but at any rate a general system of land tenure, upon which has been imposed, by way of exception, the very special code—the code for the tenure of small landholders, originating, as my noble friend said, in the Crofters Acts. The first question is: Is Part I of this Act intended to apply to small holdings, as distinguished from the ordinary agricultural holdings? I am perfectly confident that the answer to that question is "No." If I may say so, the noble Lord gave a number of reasons why that must be the intention of the Government. Very well; be it so. But the next question is: "Is it quite clear in this Bill, as clear as it might be, that that is the intention and meaning of Part I?" If we suppose that some crofters—and there are many intelligent crofters—buy a copy of the Agriculture (Scotland) Act of this Session and read Part I, will it be quite plain to them that Part I does not apply to small holdings?
  I am afraid that I do not accept one statement which the noble Lord made in that part of his speech which dealt with the legal position. I do not know these things for myself, but I happen to have here a copy of the Encyclopœdia of the Laws of Scotland, a compilation which was controlled by the late Viscount, Lord Dunedin. This is the volume that contains an article on the Agricultural Holdings (Scotland) Acts. I see that the author of this article is J. S. C. Reid, who is none other than the present Member for Hillhead in another place, and was Lord Advocate. Admittedly, he is a person of the highest authority on this sort of subject. I turn to page 242 of this volume, written by Mr. Reid, and I find that he says this about the Agricul-
  950
  tural Holdings (Scotland) Act—not the Small Holdings Act but the Agricultural Holdings (Scotland) Act. He refers to the definition of "holding" in that Act, in Section 49. He goes on to say:
  "This definition provides for no minimum size, and accordingly includes holdings which come within the scope of the Small Holdings Acts"
  It is not for me to say whether or not that is right. All I know is that here is a very considerable authority, writing in this most authoritative book which was supervised by the late Viscount, Lord Dunedin, than whom there has been no greater lawyer of this generation, either in England or in Scotland. In those circumstances I think it not unreasonable for my noble friend Lord Selkirk to ask: "What is the objection to making this plain?"
  Do your Lordships recall that when the noble Lord, Lord Morrison, was making his speech, he did not dispute that "clarification"—that was his word—was needed? He seemed to think, however (as it often appears to those instructing speakers on the Government side, whatever the Government may be), that this was not a suitable occasion for clarification. That is what the noble Lord slid. It has been recorded. He did not deny that clarification might be required, but he said that this was not a "suitable occasion" for it. Why is that so? Why should not we at any rate make a beginning, and clarify the Bill in the way which my noble friend suggests? I am perfectly willing to believe that, if you put this matter before a skilled lawyer—I could even do it, myself, although I do not know Scots law—the conclusion he would come to would be that this Part does not apply to these crofts and crofters. But nobody can say that, on the face of this Bill, that is entirely clear. I know that in the legislation of Scotland there is this contrast. I observe merely that the definition of "holding" in the Agricultural Holdings Act is, according to the opinion of these very great authorities, a definition which does not provide for the exclusion of the crofts and, accordingly, includes holdings which come within the scope of the Small Holdings Act. The noble Lord has told us that he does not mean that at all, and I am perfectly sure the Secretary of State does not mean it. We are, unfortunately, rather deprived of advice on the subject of Scots law at the moment.

  951
  To everybody's deep regret, Lord Thankerton has left us, and the other Law Lord from Scotland is not available. In another place, there are Members able to argue this matter, and I have no doubt that the Lord Advocate on the one side, and Mr. Reid on the other, could put it straight in no time. There seems to be a good deal to be said for inserting this Amendment here, in this House, if only for the purpose of having it made clear by the great authorities on this subject who are Members of another place.
  LORD CLYDESMUIR: My Lords, as a layman I intervene with some hesitation in a matter which so closely concerns lawyers, but I do so as a layman who at one time had occasion to administer the land laws of Scotland. I am puzzled about this matter. It is quite clear from what the noble Lord, Lord Morrison, has said that the Government do not intend Part I to apply to crofters. I would underline the importance of the area known as the Crofting Counties in Scotland, and I fear that if the Bill passes as it stands there will at least be some doubt in the minds of many people throughout a wide area in Scotland as to whether, unintentionally, Part I of this Act should apply to them, and thereby produce a chaotic state of affairs. Lord Morrison has clearly shown us that it would be most unwise to attempt to apply Part I of the Act to crofters. I therefore underline the suggestion made by the noble and learned Viscount that it may be necessary that this should go back to another place to be cleared up by the law officers concerned. There is no point of principle between us. None of us wishes to apply this Part of the Bill to the crofters and yet, on high legal authority which I am unable to analyse, there seems to be a definite doubt as to whether it might be so applied.
  LORD MORRISON: My Lords, with the consent of your Lordships, I will make a brief reply. I am advised that in this matter there has been no difficulty up to now with regard to any of the previous measures that I mentioned. Small holders and crofters in Scotland are perfectly well aware of all their rights and, so far as I am advised, there has never been any doubt; nor is there likely to be now. I was impressed by the noble and learned Viscount's reference to Mr. Reid,
  952
  of whom I have pleasant memories from another place. Mr. Reid has written a book on this subject. As an ordinary person, I feel that it is an extraordinary thing that Mr. Reid, who was a leader of the Opposition in regard to this Bill when it was discussed word by word and line by line in another place, and who had written a book about it, did not even mention this point, nor did any other honourable Member of another place. Far be it from me to put myself in such a high position as Mr. Reid as a great authority on this matter, but if I had written a book (especially such a big book as that), I certainly would have made reference to it.
  VISCOUNT SIMON: I think I ought to intervene to say that this is a collection of articles on a series of subjects—for instance, on animals, appeals, apprentices, arbitrations and so on. It is not all on this subject.
  LORD MORRISON: What I was going to say was that the noble Lord, Lord Clydesmuir, with all his experience, apparently did not think of it when he was Secretary of State for Scotland. If I may say so with all due modesty, I agree with the noble Viscount, Lord Simon, that clarification is needed, but I doubt whether he would say that the Report stage of a Bill which has already been through all its stages in another place, and been through Second Reading and the Committee stage here, is the point at which to embark upon what may be a considerable undertaking. To be perfectly plain and straightforward—as I hope I always am—I have no authority at all to accept any suggestion of sending this Bill back to another place, and I must leave it to noble Lords opposite to do what they think is wise and prudent.
  VISCOUNT SWINTON: I hope we shall not get "hot under the collar" about this matter. We all accept the noble Lord as one of the most straightforward of our friends; but, if I may say so with great respect, he has somewhat misconceived what the function of this House is. He said that it is an extraordinary thing that here was a Bill which went through another place and, although that place contained great Scots lawyers, attention was not drawn to this matter, and it has now come to your Lordships' House and has reached the Report stage, where it is raised for the

  953
  first time. As a matter of fact, that is not so, because this particular point was raised here by my noble friend, Lord Selkirk, on Second Reading. As Mr. Morrison—Morrison minor—has said, the essential function of this House is to revise and to look and see what are the points which have been overlooked. I make the noble Lord a present of this—that none of the great lawyers on his side of the House, nor on ours, raised this point in another place when this Bill was being considered. But if it is a good point, that is all the more reason for raising it here; and, with great respect, I submit that it is a good point.
  There is no question of principle between us. The noble Lord says that the Government do not want this Bill to apply to that kind of holding. But there is a genuine doubt—and we should not have raised this point if we had not consulted with Scottish lawyers about it—as to whether the Government's intention is being carried out. Surely if there is the faintest doubt about that, it is not sensible for us, that doubt having been raised, to leave it to either a small holder or a large holder to resort to litigation and get the matter settled in the Courts. Let us accept this Amendment and put it in now. Let it go back to another place, where it was never considered, and, if the great lawyers in another place are agreed that this is an improvement—a question which they can agree in two minutes—then the matter will stand. If they are agreed that the words are unnecessary they can strike
  Resolved in the affirmative, and Amendment agreed to accordingly.
  them out, and I do not think we have a great constitutional issue about it. But I am quite clear what our duty here is—to put these words in, for the sake of clarification and to give the other place a chance of saying whether they agree.
  LORD SALTOUN: My Lords, I think there is a good deal of misunderstanding on this point. I would suggest that the noble Lord should consider whether there is any point that would be carried by accident. Why not take it back and consider it and let us bring it up on the Third Reading? There will be time to do that.
  THE EARL OF SELKIRK: My Lords, may I, with your Lordships' permission make one point? I would like to withdraw this Amendment, and move it again, not as a new clause but as a new subsection (3) to Clause 25. I believe that will be more satisfactory.
  Amendment, by leave, withdrawn.
  THE EARL OF SELKIRK: I beg to move.
  Amendment moved—
  Page 23, line 21, at end insert:
  ("(3) The provisions of this Part of this Act shall not apply to any holding to which the provisions of the Small Landholders (Scotland) Acts, 1886 to 1931, apply")—(The Earl of Selkirk.)
  On Question, Whether the said subsection shall be there inserted?
  Their Lordships divided: Contents, 37, Not-Contents, 12.

  CONTENTS.

  Sutherland, D.

  Elibank, V.

  Hatherton, L. [Teller.]

  Long, V.

  Hawke, L.

  Cholmondeley, M.

  Margesson, V.

  Killearn, L.

  Reading, M.

  Simon, V.

  Llewellin L.

  Swinton, V.

  Lloyd, L.

  Beauchamp, E.

  O'Hagan, L

  De La Warr, E.

  Balfour of Inchrye, L.

  Polwarth. L [Teller.]

  Munster, E.

  Broughshane, L.

  Rennell, L.

  Portsmouth, E.

  Carrington, L.

  Rochdale L.

  Rothes, E.

  Clanwilliam, L. (E. Clanwilliam.)

  Saltoun, L.

  Selkirk, E.

  Stanmore, L.

  Clwyd, L.

  Teviot, L.

  Arbuthnott, V.

  Clydesmuir, L.

  Teynham, L.

  Bridgeman, V.

  Hampton, L.

  Tweedsmuir, L.

  NOT-CONTENTS.

  Addison, V.

  Henderson, L.

  Nathan, L.

  Hall, V.

  Holden, L.

  Pakenham, L.

  Stansgate, V.

  Milverton, L.

  Rochester, L.

  Morrison, L.

  Walkden, L. [Teller.]

  Chorley, L. [Teller.]

  5.17 p.m.
  Clause 27:
  Powers of Secretary of State in cases of bad estate management or bad husbandry.
  27.—(1) Where the Secretary of State is satisfied that the owner of agricultural land is not fulfilling his responsibilities to manage the land in accordance with the rules of good estate management, or that the occupier of an agricultural unit is not fulfilling his responsibilities to farm the unit in accordance with the rules of good husbandry, the Secretary of State may, after affording to the owner or the occupier, as the case may be, an opportunity of making representations to the Secretary of State, whether in writing or on being heard by a person appointed by the Secretary of State, serve on such owner or occupier a notice (hereafter in this Part of this Act referred to as a "warning notice") to that effect, and so long as such notice continues in force—

  (a) any person authorised by the Secretary of State in that behalf may at all reasonable times enter upon the land to which the notice relates for the purpose of inspecting the way in which it is being managed or farmed, as the case may be;

  (b) the Secretary of State shall have the powers of direction and dispossession conferred by the following provisions of this Part of this Act.

  For the avoidance of doubt it is hereby declared that the fact that a person is both the occupier of the unit and also the owner of the unit or part thereof does not prevent the serving of notices under this subsection both in relation to farming and in relation to management.
  (2) A warning notice served under the last foregoing subsection shall specify the general grounds on which the Secretary of State is satisfied as mentioned in subsection (1) of this section.
  THE EARL OF SELKIRK THE EARL OF SELKIRK moved to add to subsection (2):
  "and shall also specify so far as practicable in what respects the person on whom the notice has been served has failed to observe the rules of good estate management or of good husbandry as the case may be prescribed in the Fifth and Sixth Schedules respectively"
  The noble Earl said: My Lords, on behalf of my noble friend the Duke of Buccleuch and Queensberry, I beg to move this Amendment. This, or a similar Amendment, was moved during the Committee stage, and Lord Morrison then said:
  "I would ask the noble Duke to leave it over to the Report stage so that I may give him a definite answer in regard to the other suggestion he has made"
  This Amendment is proposed to enable some degree of general specification to
  956
  be made in the cases of warning notices. The original Amendment, it was suggested, was too narrow and laid down too precise grounds, so we have now put down this Amendment requiring that such information as is practicable shall be given. The idea is that the warning notice should be as helpful as possible, in order to enable the farmer, if he so wishes, to better his ways and thereby to improve the standard of agriculture. I beg to move.
  Amendment moved—
  Page 24, line 23, at end insert the said words.—(The Earl of Selkirk.)
  LORD MORRISON: My Lords, I am sorry to say that the addition of the words to which the noble Earl has just referred does not remove the objections which I raised during the Committee stage, when I was unable to accept the previous Amendment in the name of the noble Duke, the Duke of Buccleuch. Whatever interpretation one places on the word "practicable," it is clear that the acceptance of this Amendment would make it necessary for the Secretary of State, when issuing a warning notice, to specify in precise detail the grounds on which the notice was based. I will not weary your Lordships by repeating the arguments I have already advanced in Committee, in an endeavour to show that the person concerned will have every opportunity to be fully informed of his shortcomings before the warning notice is actually issued to him. To attempt to specify the precise details in the notice would involve the issue of a succession of intimations, at different dates, as fresh breaches of the rules occurred and would prejudice or render difficult any subsequent proceedings that might be necessary if no improvement were forthcoming. It might not be inconceivable that an ingenious landlord or tenant could play off a Committee by remedying a specific deficiency—while allowing others to develop—in such a way as to prevent for many years the exercise of effective sanctions against him.
  The detailed statement envisaged by this Amendment would not be of value in the event of later proceedings before the Land Court. It is more than probable that the ultimate evidence on which the Committee seek to dispossess the owner or occupier may relate very largely to

  957
  matters which had not arisen when the warning notice was served, and which could not therefore have been specified if a detailed statement had been sent at that time. A detailed statement in writing would thus be of no advantage, either to the recipient or to the Land Court. I am sorry to appear unsympathetic to the desire to amend this clause. All I can say, in conclusion, is that the point raised in this Amendment has been fully considered by the Government during the earlier stages of the Bill, both in another place and in your Lordships' House, and they have reached the conclusion that they cannot see their way to amend the clause in the manner suggested.
  THE EARL OF SELKIRK: I should like to ask two questions. Will a warning notice state simply and barely that the recipient is a bad farmer, or will there be some degree of specification? The second question appears to come from the answer to the first. Is it correct to say that a notice will be given for one reason—concerned, say, with sheep—and the eviction for something entirely different?
  LORD MORRISON: My Lords, my conception of what will happen is that the first indication given will be that the person concerned will be called upon to interview the agricultural executive committee of his area. In the general discussion which will take place, he will be left in no doubt whatever about what are the complaints made against him. They may vary from month to month. For the life of me I cannot conceive that any person would get himself into the position of receiving a notice without having a very good idea of why he received it.
  THE EARL OF SELKIRK: My Lords, I beg leave to withdraw my Amendment.
  Amendment, by leave, withdrawn.
  Clause 29:
  Directions to secure good estate management and good husbandry.
  (6) Without prejudice to the bringing of proceedings under the last foregoing subsection, where a direction under this section to carry out any work is not coin plied with any person authorised by the Secretary of State in that behalf may enter upon the land to which the direction relates and any other land managed or, as the case may be, farmed in conjunction therewith, and carry out the work required by the direction, and the reasonable cost of carrying out work in the exercise of
  958
  powers conferred by this subsection shall be recoverable by the Secretary of State from the person to whom the direction was given.
  THE EARL OF SELKIRK THE EARL OF SELKIRK moved, in subsection (6), after "complied with," to insert:
  "and the Secretary of State is satisfied that an adequate opportunity has been afforded to the person to whom the direction has been given to carry out the direction."
  The noble Earl said: My Lords, this is a new point not raised on Committee stage. In the event of the Secretary of State giving directions, certain pains and penalties follow if they are not carried out. This Amendment is intended to ensure that the Secretary of State will give adequate opportunity for the recipient of directions to carry them out. For example, if a new byre were required, adequate time would have to be given to obtain a supply of materials and the necessary man-power. I think it is a reasonable and modest Amendment, and in view of the penalties which will follow upon a direction not being carried out I think it is reasonable that this opportunity should be given. I beg to move.
  Amendment moved—
  Page 26, line 49, after ("with") insert the said words.—(The Earl of Selkirk.)
  LORD MORRISON: My Lords, this Amendment would define in the Statute something to which effect might otherwise be given administratively. As the noble Earl knows, an Amendment in similar terms was tabled in another place, but was not called. I should like to thank the noble Earl for putting the Amendment down now, and I am pleased to accept it.
  On Question, Amendment agreed to.
  5.27 p.m.
  THE EARL OF SELKIRK THE EARL OF SELKIRK moved, alter Clause 31, to insert the following new clause:
  Application of Part II to landholders.
  "—(1) Notwithstanding anything contained in this Part of this Act, in the application of the foregoing precisions of this Part of this Act to land held by landholders, there shall be substituted for the references to owners of agricultural land references to landholders and the said provisions of this Part of this Act shall, subject to the following provisions of this section be read and construed accordingly.
  (2) Where a warning notice is in force in relation to the management of land held by a

  959
  landholder and the Secretary of State is satisfied that the management thereof does not while the notice is in force show satisfactory improvement and certifies accordingly the Secretary of State shall have power by order to terminate the occupier's interest in and to require him to give up his occupation of that land or any part thereof specified in the order, as from such date not earlier than three months after the making of the order as may be specified therein and to require that the proprietor shall as from the said date let it to a tenant approved by the Secretary of State:
  Provided that in any case where under this subsection the approval of the Secretary of State is withheld the proprietor may require that the matter shall be referred to the Land Court and the provisions in that behalf of Part VI of this Act shall apply accordingly.
  (3) For the purpose of this section the expression 'landholder' shall have the meaning assigned to it by the Small Landholders (Scotland) Acts 1886 to 1931."
  The noble Earl said: My Lords, I am afraid we are back here on familiar ground. We have established that Part I of the Bill does not affect small holders. Part II does. There are now existing two entirely different systems of land tenure, and what is meant by "good estate management" and "good husbandry" is carefully defined under the Fifth and Sixth Schedules. How can we operate the Bill without providing for the separate application of the two systems of land tenure, in which the management and husbandry are on entirely different bases? Frankly, I do not think we can do that. May I give one or two examples? Once one starts working the Act, what may or may not happen can be carried a long way. In Clause 29 (2) (b), the proviso says:
  "Provided that a direction…shall not be given to the tenant of a holding to carry out…on the holding any improvement falling within Part I of the First Schedule to that Act unless either the landlord has consented…"
  Under the small holdings system the landlord does not consent, and it would be quite outrageous for the tenant to ask the landlord to consent. This proviso has no application whatsoever.
  Again, subsection (4) of the same clause says the direction shall be given to the owner of the land:
  "… notwithstanding the terms of any lease to which he may be a party"
  The factor to which that applies has no relation to the owner of the land. It is no responsibility of his, and I am at a loss to see how that can be applied.
  We go on to the position where the owner of the land is dispossessed for bad estate management. If the proprietor has no responsibility whatsoever for estate management, it is a little difficult to see why he should be dispossessed. Even more curious: if he is dispossessed, who will then pay compensation? Will it be the Secretary of State, or the proprietor? This Bill has been drawn up for the landlord and tenant system and it has been pushed, without adequate application, into an entirely different system, one to which it has no relation. My new clause proposes certain ways of doing it. I do not say that it is the only way or the best way. In fact, I do not attach a tremendous importance to my clause. What I am saying is that something must be done to enable Clauses 29, 30 and 31 to apply more fully and more equitably to the particular circumstances of small holders in Scotland. I feel that it is up to the noble Lord, if I may say so, to see that, by reasonable application, some of the points I have mentioned will work in this Bill as at present framed. I beg to move.
  Amendment moved—
  After Clause 31, insert the said new clause. —(The Earl of Selkirk.)
  LORD MORRISON: My Lords, I take it that the noble Earl will have no objection to discussing this Amendment with the Amendment next but one on the Marshalled List, which I understand is a consequential Amendment?
  THE EARL OF SELKIRK: No.
  LORD MORRISON: The noble Earl said that we were largely back on old ground. That is true, so far as I am concerned, except that I am advised that these two Amendments are unnecessary. In so far as they are further evidence of the anxiety of the noble Earl to ensure that some clear distinction should be drawn between the tenants of agricultural holdings and the tenants of landholders' holdings, there is nothing that can be added to the discussion that has taken place on his earlier Amendment, which noble Lords opposite saw fit to put into the Bill. If, however, this Amendment is designed to raise a new point—namely, to safeguard the owner of a landholder's holding against the sanctions which the Secretary of State is permitted in certain circumstances to exercise under

  961
  Clauses 29, 30 and 31, then I suggest that the Amendment is unnecessary. If we go back to the initial step from which all these sanctions flow, we find in Clause 27 that
  "when the Secretary of State is satisfied that the owner of agricultural land is not fulfilling his responsibilities to manage the land in accordance with the rules of good estate management…the Secretary of State may…serve on such owner…a 'warning notice.' "
  Clearly, if the owner of a landholder's holding had no responsibilities for estate management, the Secretary of State could not take this initial step of issuing a warning notice to him, and the noble Earl's fears that the compulsory acquisition of the holding by the Secretary of State might follow would be groundless.
  The noble Earl completed his statement on this Amendment by saying that this clause which he proposes is not necessarily the only way, and not necessarily the best way, to deal with the matter. After an admission of that sort, I am sure he will not expect me to say: "Though I admit this is not necessarily the only way, or the best way, I can accept the Amendment." I am sorry I am unable to go so far as that, and I cannot accept this Amendment.
  VISCOUNT ELIBANK: May I suggest to the noble Lord that he might say he will look into the Amendment and see whether it can be worded in a better way, rather than reject it arbitrarily, as he is doing?
  LORD MORRISON: I have endeavoured to explain, that the whole of the information that is at my disposal indicates that the Amendment is unnecessary.
  THE EARL OF SELKIRK: With great respect, I put one or two questions to the noble Lord. I referred specifically to certain Parts of the Bill and asked what is supposed to happen. It is clear that what happens is not what is laid down in this Bill. Something entirely different has to happen. With great respect, I think it is something on which, even if it is not necessary to put it in the Statute, we should have some adequate explanation. Take this example. A crofter is held liable under this Bill for bad estate management, and he manages his own estate. What action is supposed to be taken if he is moved out? Who pays his
  962
  compensation? With a tenant, no compensation is due. A bad farmer would not draw any compensation. But it is clear that some compensation would have to be paid to the crofter, no matter how bad he was, because the house would probably be his property, and various other buildings would also be his property. Does the proprietor pay compensation in those circumstances, or does the Secretary of State? In this Bill it says that the Secretary of State will purchase. I take it that that is not meant. It may mean that the Secretary of State will pay compensation to the crofter, and put in someone else. I should be grateful if the noble Lord could answer those questions. If not, I would ask the noble Lord to consider the matter between now and Third Reading.
  LOUD MORRISON: The only further statement I can make is that I am advised that, as a general rule, the estate management provisions of Part II of this Bill cannot be applied to the owners of lard-holder's holdings. I am sorry I am unable to make any further statement.
  THE EARL OF SELKIRK: I beg leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  5.36 p.m.
  THE EARL OF SELKIRK THE EARL OF SELKIRK moved, after Clause 31, to insert the following new clause:
  Application of Part II to statutory small tenants.
  ".—(1) The Secretary of State may, after consultation with persons appearing to him to represent the interests of landlords and statutory small tenants of agricultural holdings, by order vary the provisions of this Act so as to modify in their application to statutory small tenants the provisions of this Part of this Act in the same way (and to such extent as he may deem appropriate) as the said provisions are modified in relation to landholders by the immediately preceding section of this Act.
  (2) In this section the expression 'statutory small tenant' has the like meaning as in the Small Landholders (Scotland) Acts, 1886 to 1931"
  The noble Earl said: My Lords, this is an Amendment dealing with the same subject, but in the case of statutory small tenants. I do not propose to press this Amendment. I would point out, however, that the noble Lord has said specifically that this Part does not apply to owners. In that case I have to refer the

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  noble Lord to certain passages in Clause 30 where specific reference is made to owners and where it is laid down that:
  "The Secretary of State shall not give to the owner of land…direction…"
  except in certain circumstances. I am afraid the interpretation is really impossible. The clause I desire to insert is purely an empowering clause for the Secretary of State. I suggest that the Secretary of State should take powers to deal specifically with this very small and somewhat varying class of landholder. In the circumstances, I hope the noble Lord will examine this matter, because I do not think it is a purely academic point. I beg to move.
  Amendment moved—
  After Clause 31, insert the said new clause.—(The Earl of Selkirk.)
  LORD MORRISON: My Lords, I gather that the noble Earl does not desire to press the Amendment. I will give him briefly such information as I possess on the matter. It is not considered either desirable or necessary to take power to modify the provisions of this part of the Bill in their relation to statutory small tenants. The tenure of this class of holder is governed by the Small Landholders (Scotland) Act 1886 to 1931 and, in some respects, by the Agricultural Holdings (Scotland) Acts of 1923 and 1931, as amended by this Bill. The relationship between these two codes, to which reference has been made in the discussion on a previous Amendment to-day, is by no means a simple matter, and I am advised that the introduction of the clause suggested by the noble Earl would not help towards a simplification of the position. No difficulty in the administration on this part of the Bill in relation to statutory small tenancies is anticipated. They form, in any event, a small and relatively unimportant proportion of the agricultural holdings in Scotland. Incidently, it would be a difficult matter to discover
  "persons appearing…to represent the interests of statutory small tenants."
  They have no central organisation and, so far as is known, no acceptable representative who could be consulted.
  THE EARL OF SELKIRK: My Lords, I would draw your Lordships' attention to the last words of the noble Lord's
  964
  statement, that there is no representative of statutory small tenants who could be consulted. That seems to be one of the major reasons why adequate provision has not been made in this Bill for that particular class of landholder. I will not press the Amendment, but I would ask the noble Lord to consider this matter further before Third Reading. I am certain that there is a point here which requires examination. I beg leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  Clause 33:
  Power of Secretary of State to take possession where occupier dispossessed and no other arrangements made.
  (9) A certified copy of an order under subsection (1) of this section requiring a tenant to give up his occupation of any land shall be a sufficient warrant for ejection against the tenant or any party in his right in the event of non-compliance with such order.
  5.40 p.m.
  THE EARL OF SELKIRK THE EARL OF SELKIRK moved, in subsection (9), after "copy" to insert "signed by the sheriff." The noble Earl said: My Lords, this is a point which was raised, indirectly, on the Committee stage. The clause, as drafted, suggests that it is the Secretary of State's intention that the sheriff's officer shall act directly on instructions issued from the Secretary of State's office. I think it is highly improper that a judiciary officer should act on the instructions of the Secretary of State, or for that matter on instructions from any Department at all. It appears to me that a judiciary officer should act invariably only upon instructions issued by the judiciary itself. This Amendment is not intended in any way to complicate the procedure or to make it more difficult, but simply to define what appears to me to be the logical position—namely, that the warrant, after signature by the sheriff, will go to the sheriff's officer, and will not proceed directly from the Secretary of State to the sheriff's officer. I think that is reasonable and, if I may say so, I consider that, in the long run, it is the proper way. I believe that during the war an abbreviated course of the nature laid down in the clause as at present drafted was taken under Defence of the Realm Regulations. But bad precedents made during the war should not be continued in peace time. If it is wrong for a judiciary officer to be instructed by the

  965
  Department, then I think this Amendment, or something similar, should be accepted by His Majesty's Government. I beg to move.
  Amendment moved—
  Page 35, line 16 after ("copy") insert ("signed by the sheriff".)—(The Earl of Selkirk.)
  LORD MORRISON: My Lords, I do not know whether the noble Earl is batting on a sticky wicket this afternoon, or whether I am—probably both of us—but here again I am unable to accept his Amendment. When the noble Earl moved his Amendment in Committee to delete the whole of this subsection, he suggested, if I understood him aright, that although the question of eviction arose at the end of a long cycle of procedure, during which adequate opportunity of appeal to the Land Court had been provided, it was desirable at that final stage that the procedure of the sheriff's court should be used before summary ejection took, place. His present Amendment is slightly different in form, but is equally unacceptable.
  The subsection provides that when the Secretary of State has exercised the responsibility placed in his hands by Parliament, and has decided that eviction of a tenant in the circumstances envisaged in this clause is necessary, an order to that effect shall be sufficient warrant for ejection. As I have mentioned, that stage cannot be reached without opportunity being provided for appeal to the Land Court, and the order of the Secretary of State follows complete investigation and proof in the same way as does a decree issued by a sheriff in a different class of case. A copy of the sheriff's decree in the latter case is sufficient to enable a successful party in the action to instruct a sheriff's officer to enforce the decree. Similarly, under the subsection, a certified copy of an order by the Secretary of State is sufficient warrant for the ejection by the sheriff's officer of the tenant concerned. The latter, be it noted, is in fact simply a squatter, and possesses no rights as tenant.
  I have said enough in Committee, and to-day, to show that, in the Government's view, there is no need for any further inquiry by the sheriff after the signing of an order by the Secretary of State. The noble Earl's Amendment, nevertheless, seeks to make the copy order bear the
  966
  signature of the sheriff before it can be executed. That would serve no useful purpose. It would either reduce the sheriff to the status of a rubber stamp or, alternatively, it would place him in the position of having to make further inquiries and possibly needing proof before appending his signature. Neither of those alternatives is desirable, and I am sorry, accordingly, that I cannot accept the Amendment.
  THE EARL OF SELKIRK: My Lords, I feel that protest is necessary that a judiciary officer should be moved by a Department. I feel that it is wholly wrong. I am not proposing any inquiry; I am not proposing any delaying action at all, and I am not proposing that the sheriff shall become a rubber stamp. What I am saying is that the certified copy has to be in order before it receives his signature. In the circumstances, I do not propose to press my Amendment, and I beg leave to withdraw it.
  Amendment, by leave, withdrawn.
  Clause 46:
  Returns of numbers, etc., of deer.
  46.—(1) The Secretary of State may by notice in writing served on the owner of any land require him to make a return in such form as the Secretary of State may require showing the number of deer of each sex which to his knowledge have been killed on the land during such period (not exceeding five years) immediately preceding the service of the notice as may be specified therein, and also a return showing the number of deer of each sex which he estimates to be on the land.
  (2) If any person on whom a notice under the foregoing subsection has been served—

  (a) fails or neglects to make the requited return within thirty-six days after the service of the notice, or

  (b) in making such a return as aforesaid knowingly or recklessly furnishes any information which is false in a material particular,

  he shall be liable on summary conviction to a fine not exceeding fifty pounds.
  LORD POLWARTH LORD POLWARTH moved, in subsection (2) (b), to omit "recklessly." The noble Lord said: My Lords, I beg to move this Amendment on behalf of my noble friend. I do not want to appear obstinate or in any way unreasonable about this clause, because we had a good deal of discussion upon it at an earlier stage. As your Lordships know, this clause empowers the Secretary of State to serve a notice on any landowner demanding that he shall furnish a return of the num-

  967
  ber of deer killed on his land during a period up to five years past, and to furnish an estimate of the deer he considers to be on his land at the time. I think some noble Lords said on Committee stage that any estimate of the number of deer on land at any time must be in the nature of a very wild estimate indeed. I do not propose to press that point any further. If His Majesty's Government are determined to have such information, in spite of its inaccuracy, I will not hinder them.
  I would, however, like to draw your Lordships' attention to the penalties which are proposed. Subsection (2) of the clause says:
  "If any person on whom a notice under the foregoing subsection has been served—

  (a) fails or neglects to make the required return…or,

  (b) in making such a return as aforesaid knowingly or recklessly furnishes any information which is false in a material particular,

  he shall be liable on summary conviction to a fine not exceeding fifty pounds."
  I do not contest the first part of that subsection. If he is required to make the return, he must make the return. But I do think the wording of the second part is rather peculiar, although I know it is a common formula to be found at the end of nearly every return of the character one has to fill up in these days. I quite agree that, if it is a question of making a return of the number of livestock on a farm or the number of tons of potatoes, a man should be able to produce a reasonably accurate answer, and, if he produces a reckless one, he should quite rightly be convicted. But it is a little unreasonable that he should be expected to produce a return of the number of deer which, as we explained before, may be completely inaccurate and, at the same time, that he should be liable to be convicted for giving reckless information. The noble Lord, Lord Morrison, himself said in Committee that it would be almost impossible to prove that an owner had given inaccurate information. If that be the case, surely it is unnecessary to provide that he shall be liable to conviction. I do not intend to pursue that point any further, but merely to suggest that the clause would be made more sensible by the omission of the word "recklessly." I beg to move.
  Amendment moved—
  Page 45, line 31, leave out ("or recklessly").—(Lord Polwarth.)
  LORD MORRISON: My Lords, now that we have emerged into the deer forests I feel on stronger ground. This is a perfectly simple and straightforward issue. As the noble Lord has said, Clause 46 requires that owners of deer forests shall make a return to the Secretary of State of the approximate or estimated number of deer in his forests. The noble Lord said, in effect, that that is almost impossible. From my investigations into the matter—not investigations on the spot—I find that when the owner of a deer forest desires to let his forest he always seems to be in a position to give what he regards as a fairly accurate esitmate of the number of deer in the forests——
  THE EARL OF SELKIRK: No; the number which can be killed, which is quite a different proposition.
  LORD MORRISON: The short point is this. No objection was taken by any noble Lord to dealing with a person who might say "I refuse to give this information," on the ground that he would be defying law and order. I am sure that none of your Lordships would for a moment countenance that. The other case is of the man who, in my opinion, is equally bad, who does not say bluntly "I will not give you this information; I will not make a return." What he does is to make a reckless return, a return not based on an estimate. I agree with what the noble Lord has said in quoting from my remarks on the Committee stage: there is no question of tying anybody down to absolute accuracy; it just cannot be done. But there is a wide difference between the man who says "I refuse to make any return", and the man who says "Well, your guess is as good as mine; put down anything." I am advised that the retention of the words "or recklessly" is legally necessary to cover the case of a person who, when called upon to make a return, furnishes information which is false in a material particular because he has made no effort whatsoever to ascertain the facts. The use of the word "recklessly" is common form. It appears in several Statutes. For these reasons I hope the noble Lord will not wish to press the Amendment.
  LORD POLWARTH: In the case that the noble Lord has just mentioned, would the point not be covered by the word "knowingly"?
  LORD MORRISON: I am advised that the word "recklessly" appears in a number of Statutes and that it is common form.
  THE EARL OF SELKIRK: "Reckless" involves a lack of care. What lack of care would be involved in not counting one's deer?
  EARL DE LA WARR: Could the noble Lord tell us what the other Statutes are?
  LORD MORRISON: The provisions of this subsection are on all fours with Section 81 (2) (a) of the Agriculture Act, 1947, which refers to the furnishing of agricultural statistical information. That is a General Act and is applicable to Scotland.
  LORD POLWARTH: I will not detain your Lordships, because I think we all realise that the inclusion of this clause in the Bill will achieve virtually nothing. I should just like to suggest that when the noble Lord pays his long-promised visit to Scotland this summer he will arrange for some of his advisers to send him out for a day with one of your Lordship's stalkers in one of your forests, so that he may spend a pleasant time in counting deer. I beg leave to withdraw my Amendment.
  Amendment, by leave, withdrawn.
  5.55 p.m.
  Clause 50:
  Prohibition of night shooting, and use of spring traps.
  50.—(1) If any person—

  (a) between the expiration of the first hour after sunset and the commencement of the last hour before sunrise, uses a firearm for the purpose of killing hares or rabbits; or

  (b) uses or knowingly permits the use of a spring trap for that purpose;

  he shall be liable on summary conviction to a fine not exceeding twenty pounds or, in the case of a second or subsequent conviction under this section, to a fine not exceeding fifty pounds.
  LORD MORRISON LORD MORRISON moved, in paragraph (b) of subsection (1) to omit "of a spring trap." The noble Lord said: My Lords, it will perhaps be for your Lordships' convenience if I discuss the next
  970
  three Amendments together, because they all deal with the question of traps for rabbits. Having left the deer forests, we are now amongst the rabbils! When this clause reached your Lordships' House from another place, it prohibited entirely the use of spring traps of any kind for the purpose of killing hares or rabbits. As I mentioned to your Lordships in Committee, I have been very impressed by your fears that if the clause were allowed to stand in its present form the effects upon agricultural production might be serious. Similar fears have been expressed by the representative organisations and by prominent members of the agricultural industry whom I met during my recent visit to Scotland. After very earnest consideration, the Government have reached the conclusion that if the interests of food production are to be adequately safeguarded—more particularly in the near future—the clause should not be allowed to stand in its present form.
  The Amendment which I now submit for your Lordships' approval has been designed in order to permit, at the discretion of the Secretary of State, the use of a steel trap in a rabbit hole for such period as may be necessary in the future to enable adequate supplies of efficient humane traps to be made available to the industry. Whether these traps take the form of that shown to your Lordships during the Committee stage by the noble Lord, Lord Amulree, and demonstrated so brilliantly by the noble Earl, Lord Airlie, or whether the ingenuity of our inventors may produce different types, of course I am unable to say. But I should like to take this opportunity of inviting, on behalf of the Government, those societies which are interested in the protection of animal life in this country and in the prevention of cruelty to animals in any form, to use their best endeavours to secure that the inventive genius of our people is fully employed in the effort to achieve a satisfactory solution of this problem, so that the Secretary of State may be able to decide as early as possible that the period during which the use of the steel trap should be authorised can be regarded as having come to an end.
  The effect of the Amendments I am going to move is threefold. First, the use of humane traps of a type approved by the Secretary of State is legalised, in all circumstances, whether in a rabbit hole

  971
  or in the open. I might add that the Secretary of State, before approving any particular type or make of trap, would undertake consultation with the responsible organisations interested in the prevention of cruelty to animals. Secondly, the Amendments provide that the use of any non-approved type of trap shall be illegal, except to the extent that it may be authorised by order of the Secretary of State for use in a rabbit hole only. On this, I might explain that the Secretary of State may well take the view that when this clause is brought into operation he should simultaneously make an order to cover the whole of Scotland, so that there should be no interruption of the present destruction of rabbits. Thirdly, it is provided that when, at some future date, the Secretary of State is satisfied that adequate supplies of humane traps are available, he will be entitled by regulations—which will be submitted to your Lordships' House—to withdraw any order or orders he may have made authorising the use of the steel trap. At that stage, the position will have been achieved—and we all hope that it will be achieved quickly—when the only traps which may be legally used will be those approved by the Secretary of State with due regard to humanitarian considerations.
  I suggest to your Lordships that these Amendments give full weight to the general anxiety displayed in your Lordships' House and in another place, that the use of the steel trap should be abolished at the earliest possible moment, while at the same time, until such abolition becomes feasible, safeguarding the interests of agriculture and avoiding any prejudicial effect on the supplies of food which are so urgently needed at the present time. Your Lordships will remember that on the Committee stage, in return for the withdrawal by several noble Lords of their Amendments on this subject, I promised that further consideration should be given. I hope these Amendments may prove satisfactory to your Lordships. I beg to move.
  Amendment moved—
  Page 47, line 15, leave out ("of a spring trap").—(Lord Morrison.)
  LORD CLYDESMUIR: My Lords, I thank the noble Lord for meeting my point. It is one which is vital to the agri-
  972
  culture of Scotland. I am bound to say that the form of the clause appears a little too complicated. It seems a rather complicated method of catching rabbits. My only anxiety is that it will catch more than rabbits, and involve some unwary farmer in penalties. That will not be so if the Secretary of State issues a comprehensive order soon after the passage of the Bill. On that assurance that it is intended so to do, we accept this Amendment.
  LORD RENNELL: May I, on behalf of my noble friend, Lord Amulree, who, as your Lordships know, is very interested in this subject and has given ocular demonstration of his interest, thank the noble Lord for the Amendment? It entirely meets his point.
  On Question, Amendment agreed to.
  LORD MORRISON: My Lords, this Amendment is consequential. I beg to move.
  Amendment moved—
  Page 47, line 16, after ("purpose") insert ("of a spring trap other than a spring trap of a type and make for the time being approved by the Secretary of State").—(Lord Morrison.)
  On Question, Amendment agreed to.
  LORD MORRISON: My Lords, this Amendment is also consequential. I beg to move.
  Amendment moved—
  Page 47, line 20, at end insert—
  ("Provided that it shall be a defence for a person charged with the offence mentioned in paragraph (b) of this subsection to prove that the trap was used under an authority granted by the Secretary of State and that it was used in a rabbit hole.
  (2) The Secretary of State may from time to time by order authorise the use for the purpose aforesaid of spring traps other than traps of a type and make approved by him, and such authority may be granted as respects all land in Scotland, or as respects the land in any county or any part of a county, or as respects any particular land or class of land, as may be specified in the order:
  Provided that when the Secretary of State is satisfied that there are available in sufficient quantities spring traps of a type and make approved by him he may by regulation withdraw all authorities granted by him under this subsection; and after such regulation has been made it shall not be lawful for the Secretary of State, unless such regulation is revoked under subsection (1) of section five of the Statutory Instruments Act, 1946, to authorise the use of spring traps other than traps of

  973
  a type and make approved by him.")—(Lord Morrison.)
  On Question, Amendment agreed to.
  LORD CLYDESMUIR LORD CLYDESMUIR moved, after Clause 61 to insert the following new clause:
  ".—(1) The Secretary of State shall as soon as possible after the end of each financial year prepare a report as to the exercise and performance by him of his powers and functions under the Agricultural Holdings (Scotland) Acts 1923 and 1931 and this Act with respect to agricultural land belonging to or acquired or farmed by him and on his policy and programme with reference thereto which report shall be laid before each House of Parliament.
  (2) The Secretary of State shall also prepare in respect of each financial year, in such form and manner and at such times as the Treasury may direct, an account showing separately the results of the discharge of his functions in relation to farming and in the management of land.
  (3) On or before the thirtieth day of November in each year the Secretary of State shall transmit to the Comptroller and Auditor General, the account prepared by him under the last foregoing subsection in respect of the financial year last ended and the Comptroller and Auditor General shall examine and certify the account prepared by the Secretary of State and lay before each House of Parliament copies of that account together with his report thereon."
  The noble Lord said: My Lords, this is a clause which will appeal to Scotsmen, as it is designed to secure the careful handling of money and the publication of accounts. I moved a clause on the Committee stage but withdrew it for further consideration. I now move it again, with slight alterations. The purpose of the clause is, first, to remove the "iron curtain" which has come down between the people of Scotland and the Department of Agriculture, due to a war-time Treasury regulation. Secondly, it is to ensure that north of the Tweed we have no less full and accurate information of the trading activities of the Department of Agriculture than is available in England of the doings of the Agricultural Land Commission, which is, as nearly as possible, a comparable body. The clause which I now move differs in two ways from that which I moved on the Committee stage. In the first place, I have added an injunction to bring forward a report, as well as to render accounts. But that is, of course, in line with the report: which has been issued in the past by the Department, and should not in any way be a contentious matter.
  974
  It is a report which is most valuable for its information, covering a wide scope of activities.
  Secondly, there was the suggestion which the noble Lord, Lord Morrison, described as impracticable, that trading accounts should be rendered for each agricultural holding. I propose that that should be replaced by an instruction to show separately the results in relation to the farming and management of land. Those are the words used in the English Act in relation to the Commission. The trading activities of the Department of Agriculture are very far-reaching and are constantly extending. The Secretary of State is the largest landowner in Scotland. He controls almost 750,000 acres of land. Besides owning land, he conducts a wide range of farming activities. Some of the work done by him, or by his Department, is experimental, and when valuable results are being achieved by experiment, I agree that an allowance for that must be made in the accounts. None the less, much of the work of the Department of Agriculture of the Secretary of State compares closely with the functions of the landowner and the tenant, of whom we hear so much in this Bill. I conceive it to be of the highest importance that full information should be available for purposes of comparison. Your Lordships will be aware that there are critics who aver that a Government Department carry out activities uneconomically. I offer to the noble Lord a candlestick on which to set the light which has been held under a bushel now for some years past. In 1940, on account of the Second World War, the Treasury stopped the publication of these accounts, but the Second World War has been over now for three years, and the publication of the accounts and the report has not been restarted.
  The form in which the accounts were previously published hardly gives the information which it is intended should be available to the public in England of the activities of their Commission. Therefore, I am moving this clause, which would ensure that such information should be available. The noble Lord may say to me that, when I was Secretary of State, I was not directly enjoined by Statute to make such a full report or lay such accounts. In point of fact, however, the

  975
  activities of the Department are constantly increasing, and this Bill is an important factor in the situation. Therefore, I feel that there is nothing revolutionary in the proposal that the Act should contain an injunction to the Government Department to report and lay accounts before Parliament. On the Committee stage, the noble Lord spoke of the existing statutory authority which now exists but which apparently has been in cold storage for a few years under the Exchequer and Audit Departments Act, 1921. As I read that Act, however, it is left to the discretion of the Treasury as to which Government Departments should be required to lay accounts and in what form they should lay them.
  I went to the Scottish Office from the Treasury, so I am in a position to know that they are generally a very good watchdog indeed. The Treasury seem to have snoozed somewhere in the last nine years, when they did not encourage the presentation of the accounts of the Department, although I agree that during the period of the Second World War the situation did demand economy, I therefore feel that the Act itself, apart from the existing statutory authority which the noble Lord quoted, should contain a clause to ensure that the public of Scotland are kept fully aware of the numerous beneficial activities of the Department of the Secretary of State. I do not think it would be an undesirable duplication; it would, in fact, be in line with other legislation, and would be a proper thing for which to ask. I hope that the noble Lord will feel able to accept this clause in its present form, and to give us an assurance that there will be a resumption of the publication of the accounts and report, in such full form as may be necessary. I know that the noble Lord would wish that such information should be available, and that criticism should not be offered, but the fact is that the people of Scotland are less well informed of the activities of their Department than those South of the Border are of the activities of the Commission. I beg to move.
  Amendment moved—
  After Clause 61 insert the said new clause. —(Lord Clydesmuir.)
  LORD MORRISON: My Lords, I am grateful to the noble Lord, Lord Clydesmuir, for having put down his Amend-
  976
  ment (although I am not going to accept it), since it enables me to amplify the statement on this question which I made in Committee, and which I think will be reasonably satisfactory to the noble Lord. In the first place, the noble Lord is probably better aware than most of us here that the Secretary of State is under a statutory obligation to submit to Parliament an annual report on the proceedings of the Department of Agriculture. It is true that there has been a dispensation from this obligation since 1939, but I am authorised to say that publication will be resumed about the spring of next year, when a report in respect of the year 1948 will be presented to Parliament. It is hoped to include in this report a section or sections dealing with the years 1939 to 1947 inclusive.
  I also referred in Committee to the proposed publication of comprehensive accounts showing separately the results of the farming and management of agricultural lands under the Secretary of State's control. I am now authorised to say that accounts in respect of the Financial year 1948–49 will be published next year. In this connection, I should perhaps mention that in general the agricultural lands coming under the Secretary of State's control are, and will be, lands of a comparatively low agricultural standard which, in some cases, have suffered from bad estate management or bad husbandry. The Department's main concern will be to restore these lands to a satisfactory condition, and the Department's farming activities—as distinct from management—will be, in the main, temporary and incidental for improvement of the lands. It would be a mistake for anyone to assume that the financial and other results from the management and the farming of such land during the period of rehabilitation may fairly be compared with the results obtainable from agricultural lands of the standard normally to be found in Scottish agriculture. With this further explanation, I hope the noble Lord will be willing to withdraw his Amendment.
  LORD POLWARTH: May I just ask the noble Lord one question? Does his statement mean that the accounts to be published will show separately the results of the Department's operations in the management of land, as distinct from those in the farming of land?
  LORD MORRISON: I think that the kind of composite account contemplated will not be really informative, in view of the differing conditions that will obtain on different properties. But I can say that in the ordinary course the Department would give in their annual report any information of special interest on this subject. I think I may also say that if there is any particular holding in which any noble Lord is interested at any time, he has only to ask the Department, and he will be given the fullest information in their possession.
  THE EARL OF SELKIRK: My Lords, I thought the noble Lord did not quite appreciate the position in which we find ourselves at the present day. The last time he spoke, on Committee stage, he quoted the Act of 1921. The Act of 1921 does not impose any statutory obligation on the Department of Agriculture for Scotland to make any report whatsoever. What it does is something quite different—namely, that if the Treasury ask them, they have to make reports in such form as the Treasury may lay down. There is nothing whatever laying a statutory obligation upon them; it is only such Departments as the Treasury may lay down; and it does not even say every Department.
  LORD MORRISON: The noble Earl knows that they have to go before the Public Accounts Committee.
  THE EARL OF SELKIRK: But, if I may say so, the Treasury are concerned primarily with speculation; they are not concerned with the economic side—and it is the economic side which we are most anxious to see clearly brought out. It is not enough to say that the Department will always be farming bad land. The noble Lord will correct me if I am wrong, but I understand that the Department are at present farming 200,000 acres. That is a very large amount of land. Is that held only temporarily, or is it a matter of permanence? It is now three years since the end of the war, and we have had no report of any sort. Can the noble Lord tell us what is the statutory dispensation, or what is the dispensation which has allowed the Department to go for eight years without making any report or any financial statement in regard to the position at the present time? I feel that it is absolutely reasonable that the land in Scotland (which, after all, is much
  978
  the same as that in England), should receive the same consideration and be the subject of the same sort of reports as are required in regard to land in England. There is nothing to indicate that at the present time there is the same kind of obligation upon the Department as there is on the Land Commission. I will not press this point any further, but I would like to have an answer to this question—namely, is it not true that this very large amount of land (over 200,000 acres) is now being farmed? And is there any statutory obligation, other than the 1921 Act, under which the Department are obliged to report?
  LORD MORRISON: I think the answer to the last point is that there is a general Treasury authority which dates back to 1939, like many other authorities that were given to the Treasury, at the time when the noble Lord was Secretary of State for Scotland. I should have thought the noble Lord's knowledge of the Small Landholders Act of 1911 might have told him that it contains the statutory obligation to publish an annual report as distinct from trading accounts. If I may say so—and I do not wish to say anything unpleasant—it is rather remarkable that, although this has been the position since 1939—a period in which noble Lords opposite have been in power for a good deal of the time and which includes the war—we have had to wait until now for it to be suggested that there is some weakness on the part of the present Government in administration, from the point of view of accounts or of reports. I may be wrong in feeling that, but I am unable to find any other explanation as to why the suggestion should suddenly have arisen that, because there is a Labour Government in this country, there should be any slackness in not seeing that the finances and accounts necessary to carry on these public undertakings are made as easily available to the public of this country as they are by any other Government.
  EARL DE LA WARR: If I may say so, that observation of the noble Lord seems singularly irrelevant. As public lands are increasingly taken over, and managed and farmed by the State, so our concern in connection with the accountancy and so on increases. The noble Lord has not quite appreciated our print.

  979
  We should not like him to think we are not grateful for the very full undertaking he has given us with regard to the accounts for the year 1948–49 and for the previous years from 1939. But an assurance on that point takes us only a portion of the way. What some of us would like to know is, why should there be this differentiation as between England and Scotland? Where these lands are taken over by the State in England they are put under the administration of the Land Commission; and when we were discussing the Agriculture Act, under which the Land Commission were set up, the Government were prepared to accept the sections with regard to accountancy that are put down in this Amendment—namely, the compulsory separate publication of the accounts for farming and for land management.
  In the case of Scotland the lands are not placed under the Land Commission, because there is no such body there; they are under a Department. The suggestion of the noble Earl, which seems to me most reasonable, is that the same provisions for accountancy as apply to lands which come under the English Land Commission should apply to lands under the Scottish Department. Surely that is reasonable. We were not satisfied—and the Government admitted that it was reasonable for us not to be satisfied, because they accepted our suggestion—with assurances with regard to land in England. Why should we now be satisfied with assurances relating to the accountancy for land in Scotland? Surely if statutory obligations are laid on the Government for the annual publication of these accounts respecting land in England, the Government should be prepared to accept entirely the same statutory obligation with regard to land in Scotland.
  LORD MORRISON: My Lords, the noble Earl, through no fault of his own, was unable to be present at our deliberations on the Second Reading and Committee stage of this Bill. Perhaps, as he was not able to be present, he will do me the honour of reading some remarks which I made in Committee explaining this particular point. I do not want to repeat myself, seeing that what I said during the Committee stage is in print.
  LORD CLYDESMUIR: My Lords, I should like to assure the noble Lord that this question has been raised by me not out of any desire to score some small point, but in support of the view that we should, in this year of Grace, be receiving adequate reports on the operations of the Department of Agriculture. It is quite true that for nine years the Treasury barred publication of these reports, and if any Secretary of State must stand in a white sheet I stand along with him, because we were all a party to that Treasury injunction. But I feel that now the bar should be removed, and that accounts and reports should be published. This matter is brought clearly into relief when we note that the English Act contains an injunction to the Commission—as the noble Lord has said—to put forward such accounts and reports. The noble Lord, Lord Morrison, has to-night given us an assurance further to that which he was able to give us on the Committee stage. I then asked him whether, on my agreeing to withdraw the Amendment, he would be prepared to say something on the Report stage.
  If I understand correctly—and I would like to be assured that I do, for I and my friends feel keenly about this matter—Lord Morrison's assurance now is that it is the purpose of the Secretary of State to bring out in the Spring of next year a report and accounts covering the present year—that is, the year 1948—and that there will also be a report covering the blank years. That, I gather, would bring up to date the reports with regard to years which have been left out—an omission for which the Secretaries of State, including myself, who held office during that period must share responsibility. Further, and to this I attach a good deal of importance, I understand it is the intention—to use the noble Lord's own words on the Committee stage—to publish:
  "comprehensive accounts…showing separately the results of the management and farming, respectively, of agricultural lands under the Secretary of State's control."
  Substantially, those are the words I use in my proposed clause. That is all we are asking for; we wish to be no better off, but, certainly, no worse off in regard to information than our friends South of the Border. While, therefore, I should like to have seen statutory provision in-

  981
  cluded in the Bill—and I do not think it is an unreasonable or revolutionary thing to ask—I will content myself now by thanking the noble Lord for his assurances (which I hope I have correctly repeated) and ask leave of the House to withdraw my Amendment.
  Amendment, by leave, withdrawn.
  Clause 68:
  Establishment and functions of Agricultural Executive Committees.
  (3) In the exercise of the functions delegated to them an agricultural executive committee shall comply with any directions given by the Secretary of State, and a sub-committee shall comply with any directions given by the Secretary of State or by the agricultural executive committee by whom the sub-committee were established.
  LORD MORRISON LORD MORRISON moved, in subsection (3), to leave out "by the Secretary of State or" and insert "(whether on the requirement of the Secretary of State or not)." The noble Lord said: I regret very much that the noble Earl, Lord Glasgow, is not present, for the Amendment which I am now proposing—the last Amendment to this Bill—has been put down because during the Committee stage, he expressed some apprehension at the fact that subsection (3) would leave the Secretary of State free, if he so wished, to issue directions to sub-committees of agricultural executive committees without the knowledge of the main committees. It was certainly not the intention that agricultural executive committees should be by-passed in this way, and I promised to put down an Amendment to make it quite clear that subcommittees will, in each case, receive directions through the main committees. I am indebted to the noble Earl for drawing my attention to the point. I beg to move.
  Amendment moved—
  Page 55, line 24, leave out ("by the Secretary of State of") and insert the said new words.—(Lord Morrison.)
  THE EARL OF SELKIRK: On behalf of my noble friend, Lord Glasgow, may I thank the noble Lord for this Amendment?
  On Question, Amendment: agreed to.

  EMPLOYMENT AND TRAINING BILL.
  6.27 p.m.
  Order of the Day for the House to be put into Committee read.
  Moved, That the House do now resolve itself into Committee.—(Viscount Hall.)
  On Question, Motion agreed to.
  House in Committee accordingly:
  [The EARL OF DROGHEDA in the Chair.]
  Clauses 1 to 6 agreed to.
  Clause 7:
  Central Youth Employment Executive.
  7.—(1) For the purpose of facilitating the establishment of a comprehensive youth employment service, the Minister may make arrangements with the Minister of Education and the Secretary of State for the performance of any of his functions under this Act in relation to persons to whom this Part of this Act applies through an executive body, to be known as the Central Youth Employment Executive, consisting of such persons, being officers of the Minister, the Minister of Education or the Secretary of State, as may be appointed in accordance with the arrangements.
  VISCOUNT BRIDGEMANhad given Notice of two Amendments in subsection (1), the first of which was to omit the word "and." The noble Viscount said: The first Amendment which stands in my name relates to the next Amendment which is printed immediately below it, and, with the permission of the Committee, perhaps I may be allowed to speak on both of them at the same time. These Amendments, I admit, were put down largely as an exploratory measure, since neither in the text of the Bill nor in the reports of any of the discussions which have taken place here or in any other place is there to be found any mention of the position of the delinquent children who are the care of the Home Office. I know quite well, of course, that delinquent children are dealt with by other Acts and could not properly be dealt with in this Bill. Nevertheless, the employment of delinquent children is a matter which is both important and difficult. The success or the failure of efforts made for the employment of delinquent children really decides whether all the work of probation officers and of approved schools has been successful or not in the case of the boys and girls affected. Therefore, though we feel that there must be some line of

  983
  demarcation between the different Acts, there ought not in practice to be such a line of demarcation.
  We desire the facilities of the youth employment service to be used to the full for delinquent children—both those who have been at approved schools and those who have been on probation. It is not an easy matter to employ such young people. Employers, when approached, have not only to think whether, out of kindness of heart, they can take such young people into their service, but they have also to bear in mind their responsibility to those who will be the fellow employees of these young people if they are engaged. They have to make certain before engaging them that it is right to employ ex-delinquents side by side with other people. For that reason we feel that the Home Office, and, no doubt, the corresponding Department in Scotland, ought to be closely associated with this youth employment service. We should welcome any statement from the noble Viscount which will reassure us that this, in fact, will be so. I beg to move.
  Amendment moved—
  Page 5, line 43, leave out ("and").—(Viscount Bridgeman.)
  THE FIRST LORD OF THE ADMIRALTY (VISCOUNT HALL): I am very grateful to the noble Viscount, Lord Bridgeman, for raising this point, because it is necessary to clear it up. He will know that under the Children and Young Persons Act, 1933, and the Children and Young Persons (Scotland) Act, 1937, a statutory obligation is placed on the managers of approved schools to assist boys and girls to find suitable employment on their release, to visit and be friend them when they have taken up work, and to provide, where necessary, financial assistance for their support. Although the present Bill, in its definition of school, excludes approved schools, the provision I have just mentioned meets the type of case the noble Viscount has in mind.
  The youth unemployment service does not regard itself as dissociated from the problem of young persons coming from approved schools. The number of approved schools is very small—though I am not suggesting that they are on that account not important or that we should
  984
  not do our best for children coming from those schools—and, in the opinion of the Government, it would be unnecessary and uneconomical to provide for an officer of the Home Office to be a member of the Central Youth Employment Executive. I assure your Lordships, however, that there is a close liaison centrally between the Executive and the Home Office, and that locally the youth employment officers will cooperate with the headmasters of approved schools in assisting them to discharge their statutory responsibilities. Similarly, youth employment officers are encouraged to work in close co-operation with probation officers, in order that their advice may be available in matters affecting juvenile delinquents. These arrangements are working to the satisfaction of my right honourable friends the Home Secretary and the Minister of Labour and National Service. I assure your Lordships that we regard this work as important, and I hope that, in the circumstances, the noble Viscount will not press his Amendment.
  VISCOUNT BRIDGEMAN: I should like to thank the noble Viscount for his full and fair statement, and to say at once that for my part I regard the state of affairs, as he has explained it, as very satisfactory. I do not feel, therefore, that I need press this Amendment. I imagine that if there were any particular reason for a representative of the Home Office to attend a meeting of the Central Youth Employment Executive without being a member, it would be departmentally possible and would be done in proper cases. I beg leave to withdraw my Amendment. I will not move the second Amendment which stands in my name.
  Amendment, by leave, withdrawn.
  Clause 7 agreed to.
  Clauses 8 to 12 agreed to.
  Clause 13:
  Notification of particulars.
  (3) Any regulations made under this section shall make provision for restricting the disclosure of any particulars furnished thereunder, for prescribing the conditions under which records of any such particulars shall be maintained and the purposes for which they may be used and for requiring such records to be destroyed after such period as may be prescribed by the regulations.
  (5) In relation to any area in which a scheme under section ten of this Act is for

  985
  the time being in force, subsection (1) of this section shall have effect as if for the second reference to the Minister there were substituted a reference to the local education authority, and as if the references to schools did not include any school maintained by that authority.
  VISCOUNT HALL VISCOUNT HALL moved, to add to subsection (3):
  "Provided that any person being a parent or the guardian of a person of whom particulars have been so furnished shall be entitled, on application to the officer having the custody thereof, to examine those particulars in his presence, but shall not be entitled to receive or take copies thereof."
  The noble Viscount said: This is the Amendment to which I referred on Second Reading. When this Bill was discussed in another place, it was generally agreed that the parent should be allowed, if he wished, to know what information was contained in the school report under Clause 13 (1). It was also generally agreed that there should be no question of a parent receiving a copy of that report, which, was to be treated as confidential. This Amendment will give parents the right to know the particulars provided by the school, if they so wish. May I remind your Lordships that, in accordance with Clause 13 (3), the particulars will be confined to the health, ability, educational attainments and aptitudes of the person to whom they relate—in short, to particulars which are essential if adequate advice and assistance is to be given in accordance with the provisions of the Bill. I beg to move.
  Amendment moved—
  Page 9, line 35, at end insert the said proviso.—(Viscount Hall.)
  LORD BALFOUR OF INCHRYE: I welcome this Amendment. I do not think any of us likes a report on a child to be shown to a third party other than the parents, but in this case I think it is necessary. If the reports are to be of value to the youth employment officer, he must feel free to write all he wants about the child. On the other hand, the parents' position must be maintained. I think this Amendment does it fairly and reasonably. I have some doubt about the prohibition of parents taking a copy, because in my own mind I cannot decide where a copy starts and where a copy finishes. If you are shown a report across the table, you must not take a copy; but if you take out a notebook and make notes of the main
  986
  points, are you or are you not taking a copy? There may be some difficulty in the interpretation of that, but in the vast majority of cases difficulty will not arise if the Act is administered in the spirit which we know will be the case. I welcome the Amendment as implementing the promise given in another place.
  On Question, Amendment agreed to.
  VISCOUNT HALL VISCOUNT HALL moved, to add to subsection (5):
  "Provided that subsection (3) of this section shall apply to any particulars kept by the local education authority in accordance with the scheme with respect to pupils of any school so maintained, as if those particulars had been furnished in pursuance of regulations made under the said subsection (1)"
  The noble Viscount said: This Amendment is consequential to the last. It is designed to give full effect to the Amendment to subsection (3) which has just been accepted. It provides simply that the regulations under subsection (3) and the facilities which will be granted to parents by the Amendment will apply equally to all particulars, whether provided by the schools under Clause 13 (1) or by the local authorities in accordance with their schemes. I beg to move.
  Amendment moved—
  Page 9, line, 45, at end insert the said proviso.—(Viscount Hall.)
  On Question, Amendment agreed to.
  Clause 13, as amended, agreed to.
  Clauses 14 to 22 agreed to.
  6.40 p.m.
  First Schedule:
  National Youth Employment Council and Advisory Committees for Scotland and Wales.
  CONSTITUTION OF COUNCIL AND COMMITTEES.
  1. The members of the Council shall be appointed by the Minister and shall be thirty-four in number, consisting of—
  (a) a chairman and four other persons (including the chairmen of the Advisory Committees for Scotland and Wales) appointed as being independent persons;
  VISCOUNT BRIDCEMAN VISCOUNT BRIDCEMAN moved in paragraph 1 (a), to delete "four" and substitute "eight." The noble Viscount said: This Amendment was put down because we feel that the free places on the Council are not quite sufficient for all the interests that should be represented. I know that the composition of the Youth Employment Council as pro

  987
  posed in the Bill is taken almost directly from the Ince Report, but I venture to suggest that one small improvement could be made. There are now, in effect, only two free places on the Council which are not taken by nominated members of one sort or another. Although there are four independent members, two are to be the chairmen of the Scottish and Welsh Committees. I think the Council would be greatly strengthened if there were more room for independent persons. It often transpires that an independent person, joining a committee in his private capacity, is more valuable than a nominee of other people. Moreover, there are various interests which ought to be represented—possibly the Services, in view of the fact that so many young people with whom the youth employment system is dealing will shortly be going into the Services and one wishes their employment to be continued. But I do not think that is so important as two other categories I shall mention.
  First, there are probation officers, of whom I will say no more, because I have already mentioned them in my previous Amendment. I think the noble Viscount took the point. Secondly, there are the voluntary youth organisations. On this side of the House, we feel that it would be a great source of strength if the voluntary youth organisations could have at least one representative on the Council. They do a great deal of work, and they cover a large number of young people. Surely, it would be to the advantage of everybody, and not least the young people, if their work were to be associated with the work of this Council. I take it that this will be a working Council, and not a mere facade body—I am sure that is not the intention. We could, by putting down Amendments, have specifically instructed the Ministry of Labour to appoint representatives of these various interests, but, after consideration (I may say that we have since had consultation with the noble Viscount, Lord Hall, for which we are grateful) we decided not to do so. We thought it would be simpler, and would give the flexibility for which we always ask on this side of the House, if we put down a straightforward Amendment increasing by four the number of free places to which the Minister could nominate any persons, including, we hope, representatives of the interests I
  988
  have mentioned. It may be that eight is not quite the right number—I do not claim any divine inspiration for that number, any more than, I suggest, there is divine inspiration for the number thirty-four. It is possible that the noble Viscount opposite may have something to say on the subject and, without adding to what I have said, I beg leave to move.
  Amendment moved—
  Page 14, line 9, leave out ("four") and insert ("eight").—(Viscount Bridgeman.)
  VISCOUNT HALL: The composition of the Council will be seen from the First Schedule. It is made up of representatives of organisations and associations dealing with education and the various branches of industry, and some of the associations dealing with the youth movement. The noble Viscount rightly said that the Council will comprise thirty-four members. It is a fairly large number. We do not want to convert it from an active advisory body into a debating society. We are naturally anxious to avoid that. During the last day or two, I have consulted my right honourable friend, who is willing to agree that provision shall be made to permit an increase in the number of independent members, if that should be found necessary. It is suggested that instead of making the number eight, we should make it six. That would give two additional members to meet the point so ably put by the noble Viscount. I think it will be better to do that by a Government Amendment on the Report stage. If your Lordships agree to that course, I will arrange for an Amendment to be put down on the Report stage which will permit an increase to a number not exceeding thirty-six. I think that will cover the point made by the noble Viscount and, in the circumstances, I hope he will not press his Amendment.
  VISCOUNT BRIDGEMAN: I am very much obliged to the noble Viscount for the way in which he has met us on this Amendment. Although the number six instead of eight will be a fairly tight fit, I think it will cover all the essential additional members for which we ask. I fully agree with the suggestion of the noble Viscount, that it is better to deal with the matter by a Government Amendment on the Report stage. In view of the assurance I have received, I beg leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  First Schedule agreed to.
  Remaining Schedule agreed to.
  House resumed.

  NATIONAL INSURANCE (INDUSTRIAL INJURIES) BILL.
  6.43 p.m.
  House in Committee (according to Order): Bill reported without amendment.

  GAS BILL.
  Brought from the Commons; read 1a; and to be printed.
  BRIGHTON CORPORATION BILL. [H.L.]
  Reported from the Select Committee, with amendments.
  CARDIFF CORPORATION (EXTENSION OF TIME) BILL.
  Reported, without Amendment.

  GREAT YARMOUTH PORT ANDHAVEN BILL.
  Brought from the Commons; read 1a; and referred to the Examiners.
  House adjourned at a quarter before seven o'clock.