Sitting of 14 May 1948

Preamble
The House met at Eleven o'Clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  ST. HELENS CORPORATION (ELECTRICITY AND GENERAL POWERS) BILL
  As amended, considered; to be read the Third time.

NATIONAL COAL BOARD (MEMBER'S RESIGNATION)
Mr. Henderson Stewart(by Private Notice) asked the Minister of Fuel and Power whether he has any statement to make on the resignation of Sir Charles Reid from the National Coal Board.
The Minister of Fuel and Power (Mr. Gaitskell): No, Sir.
Mr. Stewart: In view of the shock to public opinion which this resignation has caused, and the fact that the whole scheme of reorganisation of the industry is now openly condemned by the author of the Reid Report, on which the scheme was based, does the Minister really think it adequate to make no statement to Parliament now that we are about to rise for 10 days? In view of the general situation will he reconsider his decision?
Mr. Gaitskell: I certainly would not agree that Sir Charles Reid's statement to the Press implied a condemnation of the proposals in the Reid Report. Sir Charles Reid has stated his position fully. I understand that the National Coal Board may be making a statement on the position and I do not consider any further statement from the Government is necessary.
Mr. Oliver Stanley: Would the right hon. Gentleman say what are the technical qualifications of the gentleman who has been selected to succeed Sir Charles Reid?
Mr. Gaitskell: He has no technical mining qualifications but has first-class administrative experience.
Mr. Stanley: While admitting that he is an eminent solicitor, is it not strange that the Board will now be left without anybody with technical mining knowledge?
Mr. Gaitskell: The right hon. Gentleman is quite wrong. Mr. Eric Young is also a member of the Board and has technical mining qualifications.
Sir John Mellor: is it not a fact that Sir Charles Reid has been in disagreement with the Coal Board for some time? In the circumstances, will not the Minister make a statement upon the reasons for that disagreement?
Mr. Gaitskell: Sir Charles Reid has explained his position fully.
Mr. Emrys Hughes: Is the Minister aware that the miners of Scotland will be very glad to hear that Sir Charles Reid who was well known as a reactionary coat owner, has left the Coal Board; and that they will welcome new people with new ideas and a new spirit to reorganise this vital industry?
Mr. Stewart: Does the Minister really think he is performing a satisfactory duty by setting up what is in effect a mere departmental committee to report to the Coal Board? What is wanted is a powerful and independent inquiry to report to Parliament on the working of the Coal Board and the nationalisation scheme.
Mr. Gaitskell: I have set up no inquiry myself but the National Coal Board, as the House will have seen from the Press, have themselves appointed a committee under the chairmanship of Sir Robert Burrows to take stock of their organisation. That seems to me a perfectly sensible procedure and I do not intend to take any further steps myself.
Mr. Stanley: Is not the right hon. Gentleman going to protect his predecessor against the grave allegation from his own Benches that he appointed a reactionary coalowner to this Board?
Mr. Boyd-Carpenter: Will the report by Sir Robert Burrows be made available to the House?
Mr. Gaitskell: That is entirely a matter for the National Coal Board.
Mr. Ivor Thomas: Is my right hon. Friend aware that, whatever may be thought of Sir Charles Reid's resignation, he himself has the best wishes of the House on having survived successfully one of the most strenuous weeks to which any Minister has ever been subjected?
Mr. Stewart: In view of the quite unsatisfactory reply which the Minister has made and the serious situation that has been created, I beg to give notice that I will take the first opportunity to raise this matter.

NATIONAL COAL BOARD (MEMBER'S RESIGNATION)
  ADJOURNMENT (WHITSUNTIDE)
  Motion made, and Question proposed, "That this House do now adjourn."—[Mr. R. J. Taylor.]

PALESTINE (MILITARY SITUATION)
11.9 a.m.
Mr. A. R. W. Low: Last night some of us heard the Under-Secretary of State for the Colonies give the first piece—although only a small piece—of encouraging news which the Government have announced about Palestine in the last few months. It was about Jerusalem, and although the subject which I am raising today does not directly concern Jerusalem, I hope that the right hon. Gentleman who is to reply will add to the news which was given last night, if he is able to do so. I refer particularly to the question that was asked, whether the Jewish Agency have now replied to the truce proposals put forward by the High Commissioner.
I wish to direct the attention of the House today solely to the military situation in Palestine between tomorrow and the date of our final evacuation. It has been argued that a discussion on this situation in the House might be dangerous, but I do not take that view. I take the view that we have a responsibility in this House even in situations of a crisis nature like this which are dangerous, and that we should have sufficient confidence in ourselves to avoid saying anything which might worsen a very difficult situation. I hope that the few remarks I shall address to the House will live up to that intention.
Tomorrow the Mandate will have ended. I am not concerned in this Debate
2420
in saying anything about the way in which we have carried out this Mandate, or in saying anything which directly concerns the tragic events of the last six months culminating in open warfare between Jews and Arabs. Those are matters for another occasion, and, if I omit to make reference to them it does not mean that I feel anything but most deeply about the things which have happened. My object is simply to get the Minister of Defence to give certain assurances which will convince us, and the many thousands outside the House who are deeply interested in this matter, that our officers and men of the three Services, the majority of whom are in the Army, will be evacuated speedily and in safety. I hope he will be able to convince me that the considerations governing the Commander in Palestine will be the safety of his men, and that the evacuation will be completed not just by 1st August but before that date if possible, as some statements seem to indicate might be the case.
Any criticisms I may have made in this House have been directed to the right hon. Gentleman accustomed to answering Questions on this subject in the House. I have never intended to call in question the actions of those on the spot. That is something which we are not capable of doing in this House, and I deprecate remarks from the Government Front Bench, particularly from the Secretary of State for War, that we are being critical of those on the spot due to some kind of superior military knowledge which we may possess. I am a civilian, and I do not have the military knowledge or the knowledge of the facts to criticise anything which those in Palestine may be doing.
One of the main reasons why it is essential that we should understand the considerations that govern the actions a the Commander in Palestine is that if they are clearly understood, then there is less chance of incurring deep enmity of both Jews and Arabs by what we may do in the next few weeks. As I understand it, up to this evening our troops in Palestine have had a positive responsibility to be fair as between Arab and Jew, and they have been called upon, in their obligation to help in maintaining law and order, to see that Jew and Arab are treated alike as far as possible.

2421
From tomorrow that positive responsibility is at an end, and the consideration governing the actions taken by our troops will be solely that of safety and speedy evacuation. That is bound to cause things to be done which will annoy Jews and Arabs. Let it be quite clear that these things are done not with the object of annoying one and pleasing the other, but solely with the object of effecting our evacuation. If we make that clear, then there is some chance of keeping the respect and confidence of the majority of the Arab peoples and, I hope, of the majority of the Jews. It is quite clear, although we may now be withdrawing from Palestine, that we cannot vary in any way the fundamental fact that the interests of Britain and of the Arab world are most closely hound together. I hope we shall always bear that in mind.
In regard to the present military position in Palestine, I cannot say that we have had an enormous amount of assistance in the information which has been given to this House. It now appears that our forces were too weak and that considerable reinforcements had to be sent to Palestine on 1st May. According to the communiqué from Palestine headquarters on 2nd May, the Palestine theatre had not apparently received operational priority, but some other Middle East commitment had. It would appear that fighting units and tanks had been withdrawn too early owing to some priority imposed from outside Palestine. That is a reasonable inference from the communiqué which was issued, extracts of which appeared in "The Times" on 3rd May. The most important extract is this:
"This theatre has now assumed operational priority over some other commitments in the Middle East."
What an extraordinary statement that is. What other parts of the Middle East could conceivably have had anything approaching the operational priority of Palestine during the last six months or more? It is because of the extraordinary nature of that statement that some doubts have arisen as to the real intentions of the Government in bringing back these reinforcements. I am satisfied, and I hope the right hon. Gentleman will satisfy us further, that the intention behind the bringing in of these reinforcements was exactly as stated, and that is that we were too weak to carry out the job which faced us at the time and we wanted more troops
2422
to cover our withdrawal. Not everyone has accepted that, and the right hon. Gentleman will do a service if he again states the position quite clearly.
Let me now come to the questions I wish to ask the right hon. Gentleman. I know that the right hon. Gentleman has laid in the library a directive which has been issued to commanders of the troops. L did not propose to refer directly to that document, because it was marked "Top Secret," but perhaps as it has been published in the Press, we might refer to its subject matter. When I say it has been published in the Press, I do not mean that the document as a whole has been published, but those parts of it to which I would wish to refer. That being so, I think it is reasonable to cut short my questions to the Minister, and to refer more specifically—
The Minister of Defence (Mr. A. V. Alexander): There has been no publication by the Government, and I would remind the hon. Gentleman that it would not be the first time that we have had leakages from foreign sources.
Mr. Low: The first question I wish to ask—
Mr. Sydney Silverman Mr. Sydney Silverman (Nelson and Colne) rose—
Mr. Low: I would like to continue, if I may. The hon. Gentleman has only just come into the Chamber.
Mr. Silverman: On a point of Order. The hon. Gentleman has just said that he proposes to read extracts from a secret document. If he does, can we see that document?
Mr. Speaker: That is not a point of Order.
Mr. Low: I did not say I would read it; I said that I would refer to it. From 16th May our troops are no longer responsible for law and order in Palestine, except in so far as their own safety is concerned. That has been stated over and over again. It follows, therefore, that only those troops required for final evacuation need remain in Palestine; the rest can go as quickly as possible. Will the right hon. Gentleman confirm that that is the policy? As to the number of troops to be retained, is it intended to keep any British units in any part of

2423
Palestine after 1st August, or the final date for evacuation of the main body, in any circumstances whatever? I ask this only because the Secretary of State for Foreign Affairs, in his speech last week, indicated that in certain circumstances—specifically if a truce was reached, and there was agreement between the two sides—we might change our position. I would like some clarification of that by the right hon. Gentleman; I would like him to refer specifically to that question. Further, can the right hon. Gentleman give us a categorical assurance that the Commander of our troops in Palestine has sufficient forces at his disposal to enable him to complete withdrawal safely, even in the worst circumstances that now seem likely? As it is the Minister of Defence who will reply to the Debate, I would also like to say that sufficient forces means not only land forces, but sufficient air support as well.
Now as to powers. We have the advantage of having seen what the powers of the G.O.C. are to be. As I understand it, he has these powers without having to refer to higher authorities. Can the G.O.C. delegate them, so that there can be immediate action on the spot? Is he allowed to take action outside the actual area occupied by his proclamation? I understand that that area is the majority of the plain, excluding the coastal towns from Nathania to Jaffa. Is he allowed to go outside if he considers it necessary for the safety of his troops?
Now I come to the question of immigrants which, as I see it, bears quite directly on the safety of our evacuation. We are told that 30,000 Jewish immigrants are waiting at Cyprus, and that 100,000 or more are waiting in various parts of Europe to go to Palestine. Also, rumour has it that some are waiting in Italy with planes ready to take them to Palestine. Would not the arrival of these immigrants, just when we are trying to organise and make effective our final withdrawal, endanger the success of our operations?
Mr. George Thomas: Why?
Mr. Low: Because it would seem to me that if they arrive at Haifa port that would almost certainly upset our organisation. It would also seem that the influx of this enormous number of immigrants
2424
must seriously inflame feeling. I would like to have a statement of policy purely from the military security angle, which is the approach to which I am directing the attention of the House. I imagine that we have taken steps with Italy, or other foreign countries, to see what can be done to prevent the wholesale arrival of such a large number of immigrants. The hon. Member for East Coventry (Mr. Cross-man) is grimacing as though I am suggesting that we have some control over these people after r6th May. I am not suggesting that; I am merely suggesting that for the sake of the safety of our troops, for which we here are directly responsible, steps should be taken to look after them in the most difficult situation which is bound to arise if all these immigrants suddenly arrive in Palestine.
Mr. Crossman: Does the hon. Gentleman seriously suggest that the safety of our troops will be increased if we attempt to ban immigrants from going into areas of Palestine which are now exclusively under Jewish military control? Does he think that it will improve relations between the de facto Jewish Government of Palestine and the British military commander if suggestions of a highly political character are made by Members opposite, as though they were ostensibly concerned simply with the security of our troops?
Mr. Low: I do not want to enter into a full discussion of this problem, but it is obvious that these matters concern the safety of our troops, whichever way a decision is made. The hon. Gentleman has put one aspect of the case; I have tried to put both sides. If we merely pay regard to what the hon. Gentleman has just said, we are appeasing the Jews because we happen to be evacuating from their area. That is not a final test of what our policy should be—
Dr. Segal Dr. Segal(Preston) rose—
Mr. Low: I want to hear from the Minister of Defence what that policy is, and not what Members opposite think it ought to be.
On the timing of the date for final evacuation, is it governed and, if so, how much, by the quantity of stores which remains to be evacuated? As I understand it, if the level of evacuation, about which we were told in March, is maintained there

2425
must be about one more month's stores remaining to be evacuated—and that is all. Will the right hon. Gentleman tell us whether it is the quantity of stores which will delay our final evacuation, or whether there is some other reason? In particular, will he tell us whether there is sufficient shipping?
A word about troops. A question was asked in the House the other day about the possibility of special leave for our troops in Palestine. I quite appreciate the difficulties of the Service Departments in arranging special leave, but I am putting this question to the Minister not from a demagogic or sentimental point of view, but because I know from my own experience in the Middle East, where I had to stay five years because of the difficulties in connection with leave arrangements, the enormous value of a selective or ballot leave scheme. In this matter I am thinking, not so much of the National Service men who will get back soon in any case, but of the Regulars of all three services on whom the right hon. Gentleman relies for the efficiency and, in the main, the morale of his fighting Services. If he has not fully considered that already, will he now do so from that angle?
Finally, I want to ask him to make the situation absolutely clear to us and to the country so that we can understand, not only the courage of our men who are fighting there—we know that, and have come to expect it—but that all precautions have been taken to safeguard them and to speed up their evacuation. Also, will he do for the Army and the Air Force what my right hon. Friend the Member for Warwick and Leamington (Mr. Eden) asked the Parliamentary Secretary to the Admiralty to do for the Navy, namely, send a message to the Army and the Air Force telling them of our admiration for their conduct in the responsible, nerve-racking and perilous task they have carried out, and of our confidence that they will successfully carry out the tasks that await them during the next few weeks?
11.31 a.m.
Colonel Gomme-Duncan: My bon. Friend the Member for North Blackpool (Mr. Low) has stated the case we wish to raise today with the very greatest clarity, which will enable me to say considerably less than I might have done. I must, first, express my surprise, to put it mildly, at the
2426
absence of the Secretary of State for War. I fully realise that the Minister of Defence covers all three Defence Services; but I think it is a gross discourtesy to the House, and is clear evidence on the part of the Secretary of State for War of a failure to recognise the responsibilities of his office, that he should not be here today, because practically everything with which we are dealing today affects the right hon. Gentleman directly.
I wonder whether this part of the world has fully recognised the significance of the day after tomorrow, when we, as a Mandatory Power, finally lay down the reins of office in Palestine? After all, 30 years is a long time; we have had a desperately difficult task, and in spite of mistakes we have done an extremely good job. We should realise that hundreds of millions —or certainly a hundred million, which I have seen mentioned today—of our taxpayers' money has been freely poured out by us as the Mandatory Power in Palestine—on behalf, remember, of other countries—and many lives have been sacrificed. Our critics, who have been many, do not realise the job we have had to do, and it is high time that we told them.
The Army dislikes, above everything else, being called in to the aid of the civil power. That is the most distasteful job that any soldier is ever called upon to perform. If all goes well the soldier gets no credit for it; if anything goes wrong, the soldier gets all the blame. Perhaps I might recall to the House Kipling's words:
"O! it's Tommy this, an' Tommy that, an' 'Chuck him out, the brute.'
But its 'saviour of his country' when the guns begin to shoot."
That is the feeling today, just as much as it was 5o years ago when Rudyard Kipling wrote those lines. "Shall we be supported?" is always at the back of any responsible soldier's mind in matters of this kind; and the answer which usually comes to him in the light of past experience is, "No," Today, Palestine is only a repetition—and I say a tragic repetition—or what has gone on before.
In General MacMillan, the Commander of our Forces in Palestine, we have a first-class, highly competent, able and gallant officer, just as was his predecessor,

2427
General Barker. There is nothing wrong there; and it is right that we should say in this House, reinforcing what my hon. Friend has said, that in any remarks on military matters which we have addressed to the Secretary of State for War we have never had the slightest intention of running down or decrying the work of the commanders on the spot or of the troops they command. The officers and men out there have done their utmost. My hon. Friend said that he spoke as a civilian. I can speak as a soldier and back him up 100 per cent. in what he said in that regard. I am glad that this is one of those perhaps rare occasions when civilians and soldiers are in complete agreement.
Three main factors have militated, and are militating, against the morale and efficiency of our Forces in Palestine today. The first is this constant chopping and changing of the personnel in the units serving in that area. A commanding officer has the responsibility of knowing his men. That is the first job anybody taking over command of a unit tries to do. Also, the men and the N.C.O.'s should know each other, and know each other intimately. But in these units in Palestine this is an impossibility, and the fact that commanding officers, N.C.O.'s and men do not know each other as they should has placed in the hands of their enemies one of the strongest weapons they could possibly have.
The terrorists—I shall not say on which side, because that is not the point—who wish to attack a camp or defensive position just revel in the knowledge that the officers and men in the unit cannot possibly know each other as they should. These terrorists arrive armed, clothed, equipped and badged—and do not forget that—exactly as the men in the post they propose to attack. They arrive in armoured and non-armoured vehicles which are correctly painted, numbered and badged in accordance with the formation, a part of which they are about to attack. Nine times out of ten they are met by new and inexperienced sentries, who see these men dressed exactly as they are themselves, riding apparently in British vehicles, and think for a moment that they must be some of their own chaps. The moment of hesitation is the fatal moment when the attack is pushed in and, as happened the other day, the guard is lined up against
2428
the wall of the guard room and shot in the back, the same fate awaiting the commanding officer as he comes out of his orderly room.
Now, that was due to this fatal momentary hesitation, which is all that the terrorists wanted. It is fundamentally due to the fact that in a war area—because it is nothing Iess—there has been a change over of personnel on a peacetime basis. That is radically wrong, because a disintegrating unit cannot be an efficient unit. Hard as it may have been for these men, they should not have been given their discharge or their leave; if it is a question of war and the safety of the country and themselves, they must forego that, unpleasant as it is to do so. It is the Government's responsibility that this peace-time policy has been carried out in Palestine in units which are doing a dangerous war-time job.
As my hon. Friend pointed out, there has obviously been a serious mistake over the question of the withdrawal. I should like to know whether the Minister will frankly tell us, and above all the world outside, that those reinforcements which had to be sent are purely and simply for the covering of that withdrawal, and nothing else. It is essential that we should know that. We have in Palestine a powerful force; and any powerful, well organised force withdrawing should withdraw through itself, and sufficient operational units should have been left for the purpose. I should like to hear what the Minister has to say on that score, because it is quite obvious that if a large and powerful force is being evacuated, and if people from outside are drawn in to help; there must be something radically wrong. This reinforcements business has had the worst possible effect not only on the Jews and the Arabs but also on the British troops themselves. I will emphasise the effect on the troops by quoting a letter from a very competent officer on the spot who says:
"It is quite maddening to have to sit around and be shot at and at the same time to be so particularly weak that all question of reprisal has to be shelved for fear of rousing these thugs to real fury. Our country has, I fear, sunk lower than it has been for many years. At no level is there vigorous action and all because "—
mark these words—
"we are too weak on the spot to be able to sustain such action or its consequences"

2429
He goes on to say:
"It is not the fault"—
he is a comparatively junior officer—
"of the military leaders in Palestine. God knows they are working wonders with the men and material allotted to them and within the limits allowed by the policy of this Government"
That is only one of many letters which I have had from officers, non-commissioned officers and men on the spot. I hope the Minister will realise how serious such feelings are within an Armed Force placed in such a difficult situation and just what that means to the morale of that force.
Thirdly, the Government's policy for Palestine over the past year or two has had disastrous effects in these ways. The Armed Forces on the spot, particularly the Army, have a feeling that their hands are tied in spite of the assurances. They have a feeling—I am quoting their feelings; I am not saying that it is an actual fact—that the Government's orders, particularly recently, favoured the Jews as against the Arabs. They have the feeling that they will not be backed up in action which they take. Nothing could be worse for morale than the three factors I have mentioned.
I will quote another letter from an entirely different officer—it is one of many —who states that he was the second in command of a road block a few miles south of Haifa. He says:
"This read block was instituted because the Jews had said that they were going to attack Haifa, and we were to prevent either Arab or Jew reinforcements reaching Haifa"—
a sound enough instruction. However, on a certain evening which he mentions:
"A staff officer came round and gave us the following orders:—

(1) To allow any Jews through the road block without any hindrance whatsoever.

(2) To stop all other vehicles. Military vehicles need not be searched unless they are carrying natives. All arms will be removed from all except military vehicles and the registered number of each arm will be handed to the Haganah section. You will retain the arms and hand them in to the Army authorities. After 15th.May they will be handed over by the Army to the Jews. All foreigners "—

he says this word was not defined but:
"We were told to assume that it included everyone who was not either Jew or Palestine Arab and it included Europeans as foreigners."
2430
All foreigners could be arrested by the Haganah section and taken back to their internment camp in Haifa. Those orders were countermanded 12 hours later, but they placed that post completely under the control of Haganah. The letter goes on:
"The next morning an officer, an Englishman, employed by the N.A.A.F.I., came along with a car and some Arab women employees for all of whom he said he could vouch, In accordance with our instructions, he was passed to the Jews for vetting, and they turned him back."
This is a report from an officer on the spot, and we cannot lightly treat it.
Mr. Alexander: Might I be quite clear about the procedure which has been adopted? The hon. and gallant Gentleman has given me no notice that he was going to quote things of this kind or taken any possible precaution so that I should be able to deal with the matter. I understood that the Opposition did not in any way wish to cast reflections on the local commanders, but the hon. and gallant Gentleman is now raising a question about some order which is said to have been given by the military authorities What is the object of this?
Colonel Gomme-Duncan: I should be very pleased to tell the right hon. Gentleman the object. I would first point out that this is not news because three or four days ago there was a Question on the Order Paper which was answered by the Secretary of State for War. It is no good the right hon. Gentleman saying that he did not know anything about it.
Mr. Crossman: Does the hon. and gallant Gentleman suggest that this detailed order is something which was imposed upon the local G.O.C. by the Government, or is he directly attacking the honour and integrity of the G.O.C., Haifa? If he is, then he is breaking the pledge given by his hon. Friend the Member for North Blackpool (Mr. Low).
Colonel Gomme-Duncan: I do not know what the hon. Gentleman's experience of military affairs is—
Mr. Crossman: Will the hon. and gallant Gentleman answer my question?
Colonel Gomme-Duncan: I am coming to that. I am quoting orders which have been given on the spot. They most obviously be in accordance with Govern-

2431
ment policy because the military commander has to carry out the orders of the Government. It is no good the Government trying to back out of it. I do not need to go on with that but it emphasises and proves my point about the effect on morale of such orders and what has been going on in Palestine recently. These officers and their men feel that they have a reason to be ashamed of being British at times, and that is a thing which should never be imposed on any force which has a difficult job to do.
Mr. Paget: Will the hon. and gallant Gentleman give the date of the order? Was it before or after the surrender of Haifa?
Colonel Gomme-Duncan: I am not concerned with whether it was before or after the surrender of Haifa. [Interruption.] The hon. and learned Gentleman, with his vast military knowledge, may laugh, but I am not concerned whether it was before or after the surrender of Haifa. This military post was to all intents and purposes put under one side in this dispute and was not neutral. That is a clear statement of fact.
Everybody will agree that the people of this country are very anxious about the Palestine situation. They should know the truth. They have a feeling, right or wrong, that the Government are hiding things. I do not say that is right, but there is a very widespread feeling. I hope the right hon. Gentleman will do something to disperse it. As we know, the Army is doing its utmost. Is every humanly possible precaution being taken by the Government to ensure the safe withdrawal of our men from Palestine? Are we providing shipping for the immigrant refugees in Cyprus, and, if so, will it be provided before we clear out of the ports in Palestine? It is no good anybody saying that the entry of large numbers of immigrants will not materially affect the safety of the troops in Palestine. Do the Government realise that the refugees in Cyprus are no haphazard collection of unfortunates by any possible means? They are very largely carefully selected partisans. Do the Government realise that a number of these refugees are not Jews, that many of them are Russians and that many of them are carefully selected and trained Com-
2432
munists? Do they also know that on occasions those people have marched from their ships to the camp in formed platoons, which does not sound like a haphazard collection of unfortunates. The situation is one which the Government have allowed us to slip into despite many warnings, and I want to know whether they realise that if things go further to the bad than at present, they as a Government are completely and absolutely responsible.
We have heard recently some talk about the statue of General Gordon. I wonder if the lesson of his death, and the responsibility of those concerned with it, has been forgotten? There is in Palestine today the chance of a far greater tragedy than anything in which General Gordon was involved. I hope the Minister will give us a full, frank statement on the points that have been raised, which are of the utmost importance, not only to the men on the spot, but to the country and the world.
11.50 a.m.
Mr. Paget: The question I would like to put, through you, Mr. Speaker, to hon. Members opposite is: what is their objective in Palestine? Do they want to get our troops out with the minimum casualties and loss and in the quickest possible time, or do they want, in some indirect way, to continue to take part in the struggle that is going on? That seems to me to be the vital question.
Certain orders from General Stockwell were quoted by the hon. and gallant Member for Perth (Colonel Gomme-Duncan). I understand that those orders were issued after the surrender of Haifa, and as part of the evacuation of our troops. If the objective is to get our troops out as quickly and as safely as possible, those are absolutely correct orders. The Jews had control of Haifa, they won the battle, and the Arabs had surrendered, but we were taking our troops out through Haifa and if we wanted to avoid casualties we could do that by consent, by arrangement and by treaty with the Jews or we could do it by battle and accept the casualties? Which do hon. Members opposite wish to choose?
Mr. Low: I made it absolutely clear that, in so far as we were dealing with the period from 16th May onwards, the sole consideration governing the Com-

2433
mander—and governing me, as I was talking about his action—was the safety and speediness of evacuation. Is the hon. and learned Gentleman not aware that until today has expired, we are responsible for a Mandate in Palestine and for law and order and fairness as between Arab and Jew?
Mr. Paget: I am not saying a word with regard to the speech of the hon. Member for North Blackpool (Mr. Low). I am dealing with the other speech, and I made that clear. I would like to have an answer to this question from hon. Members opposite: both as from tomorrow and also in the past, do they want us to get our troops away as safely as possible or to accept the casualties that inevitably result from accepting battle? That was the choice before General Stockwell in Haifa, and for my part I have no hesitation in saying that he took the right decision. The Jews had control of Haifa, we had to get our troops out through that port. If we treated with the Jews then we had to say this: "Getting our troops out will not be a method of Arab infiltration into the positions which you have taken." If we were to get our troops through peacefully, that agreement had to be made. If that agreement was to be made, then the posts which we had established to bring our troops in had to be used to see that our flow of troops was not used for Arab infiltration. The alternative was to fight our way in. That was the choice, and I am quite certain that the most sensible and proper decision reached by General Stockwell saved a great many English lives, and I applaud him heartily for that decision.
I hope that sensible decision of doing this by consent and co-operation with the de facto Jewish Government which has been established in that area will be continued, otherwise we shall have to fight every bit of the way, hundreds of our people will be killed, and I do not want that to happen. I believe that no more mischievous suggestion could be put forward than that, now we have put an end to our Mandate, we should continue to interfere with Jewish immigration. From tomorrow Jewish immigration has nothing to do with us, and if we interfere with it, it will mean inevitably wholesale war not merely by the terrorists but by the very effective Jewish Army which has proved itself in battle, directed upon our
2434
Army abroad. Our losses in material and troops will be very heavy indeed if we deliberately provoke that war, as we most certainly will do if we do not remain neutral but insist upon interfering with immigration.
Mr. Low: I think I made it clear that I was asking questions but, when the hon. and learned Gentleman says that we have given up the Mandate, he may not be aware that we have declared a large part of the Jewish partition area of Palestine an occupied military zone for which we are wholly responsible—
Mr. Paget: Certainly.
Mr. Low: —and, therefore, what are his views about a large influx of people into that area?
Mr. Paget: As to the contracting area which we are controlling for the purpose of our evacuation, that area we must control for the safety of our troops. We have come to a very proper agreement with regard to Haifa, again I think through General Stockwell, by which we have given the Jews control of Haifa subject to their granting us priority for al port facilities for the purpose of our evacuation. I would urge this upon the Minister of Defence: we should make it clear, and as public as possible, at the earliest possible moment, just what port facilities we require for those evacuation purposes, so that there can be no suggestion that we are using evacuation as an indirect method of intervening in the Jewish-Arab war by preventing the Jews obtaining through the area they control either arms or munitions or reinforcements. We must also make it abundantly clear that we are making no naval blockade and no air blockade, that our sole interest is to withdraw our troops in safety, that we desire to do it in co-operation with the Jews—because that is the only way we can do it in safety and without accepting battle—and that we certainly will not indulge in any kind of action which will be a provocation to the people through whom we are bringing our troops, or indulge in any kind of intervention now that our Mandate has come to an end.
11.59 a.m.
The Minister of Defence (Mr. A. V. Alexander): May I say at once that to most of the points put by the hon. Mem-

2435
ber for North Blackpool (Mr. Low) I take no exception; he was asking for information, so that the large numbers of people in this country who are concerned about relatives, and so on, in the Forces in Palestine may have any proper reassurance that can be given. It is a perfectly right action to raise such questions in this House, and in the course of what I have to say, I shall try to reply categorically to the points that the hon. Member raised. I regret very much the speech of the hon. and gallant Member for Perth (Colonel Gomme-Duncan). It introduced an element into this serious question which indicated no desire in the mind of the hon. and gallant Gentleman except to score party points if possible—[HON. MEMBERS: "No."]—on a matter on which this country has acted, throughout the whole of the Mandate in Palestine, with the highest motives for the good of all the inhabitants of Palestine, whether Jew or Arab.
Colonel Gomme-Duncan: As the right hon. Gentleman has drawn attention to this, may I point out that I specifically said that for 30 years we have done this tremendous job, and done it extraordinarily well, against all critics?
Mr. Alexander: I find it difficult to reconcile that statement of the hon. and gallant Member with his statement that the Government of this great country has been so wrong and weak and that officers out there felt ashamed to be British. I do not know how he can reconcile those statements. There has been nothing in the conduct of successive Governments undertaking this great Mandate in the interests of the people of Palestine which at any time could justify anyone getting up at this, time and making such a statement. I throw it back at the hon. and gallant Member as a complete misrepresentation of the standards of British conduct and British policy and what has been accomplished for both sides, Jew and Arab, in the course of the whole period that this nation has been responsible for the exercise of the Mandate.
He quoted orders of a second in command, apparently an officer who describes himself as a second in command of a road block—evidently some very junior officer. I suggest that this bears no relation to any
2436
kind of order which any hon. and gallant Member here who has military staff experience could imagine would be given in the form in which it was quoted. He says, of course, that it had been corrected afterwards, but we have not had any Question in the House about it. The hon. and gallant Member gave no notice, and the only Question I can find or remember was a Question about a N.A.A.F.I. employee, which I believe was put by the hon. Member for Thirsk and Malton (Mr. Turton), but it had nothing to do with what has been quoted this morning by the hon. and gallant Member. Yet he comes down and bases his castigatory remarks on information he has never had an opportunity to check up, and has given no notice on which a reply could be made.
Colonel Gomme-Duncan: I am very glad to realise that this has got under the skin of the right hon. Gentleman. I am perfectly entitled to say in connection with the effect on morale of troops in Palestine what has caused it to deteriorate and no one is better able to say that than a junior officer in a dangerous position. The right hon. Gentleman's rather disparaging reference to a junior officer in command of a post again shows that he has no firsthand knowledge of what it is like to be in command of a dangerous post.
Mr. Alexander: All I can say is that I cannot reconcile the remarks of the hon. and gallant Member in regard to the whole policy of the High Command in Palestine. That policy has been carried out with the full confidence and support of our military authorities in the Middle East at all times. They have had our full confidence, and would have been supplied with any strength they desired from our resources there, such as they might have requested. I think it perfectly scandalous to try to put this country into the kind of position which the hon. and gallant Member is trying to put them into this morning without any real factual support, and in complete disregard of the policy which has been carried out by the Government all the way through. It is all very well for the hon. and gallant Member to turn away and smile, but repeated assurances have been given by myself and other Ministers that the military authorities on the spot have our complete confidence and support. I say that as the Minister of Defence that we have not received any

2437
word in complaint from the military authorities to the effect that they have not had support. Not a word. In such circumstances how dare Private Members get up and make the kind of statements which have been made this morning in order to derive party advantage in the country? It is completely unjustified and not a patriotic thing to do to try to give a false picture to the world of what the real action of Britain has been in regard to the Palestine Mandate. I turn to the special question put to me by the hon. Member for North Blackpool. He asked at the outset—
Mr. Paget: Before my right hon Friend leaves this point, will he allow me to interrupt, because it is very important. Will he make it quite clear that His Majesty's Government fully support General Stockwell and all local commanders in the arrangements which they made with the Jews for the safe evacuation of our troops from Haifa. It is very important that that should be fully understood.
Mr. Alexander: I am not going into further details. The military authorities on the spot—and I do not confine it to General Stockwell, but right up to General MacMillan and all those serving under him—have had our complete confidence and support. There is no way in which we have failed to support them on any big question they have raised.
I turn to the question put by the hon. Member for North Blackpool. He asked, arising out of what was said in the House last night, whether the Jewish Agency have yet replied. I am sorry to say that up to this moment we have not yet had any reply from the Jewish Agency. Something may come through in the course of the day, and if it should come through in the course of the day, we should be very glad to communicate it. The hon. Member's remarks, I recognise frankly, have been confined to what will be the military situation between 15th May—the date on which we cease to be responsible for the exercise of the Mandate, and the responsibility for general law and order—and the final evacuation date. He asks me to give an assurance that our troops will be evacuated speedily and safely and that, if possible, they will not be retained to the ultimate date we have fixed, 1st August. I can give the most categorical
2438
assurance on that. Apparently he has studied the directive for this period from 15th May onwards, and which was put into the Library for the information of hon. Members. He will realise that it is in accord with the directive that the main consideration is the safe and speedy evacuation of our troops.
So far as stores are concerned, whilst, of course, the evacuation of valuable stores required for future needs of the Army is important, we do not at this stage regard the saving of a small quantity of stores as being so important that it should delay the evacuation of the troops themselves. I would add with a good deal of pleasure that the great bulk of stores, apart from those required for day to day maintenance of the troops and their safety, have already been evacuated, or at any rate got into what we call the evacuation enclave in readiness for shipment through the port of Haifa. The next question was whether there is sufficient shipping to make adequate arrangements for the safe evacuation of our troops. All my information is that there is adequate shipping already planned and arranged for that purpose.
Another specific question which the hon. and gallant Gentleman put to me was with regard to the troops who were sent as reinforcements early this month. I beg Members of the House to remember that when we have to face such a difficult operation as the evacuation of a country like that, in all the circumstances which are known to the House, is it not done without the most careful thought and very detailed planning by the responsible staffs on the spot. The whole basis of the evacuation of our troops and supplies from Palestine has been decided upon on the advice and on the detailed planning of the staffs on the spot. At no stage during that period has there been a suggestion. from the military authorities that their forces were insufficient. Indeed, as hon. Members opposite know, we have been questioned on that matter from time to time in the House, and either I or my colleagues have answered that there were sufficient forces on the spot.
The reason for reinforcements being sent can be put in this way: When a military plan is made some months in advance and there are scheduled phases of the plan to be carried through, every particular happening which subsequently

2439
takes place cannot always be foreseen. At the date when reinforcements were sent some events had been taking place which led the authorities to see that there might be an increased element of danger in the final days before the end of the Mandate, and during the period which had been scheduled for final evacuation. There is no other reason whatever behind this sending of temporary reinforcements. I can give the House the most categorical assurance that there has been no intention whatever to send those reinforcements in order to stay longer in Palestine; or any other ulterior motive whatever. It has never been in our minds; it has never been contemplated. I hope that the House will be satisfied on that matter.
The hon. and gallant Member, in refering to the general strength for the future, then asked whether there was now or would be in the future, sufficient troops to effect evacuation safely. I think that my answer to his previous question really covers that. We are advised that there is sufficient strength in order to see that evacuation is carried out, and with reasonable speed.
Mr. Oliver Stanley: I am sure that the right hon. Gentleman would like to say, as I am sure is the case, that we are willing to provide any further troops for whom the Command in Palestine might ask, and that we are in a position to provide them?
Mr. Alexander: Perhaps I should have been a little more specific about the way in which I answered the hon. and gallant Member's question about the sudden priority accorded over other areas to the sending of reinforcements to Palestine. The High Command in Palestine is under the Commander-in-Chief, Middle East Land Forces, who has always had a reserve of strength or reinforcements, able to be deployed in whichever way they are needed. If the High Command in Palestine required reinforcements, they would make their request to the Commander-in-Chief, Middle East; there has never been any doubt about that. The publication as to priority which the hon. and gallant Member quoted is certainly not a publication of something from the Government here. There may have been some general talk with the Press out there to make sure that it was understood that reinforcements were coming, but there has
2440
certainly never been any question that, if reinforcements were required by the military authorities in Palestine, those authorities were to be given a secondary priority compared with other commitments. I hope that that is perfectly clear.
Mr. Stanley: I do not think the right hon. Gentleman quite understood my point. I wished to give him an opportunity to say something which may be valuable if there are any ill-disposed people in Palestine who might take advantage of any weakness. My point was that, if at any time it should appear that we have not enough troops in Palestine to guarantee safe evacuation, we have plenty more available and are prepared immediately to send them.
Mr. James Hudson: And start a war.
Earl Winterton: That is a disgraceful observation.
Mr. Alexander: I do not think there is any question of starting a war. Whatever military, naval or air forces were required to provide proper security for our men who are leaving Palestine would be sent there.
The hon. and gallant Member asked whether the Commander-in-Chief, in the new circumstances of this directive could delegate powers. I was rather astonished at that? The Commander-in-Chief has his directive. He is a soldier of great staff experience, and he will, either by proclamation in a particular area, or by his orders to his officers in command in the different posts or areas, see that everything is properly done to implement the directive. I do not think that there is any question of our telling him how he should delegate powers. He is the supreme commander there in that field and he will carry out the directive. We are perfectly prepared to trust him to do it. The hon. and gallant Member asked if the Commander-in-Chief could go outside the area which is considered necessary if that is required in order to secure the safety of the troops? Certainly. The hon. Member will agree that that is covered in the directive itself.
Earl Winterton: Before the right hon. Gentleman leaves the question of the directive, might I call his attention to the answer given yesterday—a favourable answer—by the representative of the

2441
Admiralty to a Question put by my right hon. Friend the Member for Warwick and Leamington (Mr. Eden), in which he asked that the thanks of His Majesty's Government might be conveyed to the Royal Navy? Will the right hon. Gentleman consider the sending, by His Majesty's Government at the very highest level, of a directive to the Commander-in-Chief, Middle East, to thank all ranks for the magnificent courage which they have shown in the face of attacks by thugs, both Zionist and Arab?
Mr. Alexander: The noble Lord will excuse me. We are not backward in our duty in these matters. If the noble Lord will allow me to continue answering the questions put to me by the hon. and gallant Member, I shall have something to say on that before I sit down.
The hon. and gallant Member asked me about the question of the arrival of illegal immigrants. It is not possible for us to go on retaining these persons in British territory and negotiations have properly gone on to secure the evacuation from British territory of those illegal immigrants. But they will not be allowed to use the port of Haifa while we are still there engaged in evacuating our troops.
Major Tufton Beamish: May I ask the right hon. Gentleman whether that precludes the possibility of Zionist immigrants, other than immigrants from Cyprus, using the port of Haifa?
Mr. Alexander: I think that the military authorities fully understand the position. They will arrange to treat the port of Haifa primarily from the point of view of the evacuation of the British Forces with all speed and safety.
Major Beamish: Yes, but does that preclude the possibility of numbers of ships sailing into Haifa harbour, with tens of thousands of Zionist immigrants from Bulgarian and Roumanian ports where ships are known to be ready to sail?
Mr. Alexander: I think the hon. and. gallant Member will be far better advised, once I have given the assurance, to leave it to the military authorities to carry it out.
Mr. S. Silverman: Is it not a fact that complete agreement has been reached
2442
already that top priority in the use of Haifa port is to be given for the evacuation of troops?
Mr. Alexander: From my point of view, with the work we have to carry out in evacuation, and knowing the limited amount of deep water wharfage space, it would not be possible to arrange for large crowds of immigrants to go through the port of Haifa. Our primary consideration is the speedy and safe evacuation of British troops. It is open to the Jewish Agency who are arranging for the safe transport of these people when they leave British territory to sends them to other places than Haifa.
The hon. and gallant Member for Perth raised the question of leave for the troops. That question has been replied to in some detail by my right hon. Friend the Secretary of State for War, and I think that the statement he made was right, and perfectly fair. We give such leave as is possible to troops who are serving, and who have served in such difficult circumstances. But, apart from compassionate cases, we can give only that amount of leave which will fit in with the general arrangements and for which shipping is available. We shall be as reasonable as possible in that matter.
The hon. and gallant Member said he hoped that we should make the situation clear to the country, that all possible steps have been taken. I say categorically that, on these questions of the safety of the troops the strength of the troops, the time for evacuation and the like, the Government, at all stages, have done everything in their power to back up the military authorities to the fullest possible extent. One of their primary reasons for that was the safety of our troops, who have had to go through such a terrible experience. They have been shot at from both sides, and, almost without exception, they have exercised a restraint and impartiality and a standard of conduct which certainly does not put them in the position of Britishers feeling ashamed—as was suggested from the other side of the House—but something of which they can be as proud as of any campaign in which they have ever engaged. I, at any rate, feel intensely proud of them.
I would like to say this. There ha; been over and over again in the Debates

2443
of the last few weeks a sort of feeling, not always openly expressed, that there has not been complete political support—a holding back of proper collaboration in Palestine between the political and civil authorities and the military authorities. I assure the House that that is not so. I would pay a tribute on this, the last day of the Mandate, to the High Commissioner, General Cunningham, for the way in which he has carried out a frightfully difficult job. My information is that there has been full and complete cooperation and collaboration between the High Commissioner and the military authorities at all times during these difficult days, and I hope that will now he accepted generally by the House.
The Services as a whole, the Navy, the Air Force and the Army have done a really magnificent job. No one talking about the dangers of illegal immigrants can esaily assess the difficulties of the job which the Navy carried out almost without casualties, and in diverting these illegal immigrants from Palestine. It is an extraordinarily difficult job—only those who know what it means to get a fairly sizeable ship, of anything from 1,300 to 1,400 tons, right alongside vessels of the character of the immigrant ships, when they are steaming, can understand what a great job the Navy has done. I would like to say a personal, "Thank you" to the whole of the Royal Navy, and also to the Royal Air Force who have cooperated in a number of ways not only in spotting the ships, but also in supporting the military authorities in various ways in Palestine.
Over and over again, we have expressed our confidence in the Army command in Palestine. Now, when they are entering upon this last phase of a most unpleasant duty, the evacuation of troops, I would say how grateful we are to them. They have upheld the British traditions in the best possible Way. We think they have done a very difficult job with credit to themselves and their country. When history comes to be written about the events in Palestine I think there will be a far better assessment made than is being made in some quarters now of what British justice, British ideas of education and British ideas of social and economic development have meant to that country. We all pray today that in the strife which
2444
is at present going on, and which we hope will be brought to a speedy completion, a great deal of that work will not be destroyed, but will in fact, be something of a foundation on which to build up a great future for Palestine.
My last word is on a personal note. If the Secretary of State for War is not here to answer these points it is because it was quite possible that, in this Debate, other questions might have been raised, dealing with other Services than the Army. I therefore undertook, in those circumstances, to reply myself, and I take the responsibility for the fact that the Secretary of State for War is not here.

ATOMIC ENERGY (INTERNATIONAL CONTROL)
12.31 p.m.
Mr. Blackburn: In raising today the question of the control of atomic energy it is necessary to deal with the wider sphere of the whole subject of the relations between Britain, America and the Soviet Union. Before doing so it is desirable to recapitulate the present position. Today it is the sad fact that a deadlock has been reached in the deliberations of the Atomic Energy Commission and that the Commission finds itself no longer able to proceed usefully with the discussions which have taken place upon this subject. The main responsibility for this deadlock rests, in the opinion of almost all independent observers, upon the Shoulders of the Soviet Union. Every conceivable attempt has been made over a long period of time to try to get the support of the Soviet Union for a system of international inspection.
The first point which must be made is that it was established by a technical commission, on which there was a Soviet representative who signed the report of the commission, that it would be possible for U.N.O. to control atomic energy. That had been said previously by Dr. J. Robert Oppenheimer and by the Acheson-Lilienthal Committee. After exhaustive examination it was agreed that in general it would be possible, provided the nations of the world were prepared to accept the necessary sacrifice of their national sovereignty, to work out a system of international inspection. That turned very

2445
largely upon aerial inspection. As I think I suggested two and a half years ago, it is possible to place an instrument like a Geiger-Muller counter in an aircraft. That instrument would be able to detect any piles now in existence for the purpose of producing atomic energy on a large scale. It is true that by a most complicated and difficult process, such as recirculating helium, it would be possible for a factory to be built for the production of atomic energy on a large scale which would not release material into the air which could be picked up; but that would be a most difficult task. It was significant that it was very largely on this question of aerial inspection that the work of the commission broke down.
I am bound to say that it seems extraordinary that the Soviet Union, of all countries, should take this stand on national sovereignty; that at the very time when they were being responsible for the judicial murder of Petkov in Bulgaria they were saying at Lake Success, "We cannot accept any infringement of our national sovereignty." It is extraordinary that, when country after country throughout Europe is losing its national sovereignty to the Soviet Union, the Soviet Union takes its stand by this principle of national sovereignty. I do not believe that that is the true reason for which the Soviet Union has rejected so far the proposals for the control of atomic energy. I consider that the true reasons fall into two categories. The first is that in accordance with every principle of Marxism and Leninism the Soviet Union, to use a colloquialism, wish to keep the pot boiling in the world. They want to have civil war and insecurity, because civil war, such as there is in Greece, and the insecurity caused by the fear of atomic weapons and other weapons, constitute the breeding ground of Communism. That is one line of argument put to me over 18 months ago by Professor Dunn, of the Yale Institute of International Studies, and it seems to have some truth in it.
The second point, which is more widely held, is that it is almost inconceivable that the Soviet Union would be prepared to accept inspectors on their national territory. Over a long period of time they have fostered xenophobia, the fear of foreigners, and they maintain their domestic position very largely by saying
2446
that other countries in the world wish to attack them simply because they are making Communism work. However that may be, it remains the position that despite all that has been done to try to conciliate her, the Soviet Union is opposed to international control of atomic energy at the moment. The main problem before the whole world is that, before atomic weapons are possessed by many nations, we must, one way or another, persuade the Soviet Union to accept international control. If we do not, I believe that it is probable that modern industrial civilisation will be destroyed.
As to the development of weapons of mass destruction, throughout the world today individual nation States are going as fast ahead as they can with the development of these weapons and I cannot doubt that if another war comes those weapons will be used. Man has been on the world for perhaps 50,000 years. He has always engaged in wars and he has always used the most effective weapons at his disposal. The only reason why gas was not used in the last war was that gas is a most ineffective offensive weapon. This weapon of atomic energy was used twice without any specific warning by America and Britain despite the fact that we are, or pride ourselves upon being, the most peace loving and democratic of nation. If we and America have used the atomic bomb, it seems the height of simplicity for people to say that other Powers will refrain from using it on humanitarian grounds.
I wish next to deal with the time factor. The right hon. Gentleman the Member for Woodford (Mr. Churchill) said at the start of this Parliament that we have three or four years. Fortunately, that estimate has proved incorrect. The time factor is still considerable. I illustrate that by dealing first with the position of Britain. It is bound to be at least three years before we in this country are able to develop atomic bombs. That is bound to be so: one is not giving away any secret information. I note that a rather serious matter occurred in the "Daily Express" yesterday and I propose to comment adversely upon it. A number of Members of Parliament visited Didcot upon terms which made it perfectly clear that we were not to see anything secret. Yet, despite that, a front page story appeared in the "Daily Express" yesterday entitled,

2447
"Communist M.P. sees atom secrets." The "Daily Express" telephoned the Ministry of Supply the day before, and I am assured by the Ministry that the "Daily Express" correspondent was specifically told that no secrets would be made available. In spite of that, this piece of sensation-mongering was produced on the front page of that paper yesterday. The only consequence of that can be to embitter relations between America and Britain. Lord Beaverbrook had a sufficiently shameful record of appeasing Fascism before the last war: it is about time he realised not only that he should stop trying to appease Communism, but also that embittering relations between America and Britain is not a happy way of dealing with affairs today.
Mr. James Hudson: Between Russia and Britain.
Mr. Blackburn: I will deal with that in a minute. I assure the hon. Member he will be satisfied before I have finished.
We have the time factor that in Britain it will take us another three years at least to produce atomic bombs. It should be remembered that our scientists have worked hand-in-hand with the Americans. For instance, we have had the assistance of Dr. Fuchs, who worked at the Los Amalos laboratories where the atomic bomb was produced. We have many scientists in this country who had access to practically all the information and "know how" in America. Despite that, it will take us here in Britain at least another three years before we are in a position to produce atomic bombs. If that is so, that is one reason—and there are very many others—for the almost universally held scientific belief that it will be perhaps five years before Russia is able to produce atomic bombs and perhaps more years than that before other Powers which I need not mention are themselves able to produce atomic bombs. It will certainly be very much longer than five years at the present rate of French progress before France will be able to produce atomic bombs. To some extent, all this is comforting. If one felt that atomic bombs were now being developed all over the world, one would believe the situation to be almost entirely hopeless.
There is an awful lot of talk nowadays to the effect that people are saying that
2448
war is inevitable. I have never heard any one say that war is inevitable. All this denunciation seems to be a lot of characteristically hysterical rubbish. Nobody says that war is inevitable. What people are saying is that we must take steps now, Otherwise eventually we will get into a situation in which war is extremely likely. If another war comes, we know what the consequences will be. Let me emphasise one small point in that connection. The official White Paper on this subject stated that an atomic bomb if dropped on a major city in Britain would kill 50,000 people and render 400,000 more homeless.
But that is not all. The ghost of the atomic bomb is far more deadly than the atomic bomb itself. Having dropped the atomic bomb in such as way as to distribute the radioactivity, the position is that for months one cannot go anywhere near the place where the radioactivity has been left. If anybody wanted to attack this country they would have only to drop sufficient atomic bombs on our seaports and airports in such a way as to distribute radioactivity, and this country would be finished and starving. It could be done overnight. My friend Professor Oliphant said—and I do not think it has been disputed—that something like 50 atomic bombs effectively dropped on this country would have that effect.
Moreover—I am giving the black side of the picture as one is obliged to do—there are other weapons. There are bacteriological weapons and such things as radioactive dust. I would remind hon. Friends on this side of the House that the chief of the German bacteriological staff, Major-General Schmidt, was flown from Moscow to attend the Nuremberg trials. I am not quarrelling with the Soviet Union on that ground. He is being used in the Soviet Union for the purpose of going ahead with their bacteriological warfare effort. I agree that we use German scientists ourselves, and I am not making this point against the Soviet Union, I am simply stating a fact. All over the world today, weapons of mass destruction are being developed as rapidly as possible. Unless we can get some system of international control that will lead us to the state in which some country which perfects these weapons may be liable to use them.

2449
I have now to embark on more controversial grounds. One has to consider the question of what is to be done. It is difficult to make practical proposals as to what is to be done, but I have a major proposal to make at the end of my speech, namely a proposal for a conference on the highest possible level. I do not suggest that this is the right time for it, because that is a matter on which I am not competent to express an opinion. Only those in charge of affairs can know the appropriate time. I want in the meantime to deal with the deplorable events of this week. The first principle, so far as we are concerned, is that America and Britain must be strong and united. They must he strong in that they must be free from the taint of Communism, and Fascism or of support for either. It is a ridiculous suggestion that we could make friends with Franco. I heard the Junior Burgess for Cambridge University (Mr. Wilson Harris), in the Foreign Affairs Debate, advocating military co-operation with Franco, and a new approach to the Soviet Union in the same breath. We must have nothing to do with Fascism in any form. The action which we have taken over Greece has been greatly misunderstood, but I, of course, support the Government in that matter. They have tried to indicate that we do not think it is a good thing to kill people four years after the crime with which they are charged.
Viscount Hinchingbrooke: Does the hon. Gentleman put Communism and Fascism very far apart?
Mr. Blackburn: I am not putting them very far apart. I was saying that we must be consistent. We cannot denounce the Bulgarian Government and, on the other hand, enter into a military alliance with Franco. I say that we must oppose totalitarianism in any form and be absolutely consistent in the way that we do it.
Sir Henry Morris-Jones: Does the hon. Member agree with the policy which we have taken at the behest of Russia to have no diplomatic representation in Spain?
Mr. Blackburn: Personally, I suggested that our Ambassador should be withdrawn from Spain a long time ago, and I have not seen reason to change my view. I was talking the other day in the train to a Pole, who told the usual story that free Poles tell about Poland. He had also been in Spain, where he had been detained for a
2450
year. He left me under no illusion as to the character of the Spanish régime.
I want to get down to the guts of this problem, and I venture to utter a few words of really sharp criticism about the conduct of certain people in America and of certain people in Britain. I will deal first with America. It must be accepted from now on that no major diplomatic approach should be made to the Soviet Union by Britain without the consent of America or by America without the consent of Britain. What has happened? Apparently General Bedell Smith has made an approach to Mr. Molotov in Moscow. It was a fairly serious approach, of the kind that no Ambassador could take without first consulting his Government. I am sure that they did not mean any deliberate injury, but they did not tell the Foreign Secretary of Britain. That has put us in an impossible position, and they could not have done anything more to comfort Mr. Henry Wallace and the people who think like him in this country than they have done by acting in this way. I will give an illustration later from one of the most disgusting articles that I have seen anywhere in my life, namely, an article in today's issue of the "New Statesman and Nation," entitled, "Slamming the Door."
I feel that it is most unfortunate that General Bedell Smith and the Americans should have handled this matter in such a way that the Russians have been able to score a diplomatic victory. They have, of course, done it in an unfair way by making, a premature revelation of confidential conversations. Nevertheless, there is something to be said for regarding this as a Russian diplomatic victory. There is a second point which, I think, raises something which is even more dangerous. I am afraid that I shall have to quote what I have suggested on another matter to be an unreliable authority, namely, the "Daily Express." Mr. Paul Hoffman was asked yesterday by Senator Henry Dworshak, how British nationalisation would square with Marshall Aid.
"Mr. Hoffman said that they did not want to interfere politically with foreign Governments—'my goals are economic.' If Britain asked for dollars to modernise the steel industry, and it announced steel nationalisntion, we would have to decide whether or not this would promote recovery. My guess is that it would not. You don't get results in a transitional period."

2451
I am very pro-American and have consistently supported the United States. It would be wrong for America even indirectly to interfere with our political affairs. If they want to make the working class of this country passionately determined on steel nationalisation the way to do it is by American diplomatic action to prevent it. Let us settle steel nationalisation for ourselves and have no intervention from the U.S.A. In this process of trying to unite Britain and America and trying to make them strong we are also to blame. I cannot understand why the Communist and Fascist, purge has been held up, and why it did not take place long before. We have a well known scientist, Professor Nunn May, who gave, in August, 1945, to the Russian Ambassador a sample of Uranium 235, the very material from which the Hiroshima atomic bomb was made.
Mr. Solley: The trial at the Old Bailey which preceded the conviction and sentencing of Dr. May was held in camera. No statement in public was ever made of the case made out against Dr. May. I would like to know where the hon. Gentleman got his information and does he consider if that information is correct that he is infringing the Official Secrets Act or not in making it public in this House?
Mr. Blackburn: The hon. Gentleman is well-known for his interventions. I should have thought that, in order to take the line which he persistently does, he might at least take the trouble to read the published facts. They will all be found in the Canadian spy case and in the Blue Book published in this country, which the Prime Minister said he would see was more fully published. The details of Professor Alan Nunn May's giving uranium 235 to the Russian Embassy are given at length in the Canadian spy case report.
Mr. Solley: It is incorrect.
Mr. Blackburn: It is not incorrect. If the hon. Member takes the trouble to study the report he will find out.
We should be exceedingly careful about this. It would appear also that the gentleman who is responsible for holding this up is none other than the
2452
gentleman on the editorial board of the "Daily Worker," Mr. L. C. White. This matter is not being handled with a sufficient sense of urgency and importance. I think it is most important that we should satisfy the U.S.A. that if they co-operate with us on atomic energy we shall not repeat the mistake we made in August, 1945.
Here is the article entitled, "Slamming the Door," to which I referred earlier and which is presumably written either by the editor of the "New Statesman and Nation" or by its assistant editor, the hon. Member for East Coventry (Mr. Crossman). This is the sentence in which they try to sum up events:
"The conclusions drawn by ordinary people everywhere will be that those who are preparing for war in America have defeated sanity."
That is farcical. Here is the "New Statesman," which has been asking my hon. Friend and his right hon. Friend to allay Russian suspicions, denouncing America as warmongers. I have never heard anything more fantastic or malicious in all my life and I hope that the insipid and frustrated gentleman who edits this newspaper will think again and either withdraw from the editorship or start to produce a line which will be in keeping with the traditions of this country.
I cannot for the life of me understand the situation of the hon. Member for Gateshead (Mr. Zilliacus), who gave an undertaking but who produced on Monday an article in the "Daily Worker" in which he said that his hon. Friend the Member for Finsbury (Mr. Platts-Mills) had been butchered by the National Executive to make a Tory holiday. Does anybody seriously imagine it will benefit the Tory Party for us to exclude the totalitarian element in the Labour Party? Nothing could make the success of the Labour Party more certain at the next General Election than a surgical operation to excise from the Labour Party the totalitarian element.
Mr. Solley: The hon. Member for Kings Norton—
Mr. Blackburn: I give this as an illustration of the general principle that one must be exceedingly careful, both in Britain and America; that our policy in future must fall into line and that we must

2453
present a united front. The purpose of Soviet policy, in this respect at any rate, is to divide America from Britain. If we allow them to do so, we shall be contributing to the probability of another war.
I wish to dismiss the idea which has gained currency of an Atomic Union in Western Europe. At the moment that is more or less impossible. There is cooperation between Britain and America, but it is not really possible for us to have co-operation with other countries. One reason so far as France is concerned is that the high commissioner of atomic energy in France is a Communist, although a fine man of great distinction, Professor Joliot Curie, who has been to Moscow and is on friendly terms with Molotov. So long as countries of Western Europe are not prepared to take effective steps to see that the people in charge of their atomic energy programmes are to be trusted, we cannot go on with atomic unity.
An immense responsibility rests upon the shoulders of the Prime Minister and the Foreign Secretary. However much we in this country may hate the regimes established by the Soviet Union in countries like Bulgaria and Roumania, we nevertheless face the situation that it will be intolerable for us to live in a world in which many nation states have developed weapons of mass destruction. We must have a final settlement with the Soviet Union before the nations of the world develop these weapons otherwise an atomic war is inevitable. I believe—and this is a purely personal opinion—that Stalin is an isolated man and, as so often occurs, the victim of his own reign of terror. I believe that he does not get accurate reports about feeling in Britain and in the U.S.A. No Soviet Ambassador in Britain who told the truth about this country would keep his job for more than about a fortnight. He would immediately come under suspicion of having been got at by the capitalists. The history of the Fascist experiment shows that very much the same kind of thing happened there also.
There is still a chance that we might be able to recapture some of the spirit of wartime co-operation, but only by talks on the highest level. Talks at a lower or medium level are ineffective. Mr. Gromyko had no authority whatever at
2454
Lake Success. All these matters are decided by the men of the Politbureau, of whom the key member is Stalin. Therefore, a final approach should be made at some time to Stalin himself. I believe that policy is supported by a wide range of public opinion. It was supported in principle in January by the right hon. Gentleman the Member for Woodford (Mr. Churchill). It was supported recently in the House of Lords by almost every speaker, including Lord Hankey. Before we accept this situation of the nations developing weapons of mass destruction, we must make a final attempt at the highest level and at a conference with Stalin. We must exhaust every possibility of peace, and, as I said 18 months ago, we must realise that if we do not take risks for peace we shall face the certainty of war. That is why I suggest this conference. This time, it should be the most solemn conference of all.
We should not allow Stalin to assume that the people whom he meets may be removed at the next elections, either in America or in Britain. Those attending this conference should comprise, for America, Truman, Marshall and Vandenberg, who is the Foreign Affairs Leader of the Republican Party; and, for Britain, the Prime Minister, the Foreign Secretary, and the Leader of the Opposition, who still has an immense name in Europe and who might be able to help the Prime Minister and the President of the U.S.A. to recapture that spirit of wartime co-operation which, if recaptured, might have so great an effect. I do not pretend that I am very hopeful about this proposal. I am not advocating another Munich—unless one calls it a Munich of the nonMunicheers—although Neville Chamberlain must now be smiling, in whatever part of the universe he exists. We are in very much the same position as he was in. Never let us forget, whatever may be said against it—and quite enough has been said in the "Daily Telegraph"—that Munich succeeded in uniting the British peoples behind the foreign policy of Neville Chamberlain. A final conference of this nature would succeed also in uniting the whole of the British people behind the foreign policy of the Government.
I conclude on this final note. I agree with the remark made yesterday by Sir Edward Appleton, that there is unlikely to be any final solution to this atomic

2455
problem merely along technical lines. I do not believe that this problem will be solved without a religious revival which will concentrate the minds and hearts of men upon loftier ideals than the materialistic ends with which we are so often confronted. I hope that my hon. Friend will consider the proposal that has been made and, without in any way asking him to accept the view that this is the appropriate time for the conference, I hope that the proposal will be considered by the Foreign Office.
1.0 p.m.
Mr. James Hudson: I should like to say—and I did not expect to be able to say this—that I warmly approve the proposal which my hon. Friend made at the conclusion of his speech. I think it is unfortunate that he led up to it by so much that was said at the expense of Russia, which would add to the many difficulties already existing for the discussion of the whole question of atomic energy and preparations for war at the highest possible level. I do not want to say very much about the matter today, but just to voice the view that we have a very special responsibility regarding the present anxiety in the world about atomic bombs, because of our part in releasing atomic bombs in the first case. It was the right hon. Gentleman the Member for Woodford (Mr. Churchill) who came down here and confessed that he took it on his conscience, as the President of the United States also took it on his, to release on two Japanese towns the thing that now bedevils the whole of the world situation.
Viscount Hinchingbrooke: May I interrupt the hon. Member? We must have this absolutely correct. The present Prime Minister of this country was Prime Minister at the time the bomb was dropped. If it is a question whether it was right or wrong to drop the bomb, then let us realise that the present Prime Minister was primarily responsible, and that he had several weeks to decide. I cannot accept the hon. Gentleman's statement, though I agree that my right hon. Friend gave his general support to the plan.
Mr. Hudson: I am quoting what the right hon. Gentleman the Member for Woodford said in this House—that he took it on his conscience—not on the present Prime Minister's conscience, though my
2456
right hon. Friend the Prime Minister may have grave responsibilities in other ways— for working out, with the President of the United States, the dropping of these two bombs—[Interruption]. I am a careful student of these matters, and I think I was the first back bencher to raise this issue in the House. I want to refer to this point that, at the time these bombs were dropped, as is now clear beyond any shadow of doubt, the Japanese Government, untrustworthy as it may have been in itself, was seeking a way out of the war, and had been seeking a way out of the war for at least four months. If anything like wise diplomacy had been exercised at that time, the war would still have come to an end, and the world might have been saved the first experiment in this frightful method of destruction which we have to face today. I wish to be true to my own conscience. It is on my conscience, as a citizen of this country, that this thing did happen—on our responsibility. It makes me feel all' the time that we have a very special responsibility for advocating that new efforts should now be made to contact the Russians on this matter.
It is as clear as noonday, particularly to the Russians, from all the uncertainties, restrictions and discussions that have taken place particularly in America, that Russia is looked on as the nation most to be feared, because Russia may, somehow or other, be working out her own atomic plans. It is this issue of the atomic bomb in relation to Russia that is the main political issue the world has to face, and it was for that reason, I think, that my hon. Friend was right in his concluding proposal that, bad as things are now, hopeless as the Foreign Secretary himself sounded the other day when he spoke of the way in which negotiations had broken down and of the difficulty of restarting them, despite all these difficulties, a new effort must be made by our own Prime Minister to reach Stalin on this point.
I want to go a step further, and I am trying to help in this situation, as I believe my hon. Friend was trying to help with his proposal. I think that Stalin could do a great deal himself if he would say quite frankly, apart from all the tricks that have been played in the U.N.O. conferences, what he would like to have done with this atomic menace. I do not ask for any detailed proposals, or even, at the early stages, that he should

2457
make public what he wants, but, if he would make clear to our own Foreign Office, through his Embassy here in London, what sort of proposals he would be willing to have discussed on this issue, I think he would be fulfilling a part of his responsibility with regard to the great terror that today faces the world.
I hope, therefore, that some statement can be made today without throwing out any suspicious references to Russia, that, if there came from that side even the most simple proposal regarding atomic bombs, we would talk it over with them, add proposals of our own, and be willing—and I think one ought to say this again—not only to put our cards on the table, as the Foreign Secretary has said, but be willing to forego any advantage which we have in the joint possession of this secret which we hold today under a definite understanding with America. I think we have to say that, and to go on saying it, and we should never rest content, nor should the Prime Minister and the Foreign Secretary rest content, until we have found the means of bridging this abyss of suspicion between the Russians and ourselves in regard to what we really mean to do with the atomic bomb.
If I were a Russian and I had that held over my head, as we know it has been held over their heads, that the atomic bomb was being prepared against me and against my country, I should react in the same sort of stupid, foolish and wrong way which the Russians have done. [Interruption.] Yes, I should; I am not making myself out to be an angel. I say that we should try to see ourselves as others see us. I do not think I can say anything more useful at the moment than that simple plea, which I hope every hon. Member in the House will support, that a new effort should be made, despite the wrongs and mistakes for which Russia has been responsible. I am not letting her off. We are faced with a situation regarding the atomic bomb which is so terrible that it overshadows every other issue we have to discuss. We know perfectly well that all that we have striven to do through our own programme of accomplishment at home and the rebuilding of the lives of our people will be of no avail if the atomic bomb is to be released in another war. If we can only make some approach to the Russians by which this matter could be discussed now, I believe
2458
that this Government will have done, in that direction, more to deserve well of the people than in all the other good things they have already done.
1.10 p.m.
Sir Henry Morris-Jones: am sure we are indebted to the hon. Member for King's Norton (Mr. Blackburn) for bringing this matter before the House. No one likes talking on unpleasant subjects. There are some aspects of this matter which are not pleasant, but we should make no secret of this question because of that; I think it was Shakespeare who said that the person who brought in bad news was never very popular but it is a wrong attitude to say that we should no: discuss this matter which demands the attention of the whole world. The how Member for West Ealing (Mr. J. Hudson) told us that the idea of atom bomb has been like a miasma over the thoughts and minds of the whole civilised world for the last two years. There was a Debate on this question in another place some time ago, when it was pointed out that the time would come when the British Government would have to make their position clear, and that we could not go on indefinitely with the present situation. Every avenue has been explored and every attempt has been made by the Atomic Energy Commission to bring about agreement on this question, but they have so far failed.
I think we should recognise the attitude the United States are taking up. Let us suppose that Russia today possessed the secret of this atomic weapon and were manufacturing it every day, as I was told the other day the United States is manufacturing it in increasing numbers in order to keep their plant going. Does anyone think that Russia, were she in possession of this secret and had the finished article ready, would be prepared to do what the United States are now prepared to do, and that is scrap the whole of their plant?
Mr. Emrys Hughes: Is it not a fact that Russia was the only country which went to the League of Nations and put forward, through Mr. Litvinov, proposals for the complete disarmament in the world of all weapons and armies?
Sir H. Morris-Jones: I remember that. The trouble with Russia, and one has to confess it, is that we cannot trust her

2459
word, and we have no means of checking her work. The hon. Member takes a different line on Russia, and I am not antipathetic to her, but as the Leader of the Opposition his said, she is in the hands of about half a dozen men who are responsible to no one, are working in secret and have the control of that mighty country. To come back to the point I was mentioning, I think the attitude of the United States in this matter should be commended. I was very impressed when the Chairman of the Atomic Energy Commission came to this House. I do not intend to repeat what he said because some of it was confidential, but I was much impressed with the idealism and the intense desire of the United States to come to some solution which would mean scrapping for all time the manufacture and development of atomic energy.
Reference has been made to the time when Soviet Russia and other Powers will be in possession of this weapon. No one can tell, outside the few secret men in Russia, when Russia will be manufacturing these articles. My information, however, does not tally with the information conveyed to the House, that it may be five years. The assurance was given six months ago, by those in a position to surmise and make a fair estimate, that Russia would be able to make these bombs two and a half years from now. The hon. Member for West Ealing said that war is not inevitable, but nothing is inevitable in the world.
I remember that in the "History of Europe" by Mr. Fisher, he expressed the view that in his reading of history he had found nothing was inevitable and that there were always big "ifs." Mr. John Burnham, in his book on the coming world struggle, conveys the impression that war is almost inevitable, in the sense that on the one side there are the dynamic Communists who mean to extend and expand, and having started cannot retreat, and on the other side, the democratic nations, with their different perspective, who may not be able to rally the democratic nations in such a way as to stop this clash which will destroy the world. Nothing is inevitable, but the United States and Great Britain may have to come to a very much closer apposition than they are in today if they are to stop this dynamic force. I
2460
would go so far as to say that we want common citizenship between the United States and the British Commonwealth of Nations, and the sooner the better. We want an alliance, with one flag, one people and one English-speaking race, to show that we mean business in this matter and that we mean to stop this dynamic clash which it is avowed is coming.
Mr. Skeffington-Lodge: Does not the hon. Member recognise the extreme difficulty of stopping ideas with material means? He seems to be advocating that we should try to do that in conjunction with America.
Sir H. Morris-Jones: The American and British people and the British Commonwealth of Nations come from the same race. The foundation of America was laid by us; we have the same democratic feelings, the same ideals. We are wholeheartedly opposed to the doctrine of Communist permeation, because we believe it will mean the downfall of civilisation if it is allowed to continue unchecked. If we do believe that, and we see this Communist permeation marching on, is it not better for us to take steps to make it clear that that penetration will eventually clash against something solid? We have tried to make that clear by our advocacy of Western Union, in which Members in all parts of the House have taken part. It is believed that some countries in Europe will be prepared to lose their national sovereignty to get one united body which would keep democratic ideals alive and ever before this Communist penetration.
I am not afraid of a clash if the democratic nations of the world mean business. The trouble is that the democracies are always too late; they disagree among themselves; they will not unite. They are unable to take such measures as a totalitarian Power can take. One morning we may find that it is too late. After all, His Majesty's Government represents a great deal in the world, in which we have taken the moral leadership throughout the centuries. Industrially and economically, too, we were the leaders of the world. Now we have to take a back seat behind the mighty and prosperous industrial nation of the West, but morally, at all events, we have not lost force. We have behind us 1,000 years of civilisation and the art of government. We have

2461
men in all parties, men with ideals, who can argue publicly and express the facts of the situation. I hope the Government will tell the people of these islands—I do not expect the Under-Secretary to give us a conclusive answer—that they are taking the steps which are necessary to meet the present situation. There are no people in any part of the civilised or uncivilised world whose position is more vulnerable than ours. It is the duty of the Government not only to the millions of our own people but to the world to take steps to remove fear once and for all. I am not sure that we can remove the fear of war, but we can take steps before it is too late to see that this terrible weapon of destruction will not be employed against our people and the people of the world.
1.27 p.m.
Mr. Solley: Is it usual in this House for persons participating in a Debate to confess their self-interest? I have in a sense an interest in this matter since I was a research physicist before I discovered that under a capitalist system it was possible to earn more money in other activities than that for which one had been primarily trained in a university. Also for my sins, I was responsible for a small part of the research work in connection with the isolation of uranium-isotopes. This is a subject which, in its political implications, must be seen primarily from the technical point of view. For example, speakers have attempted to estimate the time which they think will elapse before the Soviet Union have a supply of atom bombs. Speaking entirely for myself, on the basis of my own estimation of the position, I am satisfied that the Soviet Union is in possession of atom bombs at the moment.—[Laughter.]—The hon. Member for King's Norton (Mr. Blackburn) can laugh but his knowledge is second-hand while I, at all events, was a participator in scientific research on this subject.
The assumptions which have been made about the possibility of war against the Soviet Union are based on false premises the first of which is, that the Soviet Union has not got a sufficient reservoir of scientific personnel who could, with efficiency and speed, manufacture atom bombs. I would like to assure the hon. Member for King's
2462
Norton that I have studied with some interest the scientific papers which have emanated from the Soviet Union and which, in spite of all the slanders about the so-called iron curtain, are available for study by scientists all over the world. I have the highest respect for the scientists of the Soviet Union. Second, the hon. Member and his friends are assuming that the only possible way to isolate Uranium 235, which is one of the fundamental explosives in connection with the atom bomb, is by the extraordinarily complex, expensive and highly inefficient methods which were developed in the United States during the war.
That is a completely wrong conception of the position. The methods of isolating Uranium 235 were developed in the United States during the war, when the essence of the whole business was not efficiency but certainty of production. I t was well known to theoretical physicists that a number of methods were available for isolating isotopes—for instance, by the diffusion of gases through certain substances which would permit of the partial separation of gases, or by the centrifugal separation of gases of different masses. It was known that these methods could be guaranteed to be successful, but that they were inefficient in the highest degree. The hon. Member for King's Norton thinks that the Soviet Union, or any country interested in the atom bomb, will necessarily adopt the inefficient but essential methods of wartime during the present epoch. I should not be at all surprised if a method based on electrolysis, a continuous method of deposition on electrodes, had not been developed, the result of which would be that it would be possible to obtain Uranium 235 within the confines of, not necessarily a small room but a small factory.
Another matter I should like to bring to the attention of the warmongers is that it is quite possible, for any physicist to calculate with a reasonable degree of accuracy the number of atomic bombs which are available in the world at this moment. We know the percentage of Uranium 235 which, in practice, can be obtained per ton of uranium ore, and the uranium it takes to make an atomic bomb. I would say to the warmongers that the scientists of the Soviet Union are as much aware as the scientists of the United States of the num-

2463
ber of bombs now available for the next war.
Finally, I do not believe that it is possible, in practice, completely to safeguard any nation from attack by another nation with atomic bombs. The only safeguard can be the complete unity between all the big Powers of today. It is primarily, therefore, a political question, of unity between us and the United States on the one hand, and the Soviet Union on the other. We are not faced with the line up of the so-called anti-democracies on the one hand and the so-called democracies on the other. It is a line up of, on the one hand the warmongers who are substantially the capitalists, and on the other hand the non-warmongers who are substantially the anti-capitalists. Let us join the anti-capitalists, and we shall win peace for the peoples of the world.
1.32 p.m.
Mrs. Ganley: I wish to add my plea to the request made by hon. Members, that an approach should be made once more to those people now holding in their hands the future peace of the world. We are discussing scientific development, and we know perfectly well that scientific development is bound to go on, in every corner of the world, wherever scientists have available their thoughts, and the materials in which to express those thoughts. That is bound to happen, and we have no desire to stop the processes of scientific development. What we must have poignantly in mind is an endeavour to stop the misuse, for the purpose of destruction, of the scientific developments which are now being made available for the whole world. Let us remember that the whole of scientific development so far is available for the consideration of and further research by those people who are prepared to bend their energies and lend their brains to that development.
The question today is not whether warmongers are capitalists' and anti-warmongers are not capitalists. The question today is the use of the power of those who possess against the people who do not possess. Surely, the people who do not possess are those who are being urged by this Government to help to make this country secure. All hon. Members today go out into the country and urge the people who are pro-
2464
ducing coal, food, cotton and steel to increase their efforts in order that we may pay our way. It is such a simple thing. That is what we have been urging those people to do—to give of their utmost capacity, energy and intelligence in the service of their country. Now we see that the production of coal is rising; and everywhere we look we see that the people 'have responded to the appeals which have been made in the last two and a half to three years. What are we now to say to those people? Are we to say, "We want you to go on producing more and serving the country. The only thing we are hedging about is real security."
Wonderful measures of security, in the National Insurance and Health Schemes, have been introduced for our people in order to raise their standard of life. We want to be able to say to the rest of the world, "This is what this British Government means to do in serving its own people, and through serving its own people to serve the world." That is the conception of life that the people of this country have at present. I urge that we should go on with this development, holding the conception of the establishment of a more secure life for the majority of the people on earth, for in that way we shall be able to say that we have not on our conscience the fact that we refrained from endeavouring once more to make the world secure for all peoples.
I urge that the plea made by my hon. Friend the Member for King's Norton (Mr. Blackburn), and very strongly made by my hon. Friend the Member for West Ealing (Mr. J. Hudson), be implemented, if that is at all possible. I ask our own Foreign Secretary—who has done so much work for the people of this and other countries—to reconsider, together with the Cabinet, whether it is not possible to face the future saying, "Yes, we have all these achievements behind us, but the future is much more important. The future life of the people must be our main consideration. Securing their future life is the service we can render to mankind." If we can only take our courage in our hands, we may once more be able to push the door to security wide open. Let us once more push at that shut door to see whether, even with all the difficulties we are facing and with all the complexities with which we are beset, we cannot open it sufficiently to secure the peace

2465
of the world. If we do that, then once more Britain will have made her contribution to the saving of world peace.
1.38 p.m.
The Under-Secretary of State for Foreign Affairs (Mr. Mayhew): The Debate has shown a considerable measure of agreement among those hon. Members who have spoken, and between them and the Government. There is a general consensus of opinion about the vital importance and urgency of this question, and about the necessity for the Government to do everything they conceivably can to get out of the existing deadlock. I may also say that there has been agreement about the difficulty of doing so, and the difficulty of putting forward concrete constructive proposals. As all are agreed, one thing the Debate has illustrated is that the subject of controlling atomic energy cannot be considered in isolation.
The Debate has ranged widely over a large number of aspects of the foreign situation. That, I think, is inevitable. In the last two years it has become clearer and clearer from the work of the Atomic Energy Commission that it is just not possible to consider and solve this question in isolation from other important political questions. I do not mean that before making a substantial contribution to the subject of atomic energy control it is necessary to range as widely as did the hon. Member for King's Norton (Mr. Blackburn). If my hon. Friend will forgive me, I do not propose to follow him on the subjects of steel nationalisation, religion, Spain, Greece, the so-called Communist purge, or this week's "New Statesman and Nation." However, I will' try as best I can to answer one or two of the points that he and other hon. Members raised on the subject of atomic energy control.
I was asked about the possibility of direct approach at the highest level in the solution of this problem. Hon. Members will recall the statement made in the House on Wednesday by my right hon. Friend the Foreign Secretary. I am not quite clear—it was not precisely stated by any hon. Member—exactly what the proposal is, but if it is a general proposal for talks at the highest level for the settlement of these questions, I can say, as has been said before, that His Majesty's Government are anxious, and always have been anxious, to reach a general worldwide solution of our problems.
2466
We are aware of the keenest hopes of ordinary people on this problem, so admirably expressed by the hon. Lady the Member for South Battersea (Mrs. Ganley), and we also agree that the problem of the control of atomic energy cannot be solved in isolation from other political problems. However, as the hon. Member for King's Norton said, and as he will agree with me, the question of the timing, the preparation and the judiciousness of this approach is one on which the Government's view is clearly a unique one. I did not find in the speech of the hon. Member any criticism of the Government on this score. I would, therefore, refer hon. Members to the statement made by my right. hon. Friend on Wednesday in the House in which he stressed the importance of clearing the ground, the essential need for careful thought and careful preparation and the unwisdom of courting new failures and increasing our disappointments and discouraging ourselves. In the rest of my speech, I will deal more precisely with this matter in so far as atomic energy is concerned.
Mr. Blackburn: I hope that the hon. Gentleman will report to the Foreign Secretary that from many different point, of view there was virtual unanimity that at some stage, an approach at the very highest level, to Stalin himself, would be advisable.
Mr. Mayhew: I have no doubt that my right hon. Friend will study this Debate —he always studies Debates on Foreign Affairs—and will appreciate that. At the same time, perhaps I may be forgiven if I do not add to what has been said—
Mr. Emrys Hughes Mr. Emrys Hughes rose—
Mr. Mayhew: Perhaps the hon. Member will forgive me if I do not give way, because I have a great deal to get through. We have now reached a definite stage in the discouraging history of the negotiations on the subject of the control of atomic energy, and perhaps the House will forgive me if I refer very briefly to the outstanding factors in the history of the work of the Atomic Energy Commission. After 22 months it has reached the stage where the French Government have put forward a recommendation supported on behalf of the United Kingdom Government and the United States Government, that the present discussions of the Atomic Energy Commission should be suspended,

2467
since it is not possible in the existing state of international confidence for the Commission to make further progress.
That calls to mind the history of the Atomic Energy Commission. Since time is short, I will refer hon. Members to a statement of this history made recently in another place by the Chancellor of the Duchy instead of going through that familiar history now. The first report of the Atomic Energy Commission, to go back to the beginning of last year, was in line with the original United States proposals put forward by Mr. Baruch, that an international control authority should be set up having far-reaching powers, including the exclusive right of research into atomic energy for dangerous uses. It recommended that the manufacture, possession and use of atomic weapons should be prohibited, that international control was technically feasible, and that, since a risk of a diversion to dangerous uses was present at every stage of atomic processes, international control should be exercised at all stages. In March last year, the Security Council began its debate on this report, and after great procedural difficulties which the United Kingdom delegation was largely responsible for solving, it was referred back to the Atomic Energy Commission for further study.
The principal work since then of the Atomic Energy Commission has been done by its sub-committees, particularly sub-committee No. 2. The work has fallen into two parts, first, a study of the alternative Russian proposals, and, second, the elaboration of the majority proposals embodied in the first report of the Commission. The Russian proposals fell into two parts. The first was for an international convention for the prohibition of the production of atomic weapons and for the destruction of existing stocks. The second was for the establishment of two committees, one to exchange basic scientific information and another to elaborate recommendations for the prevention of the use of atomic energy to the detriment of mankind. In June last year supplementary Russian proposals were tabled stating that a convention prohibiting the use of atomic weapons must be concluded and carried out before any agency for the control of atomic energy, even such an agency as the Russians
2468
themselves put forward, could be concluded. They also stated that control must be by periodic inspection only plus special investigations in special circumstances. The United Kingdom delegation asked for clarification of those proposals, and it emerged that there were fundamental differences of view between the attitudes of the Soviet Government and the majority of the members of the Commission.
The powers of the international control commission proposed by the Soviet delegate were confined to periodical inspection and special investigation in certain circumstances, and these were felt by the majority of the Commission to be an insufficient guarantee against the diversion of dangerous materials, not to provide the means of detecting secret activities, and to fall far short of the minimum inspection and security requirements needed to give the feeling of security on which the whole international system must needs be based.
It was also felt that the second great difference of opinion was that the international control commission proposed by the Soviet Union would have had no powers, except by recommendation of the Security Council, to enforce either its own decisions or those of any convention. The third difference was that the Soviet Government insisted on a system of control only after a convention for the prohibition of atomic weapons and the destruction of existing stocks had not merely been signed and ratified but also put into effect. On 15th August last year, a recommendation was passed by the Atomic Energy Commission by nine votes to four, with three abstentions, that these proposals of the Soviet Government were not adequate for an effective system of international control and could not form a satisfactory basis for further study. It was also stressed that they were not in line with the technical considerations which had been carefully studied by the Commission.
The Commission's second task was the elaboration of the original proposals in the first report. Although they are well known, I will inform the House of the basic principles on which the majority of the Atomic Energy Commission reached agreement. These basic principles are a considerable achievement, and the British Government regard them as

2469
a starting-off point for the further consideration of this problem. The principles are as follows. First, that decisions concerning the production and use of atomic energy should not be left in the hands of nations, that is, of individual nations. Second, policies concerning the production and use of atomic energy which substantially affect world security should be governed by principles established in the treaty or convention which the agency would be obliged to carry out. Third, that nations must undertake in the treaty or convention to grant to the agency rights of inspection of any part of their territory, subject to appropriate procedural requirements and limitations.
In implementing these proposals, further basic measures are provided. The first is that production quotas should be based on the principles and policies specified in the treaty or convention. Secondly, ownership by the agency of nuclear fuel and source material. Thirdly, ownership, management and operation by the agency of dangerous facilities. Fourthly, licensing by the agency of non-dangerous facilities at present operated by nations. Fifthly, inspection by the agency to prevent or detect clandestine activities.
These basic principles were adopted after thorough debate and examination by ten votes for, the Soviet Union's vote against, and abstraction of the Polish vote. The British Government welcomed the report and accepted the work done as indicative of the powers and functions which any international authority must have to deal effectively with this problem. Our representative referred to certain points where we had some reserves until further consideration could have been given to the full report. This second report was submitted too late for discussion at the Assembly in the Autumn, and has now been submitted to the Security Council, which has not yet discussed it.
Since then the Atomic Energy Commission has not relaxed its work. It has continued to deal in sub-committee with two subjects: first, the organisation and staffing of an international agency; secondly, a further examination of the Soviet proposal. Little progress has been made since then. The first question is a subsidiary question which depends on agreement upon the basic principles. The second led merely to a reaffirmation of the previous standpoint of the majority of
2470
the Commission that the Soviet proposals were not adequate and did not provide a basis for study. And so a complete impasse was reached in the work of the Commission after hopes had steadily dwindled over the 22 months and 200 meetings of the Commission and its committees.
The Atomic Energy Commission now has before it the report presented by the French delegate on behalf of three Governments. It recommends that discussion shall be suspended in the Commission for the time being on the ground that in the present state of international confidence the Commission can make no further progress. Here I should make it clear to the hon. Member for West Ealing (Mr. J. Hudson) that this is in no sense a breaking up of discussions or a dismantling of any machinery. The Commission remains, the machinery remains; what has been recommended is that, for the time being, discussions should be suspended. It is true there are certain problems which have still not been thoroughly discussed in the Commission, and it might well be assumed that we should continue to discuss these subordinate questions on matters of detail rather than suspend discussions at this point. It is true that we could continue to discuss the organisation and the administration of the agency, we could discuss the financing of it, we could discuss other problems of a more detailed kind, but we have come to the conclusion that we must now have agreement on the basic principles first. The truth is that if those basic principles are agreed, these subordinate matters can be agreed to.
Mr. J. Hudson Mr. J. Hudson rose—
Mr. Mayhew: I am sorry, I must finish. If we cannot get agreement on these basic principles then it is quite useless at this stage to continue further discussion of the details. We feel that to continue these discussions would encourage the misleading impression that progress is being made when it is not. If progress were possible, if there were one chance in a thousand, if there were one chance in a million, of progress being possible now along these lines, we would take that chance willingly, but at present we feel that without any hope of agreement in these discussions negotiations can sometimes be worse than useless, they can be a source of irritation, they can be a source of dangerous illusions.

2471
We think it better that the world should know plainly that in the present circumstances no progress is possible on the Atomic Energy Commission. I would say here that the majority of nations are plainly eager for effective international control of atomic energy and 10 out of 12 of the members of the Commission are agreed on important basic principles. They have worked out sufficiently a plan which is politically acceptable to themselves, which is technically sound, and which is fully capable of being put into operation. They welcome gladly that voluntary sharing of part of their sovereignty which is involved in this plan. There will never be an effective system of international control of atomic energy without a merging voluntarily of some part of sovereignty. As I say, 10 out of 12 of the members of the Commission are prepared for that, but, of course, any scheme must also be world-wide. There cannot be a system where part of the world binds itself by the rules and regulations of a decision and part is free, and for the success of any scheme the fullest co-operation of the Soviet Union is essential. And the Soviet Union is not willing to take this great step forward, to join in with others in this voluntary merging of a part of their sovereignty.
Mr. Emrys Hughes: Has not the Soviet Union offered to negotiate this week?
Mr. Mayhew: No, I cannot in the least —[An HON. MEMBER: "Could not we push at the open door?"]—I heard a reference to the open door, but I would appeal to the history of the Atomic Energy Commission to make it perfectly plain that this is a grotesque distortion of the situation. The truth is that the majority of nations are prepared for this, but the truth also is that the Soviet Union clings to her secrecy. Complete openness is essential for the success of a scheme of international control. That is the truth of it, and it is a fact that we have to face. Unfortunately, it is now plain that in the existing state of confidence further progress of the Commission along these lines is not possible. The Atomic Energy Commission could have failed perfectly well because it was not practicable for some reason, because it was not practicable to get a scheme of international control; it might well have
2472
been found that it was not technically feasible but in fact that is not the case. It has been found to be possible, a practical scheme has been worked out, and there is nothing wrong with the machinery of negotiation. Hon. Members are urging direct talks, but there is nothing wrong with the machinery of negotiation on this point.
Mr. J. Hudson: Except that it has broken down.
Mr. Mayhew: The machinery itself, through the United Nations, has not broken down. It has not been because of the machinery, the technical aspect, or that it was found impracticable, but as hon. Members know, and as has been stressed already in the Debate, the scheme was stillborn for the same reason as other great constructive schemes have been stillborn in these past years, because of the lack of confidence between the Soviet Union and other Powers. That is the truth.
The position now is that the Security Council will debate the report of the Atomic Energy Commission and it will submit the report, no doubt, to the General Assembly for recommendations as to future action. Our own view is that if a solution can be reached at all on this problem of Atomic Energy control, it can be reached through the machinery of the United Nations. His Majesty's Government have done their utmost so far. It was my right hon. Friend the Prime Minister who took the initiative in the first place in securing that this 'matter came under the aegis of the United Nations.
Mr. Blackburn: By direct approach.
Mr. Mayhew: At that time it was not possible to work through the United Nations machinery. The Attorney-General and the Secretary of State for Commonwealth Relations have also played leading parts in the work of the United Nations at the Assembly and in the Atomic Energy Commission. Last year, in March, we helped to resolve an important deadlock which held up the work on this matter seriously. We were responsible for the rediscussion of the Russian proposals which took place this year. However, we are facing the fact now that the outlook is extremely discouraging. We are as determined as ever we were at

2473
any time to find a solution to this problem; we are just as conscious of the importance and urgency of it, and we shall do everything possible to try to restore a state of confidence between the Soviet Union and the other Powers which is essential for the solution of this problem of atomic energy. I can gladly give an assurance that at the first sign of improved relations we shall be eager to resume discussions on this problem, and we shall give our utmost thought to reaching a solution. We are not despairing; it would not he forgivable on this subject to lose hope. To despair on this problem is to despair of peace itself and to despair of mankind itself. But two years' experience have shown that it cannot be solved in isolation. Our view is that it is best to acknowledge these discouraging facts, rather than to prolong these discussions with no hope of progress.

GOLD RESERVES (LOSSES)
2.0 p.m.
Mr. Spearman: I am very glad to have the opportunity of raising the question of losses of our gold reserves as a result of capital transactions, because I believe it to be of the very first importance. I think a sober view is taken of our economic position on the Government Front Bench today, since that jubilant figure, the right hon. Member for Bishop Auckland (Mr. Dalton), has left the Front Bench, and the Leader of the House has apparently been converted to realism. I do not think any Member on that Bench would now deny that unless we spend less or produce more we are faced with economic collapse. At the same time, the economic consequences of a failure in those two directions may be long drawn out; in fact, they may last until a General Election. What could bring upon us sudden disaster is a loss of capital on the scale that we suffered last year.
The United Kingdom balance of payments White Paper issued in February showed that the deficit on current account amounted to £675 million, yet the total drain on our gold reserves was no less than £1,023 million. After allowing for subscriptions to the International Monetary Fund, that means a balance of £297 million due to repayment of external debt, or export of capital. I have reason to fear that the amount was in fact
2474
considerably larger than that, and so large that the Government dare not disclose it but took measures to conceal how much was lost. There appears to be some confirmation of my fears in the White Paper on National Expenditure of April, 1948, where in a rather obscure note, which is on page 22, it is stated that two items which may together be of the order of £100 million would perhaps be more properly treated as elements in external investment.
I hope the Financial Secretary to the Treasury will be able to throw some light on that, because, if my fears are confirmed, it would appear that the Government have adopted a practice which if adopted by a businessman would bring him within the arms of the law. The recognised amount presumably admitted by the Government of £297 million is a vast figure, about 30 times What the Minister of Fuel and Power was expected to save by abolition of the basic petrol ration and what we spent on timber last year. Had we spent that on importing food we could have imported half as much again. Moreover, we could have made that investment in raw materials, which the Economic Survey said we were unable to do in our financial position, but which would have reaped a rich reward. In fact, £300 million is about what we expect to get for a year under the Marshall Plan and we were told that if we did not get external aid we would face mass unemployment and near starvation. Therefore, if we repeat the losses of last year it will mean that the whole of the Marshall Plan will be wiped out as far as we are concerned.
This is not a trivial matter, but one of first-rate importance. I ask the Financial Secretary if it was contemplated by the Government and if it was, why they did not take steps to meet it? If not, why not? They have had many warnings? As late as last October the then Chancellor of the Exchequer waved aside warnings from various eminent men. In particular, I will quote what he said on 24th October in this House:
"I hope I shall be able to dispose of some of the old wives' tales which have been circulating, sometimes above the signatures of academic persons who are not completely well informed on these matters.… Including my old pupil, Professor Robbins, a very talented economist but not fully informed—that is

2475
natural, as he is now no longer in Government service—on some of the subjects on which he writes."—[OFFICIAL REPORT, 24th October, 1947, Vol. 443, C. 398.]
If only the Chancellor of the Exchequer had been as well informed as Professor Robbins, I do not think we would be in the position in which we are today. I think our people would have had a much happier and more abundant year. If this loss was not contemplated, was it due to the fact that the Government received bad advice? If so, have they changed their advisers? Or was it due to the fact that they did not take the advice? If so, why have there been changes in the Cabinet? I suppose it may be said that the man most guilty was the Chancellor of the Exchequer and, indeed, that it is on account of these losses that so much relief was felt in so wine a circle in Government ranks at his departure. I suggest that this is not a small departmental matter for which one Minister alone should take responsibility. This is a matter of high policy and every member of the Cabinet should take responsibility. The Government have been most extraordinarily fortunate as far as criticism is concerned by reason of the fact that owing to the complexity and obscurity of the subject, the country at large did not fully realise what negligence had occurred.
We all know that debts accumulated during the war amounted to over £3,000 million. I realise that this raises a problem of great complexity, but what is quite plain is that we cannot repay them all and also we cannot repudiate that to which we put our name. We should distinguish between debts incurred in fighting the common enemy—which were very largely incurred in saving the very countries to whom we owe money—and the ordinary commercial debts for which we received benefits, and for which we always pay in full. It cannot be right that we should ruin ourselves and run short of food and have starvation in this country to meet these debts. I believe the United States made a condition of waiving interest on the Loan that we did not repay more than £430 million. What is the Government's policy in this matter? What is their external financial policy? Have they a policy? They are fond of asking what our policy is, but we have no responsibilities and can have no sources of information. They have both. It
2476
seems reasonable to ask them—and to press for an answer—what is their policy? What is their policy in regard to the sterling area? Is it to block all withdrawals from it? Before the war all subscribers to the sterling pool were able to convert and no one would remain in it unless they could convert. Is it the plan of the Government to block old debts incurred in the common defence in the war and allow convertibility to the new? That may be a practical proposition, but what is their policy?
The method of the Government seems to have been to consider each case on its merits, to but off those who shouted loudest and to leave all sorts of loopholes. That would seem to me to be a very unsound policy. It has certainly proved to be quite calamitous. I have some reason for thinking that the losses in April were considerably less. Is that just a flash in the pan or is it due to the Government taking measures that they have not told us about which will safeguard the future? I would draw the attention of the Ecibinuc Secretary to the "Economic Survey" of March, which forecast a total deficit for the first six months of £270 million. I would remind him that the figure for the first three months alone was about £150 million, which looks as though the Government failure accurately to predict is being well maintained.
I suggest that there must be an upper limit to the amount of money which is allowed to leave the country. Perhaps this is rather a delicate suggestion to make but the Government must really fact the fact that they have to do some planning. The rich man can afford to be careless in his distributions. The poor man must have a plan and must add up his total liabilities before he incurs them. This Government, as I see the position, are willing to spend time and energy on planning trivial and even vexatious matters but they have failed to make the large plans which are necessary. I am thinking of our failure to control the loss of capital as indeed they have failed to equate total demand and total resources.
Obviously I cannot possibly, in the short time at my disposal, make a detailed criticism of the Government or make constructive proposals. I am afraid that all I have been able to do has been to draw a very sketchy outline of the situation. I wish to stress as much as I

2477
can my dismay at the losses which have been incurred. I do not believe that there is any one failure of the Government which has caused this country so much in suffering and which has jeopardised our standard of living in the future so much as their failure to deal with this particular situation. To say that this is the greatest mistake the Government has made is certainly saying a great deal.
I wish to express not only my dismay at the negligence of the Government in the past, which has cost us so dear, but my grave anxiety and apprehension about the future. It may be that the Financial Secretary can show us today that the Government have, at immense cost to the country, learned by bitter experience and have at last taken measures to prevent disaster in the future. As the hon. Member knows I hold him in high respect, and I trust that he will think it no disrespect to him if I say that not only do I look forward to hearing him, but that I hope that at some date in the future the man in the Cabinet who is primarily responsible, the Chancellor of the Exchequer, will himself give us a clear account of what has happened and what he proposes to do in the future to prevent disaster occurring to this country.
2.15 p.m.
The Economic Secretary to the Treasury (Mr. Douglas Jay): The hon. Member for Scarborough and Whitby (Mr. Spearman) represents a very important neighbourhood, and I am sure that any thinness in the attendance in the House this afternoon is more a tribute to the amenities of his constituency than any reflection on the merits of his speech. If I understand him aright, what he is asking us to do is to put a far more rigid control on exports of capital from this country both by exchange control and other methods. I welcome this conversion of the Opposition since 1946, when they opposed the Exchange Control Act. I remember that the right hon. Gentleman the Member for the City of London (Mr. Assheton) told us then that
"Permanent exchange control is a horrible prospect to those who love freedom."
and went on to quote Professor Hayek as declaring such control to be
"'the decisive advance on the path of totalitarianism and the suppression of individual liberty …'."—[OFFICIAL REPORT, 26th November, 1946; Vol. 430, c. 1450.]
2478
We ourselves have not changed our minds. We are firmly of the opinion, to which hon. Members have now apparently come round, that we must conserve our gold and dollar reserves to the utmost extent, and limit to the maximum any strain on those reserves caused by outflow of capital or unrequited exports. The hon. Member asked me whether the fall in gold reserves in 1947 and the deficit in the balance of payments was foreseen or contemplated. It is quite evident that the exact size of that deficit was not foreseen, but I think the hon. Member ratter distorted the picture by taking the current year of 1947 by itself. If he will look at the White Paper of December, 1915, he will see that the forecast of the del cit on the balance of payments for 1946 was £750 million and in the actual result was £380 million. In that case the official forecast erred on the pessimistic side.
If we take the two years 1946 and 1947 together, and indeed if we take the three years 1946, 1947 and 1948 it will be found that the two and three year forecasts were not far out. That is a point which people sometimes forget. In 1947, in particular, the hon. Member argues that capital exports were permitted on an excessive scale, particularly to sterling area countries. I agree that such a capital outflow of that kind must take the form either of a drop in our reserves of gold and dollars, on the one hand, or exports for which we get no immediate return on the other. I do not call them unrequited exports because we may get some important return at a later date. It is worth locking at both these points and seeing what actually occurred in 1947.
If we take the drop in gold reserves first, it is true, as the hon. Member says, that, as is shown on page 4 of the balance of payments White Paper, out of a total fall in reserve of £1,023 million, only £677 million was identifiable on account of the United Kingdom deficit. But a large part of the remainder, I think this is generally forgotten—actually £189 million—represents the net drain on gold and dollars in the year, due to the trade of the other sterling area countries with the dollar area. That is the biggest item over and above the £677 million. The hon. Member rather forgot that if a sterling area country such as India is compelled Jo buy grain from the Western Hemisphere to keep her own people from starving,

2479
and has to convert sterling for this purpose, the transaction appears as a capital export from the United Kingdom point of view, but it also appears as part of India's deficit on current trading account.
The gold and dollar reserves looked after by the Bank of England are not the reserves of the United Kingdom only, but also the reserves of the whole sterling area for whom we act as banker and trustee. It is easy for us here to talk as if the whole of the £1,000 million by which the gold reserve dropped last year should have been spent on United Kingdom account only. We should remember that the other members of the sterling area look at the matter like this: they would say that out of that £1,000 million more than £675 million was spent on account of one member of the sterling area alone, the United Kingdom. Is that fair, they would say from their point of view.
The sterling area, like the Commonwealth which is largely co-extensive with it, is an association of free peoples, and it has to work by mutual trust and cooperation, not by compulsion. Some of the extreme language used on this subject by academic critics about all gold used for other sterling area countries being "lost" —the word has been used even by Professor Robbins and Mr. Harrod, and the hon. Member himself used it several times this afternoon—would suggest a doctrine which, if pressed to the extreme, would, in my experience, threaten to undermine not merely the sterling area, but the Commonwealth itself. Secondly, and this is a further point, some outflow of capital from this country may reflect exports of goods for which we may get no immediate return. That is what the hon. Member for New Forest and Christchurch (Colonel Crosthwaite-Eyre) calls "unrequited exports," which is a shorthand term. These are shown in Table I of the White Paper. In the case of the sterling area they have been no more than £80 million in 1947, which is not much, in relation to the total. In 1946 there was a movement in our favour of £30 million. Inevitably, if we are to act as bankers. for the sterling area, there is bound to be a certain ebb and flow of balances between one area and another.
I agree, however, that this country cannot afford the strain of unrequited
2480
exports beyond a very limited amount, and we mean to keep them down within the limits we can afford. Nevertheless, it does not seem to be realised that there are several very good reasons for permitting some such exports in certain cases. I may mention three. First, they are necessary in many cases, if we are to push forward the physical development of the Colonies and other parts of the sterling area, which we all agree is vital to our future, and, indeed, to the proper use of the E.R.P. period. This is a case of real investment of physical capital in the sterling area which I believe will give us a rich return in the future.
Viscount Hinchingbrooke: That has got nothing to do with it.
Mr. Jay: If the noble Lord thinks it over, he will see that it has. Secondly, in other cases it may be possible to send sterling goods to another country in order to save that country from buying goods from the United States. That applies to textiles which are needed by some Far Eastern countries. To that extent, even at the moment, unrequited exports actually save dollars on the current account. Thirdly, it also may be necessary to send to sterling area countries goods absolutely essential to their existence and recovery. In the case of Burma, for instance, exports of textile goods from this country have actually enabled rice and other products to be harvested and marketed, which ha, been a great contribution to easing the whole world situation.
Mr. Spearman: The Economic Secretary has given us a lot of excuses for what has happened in the past. May I ask if he is going to give us any reassurances as to appropriate action by the Government to preclude the experiences of the past occurring again?
Mr. Jay: That is exactly the point I have reached. The hon. Member did ask, and quite rightly, what our policy was to be in the future. Unlike the Opposition, I am only too glad to answer. In 1948, our policy in this matter will be, in general, as follows: we shall, in the first case, continue to press the other member countries in the sterling area to reduce to an absolute minimum their net drawings on the common gold and dollar reserves, and to limit the drawings on their sterling balances, so as to keep both unrequited

2481
exports and the drop in our gold reserves to the lowest possible figure. The figures in the Economic Survey show what we hope to achieve in these respects.
We intend to carry out this policy in the following way. First, by a co-operative effort on the part of all members of the sterling area to limit their purchases of dollar and other hard currency goods to the absolute minimum. We have been working hard to achieve this throughout the past months, and I am glad to say—and the hon. Member seemed to have some knowledge of this—that the outflow of gold and dollars on account of other parts of the sterling area has been very much lower in the last two months than previously. I can also tell him that this is certainly due to measures taken in all kinds of ways to try and get the drain down. Unfortunately, these measures take a little time to mature, and the results we hoped to see in January and February have, in fact, appeared in April.
Secondly, we hope to achieve this by agreed measures to ensure that sterling balances are not unduly drawn upon. We now have agreements or understandings of this kind with practically all the countries in question. Thirdly, we shall work by the strictest possible exchange control round the whole sterling area to prevent pure leakages in the technical sense. Here, again, I fully agree that exchange control can never be 100 per cent. perfect, but we shall—helped no doubt by the Opposition conversion to our policy, in which the hon. and gallant Member for New Forest is playing such a large part—try to make that system of control as perfect as we can. Therefore, though I must repeat that we are not prepared this year, or indeed in any year, to use attempted compulsory methods in this matter, which would, in my opinion, threaten to break up the sterling area and perhaps the Commonwealth, we believe that without attempting this sort of method we can, by the measures I have enumerated, keep the strain both on the gold and dollar reserve and on our productive exporting capacity within full limits, as we clearly must if our country is to go on. We have a number of new members and we are anxious to prove to them that membership of the sterling area and the Commonwealth is something which is worth while in this world.
Mr. Spearman: Would the Economic Secretary, if not now, then on some future occasion, undertake to explain and either confirm or deny my suspicion that the actual drain was much larger than was disclosed, and what is the amount in that first paragraph of page 22 of the White Paper on National Income and Expenditure?
Mr. Jay: I know of no reason to suppose that the drain was larger than supposed. The figures given on pages 3 and 4 of the Balance of Payments White Paper set out the position fairly. I could not, without notice, give any detail, but I will look into it. I think the hon. Member can assume that the figures, slightly supplemented by the Economic Survey, give as fair a picture as we can give of what happened in 1947, and I do repeat my advice to him that he should look at the story of 1946 as well.

CIVIL. AVIATION (AIRCRAFT)
2.30 p.m.
Mr. Berwick: On 26th February we had a Debate on Civil Aviation. During that Debate, of back benchers who spoke eight criticised the type of aircraft which our Corporations had to fly. One hon. Member said that unless we fly aircraft as good as our competitors we are bound to lose money. Another complained of the obsolescent and even military aircraft which civil airlines had to use. The hon. Member for Worcester (Mr. Ward), who wound up the Debate for the Opposition, spoke of "hopelessly inadequate" aircraft. But despite this, the only assurance we have had either from the Minister of Supply or the Parliamentary Secretary to the Ministry of Civil Aviation on this point of new aircraft, was:
"… a proposal has been made but whether it has gone so far as being put as a proposition to the Chancellor of the Exchequer or not, I am not able to say."—[OFFICIAL REPORT, 26th February, 1948; Vol. 447, c. 2156.]
Therefore, I feel that we are justified this afternoon in raising the question of the types of aircraft which the Corporations, especially B.O.A.C. will have to operate during the next five or six years.
The case is briefly this: first, there are too many different types of aircraft; second, most are not competitive and

2483
some are grossly uneconomic; third, on present information we are in danger of drifting on with demoralising six-figure losses for the next five or six years; fourth, the decision of the Cabinet to buy British, although understandable and laudable at the time it was made, has not acted as a stimulant to the British aircraft manufacturers, but has with one or so worthy exceptions, been more of a soporific; fifth, I hope to show, and I know that my hon. Friend the Member for Buckingham (Mr. Crawley) will show, that we can break out of this present position if a decision is given at a high enough level to enable the Corporation to go in for some reasonable aircraft within this interim period of the next five or six years.
I want to speak about the different types of aircraft with which the Corporation have to contend. If two types of aircraft are operated instead of one, I wonder whether it is realised by the House, or especially by the Treasury, just how costs mount up, how the amount of spares increase, how the storage space for them increases, and how the number of storekeepers is increased in order to keep the stores. Ground engineering staffs tend to be increased, and in any case they have to spend time getting the necessary qualifications for the new types of aircraft. Aircrews have to receive training and experience on the new types. On this last factor alone, I might mention that to fly a four-engined aircraft around the circuit on training costs something round £90 an hour. But it is not a question of B.O.A.C. having two types instead of one. I find that they have Dakotas, Haltons, Liberators, Lancasters, Yorks, Constellations, Hydes, Plymouths and Solents. In addition they either have bought or hope to buy or have had foisted upon them eight more different types, making in all something like 180 machines of 17 different types. I ask the House to consider the immense wastage which inevitably is involved.
Some of these aircraft, even if every passenger seat is taken every time the machine flies, cannot hope to collect sufficient revenue simply to pay for the cost of the petrol, oil and handling charges en route. We had one example of a converted military type flying to West Africa —the Halton—which cost £9,000 for a
2484
single trip simply to fly the machine. Even if the aircraft was full, the revenue from passengers was only £1,800. For a round trip, even allowing something for mail, the loss was about £13,000 apart from overheads which were mounting up at home.
To take another example, the B.O.A.C. are now flying down to Johannesburg a British aircraft. The pay load for the longest hop is about 3,000 kilos. That means that it requires one horse-power to carry each half kilo of pay load. The South Africans fly an American machine along the same route. The pay load of that machine for the same hop is about 4,000 kilos. That works out at one horse-power per kilo. As the cost to operate each horse-power is roughly the same, that means that the B.O.A.C. have a 100 per cent. extra cost when they carry the same load. In addition there are all the extra overheads which follow from flying uneconomic machines. Moreover, that is assuming that both aircraft carry maximum payloads, whereas in fact what is happening, according to my information, is that of about 400 passengers within a given time originating from Johannesburg the British aircraft attracted seven passengers. Quite naturally, all the rest prefer to fly in the more modern and more comfortable machines.
Such a position is clearly intolerable. We could probably continue for another few months if new and economic British machines would then be available. If we could see these British machines coming along within the next six months or so, that would be some encouragement. But it is impossible to say this. Of the British machines in view, from British factories, we have the M.R.E. 170. In the estimate of some people that is a little inferior in some respects to the Constellation. In the opinion of the manufacturers it is a little superior, and probably there will be improvements as the machine is developed. In any case, that machine is irrelevant to the argument which I am making, because it will not be available for at least another five or six years.
Then we have the Tudor. I will say little about that. Unfortunately, too much has been said about it by too many people already, and a lot of ill feeling has been

2485
engendered. I might be allowed to remark that it was a gallant attempt. If the Tudor aircraft had come into service, say, two years ago, then we could have contemplated operating it for the next year or so. To look forward to bringing this aircraft into operation on a large scale for the first time in the next year or two seems to me, to say the least, most discouraging from the point of view of the operator. I do not think that there are many people in this House who would not agree with me that this aircraft should be scrapped and that we should cut our losses. The hon. Member for Worcester, who dealt with this point in the Debate in February, pointed out that to operate the machine over the next five years would cost approximately ten times the original purchase cost. It is possible to argue that in the long run it would be cheaper if we cut our losses.
Then we have another machine, the Hermes. It is doubtful whether this aircraft will be in operation within four years. Its performance is uncertain. It is unlikely that it will even equal in performance an aircraft which we were able to buy in the world market this week. Moreover, there will be a lot of snags to be worked out. It requires a special fuel. It is necessary to use 15o octane fuel, which may not be available. If it is available, we would have to have separate supplies all the way down the line.
The hon. Member for Buckingham hopes to make some detailed constructive suggestion. I wish to emphasise only one practical alternative suggestion which I put forward to the Ministry several weeks ago and which, to some extent, has been adopted this week. B.O.A.C. already have six Constellations in service, and this week, thanks to Treasury permission, they have been able to buy five more from Ireland. We have already set aside 12 million dollars for the purchase of six Strato-cruisers. Delivery is already late. There still will be the usual teething troubles. I want to ask the Parliamentary Secretary if it is not possible to switch this order and for the same outlay we could get eight or nine Constellations in addition to the appropriate spares. That would give us 20 economic aircraft of the same type immediately. We should have the nucleus of a real fleet. According to the estimates given to me, B.O.A.C. could operate the present ser-
2486
vices efficiently and economically with between 40 and 50 of this type of aircraft against its present collection of between £60 and 18o machines.
Against this argument, we shall hear that we should lose prestige if we do hot fly British. I ask the House to consider what prestige will be lost if we continue plying for hire down the air routes of the world with out-of-date machines and with no passengers. Let us consider The Dominions aspect. I am a Commonwealth man, and I have always wanted to ice economic integration of the British Commonwealth. In particular, as a functional job done together, I visualise the operation of British Commonwealth Airways. All the way from New Zealand, Australia, India, the Middle East to the United Kingdom, and across the North Atlantic we could proudly fly the same flag. That idea has had to wait, but we did fix up close parallel agreements with South Africa and Australia. Unless we can fly similar or comparable aircraft to these countries, these agreements are bound to break down, and between the sister countries and ourselves there w ill be a widening and wasteful breach.
Finally, I want to say that, before toe war, the Ministry of Civil Aviation was set up because there was a feeling that Civil Aviation was not getting a fair share of the country's resources. During and since the war, there has been a good deal of evidence to show that the operating side of the industry is still not getting a fair deal. As regards the manufacture's, I would say that they should devote their energies, not to the interim stop-gap type of aircraft, but that they should concentrate upon developing and providing really worth-while new aircraft to take over in five or seven years' time. Let us give them all the facilities they want for developing really good engines, flying intensively in special machines for several thousand hours, getting rid of all the snags and teething troubles so that they can produce in three or four years' time first-rate engines that will sell all over the world and which will be guaranteed trouble free for civil purposes. I think we should try concentrating upon our civil airlines. Give them priority for a change. I want to see this country carrying by air the world and his wife and all their goods, We have built up a splendid service so far with inadequate tools. I am confident

2487
that, if a proper decision is made and the Corporation is given reasonable aircraft, we shall find that this country would indeed gain absolute supremacy on the air routes of the world.
2.44 p.m.
Mr. Crawley: My hon. Friend has raised a very important subject and has given us a good many details regarding the types of aircraft which the Corporations have to fly. Before adding to his constructive suggestions, I would like to reconsider the general position. It is about a year ago since in this House, we all agreed that the Corporations would have to fly British and that they should use what we knew to be uneconomical types for that purpose. I want to emphasise that this was an agreed decision of both sides of the House, and that we realised that it would run the Corporations into a considerable deficit. Nevertheless, since then the deficit has been very much larger than any of us anticipated, and, on the information which we now get, it appears as if that deficit will continue to be very much larger than either the Corporations or the Ministry expected.
On that ground alone, therefore, there is a real need to reconsider the whole question of flying British and what it means. I admit that as in every other part of our economy, the question of saving dollars is of vital importance, and compared with the 25 or 50 million dollars which we might have to spend if we flew entirely American, the expenditure of ten million pounds a year would not be very important from a financial view. But there are at least three other considerations, which I think outweigh to a very large extent the financial point of view, and one which alters it fundamentally.
They are, first, the morale of the employees of the Corporations; secondly, the extent to which the British aircraft industry is taking advantage of the opportunities given by the policy to "fly British"; and, thirdly, any new developments which have arisen since we took that decision last year and which fundamentally alter the circumstances. On the question of morale, I do not need to advertise how important it is that the spirit of the people working for the Corporations should be enthusiastic, and, as the criterion of success of any economic venture for so many
2488
has always been profit, and it is laid down in the Civil Aviation Act that these Corporations shall try to operate on commercial principles, it is quite obvious that, when year after year, these Corporations have to declare very large losses, the people operating them have become depressed and very sensitive to criticism both from here and from other parts of the world. I think that would be fairly easily bearable if the present difficulties were widely known and the Corporations had that unanimous support of the country, but both the Opposition and the newspapers have made the maximum political capital out of the losses which these Corporations have sustained, and have added greatly to their difficulties; and that in spite of the fact that the Opposition were committed to these losses in principle. It is really the third point, the fact that there have been new developments since last year, which affords the most urgent grounds for reconsidering our decision.
As the Minister knows, B.O.A.C., in conjunction with the Canada Air Company, put forward a scheme known as "Plan K," by which operations on all Empire routes should be taken over from existing types by aircraft known as the Canadair. This is a Canadian version of the Constellation with Rolls-Royce rather than American engines, thereby both giving the opportunity to advertise our best engines and also saving some expenditure of dollars. The point about this proposition is not that it is entirely new, because it is not. There was a rather similar plan by which Constellation aircraft were to be flown with another type of British engine, but that was turned down because of the expenditure involved.
The new factor in this Canadair proposition is that, instead of demanding spot dollars for the Canadair, the Canadian company are agreeable to being paid as dollars are earned; in other words, they are prepared to be paid out of annual earnings. The immediate question, therefore, is this: is there any prospect, if these aircraft were used in place of British interim types, that dollars would, in fact, be earned? The answer is that, according to the estimates which the Corporations had put forward—and I have confirmed today that these estimates are borne out by current figures and current traffic receipts—the Corporations could not only earn dollars to pay

2489
for the Canadair for the next five years, but would actually make a profit of about 4,500,000 dollars.
The point I want to make, therefore, is that whereas previously the prospect of flying American or Canadian aircraft involved expenditure of dollars, this proposition does not immediately involve expenditure of dollars but gives a prospect of earning up to four or five million dollars which otherwise we should not have the chance of earning. This proposition therefore makes a very great difference to the whole question whether, during this interim period before we can get modern aircraft, we are to continue to fly British.
When we gave our vote last year, I am sure that the thing that predominated in our minds was that we had at all costs to save dollars. Had we known then that it might be possible, without any immediate expenditure of dollars, to buy these economic types and to pay for them out of earnings, the attitude of many of us would have been more searching and critical. Further, on the estimates of the Corporation we should not merely, with the help of these aircraft be able to earn dollars but the overall balance sheet of the company would show a handsome profit in sterling as well from 1950 onwards. For, of course, these aircraft, being a type already in considerable production, would come into service much quicker than any of our new interim types.
The questions which I would like to ask the Minister are these: first, what answer has been given either by his Ministry to the Corporations or by other Ministries to his Ministry or by anyone else with authority on this matter, about the proposal to use Canadian aircraft. Secondly, if no answer has been given and the scheme is still being considered, where it is hanging fire? This scheme has now been awaiting decision—if it is awaiting it—since October of last year. Thirdly, I would ask whether the right lion. Gentleman and his noble Friend are supporting this proposal arid whether they are impressing on their colleagues in the Government and the Cabinet the advantages which, according to the estimates of the Corporation, do exist. In other words, I would like to know where the Ministry of Civil Aviation stand in this matter.
2490
Fourthly, I should like to know if the Ministry or the Treasury have any doubts about the estimates the Corporations have put up and whether we may know what the doubts are so that we may begin to be able to form some rather nearer criticism of the proposal itself. I think that it is only fair to the Corporations and to the public that these questions should be answered now. We have been waiting for many months and there has been a good deal of publicity about last year's loss and the probable loss which the Aviation Corporations are likely to incur this year. I think that depression in the Corporations is increasing and yet they all know that there is this proposition put forward, which does not incur the immediate expenditure of dollars, which would enable them to pull through economically and eventually to earn dollars. I think there is a general uneasiness that the interest of civil airlines may be being sacrificed unnecessarily to the alleged interest of the British aircraft industry.
That brings me to my final point. Even if it is admitted, as I hope and believe that it may be, that the Corporations' estimate about the earning of Canadair aircraft are correct, it is still possible that their proposal will be turned down on the grounds that it is reversing the policy of "Fly British." I think that with this new alternative proposal we have very carefully to reconsider what this policy of "Fly British" really means. I have the greatest confidence in British designers and engineers and I firmly believe that we shall be able to produce in the next five or six years an aircraft which will be a world beater. I am sure that that is what everyone hopes for in this House and in the country. I would always vote for and support all measures to spend money on research, even for the building of the most expensive prototypes, in order that the British aircraft industry should have the chance of beating the world in producing the very best civil aircraft.
But when I voted for "Fly British" I had not in mind that I was going to subsidise indefinitely aircraft firms to continue to produce, and so far as I know in many cases to protect, aircraft which are in fact obsolete before they come off the drawing board; because that is superficially what the position looks like in many cases now. If one goes through the list of some of the aircraft which have

2491
been mentioned we have no knowledge that the firms which make them have any more modern or experimental aircraft in view. We know that the De Havilland Aircraft Company has. We also know that the Brabazon and Saunders Roe are experimental types, but they were embarked upon at the instigation of the Government and not at the instigation of the aircraft industry and the firms concerned.
I think that we have nearly reached a point where we ought to have a public inquiry as to whether the Minister is satisfied that the "Fly British" policy as at present carried out is being used by the British aircraft industry to carry out real experimental work so that we can get in the future—in the next five or ten years—not aircraft five years out of date when they first begin to fly, but aircraft that really can, when they come on the runways, compete with anything that America can produce. I am sure that when I and my hon. Friends on this side voted for "Fly British," it was that progressive determination to produce new aircraft that we had in mind, and it is that which we want to support.
I want to raise one final matter to illustrate why I am disturbed about the British aircraft industry. I am not going to speak about the D.H. 106 which we all know is our greatest hope in the aircraft industry at the moment. There is another little company which is producing an aircraft which will I hope fly this June, which is made almost entirely from magnesium alloy. One cannot say anything with certainty about what the performance of that aircraft will be until it has got in the air and done its tests.
The point which I want to make is that magnesium alloy was developed to such an extent during the war and with such effect that one would have expected the major aircraft companies to have taken a very great interest in this matter long before now. I speak naturally as a layman and only have this information from experts whom I have consulted; but as far as I am aware although this idea was put up to their companies and although I believe, in fact, that a development contract for at least tail planes has been given by the Ministry of Supply to one company, that company, so far as I know, has not yet produced a single tail plane.
2492
I do not know if the major aircraft companies have seriously considered this matter. The facts are that magnesium is about 35 to 4o per cent. lighter than aluminium. In many cases it is stronger and far easier to handle. This little company making this aircraft and carrying out the ordinary tests through which aircraft go has found that it is as strong as and in many cases gives a better performance than aluminium.
A metal which is 35 per cent. lighter than aluminium, and which is just as strong and more manageable, is of such vital importance that surely aircraft firms should be interested at least in experimenting with it, especially when those experiments need not cost a great deal of money. Yet these experiments have been left to one small group of men without a factory of their own, who have been supported by enterprising people in the Ministry of Supply who have helped them to get other material and so on. We must wish them every success when their aircraft takes the air in June.
If that aircraft succeeds and produces revolutionary results in performance and payload we will want to know why, since the war, none of the major British aircraft industries thought it worth while to spend a few thousand pounds—perhaps £50,000 would have built an aircraft—to build a single machine to try out the revolutionary potentialities of this metal. There may be many other revolutionary types in preparation about which I know nothing, but I shall continue to investigate and get all the information I can. Certainly we have not heard of any such aircraft; had they existed I think we should have done so.
Unless such experimental types exist, then it would seem that the policy of "Fly British" is, in many cases, acting as an anodyne rather than as a stimulant. Unless the Minister can give us some more reassuring facts and figures I would urge strongly that the Canadair project be accepted and that the free winds of competition, from the whole world, be allowed to come into and stimulate this private enterprise industry to the efforts which are necessary to put this country ahead again in the production of civil aircraft.
3.3 p.m.
The Parliamentary Secretary to the Ministry of Civil Aviation (Mr. Lindgren): The latter part of the speech of my hon.

2493
Friend the Member for Buckingham (Mr. Crawley), whilst having a direct relationship to the subject, concerned aircraft manufacture. I am not tying to "pass the buck" in stating that governmental responsibility for the manufacture of aircraft is that of the Ministry of Supply. We have, however, had the advantage that the Minister of Supply was listening to part of my hon. Friend's speech; he asked me to apologise because he was unable to stay until the end. The responsibility of my noble Friend the Minister of Civil Aviation is for the flying of aircraft through the chosen instruments of the State, charter companies and other air operators. As far as the function of a transport operator within civil aviation is concerned, the whole of our energies is directed to securing the operation of services which will not only —in the words of air transport people— "break even," but will show a profit.
In an earlier Debate on the accounts of the Corporations I mentioned our difficulties. The hon. Member for Uxbridge (Mr. Beswick) has rightly called attention to the fact that the subsidies—or the losses as they have been called—of the Corporations are not subsidies to those Corporations alone. They are, in fact, subsidies to the British aircraft industry. Anyone going out into any form of transport must have, as a first requisite to success, a vehicle of transport which will show a profit over actual operating costs. When that profit has been achieved there will then be a margin for overheads and the like. At present the unfortunate feature, which I am afraid has not always been realised, is that even when an aircraft is full of passengers the fares do not meet the cost of the aircrew, petrol and oil, let alone allow for depreciation and overheads. It is the desire of Corporations and of my noble Friend to get equipment as quickly as possible to enable a profit to be made.
I ought to call attention to the fact that until the Debate in the House in February there was no ondication from either side that the "Fly-British" policy was in any way being questioned, or that there was any desire to depart from it. My hon. Friend the Member for Buckingham (Mr. Crawley) has mentioned what is known as "Project X." It seems to be known, both inside the House and within the industry generally, that these proposals have been made, but there was not
2494
a great deal of enthusiasm for that scheme, apart from its sponsors, until the early part of the year when the first enthusiasm was shown for a departure from the "Fly-British" policy. I ought to make it quite clear that aircraft operators have called the attention of my noble Friend to the effect of the Government's policy and the possible losses they will incur if they operate the services they are expected to operate. They have made proposals from time to time to bring their undertakings as near as possible on to a commercial basis, because no one likes being associated with an organisation which is continually operating at a loss, unless the loss is easily understood by the public at large. I am afraid that that has not been e case up to the present time, and while that is so there is bound to be some criticisms.
Mr. Stokes: The speech by my hon. Friend the Member for Buckingham (Mr. Crawley) really calls for a reply from the Minister of Supply. Before our time runs out, are we to have any reply to the very serious statements which have been made?
Mr. Lindgren: The Minister of Supply was not notified that he was in any way concerned with this Debate. The subject of the Debate is the provision of aircraft for the Corporations and particular proposals in relation to them. I have already said that the full implications of what ha; been said will be drawn to the attention of the Minister.
Mr. Stokes: Does not the Ministry of Supply provide the aircraft?
Mr. Lindgren: No, Sir. The aircraft are supplied in the first instance by British manufacturers, and then by other manufacturers. The point has been made in the Debate that British aircraft are not: available, whereas the aircraft of foreign manufacture are available and should be purchased; which is, therefore, a departure from the "Fly-British" policy. I can give an assurance that the proposals made in the recent Debate in this House, and the proposals made by the Corporations to the Minister, and through the Minister to his colleagues in the Government, are receiving very careful consideration. They are under urgent review and a decision will be taken as quickly as possible. It is necessary that

2495
such a decision should be reached quickly, so that the Corporations and everyone else will know where they stand.
I think I ought to correct an impression inadvertently made by my hon. Friend the Member for Uxbridge. At the moment, B.O.A.C. are flying six different types of land planes and three different types of flying boats. My hon. Friend included in his calculation other British types of aircraft which it was anticipated would come into service. If they had come into service it would have meant that some of the earlier types would have been withdrawn. We must recognise, however, that there has always been a multiplicity of types, which meant that it was impossible to run an economic service. To do this we must have, as soon as possible, a unified fleet, and centralised maintenance of that fleet. For the future there are the Tudors. The position of the Hermes shows the complications which arise in air transport. These aircraft were expected to come into service for the Far East. They were dependent on a certain aerodrome being made available to receive them, as they could not operate on the existing aerodrome at Hong Kong. Without that alternative aerodrome the Hermes would not be suitable for that route. My noble Friend is not responsible for aerodromes outside this country. We are, of course, consulted, and we have the right to make representations, but decisions about these overseas aerodromes are made by the Governments concerned.
Mr. William Teeling: Surely, the hon. Gentleman is not suggesting that he has nothing to do with Singapore, for instance.
Mr. Lindgren: We have something to do with it, but the ultimate responsibility is not with His Majesty's Government or with the Minister.
Mr. Teeling: Surely, it comes under the Colonial Office?
Mr. Lindgren: There is consultation, but many people who are willing that things should be provided for them—and this is true not only of air services—are not so willing to contribute themselves towards the cost. As for British aircraft, there is nothing really competitive until we come to the Comet or the M.R.E. in 1953–54.
2496
There has been the purchase of six Constellations from the Eire Government. This provides a good example of the effect which economic aircraft have on a service. These planes will be used in parallel operation with the Australian Government, on the Quantas service to Sydney. That service loses about £1 million a year. By the operation of these six Constellations the loss will be turned into a profit of approximately £100,000. I must refer to the using of Constellations on the North Atlantic route—
Mr. Beswick: Can my hon. Friend say anything about the suggestion to switch the order for Boeing stratocruisers and buy more Constellations?
Mr. Lindgren: I should like to finish dealing with the Constellations point, pass on to the Boeing and then close, because if was indicated that the Debate should finish at 3.15.
On the North Atlantic we have six Constellations in service, providing nine Atlantic crossings, six to New York and three to Montreal; they are doing four runs from New York to Bermuda, and three from Bermuda to Baltimore: eight and a half hours' utilisation per day, and 3,000 hours' utilisation per annum. I think I can rightly claim that with those aircraft we are securing the highest utilisation of any aircraft in the world. It shows what can be done with the right aircraft, the right facilities for maintenance, and the opportunity to act as a really efficient operator. Given the aircraft and the facilities we will do the rest of the job as well as and even better than the rest of the world.
A number of statements have been made about the Boeing, which I am not able to contradict. All I know is that the information provided for me shows that the Boeing has not at the moment got its certificate of airworthiness. If it gets its certificate, and is licensed for 140,000 lb. it will be a much more attractive proposition and a much more economical aircraft than the Constellation. If it only gets its certificate, for say 135,000 lb., it would be a less attractive proposition than the Constellation. Whether or not there could be a switch between Strato-cruisers and Constellations I could not answer. All I know is that I have seen the contract, and from its terms my opinion, for what it is worth—

2497
and perhaps I ought not to give it, because it is not worth very much—is that the terms of the contract prevent such a transfer.
The points which have been made today will be borne in mind by the Corporations and my noble Friend. They will be brought to the notice of the appropriate authorities in order that my noble Friend as Minister, and the Corporations with which he is associated, may better do the job for which they were brought into being; and have a real opportunity to do that job as effectively and efficiently as possible.

AFRICAN COLONIES (EDUCATION)
3.18 p.m.
Mr. Rankin: In directing the attention of the House to the state of Colonial education in Africa, I would remind the Under-Secretary of his remarks in the last Colonial Debate, when he said that the time had come when we should have regional Debates covering various parts of the Colonial Empire, and dealing with those alone. I hope that this Debate will present the opportunity, if somewhat limited, of meeting his desire in one particular field until he can realise it over a wider area. Perhaps I might look at what I think should be our general aim in Colonial education, and indicate briefly one or two points on which I hope there will be agreement.
First, our aim should be to free the natives from animism, witchcraft and primitive fears. Secondly, we should try to make the educated African a missionary among his own people; but we should guard against the danger making him a "Black" European. Nor do I think there will be any dispute when I say that the progress and growth of a community depends on the quality and extent of its education. I should like to examine the latter aspect for a moment or two.
Major developments in the economic life of Africa are taking shape, and political thought is being provoked over wide areas. Rapid extension of education services is therefore imperative. What part is education playing in the ten-year 'development plans which are being operated in each Colony? How much
2498
money is being spent? How much money is it proposed to spend? I suggest that, if that expenditure is to be justified, priority must be given to the training of educational staffs. In what degree is that priority being given? Priority means little if teachers are not being found. I should like to quote the, last report issued of the Inter-University Council for Higher Education in the Colonies. It says that:
"Even more than in university progress in the United Kingdom, the critical factor in higher education in the Colonies is neither organisation, nor finance, nor buildings, but manpower."
That exists—less acutely perhaps—in education at the lower levels, and it is due to a variety of causes. First, salaries are far too low. In Nyasaland, for example, teachers are paid salaries as low as£2 per month. There is a complete. absence of pension schemes, and the system of indirect payment—payment through the Missions and not directly from the Government—is very widely resented. There is also the difficulty of promotion whereby it is almost impossible for an African to become a principal in an African school, and that is a cause of widespread discontent. The low standard of training is not only a result of these things but a cause of the four which I have indicated. I hope that these matters, are the subject of deep concern on the part of my hon. Friend. Education; should have a most important place it the work of the Colonial Development Corporation and the Overseas Food Corporation, As to the first of these schemes, we have no information whatever. As to the second, save in the case of the groundnuts scheme, there is little knowledge of the place which education occupies.
I refer in particular to mass education, which is of vital significance in African advance. It is even more important for the adult than school education is for the child. Mass education has not yet been officially adopted as part of the work of the administrative officers. They should be relieved of much of the routine work connected with their job so that they can get into living touch with the peoples, and enthuse and inspire them by their leadership. I would not suggest that there should be distinction between mass education and mass literacy other than to say that, as far as mass literacy

2499
is concerned, it could be left in the care of the native authorities but mass education should be strictly the province of the district officers. We want to attack ignorance on all fronts. For example, there are accounts of the difficulty of persuading natives to adopt anti-erosion methods in East Africa. There are also difficulties I believe in carrying out the campaign to cut out trees infected with swollen shoot in the cocoa areas of the Gold Coast. Literature linked with agricultural and other education is the indicated solution there.
In the Colonial Debate of 29th July, 1947, the then Under-Secretary referred to a report prepared by the Advisory Committee for Colonial education which had been sent to the African Colonies. What action has followed on the receipt of that report making concrete suggestions? How many mass education Officers are now working in African Colonies, and what response are they getting from the local population? In particular, is any work being done in East Africa, Nyasaland and Northern Rhodesia comparable to the nutrition unit working in Gambia and in East Africa?
My second point concerns the type or quality of education. It is important that too much stress should not be placed on academic education. The schemes I have seen are good, but it should be emphasised that technical education in agricultural and industrial aspects is vital. What advance is being made in these fields? Teachers should be accustomed to working among the population and should not be given the type of training which encourages them to despise manual work, nor should there be too much dependence on the mission schools. In saying that, I pay tribute to the work which they have done in the past, but the system of dual control in education is of doubtful merit because we should aim in the long run at compulsory education, and only the Government can do that. Also we should aim at uniformity and co-ordination in the curriculum. That is essential. It must be a function of government and not left to any unofficial bodies. I feel that the activities of the mission schools tend to come into conflict with the work of mass education, and therefore the Government should shoulder the responsibility to a much greater extent. For example, in
2500
the Gold Coast and Ashanti, while there are 2,000 non-assisted schools and 521 mission schools, there are only 19 government primary schools. The stress of denominational teaching should be a decreasing one and not an increasing one. as it tends to be in certain areas.
My third and final point is the responsibility which is evoked from the population. There we remember the old adage that we can take a horse to the well but we cannot make it drink. I agree that one of the difficulties here is the lack of revenue, both from Government and native resources, but I suggest that the substitute for that is the voluntary, unpaid co-operation of the native population in providing by spare-time effort, where other means fail, the capital equipment necessary for the work of education. It is worth while noting that this is going on at the moment in very wide fields other than education. To accomplish that purpose all officers should regard it as part of their job to arouse this response and to welcome initiative on the part of the native population. I fully recognise that much is being done for education now, not only in the training of students and' providing centres of learning, but in a great many other ways. My chief purpose in raising this subject today is to find out, first, how the work is being done, secondly, with what results, and thirdly, what response is being evoked.
I close with a little analogy. The richness of our milk supply does not depend on the colour of the cow. Neither does the contribution of the individual to the progress of mankind depend on the colour of his skin. In approaching the great educational task which lies before us in the Colonies—and we are only approaching it as yet—there comes the warning,
"As ye sow, so also shall ye reap."
Let us take that warning as a challenge, and let the challenge be our inspiration.
3.32 p.m.
Mr. Skeffington: I should not have intervened in this Debate had I not had the privilege recently of spending a few weeks in East Africa and, as an ex-teacher, I naturally looked at educational problems there. One is very struck at first when one realises what a small proportion of the African population receive any education at all. This is no one's fault, but is because the areas are

2501
so large, and populations so scattered. Even primary schools have usually to be run on boarding school lines. One cannot slip home for lunch. There is the further difficulty of shortage of teachers and of buildings, and the fact that it is highly difficult to make education compulsory in any way as there is no method of enforcing it. The All-African Union suggested—and I thought the suggestion worth passing on to the Under Secretary—that some experiments might be made in the larger centres of population to see whether universal primary education for Africans could be applied.
Despite all the difficulties, one is still staggered by the fact that such a small minority of the African population gets any education at all in these territories. In Kenya with, I suppose, a population of something like two million African children, only just over 200,000 are getting any primary education, and only about 4,000 are getting any secondary school education. I hope that various ways will be devised to increase those numbers. Buildings should not cause such a difficulty in that climate. So long as the rain can be kept out in wet seasons, it should be possible to build fairly easily and cheaply. We have the example of one chief who was particularly anxious to assist the work of education in his area, who got his local native council to build a reasonable school —although there may have been an element of forced labour—in three weeks.
Teacher training is much more difficult and many more facilities will have to be provided. I hope that in Makerere College the standard and numbers of teachers in training will be increased. I was surprised to find there were only just over 200 students on all courses at the college and that no history had been taught in the establishment for more than a year owing, I understand, to the difficulty of getting a lecturer. I also found that no language had been taught. The facilities for private study are also almost non-existent. The students are supposed to know English. Apart from that no other language is taught. If this is to be the University of East Africa, it must receive much more assistance.
Lastly, I hope that much more will be done in regard to technical education and that we shall not think that only academic
2502
education is required. It is rather depressing that Italians should have to be brought into East Africa when we are quite certain, from our experience of Africans working in the railway workshops at Nairobi and elsewhere, that Africans can be taught to do a large number of these jobs. In Uganda we saw an excellent training centre which had been developed to teach ex-Army people. Most of them are becoming quite satisfactory carpenters and bricklayers, but they do not always stay in the trades they have been taught, probably because they are warriors and not craftsmen. I hope that special efforts will be made to get girls into the schools. We know how much of the work in that part of the world is done by girls and women, and I realise that when we begin educating women in society we are probably tackling a bigger thing than we realise. Still, I think the risk is justified and would add enormously to the resources of East Africa.
3.37 p.m.
Mr. Skinnard: While I am sure that we are all grateful to my hon. Friend the Member for Tradeston (Mr. Rankin) for initiating this discussion, may I be permitted to join issue with him on two points. First, I would deprecate any uniformity in either curriculum or system because the beet education comes from diversity of approach within a unity of spirit, and the inspiration should come from the needs of each district. This is already well exemplified in the Colonial Empire, for instance, at Njala in the Protectorate of Sierra Leone, where a teachers' training college is on the same campus as a school for training African agricultural and forestry officers. They all share certain subjects and have a communal life, the end being that each of them should recognise and be able to help the work of the others. They are consciously directed to be the real leaders of the kind of villages from which they originally came. That struck me very forcibly when I visited it as a pattern not only for the Colonies in Africa, but as something which could well be adopted by education institutions even in this country because of the practical approach shown there.
As for mass education, I am not absolutely certain whether my hon. Friend was right when he attempted to make a distinction between mass literacy cam-

2503
paigns and mass education campaigns. There need be none if the mass literacy campaign is built on the needs of the neighbourhood and the instruction is related to the problems of a particular village or of a particular area. In the Udi District of the Eastern Provinces of Nigeria the local printing press produces textbooks for mass literacy which are also text books dealing with problems of the people. If we can achieve that diversity of approach in unity of objective, as in the examples in the Colonial Empire which I have given, we could have a pattern of development which could well be stimulated from this country and from the Colonial Office itself.
3.39 p.m.
The Under-Secretary of State for the Colonies (Mr. Rees-Williams): I agree that we are indebted to my hon. Friend the Member for Tradeston (Mr. Rankin) for raising today this most interesting subject. I am only sorry that we have not more time in which to discuss this matter. It is constantly in our minds in the Colonial Office and one of the, points on which we have great argument is that which has been raised today. In other words, can we divorce mass literacy from mass education? I must admit that I am rather on the side of those who believe that mass literacy is an essential weapon, as it were, in the attack on mass ignorance. We are trying to work out a solution to that very problem.
Mr. Rankin: I dislike interrupting my hon. Friend, but I wish to make it clear that I did not mean to divorce mass literacy from mass education. Of course, we cannot go into that any further.
Mr. Rees-Williams: As to education generally, I can assure my hon. Friend that we are giving this the very highest priority in the Colonial development and welfare plans. No less than £18,500,000 has been allotted to education, that is, 13½ per cent. of the total not only for welfare but development. We agree that education and social services must be extended. We would like to see them extended at a very much greater rate than in the past. But I must point out to hon. Members, as I pointed out to people in the Colonies, that if the peoples in the Colonies wish for more educational and social services—as they do—then they
2504
must work hard to get them. There is no fountain, no tap, which we can turn on to provide money in large quantities to supply social and educational services, either in this country or the Colonies.
Teachers are one of our great problems. We are very short of teachers, and, therefore, we have to concentrate our European staff in secondary schools and in teachers' training establishments, where we can get the maximum benefit from their services. There is no bar whatsoever to Africans as principals of schools. In fact, in West Africa nearly all the primary school principals are Africans already, and many of the secondary school principals are also Africans. In East Africa many heads of the primary schools are Africans and it is our intention to bring Africans along to take their part in all groups of education, universities, secondary and primary, whether as teachers, administrators—
Mr. Skinnard: May I ask, is not the difficulty in East Africa that the rates of pay for white principals and Africans are different, and that that has led to some friction?
Mr. Rees-Williams: There has been a little difficulty in the past, but as my hon. Friend knows, the African Government is going into this and many other points. It is absolutely vital to develop these great areas. East Africa and Northern Rhodesia are greater in area than the whole of Western Europe, and in this development plan, education must play its part. In my opinion there can be no economic development of these great areas unless we regard education as a part of the essential methods of obtaining that development—
Mr. Brendan Bracken: If that is the case, why has the Government decided to shut down one of the most useful of the university colleges in Africa?
Mr. Rees-Williams: I presume that the right hon. Gentleman is talking about a certain Methodist institution in West Africa.
Mr. Bracken: Yes.
Mr. Rees-Williams: That is another point with which I have no time to deal. I am now referring to the broad question of education in Africa. In the case of

2505
that particular college, it was not a question of shutting down, but maintaining it with a Government grant and if the right hon. Gentleman would get an Adjournment Debate on that point I should be happy to deal with it. When I was in East Africa I was asked two things. The first was for more education, and, secondly, for more British technicians to come out to assist the African in his development. The reference there was not merely to education purely and simply in the normal sense of the term, but in the broader sense of mass education. We attach the greatest value to mass education and we have now sitting a committee to decide on possible methods of applying it, having regard to certain practical studies we have already made, particularly in Nigeria, which have been very successful. The work of the district officer is, of course, invaluable, but he is a man who has a variety of other tasks and in most cases it is desirable to attach to him someone with more specialised knowledge of this subject.
Mr. H. D. Hughes: A most successful example of mass education was carried out by a district officer and not by a specialist.
Mr. Rees-Williams: It was carried out by him, although I understand that it was developed very largely when he went on leave. I am only saying that one cannot expect always to get a district officer who spends a large amount of his time on mass education or who in fact is capable of doing so. We must take account of the ordinary common or garden district officer. We are wondering whether it would not be better to attach someone to him. That matter is being considered. My hon. Friend the Member for Tradeston mentioned two matters which should be the subject of mass education. One is erosion and the other is swollen shoot disease. Erosion is a great danger. It is largely due to overcrowding and to bad methods of agriculture owing to the fact that the power which controls East Africa is the tsetse fly. The fly controls three-quarters and we control the other quarter of the area. Because of the tsetse fly's power, the people are crushed up into one quarter of the territory with the result that we have this danger of erosion.
2506
There has been some hostility from the people when we have tried by agricultural methods to overcome this danger. In fact, on one occasion six months' work was destroyed in half an hour by an agitator who persuaded the people to ignore everything that had been suggested by the medical officer and the district officer in the previous six months. We must overcome this danger of erosion first by education and, if that fails, by compulsion. I do not feel that anybody in these days has the right to abuse and misuse land in the way in which it is abused in some parts of Africa. It is only right, as we have put our own farmers in this country under certain controls, that farmers in other places should be put under controls if necessary.
Mr. John Hynd: That is all very well, but the farmer in this country does control the Government and the policy of the Government, and the African farmer does not.
Mr. Rees-Williams: I would say that I would only institute this compulsion through the farmers' own native authorities. That is a large subject which we need not go into now. With regard to swollen shoot disease—
Mr. Bracken: It is swollen Ministers that I object to; they have no right to introduce compulsion.
Mr. Rees-Williams: There are 25 million trees affected by this disease in the Gold Coast. All over the Empire we hay? the same trouble with trees. I am not at all sure whether it is not due to lack of mass education and to the fact that in the past the soil has not been fertilised, with the result that the trees are tired and worn. That is another matter, as in the case of soil erosion, where mass education is desirable. In this mass education campaign, whether in agriculture, in technical subjects or in any other phase of activity, we must give the people of the territories the idea that manual work is dignified work and that the white collar job is nor to be sought after, to the exclusion of a. job with the hands.
We are going a very long way towards that, even without this measure of compulsion. I admit that it is for the Africans to decide, but many of them are agreeable to it. In fact, I met one chief who

2507
imposed it himself, because he found that his land was rapidly dying and his people dying. The right hon. Gentleman the Member for Bournemouth (Mr. Bracken) may know quite a lot about gas but not much about Africa—
Mr. Bracken Mr. Bracken rose—
Mr. Rees-Williams: No, I am not going to give way.
Mr. Bracken: Swollen bully.
Mr. Rees-Williams: Therefore, as I was saying, this chief has managed to get his land back into good cultivation by making the necessary rules for his people, and that is the sort of thing—
Mr. Bracken: Using the big stick.
Mr. Rees-Williams: Using the sensible rules of Africans by Africans. I know that the right hon Gentleman would rather keep Africans as zoological specimens, but we would rather treat them as men. We would rather see them developing as men and utilising the fruits of the land in the way they should be utilised. We know all about Tory policy in the Empire. If the Tories had been in power much longer, there would not have been an Empire. It would have been a "Dust Bowl," like some other parts of the world where private enterprise has had uncontrolled sway. We do not intend to do that. We intend to use all the methods of mass education and all the methods of other types of education for the benefit of the African, and he will benefit in the end and develop himself and his country in a way in which the Tories would never have developed it in a hundred years. If there is one type of man who has every right to be grateful and to go down on his knees because a Labour Government came to power in 1945, it is the inhabitant of the Colonial territories, European or otherwise.
Mr. Bracken: You are making him do so, and using the big stick as well.

UNEMPLOYMENT FUND (INVESTMENTS)
3.53 p.m.
Sir John Mellor: I propose to call attention to the recent investments of the Unemployment Fund, a matter which, whether they know it or not, must be of great importance to all the people of this country. In the year ended 31st March, 1948, £77 million of Government Stocks were added to these investments, but no short-dated or medium-dated stocks were purchased during that period. All this new money went into long-dated or undated stocks, and the new purchases included no less than £55 million of what is commonly known as "Dalton Undated Stock." It is evident that this involves a change of policy, and I want to ask the Financial Secretary to the Treasury who changed that policy and why.
One would expect that funds of this kind, so far as investments are concerned, would be kept in a liquid state. The risk of unemployment is not easily predictable as to time or extent, and, if long-dated, or still more undated, stocks are subject to forced sale at a time of depression and when markets are bad, inevitably a heavy loss must be suffered upon their realisation. If the right hon. Gentleman is going to say that there are quite sufficient funds invested in short-dated stocks and it does not matter about the rest, then I want to know why the Government proceeded to collect contributions which were not required for the stability of the fund? As I have said, this change of policy in investment from investing in short-dated stocks to putting, during the year added 31st March, 1948, the whole of the new money into long-dated and undated stocks is a surprising one. We naturally inquire what was the motive for the change.
There is a view which is fairly generally held, and which I share, that the motive was that the Government wished to support the gilt-edged market, for this reason: On 1st January all railway stocks vested in the Government. On 1st April all electricity stocks vested in the Government. The compensation which was to be given to the railway and electricity stockholders was dependent upon gilt-edged market prices upon the vesting dates, so that if prices for long-term gilt-edged stocks were

2509
higher, less favourable terms of compensation were given to the railway and electricity stockholders. Therefore, my submission is that the Government desired to support the gilt-edged market and especially the long-term stocks in order that they might give less to the unfortunate railway and electricity stockholders, who were to be compensated.
The Unemployment Fund, in my submission, is a trust fund and should be treated as such, in the same way as all other national insurance funds, and as the National Insurance Reserve Fund should be treated when it comes into being on 5th July this year. I suggest that it would be improper in any case for the Government to manipulate the Stock Market for any purpose, even with money which had been properly at their disposal, but I say that it is positively shameful for the Government to use trust funds for such a purpose. The consequence so far as the unemployment fund is concerned is that there has been a heavy deprecation of the holding of the Dalton undated stock. It is all very well for the Chancellor of the Exchequer to say that there is no loss until the stock is sold out. It may be that there is no realised loss, but the loss is there, and surely any prudent person must take note of the sharp adverse difference between book values and market values. I would like to know from the Financial Secretary what that difference amounts to today. I want to ask where the responsibility resides for making these investments—
It being Four o'Clock the Motion for the Adjournment of the House lapsed, without Question put.
Motion made, and Question proposed, "That this House do now adjourn."— [Mr. George Wallace.]
Sir J. Mellor: On 11th May, in reply to a Question regarding these investments from my hon. Friend the Member for New Forest and Christchurch (Colonel Crosthwaite-Eyre), the Chancellor said:
"The Treasury have not increased the holding. The increase is by persons responsible for the investment …."—[OFFICIAL REPORT, 11th May, 1948; Vol. 450, c 1972.]
Who are the persons responsible for the investment? Section 58 of the Unemployment Insurance Act, 1935, provides that money accruing to the Unemployment
2510
Fund may be transferred to the National Debt Commissioners for investment. It is common knowledge that those Commissioners never meet. They are like the Board of Trade which, I understand, last met in 185o. It is interesting to note that in 1911 Mr. Horatio Bottomley asked the then President of the Board of Trade about the attendance of the Archbishop of Canterbury at the meetings of the Board. Mr. Buxton gave this ingenious answer:
"His Grace has been as assiduous in his attendance as any other member of the Board. …— [OFFICIAL REPORT, 17th May, 1911; Vol. 25, c. 2008.]
We can say the same thing about the present National Debt Commissioners. They have all been equally assiduous their attendance—except the Chancellor of the Exchequer, whose assiduity has been wholly misdirected.
The Interpretation Act of 1889 says:
"The expression 'national debt commissioners' shall mean the commissioners for the time being for the reduction of the national debt."
The National Debt Reduction Act, 1786 as subsequently amended, provides that the Speaker of the House of Commons the Chancellor of the Exchequer, the Master of the Rolls, the Accountant. General of the Supreme Court, the Lord Chief Justice and the Governor and Deputy-Governor of the Bank of England for the time being respectively shall be those commissioners. The Act later states:
"All powers and authorities which the said commissioners are or may be enabled of required to exercise by the present or any future Act or Acts of Parliament shall and may be exercised by any number, not less than four, of the said Commissioners."
In other words, a quorum shall consist or four Commissioners.
I want to know whether the National Debt Commissioners have delegated their functions. If so, by what instrument, when, and to whom? We know that there is a National Debt Office. Who is the effective authority over it? If the National Debt Commissioners never meet, obviously they cannot be that authority. I submit that the real position is that the Treasury have usurped the authority of the National Debt Commissioners. believe that the Chancellor of the Exchequer is ex-officio chairman of the National Debt Commissioners. If he and

2511
the Governor and the Deputy-Governor of the Bank of England went into a huddle, they still would not form a quorum of the National Debt Commissioners.
By what authority are these investments made? The Unemployment Insurance Act, 1935, says that the investments are to be made by the National Debt Commissioners. They never meet, but the investments are made. I hope that the Financial Secretary will explain to the House from where the authority for making these investments is derived. It would be profoundly unsatisfactory to find a position in which, whether they have authority or not, the Treasury are controlling the policy of investment of trust funds like the Unemployment Insurance Fund. It is most unsatisfactory that the Treasury should be able to use such funds in the market for purposes in no way connected with the Unemployment Insurance Fund. Such funds should be administered in a way which is disconnected entirely from Government policy. The investment should be made solely from the point of view of the stability of the Fund, and should have regard to no other circumstances whatsoever. Therefore, I say that such funds should be put beyond the control of the Treasury altogether. I make the definite suggestion that, unless some more appropriate authority can be found, these funds should be placed in the hands of the public Trustee, who would be in a position quite independent of any Treasury control or influence to ensure that these funds are invested in a way which will best serve the interests of the Fund itself.
4.7 p.m.
Colonel Crosthwaite-Eyre: I understand from the account that there is £530 million in the Fund and £79 million is in "Dalton" irredeemables. I should like to know how one-sixth of the total issue of this stock has been collected. Even if there were some reason for putting money in this stock, it seems very odd that one-sixth should have been taken over. I should like to know also why £55 million has been put into this stock in the last year, and when that stock was bought. In the Press and in this House the right hon.
2512
Gentleman the Member for Bishop Auckland (Mr. Dalton) has been blamed for the Government's financial policy, but I believe I am right in saying that it is the present Chancellor of the Exchequer who, in the first few months of this year, in order to bolster up the market, which was sagging desperately, made these investments.
Why is it considered right to put over £8 million into Transport 3 per cent. Stock? That stock was issued in a manner which has been criticised very often, and I do not think it is too much to say that the market was rigged before it was issued. It was issued in such a manner that it could never stand at par. How is it, when all this was said in the financial Press, that £8 million has been put into this stock? Of all the vicious principles in Government finance, there is nothing worse than using a particular fund designed for specific beneficiaries to bolster up Government financial policy. It was not so long ago when a similar issue to this was brought into question and the Government of the day fell. I hope that the Financial Secretary will be able to justify how it comes about that of £530 million nearly one-fifth has now been put into stock for no conceivable benefit to the community, but in order to satisfy Socialist finance and to maintain a market hopelessly rigged by the very gentlemen who are now using public funds to keep themselves in office.
4.10 p.m.
The Financial Secretary to the Treasury (Mr. Glenvil Hall): The hon. Member for Sutton Coldfield (Sir J. Mellor) and the hon. and gallant Member for New Forest and Christchurch (Colonel Crosthwaite-Eyre) had some hard things to say about the way in which the money of the Unemployment Fund has been invested. I suppose that looking at the matter superficially, without going into it very deeply, they are right to come to the conclusions to which they have come. I have, however, to tell them and the House that they based what they had to say upon a complete misapprehension of the facts. For example, the hon. Member for Sutton Coldfield called attention to recent investments and said that there has been a change of policy. He wanted to know who had changed it, and why. It is my job to tell him that this policy is not a policy which was initiated by the

2513
present Government. It was decided upon before the results of the last General Election were made known.
As I understand it, the criticism is that it is wrong in principle for the resources of this particular Fund to be invested in long-dated or irredeemable stock. The further charge is made that the reason for this change of policy has been not to benefit the contributors to the Unemployment Fund hut in some way to underpin the gilt-edged market. I suppose the underlying motive of all that has been said has been to carry on the vendetta against my right hon. Friend the Member for Bishop Auckland (Mr. Dalton) and the policy he pursued, which I think was a right and proper policy, of trying to provide cheap money. It is not my purpose this afternoon—for one thing there would not be time—to defend my right hon. Friend's policy, but I think posterity will see that it was eminently right. It has given industry, the taxpayer and the local authorities money at a cheap rate when all of them badly needed it after the war. It has helped to rehabilitate industry, to build houses and in so far as is possible when taxation is so high, to relieve the taxpayer.
Mr. Brendan Bracken: Then why does not the right hon. Gentleman carry it on, if he agrees with it?
Mr. Glenvil Hall: I have here some figures which I did not get out for this Debate but for another occasion. If I quote them, it will serve to show what I am trying to say. In 1919 the average rate of interest on servicing the internal National Debt was 4·9 per cent. Thanks to my right hon. Friend and—I wish to he quite fair—thanks to the policy of the Government of the day during the war, and to the reduction of the rates of interest which this time have been put into operation, there has been a terrific fall in the average rate. It is now 2·2 per cent.
As those who follow our finance Debates will remember, we are budgeting this year for something like £500 million to service the National Debt. If the cheap money policy had not been pursued, and if the same sort of thing had happened as happened after the last war, we should be spending twice that amount, and should need a much greater increase in the Income Tax in order to service it. Therefore, although it is not my job at
2514
the moment to defend the cheap money policy, I am surprised, even shocked, that hon. and right hon. Gentlemen opposite should not be supporting the Government. This is not a Socialist policy which we are carrying out. It should be common ground on both sides of the House that it is our common duty at this time to embark on a cheap money policy, if we can.
Mr. Bracken: Of course, the cheap money policy did not begin with the arrival of the right hon. Gentleman the Member for Bishop Auckland (Mr. Dalton); it dates back for 25 years. The truth of the matter is that we all agree with cheap money but we object to rigging the market in order to create synthetic cheap money. Our objection to the right hon. Gentleman the Member for Bishop Auckland was that he rigged the market in his anxiety to do something which was highly desirable.
Mr. Glenvil Hall: I will come to that charge in a minute. I was saying, in passing, that underlying the criticisms that have been made, there is a vendetta against my right hon. Friend for trying to achieve what I think we should all want to see achieved, namely, cheap money. It is quite wrong of the right hon. Member for Bournemouth to say that that policy was followed 25 years ago after the last war.
Mr. Bracken: Twenty years ago.
Mr. Glenvil Hall: Earlier, that was not the case.
Mr. Bracken: Mr. Chamberlain began it.
Mr. Glenvil Hall: That may be; but that was much later. What is the answer to the charges which have been made The view that has been expressed is based on the failure to realise that circumstances have changed. There are changes in relation to the Fund itself, and there are also changes of an economic kind. In the old days the Fund was based on the assumption that there were trade cycles, and that a boom was inevitably followed by a slump; that there was always a pool of unemployed, and that now and again that pool reached considerable dimensions. During the war it was agreed—and both sides of the House were involved in this —that we should try to achieve a situation in which we had full employment.

2515
It is part of the policy of the present Government that full employment should be achieved, and that we should carry on the policy of full employment. Unless something definitely goes wrong we hope that in future, with the knowledge that we now have of economics, and with the assistance of both sides of the House, unemployment of the dimensions which we knew in the old days will not occur again. That has to be borne in mind.
Another thing which must be remembered—this is a point I want to try to drive home to hon. and right hon. Members oposite—is that in 1946 we passed the National Insurance Act, which laid down that there should be an amalgamation of these various funds—the National Health Fund, the Old Age Pension Fund, and the Unemployment Insurance Fund which we are now discussing. In the old days it was quite impossible—or so it was thought, and events have proved those who thought so to be right—to put money in any shape or form to reserve; that is, using it, not in order to have it there in liquid or semi-liquid form for use in an emergency, but as an endowment fund which would bring in an income, year by year, to assist the objects for which the money had been raised. It is part and parcel of the underlying financial structure of the National Insurance Act that year by year a sum should be put away to reserve. A reserve fund has been set up and we hope that, year by year, it will yield money to, and for the benefit of, those who come under what we colloquially call the Beveridge Scheme.
The curious thing is that this is not a new thing so far as Governments are concerned. It is true that, in the old days, the Unemployment Insurance Fund had to be kept fairly liquid because of recurrent slumps. Those who ran it, therefore, took the view—and I think possibly it was a proper view—that the money should be invested in securities which had not more than about 10 years to run. But this did not apply to other funds of a similar kind. The National Health Fund had not the same pressures put upon it; part of it was put to reserve in accordance with the policy of every successive Government. It is not something new. It is a policy which was also followed by Governments of which the right hon. Member for Bournemouth was such an
2516
ornament, and it is a policy which will continue now that the funds are being amalgamated. So far as the National Health Fund is concerned, Governments have always invested—I will not say enormous sums—very large sums in local loans. If hon. Gentlemen opposite tell me that local loans have always stood at par, I beg them to turn up the financial journals—
Mr. Bracken: Not at par. That is the important part.
Mr. Glenvil Hall: Let me develop my case in my own way. It is true that 3 per cent. local loans have always been used. I took the trouble this morning in anticipation of the Debate to get a friend of mine to look up some figures. In 1920, just after the last war, local loans were down to 45⅝ and Consols down to 40⅜—
Mr. Bracken: We all agree.
Mr. Glenvil Hall: Those are gilt-edged securities. Moneys of this kind must be invested in gilt-edged or Government guaranteed securities which are next door to, if not entirely, gilt-edged. We cannot put public funds of this kind into all sorts of securities. They must go into Government gilt-edged securities. Looking down the list, we find that Government stocks go up and down, and it is quite immaterial and quite wrong to pretend that there has been a heavy loss unless it has been essential to sell the stock and securities one has bought at something less than one gave. I do not believe that, in the old days, the only thing for the Government of the day to do was to invest in gilt-edged securities without making sure that they were investing in something which would never go below the rate at which they bought it. We must remember that the Government have only one outlet for their money, namely, gilt-edged securities. They cannot control indefinitely the price that those securities will fetch at any given day in the market; therefore they must buy at the best price they can. That is what the Government have done.
Mr. Bracken: The right hon. Gentleman is absolutely right in what he says about the fluctuations in Consols and so forth. The accusation of the hon. Baronet the Member for Sutton Goldfield (Sir J. Mellor) is quite a clear one. These funds

2517
were used to support what are called "Daltons." They were not invested on the long-term basis but used so that the right hon. Gentleman could carry out his insane ambition for a 2½ per cent. yield without taking any market factors into account. I congratulate the right hon. Gentleman and his colleague the Chancellor of the Exchequer on their good sense and judgment in abandoning the discredited Dalton policy.
Mr. Glenvil Hall: That neither adds to the discussion nor throws any additional light on this subject. Up to now I have made one point, that the Government must invest this money in gilt-edged securities and that they must invest that money in what is open to them. So far as the Fund is concerned—and after the appointed day all these funds will-be concerned—much of the money should be invested in long-term or irredeemable stock if that stock is the best thing to buy at that juncture. In buying what are colloquially called "Daltons," savings bonds and Transport stock, the National Debt Commissioners have bought what would give the best yield at the time when they bought. There is not the slightest doubt about that. I have gone into it. It is quite obvious that, in looking round the market to invest this money, they have bought what was the best to buy in the altered circumstances and for the purpose of building up a reserve.
Mr. Bracken: Ten million pounds of it.
Mr. Glenvil Hall: A figure of £80 million has been bandied about as though this money has been taken along by the brokers acting on behalf of the National Debt Commissioners, and as if the whole of that sum was spent in one day in bolstering up a falling gilt-edged market. What happens is this: This money comes in week by week. The surplus is then passed over by the Ministry of Labour and National Service to the National Debt Commissioners. It is part of the instruction to them that they must invest it as soon as possible after it reaches them. Therefore they invest the money in relatively small amounts which are quite incapable of bolstering up the market or preventing the gilt-edged stock from slipping.
Mr. Bracken Mr. Bracken indicated dissent.
Mr. Glenvil Hall: The right hon. Gentleman shakes his head. He has had a long experience in office but he is not there now—
Mr. Bracken: That is only too obvious.
Mr. Glenvil Hall: I am speaking of what I know. It is a fact that these moneys are invested as they come along—
Mr. Bracken: That is true.
Mr. Glenvil Hall: They are not invested by the Chancellor. He is much too busy to go down to the City and mess abort in this way—
Colonel Crosthwaite-Eyre: Mess about is right.
Mr. Glenvil Hall: That is not his job. The moneys are invested, as they were in the time of the right hon. Gentleman, by the proper people acting under authority, and according to instructions. They buy the stocks that will give the best yield.
Sir J. Mellor: Yes, but under what authority? Will the right hon. Gentleman deal with my last point? What is the authority?
Mr. Glenvil Hall: It is the same authority as was invoked by previous Governments—
Mr. Bracken: To be quite fair to the right hon. Gentleman, of course, the Treasury have an overriding control of these funds. We could end this Debate now if the right hon. Gentleman would give this assurance: that the Treasury in no instance asked the Commisssioners of National Debt particularly to buy the so-called Daltons. Was any instruction given by the Treasury that they should be supported?
Mr. Glenvil Hall: I can give that assurance. The only instruction they get is to seek the best yield for the money they have at that moment to invest, bearing in mind the purposes for which it is to be invested.
The hon. Baronet said that the Treasury have usurped the rights of the National Debt Commissioners, and the hon. and gallant Member for the New Forest (Colonel Crosthwaite-Eyre) wanted to know how the National Debt Commissioners had managed to collect so much of what he called the

2519
"Dalton" stock. The reason is that that stock, which had gone to a discount, was the stock which would give the best yield at the time they bought it. [Laughter.] I can find nothing wrong with that, or see any cause for mirth in that assertion. This policy was laid down years ago, and it is quite obvious that the Treasury, acting for the Government, must have control of these funds and that the policy must be laid down by the Government of the day. Curiously enough, we are in this matter following the policy of our predecessors because, again curiously enough, it happens, unlike most of their policies, to be a sound one. We are, therefore, doing nothing new but something which is good common sense and in the best interests of those—
Mr. Bracken: Why did the present Chancellor abandon the policy, and wash his hands of Daltonism?
Mr. Glenvil Hall: That is an assertion which cannot be substantiated—that the present Chancellor has abandoned the policy carried through by his predecessor. Both of them believe, in the cheap money policy, and it is a fact that the rate of interest moved upwards from 2½ to 3 per cent., not because there was a change of policy, but because there were certain changes in the City which led to that movement.
The Question having been proposed after Four o'Clock 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 Half-past Four o'Clock till Tuesday, 25th May, pursuant to the Resolution of the House yesterday.

  TOWN AND COUNTRY PLANNING (BERKSHIRE)
  TOWN AND COUNTRY PLANNING (BERKSHIRE)
  QUEEN'S UNIVERSITY, BELFAST (BALLOT PAPERS)
  QUEEN'S UNIVERSITY, BELFAST (BALLOT PAPERS)
MINISTRY OF WORKS
  Farm Buildings (Repair Licences)
  Farm Buildings (Repair Licences)
  Building Materials (Inquiry)
  Building Materials (Inquiry)
FOOD SUPPLIES
  Maté Tea
  Maté Tea
  Special Cheese Ration
  Special Cheese Ration
  Feedingstuffs (Pigeons)
  Feedingstuffs (Pigeons)
  Invalids
  Invalids
  NATIONAL INSURANCE (LOST CONTRIBUTIONS)
  NATIONAL INSURANCE (LOST CONTRIBUTIONS)
  KENYA (CO-OPERATIVE SOCIETIES)
  KENYA (CO-OPERATIVE SOCIETIES)
  UNITED KINGDOM AND ETHIOPIA (DRAFT TREATY)
  UNITED KINGDOM AND ETHIOPIA (DRAFT TREATY)
ROYAL NAVY
  Sea Cadet Corps
  Sea Cadet Corps
  Victualling
  Victualling
  Recovery Depot, Urlay Nook
  Recovery Depot, Urlay Nook
BRITISH ARMY
  Pay and Allowances
  Pay and Allowances
  Devil's Point, Plymouth
  Devil's Point, Plymouth
  Italians, Eritrea
  Italians, Eritrea
  Rosebank House, Lockerbie (Caretakers)
  Rosebank House, Lockerbie (Caretakers)
  Ogaden (Sinclair Oil Company)
  Ogaden (Sinclair Oil Company)
  ELECTRICITY SUPPLY INDUSTRY (PROFITS)
  ELECTRICITY SUPPLY INDUSTRY (PROFITS)
  HOUSING (DEFENCE REGULATION 56A)
  HOUSING (DEFENCE REGULATION 56A)
  HOSPITAL AND SPECIALIST SERVICES
  HOSPITAL AND SPECIALIST SERVICES
NATIONAL FINANCE
  Purchase Tax
  Purchase Tax
  Salaries
  Salaries