Sitting of 24 May 1950

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  LONDON COUNTY COUNCIL (MONEY) BILL
  Read the Third time, and passed.
  WEAR NAVIGATION AND SUNDERLAND DOCK BILL [Lords>] [King's Consent, on behalf of the Crown, signified]
  Read the Third time, and passed without Amendment.
  BRITISH TRANSPORT COMMISSION BILL (By Order)
  Consideration, as amended, deferred till Tomorrow.
ORAL ANSWERS TO QUESTIONS
  ROYAL AIR FORCE

    Aircrew (Medical Examination Fee)
    Mr. John Grimstonasked the Secretary of State for Air why he has increased the fee payable by all pilots, navigators and radio operators for the official medical examination, which they must take on renewal of their licences, from 10s. 6d. to 15s.
    The Secretary of State for Air (Mr. Arthur Henderson): The fee, which was fixed in 1923, was increased because the cost to the Royal Air Force in carrying out the medical examination on behalf of the Ministry of Civil Aviation has increased to an equivalent of 15s.
    Mr. Grimston: Is it not a fact that these examinations are done by Service doctors, and that their fees have not increased to this extent in the last few months?
    Mr. Henderson: No, Sir, but the cost of equipment and the basis of remuneration have both altered since 1923.

    Fighter Squadrons (Strength)
    Air-Commodore Harveyasked the Secretary of State for Air what progress has been made in the manning and re-equipment of Fighter Command Fighter Squadrons in bringing them up to a two flight basis.
    Mr. A. Henderson: By the middle of this year about three quarters of the Regular day fighter squadrons of Fighter Command should be at doubled strength. I now hope that the process will be complete by December and not by March, 1951, as I stated in the course of the Air Estimates Debate.
    Air-Commodore Harvey: While gratified to hear what the right hon. and learned Gentleman says, may I ask if he can indicate when the Royal Auxiliary Air Force squadrons within Fighter Command will also expand to a two-flight basis?
    Mr. Henderson: No, Sir. Not without notice.

    Tank Range, Yorkshire
    Mr. Woodasked the Secretary of State for Air whether his Department intends to purchase the area known as the Cowden tank range in the East Riding of Yorkshire; and, if so, for what purpose it will be used.
    Mr. A. Henderson: Yes, Sir. This range will be used jointly by the Army and the Royal Air Force. The Army will use it for tank gunnery and the R.A.F. for live bombing, practice bombing and air-to-ground gunnery and rocket firing.
    Mr. Wood: Will the right hon. and learned Gentleman give an assurance that the Cowden tank range will be fully used in the next year or so, as it has not been fully used in the last three or four years?
    Mr. Henderson: Yes, Sir. It is the intention that the Army will use it for Territorial practice only between the months of May and September, and that the Royal Air Force will use it for four or five days a week.

  CIVIL AVIATION

    Airworthiness Certificate (Fee)
    Mr. J. Grimstonasked the Parliamentary Secretary to the Ministry of Civil Aviation why he has increased the fee payable for the grant of a Certificate of Airworthiness to a prototype aircraft to roughly double the present fee.
    The Parliamentary Secretary to the Ministry of Civil Aviation (Mr. Beswick): The fee is now related to the actual cost of investigation by the Air Registration Board, subject to a maximum.
    Mr. Grimston: Will the hon. Gentleman say when the fee was last fixed at the previous figure?
    Mr. Beswick: I cannot say when the fees were last fixed, but the fact is that the deficit which is made up by the Ministry of Civil Aviation and by the guarantors has been increasing each year for the last 10 years.
    Air-Commodore Harvey: Does the hon. Gentleman realise that the cost of renewing a certificate of airworthiness has gone up twice in the last few years? How does he account for that?
    Mr. Beswick: I account for it by the fact that the cost of investigation has increased. The hon. and gallant Gentleman will agree—I think both sides of the House will agree—that the Air Registration Board is efficient and economical in its workings.

    Radio Service (London Airport)
    Mr. J. Grimstonasked the Parliamentary Secretary to the Ministry of Civil Aviation why the radio range service at London Airport has been discontinued.
    Mr. Beswick: The radio range service at London Airport has been discontinued owing to radio congestion in the medium frequency band. It has been replaced by a low power non-directional medium frequency beacon which meets operational needs.
    Mr. Grimston: Is the Minister aware that a number of aircraft which use this airport would need this particular facility? They have not the alternative he mentioned.
    Mr. Beswick: This new beacon has been agreed to by the operators.

  SOUTH-EAST ASIA
  Mr. Harold Daviesasked the Secretary of State for Foreign Affairs if he is now able to tell the House what form the agreement on the need for collaboration in the development of South-East Asia took at the recent discussion between the Foreign Ministers in London.
  The Under-Secretary of State for Foreign Affairs (Mr. Ernest Davies): I would refer my hon. Friend to the relevant passage in the final communique issued on 13th May after the meetings of the three Foreign Ministers and which defines the form and extent of the agreement reached on South-East Asia matters.
  Mr. Harold Davies: Is there any hope of elaborating that statement and giving a little more detail in today's Debate, in view of the paucity of the information given this House about Far Eastern affairs?
  Mr. Ernest Davies: Perhaps my hon. Friend will exercise a little patience and sit through the Debate.

  PORT OF BEIRA (DEVELOPMENT)
  Mr. Baldwinasked the Secretary of State for Foreign Affairs whether, in view of the break-down of negotiations with the Portuguese Government for the development of the port of Beira, he will consider proceeding with the development of a transcontinental railway, which would give an outlet to the Atlantic for the products of Southern Rhodesia and east and central African colonies and, at the same time, be of value to our defence system.
  Mr. Ernest Davies: I cannot accept the hon. Gentlemen's contention that negotiations with the Portuguese Government for the development of the Port of Beira have broken down. They are still continuing and it is the hope of His Majesty's Government that they will result in the early signature of an agreement. The second part of the Question, therefore, does not arise.
  Mr. Baldwin: Is the Minister aware that an answer was given quite recently stating that these negotiations were tending to breakdown? In view of the fact

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  that Beira will always be a bottleneck, is he aware it is about time that the recommendation of the Development Commission, presided over by Sir Miles Thomas, to set up an investigating committee on this particular problem was carried out?
  Mr. Davies: There are two steps which are being taken, of which the hon. Gentleman may not be aware. One is that a transport conference is to take place at Johannesburg, probably in October, where the whole question of railway communication with the hinterland will be discussed. The other is that His Majesty's Government and the Portuguese Government have made joint application to the Economic Co-operation Administration for technical assistance in carrying out a survey of the various methods of relieving the pressure on the port of Beira.
  General Sir George Jeffreys: Can the Minister give an assurance to the House that His Majesty's Government realise that this is a matter of very great urgency—this development of railway communication and the facilitating of east to west rail communications through Rhodesia?
  Mr. Davies: Certainly.
  Mr. G. B. Craddock: Will the Minister also bear in mind that in a short time there may be a change of ownership in the Suez Canal? Would it not be prudent to ensure that British shipping will not be held up to ransom for canal dues?

  CZECH INSTITUTE, LONDON
  Major Tufton Beamishasked the Secretary of State for Foreign Affairs what work formerly done by the Czech Institute in London or by the Information Service of the Czech Embassy has ceased following the closing down of these organisations; and what work which they formerly did is still carried on, and by whom.
  Mr. Ernest Davies: Since the Communist coup in Czechoslovakia in 1948, the Czechoslovak Institute in London has been inactive. Nevertheless, its continued existence offered an opportunity, of which the Czechoslovak Embassy could avail itself et any moment, of producing
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  film shows and holding propaganda meetings. The main activities of the Czechoslovak Embassy's Information Service have been the production of a Czechoslovak News Letter and the distribution of literature imported from Czechoslovakia. These activities will now cease.
  Major Beamish: Can the Under-Secretary say what sort of kick the Government get out of closing this nonexistent organisation? Is he aware that this gesture is just as empty as the gesture made in the case of the Hungarians, which I raised two weeks ago?
  Mr. Davies: His Majesty's Government get no kick whatever out of this. We regret very much the action taken by the Czechoslovak Government which has driven us to take these retaliatory measures.
  Mr. Sydney Silverman: In view of what he has said, would my hon. Friend reconsider this whole policy of so-called retaliation, bearing in mind that there are a great many people in this country who do not see why we should deprive ourselves of information because other people are foolish enough to deprive themselves of it?
  Mr. Davies: It depends on what one considers to be information.
  Major Beamish: Is the Minister aware that we are not depriving ourselves of information, which is proved by the fact that the "New Central European Observer," a particularly scurrilous weekly newspaper, to which some of his hon. Friends contribute, belongs to the Czech Government and is run by the Czech Embassy in London?
  Mr. Davies: Yes, Sir. As I have stated on other occasions, it is not our policy to shut down on periodicals in this country. We consider ourselves sufficiently democratic to be able to afford to take the risk of receiving all forms of information.

  BRITISH-CZECHOSLOVAK LEAGUE
  Major Beamishasked the Secretary of State for Foreign Affairs whether he is aware that the British-Czechoslovak Friendship League of Pont Street, Chelsea,

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  is the main organ of Czech Communist propaganda in the United Kingdom; and whether he is prepared to permit their work to continue on its present lines in view of the Czech action in closing down the British Council and the British Information Service in Prague.
  Mr. Ernest Davies: The British-Czechoslovak Friendship League is not an official Czechoslovak body but a British institution with British executive officers. It is consequently in a different position from organs of the Czechoslovak Embassy. A close watch is being kept upon the activities of the League, and His Majesty's Government hope that all its British members and supporters will draw appropriate conclusions from the Czechoslovak Government's action in suppressing British cultural and information activities in Prague.
  Major Beamish: Is the Under-Secretary aware that the so-called British-Czechoslovak Friendship League is largely financed and organised by the Czechoslovak Government and is, therefore, an agency of the Czechoslovak Embassy in this country? Does he get any particular satisfaction from the fact that until a few hours ago it was under the chairmanship of one of his colleagues on that side of the House?
  Mr. Davies: We understand that the British-Czechoslovak Friendship League has been in receipt of a subsidy from the Czechoslovak Embassy, but that does not constitute it an agency of the Embassy. It is not an agency of the Czechoslovak Government; it is a British institution registered as a British club.
  Mr. Eric Fletcher: Is the Minister aware that the activities of this League are bitterly resented by a great many Czechoslovak refugees in this country?
  Dr. Barnett Stross: Is my hon. Friend aware, first, that there is already a sufficiency of malice and hatred in international affairs and that we should not contribute any further to that ourselves? Second, is he aware that if any hon. Member opposite is worried about this particular organisation, he is welcome to join it and look at it for himself?
  Miss Horsbrugh: In view of that suggestion that hon. Members might join
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  this organisation, does not the Minister think that a great many hon. Members would not like to be subsidised by the present Czechoslovak Government?
  Mr. Davies: That is entirely a question for hon. Members.
  Major Beamish: In view of the idiotic nature of the Minister's reply, I beg to give notice that I shall raise this matter on the Adjournment at the first possible opportunity.
  Mr. Speaker: If I heard the hon. and gallant Member correctly he said, "In view of the idiotic nature…" I think the proper wording is, "Owing to the unsatisfactory nature." I do not think he ought to add to that. I therefore ask him to say, "Owing to the unsatisfactory nature of the reply…"
  Major Beamish: I readily apologise, Mr. Speaker.
  Mr. S. Silverman: On a point of order. [Interruption.]
  Hon. Members: Go on.
  Mr. S. Silverman: I prefer to wait until I can be heard.
  Mr. Speaker: Is the hon. Member addressing me?
  Mr. S. Silverman: Yes, Sir. On a point or order. Do I understand that you ruled just now that the use of the word "idiotic" was unparliamentary? If that is so, is it not the custom of this House that, when a word has been used that you have ruled to be unparliamentary, it should be immediately withdrawn as well as apologised for?
  Mr. Speaker: Certainly not. If I want a word withdrawn, I say it shall be withdrawn. It is not for the hon. Member for Nelson and Colne (Mr. S. Silverman) to say whether I should order a word to be withdrawn or not.
  Mr. S. Silverman: Are we then to understand from what you have just said, Sir, that it is a matter within the discretion of the Chair as to whether an unparliamentary expression should be withdrawn or not?
  Mr. Speaker: Certainly. It is within my discretion entirely. Often I do not ask for a word to be withdrawn if I do not so desire.

  CONSULAR OFFICERS (RESIDENCE)
  Mott-Radclyffeasked the Secretary of State for Foreign Affairs in how many of the consular posts overseas, the British consul-general is the only consular official who is obliged to accommodate himself and his family in a hotel, in the absence of any private residence being available.
  Mr. Ernest Davies: I have no information about the residential arrangements of foreign consular officers at posts overseas.
  Mr. Mott-Radclyffe: Would the hon. Gentleman agree that if in any particular consular post only the British consul had accommodation at a hotel, it would give a thoroughly undesirable impression?
  Mr. Davies: I cannot altogether accept that, because I do not consider that the prestige and dignity of His Majesty's consuls abroad depends upon the houses which they occupy.
  Mr. Mott-Radclyffeasked the Secretary of State for Foreign Affairs whether he will state the reasons which prevent H.M. Consuls-General in Salonica and Seville from obtaining private residences for themselves and their families; and for how long it is anticipated that they will be obliged to continue living in hotels.
  Mr. Ernest Davies: The Consul-General at Salonica is waiting for a house to be redecorated and repaired. The Consul-General at Seville has now obtained a private residence.

  ATOMIC WEAPONS (CONTROL)
  Mr. Blackburnasked the Secretary of State for Foreign Affairs what steps he is taking to make use of the forth coming visit to London of Mr. Trygve Lie, Secretary-General of the United Nations Organisation, for the discussion of a fresh approach by the United Nations to the control of weapons of mass destruction including the atomic and the hydrogen bomb.
  Mr. Ernest Davies: The international control of weapons of mass destruction was among the subjects covered during my right hon. Friend's confidential talks
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  with Mr. Trygve Lie yesterday. Mr. Lie is already well aware of His Majesty's Government's readiness to resume consultations in the United Nations as soon as the Soviet Union signifies its readiness to attend. The proper forum is the group of the six permanent members of the Atomic Energy Commission set up by the Assembly in 1948.
  Mr. Blackburn: While I am glad to hear that the Government are now prepared to make a fresh approach in this matter, may I ask my hon. Friend whether active steps will be taken as soon as the problem of Chinese representation is solved, so that this matter is immediately discussed by the United Nations?
  Mr. Davies: Once the question of Chinese representation has been settled and the Soviet representatives return to the Atomic Energy Commission, His Majesty's Government are prepared to resume the talks, as indeed we are now prepared to do.
  Mr. Hector Hughes: Has Mr. Lie's visit in any way advanced the control of these weapons of destruction, and, if so, will my hon. Friend indicate in what way?
  Mr. Davies: As I have stated, these talks are of a confidential nature and it is better to wait until Mr. Lie himself makes any statement.

  NORTH ATLANTIC COUNCIL (MEETING)
  Mr. N. Macphersonasked the Secretary of State for Foreign Affairs on what matters agreement was reached during the discussions between the Foreign Ministers of Britain, France, the United States of America and Canada, and the subsequent discussions between the Foreign Ministers of the 12 countries represented in the North Atlantic Treaty Council; what common action was agreed upon in each case; and what specific obligations have been undertaken by this country in connection therewith.
  Mr. Maclayasked the Secretary of State for Foreign Affairs if he will make available in a White Paper or some other convenient form the conclusions reached at the recent meetings of the representatives of the Atlantic Treaty Powers.
  Mr. Ernest Davies: Hon. Members will have seen the communiqués issued after the meetings, as well as the agreed declarations on Germany, Austria, Berlin, German prisoners of war in the Soviet Union and on migration. They will also have seen the statement, with which Canada was associated, about the proposal to establish a working relationship on an informal basis between the Organisation for European Economic Cooperation on the one hand, and the United States of America and Canada on the other.
  As regards the North Atlantic Council, there is nothing I can add to the very full communiqué which was issued at the conclusion of the Council meeting on 18th May. Within the limits imposed by security, this communiqué contains a full account of the matters discussed and the conclusions reached by the Council. His Majesty's Government undertook no new obligations at the Council meeting beyond those already contained in the Treaty itself. The Council is not a body which can create new obligations. A White Paper on the London Conferences is in course of preparation.
  Mr. Macpherson: Are we to understand that all the members of the North Atlantic Treaty Council who were represented agreed to recommend to their respective Governments that O.E.E.C. should, in future, be associated with Canada and the United States of America? Further, may I ask whether any agreement was reached about the method of calculating the contributions that should be made by the different countries to common defence services?
  Mr. Davies: The communiqué regarding co-operation between O.E.E.C. and Canada and America will be discussed, presumably, at the next meeting of O.E.E.C., when we expect and trust that arrangements for that co-operation will be brought about. As to the second part of the supplementary, I do not feel that one should anticipate the terms of the communiqué.
  Mr. Henry Strauss: Will the White Paper also contain an English translation of these documents?
  Mr. Emrys Hughes: Did our representatives at this conference point out to
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  the Americans the grave peril which would face this country in the event of atom bombing in Europe?

  WEST INDIES

    Caribbean Commission
    Mrs. Eirene Whiteasked the Secretary of State for the Colonies what projects have been undertaken, or reforms instituted, in the British West Indies as a result of the work of the Caribbean Commission.
    The Minister of State for the Colonies (Mr. John Dugdale): As the reply is rather long, I will, with my hon. Friend's permission, circulate it in the OFFICIAL REPORT.
    Following is the reply:
    By the terms of the International Agreement establishing it, the Caribbean Commission is a consultative and advisory body to further and co-ordinate economic and social progress in the territories within its scope for which the metropolitan Governments concerned are responsible. The Commission's activities are very varied, and they are not, of course, confined to the British West Indies.
    The following are some of these activities:
    (1) Technical Information Services.
    Answers are given to technical inquiries over a wide field; and the following are produced and circulated:

    Information leaflets.

    Monthly information bulletin.

    Half-yearly Caribbean economic review.

    Yearbook of Caribbean research.

    External trade bulletins.

    Crop and livestock information.

    Educational films.

    Plant and animal disease reports.

    (2) Technical Conferences have been held on the following subjects:

    Land tenure.

    Forestry.

    Meteorology.

    Livestock.

    Soil science.

    (3) Surveys and studies have been carried out into the following subjects:

    Plant and animal quarantine legislation.

    Labour legislation (jointly with F.A.O.)

    Rural women's and youths' organisations (jointly with F.A.O.).

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    Transportation and communications.

    Industrial development.

    The criteria for potential Caribbean industries.

    Fishery population movements.

    The utilisation of sugar by-products.

    (4) Assistance in Social and Economic Development has been given in the following directions:

    Administration of war-time Caribbean schooner pool.

    Recruitment of agricultural labour for the United States.

    Tourist development.

    Aids to pioneer industries.

    The Commission is also the parent body of the Caribbean Research Council and the West Indian Conference. Political representatives of the territories concerned meet at this Conference, which is held once every two years, and gives a valuable opportunity for an interchange of views on subjects of regional importance. Examples of recommendations made by the Conference and adopted by the Governments affected are:

    (a) The establishment of the Caribbean Interim Tourist Committee.

    (b) A meeting of meteorological experts in 1949, which resulted in improvements in the hurricane warning system.

    (c) The grant to the Caribbean area by the University of Puerto Rico of 30 scholarships to its School of Industrial Arts.

    Trade with Canada
    Mr. Donnerasked the Secretary of State for the Colonies whether his attention has been drawn to the concern felt by the Barbados Chamber of Commerce and other similar institutions in the West Indies regarding the consequences of the increased restrictions upon dollar imports from Canada imposed with little regard for established trade ties; and whether he will give an assurance that these restrictions are not such as to endanger Canadian-West Indian shipping communications by so reducing the volume of freight as to render this unremunerative.
    Mr. Dugdale: I know that the unavoidable restrictions imposed on Canadian and other dollar imports into the West Indies have caused some concern to the local chambers of commerce. I am not aware that the volume of freight between the West Indies and Canada has
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    been reduced by these restrictions to the extent the hon. Member suggests.
    Mr. Donner: Is the right hon. Gentleman aware that these import control regulations have apparently been drawn up with very little regard to availability of supply?
    Mr. Dugdale: No, I do not think that is the case.

    Rum Industry
    Mr. Peter Smithersasked the Secretary of State for the Colonies how many workers were unemployed in the rum manufacturing industry in Jamaica, Barbados and British Guiana, respectively, at the latest convenient date.
    Mr. Dugdale: I am making inquiries and will write to the hon. Member as soon as I get the information.
    Mr. Smithers: Is the right hon. Gentleman aware that this industry has cut down its production by 25 per cent., and that in view of the high rate of unemployment in these territories there is considerable concern at this cut?

  BRITISH HONDURAS

    Evans Report
    Mr. Peter Smithersasked the Secretary of State for the Colonies what steps he proposes to take to implement the recommendations of the Evans Report regarding European settlement in British Honduras.
    Mr. Dugdale: An officer is being appointed to investigate further the establishment of dairy farming in the Cayo District, which the Evans Commission considered was the only possibility for European settlement.
    Mr. Smithers: In view of the suggestion in paragraph 218 of the Report that that area is specially suited for Mediterranean settlement, has the possibility of settling people who wish to emigrate from Malta been considered? I appreciate that there may be difficulties, but I believe that there is great pressure in Malta.
    Mr. Dugdale: We shall certainly bear that point in mind, but the Evans Commission have said that settlement would have to be undertaken gradually and with caution.

    Devaluation
    Mr. A. Fenner Brockwayasked the Secretary of State for the Colonies whether his attention has been drawn to the economic difficulties which have followed devaluation in British Honduras; and what action has been taken.
    Mr. Dugdale: I would invite my hon. Friend's attention to the reply which I gave to the hon. and gallant Member for the New Forest (Colonel Crosthwaite-Eyre) on 14th March, from which it will be seen that the devaluation of the British Honduras dollar was necessary in order to counteract economic difficulties which already existed. It was appreciated that devaluation was bound to entail some rise in the cost of living, and arrangements were made to offset this by the extension of price control and the provision of food subsidies.
    Mr. Brockway: May I ask my hon. Friend whether one of the actions taken was to introduce an emergency Act on 15th February, and whether that Act can now be withdrawn?
    Mr. Dugdale: That is quite another question.
    Mr. Brockway: I asked what action had been taken.
    Mr. Dugdale: It has certainly been introduced, but the question of its withdrawal is quite another matter.

  BRITISH GUIANA (FORESTRY REPORT)
  Mr. Peter Smithersasked the Secretary of State for the Colonies what steps have been taken to remedy the grave deficiency in Forest Department staff, referred to in paragraph 1 of the Forest Report for the Colony of British Guiana for 1948.
  Mr. Dugdale: The deficiency was made good by the appointment of three assistant conservators of forests in September, 1948, January, 1949, and September, 1949, respectively.
  Mr. Smithers: Does the right hon. Gentleman think that the appointment of three assistant conservators is adequate, in view of the fact that the 1948 Report says that the whole of the work of the
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  Department was paralysed owing to failure to fill staff vacancies? Will the 1949 Report, when published, disclose a more satisfactory state of affairs?
  Mr. Dugdale: Yes, Sir, I am told that it, will.

  HONG KONG

    Population
    Mr. Thomas Reidasked the Secretary of State for the Colonies what was the population of Hong Kong before the war; what it is now; and what restrictions are placed on the entrance of immigrants.
    Mr. Dugdale: The last official census in 1931 gave the population of Hong Kong as 869,751. The population in March of this year was 2,317,000. As regards the last part of the Question, the entry of aliens into Hong Kong is governed by the Hong Kong Immigrants Control Ordinance, 1949, and regulations thereunder. Recently, in view of the very serious overcrowding of the Colony, with consequent danger to public health and to food and water supplies, the regulations have been amended and the previous exemptions to citizens of the Chinese Republic have been withdrawn.
    Mr. Reid: Have the Government of China made any complaint about the restriction of immigration?
    Mr. Dugdale: I think that at the moment the situation appears to be quite satisfactory in that respect.
    Mr. Walter Fletcher: Do those figures include Kowloon and the leased territories, or just the island?
    Mr. Dugdale: As far as I know, they refer just to the island.

    Minister (Visit)
    Mr. Gammansasked the Secretary of State for the Colonies what reply he has sent, or proposes to send, to the request made by the Reform Club of Hong Kong that he should reconsider his decision not to visit the Colony.
    Mr. Dugdale: My right hon. Friend has informed the Reform Club of Hong Kong, through the Governor, that he much regrets his inability to include Hong Kong in his tour owing to the shortness of time at his disposal.

    Rice (Price)
    Mr. Ian Winterbottomasked the Secretary of State for the Colonies whether his attention has been called to the increase in the price of rice in Hong Kong over the last three months; and what measures are the Government of Hong Kong taking to stabilise the commodity.
    Mr. Dugdale: It is understood from the Governor of Hong Kong that there has been no increase in the price of rationed rice for several months. The cost of free market rice fluctuates, but has fallen by at least 13 per cent. in the last three months. In addition, ample supplies of unrationed cheap grade rice have been available. In these circumstances, the last part of the Question does not appear to arise.

  MALAYA AND SINGAPORE

    Anti-Bandit Campaign (Tribesmen)
    Mr. Donnerasked the Secretary of State for the Colonies whether he will further improve the effectiveness of the forces operating against the bandits in Malaya by temporarily enlisting substantial numbers of tribesmen in North Borneo who are already accustomed to jungle conditions and versed in jungle warfare.
    Mr. Dugdale: The hon. Member can be assured that the authorities in Malaya have constantly under consideration the question how the jungle experience of these and other tribesmen can best be utilised. The number of Dyaks attached to the Forces is being increased but there is not at present scope for the employment of larger numbers of these or other tribesmen from North Borneo or elsewhere in the region.
    Mr. Donner: Is the right hon. Gentleman aware that unless manifestly new and successful measures are taken, we shall never get the essential information regarding the movements of the guerillas which only the civilian population can supply?
    Mr. Dugdale: Yes, we will certainly bear that in mind.
    Mr. James Hudson: Will my right hon. Friend bear in mind the inadvisability of
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    stirring up one uncivilised tribe against another in various parts of the world?
    Mr. Emrys Hughes: Will the head hunters of Borneo be expected to attack the people of Malaya while singing "Onward Christian Soldiers"?

    Trade Unions
    Wyattasked the Secretary of State for the Colonies what is the present number of trade unions in Malaya; and what is their total membership.
    Mr. Dugdale: In the Federation of Malaya there are 162 registered trade unions with a total membership of 42,669. The figures for Singapore are 92 and 47,968, respectively.
    Mr. N. Macpherson: How many of those trade unions are Communist dominated?
    Mr. Dugdale: None of those which I have given. To the best of my knowledge, all the previous Communist trade unions migrated into the jungle and there are no regular Communist trade unions, now in any other part of Malaya.

    Singapore (Constitution)
    Mr. Wyattasked the Secretary of State for the Colonies whether he will introduce legislation for a similar constitution in Singapore to that laid down for Trinidad and Tobago in the Trinidad and Tobago (Constitution) Order in Council,. 1950.
    Mr. Dugdale: My right hon. Friend will take the opportunity, during his visit to Singapore, of discussing with official and unofficial members of the Legislative Council the constitutional machinery of the Colony.
    Mr. Wyatt: Will my hon. Friend bear in mind that if we are trying to bring self-government to Malaya in democratic form it is advisable to give the Chinese in Singapore as much control of their own affairs as the West Indians have in the West Indies?
    Mr. Dugdale: I am sure that my right hon. Friend will bear that in mind, among other things, in his consultations.
    Mr. Lennox-Boyd: Will the hon. Gentleman's right hon. Friend also bear in mind, when in Singapore, the particular

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    and almost unique importance of Singapore in the Imperial defence system, and have this in mind when he arrives in other places?

    Captain Westerling (Extradition)
    Mr. Wyattasked the Secretary of State for the Colonies why the Government of Singapore has not acceded to the request of the Republic of the United States of Indonesia for the extradition of Captain Westerling.
    Mr. Dugdale: A formal application for Captain Westerling's extradition was submitted to the Governor of Singapore by the Indonesian Representative on 4th May. I am advised, however, by the Governor that while the application may be intended to be a requisition under the Anglo-Netherlands Treaty of 1898 it was not accompanied by any evidence of the commission of the offences referred to in the application. Until the Governor is satisfied that the requirements of the Treaty and Extradition Acts have been fulfilled in respect of Captain Westerling he is not at liberty to act upon the Indonesian Government's request for his extradition.
    Mr. Wyatt: Will my right hon. Friend instruct the Governor of Singapore to give what assistance he can to the Indonesian representatives in Singapore in the correct formulation of this request, because there is a strong feeling in Indonesia that Captain Westerling is being shielded deliberately in Singapore, when he should, of course, have been handed over to the civil authorities in Indonesia to stand his trial?
    Mr. Dugdale: No, Sir. It is naturally open to the Indonesian Government to make what requests they like, and when they are made they will be considered.
    Mr. Braine: Can the right hon. Gentleman tell the House whether Captain Westerling sought sanctuary in British territory in the first instance?
    Mr. Dugdale: Yes, Sir.

    General Service Medal
    Air-Commodore Harveyasked the Secretary of State for the Colonies if, during his forthcoming visit to Malaya, he will look into the question of awarding the General Service Medal to members
    2048
    of the Auxiliary Police Force in Malaya, with a view to reconsidering his decision on this matter bearing in mind that in several towns this force is a permanent body, the members of which assist the regular police.
    Mr. Dugdale: My right hon. Friend was aware of this problem before leaving, and I have no doubt that he will give the matter due consideration during his visit.
    Air-Commodore Harvey: Will the right hon. Gentleman send this information out to his right hon. Friend, to ensure that it does reach him?
    Mr. Dugdale: Certainly.

  FIJI (CONSTITUTION)
  Mr. Geoffrey Cooperasked the Secretary of State for the Colonies in view of the recent discussions over constitutional reform that have taken place with the Governor of Fiji, what steps it is proposed to take in order to give more scope for the expression of democratic opinion and the elimination of the present dissatisfaction caused by the system of nominations on the unofficial side of the council.
  Mr. William Teelingasked the Secretary of State for the Colonies in view of the official assertion of the Governor of Fiji that his Department had no evidence that changes are desired in the Constitution of Fiji, what steps have been taken to find out what public opinion in Fiji is on this subject; and what attention has been paid to the views expressed during the November session of the Council, by honourable unofficial Members of the Council.
  Mr. Dugdale: Every opportunity was given to the unofficial Members of the Legislative Council to make known their views in the three-day debate last December on the Report of the Fiji Constitution Revision Committee. The voting showed that a majority of unofficial Members was opposed to substantial changes in the Constitution being made, and I see no reason to take any action contrary to their declared opinion.
  Mr. Cooper: Can my hon. Friend say how the democratic opinions of the people of Fiji can ever be represented on the

  2049
  Legislative Council under the present system? Will he give further consideration to the whole question of revision so as to enable democratic opinion to be expressed?
  Mr. Dugdale: No, Sir. I am having regard to the views expressed by the unofficial Members of the Council, and I think that is a reasonable thing to do.
  Mr. Teeling: Is the hon. Gentleman not aware of the very strong feeling among the people of Fiji on this matter at present? Will he not strive to find out what that public opinion is, since it does not necessarily mean going to the unofficial Members?
  Mr. Dugdale: Public opinion is expressed in the Legislative Council, which has expressed the views which I have stated.
  Mr. Teeling: Are they not all nominated Members?
  Mr. Cooper: If I send my right hon. Friend extensive memoranda on the subject, will he reconsider the matter?
  Mr. Dugdale: Certainly, Sir.

  BARBADOS (REPATRIATED WORKERS)
  Mr. Gammansasked the Secretary of State for the Colonies what steps will be taken to provide employment to the Barbadians who are being repatriated as a result of the closure of Bermuda dockyard.
  Mr. Dugdale: This will be a matter for the Barbados Government when the occasion arises. In the meantime, the Governor's attention has been drawn to the problem.
  Mr. Gammans: Is it not possible to use these trained personnel in some other part of the Colonial Empire, which is short of men with this particular background?
  Mr. Dugdale: That seems to be quite another question.

  EAST AFRICA

    Cattle Disease (Antrycide)
    Mr. Alportasked the Secretary of State for the Colonies what results have been obtained from field experiments in
    2050
    the use of antrycide to protect cattle in East Africa from trypanosomiasis
    Mr. Dugdale: I would refer the hon. Member to the reply to my hon. Friend the Member for Swindon (Mr. T. Reid) on 19th April.

    Arrests, Nairobi (Strike)
    Mr. Brockwayasked the Secretary of State for the Colonies whether his attention has been drawn to the arrest, on 15th May in Nairobi, of Fred Kubia, president, and Makan Singh, secretary, of the East African Trades Union Congress on the ground that this organisation was refused registration last September; to the police raids on the homes of Kubia and Singh, the Trades Union Congress offices, and a printing press; to the refusal of bail to the accused; to the strikes which have taken place in protest against the arrests and the use of batons and tear gas by the police; and whether he will make a statement.
    Mr. Alportasked the Secretary of State for the Colonies whether he has any statement to make regarding the arrest of Makan Singh and Fred Kubai; and whether he is satisfied that the Government of Kenya has sufficient powers to deal effectively with the subversive activities of such organisations as the East African Trade Union Congress.
    Mr. Sorensenasked the Secretary of State for the Colonies what were the circumstances that led to the recent disturbances in Nairobi.
    Mr. Dugdale: Makhan Singh was arrested under powers granted by the deportation legislation of the Colony. Frederick Kubai was arrested for an infringement of local trade union legislation but since his arrest further charges have been preferred against him of attempted murder and of attempting to purchase a firearm without a permit. The unions which have instructed their members to strike have a total membership of less than 5,000 and represent only a small proportion of the working population in Nairobi. There is little doubt that the number of workers on strike has been increased by widespread intimidation.
    On 19th May it was necessary to disperse a large crowd with the use of tear gas and batons. There were, however.

    2051
    no serious casualties. I have no information regarding the alleged police raids on the homes of Kubai and Singh and the Trades Union Congress offices. The Government of Kenya are empowered to enforce settlement of disputes in essential services by arbitration and this power has been extended to include a number of industries. I am satisfied that the Government of Kenya is fully equipped to deal with this situation. The House will realise, however, that the cases of Makhan Singh and Frederick Kubai are sub judice and, therefore, I am unable to enlarge upon this statement until the court proceedings are completed.
    That was the original answer which was prepared, and which I had intended to give, Sir. Since then I have received further information which I think the House may like to know, and which has been received by telegram. It states that the labour situation has sensibly improved. About two-thirds of the hotel employees and half of the municipal employees are now at work. Railway and Kenya bus company employees are working normally, as is the Public Works Department, following on a small number of dismissals. The situation of commercial firms is generally better. It is estimated that the number of persons still on strike is now only 2,500, compared with 6,000 at the peak of the strike.
    Mr. Brockway: In view of the serious situation which this reply indicates, will the right hon. Gentleman advise that a small commission of inquiry, including British trade unionists, should be sent to Kenya and report to him?
    Mr. Dugdale: I think we had better wait until the situation clears up before deciding on a matter such as that.
    Mr. Alport: Is the right hon. Gentleman aware that the so-called East African Trade Union Council is a Communist dominated organisation and that attempts have recently been made to affiliate it to the Communist dominated World Federation of Trade Unions; that Singh is a self-confessed Communist, and that it was this organisation that organised——
    Mr. Speaker: Is the hon. Gentleman asking a question or giving information?
    Mr. Alport: Will the Minister ensure that the Government of Kenya are supported by the Colonial Office in dealing with the subversive activities of this organisation?
    Mr. Dugdale: The Government of Kenya are supported by the Colonial Office in this, and I quite agree with the hon. Gentleman to this extent, that the East African Trade Union Congress is, in fact, largely Communist, and is not representative of the vast majority of workers in Kenya.
    Mr. Sorensen: Can my right hon. Friend tell us how many workers belong to the other trade unions and those that are actually involved, so that we can compare the numerical strength one with the other? Is he aware of any economic factors in this apart from the trade union matters?
    Mr. Dugdale: I can only say that the figures are infinitesimal in relation to the total numbers. They amount to only a few thousand.
    Mr. Harry Wallace: Can my right hon. Friend say whether the organisation, association, or joint committee which represented the six trade unions in this territory is itself regarded as illegal and as something which is not a trade union organisation? Can he also say on what grounds it was disqualified from registration?
    Mr. Dugdale: As the whole of this question is sub judice, I think I had better leave that point until a decision has been reached by the court.
    Mr. Baldwin: Is the right hon. Gentleman aware of the indignation among Europeans in Kenya at the attitude of some hon. Members of this House who uphold the activities of these dangerous men, which eventually lead to disturbances causing the loss of life?
    Mr. S. Silverman: Whether or not the East African Trade Union Congress is Communist dominated, and whether or not it is representative, can my right hon. Friend say whether it is in any respect an infringement of the criminal law of Kenya? Is it a trade union at all?
    Mr. Dugdale: The East African Trade Union Congress is an organisation containing unions each of which represents a given number of workers, but it is not

    2053
    considered to be a trade union. That is a decision made up to the present. It is, in fact, a separate organisation, apart from the individual unions.
    Mr. J. Hudson: Will my right hon. Friend keep in mind that for many years past, and not merely during the recent crisis, charges have been made from East Africa that trade unionists of genuine character are none other than Commuunists when, afterwards, it has been proved that they have had no connection with the Communists?
    Mr. Speaker: That is going very wide of the Question.

  COLONIAL EMPIRE (LOCAL GOVERNMENT)
  Mr. Alportasked the Secretary of State for the Colonies what changes have been made in the composition of the Colonial Office Local Government Advisory Committee since it was notified in the Secretary of State's Annual Report of 1947–48.
  Mr. Dugdale: The membership of this body has remained unchanged since its formation in 1948, except for the addition of Dr. A. H. Marshall, City Treasurer of Coventry, and Mr. R. E. Wraith, Organiser of Colonial Services Courses, London University.
  Mr. Alport: Is the right hon. Gentleman aware that the political members of this Advisory Committee are exclusively Socialist, and will he make certain that proper representation of all political opinions in local government is provided for in future?
  Mr. Dugdale: This is not a body to deal with a political approach. It is a body of people chosen for their technical qualifications, and these people have the correct technical qualifications.

  MALTA
  Mr. T. Reidasked the Secretary of State for the Colonies whether he will make a statement about our financial and economic relations with Malta in the light of the recent official visit to the island of Sir George Schuster.
  Mr. Dugdale: With permission, I propose to make a statement after Questions tomorrow.

  GIBRALTAR (TAXATION)
  Commander Nobleasked the Secretary of State for the Colonies what representations he has received from Gibraltar that the new direct taxation be postponed until the establishment of a Legislative Council.
  Mr. Dugdale: My right hon. Friend has himself received no such representations, but in a petition to His Majesty, forwarded through the Secretary of State, the Gibraltar Chamber of Commerce, the Association for the Advancement of Civil Rights and the Exchange and Commercial Library, have prayed His Majesty to disallow the new Trades Tax Ordinance and to command that no further direct taxation should be introduced pending the constitution of the Legislative Council.
  Commander Noble: In view of the fact that the Government delayed so long in setting up the Legislative Council, would it not be sensible to delay the tax to allow the people of Gibraltar an opportunity of settling the matter for themselves?
  Mr. Dugdale: No, Sir. It is necessary that the revenue from the tax should be secured now, and it is thought advisable that the tax should be introduced. After the Legislative Council has been set up it will be open to them to take action if they wish to do so.
  Miss Horsbrugh: Does the right hon. Gentleman not know that the estimates were not published this year, that they are only now being published, that there is sufficient revenue to carry on in the meantime and that the money to be raised by the tax will not be required before the Assembly meets?
  Mr. Dugdale: I think that the Assembly would probably find, when it met again, that it would not have as much money as it required unless this tax was brought in. If it finds that it has sufficient money, it is open to the Assembly to make what arrangements it desires.
  Mr. Lennox-Boyd: Surely the right hon. Gentleman realises that it leaves a rather unpleasant impression when, after the delay in the setting up of the Legislative Council, for reasons which many people do not understand, something which would be entirely within their discretion is settled in advance, over their heads?
  Mr. Dugdale: I do not think it is right that any connection should be sought to be drawn between these two matters, which are entirely separate from one another. I assure the hon. Gentleman that they are entirely separate.
  Miss Horsbrugh: Is it not a strange coincidence, if they are entirely separate, that a new tax is being brought in for the first time when, also for the first time, the Legislative Council is being set up?

  OFFICIAL PAPERS (PRESENTATION)
  Mr. Errollasked the Prime Minister whether he is aware that the long interval which frequently elapses between the presentation of papers to the House and the availability of the full texts, either in typed or printed form to hon. Members, causes them inconvenience; and if he will instruct all Departments to ensure that there is no avoidable delay in accordance with the Order of the House of 20th March, 1871.
  The Prime Minister (Mr. Attlee): I am aware that there have been long intervals in a small number of cases, chiefly for technical reasons connected with the publication of accounts. There is, of course, no wish to cause inconvenience and if the hon. Member will tell me of the particular cases he has in mind, I will look into the matter.
  Mr. Erroll: In that case, would the Prime Minister accompany me to the Library at the end of Questions, when I will show him a number of such examples?

  COUNCIL OF EUROPE (U.K. REPRESENTATION)
  Mr. H. Hyndasked the Prime Minister whether substitute delegates will accompany the British delegation to the Council of Europe this year.
  The Prime Minister: A certain number of substitute delegates will be available if required; detailed arrangements are at present under consideration.
  Mr. Hynd: Does that mean that the same thing will happen as happened last year, namely, that the representatives
  2056
  from the Government side of the House will not have substitutes available there, but that the Opposition Members will?
  The Prime Minister: What it means is that detailed arrangements are at present under consideration.

  ARMED FORCES

    Regular Recruitment
    Mr. T. Reidasked the Minister of Defence what progress is being made in the recruitment of Regulars for the Services.
    The Minister of Defence (Mr. Shinwell): The latest available figures which are given in full in the Quarterly Statement of Recruiting, which has been placed in the Vote Office, show a slight improvement. A total of 11,880 men were enlisted in all three Services during the first quarter of 1950 as compared with 9,454 in the previous three months. This is by no means sufficient for our needs and, as the House knows, we are engaged on a comprehensive examination of life in the Services in all its aspects in relation to the current problems of regular manpower recruitment and re-engagement.
    Brigadier Head: Would the Minister say whether this slight improvement takes into account the additional and increased wastage which has been going on in the Regular Forces during the last year?
    Mr. Shinwell: I cannot say offhand, but I am not satisfied with the rate of recruitment.
    Lieut.-Colonel Sir Thomas Moore: Would not the security of a job and a house on discharge be the best method of recruitment?
    Mr. Shinwell: No doubt they would have a beneficial effect, but we cannot give guarantees which could not be implemented.
    Sir T. Moore: What about the nationalised industries?
    Squadron-Leader Burden: Is not the Minister aware that a great many men may go into the Forces immediately pay and allowances have been reviewed? Is the right hon. Gentleman not aware that this is a matter of great importance, and should be tackled at the earliest moment?
    Mr. Shinwell: I am not concerned with what the hon. Member thinks; it is the facts with which we are concerned.

    Deserters
    Mr. Keenanasked the Minister of Defence on what terms men who had served in His Majesty's Forces during the war 1939–45 and deserted, could secure their release and return to civilian status.
    Mr. Shinwell: As the answer is lengthy I will, with permission, make a statement at the end of Questions
    Later—
    Mr. Shinwell: There are at present nominally about 19,500 deserters from the Armed Forces. As I informed the House on 29th March last this nominal total is greatly inflated and it is doubtful whether there are in fact more than 7,000 or 8,000 deserters at large in this country at the present time. The true figure may well be much smaller.
    The way is open to all these men to rehabilitate themselves by surrendering, and I give the assurance that the scale of punishments is neither vindictive nor harsh. Isolated cases are sometimes reported in the Press in which sentences of 18 months or two years' detention are awarded by courts martial. Such cases are not, however, by any means representative. Court martial sentences are often reduced on confirmation or when subsequently reviewed, and are frequently suspended, subject to good behaviour, after a relatively short period served. They are also subject to remissions of one-third for good conduct. A recent analysis has shown that over a period of 15 months some 800 deserters who surrendered were tried by courts martial. The average sentence awarded was a little over six months; the average sentence served was two months 19 days. In addition, during this period nearly 600 deserters were dealt with summarily which, in the majority of cases, means a maximum sentence of 28 days' detention, and in 76 cases the men were not brought to trial at all for various reasons
    I submit to the House that, with these facts in mind, it cannot be thought that these men are being forced into lives of crime by fear of the consequences of surrender. In fact, the criminal statistics and the advice of the police authorities both indicate that comparatively few
    2058
    deserters are engaged in crime. I am advised that most of those who are so engaged, and, of course, there are some, had criminal records before they deserted.
    Desertion is a serious Service offence. Any action, such as an amnesty would be unfair to those who have already surrendered and been punished, and unfair to those who have served and are serving loyally. Its effect in any future emergency might also be harmful. These objections to an amnesty apply equally to men who deserted during the war and to those who have deserted since. In the view of His Majesty's Government it would be wrong to condone the offence of desertion, and, in so doing, to encourage any tendency on the part of individuals to desert from His Majesty's Forces. His Majesty's Government have accordingly decided against any kind of general amnesty and to maintain the present procedure—which allows the fullest weight to be given to compassionate considerations.
    Mr. Keenan: Will the Minister note that I think that what he has said has not given most of us interested in this matter the satisfaction which they hoped for? The question I asked was about the men who had served in the Army during the war. Will he give this question serious consideration for that particular period apart from the other aspects of desertion, because I can assure him that there are cases, very bad cases, where individuals would return if there was a reasonable chance of getting reasonable treatment; and that his predecessor promised reasonable treatment? Even the sentences which he has read out show that the treatment is harsh and will prevent men from serving.
    Mr. Shinwell: What I said in my reply applies equally to the men who served during the war as to the men who served after the war, and I must reject the idea which my hon. Friend apparently has, that the actual sentences served are vindictive. All compassionate and other considerations are taken into account, and although the nominal sentences may appear to my hon. Friend to be harsh, the actual sentences served are far from being harsh.
    Mr. Chetwynd: Can my right hon. Friend say in the case of long-term deserters, whether these men are automatically discharged from the Service when

    2059
    they have served their sentences, because if they have to go back to the Army that may be a greater deterrent than having to serve their sentences?
    Mr. Shinwell: I think that generally speaking, they are dismissed from the Service with a character that is not altogether satisfactory.
    Lieut.-Colonel Sir Thomas Moore: Is there not a marked difference between the men who deserted during the war and the men who desert during peace time, and should there not be some discrimination in the attitude of the Government and the authorities towards them?
    Mr. Shinwell: There are, of course, a great many anomalies in this situation. The Government came to the mature consideration that we cannot discriminate between those who served during the war and those who entered into contractual obligations when the war was over.
    Lieut.-Colonel Lipton: Can the Minister amplify what he meant when in the course of his reply he said that these sentences were either reviewed or remitted after a relatively short period; and what does "a relatively short period" mean in that context?
    Mr. Shinwell: As I have said, subject to the good behaviour of the man, and there may be other considerations, the sentence is reviewed not long after he has been sentenced. According to the advice I have received, the men have very little of which to complain.
    Mr. Joynson-Hicks: Does the right hon. Gentleman realise that the disparity between the published sentence and the sentence to which he has referred today, influences the families of these men against helping them to surrender; and does he realise the shadow which overhangs the family and try to make these facts known, so as to get the family on his side?
    Mr. Shinwell: I think that the hon. Gentleman is right, but obviously I cannot influence courts martial. That would be quite improper. I must leave them to decide. They are sensible people and they take into account suggestions made in the course of Questions and answers in this House, and no doubt that will be an advantage to the men concerned.
    Sir Ralph Glyn: Can the Minister say whether any assessment has been made in the figures which he has given of those who deserted during the war and since the war?
    Mr. Shinwell: Yes, I have had the figures before me, but I have not got them in mind.
    Mr. Hector Hughes: As five years have elapsed since the end of the war and such a large number of men have not given themselves up, is it not obvious that the offers made to these men so far have not been sufficiently attractive, and in order to induce these men to come back into civil life will the Minister reconsider the question of an amnesty?
    Mr. Shinwell: I think there is some misunderstanding. My hon. and learned Friend must realise that it is not the Service Departments who are in the dock but the men concerned, and nothing short of a general amnesty covering the Regulars who enter into contractual obligations and also the men who are conscripted would suffice to satisfy the men, and the Government have decided against it.
    Mr. Henry Usborne: When a man who is a deserter gives himself up and is properly tried for that crime, is he also asked awkward questions, such as how he got his employment papers, ration cards and other things in the meantime? Are there other offences for which he may be tried at the same time?
    Mr. Shinwell: I have some acquaintance with the officers in the Service who are sometimes attached to courts martial, and I think that they are quite well content to deal with matters that concern them without interfering with other matters.

    Service Voters
    Mr. Keelingasked the Minister of Defence what committee is investigating the failure of about half the men and women qualified for the Service vote to register; and what are its terms of reference.
    Mr. Shinwell: I assure the hon. Member that this question is being thoroughly investigated. It is not the practice to publish details of Departmental Committees.
    Mr. Keeling: May we assume that all the suggestions made in this House on 31st March have been or will be considered, and that the House will be informed of the result of the consideration?
    Mr. Shinwell: Of course, every suggestion made will receive every consideration.
    Lieut.-Commander Gurney Braithwaite: Is the Minister aware that men arriving home from Malaya for demobilisation are complaining that they had no opportunity of registering their votes, and, while allowing for the difficulties in the area, will he pay attention to that point?
    Mr. Shinwell: No doubt the hon. and gallant Gentleman is correct in what he says, but I have no information about it.

    Defensive Bombing (Strategy)
    Mr. Emrys Hughesasked the Minister of Defence what steps he has taken to inform the American Chiefs of Staff of the danger to this country of their strategy of defensive bombing.
    Mr. Shinwell: Strategic questions of this kind are discussed in the Standing Group of the North Atlantic Treaty Organisation, which consists of representatives of the Chiefs of Staff of U.S.A., France and the United Kingdom. In considering any particular form of military action the advantages and disadvantages are of course carefully assessed.
    Mr. Hughes: Is the Minister aware that representations have just been made to the American Chiefs of Staff from 12 eminent publicists in which they state that this bombing will involve the obliteration of Great Britain; and should he not take a more active line of approach on this?
    Mr. Shinwell: It depends on who the publicists are.

    Atlantic Powers (Security Plans)
    Charles Ian Orr-Ewingasked the Minister of Defence what security plans are being made amongst the Atlantic Powers to regulate the release of information on equipment being supplied to our Defence Forces and those of Allied nations.
    Mr. Shinwell: Comprehensive security plans have been worked out for safeguarding North Atlantic Treaty Organisation information within the Organisation itself and for regulating the release by member countries of information about the work being done. Each member country continues to retain responsibility, however, for its own security policy and, unless equipment has been provided subject to special security restrictions, for the release of information about any equipment which it has received.
    Mr. Orr-Ewing: After the concern that we on this side have felt about the Canberra bomber, ought there not to be a tightening up of our own defensive security measures with regard to the equipment which we shall provide, not only for our own Forces but for those of Western Union?
    Mr. Shinwell: As I say, the security arrangements are in the hands of the nationals concerned. As far as we are concerned, we take every possible precaution.

    Legal Aid Scheme
    Lieut.-Colonel Liptonasked the Minister of Defence to what extent the Services Legal Aid Scheme is being continued, pending the full introduction of the Legal Aid Scheme.
    Mr. Shinwell: This question is still under consideration. In the meantime, however, the existing schemes for providing legal aid and advice to the Forces are continuing.
    Lieut.-Colonel Lipton: Can my right hon. Friend give an assurance that no facility at present available to Service men will be withdrawn until they are replaced by equivalent facilities under the general Legal Aid Scheme?
    Mr. Shinwell: Certainly.

  FOOD SUPPLIES

    Groundnut and Sunflower Schemes
    Mr. Hurdasked the Minister of Food if he is now able to inform the House of the reports which he has received from the Overseas Food Corporation as to the estimated yields of groundnuts and sunflowers being harvested in

    2063
    Tanganyika; and if, in view of the experience over three seasons at Kongwa, he has approved the cessation of further agricultural operations there.
    The Minister of Food (Mr. Maurice Webb): As only a small proportion of the crop has so far been harvested, the Overseas Food Corporation do not feel that they can yet give any reliable estimate of the yield. There has been no proposal to stop agricultural operations in Kongwa. The Corporation have appointed a working party to consider future agricultural policy for this region and will no doubt let me have their considered recommendations when the working party has reported.
    Mr. Hurd: Will the Minister take the earliest possible opportunity of setting out these recommendations and any other relevant facts in a White Paper, so that the House may have accurate information before we have another groundnut Debate?
    Mr. Webb: I will consider that.
    Mr. Godfrey Nicholson: Does the right hon. Gentleman envisage the likelihood of a still further reduction in the acreage of this scheme, which has been reduced already from 3,100,000 to 600,000?
    Mr. Webb: There is another Question on the Order Paper about this matter, and I would rather not answer that point now.
    Captain Crookshankasked the Minister of Food whether he has now completed his review of the groundnut scheme and is able to make a statement on the subject.
    Mr. Webb: I am afraid that a full statement will have to wait until the Board of the Overseas Food Corporation have given me an assessment of the position in the light of this year's agricultural and clearing work and I have considered this assessment; and as this year's harvest is only just beginning this will take some time. With your permission, Sir, I shall be making a statement about the Board of the Corporation after Questions today.
    Captain Crookshank: Does the right hon. Gentleman realise that all our anxieties about this groundnut scheme did not cease by the mere transfer of his
    2064
    predecessor to the War Office, and that we shall have to discuss this matter soon? Will he, therefore, even in advance of the full report, secure the information that is necessary?
    Major Beamish: Can the Minister confirm that the Government hope soon to be able to grow more monkey nuts without bottlenecks?
    Mr. Nicholson: Could the Minister now answer the question he was unwilling to answer a few moments ago—whether he envisages the possibility of a still further reduction of the area proposed to be cleared, which has already been reduced from 3,100,000 acres to 600,000?
    Mr. Webb: I should not like to speculate about details of that kind.

    Ration Books
    Mr. David Griffithsasked the Minister of Food the cost of distributing ration books annually from the commencement up to date.
    Mr. Webb: We expect that the cost of distributing the new ration books this year will be about£675,000 against£790,000 in 1949. These figures include the pay of regular and casual staff, the rent of distribution centres, the cost of the books themselves, advertising and everything else. I am afraid there are no comparable figures for earlier years.
    Mr. Griffiths: While appreciating the slight reduction in the cost, may I ask my right hon. Friend whether he is aware that, whereas in one area where 200 ration books were recently distributed six clerks were engaged, in another area the ration books were distributed by the Women's Voluntary Service at no cost?
    Mr. Webb: I should like to look into that particular case if my hon. Friend will give me the information.
    Sir Herbert Williams: Does this include the cost of distributing the points books, which have been rendered unnecessary since the Minister's statement last Friday?
    Mr. Webb: Points are part of the ration book.
    Sir H. Williams: Do I understand that all the points coupons were printed despite the fact that they were soon to be rendered useless?

    Oranges (Price)
    Mrs. Middletonasked the Minister of Food whether, in view of the fact that in some areas oranges have doubled in price since decontrol, he will now re-institute price control of this fruit which is important for young people.
    Mr. Webb: This is a between-season period for oranges, and I would prefer to see how decontrol works out over a longer period before making any judgment.
    Mrs. Middleton: Is my right hon. Friend aware that the high prices since decontrol for wholly necessary or wholly desirable foods are causing alarm and despondency among the housewives of Great Britain; and will he turn one ear away from what his experts are telling him to listen to what is being said about this in the kitchens of Great Britain?
    Mr. Webb: I am also aware that at this time last year and the previous year there were no oranges at all on sale.
    Mr. McAdden: Is the Minister also aware that at this time of year oranges are always high in price? If alarm and despondency exists now, will he bear in mind that it has always existed at this time of the year?
    Brigadier Head: Will the Minister recall that probably the true answer is a lemon?

    Fats and Oils
    Dr. Strossasked the Minister of Food the total imports of fats and oils in the years 1947, 1948 and 1949 and the figures for exports in the same years.
    Mr. Webb: According to my Department's records the import figures are as follow:

    1947–1,092 thousand long tons.

    1948–1,185 thousand long tons.

    1949–1,321 thousand long tons.

    The export figures were:

    1947–18 thousand long tons.

    1948–46 thousand long tons.

    1949–20 thousand long tons.

    All these figures are in terms of oil or pure fat.
    Dr. Stross: Are imports now almost as high as they were pre-war?
    Mr. Webb: Yes, Sir.
    Sir H. Williams: Could the Minister say how long is "a long ton"?
    Dr. Strossasked the Minister of Food the consumption per head of population in the United Kingdom of fats and oils, excluding the amounts used for industrial purposes, such as paint and linoleum, for the years 1946, 1947, 1948 and 1949.
    Mr. Webb: The average annual consumption per head of fats and oils as food, expressed in terms of fat content, was as follows: 1946, 34.7 1b.; 1947, 33.9 lb.; 1948, 38.1 lb. and 1949, 44.0 lb.
    Dr. Stross: Could my right hon. Friend say whether the figures he has given me are approximately the same as pre-war consumption, or are they higher or lower?
    Mr. Webb: Not without notice.

    Fruit and Vegetables (Transport)
    Sir Waldron Smithersasked the Minister of Food if, in view of the fact that the British Road Haulage Executive has increased haulage charges by 7½per cent., he will arrange for an increase in merchants' margin price on potatoes, fruit and vegetables to offset this addition.
    Mr. Webb: No, Sir. The only fruit and vegetable margins controlled by my Department are those for apples, bananas, imported grapes and potatoes other than new potatoes. These margins are kept continually under review and the cost of road transport is only one of the many factors affecting them.
    Sir W. Smithers: Does the Minister realise that the nationalisation of transport inevitably increases costs, and that distributors are losing money and consumers are suffering, entirely because of Government policy, and through no fault of their own?

  SOAP
  Dr. Strossasked the Minister of Food when he estimates it will be possible to de-ration soap.
  Mr. Webb: I would rather not speculate about this just now.
  Dr. Stross: Will my right hon. Friend remember the answer he gave me to a

  2067
  previous supplementary question, that our imports of oils and fats now stand rather high?
  Mr. Webb: I hope I shall not forget any of my answers.
  Mr. Harrison: Will my right hon. Friend seriously consider increasing the soap ration before he ever considers derationing it?
  Mr. Douglas Marshall: In view of his reply, will the Minister consider giving an increased ration to fishermen—that is to say, those fishermen who still manage to survive under the present Administration?

OVERSEAS FOOD CORPORATION (CHAIRMAN)
The Minister of Food (Mr. Maurice Webb): Since I took office last March I have discussed with Sir Leslie Plummer, the Chairman, the future direction of the Overseas Food Corporation, and particularly that part of it dealing with the East African Groundnut Scheme.
The House is aware that the scope of the Corporation's activities has changed materially from that assumed by all parties concerned at the time of Sir Leslie's appointment. It was then envisaged that the Corporation would operate a number of schemes, whereas except for the operations of the Queensland-British Food Corporation, efforts have had to be concentrated on the East African Groundnut Scheme, and the plan upon which the Corporation is now engaged for that scheme is on a smaller scale than was contemplated in the original estimates as accepted by the Government and on the basis of which Sir Leslie Plummer accepted appointment.
In the light of all the circumstances Sir Leslie Plummer and I have agreed that he relinquish the Chairmanship. Accordingly he will give up his post on 30th June, 1950. Having regard to the terms of his appointment suitable compensation will be paid to him.
I want to take this opportunity of thanking him on behalf of the Government for his able and energetic services and of paying tribute to the public spirit
2068
which led him to accept the Chairmanship of the Corporation. In particular the Government recognises Sir Leslie's service in initiating the Queensland-British Food Corporation, which has made considerable progress with its enterprise since it was founded two years ago.
I will announce the appointment of his successor after the Recess.
Mr. Hurd: As the Minister is showing himself a realist rather more than his predecessor in regard to this Groundnut Scheme, will he go a little further, in adopting the advice given to him from this side of the House, and ensure that before any public money is spent in Tanganyika we shall have the advice of a high-class technical mission so that we really know what we are doing?
Mr. Webb: I do not propose to add to my statement.
Mr. George Thomas: Will my right hon. Friend bear in mind that it was the advice of a high-class mission which gave rise to so much of the trouble? Would he further realise that Sir Leslie Plummer carries the confidence of a great many people and their appreciation for the service he has rendered?
Mr. Turton: Can the Minister say whether, besides eliminating Sir Leslie Plummer, he intends to cut down the very high cost of the headquarters of the Overseas Food Corporation in London?
Mr. Webb: We had better await the further reports of the development of the scheme before we go into that.
Mr. Driberg: Did my right hon. Friend observe that his announcement of the dropping of Sir Leslie Plummer was extremely welcome to the other side of the House and the other side only, and can he say whether this announcement indicates any diminution of the complete confidence in Sir Leslie Plummer expressed so recently, on behalf of the whole Government, by his predecessor?
Mr. Webb: I think the House will be aware of the fact that the statement said that he and I
"have agreed that he relinquish the Chairmanship."
Mr. Walter Fletcher: Will the right hon. Gentleman look rapidly into the question of the expenditure of capital

2069
goods and money on ports and transportation in East Africa which may prove to be redundant, so that there is no unnecessary waste of that kind?
Mr. Boyd-Carpenter: Could the right hon. Gentleman give an assurance that the compensation to which he referred will not be paid tax free?
Several Hon. Members Several Hon. Members rose——
Mr. Speaker: I think the House has the information now. We had better get on with the Business.

BALLOT FOR NOTICES OF MOTION
  RE-SALE PRICE MAINTENANCE
  Mr. W. T. Williams: I beg to give notice that on Friday, 16th June, I shall call attention to re-sale price maintenance, and move a resolution.
  INDUSTRIAL COAL (PRICE)
  Mr. Norman Bower: I beg to give notice that on Friday, 16th June, I shall call attention to the effects of the high price of coal on industrial costs and move a resolution.
  SERVICES PAY AND ALLOWANCES
  Commander Noble: I beg to give notice that on Friday, 16th June, I shall call attention to pay and allowances in the Services and move a resolution.
ORDERS OF THE DAY
  SUPPLY
  [15TH ALLOTTED DAY]
  SUPPLY

    CIVIL ESTIMATES AND ESTIMATES FOR REVENUE DEPARTMENTS, MINISTRY OF DEFENCE ESTIMATE, ARMY ESTIMATES AND AIR ESTIMATES, 1950–51.
    Considered in Committee.
    [Major MILNER in the Chair]
    Motion made, and Question proposed,
    That a further sum, not exceeding£70, be granted to His Majesty towards defraying the charges for the following service connected with the situation in the Far East and South East Asia for the year ending on 31st March, 1951, namely:

    £

    Class II, Vote 1, Foreign Service

    10

    Class II, Vote 2, Foreign Office Grants and Services

    10

    Class II, Vote 6, Commonwealth Relations Office

    10

    Class II, Vote 9, Colonial Office

    10

    Ministry of Defence

    10

    Army Estimates, Vote 3, War Office

    10

    Air Estimates, Vote 3, Air Ministry

    10

    Total

    £70

  FAR EAST AND SOUTH-EAST ASIA
  3.52 p.m.
  Mr. Eden: I think the whole Committee will feel that this Debate is very much due. It would, indeed, normally have taken place a good deal earlier but a number of circumstances have combined to delay it. We all wished to hold it, if we could, at a time convenient to the Foreign Secretary. We were all distressed at his recent illness and operation and we are glad to see him with us to day. We hope that the further operation, which we were distressed to learn this morning that he has to undergo, will finally set him on the road to complete recovery. There was, of course, also the inevitable delay because of the meeting of Foreign Ministers in London, but we thought it might be advantageous in some respects to wait for that meeting since we hoped that the position might be clarified both by events here and by the outcome of the Sydney Conference.

  2071
  I should like to begin my comment with some reference to events in China. Last January, when the Foreign Secretary was on his way to the Colombo Conference, and before that Conference assembled, His Majesty's Government decided to recognise the new Communist Government of China. I must say that I did not think then, and I do not think now, that that decision was fortunate either in its timing or in its method. There is, of course, no dispute between us, let me emphasise, that recognition does not entail any kind of approval of any particular Government. It never does; it is largely a matter of practical convenience between the two countries concerned for the conduct of their affairs. My right hon. Friend the Leader of the Opposition made that quite clear in his speech last November.
  At the same time, as my right hon. Friend also emphasised, it did seem important that we should move in step with our partners in the Commonwealth and with the United States of America. I emphasise this, not merely as a matter of sentiment or from the general desire we all have to work together, but for the practical reason that unless we are in step when we take decisions of this kind there is an inevitable temptation on the part of the Communist Government of China to try to play off one of the Governnments concerned against the other. That is precisely what has happened in this case. The truth is, and I think the Foreign Secretary would admit it, that recognition has in fact brought out no advantage at all today.
  Meanwhile, it is admittedly embarrassing, to put it no higher, that neither Australia, nor New Zealand, nor Canada nor the United States, nor France has recognised this Communist Government of China. This does show a certain divergence of opinion, although I would add, that too much ought not to be made of it because our underlying unities are much stronger, much more important than a divergence of this kind, unfortunate though I think it is.
  More important than the past are the present and the future. What is the position now as between the Chinese Communist Government and ourselves? Recognition has beer given but diplomatic relations have not been established.
  2072
  All kinds of conditions are being put forward by the Chinese Communist Government and those are, as I understand, being resisted, and I think rightly resisted, by His Majesty's Government. No doubt we shall be told today by the Foreign Secretary how this matter stands, and I imagine it will be made abundantly clear that there cannot be any question of making concessions in order that diplomatic relations should be established and that the persistance of the Chinese Communist Government in insisting on these conditions will only result in a failure to establish such relations.
  The chief Communist conditions, as far as I have seen them in the Press, are concerned, first, with the property owned by the former Chinese Government and, secondly, with the position at Lake Success where the Soviet Government are attempting by methods of boycott to force a decision. The official communiqués issued after the London conference of Foreign Ministers the other day made no reference at all to this vexed question of the representation of the Chinese Government on the Security Council, but it is obvious that the subject must have been discussed. I have seen a Reuter message, published in the "Manchester Guardian," which I think came from several other agencies as well, that Washington officials had said that the Foreign Ministers in London were not prepared at present to make any movement in respect of the admission of Communist China to the United Nations. I do not know whether that is accurate, or not; perhaps the Foreign Secretary can tell us.
  There is in truth an awkward dilemma as a result of the varying shades of attitudes taken up by friendly Governments and, indeed, Governments within the Commonwealth, towards this Chinese Communist Government. I should have thought that this dilemma in which we now find ourselves might, without much difficulty, have been anticipated. Indeed it was almost bound to arise once we took isolated action in regard to this Chinese Communist Government. Moreover, the Committee will, I think, recall that the Russians began their campaign to force the admission of Communist China on to the Security Council as long ago as last December, so that we must have foreseen our difficulty when we decided to recognise it in January.

  2073
  Therefore, it seems to me that if the Commonwealth and our immediate allies were not able to move together with us, we would probably have been wiser to hold our hands for a little while and see whether we could not make a united front on this issue and take our decision together, when it would have been at once more effective and more rewarding. I am not, of course, for a moment suggesting that there was anything either improper, or still less dishonourable, in the Government's decision to recognise. Of course not, but I do think that in the timing and the unfortunate lack of unanimity that move was of doubtful wisdom. However that may be, I am sure we are all agreed that there is nothing to be gained now by giving way step by step to a series of Chinese Communist conditions.
  Our commercial interests in China are of immense importance, not only to this country but, let it be recalled, to China too. They exceed those of any other foreign country and we are frankly concerned about them. But the present Communist Government of China would, I think, be wise to recognise that they will gain nothing for themselves by treating our commercial interests with harshness and injustice. No doubt British firms are today, many of them, faced with decisions of the greatest complexity and gravity. I feel sure the Foreign Secretary will do all he can to help and assist them, but the point I would make to the Committee is that it will advantage no one—not those firms, nor anyone else—to embark on a policy of appeasement which, as our own bitter experience has shown in so many parts of the world, can be so ruthlessly exploited at our expense.
  Now I want to say something about Malaya. Of course it is true that the victory of the Chinese Communists in China and our recognition of that Government have had an influence upon events outside China, notably in Indo-China and in Malaya, and throughout South-East Asia. This new factor raises with increasing urgency the need for a co-ordinated policy in this area where we, France and the United States are all committed separately, if not together. The most urgent British interest is focused in Malaya, the most urgent French interest in Indo-China, while the
  2074
  American decision to give aid to Indo-China indicates that the State Department regards the struggle there as one of the situations of weakness which require, to use Mr. Acheson's words to be made "situations of strength."
  This state of affairs, I think the Foreign Secretary will agree, also calls for a concerted effort towards unity amongst themselves by the peoples of South-East Asia. We are constantly assured from all quarters, and I have no doubt it is true, that the overwhelming mass of opinion in those countries is anti-Communist. It is admittedly the duty of the Western Powers to do all they can to help, but our resources are not unlimited and this country has certainly carried exceptionally heavy burdens, not only during the war, but since. And so it does not seem unreasonable to look for an effort of statesmanship among those countries of South-East Asia—Siam, Indo-China, Burma, and Indonesia—to co-ordinate their own endeavours so that the help that can be offered for security and economy from the West can be used to the best advantage.
  I was in Malaya for a short time last year and I should hope I would not make the mistake of thinking that a few days in any country allows one to speak with authority upon it. It most certainly does not. But I did have the opportunity then of meeting a number of those on whom responsibility lies, Mr. Malcolm MacDonald, Sir Henry Gurney, the commanders of the various Armed Forces and many representatives of the Chinese and Malay communities; and, not least let me add, the planters and tin miners upon whom falls the burden of their daily work in conditions of anxiety, tension and danger. I am not sure how far hon. Members are aware that the majority of these men had, previous to this ordeal, themselves been for many years prisoners of war in the hands of the Japanese. They and their families are surely deserving of our sympathy, our understanding and our support.
  There is, to the best of my belief—I stand to be corrected by the Government if I am wrong—virtually no Communism at all among the Malays; nor do I believe that the number of Communists among the Chinese in Malaya was at all signi-

  2075
  ficant a year ago. It is probably true to say that then the internal position, though still very serious, did show improvement, but that improvement, as surely the Government must have known, was entirely dependent upon the general situation outside Malaya. So long as that showed no deterioration the process of gradually pushing the guerrillas into the more remote recesses of the jungle, breaking them up, and finally eliminating them, could continue.
  What are the reasons for the admitted deterioration of the situation since then? I understand that at the beginning the guerrillas started their operations sooner than they had intended. They suffered accordingly, and have reorganised their ranks to some extent since then. Certainly another cause of the deterioration is the inevitable reaction to the Communist victories in China and, I fear, the recognition by His Majesty's Government of that Communist Government.
  The question to which this Committee has now to address itself is: Is there anything further that we can do to help this situation internally? There are one or two assurances that I should like to get, either from the Foreign Secretary or later in the Debate. I should like to be assured that every military step that is necessary in Malaya and that our power and resources can command, is being taken. There have been some rather disturbing delays. One case was mentioned to the Committee the other day in respect of wireless equipment. The Colonial Secretary, answering an interruption in this House said:
  "I am speaking for the moment about the wireless equipment…I said that the orders were being urgently dealt with and assembled, and were being flown out by air."—[OFFICIAL REPORT, 6th April, 1950; Vol. 473, c. 1400.]
  That is all right. We are glad they are being flown out by air, but why only now? It seems strange that, after all this period of operation, there should be at this moment a shortage of wireless equipment. Then about armoured vehicles. I remember hearing a year ago of the need for armoured vehicles and whether ordinary vehicles could be armed to some extent. I saw an answer from the Secretary of State for War in which he said that armour plate and bullet-proof glass had now been sent out.
  2076
  That was on 21st March this year. One wonders why it was not done on 21st March last year. What has been the cause of these long delays before these arms were assembled?
  There is the question of helicopters. I remember raising it about a year ago with the Minister. He said that the matter was being tackled with energy and vigour at the time but that helicopters were not available and would not be available for a year. I think three are now there. I did see that they were expected to be useful in respect of wounded. I do not know whether that idea has worked out but it would be interesting to know whether it is contemplated to send more of them. I see that the Dean of the college in which I had the honour to be in Oxford has been actively gyrating in a helicopter. I am strongly in favour of it, but if the helicopter is needed in Malaya I would rather see it there than carrying the Dean of Christchurch.
  In all these things we should like to know whether the necessary priorities are being given to Malaya. There again, the Colonial Secretary was by no means clear in what he said. He was questioned about priorities—I have a quotation here—by the hon. Member for Northfield (Mr. Blackburn) who asked:
  "May I take it that, in general, priority is given?"
  The Colonial Secretary answered:
  "I should not like to make a general statement of that kind."—[OFFICIAL REPORT, 6th April, 1950; Vol. 473, c. 1400.]
  Why not make a general statement of that kind? Why not say: "Priority is given to Malaya at the present time"? No doubt it should be. I hope before this Debate is over that the Government will declare clearly that in respect of all the supplies and services we can command, we give priority to Malaya where the need exists in Malaya.
  There is one other point about aircraft. Can we be assured that there are sufficient of types of aircraft suitable for jungle warfare available in Malaya? That does not mean necessarily aircraft of the highest performance. That type of aircraft may not be of most service for that type of warfare. We ask for an assurance from the Government that priority is given to Malaya, and that everything needed is supplied to the maximum extent to which we are capable of supplying it. It is not

  2077
  a cold war that is being fought in Malaya but a very hot war indeed. It is the major military activity in which this country is engaged at the present time.
  As I am speaking about British interests I must make reference to Hong Kong. We trust that the Government, despite their preoccupations in Malaya, will continue to ensure beyond a shadow of doubt that the necessary forces are available for the security of Hong Kong. I have already recalled how deeply the Communist victories in China have influenced events in Malaya. That applies still more strongly to Indo-China where a bitter struggle is being carried on between the French and the Government of Bao Dai on the one hand, and the Communist forces of the so-called Government of Ho Chi-minh on the other.
  This latter Communist Government, or administration, or whatever one like to call it, is recognised by both Russia and the Chinese Communist Government. That is worth recalling. We, of course, have recognised the Government of Bao Dai, to the disapproval of the hon. Member for Maldon (Mr. Driberg), within the French union. So have the United States and so have a large number of other countries. The French have deployed a considerable military force in support of Bao Dai.
  We have to determine where we stand clearly in this matter. It is encouraging news that the United States is now proposing to give military supplies as well as economic assistance in Indo-China. So far as one can learn of the local situation, it would appear to be very serious. While the Government of Bao Dai appears to be in control of all the more open territories and while communications are still being maintained between the chief centres, the hilly areas of Indo-China, principally in the north, are admirable terrain for guerrilla warfare.
  Whatever the feelings of anybody in this Committee may be about the internal events in Indo-China—I have often watched with respect the manner in which hon. Members follow events in the remote parts of the world—we must not disguise from ourselves the fact that if Ho Chi-minh and the Communists were to triumph, the consequences that would certainly follow in South-East Asia and
  2078
  Malaya would be such as no Member of this Committee could possibly wish to contemplate. I know that there are hon. Members on the Benches opposite who, in the past, have criticised the Government for recognising Bao Dai. I can leave that point for discussion among them, but I did notice with some interest in a paper with which I do not always agree, "Tribune," last week some comments on this situation which seemed to be worth quoting. It said:
  "The Labour movement should make up its mind honestly as to where it stands. It cannot like the idea of assisting the French in a Colonial policy which would never be tolerated in this country."
  I am not sure that that is quite fair to the French. It goes on:
  "At the same time, it would seem to be a worse evil to allow Communism to sweep to an easy success in an area from which it could threaten the whole of our position in South-East Asia."
  I agree with that entirely. If we are all agreed about that, it is the foundation from which we can move forward to the next step. What is the next step? What can be done if that is what we want to do? Did I hear the hon. Member for Maldon? I did not understand whether he was murmuring agreement or disagreement.
  Mr. Driberg: I was murmuring disagreement to an hon. Friend in front of me. I am listening with great interest to the right hon. Gentleman.
  Mr. Eden: I see. I apologise. We can now come to the Sydney Conference. Let me say a word about that Conference. Nobody would deny that there are really two problems interwoven into the whole of the South-East Asian situation. One is security and the other is economic, the standard of life. In my judgment both are equally important, but the solution of the first—that is, security—must be short-term and the solution of the other can only be long-term. I submit to the Committee that we should be de luding ourselves if we thought that by concentrating solely on the economic problem we could resolve the situation in South-East Asia. We could not. As I have said many times——
  Mr. Harold Davies: Or the military.
  Mr. Eden: I said both together. Let us try to keep this in perspective. I said earlier that it is quite useless pouring economic aid into a country if there is no internal security there. These conditions have to be created, otherwise the payment of millions of pounds could have no effect at all.
  There are a number of organisations and activities on the economic front which I have no doubt can do good work. One is the Sydney Conference about which I hope the Foreign Secretary will tell us something when he comes to reply. I am sure that we have all welcomed—certainly I have welcomed—the initiative shown by the Australian Government at Colombo and since. I attach much more importance to this display of keen interest and activity by our Australian friends than to any transient friction which there may have been in the handling of these matters at any one conference. The great thing is that everybody should wish to take their part, and if they have diverse views as to how it should be taken it is to reconcile those that conferences are held, so I think that is all to the good.
  There seem to be two spheres of activity for economic help at the moment if I am right. One is the outcome of the Sydney Conference and the machinery which has been set up there and the other is the American help under Point 4. It is desirable—I hope that the Foreign Secretary can show us that there is some plan—that these two methods of help should be brought together and reconciled and that we should be working together on a common plan.
  It seems to me that the effect of these various activities in the economic, political and security spheres ought to be brought together as soon as may be and that we ought to try to agree among ourselves on a co-ordinated policy, and that covers not only arms, fighting and economics, but such things as propaganda and information services and all those things which should be closely co-ordinated if we are to have the fullest effect throughout that area. No doubt to do that will entail some rather difficult decisions about priorities, but that issue had also better be faced, and the sooner it is, the greater will be the benefit for everybody concerned. While I think we agree that economic plans on any scale that we can contemplate cannot be immediately effect- 2080
  tive, yet joint security plans could be devised fairly rapidly and their influence could be immediately felt. I hope that is what the Government will seek to do.
  Before I sum up, I should like to put to the Foreign Secretary one or two questions on the subject of Japan. What is the position about Japan? What are the prospects of a treaty such as we know that our Australian and New Zealand friends are so anxious to see concluded? I fear that the position is more involved than ever. Events in China have simply added to the tangle. I do not see how it is possible at present to make any progress towards a treaty, desirable though that no doubt is, but perhaps the Foreign Secretary will tell us what is in his mind. Meanwhile, there is the question of Japanese trade, which has its immediate importance to this country. I hope that before the Debate is over we shall be told something about this and given some information about the reports of the British Commission on their recent talks with the Japanese textile industry.
  I will now sum up. These South-East Asian events taken as a whole are of a significance not easily to be measured and certainly not easily to be traversed in one single speech. Today they seem to me to have an importance at least as great as, and possibly greater than, our problems in Europe. They certainly call for as much thought and attention. I have endeavoured to open this subject so that the Committee can collectively apply its mind to these most urgent issues. I do not pretend that I have even surveyed more than a part of the field, but if, as a result of this Debate, we ourselves understand all the more clearly the gravity of these problems and can assist the Government to constructive policies to resolve them, this will not have been one of the least valuable Debates of the Session. As I see it, we have to analyse our problems, set them in their true perspective and determine our course of action together with our friends. We have to apply to the solution of these problems a sense of determination and a sense of urgency, and it is my hope that this Debate will help our country to do just those things.
  4.17 p.m.
  The Secretary of State for Foreign Affairs (Mr. Ernest Bevin): I want to express my appreciation and thanks for

  2081
  the very kindly reference which the right hon. Gentleman the Member for Warwick and Leamington (Mr. Eden) made at the beginning of his speech. I join with him in expressing an earnest hope that his wishes will be fulfilled and that I shall be cured. [HON. MEMBERS: "Hear, hear."] I have discovered that pains can be more severe in certain parts of one's body than in one's head.
  I welcome the opportunity for this Debate too, because I realise that there has been little opportunity for dealing with the very complicated matters which have arisen in the Far East. First of all, I will take China. In the days of the Coalition Government this country gave up all extra-territorial rights there. We took as our policy the restoration of China. Things went a little wrong, I think, at Yalta when we entered into agreements to hand over some Chinese territory to Russia. We did not like doing it, but, as an act of appeasement, we did it. I have to share responsibility for this with others. I do not deny that such an agreement was' made. I think that everybody regrets it now. It has made the situation more difficult. No one wants to indulge in appeasement, least of all myself. Right from the close of the Great War there has been civil war in China. The situation has changed from day to day, and there has been this emergence of nationalism not only in China, but right throughout the Far East.
  I myself think that this country can take great credit that the national desires for independence have been fulfilled with such ease and with so little strife in such large areas of Asia. There have been troubles in Pakistan; there have been troubles in India. But one cannot now deal with the problems of South-East Asia without taking into account not only the opinion of the United States but also those of India, Pakistan, Ceylon, which are now great Powers in this part of the world. In the days before the war the U.K. Government acted on behalf of those countries and therefore, apart from consulting its representatives there, the formidable public opinion of those countries did not count as it does today. I was faced with this difficulty.
  Clearly, in so far as recognition is concerned, the right hon. Gentleman is right. You cannot inject into that problem
  2082
  the question of the political colour of the Government concerned. It is not for us to consider this. In China the People's Government had won the civil war. We had large interests in China. We had large numbers of British personnel there and we had problems ahead of us which might have led—as all those interested in the China question will admit—to very serious troubles indeed. On top of that, the Indian Government had decided to recognise much earlier. I will here ask the Committee, in consideration of the Far Eastern problems, always to keep in the front of their minds the fact of the emergence of the new Indonesian Government. The situation in Indonesia will be one of the deciding factors in the Far East.
  Then there was Burma, in which I am happy to say law and order are being restored much faster than they were some time ago. If everybody friendly to Burma will encourage the Karens to settle their differences with the Government, law and order may be restored at an early date. We must not, from outside, accentuate the differences between these races or else the civil war will continue.
  But returning to the question of the recognition of the People's Government, I discussed this matter with Mr. Nehru. I got his point of view and, by arrangement, there was a delay. During that period of delay I discussed the problem in Washington with Mr. Acheson and it was quite clear that, with our different responsibilities, there was bound to be a divergence of opinion. I could not reconcile what members of the Commonwealth wanted to do with the very aloof attitude of the United States. This was a difficult decision to make, and it must be remembered that in this country at that time there was pressure on the Government from all our China interests and experts to recognise. In fact, if I remember—and I am speaking from memory now—the Leader of the Opposition rather pressed me to recognise during the last Debate, though he asked me to try to keep in step with America.
  Mr. Eden: The Leader of the Opposition is not coming until later and I do not wish that there should be misunderstanding. I think the right hon. Gentleman will find that what I said was entirely consistent. My right hon. Friend was careful to say that it

  2083
  must be together. I am not making a big point of this, but it is important, and it seemed to us strange that on the way to Colombo, where the other representatives were to meet him, the right hon. Gentleman recognised before he got there.
  Mr. Bevin: I am coming to that point. Our policy of recognition had been communicated to Commonwealth Governments before I left London for Colombo. The Colombo Conference did not have this question definitely on the agenda. The reason it did not was that there was divergence within the Commonwealth. What we did in Colombo was to exchange views without commitments, but clearly there was a definite difference of view both as to timing and principle. I explained at that Conference the British attitude—why we thought recognition was desirable—and I do not think that we took a wrong step. One cannot judge the outcome of an action in international affairs immediately. I believe that we were right at that time to recognise the Peoples Government and not to leave the Russians to assume that, although it is a Government based on Communist principles, they were the only country which would do anything at all for China. That is a very important factor to be kept in sight.
  While there was some criticism in the United States about our action, we were at the same time being asked to take charge of their interests. Supposing we had said, "No, we will not take charge of your interests. You are going out of China, we will do nothing, we are going out too," I really think we should have thrown away our position in the Far East for ever. That was my opinion, and although it was an awkward decision to have to take, yet, at the same time, I searched my conscience as to what alternative there was. I came to the conclusion that the advice I gave to the Cabinet was right and, in a few years time, I think it will turn out to have been right.
  Of course the right hon. Gentleman knows—he has had this job himself—that the difficulty one is always in is whether a decision will have the desired effect in 10 or 20 years time, not the next morning. I think that is a fair statement. You have to project your mind
  2084
  forward and ask, "If I take this step, what situation will it produce in 10 years?" It is not an easy thing to be able to arrive at a decision under such conditions, and I can only say that the advice I tendered to the Cabinet I believe to have been correct.
  Then I have been asked what has happened since we accorded recognition? I think Mao Tse-tung has been receiving advice from Moscow—his is the same kind of attitude as Moscow's. I did not expect that our representative would go up to Peking and settle everything in a moment. What is happening at the moment is that the Chinese are attempting to raise side issues which may be annoying and irritating to a country of this character. To that we have no intention of submitting. First of all questions have been raised about some aeroplanes whose ownership is in legal dispute. I decline to discuss that in the context of the establishment of diplomatic relations. What has happened is that these planes, so it is alleged, were sold to Americans by people who were connected with the Nationalist Government. It is not for a Foreign Secretary of this country to determine whether those planes have been sold legally. I will not undertake such a task. Neither will I step in and say, "I will do this, that or the other thing as the price of getting your agreement to the establishment of diplomatic relations." I cannot do that. What we have done is to make arrangements for the process of law to be carried out properly, and we stand or fall by whatever are the decisions of the courts. But this is a separate and distinct thing altogether from the establishment of diplomatic relations. My message to the Chinese Government is that I would not imitate these bad practices from elsewhere.
  Then the question has been raised of our failure to vote for admission of the representative of the Peoples Government to the United Nations; that is the second point. As far as I know, there are only two. When we recognised the new Government we felt that its admission to the United Nations ought to be dealt with in the Security Council according to the rules. However, we could not in the transition period come to a conclusion to throw out one representative and to take on another. I think that the sponsors of the new Chinese Government have

  2085
  really created the present difficulty, for the first thing that happened was that Russia walked out because at the immediate moment of recognition we were not ready to admit a new Chinese representative and we had not completed our negotiations for the establishment of diplomatic relations with the new Government of China. We had simply announced that we were ready to negotiate the establishment of diplomatic relations, and the Soviet Government then sought to force us to implement what they regarded as the consequences before these negotiations were completed.
  There was a good deal of discussion going on in United Nations circles as to how this change was to come about. The question of the legal position was being examined, and Russia walked out. Since then, we have been able to do nothing. The onus of keeping China out of the United Nations is on Russia. They are not present and taking their part. They must return to work pending negotiations. What it amounts to is that they are on strike. They are holding up the work, and that will not do. I cannot agree to being told that I must promise to do this, that or the other thing unless someone else is to fulfil their functions also.
  I am of the opinion that during the time that this occurred there was an assumption on the part of Russia that if they did it, everybody else would get frightened or would yield. We have not done that. America, with all her feeling with regard to China, has in my view adopted a very fair attitude. She says, "We will not vote for. We will not veto," which I think is a very good decision for a country with feelings like those of the United States. But they say, "If there are seven members who vote for, then we will accept the decision." Two of the members Russia is keeping off the council by refusing to function; one is herself. There are five already and there is this stagnating of the United Nations as Russia herself has placed herself in this rather embarrassing position. We have tried, quite frankly, to see if we could get this cleared up by seeing whether seven votes could be collected, our main object being that we think it is better for the New China to be inside the United Nations. We do not want to ostracise anyone on political grounds. We
  2086
  believe that future association for these countries which are emerging is a good thing, and we are proceeding on that basis.
  I do not know what France would have done, but France was put in a most embarrassing position. She was in difficulty with Indo-China, and largely through Russian influence the rebel authorities who had no claim at all to success, not even a 20 per cent. success if the country is taken as a whole, were recognised by one member of the United Nations and by China. What could the French do? the French, I think, came to the conclusion that this was really a direct attack upon them, and it prevented them functioning as they would have functioned had this event not taken place.
  The right hon. Gentleman asked me whether this question was discussed in the tripartite meetings. We did not discuss it in the sense that I can make a report about it. We exchanged views and we have instructed our people in New York to keep in touch with one another when they are handling the United Nations problems, and we are ready to take advantage of any development which these two countries might adopt which enables us to function with dignity and at the same time does not put up positions which are intended to humiliate, which we are not prepared to accept. I think that that deals with the Chinese situation.
  Of course, there is another side to the problem, and that is the blockade by Chiang Kai-shek from Formosa. The British interests in China have been hurt more by that than by what the Communists have done. The Communists have taxed them, charged them and done all sorts of things, but I think that in all probability their difficulties could have been got over if the blockade had not been put in operation. The United States are as much opposed to it as we are and we think that with that great country, after these years of civil wars and strife, we all ought now to co-operate, to give China a chance. I cannot believe that all the Chinese have gone Communist overnight as is suggested.
  There is one thing which all these countries are looking for and which is exploited: that is, a desire really to have peace and to live their own lives. These marauding armies create the situation that

  2087
  if anyone comes along who is strong enough to enable people at least to avoid the marching of armies through their territories, the people are apt to turn to them; and that is quite understandable. The next point which was made with regard to the Far East was Malaya. I think that the Government have given support on equipment and the other factors which have been needed. I know of no incident where the Cabinet have rejected or refused anything which has been shown to be necessary to bring this thing to a successful issue.
  I am not too sure that the success of the new regime in China is the cause of the recrudescence of the guerillas—I do not think so. What happened was that they were not successful, and we know that a new technique has been worked out which, in my view, would have been worked out in any case, whether the Communists had been successful in China or not. This information is coming from sources which we well know, and it does involve us. Our Forces have not been trained in guerilla tactics to the same extent, but our armies have applied their minds to this matter.
  We have definite evidence at least that for some time during the lull the whole question of the guerilla tactics was being considered, and of course we were keeping as closely in touch with it as we could to see what would emerge. Among the things that emerged, I understand, from the Home Office expert out there was a request for more, and a different type of, wireless sets. As the right hon. Gentleman knows, this is not within the province of my Department, but the information which I have is that these sets were ordered and are being got out as quickly as possible. It was a new type of radio set that was essential.
  I agree with the right hon. Gentleman that the Malays have not adopted Communism, and there is no sign of any great development so far as the people there are concerned. Perhaps the greatest evidence of their resistance to it was that the Malays rallied enthusiastically to the Malay Regiment and the police. That is the best test we can apply. Of all the South-East Asian territories we can say that the local inhabitants who have been called upon to defend their country against these tactics have shown that they
  2088
  prefer the British with their political system, and the undertakings that we have given, and are anxious to carry out, of proceeding step by step towards complete self-government. It must be remembered, however, that we cannot force self-government on a country where there is trouble, and we cannot leave them in a position where they cannot defend themselves. But once this thing is over we shall proceed once again to extend—indeed, we are extending—in every possible way we can the social, political and cultural development of Malaya.
  The next place referred to was Indo-China. The French Colonial System, as the Committee knows, is rather different to ours. I do not deny the fact that His Majesty's Government have tried in a friendly way to get everyone, Dutch, French, and others, to recognise the emergence of this nationalism coupled with economic development, and the reason we adopted that as our policy throughout that territory was with a view to getting people interested in government and taking the responsibility of government. By that method is produced a new psychology and a new acceptance of responsibility, especially by people who have hitherto been controlled from outside.
  Everyone in this Committee is committed to working for self-government, and it is a question of stage and degree as we move along, as well as what we are able to do. The French system is rather different. They proceed to a kind of independence in the French Union. We have taken the view that it would be better if all of us proceeded along the lines that we did in India, Pakistan and Burma, so that the basis upon which nationalism emerges will be of such a character that there will not be a diversity of systems, but we will be able to bring the people together in that cooperation of which the right hon. Gentleman spoke. There has to be in South East Asia a great co-ordination of effort by the people themselves and particularly by the Governments.
  At Colombo when the Spender Plan was evolved, we took care to make provision for all the countries concerned to be associated with it, whether they were in the Commonwealth or not. It is said that we must go for security as well as economic development if we are to win.

  2089
  With that I agree; but, on the other hand, the question is—where do we get the security? It has been suggested that the United States have agreed to take military action. I have not read or heard of that. There have been indications that they are taking a greater interest, and that money is going to be voted, and all that kind of thing, but I have not heard that they are going to take part in troop movements.
  Mr. Eden: I hope I did not give that impression. I did not mean to give that impression. What I meant was providing money for supplies, arms and other things for Indo-China.
  Mr. Bevin: I should like to thank the right hon. Gentleman for that correction, but that was the impression he left with me. He was following on what he said in regard to Malaya where our services are in operation, and I thought he meant the same kind of thing in Indo-China.
  We went very carefully into the question of the recognition of Bao Dai. I think it was right to do it, but we were anxious that rather more independence should have been given to the Bao Dai Government than has, in fact, been given. I gather from the French that they have the situation constantly under review. They are trying to create a situation in which they can achieve that, and the handicap is the civil war which is going on. This is a difficulty of which there is no previous record. There is no record of civil war being used as a set instrument in foreign policy. We met it for the first time in Greece and I was subject to a good deal of attack on that matter. In the end our policy was proved to be right, because we have established the fact that a Government from outside a country cannot come in and create civil war between a people as an instrument of policy.
  Hon. Members no doubt this morning read about the protest in Berlin about the arming of the East German Police. Again, I think the development is significant. There may be no challenge to us directly as a State, but there may be an attempt to use this force in a very brutal, civil war, a situation which we have to watch extremely carefully. When we look at the map of the world we can see how troublesome it could be if there were a big civil war in Indo-China and one in Europe at the same time. It could be a
  2090
  very nasty thing for the rest of the world. Hence, other countries are watching with very great interest what is developing. I thought myself that the Russians were going to start it more than they did when the Berlin blockade began. There again they had to re-study the problem, and I suppose they are trying to create new tactics and new methods.
  On the other hand, there are signs that even my Russian friends are not satisfied with the results that they are achieving. Therefore, I feel our task in the Far East is to strengthen our position. I must include the South as well as South-East Asia, for it is all one territory right the way down from Afghanistan. The methods and the activities cannot be separated. Every time a move is made consideration must be given to the Moslems, Hindus, and other religious groupings, and to the question as to whether action taken here might cause an outbreak there. It is really one great area, in which this country has very vital interests indeed. I believe that as a result of the policy we are following we are building up great friendships, and the friendship to us in that territory is better than it has ever been. We have had to give up occupation of some countries, and that tendency sometimes leaves memories and difficulties. However, in this case, they all disappeared in the night, and this country's standing is very high, indeed, in that part of the world.
  I have not seen the full report of the Sydney Conference, and I am sorry, therefore, that I cannot give a complete answer to the questions that have been raised about it. I can undertake to give the fullest information that I am permitted to do as soon as it arrives, but I should like to put on record that the Conference was virile and I am extremely glad that it started in Australia. This country has benefited very much in our relations with the United States by having Canada acting as a bridge in the North Atlantic. I have always been anxious that Australia should play a similar role in the Pacific, and so keep our country, the Pacific and the North Atlantic group together. Australia is to be congratulated on the work she has done.
  Equally I think that Lord Macdonald has done a very difficult job indeed. Our attitude to the matter before the Conference was that it had nearly drifted into

  2091
  a discussion on what the right hon. Gentleman referred to as long-term and short-term action. Our last advice to our delegation before they went out was, "Do not be drawn into discussions as to long-term and short-term action. There is no classified dividing line between the two." One can have an objective which is long-term but in the carrying out of which everything one determines is probably short-term action.
  There are some matters in which by short-term action a foundation is laid which ultimately leads to a long-term development. So if we get into these discussions of trying to classify what is short-term and long-term and then deciding what category action should come under, a conference is apt to be spoiled. We urged our delegation to have regard to what the right hon. Gentleman said were our commitments and our financial responsibilities. It is no use promising what one cannot carry out; it is no use misleading people. We said, "If you do that, go as far as you can in order to collaborate with your fellow members of the Commonwealth to try and get busy at once to stabilise and improve the situation." That has been the spirit in which they have worked.
  I should like to make one comment about disagreement. I agree with what the right hon. Gentleman said. The Press has a peculiar habit. A conference is called because the parties to it are not agreed as to what to do, and they sit down together to agree what to do, and because they tell each other that they have different opinions, out come headlines saying that there are disagreements. It is all very peculiar. If there is agreement one might as well send a postcard and not go at all. The solution to the world's future will be decided by conference. There will be regular meetings and closer meetings. To take our situation in the West, from the Brussels Treaty to the Atlantic Pact meeting last week, we see that the more we meet the more we understand one another and one almost forgets what party one belongs to.
  We discuss a problem, and when there are these great problems to be faced it is the solution of the problem that is the thing that grips one, and antagonisms are broken down. I have found that in some
  2092
  of these meetings I have had to shake myself. I have found the most conservative people making revolutionary proposals and I have wondered what would happen to them when they got home if their party only knew. As I say, in these international affairs it is the problem that grips one, the problem to which an answer has to be given and to find a solution to which those taking part have to strive.
  The next point raised was the question of Japan. That is a very difficult problem. His Majesty's Government took the initiative in 1947 in trying to see whether it was possible to lay the foundation of a treaty with Japan. A conference was held at Canberra, and while those participating in that conference did not design a treaty, there arrived from over the whole area of the British Commonwealth some concrete ideas as to how such a treaty should be constructed. This is a matter in which we cannot move without the United States. They are the prime factor in the whole business.
  Then came another problem: how and who should construct this treaty? We wanted the countries that fought in the Japanese war to make the peace treaty. We still adhere to that view, and there is nothing in the Potsdam Agreement or in anything else which is against it. I think that view is perfectly reasonable but it is argued that because a Council of Foreign Ministers was set up to deal with Europe, that Council must make the treaty. The countries which participated in the Japanese war will not accept that. I cannot, and I do not think that His Majesty's Government would attempt to say to Australia, for example, which was in the thick of the fight, "You shall not come into the conference room to make a treaty which is to affect Japan, your nearest neighbour." That has been a further factor.
  A third factor has been—I have to be very careful in what I say—that there has not been, I think, absolute agreement in the United States itself as to the form the treaty should take. I notice in the Press that the Secretary of Defence has gone out there now. From the defence point of view the position is that we have beaten Japan and demilitarised her, and having done these things, we have to take some steps to see that what we said we

  2093
  would do has been done. We intend to maintain what has been done and to prevent Japan from again being an aggressor. In that, the biggest role has to be played by the United States, and it is no use disguising that fact.
  We have placed at the disposal of the United States our own views and those of the other Commonwealth Governments. We discussed this matter at Colombo and thought that a very good method, without having to wait for another conference to be called, was to have a committee appointed under the High Commissioners in London who could be in contact with His Majesty's Government as the process went on. That committee have held their meetings and have reached their conclusions. Their Governments are now considering the whole problem.
  I can only say, in conclusion, in regard to the South-East Asian problem that a new era will have to be created and can be created only by close association with the West. It will be the biggest area for capital development goods. The standard of life in it has to be raised. It will not be an area in which any of us should embark upon exploitation, but rather there should be a great co-operative effort to try to make up some of the leeway in the standard of life that exists as between East and West. This is a very important matter indeed. While I do not minimise the necessity of security, whether by supply of arms or whatever it may be, we take the view that the economic development of the area is very vital indeed, and that co-ordination right through with all these countries can probably give us, if handled aright, one of the biggest stabilising influences in maintaining the peace of the world.
  4.49 p.m.
  Mr. Somerset de Chair: We are all glad that the Foreign Secretary has been able to take part in the Debate today. If his mind functions with such clarity on occasions like this, when we know he is speaking under difficulties, we feel that when he returns to the House in still better health there will be no holding him. We on this side of the Committee are particularly glad that the Government have agreed to have this Debate today on the situation in the Far East, because there has been a growing recognition in all parts of the Committee
  2094
  that the real menace to the peace of the world may lie in the Far East. Although we in Europe are accustomed to think of our world wars as starting and taking place in Europe, it is quite possible that if another war breaks out, it will break out in the Far East, with the first major clash between America and Russia in the Far East, and be fought out in the early stages over China; and the whole of that aspect of our foreign relations has to be considered very carefully in that light.
  The Foreign Secretary made a great point about the recognition of the Government of China, but what he did not explain to the Committee was why it was necessary to recognise the Government of China on the eve of the Commonwealth Conference at Colombo, If there were disagreements within the Commonwealth on this point, as indeed there were, would not it have been better—and, certainly, have looked better—if he had waited only a few days until the Conference had taken place? Then, even if he was unable to secure agreement at the Colombo Conference, at least the Empire and the Commonwealth would have felt that when His Majesty's Government took that step it had been after placing all the facts before the other members of the Commonwealth and after due consultation. Whereas it had all the appearance of a precipitate recognition on the eve of the Conference, which had unfortunate results.
  Today is Empire Day, and it is a melancholy fact that on this occasion there is an empty seat at the table, that of Burma. I felt that the Foreign Secretary was altogether too complacent about the way in which events have developed and are developing in Burma. No doubt the Government hoped that by their approach to the problem of the independence of Burma they would have been able to achieve the same result as they achieved in the case of India and Pakistan; that by giving to Burma a perfectly free choice, she would decide to remain within the Commonwealth.
  I know that was the hope of the Government, but conditions in Burma and India were entirely different. Whereas Burma had been the scene of savage fighting, and the country had suffered all the dislocations of war, India had been spared that and as a result it would

  2095
  have been better to delay the constitutional transfer of power in Burma, however difficult that might have been to achieve, until such time as a new climate of opinion could have established itself in Burma after the war.
  The situation in Burma has almost completely disintegrated. The Government is in control of the immediate capital and environs, but we cannot describe that as law and order. We have a deep debt of honour and obligation to the Karens and the Government were extremely precipitate when they handed over the frontier areas to the Government of Burma in this constitutional transfer of power. It would have been quite practical to leave Lower Burma to achieve independence while retaining some control over the frontier areas. At all events, it seems to me that this is one of the tragedies of the last five years for which the Government must eccept responsibility.
  We have recently had a Debate upon the subject of a Commonwealth loan to Burma, and I do not propose to cover that particular ground. I will confine myself to saying that the Government are complacent in supposing that this money will necessarily provide an effective defence against Communism. A Burmese friend of mine said that the British Government had not merely been double-crossed by the Burmese leaders, but trebled-crossed; and in point of fact they had played to a large extent upon our fear of Communism in South-East Asia in order to secure the loan. My informant was the brother of a former Burmese Prime Minister, who, admittedly, was recently hanged for over-stepping even the elastic limits within which party politicians operate in Burma. Nevertheless, he was clearly of opinion that the Government were giving away the money without any certainty that they would achieve the object they have in mind.
  We have now to consider a shift in our whole position of defence as it affects the Commonwealth. The Foreign Secretary said it was impossible to consider South-East Asia isolation, and that we have to take in the whole area as far as Afghanistan. He could have gone even further west, because the disintegration of our position in the Middle East from a defence point of view has gravely
  2096
  affected our position in relation to the defence of the Commonwealth. We have, to a certain extent, to fall back to an entirely new line of defence. Whereas before, our main line of defence for South Africa and Australia was the Middle East position, with India buttresing it further east, now we have to fall back to a much more uncomfortable part of the world, from Freetown in West Africa, through Kenya to Colombo and on to Malaya. That is why Malaya achieves a nodal position in our defence of the Commonwealth and why Russia is using every opportunity to weaken our position at the very point where it is important that it should be stable.
  I wish to say a word about the position of our troops in Malaya. Like the right hon. Gentleman the Member for Warwick and Leamington (Mr. Eden) I do not pretend to speak with authority upon these areas merely because I have recently visited them. But I think that the position of the troops themselves should be improved. The cost of living of the troops in Malaya is extremely high compared, for example, with the cost of living of the troops in Hong Kong. The Hong Kong dollar and the Malayan dollar buy approximately the same amount of goods, whereas the British "Tommy" has to pay about 2s. 6d. out of his weekly pay for the Singapore dollar compared with 1s. 4d. for the Hong Kong dollar. If the Government could subsidise the Malayan dollar for the troops, so that they could get a special rate of exchange to enable them to live more easily in Malaya, that would be a real service to troops who are serving under very difficult conditions.
  The importance of prestige throughout the Far East is one to which the Government have not devoted sufficient attention. The impact of the Japanese war lowered the prestige of the white man throughout the Far East. If one had established, for example, a cricket ball in a pagoda for many years and secured the reverence of the people for it, and then a General like Yamashita came along and knocked it for six, it would not be sufficient to restore the cricket ball to its former position and expect the people to treat it in the same way. British prestige did suffer a disastrous rebuff and the same fact applies to the members of other white nations in that area.

  2097
  I feel that the Government underestimate the impression made in Far Eastern waters by the appearance, for example, of battleships and large aircraft carriers. After the recapture of Hong Kong the Americans were very quick to send there "Valley Forge," one of their largest aircraft carriers, and if we could send some of our larger capital ships to the Far East it would help to restore our prestige in that quarter. I was struck, when in Singapore, by the impression created by the first jet aircraft which appeared there. A single jet aircraft screaming about over the roof tops in Singapore did more to impress them with our advance in aeronautical science and our superior position in military affairs than the presence of a great many troops on the ground. I hope that although we want special types of aircraft for jungle warfare, that will be considered.
  There is this difficult problem about Chinese recognition. There are differing points of view in the House as to whether the Government were right in recognising the Government of China. As I have pointed out, I think that it was done at the wrong moment, just before the Colombo Conference, but I am bound to say that I think the Foreign Secretary was right to recognise the Government of China fairly soon. He is correct in thinking that we must look 10 or 20 years ahead, and the situation is not incomparable to that which existed when Chiang Kai-shek first appeared on the scene after the First World War and was regarded as a rebel and guerilla leader by many people. It was one of our diplomatic officials in Pekin who, at that time, took the first step to contact him and to make a friend of him, and that friendship proved of value to this country for many years afterwards.
  By taking an early initiative in the recognition of China, I believe that in the end we may benefit as a result of our relationship with China. Perhaps it is more difficult for us in this matter than it is for the Americans. The British holding in China is about£300 million which, I think, is about 10 times the size of the American holding. Therefore, the question of the recognition of China achieves a greater importance for the British Government than it does for the American Government.
  2098
  It is a matter of disastrous inconvenience for us that we should have to recognise China at the very moment when we have a Communist war on our hands in Malaya. For example, the question of the opening of Chinese Communist consulates in Malaya would undoubtedly present a very grave problem for us in the development of the campaign in Malaya. But when all is said and done, the Russians have got consulates in Malaya, and so long as we are maintaining diplomatic relations with the Soviet Union and the satellites of the Soviet Union it seems to be inconsistent to boggle at having diplomatic relations with Communist China itself.
  I think that when the Foreign Secretary made his case, every word he used in regard to recognising an effective Government in China could have applied with equal force to the recognition of the Government of Spain. If he was thinking in terms of security and the most effective defence arrangements for the West against the spread of Communism, he might well have considered simultaneous recognition. [An HON. MEMBER: "It is recognised."] When I say that, I am referring to the withdrawal of the Ambassador from Madrid and the difficulties that we have had over that. I should have thought that the right hon. Gentleman would have made similar efforts to get Spain into the Western Union defence arrangements. However, he did not. We have recognised China, and we should make the best we can of the business, and not give the Chinese the impression that we do not want to have friendly diplomatic relations with them.
  I was most impressed, when I was in Hong Kong and the Far East, by the fact that the people who know China best were those who were most reluctant to believe that China would necessarily remain a loyal adherent of Moscow or that Communism would easily adapt itself to China. In those circumstances, I think that the Government were right to take the difficult decision and I am only sorry that they could not get more general agreement upon it.
  The Foreign Secretary pointed out what a complicated area South-East Asia is. If we could have placed any credence upon the report in a German newspapers which said that a reporter had had an interview with Martin Bormann, who said that

  2099
  Hitler was living in a monastery in Tibet, we should have had a final complication which it would be enchanting to contemplate. As an author, I am almost tempted to digress for a few moments to consider a day in the life of the Führer in this Tibetan monastery, if he really exists. One would imagine that breakfast would be rather late. Presumably, the news papers would arrive rather late and no doubt Hitler is just reading that M. Schuman has made his offer of a super- cartel for steel in France and Germany. We may imagine that that would lead to a slight agitation on Hitler's part. No doubt Eva Braun would suggest a picnic on a particularly high mountain so that the Führer could munch a few snowballs and dash a bit of snow into his eyes to work off that feeling. He would then address the distant Himalayas for an hour or two——
  Mr. Walter Fletcher: Himmlers?
  Mr. de Chair: No, the distant Himalayas. No doubt he would return, in due course, to the monastery for tea of a bowl of sour butter followed by a period of "teppich-fressing," before going off for a good night's rest. We may hope that the world will be spared the nightmare of a reappearance of Hitler in Tibet. It is sufficient to think of the problems which South-East Asia places before us.
  I only hope that we shall not find ourselves embroiled in a spreading war throughout South-East Asia. That will depend upon the success with which we stamp out the Communist guerrilla forces in Malaya now. If that can be done and if the French, with American assistance, are successful in Viet-Nam in resisting the spread of Communism there—if all that is done promptly and effectively now—a cordon may be drawn around South-East Asia which will contain the spread of Communism and thus prevent, possibly, the outbreak of a third World War.
  5.17 p.m.
  Mr. Wyatt: I hope that the hon. Member for Padding-ton, South (Mr. S. de Chair) will forgive me if I say that after listening to him it is with some relief that I consider that he and his friends have not been in charge of the direction of our affairs in South-East Asia for the last five years. I should
  2100
  imagine that, if they had been, the chaos now reigning in that area would be indescribable. His policy for Burma has already been exploded in previous Debates, and I do not think that we need waste much time on it today.
  I was particularly interested in his remarks about prestige which he appears to think is something one can buy at the local store, and it turns out in the event to be a cricket ball, which, of course, is all too laughable for words. That may have done for 1900, or 1895, but it will not do for 1950. I was pleased to note that most of his colleagues did not register much enthusiasm for most of his policy.
  Mr. de Chair: I was trying to make a joke. I am afraid that it may have been rather a heavy one.
  Mr. Wyatt: I am very glad to have that assurance.
  I believe that this area is important for three main reasons, and what happens there is important for us for those three reasons. The first is the obvious economic reason that if we do not have some control over part of South-East Asia or some living connection with it, we shall lose our valuable export markets in that area, which will play a great part in the future economic stability of this country and we shall also lose much of our dollar earnings for the sterling area.
  The second reason is strategic. Not only do we have two new Dominions, India and Pakistan—and Ceylon as a third—in South-East Asia, but the whole of South-East Asia is, so to speak, on the way to Australia and New Zealand. The area does, in fact—as hon. Members will see if they look at the map—divide the world in half. Therefore, if South-East Asia were to be dominated by a Power which was hostile to us, we should find it very difficult to maintain communications between one part of the Commonwealth and another.
  The third reason is political which, in a sense, is distinct from the strategic reason. South-East Asia today is the principal scene of the great contest between Communism and democracy. Nowhere is it being waged so furiously and so earnestly as it is in South-East Asia. It is with the political aspect that I should like to deal first.
  I believe that South-East Asia is usually taken to be Burma, Malaya,

  2101
  Indonesia, Indo-China, and Thailand, but I find it difficult to consider these countries without also considering India and Pakistan. If India and Pakistan go down, so will these other countries of South-East Asia, and if these other countries of South-East Asia go down, so, inevitably, will India and Pakistan. They must be taken, therefore, as a whole.
  The obvious obstacle between close association with the West and South-East Asia is Communism. But if we are to defeat Communism in this area, it is important to try to consider for a moment what appeal it makes to the people of this area. Why is Communism a menace to the West in South-East Asia? In the first place, most of these countries are newly independent. It was not until after the war that the Western nations made substantial moves towards granting these countries their independence.
  The politically active and politically aware people of the area believe that this delay in granting independence and self-government was due to the dominance of the commercial interests in the counsel of the Governments concerned. They believed it was the big business houses, the big commercial interests, which held up their independence. They believed that imperialism in that part of the world was an indissoluble link with capitalism, and that to get rid of the one meant getting rid of both.
  The interlocking of capitalism and imperialism is, of course, the classic Marxist concept; hence the immediate attraction of Communism to the politically aware people in these countries who desired the independence of their country. Therefore, all the nationalists in this area tended to move towards the Left very much more than towards the Right, because the Left was so very much more obviously against foreign domination. Because these countries lack the sort of trade union movement we have in this country, the kind of political work in a Socialist and democratic labour field, it meant that those men who wished to do something drifted into theory rather than practical work, because there was no really practical work to do. Rightly or wrongly, the dominating countries of the area did not encourage trade union movements and did not make possible the conditions under which such people
  2102
  moving towards the left could do constructive work, with the result that Communism, with its twin attack on imperialism and capitalism, made a great appeal.
  That appeal was reinforced by the appalling poverty of so many people in this area. Very few people who have visited these parts of the world can have failed to wonder to themselves whether anything less dramatic and less overwhelmingly revolutionary than something like Communism would really be sufficient to turn the earth fast enough to create decent conditions for the people who fall below any imaginable poverty level we can think of in this country. That was a further inducement to turn towards Communism.
  Having said that, I think we should consider what are our possible assets against Communism in South-East Asia. I think that we have more assets in these areas than we sometimes believe. The first asset is the tradition of democratic government and Western culture left behind in this part of the world by the Western nations, mainly by this country. It is astonishing perhaps, that in a climate of authoritarian rule by unbridled princes democracy should have got a hold at all in this part of the world. It is not something that Western visitors, some 200 years ago, would have thought possible. However, it has strangely caught the imagination of the leading politicians and those politically aware in the area who are considering how to establish a form of democracy on the Western pattern. It is a remarkable tribute, particularly to this country, that that should be so. It may be an astonishing fact, but it is a fact.
  The second great asset we have is the willingness shown, principally by this country, with a Labour Government, directly after the war, to assist the achievement of the national aspirations of the peoples of this area and then afterwards to help their Governments. France and Holland very regrettably tarnished the reputation of the West in this respect immediately after the war. Holland, with her long and carping delay over Indonesia, in which country, fortunately, we were able to be of considerable assistance to the Nationalist movement, is now redeeming herself a little, whereas France has shown very little sign of redeeming herself at all in Indo-China.

  2103
  The third asset has been our great willingness and, indeed, our eagerness to help these countries after independence. The Government's immense release of sterling balances, its loans and gifts to Burma and Malaya, has been a tremendous contributory factor in maintaining stability in South-East Asia. I was surprised that the right hon. Gentleman the Member for Warwick and Leamington (Mr. Eden) did not pay tribute to that fact, because I am sure he appreciates, although maybe he is thinking of the coming General Election, and did not wish to recognise the effect it has had. It is because the Government, against the repeated opposition of Members opposite, have insisted on releasing sterling balances in such a large quantity that South-East Asia is today in a far healthier state than would otherwise be possible.
  How are these assets we have in South-East Asia to be improved upon and benefited from? The first thing we have to recognise, without any reservation whatever, is that the mood of the area is one of intense nationalism, and that none of these countries will accept any aid at all from the West if there are any political strings attached, or if they think that there are any political strings attached. They would sooner risk turning towards the Soviet block than lose, even in their imagination, any particle of the independence they have newly won. The approach for giving assistance must be that we believe this area deserves assistance, because the conscience of the West is stunned by the appalling poverty level of so many of the people in that area, and because it is right to come to the help of this region rather than that we wish to gain any political advantages from it. If we approach the matter in that spirit, we shall get political advantages we should not otherwise get if we left that attitude out of account.
  The second thing is to treat this area as a whole, not to try to distinguish too much between one country and another. I believe that one of the main reasons why our policy in Malaya falls short of what is needed is because we do not sufficiently link Malaya with the rest of South-East Asia. Malaya is a country moving rapidly towards self-government, yet it is a country that is under the Colonial Office and dealt with in a separate compartment
  2104
  by the Government instead of being a part of the whole pattern of South-East Asia.
  Worse than that, it is administered by civil servants who have no understanding of the complex political situation involved. These people are, no doubt, very worthy and good people, but they make mistake after mistake because they do not understand that they are living in the midst of a highly-charged political situation. I believe that the High Commissioner of the Federated States of Malaya and the Governor of Singapore should, at the very least, be political persons. I can concede that I would sooner see some Members opposite occupying these posts than the present incumbents. Although hon. Members opposite may not like the idea of trade unions, they know we have to have them, and they know how to deal with them to some extent, and so it would be more valuable to have even a Conservative minded politician there than not have a politician at all. That is one of the things we have to face.
  I believe Malaya ought to be put immediately under the Commonwealth Relations Office or a special department of the Foreign Office. That would, in itself, give great encouragement to the people of Malaya, who do not much care for their country being looked upon as a colony. It is absurd that we have not acted more rapidly in Malaya in constitutional reform than we have. The absurd situation has now arisen in which Trinidad and Tobago have a democratic constitution under which the Governor cannot override the Executive Council, the majority of whom are elected members. That is quite an advance. Yet in Singapore we have not got anything like as far as that. We cannot say to the Chinese in Singapore that they are more backward intellectually or politically than the West Indians.
  Air-Commodore Harvey: Would the hon. Gentleman contend, then, that the Government's experiments in appointing politicians as Governors in other British Colonies in the last four years—in Cyprus, the Leeward Islands and Malta—has been successful?
  Mr. Wyatt: When I say "politically minded people" I do not necessarily mean full-time politicians. One can have

  2105
  an awareness of what the political situation is without necessarily being a Member of the House of Commons, and there may be people with more resilience than civil servants who could be drawn from other walks of life.
  We have not encouraged the trade union movement in Malaya as much as we ought, and we have attempted—or our officials have—to prevent the juniors there getting into the political field. It is important they should be able to enter the political field if they are to be able to stand up against the Communists. We are in a fair way to losing Malaya for the Commonwealth, although there is great good will for us there, and a great desire to remain in the Commonwealth, because we have lamentably failed to adjust our administration of the country to post-war needs, as we have done in other parts of South-East Asia. It is probably because the Colonial Office still retains control of the country, instead of its being regarded as a part of the general South-East Asian problem; and in South-East Asia, as I said before there is, as a whole, a mood of intense nationalism.
  I should like to turn for a moment to Indo-China, where we have the scene of a Churchillian policy carried to its logical conclusion. It is, as we now know, a situation in which the insurgents against the French authorities are by far the majority of the country, and the only way in which they can be held back is by obtaining American arms and equipment.
  Mr. W. Fletcher: Would the hon. Gentleman give some facts in support of this statement that the insurgents are in a majority? I believe that a really careful check of the facts shows the contrary.
  Mr. Wyatt: I do not think either of us is in a very good position to check carefully the facts in Indo-China, but my impression certainly is that the general support of the country is for Ho Chi-minh and his Government rather than for Bao Dai, who finds it extremely difficult even to form a Government. Indeed, I believe he has had to issue an order conscripting people to serve in his Government, which is a rather remarkable state of affairs.
  However, I am not going to attack Bao Dai particularly today, because what I want to do is to follow up some remarks of the right hon. Gentleman the Member
  2106
  for Warwick and Leamington (Mr. Eden) in his quotation from "Tribune," because I quite agree with that quotation, in that I think we cannot have this situation both ways. The fact that the Americans have come to the aid of Bao Dai with arms and equipment has greatly stiffened the people of Malaya and of Burma, because they feel confidence that they are not to be deserted should there be an armed clash. So I think it is important that we do not take the benefits of such a policy and then run away from backing the French at this moment. I think we have to face up to that honestly.
  However, we know that Bao Dai's regime is a puppet regime; and because the Americans have offered these arms and equipment to help the French there, and because we have given our approval—which means more than anything else in South-East Asia today—by giving recognition to the Bao Dai regime, we and the Americans, and India and Pakistan, which are the biggest Powers in that area, have the right and the duty to summon some form of conference with the French to decide what is to be done about Indo-China. We cannot have a situation dragging on indefinitely in which we pile arms and equipment into Indo-China, with the French going on fighting this losing battle year after year. That is something which we cannot tolerate.
  We have split the Nationalists and the Communists elsewhere. We have done it in Burma. It is done today in Malaya. It certainly ought to be possible to do it in French Indo-China. I think if we were to insist with the French that the Bao Dai Government should be fully democratic, or, at any rate, fully independent—I do not know that we can insist upon its being fully democratic—fully independent, and that talks should be begun or should be offered to be begun with some of the leaders of the insurgents, with a view to their joining the Government also, we might then find that those two elements, the Nationalist and the Communist elements, in Ho Chi-minh's ranks could be split now, as they will split eventually. If we do not, there will be no hope for the West in Indo-China.
  At the moment, I think that the battle between Communism and democracy in South-East Asia leaves us with the situation in which both sides are about level. In Burma and Indonesia conditions are

  2107
  relatively stable and encouraging, and so they are in India, Pakistan and Siam; but we can maintain that situation only if we can move with rapidity in improving the living standards and the conditions of the people in that area. We have fulfilled so far a large part of our task in showing our sympathy with the nationalist forces in that area. Hence, of course, the obvious importance of the Sydney Conference. However, I believe that the matters discussed at the Sydney Conference will take far longer to develop, far longer to achieve, than some of the delegates at the Conference seemed to think.
  The problems are so vast they cannot be considered in terms of quick-return plans spread over the next 18 months, and I should think that the investment needed would be somewhere nearer£10,000 million rather than£1,000. It will take a large number of years for this development to come to fruition. We have the whole time to remember that Pakistan and India have got to be helped at exactly the same pace and time as the other countries of South-East Asia.
  I think we have shown that we can do this job with South-East Asia. The Labour Government, by the help they have given in South-East Asia, have shown it is possible for the West to continue in association with this region, to give support to it, and to buttress it up against Communism. If we continue with this type of policy—which has had little enough support from the Opposition—in the future, as we have continued it in the last five years, there is a very good chance that we can resist the onward rush of Communism until such time when, as is not at all improbable, the régime of Mao Tse-Tung goes the way of Tito.
  5.39 p.m.
  Mr. Emrys Roberts: I am very glad we are having this all-day Debate on the Far East, but the subject is so vast that we can deal only with a particular aspect of it. I should like once more to refer to the position of China, particularly as that position is reflected in the deadlock at the United Nations.
  The question of recognition of the Chinese Government was covered very adequately in the speech of the Foreign Secretary. It is no use bewailing now that premature recognition was given to the
  2108
  Chinese Government by His Majesty's Government. I do not think that that recognition was in fact premature. It is a strange thing that no one has yet pointed out in this Debate that recognition of the Chinese Government at that time by the British Government was strictly in accordance with the rules of international law. At a time when it is so important to base world relations on the rule of law, it is vital that in these matters we should base our practice on the rules of international law.
  After all, recognition of a new Government is not a question of political approval. It is a legal process, and recognition should be given always in accordance with the well-established rules of international law. The generally-accepted view is that if a Government enjoys the confidence of the mass of its subjects, and is in effective control of the national territory, it is entitled to recognition. I do not think it can be denied that the present Government of China has satisfied these conditions. How it obtained that control or what its political complexion may be are not relevant questions. They may be relevant to the extent of the diplomatic relations we have with that new Government, but that is another matter.
  Indeed, refusal of recognition would mean that the British Government would be unable even to begin to try to use the ordinary international methods of protecting British nationals and British interests in the territory of China. The right hon. Member for Warwick and Leamington (Mr. Eden) said that it was awkward that other States and certain members of the Commonwealth have not recognised China, but he did not really explore the full extent of how awkward this divergent practice is, nor did he indicate what we might do about it.
  The real difficulty is that China is a permanent member of the Security Council of the United Nations, entitled to a permanent seat and the right of veto over its proceedings; and it is still the old Nationalist, powerless, Government of China that is occupying that seat. Accordingly, although I deplore the fact that Russia has walked out of the Security Council, I must say I have a certain sympathy with Russia's point of view. After all, why should they sit round a table at which there is represented a Government which has no control whatsoever

  2109
  over the territory of China, but which can veto the whole proceedings at any moment? The continuance of this position is becoming absolutely farcical, and it can add little to preserve, or indeed enhance, the respect in which a body like the United Nations should be held.
  The Foreign Secretary indicated that, although the United States of America are not prepared at the present time to accord recognition to the Chinese Government, nevertheless they are prepared to take a reasonable attitude in this matter in that they will not exercise their veto if the question of the admission of the new Chinese Government to the United Nations is brought up for discussion. What can we do in that situation? I regard it as imperative to resolve this deadlock forthwith. There could be no more dangerous tendency in the world than the discrediting of the United Nations. Whatever criticism we may have of that body, it is vital for the peace of the world that it should be kept intact as perhaps the only permanent meeting ground of countries on both sides of the Iron Curtain.
  According to a report in the "Manchester Guardian" of 23rd May, Washington officials said on 22nd May that the British, United States and French Foreign Ministers had decided at their recent London meeting not to make any move, at present, for the admission of Communist China to the United Nations. It would be most regrettable if that were so. I understand that that position was not correctly stated by those officials, from what the Foreign Secretary said today, but I should like to have an assurance from whoever is to reply for the Government that the British Government will use every endeavour to persuade other members of the Security Council to admit the new Chinese Government into the Security Council. The United States, consistent with the position they have taken up, have made it easy for the British Government to give a lead in that respect and bring the Chinese Government into the agencies of the United Nations. Unless we do this, we shall not get the Security Council working again or have any other agency of the United Nations functioning.
  I do not wish to cover the rest of the vast field, but I say that, taken by and large, the policy of His Majesty's Government since 1945 has been right and
  2110
  has been statesmanlike in the Far East in granting the wishes of the people of India, Pakistan and Burma.
  Air-Commodore Harvey: Even in Malaya?
  Mr. Roberts: I believe that if a Conservative Government had been in office since 1945 there would have been far greater bloodshed in the Far East; in India—there might be bloodshed today—and in Burma. I praise the Far Eastern policy of the Government for according independence to India, Pakistan and Burma. Of course, we would wish Burma to stay inside the Commonwealth, but that is a matter for the Burmese people themselves. British Colonial and Imperial policy at its best has always declared that the future of any far-flung territory should be for the people of that territory themselves to decide.
  5.48 p.m.
  Colonel Cyril Banks: I beg the indulgence of the Committee. I shall endeavour to summarise in a comparatively few minutes what has taken me a number of weeks to collect together.
  I have been concerned for many years now with food. To many hon. Members that may seem very wide of the mark in this Debate, but it will not seem so to those comparatively few who are closely concerned with it. I find that where there is an under-fed population in any part of the world, there is great difficulty in maintaining law and order. Where there is an under-fed people, Communism can spread very rapidly. This country and the world today must face the very rapid spread of Communism unless we do something in the areas which I have investigated.
  The countries of South-East Asia and the Middle East cannot be divided. They are as one. If one brackets together Egypt and the Middle East, Persia, Afghanistan, Saudi-Arabia and Iraq into one zone, and Burma, Indo-China, Siam and Malaya into another zone, they make a V-shaped formation on the map. In the first zone there is a population of 38 million. That is in Persia, Afghanistan, Pakistan, Saudi-Arabia and Iraq. In the other area, French Indo-China, Siam and Malaya, there are a further 66 million people, making a total of 100 million people. The conditions in which these people in these areas lived before the last

  2111
  war were, on the whole, deplorable. They have lived on the edge of starvation for centuries, and one might reasonably say that they are content to live at that level.
  Even though these people may be glad to live on a pre-war level, it should be appreciated that at the present time they are far worse off than they were before the war started. There are countries in the Western Hemisphere which have not done too badly since the war finished; some of them are enjoying rations as good as pre-war, in quantity at least, and some are exceeding the pre-war quantity.
  When we consider that people in the countries I have mentioned are living on a calorie scale which is about half the scale that applies in this country, then we can have some conception of just how near these people are to starvation, and can appreciate how gladly they will receive anybody who will bring them food, whatever be their creed. It is time that the free countries in the world took stock and said what they are going to do for these people, not only in the interests of these people alone but in the interests of peace and of putting down Communism.
  I have given some consideration to the food problem and to what can be achieved. It is not possible to say that we will give a large amount of food to ICO million people. We all know that the stock position in this country does not permit of anything of that kind. But if we wished to provide for these people an uplift in terms of calories—I know the Minister of Food does not like the word, but I am talking of the balance between cereals and animal fats—if we were to give an uplift of 500 calories to 100 million people, it could be done. In terms of quantities of food it is very large; in terms of world production it is largely insignificant.
  For instance, taking zone A, which comprises Persia, Afghanistan, Pakistan, Saudi-Arabia and Iraq, with 38 million people, 4,620 tons of meat and fats a day would give those people an increase of 500 calories a day. That is not an impossible figure. In zone B, Burma, Indo-China, Siam and Malaya, with 66 million people, 8,025 tons would provide an uplift of 500 calories for those people. I suggest that we could afford from the stocks of food in this world the amount
  2112
  of food necessary to give them this necessary uplift.
  I further suggest that if that uplift were given to those 100 million people, we would have better citizens in the world; we would have people prepared to resist Communism because they would be happy with the people who were caring for them. If the free countries in the world were to give careful consideration to lifting the calorie scale and raising the standard of living of the people in those areas, they would find the finest defence against the advance of Communism. I am certain that unless something is done for these people, not only in that part of the world but all over the world, Communism will continue to spread, and I do not think there is any hope for the world unless we take care of people who are in such a plight.
  5.55 p.m.
  Mr. Paton: It falls to me to perform a very pleasant duty, and that is to congratulate the hon. and gallant Member for Pudsey (Colonel Banks) on an extremely able and interesting maiden speech. It was a speech delivered obviously with very deep feeling and sincerity, and with great fluency, and to me it had the unexpected charm and advantage of approaching these tremendously important problem." of the Far East from an entirely new and important angle. I am sure the Committee will agree that it was a valuable intervention in our Debate, and I think hon. Members will equally agree that they will all have much pleasure in hearing the hon. and gallant Member on some future occasion.
  The second duty that I should like to discharge, as a back bencher who has been extremely critical of certain aspects of our foreign policy on many occasions during the last five years, is to say how pleased I am that the Foreign Secretary is able to be with us again today on the occasion of this Debate, and to express my own deep feeling as a back bencher that, however much we may differ on matters of policy and however much we may clash, I myself—and I am certain I speak for every back bencher in the Committee—am most anxious that the further treatment which he is to have next week will be speedily and fully successful and will restore him to the health that is necessary to him in carrying on

  2113
  the very heavy responsibilities which he bears. [HON. MEMBERS: "Hear, hear."]
  I welcome this Debate on the Far East, and I welcome particularly the sense of urgency that seems to pervade the speeches that have been made upon it. I welcome also the spate of conferences that have taken place during the last few months, which shows that something of the importance and urgency of Far Eastern questions has at last emerged in the centre of the stage. Two or three other hon. Members and I have been, for more than four and a half years, trying to get the House to appreciate the enormous significance of these problems that face us in the Far East, with, I am afraid, very little success up to now. I have always held the view, and I have expressed it in the House on former occasions, that the problems that emerge in the Far East, the fundamental issues that have to be determined in this great area comprising half the world, are probably ultimately of far greater importance than the very important questions that we have been discussing so frequently relating to European affairs and European policy.
  These great movements that have been surging to the surface in the Far East have not done so merely since the end of the war. These movements, which are changing over half the world the pattern of society which has been static for centuries, contain within them forces which will profoundly change the whole history of the world, and will inevitably change for ever—in fact, has changed it now—the old relationship of the white nations to the coloured peoples of the world. These movements with which we are dealing in this Debate are, in fact, an expression of something that is not even confined to the Far East but which stretches right across the whole world, affecting the Middle and the Near East and even great sections of the peoples in countries like South America. We are in the presence here of one of the great movements of all time, which will profoundly affect the whole world. This movement in relation to the problems of the Far East is of very peculiar significance and paramount importance, and I felt today as I listened to the Debate, as I have felt on many occasions when reading comments upon these problems of the Far East, that there is a profound misunderstanding running through the whole discussion.
  2114
  It is my belief that we are approaching this problem, as I think almost everybody has approached it in this Debate, excepting the hon. Members for Merioneth (Mr. Emrys Roberts) and Aston (Mr. Wyatt), with the idea of containing Communism, and, if that is so, I believe that we shall utterly fail in our endeavours, and deserve to fail. That is wholly the wrong approach, and it betrays what I think is the fundamental misunderstanding underlying the approach. What we are facing in the Far East is not a collection of problems that have arisen because of Communist propaganda or Communist pressure. Communist propaganda and pressure merely exploit the situation which already exists.
  The fundamental problem in the Far East and over a great area of the world is the one mentioned by the hon. and gallant Member for Pudsey—the problem of poverty, and an intensity of poverty that we in the West have never known. My hon. Friend the Member for Aston attempted an analysis of this underlying cause, and he indicated that there was this pressure of the literate few, who, in revolt against racial subjection, are leading a movement for national emergence. My hon. Friend also indicated that there was the accompanying movement by the poverty-stricken masses against economic subjection, so that we have two main impulses, one for freedom from racial subjection and one for freedom from the economic subjection to which these people have so long been victims. It is these two main impulses that underlie the whole of these movements which have given us so many headaches and so many problems to solve.
  Everybody in the House is perfectly familiar with the fact that all over the East the basic need of these people, because they are peasants, is land on which to grow their food, and, having grown the food, to be allowed to eat it themselves. I realise that this is extremely elementary, but nevertheless it seems to me to be extremely necessary to say it, in view of the many other things that seem to me to be wrong in this Debate. If these are the basic needs over these territories, it seems to be essential that the British Government and their allies, in their approach to the problems presented in those territories, must be prepared to accept new social patterns and forms of

  2115
  a kind with which we are quite unfamiliar, and certainly might have to accept, so far as Conservatives are concerned, Socialist forms and patterns of society which they so much dislike.
  If only the Western nations will make up their minds that there is no greater folly than to imagine that we can force Eastern peoples into the mould and pattern of American democracy, we shall begin to make real progress. We have to make up our minds that the only way in which Communism can be stopped—and that is not, of course, the main purpose—is by giving these peoples in the Far East and in South-East Asia some dynamic conception that will appeal to them with at least as great a force as the Communist conception. For most of the peasants, after all, the landlord, the merchant moneylender and the harsh tax-gatherer are the forces and symbols of evil, and it is exactly those forces which Russian Communism promises to destroy, and thereby hangs its appeal.
  It is no good, therefore, for our own Government, in association with other Governments, to try to formulate policies for these countries in the Far East and South-East Asia which are merely intended to buttress and support the old tyranny. It will not do, and therefore, I ask the Government, particularly since it is a Socialist Government, to get back in this matter to its own first principles and join in the movements that are in evidence in these areas tending towards the liberation of the people by bringing about systems of social justice. I was very glad to hear my right hon. Friend the Foreign Secretary give expression to these ideas this afternoon.
  It seems to me that it is against this background that we must assess our effort and plan our purpose, and against that background it is very obvious that the mere granting of dollars will not be enough. The material aid that is promised from the United States and from our own Commonwealth countries will, of course, be of quite tremendous value, but we must supplement it in other ways, and one of the most effective ways in which we can really force the effect of the material aid that we promised to give is by supplying technical assistance and advice which is so very badly wanted all over the Far East today.
  2116
  Again, this is an old idea of mine, but I was gratified to see that it was one of the ideas that came out of the Sydney Conference, although, unfortunately, that Conference apparently wanted it at this stage only in a token form. I believe that this is one of the most urgent things to which we could possibly put our hands. We want teams of technicians, and it would help very greatly in this connection if we considered whether we might now draw on Japanese resources for technicians to work with technicians from other countries of the world. After all, in Japan there will in future be a surplus of technicians of all kinds, and they might be put to very useful work in helping to develop some of the Asiatic countries which they raided and destroyed.
  I want now to pass quite briefly to talk about two other matters. One is our attitude to China, and I was very glad that the hon. Member for Merioneth said that he was in support of the Foreign Secretary's policy. I wholeheartedly accept the Foreign Secretary's policy in the recognition of China. My only regret was that it was delayed as long as it was. I thought that it should have been done earlier, and, despite all the difficulties that have arisen since, I am convinced that it was the right decision and that, as time goes on, it will be seen very obviously to have been the right decision.
  Mr. Mott-Radclyffe: Will the hon. Gentleman explain to the House what benefits we have received hitherto out of recognition?
  Mr. Paton: The question of recognition and of entering into diplomatic relations between nations is not one of a bargain. It is not a question of assessing profits and losses; it is a question that is decided, as the hon. Member for Merioneth said, partly on legal grounds. It is based on trade grounds and on grounds of general convenience, but, as I say, it is not something which one can assess on the lines of a profit and loss account.
  So far as the recognition of China is concerned, I think that the action of the Foreign Secretary was right, but I now want to make a criticism of what accompanied it. Although that recognition was the right thing to do, we then almost at once destroyed a large part of its value by failing to develop any kind of policy

  2117
  that had the least consistency or logicality. The right hon. Member for Warwick and Leamington (Mr. Eden) told us that in his view that recognition was wrong in time and in method because, apparently, it was not a recognition acceptable to the whole of our Western Allies, although acceptable to some. It was not acceptable to Australia or New Zealand under their new Governments to which, unfortunately, they succumbed a little before the decision had to be made. But it was acceptable to India, a country which in this area of the Far East and of South-East Asia is surely of no less importance than the Dominions of Australia and New Zealand.
  Where we did wrong was not in making the decision at our own time and by our own methods, but in allowing ourselves subsequently—under pressure, no doubt, from our own Allies, the United States and France—to be led into other courses which completely bedevilled the whole situation with regard to Communist China. About a week after we gave that recognition, we went to the United Nations, and when the issue was raised there in sharp form, Great Britain, which had already taken the courageous decision to recognise Communist China, sat on the fence and did nothing. We helped to play right into Russia's hands and gave Russia an absolutely first-class excuse for paralysing practically every organ of the United Nations organisation.
  Then we rushed in to recognise Bao Dai, a Westernised play-boy who is just a puppet of the French Government, a man who is called the ruler of Viet Nam. It was particularly significant to note in this connection the words used by the right hon. Member for Warwick and Leamington. It struck me at the time how significant and revealing it was that he talked about the Government of Bao Dai and the so-called Government of Ho Chi-minh——
  Mr. Eden: I am in complete agreement with the Foreign Secretary on this.
  Mr. Paton: The right hon. Gentleman has lost sight of the fact that, at the moment, I am in a critical frame of mind with regard to the Foreign Secretary.
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  It is no use blinking the facts. Bao Dai is merely the so-called head of the Government because there are 170,000 French troops fighting in Viet Nam to try to keep him on the throne. France is involved in a colonial war of a most disastrous and destructive kind. For the right hon. Member for Warwick and Leamington to imagine that because this French action in Viet Nam is being supported by a great mass of troops and at ruinous cost to the French Exchequer, he is thereby seeing something being done to strengthen the buttress against Communist infiltration, absolutely paralyses me with astonishment.
  Mr. W. Fletcher: Does the hon. Gentleman think that Ho Chi-minh is not a puppet of Moscow?
  Mr. Paton: No, on the contrary. Ho Chi-minh's whole record, up to a point—[Laughter.] It is always inadvisable for hon. Members to find amusement in a statement they have not yet heard. Ho Chi-minh was not a puppet of anybody or of anything, at least up to a certain point in time. There is no doubt at all that he, although a Moscow-trained Communist, was not for a long time—and it is doubtful whether he is even now—leading Communist forces. There is no doubt that whatever we may think of him as a Communist, Ho Chi-minh is, in fact, leading a definite nationalist movement. It surprises me that the hon. Member for Bury and Radcliffe (Mr. W. Fletcher), of all people, and with his knowledge of the East, should seek to challenge that. He must know perfectly well the effect of the history of French nationalism in Viet Nam and in French Indo-China over many years. It has certainly not been to create a nation in love with the French Government or the French colonial system. Therefore, I believe that there is no doubt that Ho Chi-minh was unfortunately pushed into the arms of Moscow by a policy which I thought all wrong.
  I think that the recognition by all Governments of Bao Dai immediately following our recognition of China was a blunder and a mistake. We must also remember, in connection with the Chinese attitude, that while we have been having talks in Peking with a view to the exchange of diplomatic representatives, these have been accompanied by the thunder

  2119
  of exploding American bombs, dropped from American planes in the service of Chiang Kai-shek, our ally—the Chiang Kai-shek with whom we maintained consular relations on the island of Formosa. Is it any wonder that the Chinese Government look upon us and our approaches with grave suspicion? If we were going to take that step in China, then we ought to have followed it up with a completely logical and consistent policy, and maintained that line in the United Nations and elsewhere.
  I have already talked longer than I intended, but I must say a word or two about Japan. The big single issue which we face in Japan at the moment is the question of her rearmament. I heard what the Foreign Secretary had to say about the desirability of a speedy peace treaty, but the difficulty, of course, as we all know, is to get it. At the moment there is on the question of the rearmament of Japan, an issue of first-class importance and of extreme urgency. It is very necessary that in the course of this Debate we should try to obtain from the Government their view of where they stand on this matter. We know that, with regard to the rearmament of Japan, there are now at least three different American opinions. There is the view which appears to be held by General Eichelberger, General MacArthur's chief military aide, that Japan should be fully rearmed; there is the view held by others that America should establish and retain bases in Japan, and then there is General MacArthur's own view, reiterated again only a few days ago, advocating the neutralisation of Japan.
  It seems to me that if there is such a conflict of American opinion on this subject, a decisive lead given by the British Government might have a tremendous effect in the right direction. It would be monstrous folly to allow Japan to rearm. She is, by the constitution that we imposed upon her, a completely demilitarised country. The whole object of the political planning that has been done over the last five years has had the purpose of developing a democratic and peace-loving people in Japan, and if we now, because of the development of American hysteria with regard to Communism, take this fatal step of abandoning all that we have stood for hitherto and decide to rearm Japan,
  2120
  wholly or in part, we shall have destroyed everything that we stood for during the war.
  It would be a tremendous mistake to imagine that the old nationalism which dominated Japan is dead. It is true that it is underground, but it nevertheless still lives, and I can conceive nothing more likely to bring it forth again in its full flower and vigour than the creation of a Japanese national army, and the creation of Japanese arms generally. It would be a betrayal of all that we fought for in the war; it would mean the re-creation of the standing menace of Japanese power over the whole Pacific area, not least to our own Dominions of Australia and New Zealand; and it would mean inevitably, eventually, another world war.
  I, therefore, hope that in this matter the British Government will be able to speak with an absolutely clear and vigorous voice in opposition to the whole idea of rearming Japan because, after all, this is completely unnecessary. General MacArthur himself has made it quite clear that in his view America already possesses all the sea and air power, based on impregnable bases on the islands scattered all over the Pacific, which gives her complete supremacy over the whole of that area. I am only a layman in these matters, and I have been quoting General MacArthur, but so far as one can see there would not even be any practical advantage in this proposal that we hear coming from America for the rearming of Japan. I hope that the Government, through their spokesman tonight, will be able to give us a clear view on that matter.
  I have already spoken longer than I intended—[HON. MEMBERS: "Hear, hear."]—much to the impatience of certain hon. Gentlemen opposite, and I know so well what it must have been for them to endure my speech. Nevertheless, I hope that in putting forward these ideas I have put forward, besides the critical matters I have raised, something which may be of constructive value, and which I hope the Foreign Secretary will consider.
  6.23 p.m.
  Brigadier Head: It is not my intention to delay the Committee for more than a few moments, your own pleasure at which, Mr. McLeavy, will

  2121
  even be exceeded by that of those hon. Gentlemen who are waiting to speak. I should like to spend just 30 seconds of that time in adding my own hopes regarding the recovery of the Foreign Secretary. I wish I could feel that operations in Malaya were likely to improve what he complained of concerning the pain in his head which these had given him. I can only hope that operations elsewhere will be more successful regarding the more remote pain to which he referred.
  The object of my remarks, which will be brief, is solely to draw the Committee's attention to one matter which in my opinion, especially in the Far East, is of paramount importance. I believe that this country and the other countries of the Western World have failed to grasp the immense importance and implication of propaganda and the whole question of political warfare, especially in the Far East. I believe that this failure to grasp its importance and our adherence to what are now often out-of-date ideas is fundamental in our failure to grasp the full implications of the Far Eastern situation today. That belief is reinforced by the fact that, despite common knowledge that political warfare, propaganda and psychological warfare are perhaps Russia's main weapon throughout the Far East, that subject was not even once referred to by the Foreign Secretary in his speech today.
  Perhaps I ought to start by defining, or attempting to define, what I mean and what field I am attempting to cover. The ground which I am attempting to cover concerns those steps taken to influence peoples and communities other than by armed force, and not of course including economic measures: that is to say, propaganda, psychological warfare, political warfare and the encouragement and assistance of supporters, both in countries whose Governments are still friendly to our own and also in countries which have been overrun or are dominated by Communism.
  I think that much of what I say applies equally to the situation in the West—a fact which is coincidental, and which for that reason I hope will not be considered out of order. I believe that when historians look back on these uneasy five years since the end of the war, they will be struck particularly by the immense
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  success and expansion which Russia has achieved by a bold and ruthless use of propaganda and political warfare. They will be equally struck, I think, looking back retrospectively, by the lack of response which, anyhow so far, there has been among the Western nations in perfecting or creating any machinery to counter this ruthless propaganda and political warfare carried out by Soviet Russia. It is a most remarkable thing, somewhat parallel to the rapid rearmament of Germany and the lack of response by the Western Powers at that time.
  Perhaps the most outstanding of all contemporary events is the amount that Russia has staked on this technique—the amount of energy, money and manpower that has been expended on it, and the amount that she has achieved by that policy. In the Far East, with which I am concerned, she has obviously a very fertile field for this technique. This, of course, is much better known to some of my hon. Friends who will be speaking. They know the Far East much better than I do. The seeds of doubt have been sown throughout the Far East by the Japanese occupation against previous authority, which the Western nations maintained in those areas before the war. In the Far East they have a very low standard of life, and yet despite all these defects, and despite Russia's success—and success is the greatest asset to any propaganda machine—there is still, I believe, a potential field of goodwill, provided we make known what we intend to bring to the Far East, what our policy is, and that we mean to stand by and to support those who wish us well, both materially and throughout future policy.
  Up to date there has been no indication of that being so. What has happened is that the voice which has been reaching the Far East has been a divided one. There has been American propaganda pursuing, in many instances, a markedly different line from our own; there has been our own line; and there is now a third voice added, which is the station from Munich. It is largely controlled and has a policy dictated by emigré Governments, much of whose propaganda would, I think, be considered reactionary even by my hon. Friend the Member for

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  Orpington (Sir W. Smithers). That divided counsel, lacks co-ordination and is small in quantity.
  I believe that the reason we have failed to realise the importance of this weapon is that our whole method of thinking about the situation in the Far East reverts to our past experience. Is there trouble in the Far East?—send troops; make up the local police; send some Navy to show the flag, and it will probably be all right in time. Now, that is the old method of considering the difficulty, especially in the more remote corners of the world. Furthermore the Foreign Office is concerned with establishing cordial relations with all foreign Governments, but in the Far East there are very few Governments prepared to establish cordial relations with us.
  We ignore the possibilities which now lie open to us of influencing communities as a whole in their opinions through this new and far-reaching propaganda machine. It is my contention that we have entirely neglected that new chance. It is no good thinking that we are going to do frightfully well with this or that Government in China, Indo-China, Malaya or elsewhere by some good old Palmerstonian notes and so forth from the Foreign Office. If we influence the people who support these Governments, that influence will be reflected in the Governments themselves. We do not have to go to the Far East to know that. One can take a sixpenny bus ride to Dorking to find that out.
  Not only are we outmoded in that, but also in the other question of military intervention. We often hear in the House people saying that we must "hold the ring"; in other words, we must send troops to ensure that the geographical boundaries and frontiers of these countries are not violated and that the countries geographically retain their integrity. This new weapon of which the Russians have made so much use, cleaves right across geographical frontiers, because it lives and works in men's minds. Although it is important to retain the geographical integrity of the country, it is equally important to ensure that we are countering this other weapon. I believe that when we look back on this period, it will be considered just as illogical to
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  send troops to Malaya without the support of an efficient political warfare and propaganda machine as it would be considered illogical to send troops to a "hot" war without any air support.
  I commend that to the Government for very serious consideration indeed. It is already plain to some of our troops that our projects, our policy and our ideals are little known to the people with whom they are coming in contact in Malaya. I believe that a further reason why we have failed to build up a machine is that the Government have clung to the hope and belief that after a few months or even a year, the situation will be cleaned up and we shall be back to the status quo and therefore that this machine is hardly worth creating. That I believe to be fundamentally wrong. This situation is here to stay and it will only end in victory or defeat on one side or the other. We are not going to clear it up by just sending troops or gunboats.
  Unless we take positive action and create some sort of propaganda instrument, however many troops we send and however much of the Air Force we send the situation will gradually deteriorate, because whether we get success through our troops, our policy or our diplomacy, we shall be incapable of exploiting it by propaganda. The instrument will not be available for that purpose. When we bear in mind these facts and the immense effort in the whole field of political warfare and propaganda being made by Russia in the Far East, it is indeed disturbing to examine and reflect on the instrument which we now have available for that purpose in the Western Powers, and particularly in this country.
  Hon. Members may remember the position during the war. We had a Ministry of Information, the Political Warfare Executive, certain para-military organisations and the Office of War Information in America; and all these organisations were co-ordinated both between America and ourselves and between the Chiefs of Staff organisation and the Foreign Office. They created an extremely efficient machine of immense influence in the war, and I think that the prestige and status of the B.B.C. overseas broadcasts towards the end of the war were immensely high and had a considerable effect in the general prosecution of the war. That was all wound up with a

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  rapidity that exceeded even the disbandment of our Armed Forces, and there remains today very little of that organisation. What we have is our own organisation and the American organisation unco-ordinated and the organisation at Munich which is of a type which cannot be fundamentally reconciled with the present psychological outlook in the Far East. That is all that is left, and the entire responsibility for this desperately important subject is vested in one small Department of the Foreign Office.
  It is called the Overseas Information Department and its full responsibility comes under an Under-Secretary. I do not mind how capable and excellent a man he is—and he is that, I understand—an Under-Secretary is too low in the scale of the hierarchy to be in charge of that responsibility, and I believe it to be fundamentally wrong for that responsibility to be vested in the Foreign Office itself. The whole of our thinking and our machine in this respect is out-of-date for this reason. In peace-time, or twilight peace or half war, we have the Foreign Office dealing with the establishment of friendly relations with foreign Governments on matters of diplomacy and the Minister of Defence dealing with matters of defence for a hot war, and in between the two there is nothing.
  Our ideas and propaganda should be getting at the communities of people in the Far East to counter the Russians. Very often that policy will be in opposition to the Foreign Office policy of establishing friendly relations with foreign Powers, and a project may come up in the Far East and the Foreign Office may say, "If you tell them that, the projected dear in that area won't come off because Wing Wang Woo won't like our saying that," or something like that. The Foreign Office should not be responsible for that because they are particularly interested in one limited aspect and I believe that this responsibility should to some extent be taken out of the hands of the Foreign Office and that the lines of responsibility of P.W.E. which we had during the war, should be re-created. Further, it should be closely integrated especially in the Far East with American policy and a much stronger instrument could be created for propaganda throughout the Far East. I beg the Government to consider this matter. I think that we are out-of-date in our thinking and that
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  if we continue to neglect it, whatever effort we pour into the Far East, we shall never be able to make the best use of it owing to the failure to create an adequate policy making and propaganding machinery. I hope that the Minister on the Front Bench will recognise that and that urgent and early consideration will be given to the matter.
  6.38 p.m.
  Mr. Driberg: I am rather glad that this Debate so far has not tended to develop, as some of these Debates do, into a series of disjointed contributions on special, limited subjects. We are concerned today with great fundamental issues, and the Debate has ranged, quite rightly, very widely indeed. Therefore, I hope that I shall not be accused of indulging in vague generalities if I try to sketch some of the wider considerations which underly this vast problem. Indeed, unless we can see such problems as these in the light of certain general principles, we shall inevitably be confused, and our efforts to tackle them will be uncertain and vitiated by what has been called "horrible ad hoc-ery."
  There are two major problems in the world today, or two aspects of the same major problem. The first is what is usually summed up, in short, as the East-West clash. The second is the question of the relationship between the races of mankind. The deep division between the Western democracies and the Soviet bloc is the most tragic of all the developments which have followed the last world war. I remember well an eloquent speech made by the right hon. Gentleman the Member for Warwick and Leamington (Mr. Eden) in this House towards the end of the war, when he said how tragic it would be if the victorious Allies should fall apart and start quarrelling over Germany or other things. Unfortunately, this has come to pass, although he seemed at that time to think, and we all certainly hoped, that it would not.
  The right hon. Gentleman, in his speech today, defined the two main problems as being problems first, of security and, secondly of economics. That is a different definition, in a sense, from the one that I have just essayed, but there is a certain overlapping between the two definitions. The first of the problems, as I say, is the East-West clash. The second is that of relations between the white

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  peoples of the West and the colonial, or subject, or coloured peoples in Asia, Africa and elsewhere—racial relationship, in the broadest sense, social, economic, human.
  Only the former of these two problems—the East-West clash—arises in Europe; and here, for the moment, the position seems to me to be almost hopeless. There seems to be practically nothing that we can do to solve it here. There is this rigid demarcation, this "Iron Curtain." In the East, the position is far more fluid, and, therefore, at once more dangerous and more hopeful, potentially. It seems to me possible that in Asia, in trying to solve the second of these problems—the social, economic, racial complex—we might find ourselves on the way to solving the former of the two problems, the division between the two halves of the world. For what is the essence of the problem? It is simply this: that we have got, pretty quickly, to convince the peoples of the East that we really mean what we say when we talk about freedom, self-government, human rights and equality of opportunity.
  I know how difficult it is for people in this country, particularly people who have never been to the East and seen for themselves the conditions under which people there live, to make the imaginative effort that is needed to look at the world, as it were, through the eyes of an undernourished Chinese peasant. To people such as the hundreds of millions of people in the East, living in squalor and in that hunger that was described so eloquently in the maiden speech of the hon. and gallant Member for Pudsey (Colonel Banks)—to people who have never enjoyed the benefits of what we call democracy—our democracy is not automatically and self-evidently the ideal way of life. There were some extremely wise words about this in the report of a conference held two years ago, about which many hon. Members will know, the Conference of the World Council of Churches, at Amsterdam. These remarks were addressed primarily to Christians of the various churches, Protestant, Anglican and Orthodox, represented at that Conference. This is what was said:
  "Christians should ask why Communism in its modern totalitarian form makes so strong an appeal to great masses of the people in so many parts of the world. They should
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  recognise the hand of God in the revolt of multitudes against injustice that gives Communism much of its strength."
  They go on to say, and this is particularly apposite to the point I was trying to make:
  "Christians who are beneficiaries of capitalism should try to see the world as it appears to many who know themselves excluded from its privileges, and who see in Communism a means of deliverance from poverty and insecurity."
  One sees so clearly, if one thinks it out on these lines, why these millions in the East may be attracted to a Communism that seems to promise them a short cut to a material Utopia and also, which is equally important, assistance in achieving national independence. We all know about these tremendous nationalist pressures, these movements that have blazed up in the last decade or two all over South-East Asia and elsewhere. Self-government is perhaps, of all the "Western" human rights and ideals, the one which has "caught on" most intensely among the hitherto subject peoples. It may seem very wrong-headed to some of us, it may seem foolish to those who feel, perhaps, paternal about them, but there are quite a lot of people in the world who would sooner even misgovern themselves than be moderately well-governed by others.
  I should like to illustrate what I mean by one or two special points. First, I do not think that any one who has studied it at all can be really happy about the situation in Hong Kong, which is very much a key place in the Far East, the shop-window, as it were, of Western democracy. In Hong Kong there are not the "two nations" of Disraeli, but three nations. There are the British, the rich Chinese merchants, and the vast mass of the Chinese workers, who, I am afraid, have largely lost confidence in us because of our slowness in bringing about the necessary economic, social and constitutional reform and improvements. I quite realise, as perhaps some hon. Members opposite may remind us, that, on the whole, wages in Hong Kong are relatively high, compared with wages elsewhere in that part of the world. None the less, the average labourer in Hong Kong has absolutely no sense of belonging to a society that he can be proud of, or any real citizenship in that society, whether he is a British subject or Chinese by nationality.

  2129
  There is a great reluctance in official quarters in Hong Kong to extend proper recognition to trade unions, or to consult them fully about matters that they should be consulted about. The status even of our own excellent labour officers there does not compare with their status in Nigeria and other Colonies within the Commonwealth. Extraordinarily little seems to have been done—I know that something has been done—to cope not only with the economic difficulties, but with such matters as illiteracy and the provision of education. Some schools have been provided, but there are still at least 50,000 children who never go to school. One cannot stress that too much in the present conditions, because of the tremendous influx of refugees from the mainland; but it is a point worth noting. Finally, on Hong Kong, I cannot help feeling that the situation there should be more closely integrated with the whole South-East Asia set-up, if that is practically possible. I sometimes feel that Mr. MacDonald is not as fully informed as he might be of what is going on in Hong Kong and what the position is.
  Nor, indeed, to come to a second special point, was he particularly well informed, in my opinion, if it was he who. as I gather it was, reported favourably to His Majesty's Government on our old friend the Emperor Bao Dai. In my view, also, my right hon. Friend the Foreign Secretary was profoundly misreading the situation in Indo-China when he seemed to imply—it was not quite clear what he meant, but I thought he implied—that the war in Indo-China was mainly or largely a civil war created by external Communist influences. As my hon. Friend the Member for Norwich, North (Mr. J. Paton) said, this war and the campaign being waged by Ho Chi-minh contains at least a substantial element of a genuine struggle for national independence.
  I am not going to repeat all that I said on the Adjournment Debate on 4th April on this particular subject, but I should like to remind my hon. Friend the Minister of State, whom I see listening with his usual courtesy and attention, that he gave us an assurance towards the end of his speech, in reply to a remark made by my hon. Friend the Member for Aston (Mr. Wyatt), that he would continue to press the French to develop what he rather optimistically called "the present state
  2130
  of considerable independence into a state of full independence." I wonder if he can tell us whether any further discussions with the French have taken place or if any further pressure has been applied?
  Although I know he did not like my remarks, almost everything I said on that occasion has been substantiated since by everything we hear from Indo-China. He has perhaps seen, for instance, the very moderately expressed, sensible editorial in a politically moderate American newspaper, the "St. Louis Post Despatch," which says, among other things:
  "Quite apart from the moral question of using American power to bolster European colonialism in the Far East virtually every correspondent who knows that area reports that any attempt to do so would be doomed in advance. Thus Philips Talbot, 'Chicago Daily News' correspondent, recently wrote, 'United States support for Bao Dai is caught in the dilemma that he cannot now hold power in Viet Nam without the help of the French Army, and yet he cannot win Viet Namese nationalist support without rejecting French rule.' "
  The "St. Louis Post Despatch" goes on to comment:
  "There is one possible way out. That is for the French to do what Britain did in India and Burma, and what the Dutch did in Indonesia—voluntarily abdicate a power which can be temporarily held only by excessive force and, in the long run, cannot be held at all. Unless American policy is grounded firmly on that principle, we are not likely to gain friends in South-East Asia, and the dollars we spend will be largely, if not entirely, wasted."
  From the American point of view that is absolutely true, and corresponds with what I feel our attitude should be vis-a-vis the French on this question of Indo-China and Bao Dai.
  The dilemma indicated in that editorial is a true one. It is the whole dilemma of the Western Powers in the East. Unless they encourage, positively and sympathetically, the Nationalist movements, and thus put an end to their own empires, in the old sense of the word "empire," then they will lose, anyway, and they will lose not only power but prestige, influence, and friendship. There seems to be a kind of irony in history that forces some nations and empires to take courses that produce results exactly the opposite of the results that they desire to produce. I hope that we ourselves shall not be trapped by that historic irony. The Foreign Secretary stated the correct policy

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  today—economic and constitutional reform; but success is dependent on the speed with which the reforms can be put into effect, and, personally, I do not think that the speed is like anything adequate at the moment.
  My last special point is this. Surely, as the hon. Gentleman the Member for Merioneth (Mr. Emrys Roberts) said, the Chinese Communist Government ought now, or very soon, to be represented in the various agencies of the United Nations—the Security Council U.N.E.S.C.O. and the other agencies. It seems quite illogical to extend recognition to that Government and to say, "You are, in fact, the Government that represents and speaks for the majority of the Chinese people," and yet say, at the same time, "You must continue to be excluded from the councils of the United Nations." No action could be more calculated to encourage that reciprocity, for which we have been anxiously waiting for some time from the Chinese Communist Government, than steps by His Majesty's Government to secure their admission to the United Nations.
  An hon. Member opposite asked what we had got out of it in exchange for recognition. One answer is that recognition is extended for legal reasons rather than as a commercial bargain; but I think it is fair also to say that there are very great prospects of trade with China, which we need and can get if we have good diplomatic relations with the Chinese Communist Government. The Chinese people are, on the whole, friendly disposed towards this country and ourselves, and they certainly need the things that we can send them—machinery, consumer goods and many things which they cannot get, for instance, from Soviet Russia.
  The right hon. Gentleman the Member for Warwick and Leamington (Mr. Eden) said he had been "assured" that the overwhelming majority of the peoples of South-East Asia were anti-Communist. I do not know who gave him that assurance, but, frankly, I do not think that it is a very sound generalisation.
  Mr. R. A. Butler: My right hon. Friend is absent, but I think he said, "Malayan."
  Mr. Driberg: I thought he was speaking of South-East Asia generally, and if I misquote him I apologise. We shall see in HANSARD tomorrow morning. In any case, it does not affect the point that I want to drive home.
  The generalisation that I would venture to make on South-East Asia is that the overwhelming majority of the peoples are not anti-Communist so much as non-Communist. They are beginning to be interested in Communism; they are attracted to it in some ways, for reasons which I explained earlier. They are prepared, and indeed likely, to become pro-Communist if we fail to face the challenge of the times.
  We keep on hearing and using that phrase "the challenge of Communism." We talk about "checking the onward rush of Communism," and so on. A lot of the rhetoric about it is nonsense. A dynamic idea, even if we consider it a warped and wrong idea, cannot be stopped either by military means alone or, despite the extremely interesting and thoughtful speech of the hon. and gallant Member for Carshalton (Brigadier Head) who preceded me, by counter-propaganda alone, or by military means and counter-propaganda combined.
  The challenge of Communism is not fundamentally, in my view, a challenge to war; it is a challenge to a competition in making peace. Here, again, I am going to quote briefly from one other ecclesiastical document, the report of another great conference that was held in 1948, the Lambeth Conference of all the archbishops and bishops of the Anglican Communion throughout the world. They had something to say about Communism, which seems to me to be extremely sensible. It is addressed to Christians, of course, and it is part of the formal resolutions of the Lambeth Conference. Here it is:
  "The Conference believes that Communism is presenting a challenge to Christian people to study and understand its theory and practice, so that they may be well instructed as to which elements in it are in conflict with the Christian view of man and must therefore be resisted, and which elements are a true judgment on the existing social and economic order."
  That seems to me a sane and well-balanced attitude, very different from the hysteria that prevails in some quarters.

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  I refuse to believe that the situation in Asia or anywhere else obliges us to regard as inevitable a future war against Russia, or the continuation of that global neurosis which we call the "cold war." We ought not to acquiesce with equanimity in that process. Indeed, Asia—through our friends in India, perhaps through the Chinese Communists, or through our friends in Burma, with their unique spirituality and intuition, if I may so put it—might yet provide some measure of healing this terrible schism of the world which may lead to the ruin of all civilisation.
  As other speakers have said, the Labour Government must be praised for the outstanding statesmanship of their actions in regard to India and Burma. I only hope that the recognition of Bao Dai and some other recent events do not indicate any retrograde step in our foreign policy in the Far East and South-East Asia—what I should call "a swing to the Right." If we go that way we shall never establish peace in the world—peace as defined recently in an interesting article by Mr. John Foster Dulles, an American statesman with whom I do not always find myself in agreement. Peace, he told his fellow-Americans, is not a self-contained isolation; nor does it mean a world dominated by American ideas or run in accordance with American wishes. Peace is
  "a condition of community, of diversity, and of change."
  We had better get moving with those changes—but fast.
  7.3 p.m.
  Lord John Hope: I wonder whether, at the beginning of what I hope will be a short speech, the Committee would mind if I referred briefly to a matter which has come to the knowledge of some of us here. I refer to the death of that most distinguished servant of this country, who served the Far East and his own country so well in peace and war, Lord Wavell. I know a little bit of what was involved in the burdens of Viceroyalty, because I saw it. I think I may say, and I believe the Committee will join me in saying, that we only hope that the strength and the service which that distinguished man gave, and gave in full measure, will not have been given in vain.
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  This is one fight, whether we look East or West. It is difficult sometimes to remember that fact, because we must divide our debates; otherwise, we should go on interminably. In that fight there are two possible false moves. Certainly, they are false moves which the enemy hopes we shall make, and which may yet be made by the West. The first is to suppose that there can be any neutrality in the struggle. The conception of a so-called third force, however well meaning it may have been, is disastrous and I hope that it will be dropped from now on. The second false move is confusion between the long-term and the short-term remedies for the situation. That is a convenient confusion, especially for those who are in responsible positions, but it is very dangerous. It is summed up in a phrase which has already been referred to in the Debate, "the standard of living."
  About the rising standard-of-living argument, as I call it, I want to make two short points. The first is that Communism, whatever the idealistic nature of its foundation may have been, is now a racket, well established everywhere. Communism is, for instance, more powerful, I believe, in Australia than in any other country in the Empire. But there is practically no poverty at all in Australia. That point might be pondered. The second point is that the short-term necessities of military and of political security must now come first. On both sides of Committee we should have the courage to say what we believe to the people. These necessities undoubtedly pull against the possibility of a rising standard of living in the West for some time. That, too, must be faced. Perhaps I may refer, in passing, to a speech I once made in this House. I remember making that point in the same sort of terms, and it received a reference from the hon. Member for Maldon (Mr. Driberg), who was good enough with his eloquent pen, to write that in saying it I had "spilt a mouthful." Well, I spill another one willingly, because I believe it to be a profound truth.
  Let us concentrate for a few minutes upon the short-term policy. I have no time to go into the long-term ideal of raising the standard of living. I know that that is a matter which has to be faced in the end, but I have no time, in a back-bench speech, to cover the whole of the waterfront. It has been suggested, not only in this country but in

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  other countries in the Commonwealth, that we should try to form a Pacific Pact. I am wholeheartedly behind the idea of a Pacific Pact, but it will take a long time for any such pact to come into being. The authors of the idea of the Pacific Pact must be thinking of the Atlantic Pact, but I cannot help feeling a little despondent about quick results when I compare the weakness and inexperience—there is nothing derogatory in either of those adjectives—of the new Eastern Governments with the relative stability of the countries that signed the Atlantic Pact. There was a great deal of drama and a certain amount of indecision before that pact was signed even by so many experienced Governments. That kind of indecision will be but intensified when it is a question of these new, young Governments of the Far Eastern countries having to sign up.
  Reference has been made, I think rightly, to the newly released nationalism of Asia. That will make it terribly difficult for these Governments to make commitments with the West, debarred, as they must be, from wanting to express their willingness to do that by the fact that only so recently have they gained their freedom from the domination of the West. How difficult, too, it will be for these Governments to come out openly and bravely against Communism. There is the background of the Communist triumph in China—whatever may happen in the future it is no good anybody pretending that up to the moment it has not been a Communist triumph—which will help to make those Governments delay before openly asking for or welcoming help from the West. We should bear in mind the great courage of Bao Dai in Indo-China, Songgram in Siam and Hatta in Indonesia who, in coming out so openly against Communism, carry their lives in their hands every day.
  Never mind if the East is not ready for a Pacific Pact yet. Let us go ahead as best we can and get as near to the benefits of such a pact as we can. In that respect I welcome more than I can say the initiative which the United States of America are now taking in the East. I do not pretend that His Majesty's Government could not have taken more initiative than they have taken and are taking in the East, but, apart from that,
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  I think it is undoubtedly much easier for the United States to take the initiative in the Pacific.
  There are three main reasons. The first is the economic reason. That is an obvious one. They have the money and manpower which we and others have not. Secondly, there is the historical reason. The United States have been in the van of the movement to free colonial peoples from the dominion of the colonisers. Whether they were right or wrong is purely academic; it is a fact that they have been in the van. Thirdly, there is the political reason. The United States have been alone in their undeviating and unequivocal attitude towards Communism.
  The Americans have taken the initiative in a big way and in the right place, and that is in Indo-China. The hon. Member for Maldon was wise in refraining from dwelling in any way upon the speech which he made not long ago attacking His Majesty's Government's recognition of the Bao Dai regime, attacking Bao Dai and attacking the French. It was an unfortunate moment to make it. There are weaknesses and there are things which are unattractive about the situation which obtains there, but it is our job to do the best we can in the public assemblies of the democratic world at this moment of great crisis.
  I put Indo-China first because if that goes, I believe that everything will go. It is no use pretending that we can hold Malaya if Indo-China goes. Malaya will go, Singapore will go, Burma will go and Siam will go and I believe that Indonesia and the Philippines will also fall. Then what of India, out-flanked as she will be and with her food supplies cut off? I do not believe that that is an over-statement of the case. Indo-China has to be held, and I am glad that the United States at least are determined that it shall be held.
  I have read that the United States have to support "an uncomfortable paradox" in deciding to help the French Army in Indo-China. It is so. However, the United States know that if the French troops go from Indo-China, then South-East Asia is done. It has always been the test and the duty of leadership to face uncomfortable paradoxes. This is not the first one, and it will not be the last one; we have had to do it for a long time. I believe that the Americans

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  are rising to their responsibilities in a great manner. If the United States decide physically to go into Indo-China in order to save it I hope that they will waste no time in doing so should it be necessary.
  What about the Commonwealth reactions to America's new "total diplomacy," to use Dean Acheson's phrase? Whether we like it or not, this has been welcomed by the Dominions in a way which His Majesty's Government have certainly not echoed. It is extremely significant that the Australian Minister for External Affairs has called for a partnership with the United States of America in unmistakable terms. Mr. Doidge, the New Zealand Minister, says that the situation demands an organisation wider than the British Commonwealth, and I believe that the speech of Mr. Pearson, of Canada, at the Pilgrims' dinner went a very long way along the same path. I am not afraid to welcome American initiative and the enlargement in every way possible of comradeship, brotherhood and union between the United States and the United Kingdom.
  I want to say something else about the relations between His Majesty's present Government and the United States. I said that one reason why it was easier for the United States to take the initiative in the Pacific was that they alone have been undeviating in their opposition to Communism. I want to make this appeal to His Majesty's Government. It is an appeal about which it is quite easy to try to make a perfectly legitimate party point. I do not in the least mind doing that in the normal case, but I make my appeal with all sincerity. Do the Government realise that they have never yet stated unequivocally what the difference is between Socialism and Communism? It is very important that they should do so. I wonder if they could find a difference. The Secretary of State for Commonwealth Relations smiles and then looks, somewhat embarrassed, at his fingers, but it will take him all his time to find an answer.
  Now I must refer very briefly to statements written and made in the one case by the Secretary of State for War and in the other by the Minister for Defence. I do not suppose for a moment that either of those Ministers is really a Communist. Of course they are not; they have both said that they are not, and one must
  2138
  accept it. The fact remains that only last February the Secretary of State for War wrote in the "Tribune" that Communism was a lily among the weeds. He added that it was a festering lily, it is true, but the fact remains that it was a lily among the weeds. He now goes out to strengthen the case against Communism in Malaya. On 10th January the Minister of Defence said that he had "no particular quarrel with the objects of Communism" and that what he quarrelled with was "not their objects, which could be quite reasonable but their technique in trying to achieve their objective." That is not an unequivocal opposition to Communism, whatever anyone may say.
  I hope that His Majesty's Government will respond to that appeal. I will say no more about it except this: it is no good the Labour Party trying to persuade the people of this country, through its speakers and its Press, that the present Administration in the United States is really a Socialist Administration. Poor President Truman is having to stump the country to deny that his Administration has anything to do with Socialism, which he referred to in a speech the other day as "that old bugaboo." I can find no more fitting description than that from every point of view.
  Let the Government, therefore, take its courage in both hands, and define what it thinks Communism is, and define the enemy. Then we may once again, as a country, play some part in rallying the free peoples and in preventing their destruction. I believe that the road along which the Government must try to lead us is that road towards an invincible Atlantic community, which alone will save the peace of the world and keep it.
  7.21 p.m.
  Mr. Awbery: I want to deal with one of the problems of the Far East. The hon. and gallant Member for Carshalton (Brigadier Head) made one or two statements to which I want to refer. He said there is political warfare going on in the Far East and that we have done nothing to counteract it. During my speech I shall suggest some methods by which we can counteract the political warfare now going on. I would say to the hon. and gallant Member that for many years we have been too busy making profits in the Far East while the Communists have been busy converting

  2139
  people to Communism. That is one reason why they are succeeding in fostering Communism to the extent they have done in Malaya.
  The right hon. Member for Warwick and Leamington (Mr. Eden), in opening the Debate, said a number of things with some of which I agree and with others of which I must disagree. For instance, he said there are no Communists among the Malays. To a considerable extent he is right, because among the Malays themselves there is a very small number of Communists. The Communists in Malaya are Chinese. The right hon. Gentleman also said that there has been a great deterioration in Malaya since we recognised China, that the events in that country have influenced the events in Malaya, that prior to a year ago there was little Communism in the Peninsula of Malaya. I do not think that statement is correct because there was Communism in that country long before the war.
  I want to trace the position as this Government found it in 1945 and then, as quickly as possible, to trace the historic development of the Communist Party and see why we have not succeeded in crushing Communism, as suggested by the Opposition. I am afraid that hon. Members opposite are not aware of the fact that in Malaya we are now fighting a machine which was created by ourselves and we are fighting men who were trained by our own officers during the war. I hope to prove that as my speech develops.
  Like the right hon. Member for Warwick and Leamington I have paid a short visit to Malaya and have had an opportunity of meeting a large number of trade unionists in the Peninsula and in Singapore. I also had an opportunity of meeting some of the men who are now in the jungle fighting against us, because they were sitting on the committees we interviewed when we held an inquiry two years ago into the development of the trade union movement in Malaya. So I know something about both sides of the picture, and I want to express my opinion as to what should be done. In the past, when we have talked about Malaya we have usually had in our minds tin and rubber, products and profits, rather than people. If we had turned our attention more to the people of Malaya rather than to the
  2140
  profits from tin and rubber, our position would be more substantial there today than it is. Perhaps it would have been better for the people of Malaya if tin, had never been found, and if they had never grown rubber in that Peninsula. Certainly they would have been saved a great deal of trouble.
  We cannot deny the fact that when the war ended, a revolution was proceeding among the common peoples of the world. It was apparent that all colours and races of people had been seeking a new way of life. The process has been slow, but it was accelerated by both world wars. By 1945 people had learned this better way of life and, in Malaya particularly, were demanding access to it. After the Japs left, we found that a political ferment was proceeding among these people, they were seeking an outlet and were trying to obtain the freedom about which they had heard so much. We sought, and as a Government I believe we sought rightly, to give direction to this new-found feeling of the people of Malaya.
  I agree that we have played an important part in the development of the backward peoples of the world. In some cases we have played a noble part, but in many cases we have played an ignoble part. We now hold Malaya as the trustee of the people of that country and not for a few industrialists. Not many weeks ago reference was made here to the people of Malaya losing faith in this Government for fear we would leave them. I got it from one of the highest people in the Peninsula that the only people who fear in that direction are a few industrialists who are afraid of losing their profits in rubber and tin.
  We have helped in health, we have helped in education although in the past we have neglected the latter. When my colleague and I went to one trade union, we saw in the large office there a number of children and a teacher. When we asked them what they were doing, they said, "This is our school. There is no school to which the children can go, so we have established a school of our own." [An HON. MEMBER: "Hear, hear."] My hon. Friend says, "Hear, hear," but we found they were training the children in the dogmas and ideas of Communism. If we allowed all the trade unions to establish classes and schools to teach Communism, we would be in a difficult position

  2141
  in a short time. However, we have helped in education, we have helped in research and we have helped in labour welfare.
  We have given much to our Colonies and Dependencies but we must not forget that we have also taken a great deal from them. As I have said, we are there as trustees, and that trusteeship must develop into co-partnership; we must share with them their victories and defeats, their joys and their sorrows, and their advantages and their disadvantages.
  I want to trace, if I can, the picture of events during the war. Since the war, the position in Malaya has been very disturbing, and naturally so. The Japanese were in occupation for nearly four years, during which time they were preaching anti-British policy amongst the whole of the people by means of wireless and other forms of propaganda. As a result, when the war ended there arose in Malaya a fight between Communism and free democracy. My hon. Friend the Member for Maldon (Mr. Driberg) said that Communism cannot be destroyed by military force. I believe that we can destroy it by putting something better in its place. The only way of removing an ideology is to replace it by one which is better.
  During those four years of the war the Communists were busy establishing themselves, and I think it is necessary that we should know something of the history of Communism in Malaya. It started from the old Chinese secret societies; it was established in 1928 and remained as a secret organisation until 1940. When during that year the Russians entered the war, the Communists of Malaya came out of hiding and offered their services to the British Government to help in the war. That offer was accepted by the Government because we could make use of the Communists to help to defeat the enemy.
  Major Tufton Beamish: The hon. Member will agree, will he not, that the Chinese Communists in Malaya flatly refused to support the war effort until Germany attacked Russia?
  Mr. Awbery: That is just what I said. They did not enter the war until Russia did so. Before the entry of Russia they took the view that the war was an imperialist war, and they were creating strife, discord and discontent in the plantations and in the mines. Immediately
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  Russia came into the war, however, the Communists of Malaya offered their services to the Government. Most of these Chinese had been trained in Kwangtung, the stronghold of the militant movement in China, under Sun Yat Sen. They came across into Malaya, bringing their ideals with them. That was the position as far as the Communists were concerned.
  What was the general position of the trade union movement? Before the war, it did not exist in Malaya. Instead, there were mutual friendly societies and social clubs, which took the part usually played by the trade union movement. In 1939 there were 427 of these organisations, 357 of which were mainly Chinese. In 1940 the trade union ordinance was passed which permitted the establishment of trade unions, but this was rendered ineffective by the invasion of the Japanese.
  During the war we encouraged the Communists. They went into the jungle and formed seven different armies, mostly of young men. The young men whom I saw were inspired with the great motive of helping the British to defeat the Japanese, but when they got into the jungle they found themselves, trained week after week in Communism, in a veritable hothouse. They were told that they must prepare for the period when the war was over, when they would establish a Malayan Communist Republic. They were formed into the Malayan People's Anti-Japanese Army and the Anti-Japanese Union. One of these groups worked in the jungle, the other worked underground.
  Their training in the jungle under military and political commanders continued for three years, during which time they were being taught and trained in Communist tactics and education. They were told that when the war ended they must infiltrate into the workers' organisations, industrial establishments and places of employment; and that is what they did. These are the men, who were trained more or less under our supervision in the jungle, whom we are now fighting in Malaya.
  When the liberation arrived, the people of Malaya found a new sense of freedom, which gave to them a tremendous upsurge and feeling of liberty. Gone was the oppression of the Japanese, and now they were seeking something which as

  2143
  yet they had not found. For four years they had had no rights except the right to starve and to die, and they saw the establishment around them of strong political organisations by the Chinese in the Malayan Communist Party and the Indians in the Indian Independence League.
  That was the position which awaited the arrival of the guerillas. They found a people who were prepared to receive their doctrine of Communism which they had been learning in the jungle, and the two groups started to work. They infiltrated into the trade union movement. The British Military Administration, which arrived in September, 1945, to prepare the way for the civil Government which was to follow, called upon the guerillas to disarm and to disband. Some of the guerillas did so because they were under the jurisdiction or control of British officers, but others refused to give up their arms and went back into the jungle and to their dumps of arms. The British military organisation had the difficulty of maintaining a balance between the aspirations of the Malayan people and the policy of the new Labour Government which had been set up in Britain. They encouraged, therefore, the establishment of a responsible and democratic trade union movement in Malaya and endeavoured to destroy those movements which were undemocratic. The British military organisation, as has been said from this side of the Committee, set up a trade union advisory department, and advisors were sent out from this country to give assistance.
  The choices before the British Government at that time were, first, whether the responsible trade union movement in Malaya should be established and encouraged; secondly, whether we should leave this field open entirely to the Malayan Communist Party; and thirdly, whether the trade union movement should be made illegal. The Government, I believe, followed the right policy in adopting the first of these courses and deciding to establish and to assist trade unions on democratic lines. The trade union ordinance became operative, and the trade union movement became legalised once more. Labour departments were set up and trade union advisers sent out from this country.
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  The trade union advisers were specialists in trade union movements, trained in this country, and knew the job, not from books, but from practical experience; they were men who had experience of operating conciliatory machinery and knew something about industrial legislation. When I saw them two years ago these men had been doing excellent work. I am afraid we do not appreciate what these men are up against in the work they are doing, not only in Malaya, but in other countries also. They have prevented numerous strikes and have created a better feeling between employers and employees.
  It was not an easy task. In Malaya there are three distinct nationalities—Chinese, Malays and Indians—and they had to adapt themselves to the circumstances of those three nations living as one. They also established native trade union advisers. I met some of them in the House when they came to this country to have their training here. They are doing exceedingly well and deserve our thanks for the work they have done. The result is shown in the returns from the plantations and the mines. The production of rubber and tin is continually increasing.
  Mr. W. Fletcher: Will the hon. Member say to what extent he thinks the production has increased, in figures?
  Mr. Awbery: Yes, the figures are available, but I did not bring them. The hon. Member for Bury and Radcliffe (Mr. W. Fletcher) is associated with the tin and rubber industry——
  Mr. Fletcher indicated dissent.
  Mr. Awbery: —and he may be able to give the figures. He knows that there has been a substantial increase year after year during the last two or three years. The position in the industrial world is far better today than before. A Whitley Council has been set up for the railways. The railwaymen are operating trains in Malaya and have to drive at night through the jungle where the guerillas are. There is still much to be done, and this Government must not "let up." There is much to be done by way of improving workmen's compensation, factory inspection, the prevention of accidents and improving the negotiating machinery.
  I received a letter from a friend in Malaya a fortnight ago. He said:

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  "There are still some troubles out here. The troubles are caused because the workers have put in an application for increases in wage rates. The employers are saying, 'Now the men who caused the trouble are away in the jungle there is no fear of a strike and we need not bother with the demand.'"
  If we want to maintain peace in industry in Malaya, we must deal more expeditiously, as employers and as a Government, with the demands which are being made. Employers in Malaya, and, incidentally, in this country, must not dub every man a Communist because he expresses dissatisfaction with industrial conditions which exist. There are industrial grievances which are real, both in this country and in Malaya, and they should be dealt with before they reach the stage of a strike and not delayed until a strike takes place. The energy and zeal of the young men in this new Federation should be directed into a democratic way of life, and I believe we can do that.
  I hope I have not implied that all the employers are bad. I met good, bad and indifferent employers in Malaya. I met some who said they wanted to employ whom they liked, when they liked, and where they liked and pay them as they liked, but others wanted to use conciliatory machinery and to come to agreement with the men. Progress has been made in Malaya from an industrial point of view and from a trade union point of view. One hon. Member said that we wanted to see politicians appointed as governors in the Federation. I do not think it is necessary to have a politician. What we want is a man with great human understanding who can grasp the problems which are presented, whether he is called a politician, an industrialist or anything else. I met Governor Gent, who unfortunately was killed in an air accident. His death was a great loss to this country and to Malaya. There is a fine body of trade union advisers in Malaya and a fine labour department, and we should do all we can to encourage them and recruit more advisers to send out to the Federation.
  7.46 p.m.
  Mr. Mott-Radclyffe: In the short time I have been in this House I have heard many remarkable statements by hon. Members in all quarters but I must frankly confess that I have to award the prize to the statement of the hon. Member for Bristol, Central (Mr. Awbery)
  2146
  which implied that it would have been better for the Malayans if no rubber or tin had been discovered in Malaya.
  Mr. Awbery: I think the hon. Member got me wrong. I said that it might have been better if no rubber or tin had been found there.
  Mr. Mott-Radclyffe: I find it difficult to believe that any hon. Member should even say that it might have been better. I ask the hon. Member to reflect for a moment when he talks of social reforms and the improvements in trade union organisation which he thinks are necessary. Surely none of these things can come about, until and unless we win the shooting war.
  I think this Debate is most important, not least because it is overdue. I know there have been reasons why the date of the Debate has been postponed but, at the same time, I have the impression, and I think the public outside have the impression, that for far too long, in the minds of right hon. and hon. Gentlemen opposite the emphasis on the Far East has been on the word "Far." It is a long way away and is not "news." Dr. Fuchs is "news," because he is here, but the Far East is far away. We have had one or two incidents, such as that of the "Amethyst," which captured the public imagination and which were news for a little time, but the public are too complacent about the Far East except, of course, the relatives of the troops engaged on active service. I use the phrase "active service" deliberately. We hear a great deal about the cold war, but we must never forget that the war in Asia is far from cold.
  I am not a professional strategist, but I challenge any hon. Member to deny that what we may be witnessing is a gigantic pincer movement on a worldwide scale. Indeed, the Foreign Secretary referred to that by implication. The right paw is on Germany and Central Europe with its immense industrial and military potential and the left paw is on the unlimited man-power of Asia. As the Foreign Secretary said, it would be awkward if there were a civil war in Europe and a civil war in the Far East, and that suggests a pincer movement on a very large scale.
  What I am sure is fatal is any tendency to put the hot and the cold wars

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  into two watertight compartments. The two cannot be separated. They are not just bits of a jig-saw puzzle lying about on the Cabinet table in No. 10, Downing Street. They should be fitted together to make one whole pattern. There are, surely, two requirements. The first is a co-ordinated policy in both the military and the economic sphere. The second is a perfectly clear distinction in our minds between our short-term and long-term objectives. The short-term objective must surely be to win the shooting war in Malaya, so far as Britain is concerned, and in Indo-China so far as France is concerned, for it is in those two areas that British and French troops are involved.
  I hope that, in reply, the Minister of State will give us a little more information about what is going on in Malaya. We had a short Debate not long ago, and a Debate has taken place in another place. I read that Debate; I do not think it was particularly satisfactory from the Government's point of view.
  Mr. Blackburn: I am getting a little fed up with this business of Members of this House not being allowed to say anything about another place, whereas they are allowed to say things about this House. The hon. Member, I suggest, might in such circumstances refrain from taking advantage of a Debate in another place to make the comment he did about the Government in relation to a Debate there.
  Lord John Hope: On a point of order. The hon. Member is talking absolute nonsense. Surely we are allowed to refer to another place, but not allowed to quote; that is all.
  Mr. Blackburn: Further to that point of order. As the hon. Member for Edinburgh, Pentlands (Lord John Hope) has chosen to use characteristic and discourteous phraseology, may I point out that the matter I raised was that we are not allowed to refer adversely to another place although Members of the other place do in practice refer adversely to this House. I was merely suggesting to the hon. Member for Windsor (Mr. Mott-Radclyffe) that it was quite wrong to refer to a Debate in another place and say that the Government came off badly, because we are not allowed to go into
  2148
  detail into the circumstances of Debates in the other place.
  The Temporary Chairman (Mr. Frank McLeavy): According to the rules of the House the position is that Members are allowed only to refer to Government statements in another place.
  Mr. Mott-Radclyffe: Subject to your Ruling, Mr. McLeavy, I was merely referring to the fact that a Debate had taken place in another place.
  The Temporary Chairman: I am not suggesting that the hon. Gentleman has broken any rule.
  Mr. Mott-Radclyffe: I do not think that the hon. Member can object to a reference to a Debate in another place, whether he agrees with my view that the course of that Debate was satisfactory or otherwise to the Government.
  All I was about to say was that we have had far too many contradictory statements about Malaya. On his way to Australia six months ago Mr. Malcolm MacDonald pronounced the situation as being very serious indeed. He used the word "deterioration." When he got to Canberra he told a Press conference that the British Forces were adequate and well-equipped. These statements do not quite tally. Just over a year ago in London he spoke rather optimistically of the defeat of the Communist terrorists and of the steady decline in the enemy's morale. It is not surprising that the public are a little bemused about what is going on there.
  I wish to ask the Minister one or two questions about the situation in Malaya. Would he tell us first, when he comes to reply, whether the Government are satisfied that the reinforcements to Malaya from Hong Kong will leave Hong Kong adequately defended, because nothing could better suit the Communist hand than to oblige us to ring the changes by reinforcing Malaya from Hong Kong and then to turn on the heat in Hong Kong and oblige us to reinforce from Malaya? That is a typical Communist technique. I should like to know whether in spite of the reinforcements sent from Hong Kong to Malaya, the Government are satisfied that Hong Kong is still adequately defended. I hope that we shall have a reply on the questions of equipment, notably wireless sets and

  2149
  helicopters, which were raised earlier in the Debate by my right hon. Friend the Member for Warwick and Leamington (Mr. Eden).
  To turn to my next point, if it was considered necessary that a Director of Operations, which, I think, is the title of General Briggs, should be sent out a month or two ago—and we all welcomed the appointment—surely there was all the more reason for having sent him or some other senior general out to do precisely the same job well over a year ago. Why wait until 11.55 p.m. to do something which should have been done at 9 a.m.?
  Perhaps the Minister of State will also have a little information on the question of Indo-China. So far as I have been able to discover from Press reports, the situation there is something like deadlock. The French are reported—I do not know if these figures are correct—to have 130,000 troops. Their casualties are alleged to be about 1,000 a month, and the situation is not too good. Their equipment is very old and out of date. I understand that they are short of uniforms, among other things. I noticed in a newspaper the other day that the Ministry of Supply were selling off large quantities of khaki cloth and other khaki clothing which was of no value to us. Was this surplus of any value to the French in Indo-China? Was this khaki cloth and clothing unsuitable for the type of warfare going on in Indo-China, and was it offered to the French Government? Was it refused as being unsuitable? We should like to know whether any sort of co-ordination of this kind has taken place between the British and French Governments in respect of Malaya on the one hand and Indo-China on the other.
  From the long-term point of view I see little sign of co-ordination. We have got ourselves into a humiliating position over recognition of the Communist Government in China. That decision was one of doubtful wisdom at best. If we intended to recognise Communist China I cannot help feeling that we should have taken that step not only in conjunction with the United States but after not before the Colombo Conference. I know the arguments in favour of recognition—that we have enormous assets in China, computed, I believe, at about£300 million. I know that certain business
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  interests in Shanghai and elsewhere took the view that the only chance of preserving and safeguarding our industrial and commercial property in China, particularly in the ports, was by representations made by a properly accredited ambassador. But what have we got out of it so far? We have been humbugged and humiliated. We have made an offer to send an ambassador and it has not been accepted, so that no representations can yet be made on behalf of any British interest in China.
  The Foreign Secretary told us that one of the reasons for recognising Communist China was his desire not to ostracise anyone on political grounds. I know that this Debate is about the Far East; otherwise, I should be tempted to ask him how he squares that statement with his attitude towards Spain. It would surely have been wiser to have waited, in the first place, to see if the Communist Government in China was really independent of Moscow. There is a heap of evidence to show that it is not. It would also have been wiser to have paid very close attention to the effect on morale in Malaya of that offer of recognition. This aspect has been ignored altogether. Here was an admirable opportunity for coordination with the U.S.A. and the Dominions. His Majesty's Government threw it away, and promptly proceeded to introduce an element of discord.
  I wish to refer to the question of coordination in another direction by taking up a point made with great clarity by my hon. and gallant Friend the Member for Carshalton (Brigadier Head). We have learned in the West, to our cost, that in certain circumstances propaganda is a much more effective weapon than bullets. Is not it time that there was a coordinated policy between the B.B.C. and the American broadcasting services?
  Have the Government thought about setting up a political warfare executive? Have any attempts been made to get together with India and Pakistan—who are facing a similar threat of Communism—to put out some co-ordinated propaganda on the air? Has any such inquiry been made; has any such proposal been turned down, and if it has may we be told something about it? What about the Hong Kong radio? I may be wrong, but I am informed that, for a very small expenditure,

  2151
  about£200,000, which is a drop in the ocean compared to the cost of the war in Malaya, the Hong Kong radio station could be made infinitely stronger. Has any decision been taken about that?
  Finally, I come to the question of economic assistance. In this respect the American decision to help is very welcome indeed, and most important, but we must get firmly fixed in our minds the relative priorities of the short-term and the long-term plan. Even in Western Europe where, on the whole, the powers have something like a common form of government, and certainly a common background of civilisation, economic assistance alone was not thought to be enough. In the present state of the world the real strength of O.E.E.C. lies in the conception of the Atlantic Pact. It is the Atlantic Pact which gives some teeth to O.E.E.C. How much more difficult is the problem of economic assistance in South-East Asia where these countries have no common background of civilisation and no common form of government.
  Hon. and right hon. Gentlemen opposite continually tell us that the real bulwark against Communism is to raise the standard of life of the people in the threatened areas. I agree that that is one of the bulwarks, but the time factor is vital. Unless we can win the shooting war there will not be time for results to be achieved by economic assistance designed to raise the standard of life of the peoples. Here, we must make up our minds what we want to do.
  We have to ask ourselves some very searching questions which raise some very difficult problems. It would be quite wrong to refuse to admit that this is so. Is security and stability for the new Governments to take priority over the economic plans to raise the general standard of living, or is it to be the other way round? I do not think anybody would seriously suggest that the granting of independence to Burma has resulted in an improvement in the standard of life of the Burmese. On the other hand, Pandit Nehru still maintains his policy of antagonism to French interests in Indo-China; and this raises acute problems at both ends of the scale. Here is a real test for the statesmanship and leadership of the right hon. Gentlemen opposite. It provides a real opportunity for displaying
  2152
  just those qualities with which, unfortunately, the Almighty has not unduly endowed them.
  The Communist threat to Asia is no less dangerous than the Communist threat to Europe. The scene with which we are confronted is not that of two landscape pictures back to back, so to speak. The whole canvas has to be unrolled so that we get a proper view of the panorama. Communism is something more than a political philosophy with which we may disagree or otherwise. It is a creed, vital, insidious, dynamic, demanding a degree of uniformity, subservience and discipline the like of which has not hitherto been seen in history. Where the war is hot we must fight it with bullets. Where it is cold we must fight it by pooling to the maximum extent our general economic resources. There must be overall strategy and overall planning, but in the last resort something more is needed if both Asia and Europe are to be saved from Communism. Marshall dollars may provide food for the body. What is required, in addition, is a little more food for the soul.
  8.5 p.m.
  Mr. Thomas Reid: During the Debate we have several times heard that a huge revolutionary movement has taken place in Asia and especially in South-East Asia. I entirely agree with that point of view. When I was living in that part of the world 20 years ago, I recognised it and I gave as my advice that the only solution was to hand over responsibility and power to elected leaders of the native peoples. I can well remember that I understood the risks of what might happen, but in my opinion we had to take that risk. The Donoughmore constitution in Ceylon accepted my views.
  When I came to this House I adopted the same views regarding India. In my opinion the reason there was so much trouble with us in India was because the Government of this country could not make up their mind whether to quit or not. They were dilly-dallying about handing over power to the elected representatives of the people long before the present Labour Government made up their mind and agreed to hand over. I would say, in response to some of the remarks made about actions taken in Burma and India and Ceylon, that the Labour Government have done a tremen-

  2153
  dous job in meeting this demand for independence and self-government. It is true that disasters have occurred in India and Burma, but the situation would have been ten times worse if the Labour Government's policy had not got us out of the mess and prevented us from being mixed up with the bloodshed.
  Anyone who has studied Eastern history, or who has lived in Asia, must have realised that in recent times most of the trouble in the East, which used to be static, was caused by the dynamics of Western civilisation. Then the wheel went a full turn, and, at the request of the peoples of Asia, the Europeans who revolutionised life in Asia are now retreating from the East and handing over the countries to the native inhabitants. And the wheel has gone round again, and the West is going back to save the East from Communist imperialism.
  At the London Conference the other day it was claimed by implication that the plan for the Atlantic Pact extended far beyond the Western countries. In fact, it is recognised that peace and war are indivisible, especially at a time when we have a dynamic force like Communist imperialism, which plainly proclaims its intention to conquer the world. We cannot preserve peace by preserving it only in the Atlantic. It has to be preserved in the Pacific as well.
  This new Communist imperialism is not due to a lack of social justice in the Eastern countries concerned. There was a lack of social justice there for the last 3,000 or 4,000 years and yet there was no insurrection of a Communist nature. It is said that Communism cannot be stopped by force. I ask those who say that whether it is possible to destroy democracy by Communist force? One need only look round Europe today to see the number of democracies which have been destroyed by force. I suggest, also, that Communism can be destroyed by force. I do not say that that is the only way to contain Communism, although I hold that it is absolutely necessary for us to contain Communism.
  If these Eastern countries fall, with their enormous resources and their great strategic positions, our turn may come and we may fall, too. Peace is indivisible and war is indivisible. If we intend to save ourselves from Communism, as we
  2154
  all do, because it is a pestiferous system, then we must also save the rest of the world from Communism. It is part of the policy of protecting ourselves. The hon. and gallant Member for Carshalton (Brigadier Head) said, rightly or wrongly—I do not know—that our propaganda against Communism is weak. I know that Communist propaganda is very strong and first-class. We should not contain Communism merely by fighting. We must contain it also by a war of propaganda.
  Again, it is said by some people that the East is allergic to Communism. That is wishful thinking by people who believe that ideas will stop bullets—a belief with which I do not agree. In the East religion dominates the whole of the life of the people. Religions are a way of life. All the great religions of the East—Buddhism, Mohammedanism, Hinduism and Confucianism—are allergic to Communism, but that will not stop Communism. We need a combination of the whole lot. It is necessary for us to be wide awake and alert in all respects.
  The right hon. Member for Warwick and Leamington (Mr. Eden) made a statement today with which I entirely agree. There is no good in simply thinking that ideas can cure this evil. Of course, we must have ideas before we act, but ideas alone are not the cure. The right hon. Gentleman said today that the first priority in South-East Asia is defence. I entirely agree. One cannot get away from that. We cannot stop Communism, which in the last resort, relies on force, without fighting in Indo-China. We cannot prevent a war without being ready to fight. Even that may not prevent a war; but if we are not ready, the war will not be prevented, and if it should occur it will not be won.
  A country which I know well and for which I have a deep affection is Turkey. I quote the example of Turkey—which, after all, is in South-East Asia—to the other countries of the East. The fact is that the whole of South-East Asia, from the Adriatic to the Timor Sea, is threatened, and defences against Communism do not exist there. The morale or the bullets or the force do not exist there to save all these countries. From what I know of the Turks, they would rather die on their feet than live on their knees. They have the morale, the backbone. They are willing to fight and to die. The

  2155
  other nations of South-East Asia must also be willing to fight and to die if they are to be saved from Communism.
  I have read in responsible journals messages from correspondents in the East who say that in most of these countries the people are simply waiting to see what the West will do. I think that is the truth. Most of the people are helplessly waiting to see what the West will do. That will not save them, and it will not save the West. They must come into unity with the Western Powers, economically and strategically. It is useless to sit on the fence. Also, we know that some of these countries preach neutrality and say that they are not concerned with the cold war or the hot war. They say that they intend to be neutral.
  That will not save South-East Asia or them. They must be ready as we are ready, and still preparing at enormous expense and sacrifice, to fight if necessary. That is the only possible chance of preventing a world war as we in the West know it. There is safety in numbers. I suggest that these people who talk pacificism or neutrality, to save themselves and the world must openly join with the Western powers who are their friends.
  I quote another country which I know well, the little island of Ceylon. During the last war the people there did not try to be neutral or to preach pacificism. They came into the war fully and struggled along throughout. They did not object to European troops being in Ceylon. They have not asked us to clear out and to give up the great naval base of Trincomalee or the airfields. They made a sensible agreement with us that these great defences against attack are to be preserved unless both parties agree otherwise. I quote the example of this little island to other nations of the East who have not got the statesmanship which Ceylon has shown. Here in Britain we have American forces. Are we disgraced because we have them here? Are the countries in Asia, from Japan to the Mediterranean who are asking white troops to quit, statesmanlike, or is Ceylon statesmanlike because she keeps the troops and works on the friendliest terms with them?
  All sorts of suggestions have been made about what we, America and the rest should do. That is all very well, but it is
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  not enough. I suggest to the people of South-East Asia what they should do. They must save themselves. They must join in, economically and otherwise, or we shall all sink. I have quoted the examples of Turkey and Ceylon. They show statesmanship. They are people willing to die rather than live on their knees. Other countries must show the same spirit. It is no use shirking facts and advocating a barren philosophy which gets nowhere. The Communists have made a wonderful study of propaganda. They know that there has been, and still is, in coloured countries a strong objection to white rule. They are cashing in on that and posing as the champions of the coloured people.
  We in the British Empire have already shown the true solution which is that, as soon as these peoples do not want us to stay, we quit. The policy of the Labour Party, and I think the policy of hon. Gentlemen opposite, is that as soon as possible we should give self-government to the remainder of our Colonies when they have produced people who can possibly run the show. Everyone knows that we are willing to hand over control. That is the greatest obstacle to Communist propaganda, which sets out to liberate everybody from white rule and then to liberate the rest from native rule in order to establish Communist tyranny. What is needed in South-East Asia is leadership. The people must produce men of calibre, men or morale who will face facts and not live with illusions. Unless they do that, they will sink.
  A great deal of the Debate today has dealt with one of the few things in Marx with which I agree, and that is that one gets revolution from increasing misery. The Communists in every country of the world have tried to increase misery by creating turmoil and civil war. I have seen one proposal—I do not know whether or not it was official—that the West must put down£6,000 million to redeem South-East Asia. One hon. Member opposite said that that would not do. He said that£10,000 million would be required. The West poured out a lot of money during the last war, and we ourselves poured out enormous quantities of wealth, to rescue Europe and other countries from post-war misery. But there is a limit to what the unfortunate taxpayers of the West—even those of rich America—can do. I have read an account of what happened at the conference in

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  Sydney. There seemed to be a proposal, "Throw in enough money and let go." I think we must be sure, first of all, that there is pre-planning and I believe our representatives were right to see first what we are going to do with the money, even if it is available.
  I do not know exactly what has been planned, but the task in South-East Asia is certainly colossal. We have to deal with enormous territories and with the ignorance, poverty, squalor and conservatism which exist in those countries. It is a colossal task and people who have not worked within those countries and dealt with them have no idea of the enormous task involved in doing anything at all. Here, again, I quote the example of British Ceylon. During the period of British rule about one million acres of land were brought under cultivation to grow rice, by big irrigation schemes. But today Ceylon is not stopping there. The Cingalese have brought American engineers out there and are opening up vast irrigation schemes to increase the food supply of the country. Ceylon has to depend on imported food to an enormous extent, but they are trying to overcome that problem themselves.
  We are going to tackle the regeneration of the whole of South-East Asia. At the present time large tracts of those countries are threatened with famine and the first thing we have to do is to assure the people in those areas, by some means or another, that they will get enough to eat, enough to keep body and soul together. When people who do not understand the tropical regions talk about the squalor, the famine, the poverty and all the rest of it, they do not realise that those countries double their population every 30 or 40 years, and it takes quite a bit of statesmanship to cope with a problem like that.
  Little was thought here about the great famine relief code of India, but it was a wonderful achievement which, by semi-socialistic schemes and by pre-planning, provided that nobody died through the famines which resulted in India when the rains failed. It was an enormous achievement to prevent people from dying of starvation. That is the sort of problem which we have to face in many countries of South-East Asia and it is a colossal task. Even if we provide the money and pour out the riches, the task
  2158
  will still be enormous and I suggest that it will be a complete failure without the positive co-operation of the leaders in the countries of South-East Asia themselves.
  Obviously, if these schemes materialise we cannot have a situation like that which happened in China, where America poured out hundreds of millions of pounds which went down the drain or into the hands of the Communists in China. We have to deal with Governments which are not very strong and are very touchy, and the organisation required to carry out these schemes needs to be exceptional. In any case, the project for raising the standard of living in South-East Asia is a long-term project. Even if we had£10,000 million available tomorrow, it would still be a long-term problem.
  Things move very slowly in those parts of the world, and in the meantime Communist imperialism is advancing. It is knocking at the door in Indo-China. It is not for us to quarrel whether the French system is right or whether our system is right; I think ours is the right one and that the French system is wrong, but that is not the issue here. The issue here, as has already been said, is that if Indo-China falls then the whole of South-East Asia may follow. While we are devising long-term projects we have to organise at once for the defence of South-East Asia, in co-operation with the people who live there.
  8.25 p.m.
  Mr. Fitzroy Maclean: I agreed with many of the things said by the hon. Member for Swindon (Mr. T. Reid) and, of course, the hon. Member speaks with great knowledge of those parts of the world which we are discussing today. That part of his speech with which I agreed most was when he reminded us that peace is indivisible. That is something which the Russians have always borne in mind. I remember that when I was in Moscow they used to have it written on the pats of butter at the Kremlin banquets. I think we do well to remember it.
  We on this side of the Committee are very glad to have the opportunity of a Debate on the Far East. Certainly, when we consider how bad things are in the Far East, we must reflect that we have had a long time to wait for such a

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  Debate and also a long time to wait for any statement of Government policy on the Far East, if there is such a thing. I think it is most important that we should not fall into the habit of treating the Far East as a separate problem, because it is not a separate problem; it is all part of the same problem—that of how to check the advance of Soviet Communism in the world.
  We have to remember that Russia is an Asiatic Power just as much as she is a European Power, and when her progress is temporarily blocked in one part of the world, she seeks an outlet in other directions. That was always the case, long before the revolution. The Soviet advance in Asia is a danger against which we have been warning the Government for the last five years, but unfortunately our warnings have been ignored. The Government have gaily gone ahead evacuating the position which we once occupied in Asia. They abdicated their responsibilities; they just cleared out and left behind them a power vacuum.
  Mr. Harold Davies Mr. Harold Davies (Leek) rose——
  Mr. Maclean: I am sorry, but I cannot give way; there is very little time. Like nature, the Russians abhor a vacuum and the result has been that the expanding force of Soviet Communism is filling that vacuum and filling it very quickly.
  Mr. Davies: Where?
  Mr. Maclean: The hon. Member says, "Where?" What has happened in China in the last year or two has completely upset the whole balance of world power. Today, with Russia and China linked as they are, with the policies of both directed from Moscow as they are, Asia is dominated by a massive bloc of 600 million human beings, backed by immense material resources. It is only a matter of time before the pressure brought to bear by that bloc on the rest of the Continent becomes unbearable. Already the heat is being turned on in South-East Asia and the cold war there has become a hot war, a shooting war; and the shooting war is going very badly for the forces of democracy.
  That is a very disturbing situation. Elsewhere, in America and in the Dominions, people realise how disturbing it is and, what is more, they are doing
  2160
  something about it, but here that is not so. Not only have the Government given no lead themselves, but they have not even responded to the lead which has been given to them by others. Their attitude started by being negative and it has remained negative. We shall be told, no doubt, that there was the Colombo Conference. So there was, but what did the Government contribute to it?
  The chief contribution of the Foreign Secretary, so far as one can gather, was made not at Colombo but on the ship going there, and that was the moment he chose to announce the recognition by His Majesty's Government of the Communist Government in China. That was a decision which, whatever else it might do, was bound to serve to encourage all Communist and pro-Communist elements in Asia, and bound to discourage anyone who was disposed to resist Communism. Yet the Foreign Secretary took that decision while on his way to an Imperial Conference which, it was supposed, was going to stem the advance of Communism in South-East Asia. He took it without regard to the views of Australia, New Zealand, Canada and the United States of America.
  I do not want to dwell for any length of time on this question of recognition, but I think it needs tidying up. I hope that the Minister of State, or whoever replies to this Debate, will tidy it up, because the Foreign Secretary left a lot of loose ends. My own view is that we should not have rushed into recognition; I think we should have waited until there was reason to believe that we were dealing with a genuinely independent Government, and not just a puppet of Moscow; secondly, that by recognising the Chinese Communists we should not be prejudicing the conduct of the cold war in the Far East; and, finally, that we could take this step in conjunction with the United States, Australia, New Zealand and Canada.
  As it was, none of these conditions was fulfilled, but that did not stop the Government from trying to go ahead, although they have not made much progress so far. It is now nearly five months since they first approached the Chinese Communists with the object of establishing diplomatic relations. We are told that during that period procedural and preliminary discussions have been going

  2161
  on; but, said the Minister of State the other day, it takes two to make a bargain. Why should there be a bargain? What are we bargaining about? It seems to me quite wrong that the establishment of normal diplomatic relations should be made the subject of a bargain. If the Chinese Communists are not prepared to accept the British Ambassador in Peking on terms long established by international usage, then we should make up our minds not to send one, and we should inform the Communist authorities accordingly. It is really time that we showed that there is a limit to what we are prepared to put up with in this way.
  At first sight, what the Foreign Secretary said about all this sounded very robust. He said that he was not going to be bullied, and so on, but that does not quite fit in with what is happening. It is not so long since he sent instructions to our delegation at Lake Success to lobby the delegates of Ecuador, Egypt and Cuba to try to get them to support the Soviet demand for the exclusion of the existing Chinese representative. That, it appears, was one of the conditions imposed for recognition. To respond in that way looks very much like appeasement, and it is not at all reassuring.
  There are other conditions being imposed. There is a report that one of the questions being raised is that of British property in China. Another is that the Communists have raised the question of Hong Kong; they are trying to make that a condition of recognition. That is why I hope that when the Minister of State replies he will be a little more explicit than his right hon. Friend has been. I hope he will tell us what all these negotiations have really been about. If they were not about that, perhaps he will say what they were about because we have been left completely in the dark on that matter. We were told—and the Foreign Secretary hinted at it again—that recognition was going to help our trade in China. We were told that it was going to win Mao Tse-tung away from Moscow. Of course, it has done nothing of the sort. Our trade prospects in China are worse than they were before, and Mao Tse-tung is closer than ever to Moscow.
  All that has happened is that we have lost face, and lost it in a big way. For our pains we are now being abused daily
  2162
  over the Peking radio. To my mind, the Government's conduct in this matter has been typical of their Eastern policy as a whole, so far as they can be said to have a policy. They have taken the line of least resistance; they have appeased, and they have drifted. With things as they are, we cannot afford to drift; we cannot muddle along on our own. We and our allies must have a strong, concerted policy. To my mind, there is only one hope. We must reproduce in Asia and the Far East a sort of security system such as which we are gradually building up in Europe and the West. Lenin once called Asia and Africa the back-door of the capitalist and imperial Powers. It is no good barricading our front door if we leave our back door open. To balance the Atlantic Pact, we must have a Pacific pact.
  That is going to take time, and in the meanwhile we are confronted with an immediate military problem in Indo China and Malaya. I shall not attempt to talk about Indo-China, except to say how very thankful we should be for the American help that is going there; that is a very important and very encouraging step. But I should like to say a word or two about Malaya, because unless effective action is taken, and taken soon, we shall lose it altogether—and if we lose Malaya it may well be that the rest of South-East Asia will be lost with it, and the basis for any Pacific pact will disappear before that pact has come into existence. I suppose that we should welcome the forthcoming visit of the Secretary of State for the Colonies and the Secretary of State for War to Malaya. We have got to assume, I suppose, that it shows that the Government are beginning to take rather more interest in what is happening. It will also, I suppose, be an interesting experience for our troops in their fight against Communism to be visited by so ardent if so recent an anti-Communist——
  Mr. Harold Davies: Keep it up. Another Senator McCarthy.
  Mr. Maclean: It will be interesting for them to be visited by so ardent if so recent an anti-Communist as the Secretary of State for War. They will find in him, no doubt, the proverbial enthusiasm of the convert. But I am afraid that rather more is needed than a fortnight's visit by two Ministers of the Crown, how-

  2163
  ever interesting their ideological pasts may be.
  There is a widespread feeling in this country today, which has found expression over and over again in this Debate, that an entirely new approach is needed in Malaya. Of course, it would be foolish to under-rate the difficulties involved. In many ways Malaya is a country ideally suited to guerilla warfare, and in the past two years, while the Government have been doing little or nothing, the guerillas have had time to get a very firm hold. Even so, I cannot help feeling that there are a number of ways in which we could make the task of our troops there easier; and I think that is very important, because they have had a very bad time, and by all accounts they are getting very tired indeed.
  People are inclined to think that Regular troops are at a disadvantage against guerillas, but that is not necessarily the case. I have had a certain amount of experience of guerilla warfare from the guerillas' side, and I can say, and say with feeling, that Regular troops can make life very disagreeable for guerillas if they set about it the right way. Guerillas, if they are to succeed, have got to retain the initiative; they have got to remain on the offensive and not allow themselves to be forced on to the defensive; they have got to avoid pitched battles; they have got to keep on the move; they have got to have plenty of room to manoeuvre; they must never on any account present a target at which the enemy can strike back; and, finally, they must have the support of the civilian population—one of the most important things of all.
  Now, the first object of an anti-guerilla force must be to deny those advantages to their adversaries. They have got to try to pin them down; they have got to try to force them on to the defensive—because once they have been pinned down, the guerillas are a fairly easy prey. After that, it is largely a matter of superior armaments, and there the Regulars have the advantage. We have to assume that our troops are already operating on these lines. But I wonder whether they have the necessary equipment and the necessary backing to achieve their object, because a lot depends on that. If the guerillas are pinned down,
  2164
  then our troops ought to be able to seal off the areas in which they are operating; otherwise the guerillas simply flit back into the jungle and come back at them another day. As we have to try to stop that happening, guard the frontier with Siam and guard the coast, we necessarily have to drive strategic roads through the jungle and establish strong points.
  Our striking force must also be properly equipped for their task. I hope that when the Minister of State replies, he will say something about the number of jeeps and light armoured cars that are available. I hope he will also say something about whether our troops have sufficient automatic weapons to ensure that their fire power is always greatly superior to that of an equivalent force of guerillas. I hear that they are largely armed with Sten guns. I do not think that the Sten gun is a suitable weapon for that sort of operation. Have they enough mortars, and, above all, are they being properly equipped with wireless sets and wireless operators? I hear that at the moment it takes three men to carry one wireless set. That does not make for mobility. There is a perfectly good set in existence that can be carried by one man and which has the necessary range. I have carried one much further than I like to remember. Why are our troops not equipped with these sets?
  Then there is the question of air support. The aeroplane, if properly used, can be a most effective weapon against guerillas, but are our aeroplanes being properly used? Are there enough of them? One hears of Lincoln bombers being sent to Malaya, but surely heavy bombers are not needed for this kind of operation; the guerillas do not present a suitable target. What is wanted are rocket-firing fighters and fighter bombers and light aircraft for reconnaissance and helicopters for collecting our own wounded.
  Another thing, and the most important of all if we want to win the war in Malaya, is that we must have the support of the civilian population and deny that support to the enemy. No guerillas, least of all in a country like Malaya, can exist of they have not the help and support of the local population. There are. I believe, only 3,000 or 4,000 guerillas all told in Malaya, and a force like that can do very little indeed on its own, but

  2165
  it can do a great deal if it has civilian support; that is why I think we have to give the local population every possible inducement and incentive to help us and not the guerillas.
  There should be no difficulty about that because, basically, the Malayans are perfectly loyal to us and the Chinese are not necessarily disloyal, but we cannot expect them to give us the help we need unless we can offer them some sort of security and give them some reward for the help they give us. At the present moment, the position is that anyone who helps us is pretty certain to get "bumped off" by the guerillas, whereas anyone who helps the guerillas gets off scot-free, and gets a good mark for the future. [Laughter.] Hon. Gentlemen laugh, but it is not so amusing for our troops. The hon. Member finds it very amusing, but he would not be so amused if he were out there himself.
  Mr. Harold Davies: On a point of order. Is it in order for the hon. Member to assume that I was laughing at our troops, when I was merely saying that what he said was quite logical?
  The Deputy-Chairman (Sir Charles Mac Andrew): That is not a point of order.
  Mr. Maclean: We shall be able to protect our friends and those loyal to us only if we establish an effective occupation in the areas that have been cleared by setting up a proper civilian administration, which is not the case at the present time. More important still, we have to restore confidence. We must show that we really mean business. We must make it quite clear that we are in Malaya "for keeps" and are not going to allow ourselves to be pushed out. The inhabitants might well be excused for imagining that we are, after what has happened in India, Burma, Palestine and elsewhere.
  I beg the Government, when they act in Malaya, to act with speed. I beg that their programme shall be on a sufficient scale, because this is not the time for half-measures, delay or procrastination. This may well be democracy's last chance in Asia. This is not a local problem. If Malaya goes, or if any of the surrounding countries, for that matter, go, the rest of South-East Asia will go, and if
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  South-East Asia goes, then India and Pakistan will be the next on the list. Already the ground is being prepared all round the fringes of the Indian subcontinent, in Sinkiang, Tibet, Persia, Afghanistan, India and Pakistan. These are vast areas, it is quite true, with vast populations, but China also is a vast area, and China went in a few months. We have to remember that Asia is particularly vulnerable to Communism, and that things are likely to move there very fast. If the whole of the Continent of Asia comes under Soviet domination, as well as half of Europe, then the Russians will have gone a very long way towards winning the cold war.
  8.47 p.m.
  Mr. Walter Fletcher: My time is very limited, a minute for almost every year I have spent in Parliament. This Debate is taking place on a Supply Day, not in Government time. That is my first condemnation of the Government and their history in dealing with South-East Asia and the Communism there during the last five years. On every occasion these Debates have taken place on Supply Days, which is Opposition time. Before the trouble started in Malaya, I used to ask the Lord President of the Council every Thursday whether we could have a Debate, but the reply was always "No." It was only when the danger we foresaw and forewarned the Government about burst upon us, and we very nearly lost Malaya, that we were able to get a Debate.
  Those interested in Asian problems know that there has been far too little interest taken by the Government in this matter. Let me try to etch, in a few words and phrases, some of the problems we have to face. We can talk endlessly about the theory of Communism and its long-term and short-term problems, pinpointing the problem in each area. Let me start furthest away, that is, in Japan. Four and a half years ago I pointed out that a cloud no bigger than a man's hand had appeared—the danger of Japan becoming a highly technically equipped dumping machine of greater danger than she has ever been before. Now, we hear, in every speech, about the danger of competition by Japan and Germany. What has been done about it? Nothing.
  What is the situation in Japan? There is danger on two sides. It seems obvious

  2167
  that America is thinking of withdrawing sooner or later. There are dangers which are becoming apparent, the first being the danger of Communism, which has now appeared in Japan for the first time. This danger is now creeping in. These are factual reports which can be checked. At the other end of the scale, the old reactionary families who used to control the big firms and retired in the hills, are now raising their heads again. Therefore, on balance, democracy in Japan is only rearing its head, and is in danger of being attacked from both flanks.
  Not a word had we from the Foreign Secretary about this problem. The great bear came and rumbled, but never produced a policy. Possibly the Minister of State, the Brumas of the Government, in the statement he is to make tonight, will particularise a little bit more. The question he must answer, as far as Japan is concerned, concerns textiles. The mission on textiles that went there very recently came away empty handed, because what was proposed to them was an area, in which Japan should be dominant and out of which we should be pushed, affecting every Lancashire constituency. This was not agreed to by the Americans because of one of their trust laws. That is entirely negative.
  What is the position and what is the remedy? The position is that in every part of the world where textiles, manufactured in and exported from this country, are being sold they are faced with low-priced textiles produced in Japan. We cannot get away from it. The quantity may not be so very great now, but it is low priced—being an export of the low standard of living in Japan—and is sufficient to be a threat. I find myself, to my surprise, at one with the hon. Gentleman the Member for Nelson and Colne (Mr. S. Silverman) on this matter, though he is a long way behind in the queue.
  How is that to be dealt with? It is no use the Under-Secretary of State for Foreign Affairs saying, as he did the other day about German exports, that they are not big enough. They have now become so big from Japan that they are a real threat. I suggest that the only way of dealing with it is in the form of a sort of Schuman plan as applied to the iron and steel industry in Europe. Such a plan would be applied to the Japanese
  2168
  textile industry. In other words, the marketing of this production, which cannot be stopped, should be handed over to an international body, which will see that the production of essentially low standards of living in Japan which cannot be stopped—they will continue to live in flimsy houses and so on—shall be handled in that way.
  Let me now turn to China. On the question of recognition and non-recognition, a great deal has been said on both sides of the Committee, and it is possible for it to assume more importance than the act will duly justify. It has assumed real importance not because of the effect in China itself, but because of the by-products, which we have had in Malaya and other countries, and of the increasing Communist morale in those countries. But when we are taken to task by America on this question of recognition and non-recognition, it is only fair to remind the Americans that they recognised the Vichy Government and had an ambassador there during the time when, in the war, we were recognising De Gaulle and the Free French as the French Government. That suggests that two nations, which are as closely associated as this country and the United States, can pursue different courses towards the same ends.
  It is possible that if we think not of recognition or non-recognition as a policy but as a means to an end, we may get the thing in its right perspective. That presupposes that there is a policy, and we have got none in regard to China. The only policy I can remember the Foreign Secretary producing was over a year ago—he hinted at it again today—when he said that his policy for the whole of South-East Asia was a policy of containment. That is the very bankruptcy of policy. The only policy of containment that I can remember in China goes back a long time and led to the building of the Great Wall of China. The only comparable one in more recent times was the Maginot Line. As far as Communism in the Far East is concerned, we are in danger of getting into a Maginot-Line, Great-Wall-of-China way of thinking. We cannot produce a policy of containment in South-East Asia that will work. We have got to think in terms of taking the new offensive.
  We are accepting far too easily that China has been conquered by Communism. It has not. To the intense surprise

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  of the northern Communists, who differ so very greatly in ideology and outlook from the people of south China, there is no resistance. A thin veneer of red paint has been put over China, but below it there are great movements which, if they are properly fostered, will lead, as we have seen in South-east Europe, to other powers arising which are anti-Communist.
  There is no such thing as a nationalist movement in China. There never has been. The unit of government in China is the province and not the central Government. There are already signs that that discontent with Communism, which always grows very rapidly with an individualistic people like the Chinese, is beginning to stir. The currency has lost its value and the dislike of the south for the north is becoming very apparent. A very sharp eye ought to be kept on the whole question of what is happening inside China, so that we do not too easily accept it as one centrally-governed, Communist-controlled area. Look how long it took the Communist Government to mount a small and simple operation like the capture of Hainan Island. I happen to know that area very well and it was astonishing to me to see how difficult an operation it was. That was the sign of very slight control, easy to be upset. It can be upset very easily.
  I have not time to go more deeply into these matters, which I had an opportunity of studying during the war. The key to South-East Asia is Indo-China. The defence of Malaya is in Indo-China. Do not forget that during the war, when Indo-China fell, air bases were established and the penetration of Siam took place. That was the death knell to Malaya. That is equally true today, but there is the opportunity given to us to co-operate with America whose swiftly and imaginatively accepted the French Union because the French situation is balanced on a knife edge in Indo-China. The best move that we could make is to co-operate in every possible way, it may be by sacrificing arms that appear to be needed elsewhere. If we have an overwhelming success—and we need success against Ho Chi-minh. It is perfectly possible, because he has not been very successful and he is not very powerful—and if we can give a knock-out blow, we open up the whole of South-East China. We draw a line which will prevent Burma and Siam from penetration and protect
  2170
  Indo-China. We shall have sealed off to a large extent the great danger of attack in Malaya.
  It is obvious that if we try to create a common front against danger, as my right hon. Friend the Member for Warwick and Leamington (Mr. Eden) made abundantly clear in his opening speech, if we do not separate these problems at all, and if we think of them as one problem, we shall see that the kernel of the problem, in Indo-China, is, at the moment, the most urgent.
  I would like to say something about Indonesia, where we are seeing a tragic thing from the economic point of view. That country is the richest in South-East Asia, the most highly developed and the least difficult in racial problems. It has the lowest proportion of Chinese to Malays. It has achieved self-government with the only really genuine nationalist movement of any magnitude in that area. We are seeing a decline in economic power there and a lack of sense of responsibility to the rest of the world in fulfilling its function. That is a great amber light, a danger signal, against giving way too easily to people who are going to be interested only in their own particular corner of the world and have not achieved a sense of world responsibility. We may see a 30 per cent. or 40 per cent. decline in the production of Indonesia in things that the rest of the world wants. That will mean a fall in our own standard of living and that of the rest of the world. I cite that quickly, as something that we must watch.
  Two minutes on Malaya, as my right hon. Friend has very kindly suggested I should be allowed to have. The problem in Malaya is, first of all, to make our own position quite clear. I want to take this opportunity to correct something I said in a Question and which gave a wrong impression. The first thing we have to say is that we are there for a generation, not for selfish reasons but because we think it will take at least a generation before that sense of responsibility to which I referred just now, can possibly be developed. It is five years since the war ended, and we have a basis on which to judge.
  Then we must say—it has not been said yet—that the protection which we have to give by the introduction of

  2171
  martial law to the police in particular and some of the others there, which has not been given them so far, will be given if it is found necessary. The police in Malaya have been put in an extremely difficult position. They have not had adequate protection and when they have embarked upon preventive measures, which are necessary in a war of this sort, they have been condemned for it.
  The next thing we have to do is to think not only in terms—very important terms they are—of the actual shooting war but of knocking out the centres which are supplying the food, the information and the direction of the war from dozens of towns and villages throughout Malaya. That we can only do by counter-measures which are well known to hon. Members. We may have to devote a great deal of time and money to it, but until we can make it quite clear that it is not worth while for people to be put under tribute and to contribute to the Communist bandit effort, by shooting and putting to death people who are shown to have aided them, we shall not have persuaded these people, who, alone, can help us to get over this trouble, that we are able to help because we are going to win.
  We have to reaffirm the will to win not by negative methods but by positive methods in Indo-China and Malaya. Until we have done that, all the talk about raising the standard of living, all the talk about our great responsibilities and all the stratosphere verbiage into which we so easily stray will mean very little. A short sharp task and a short sharp lesson m those two areas will, in the end, not only defeat Communism in Asia but be its death knell in Europe as well.
  9.2 p.m.
  Mr. R. A. Butler: The main theme of the Debate has been the general desire that there should be some concerted action in regard to the problems of South-East Asia, and I think that, on the whole, we have had a valuable Debate which has been distinguished by some very interesting speeches.
  I should like, first of all, to make reference to the condolences which have been offered by my hon. Friend the Member for Edinburgh, Pentlands (Lord John Hope) to the relatives of the late Lord Wavell who, unfortunately, passed away
  2172
  this morning His is a name which is reputed not only throughout the world but particularly in this part of the world and in India, and I feel that the Committee would be with me in expressing their sentiments of great regret at his passing.
  The Debate has also been distinguished by the maiden speech of my hon. and gallant Friend the Member for Pudsey (Colonel Banks). He not only betrayed a knowledge of the subject, of a kind which is unfortunately, becoming very obvious in all the maiden speeches that we are having in this House and is making some of us who have been here some time, sit up and revise our knowledge, but was also enlivened by a very great humanity. I hope that further contributions to our Debates will be made by my hon. and gallant Friend.
  There have also been other speeches on both side of the Committee which have followed the line which we are now coming to expect in these Debates. For example, the hon. Member for Maldon (Mr. Driberg) feared that perhaps the Labour movement and Labour policy were swinging to the Right. I understand, through his weekly contribution to "Reynolds News," that he was one of the many who attended the house party at Dorking, and no doubt he has betrayed in the Debate the fear he attempted to keep silent in his article on Sunday. At any rate, we are ready to face Labour policy in whatever direction it may move, and if it moves rather more to the Right in this sector of the world, we shall not be sorry.
  Mr. Driberg: I do not know that I ought really to rise or to be drawn on that, but the right hon. Gentleman will realise that in my speech this evening I was referring specifically to the Labour Government, which is to be distinguished from the Labour Party.
  Mr. Butler: I am glad that this Debate has served an even more useful purpose than we at first anticipated, because it has revealed that split between the Government and their supporters which we were already aware existed in the country between the Government and public opinion. That certainly means that this may well be one of our last Debates in this Parliament on this subject, because I do not think the Government will long be able to continue

  2173
  if the hon. Member for Maldon is proposing to lead a revolt against the present Administration. I hope that that revolt will shortly be evident in the Division Lobby.
  I have been impressed by the simple fact that today is Empire Day, and I think it is not inappropriate as we see the flags flying and as some of the uninitiated ask what the flags are flying for that we should be discussing this subject. We remember that this Debate has a special significance in that we are today considering far-flung outposts of what it is still permissible to call the British Empire, where many people are defending the rights and liberties of the Empire—or Commonwealth as it is now called—against the inroads of Communism.
  We remember the position in Hong Kong—and here I would not for a moment accept all the strictures of the hon. Member for Maldon about the administration in Hong Kong at the present time. We remember, as my right hon. Friend the Member for Warwick and Leamington (Mr. Eden) said, the heroic efforts that are being made not only by our own troops in Malaya but by the planters and other residents there who are doing so much in our present struggle; and we are determined to have no compromise with the Communist menace, wherever it may be found.
  One thing that we regret in this Debate is the evidence which comes from certain hon. Members opposite of their muddled thinking on the subject of world Communism, managed as it is from a central point and having a central and total idea. It is most important to rebut some of the speeches that have been made which attempt to prove that Communism, as it is seen in the Northern parts of Indo-China or in many parts of China at the present time, is different from the Communism which is world-controlled from the Kremlin. I do not doubt that in the course of history the geographical and racial conditions in China will cause some modification perhaps of the Communist philosophy and the Communist idea, but the fact is that unless we face this menace in a downright way, we shall not defeat it in South-East Asia or in the Far East, any more than we shall defeat it in Western Europe.
  2174
  The right hon. Gentleman the Foreign Secretary, who plays Ivy to the Brumas of the Minister of State, was in one of his most conversational moods. Anybody who is an expert in foreign affairs would be able to pick out from the engaging personal speech of the right hon. Gentleman certain profound remarks on the subject of the foreign situation, but to the mere ordinary man like myself, and to many other hon. Members in this Committee, the right hon. Gentleman said absolutely nothing. While we have been pressing for this Debate for a long time I fear that many of my right hon. and hon. Friends on this side of the Committee will go away tonight bitterly disappointed that their knowledge of Far Eastern affairs has in no way been increased by the speech of the Foreign Secretary.
  That is an unfortunate situation because those of us who are in opposition, at any rate for the time being, have to obtain our information from the sort of sources which the Prime Minister knows perfectly well were available to him when he was in the desert himself; that is to say, we hunt through the newspapers, we see friends who come from the part of the world which we are discussing, we obtain information at every corner we can and, finally, put together our remarks. However, we do hope occasionally to have a treat, and when we come to the House and arrange tickets for our friends to hear the Foreign Secretary, we hope we shall get some authentic information on the foreign scene. I must honestly confess that, leaving aside all personal considerations—because I am the first to agree with the Committee that we were delighted to see the right hon. Gentleman in good trim and we wish him well in the future—unless the Foreign Office can give the Committee and the House more information, these Debates will not have the value they ought to have.
  The right hon. Gentleman referred to Burma and he did on this occasion make some reference to the Karens, which was a great improvement on the speech of the Minister of State in the recent Debate on Burma, when he made a speech without any reference to the Karens at all. I am glad to welcome the observation of the Foreign Secretary that there are contacts with the Karens and his appeal that peace shall be made with them so that there

  2175
  may be order and stability restored to Burma. I hope that the Minister of State will be able to enlarge upon that and to indicate further what contacts there are with the Karens and what opportunity there is for restoring stability to Burma.
  In this connection I should like to say what a pleasure it was to many of my right hon. and hon. Friends and myself not only to see, but also to entertain, the Prime Minister of Burma on his recent visit. A more able and attractive personality it would be hard to meet, and we can only say that we wish him the best of good fortune in returning to his country to face the very difficult situation which undoubtedly confronts them at present.
  The first big matter upon which I want the Minister of State to give us some more information is the Sydney Conference. The Foreign Secretary said that he could tell us nothing about this conference because he had not yet read the papers. Surely the Foreign Office must have some telegraphic system still existing. I served for several years in that august building and during that period we reformed the whole telegraph room, as it was then called, in a highly up-to-date and modern way. When I was a Minister in the Foreign Office it was very difficult to get through the telegrams, which were put before me as my daily repast, during the day.
  In those odd functions which some of us have attended in the last two weeks at the kind hospitality of the Government, we have been informed by the Minister that the situation in regard to telegrams is much worse than it was when we were in power. That means that there is more paper and less sense. If there is more paper, then for goodness' sake let the Minister of State give us an indication of the results of the telegraphic exchanges between the now almost deified Lord Macdonald and the Government. As it is obviously impossible for the Government to send one of their Members away from this House, and as they have now found in Lord Macdonald—we all remember him as the former hon. Member for Ince, and a most charming and most able personality—an Ambassador at large, for goodness' sake let them vouchsafe to the Committee a few of the telegrams which he or his advisers must have sent home on this occasion.
  2176
  Let the Government tell us, for example, whether the Sydney Conference has faced up to any of the real problems of South-East Asia, and whether there was anything in these reports, which the Foreign Secretary pooh-poohed and pushed on one side, about disagreements—we only hope that that may be the case. Let them tell us whether the Americans are standing outside the South-East Asian scene and hoping eventually, with their great generosity, to make grants and to give financial help, or whether there is an integrated plan, such as that in the Middle East supply centre during the war, for the various nations involved to understand the liabilities, to understand what assets are available, and above all, to understand to which corner of this immense theatre the aid will go first, and what priorities are to be established. Let us have some information of that sort so as to give some indication, leaving aside the near or the long-term aspect, as to whether the Sydney Conference has had a practical effect upon the problem of the South-East Asian region.
  The Foreign Secretary said that Australia might well play, in that part of the world, the part that Canada has played, and I hope will play, in the North Atlantic sector. I know that Cecil Rhodes used to say that Canada would be the keystone of the arch of empire in the north, and it is indeed refreshing to have noted the initiative taken by Mr. Spender and the present Australian Government at the Sydney Conference. Is this initiative going to be seized and carried forward with enthusiasm that it deserves by the Government? Perhaps the Minister of State will tell us.
  I, personally, have always been, and shall always be, interested in another great nation member of the Commonwealth, namely, India. As I see it, the problem of South-East Asia ranges right away from Pakistan and India and right through and round to the Far East and Japan. This Debate has, therefore, an immense scope, and the problem seems to me to be how to encourage the growth of nationality and to establish the budding nationalism and, at the same time, to fuse all this into a greater whole. Unlike Western Europe, the operation has all to be done at once. We have not only to encourage the growth of nationalism and see that it is growing in the right ways but to

  2177
  fuse that into a greater whole, almost before the nationalism has had time to grow. Therefore, it is an immensely greater effort than we have to face in Western Europe at the present time. That is why we would like a little more information, why we would like a little more colour, a little more life, and a little more "kick" on the subject of the Sydney Conference and what it achieved.
  The importance I see in the Eastern theatre is that we should associate closely the new Eastern Dominions of Pakistan, India, and Ceylon and the West. I read Mr. Nehru's last speech in the Indian Parliament on 17th March last and he said that the resurgence of Asia was "the biggest thing in modern history." He reminded us that after gaining her independence, the United States of America took great care not to get herself involved in undue commitments because she was a growing nation. Mr. Nehru is setting out on a tour of the South-East Asian regions and I can only hope that from his experience of that tour he will see that it is essential for India to move faster than the young United States did immediately after her independence, because the problems which India has to face today are even more complex and difficult than those which the early United States had to face.
  The Pax Britannica upon which the whole of that region rested is no longer existing in the same sense. India is, in many ways, the long arm stretching out of the Imperial policy which has in the past done so much good to mankind, but an arm which is quite independent and which we realise is quite independent. Sir Ramaswami Mudaliar, whom many of us know, the representative of India at Sydney, told us that colonialism of the old-fashioned kind cannot survive. I would say to Sir Ramaswami Mudaliar that the real danger today is not colonialism in the old sense but Soviet colonialism in the modern sense. It is that Soviet colonialism that has to be fought in a more virile and active way than was suggested, for example, in the speech of the hon. Member for Aston (Mr. Wyatt). I fully understand the principles which guide his conduct and his remarks, but I think it is essential to face the fact that unless Malaya and Indo-China put up a stand and defeat Soviet colonialism, the
  2178
  peoples of those countries will be subjected to greater indignities than they ever think they have suffered in the past.
  Sir Ramaswami Mudaliar finished his speech at Sydney by saying that the Indians would approach the whole problem by a human approach. That is the approach we can adopt and which we have to adopt in the face of the slant put on this problem by the "Daily Worker," and to some extent by some hon. Members opposite, that we are simply in the South-East Asian region to save the capitalist gains and riches there. I think the picture is exactly opposite to that painted by Goldsmith when he said:
  "Where wealth accumulates, and men decay."
  What is happening is that men are accumulating and wealth decaying.
  If we look round on the whole of the South-East Asian theatre we find that Japan's population is increasing to 100 millions and that, with demographic problems of an extreme severity in Indo-China, makes the whole problem exactly opposite to the famous adage of Goldsmith. This problem of population raises the whole question of food supplies and hon. Members must remember that unless we can deal with the food problem through the Sydney machinery or in another way, we shall be faced with the very severe problem of famine, which is almost certain, at any rate, to take place in China, judging from the reports I receive, and will quite likely cover other parts of that area. There is a need, therefore, for a synthesis between the human and the purely economic approach.
  The next point I wish to get quite clear is that this area, for which many of our young men are at present fighting in Malaya, is not only one of great human interest and great political interest. We must face up to the fact that the standard of living of the average British worker depends as much on exploiting, developing and saving the resources of South-East Asia as it does in developing and saving our coal here or destroying the whole thesis of the hon. Member who has recently gained notoriety by attacking our agricultural policy. The riches of South-East Asia are vital to the economy of the British and sterling group and to the economy of the world.

  2179
  To put it in simple terms, to anyone who may be listening to this Debate and who is not particularly interested in South-East Asia, there is not a leaf of tea grown within 6,000 miles of London. Our tea resources come entirely from the area which, broadly, we are considering today. Malaya is the chief dollar-earning country in the Empire. Its exports to the United States exceeded the total exports from the United Kingdom to the United States last year. The exports consisted almost entirely of rubber and tin. Malaya being the greatest rubber-producing area and providing half the world's supply. Without these commodities, it would be impossible to balance the economy of the sterling area or save the economy of this small island.
  Therefore, let us dismiss, once and for all, the evil attacks upon our policy which claim that we on this side of the Committee or anyone who stands up for the saving of the riches or resources of this area, are doing it for what may be described as old-fashioned reasons. Not at all. We are doing it for our economy and for the standard of living of our people.
  The position in Malaya was referred to in almost sufficient detail by my right hon. Friend the Member for Warwick and Leamington. Indeed, after hearing his speech, I was in some doubt whether I could add anything at the conclusion of this Debate. I should, however, like to add these two thoughts about action in Malaya. The Foreign Secretary said that the Cabinet had never failed to support any suggestion put forward for increased action or increased supplies in Malaya. All I can say is that that is far too negative an attitude for us on this side of the Committee If the Government are sitting back in a sort of contented manner, waiting for schemes to be put up to them and then graciously deigning to let them go through, that is not the spirit we want to see in the conduct of this campaign in Malaya. There should be a far more positive and active attitude to this question than is shown today.
  The Foreign Secretary gave us no description of General Briggs's views on this matter. Perhaps the Minister of State can do so. I understand it to be the view of General Briggs that there should be administrative cadres forming a network
  2180
  over the whole Malayan peninsula, once areas have been gained by military action, so that they do not fall back into the jungle. If that is a sensible view, as I believe it to be, let us hear that the Government intend to second men from the Malayan Civil Service who are in non-vital jobs and utilise men from outside, some of those for whom the hon. Member for Aston, I and others have been fighting, ex-members of the Indian Civil and Police Services. The administration in Malaya has to be increased and this network advanced over the whole peninsula, if we are to consolidate the gains made by our gallant men.
  The hon. Member for Aston referred to a change of central control. He appeared to think that politicians should be sent out to control the situation, but he also appeared to be very dissatisfied with any politicians which his own Government have ever sent abroad. He therefore turned to these benches and asked for recruits. He qualified his observations by saying he wanted only half-time politicians. I can only suggest that he offers himself and goes out to this area to assist in administration. Seriously, I would draw the attention of the Committee to the remarks made by a distinguished ex-Commissioner-General of that area on the situation in Malaya and suggest that any danger of this area falling between two stools, between the Foreign Office and the Colonial Office and the different types of administration in this country, must be avoided. There must be no great diversity of authority at the top.
  On the subject of China, I will only add this to the remarks made by my right hon. Friend the Member for Warwick and Leamington. One hon. Member pointed out far more clearly than we can do, the immense muddle in which the Government have got themselves over this question. It is clear that they did not think out the total results of their policy. It is quite clear that they did not think out the results of this recognition on their policy at Lake Success. It is quite clear that by their abstention at Lake Success they have been playing a sort of waiting game and a game of going all out in China on the lines of recognition. Of course, their diplomacy has been found out by Mao Tse-tung and his fellows in China and the fact is that

  2181
  the Government should have realised, when they adopted the policy of recognition, the consequences that would result both in Formosa with Chiang Kai-shek and at Lake Success especially, at Hong Kong, in Malaya and elsewhere. They did not think out these things ahead, and now they are hoist with their own petard.
  What are we to do about it now? This country, there is no doubt, has immense commercial interests at stake and it is important that this Committee at least should let the Chinese people know that this action of recognition was taken as an honourable step by the British Government on behalf of the British people. It is most important that the Chinese should realise that our integrity in this matter is above question. But do not let the Government further aggravate the situation by any further concessions they may make in response to the blackmail to which they are undoubtedly being subjected from Russia.
  One matter which has come quite clearly out of this Debate is the control of Russia, not only in the China situation, but throughout the whole area. It is clear that Russian influence, for example, has started Sino-Soviet agreements with joint stock companies in Sinkiang. Russian technicians, literally in thousands, are reported in Shanghai and the Russians, as the Foreign Secretary rather disarmingly remarked, are now causing the Chinese to speak with their voice.
  Let us remember that in any action we may take in the future in China we should not make things worse by further muddle, but realise that we are dealing with the Kremlin in that area as much as we are in the West. The chairman of the China Association has stated that what is at stake in Shanghai is gradually withering. He wonders whether a further transfusion of funds to preserve those assets there is justified. My answer to him and to the Government is that we should keep up our courage in these matters. Let us be clear that whatever assets there are, it is never worth departing from a moral position in defending them. That, I am sure, will serve not only those who have so wisely husbanded our resources in the Far East but, also, will be a source of comfort to Government policy as a whole.
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  I wish to press the Government to give more information about Japan. We have had Debates in this House and in Committee for nearly five years, without obtaining any information at all about the policy of the Government in Japan. The Japanese situation is a very peculiar one. Under the umbrella of the MacArthur régime there is no doubt that the Japanese are developing their strength to an enormous extent. There is no doubt that they are, for example, now producing 93 per cent. on average of what they produced between 1932 and 1938. I agree that they have fewer cotton spindles than they had, but partly as the result of the Anglo-American Commission they are to be allowed another half a million spindles. Japanese trade in the world is steadily increasing and hon. Members representing Lancashire constituencies want to know whether anything can be done, in the first place, about the wage situation in Japan, to which reference has been made by the secretary of the textiles workers; or whether there is any opportunity of getting together some export price-supporting agreement, by the modification of postwar anti-trust and anti-monopoly laws.
  I ask the hon. Gentleman those two questions to see if, in dealing with Japan, a practical aspect will be taken and if he will give an answer to the question put by my right hon. Friend as to whether the British have a policy in Japan or whether they do not like to state their policy because they do not want to offend somebody else. If the latter is the case, they ought to think again and endeavour to produce a policy which will interest us and which will be to the benefit of the whole area.
  My time is up. The hon. Gentleman wants to have time to reply. I will, therefore, sum up by saying that we have desired to hear of more positive action in regard to this area. We have desired to see a more virile approach to the problem of this area. Had the Government had the wisdom to get together an Empire Economic Conference at an earlier date, and to resolve our own Empire difficulties first, they might have been able to give us a better report from the Sydney Conference and to instil more courage into our hearts in facing; the problems that lie ahead.
  9.31 p.m.
  The Minister of State (Mr. Younger): Perhaps before I reply to this Debate I might be allowed to add, on behalf of all of us on this side of the Committee, my condolences, in the same way as the right hon. Gentleman the Member for Saffron Walden (Mr. R. A. Butler) did, to the relatives of Field-Marshal Lord Wavell, who has just passed away, and to pay my tribute to his great services to this country in the Eastern theatre as well as in many other theatres of command.
  We have had a very interesting Debate on an extremely wide subject. The speeches have covered a large number of different territories; and some of the speeches have covered them in detail. I have been asked a great many questions and, in the time available to me, I want to answer as many of them as I can; but inevitably I cannot deal with all the lesser questions which have been mentioned in the speeches of hon. Members. It has seemed to me at some moments in the Debate, particularly when hon. Members were deploring the unfortunate situation in certain parts of this area and implying that His Majesty's Government were at fault in the way they were handling it, that hon. Members have sometimes underestimated the immensity of the problem which is covered by today's Debate. They have spoken as though we were merely maladministering some territory over which we were in full control.
  Therefore, I make no apology in starting my remarks tonight with a few general observations which I think must be kept in mind when one is judging the particular problem of any part of this area. I think it was my hon. Friend the Member for Norwich, North (Mr. Paton), who pointed out that in all this area there have been, not just in the last months or recent years but over 25 years, convulsions and changes such as dwarf anything which has happened in Europe even during the last war. An area which was once socially static and backward suddenly awoke and began to resent European intervention which had gone on for 100 years or more in a more or less peaceful and advantageous manner. A wave of nationalism and revolutionary fervour swept through the area. It was there even before the last war, in varying degrees, in all the major sections
  2184
  of the area we have discussed—Japan, China, South-East Asia.
  All this has occurred against a background of extremely low living standards and a technical backwardness which has been very great in all parts of the area, with the one exception of Japan. Japan has been something of a portent in this part of the world because of its great technical and industrial development and the immense contrast, therefore, between it and its neighbours. It had great population pressure which led to a form of imperialistic expansion which brought it into conflict with the mainland of the Continent and in turn stimulated nationalism and the process of change in China which was already going on.
  Therefore, even without the immense results of the recent war, I think it would undoubtedly have been necessary for the Western world to re-orientate its whole attitude towards the East. With the war, as the hon. Member for Paddington, South (Mr. S. de Chair) pointed out, Europeans were driven by an Eastern people from a great part of this area, with consequent loss of prestige. The attempted new order of the Japanese crashed, but it did not leave conditions in which the old order could be restored, and the situation which had to be faced at the end of the war was something in the nature of a vacuum—the complete collapse of the old system, the collapse of the new system of the Japanese—and what next? It might have been almost anything.
  I think the Committee will agree that this situation had in it all the elements of a major division and of increasing estrangement betwen the East and the West, and the possibility that a hard and fast barrier might arise between the new Asia and the West, whose presence in many respects it had resented. Such a development would, in the first place, have undone the considerable technical progress which had been achieved during the 100 years or so when Europeans had been going to this area and would have wiped out the whole legacy of incipient democratic feeling which had begun to take root in certain parts of that area.
  Moreover, from the point of view of a country like ourselves, which subscribes to the policies outlined in the Charter of the United Nations, such a division, if it were to become complete, would

  2185
  render entirely impossible the sort of rational adjustment of world resources to world markets, the sort of collaboration between industrially advanced countries and technically backward countries, and the sort of world attempt to raise living standards and productivity which was envisaged in the Charter. For all those reasons, therefore, an entirely fresh view had to be taken of this great problem.
  I think that in the last four or five years no one has done more than this country to cause a shift in Western opinion in its attitude towards the East—in recognising the new nationalism more quickly than perhaps anybody else, in giving perhaps more help than anyone else has done to the establishment of new national States and new national Governments and in seizing the unique opportunity offered by a Commonwealth which contains within it Pacific Powers, Asian Powers and Powers in the West. No one else was so well placed as was Britain to maintain, despite the difficulties to which I have referred, East and West relations and friendship and to prevent the two worlds from splitting apart.
  I think it is fundamental to realise that in our policies from now onwards the destiny of the East can only be satisfactorily settled if the Asian countries themselves take a great share in the initiative. We can do a great deal. We have accumulated experience, we have many links with the East, but it is very largely from the Asian countries themselves that initiatives must come if this very disturbing and very dangerous situation is to settle down and if living standards, productivity and so on are not to suffer even more seriously than they have suffered during and since the war.
  In all the remarks I have made so far, I have deliberately not referred to Communism. I have not referred to it so far because I think it is important for us to realise that a great part of the problem which we face in this area, though aggravated by the Communist menace, would in fact exist even if there were not world Communism, even if there were not the cold war, and even if the policies of the Soviet Union were quite different from what, in fact, they have been.
  Having made that point, I do not want to under-estimate the gravity of the Communist menace which is doing so much to add to the difficulties of the very
  2186
  difficult transition and to put a very great extra burden on countries like ourselves which have great responsibilities, in some cases direct responsibilities for administration, within the area. In South-East Asia, in particular, the Communist menace threatens what is in many parts of the area a very promising democratic development of new, independent States. It is hindering the progress towards self-government of others not yet independent. We cannot emphasise too strongly that it is doing no service to any of these areas, or to any of the nationalist movements, to allow them to fall under a new foreign domination, and in that respect I subscribe to what the right hon. Member for Saffron Walden pointed out, that it is not only the old colonialism, but the new that many of these peoples have to fear.
  I now wish to come to the main questions put to me. Obviously, China is one of the central problems within this area. The right hon. Member for Saffron Walden said that in recognising China we did not think out the consequences. At a later stage, he appealed to us not to make concessions or to give way to blackmail. I am not sure what he was referring to in those last remarks. My right hon. Friend indicated quite clearly that there has been no question of concessions and that there will be none, and as for blackmail, I do not know to what that refers.
  As regards the point about not thinking out the policy, that again, I think, is unfair and incorrect. It is, of course, true—and it was realised that it would be so at the time—that recognition has carried with it many inconveniences. When we recognised, we knew that not all other countries were recognising, and that the United States, in particular, were not recognising. Whichever course we took, there were bound to be grave inconveniences, but because they have occurred, it does not mean that we had not thought them out and were not prepared to face them. We thought, and still think, that the recognition of the Chinese People's Government, which had, in fact, gained complete and, as far as one can judge for any length of time, irrevocable control of this vast area and these vast populations, was really no more than the recognition of a fact which we could not help, and that it was the only way in which we could avoid creating a complete

  2187
  barrier around China—a complete blackout between China and the rest of the world.
  Mr. Gammans: Can the hon. Gentleman assure the House that the recognition of a Communist China was entirely supported by the administration in Malaya?
  Mr. Younger: They were fully consulted on this, and it was supported by the administration in Malaya. Of course, there are possible dangers in relation to Malaya, and we propose to face them if they arise, but they have not so far arisen. I have dealt with this point in a previous Debate. It is, of course, probably true that these successes of the Communists in China have aggravated the situation in Malaya and in other parts of South-East Asia, but I would be very surprised if the act of recognition by some Governments had much to do with it.
  The timing of the recognition has also, to some extent, been criticised. On that I can do little more than repeat the reasons given by my right hon. Friend. There had been very long consultations with all members of the Commonwealth before the Colombo Conference. It was clear before the Colombo Conference that if a decision was to be taken at all in the near future, it would have to be taken by the individual members of the Commonwealth. There was no possibility of an immediate agreement at that time if it had been left over until the conference. In fact, certain members of the Commonwealth—India and Pakistan—had recognised before us, and as we considered that, according to international law and the actual situation in China, recognition was fully due, I think it was quite right that we should have granted recognition in the way we did.
  It is true that we have not yet full diplomatic relations, but it is also true that contacts between our representative and the Chinese Government do exist, and that discussions do take place. In fact, at the present time our representative is approaching the Chinese Government and making representation—we cannot say with what results—on behalf of our interests in China which have been suffering so severely. Whatever else one may say about it, it is, I think, clear that if we had not recognised and if we had no representative in China, the position of
  2188
  our interests certainly could not be better; it may be that they might be worse; nobody can tell; that is hypothetical. At any rate, it seems to us that it is an advantage that we should have a representative there, and, as my right hon. Friend pointed out in his opening speech, we are in fact looking after American interests in so far as we can, which appears to indicate that at any rate they, too, attach a certain value to our having a representative in that capital.
  As regards China and the United Nations, there is not much that I can add to what my right hon. Friend said. The right hon. Member for Warwick and Leamington (Mr. Eden) and the hon. Member for Merioneth (Mr. Emrys Roberts) referred to a statement in the Press which had indicated that there had been some kind of decision at the tripartite talks that nothing should be done. That, I can assure the Committee, is not correct. There was an exchange of views; full agreement upon the problem was not reached, but there was no restriction upon the action of those taking part in the talks. In fact, as my right hon. Friend made clear, we have been anxious to see this matter solved; we have been trying to get support in the relevant bodies of the United Nations for a course that would bring the People's Government into the United Nations, and there is no restriction upon our activities in that regard during the coming period.
  I might perhaps now turn to some of the problems of South-East Asia. We have had a number of Debates about various parts of this area fairly recently We have had two Debates on Burma, and I do not think there is really anything further that I can add to what my right hon. Friend said earlier on, either generally on the situation in Burma, or with regard to the Karens. My right hon. Friend made it clear that what he was saying was what he had gathered from his conversations with the Burmese Prime Minister. It is really not a matter with which I can deal, to say exactly what contacts exist between the Burma Government and the Karens. All I can assure the Committee is that our information has been that contacts do exist, and my right hon. Friend has urged that there should be reasonableness on both sides, not least on the side of the Karens, to lead to an agreement.

  2189
  Some of my hon. Friends said some rather harsh things about Indo-China. I think myself that those speeches greatly under-estimated the difficulties which faced our French friends there. They also greatly under-estimated the Communist orientation of Ho Chi-minh, which I thought was fairly clear from the very start. I think it is, to say the least of it, doubtful whether any handling of any kind of Ho Chi-minh by the French Government could have prevented him from adopting the fully Communist attitude which he now adopts. Whatever mistakes may have been made—and no doubt mistakes have been made—I think that our French friends have gone a good long way to putting them right in the course of the last year. I think all the critics ended their speeches by saying "We must help the French." All I can say is that I thought they went a very funny way about it. I certainly think that from our point of view it would be no solution at all if the French were, either voluntarily or under compulsion, to go out. The consequences in Malaya, in Burma and elsewhere in the area have already been made clear by hon. Members on both sides of the Committee, and I am entirely in agreement with what was said on that subject.
  Much has been said about Malaya, on which we have had a Debate fairly recently. As everybody knows, there has been an increase in the activity of the Communists. I can only repeat the assurance that the military force which is considered necessary by the military advisers is given there, and also the administrative powers to which the hon. Member for Bury and Radcliffe (Mr. W. Fletcher) referred. There is no lack of powers available to the Government. The question of martial law is a different question, and it is, I think, the considered opinion of most people that martial law would add nothing to the powers which already exist, but would in fact put fresh burdens upon the military which at the present time they are not required to shoulder, with the consequence that they are more free than they would be under martial law to carry out their military duties.
  I would point out that this Malayan problem is not purely military. It is the opinion of General Briggs and many other people that this is as much an administrative as a military problem. The popula-
  2190
  tion of large areas of this country is Chinese-speaking, and I think I am right in saying that these areas were not administered at all, or, if they were, only very lightly, before the war, and there is a great problem in recruiting and setting up administrative and police services composed of a sufficient number of people speaking Chinese to be able to deal with this problem.
  Mr. W. Fletcher Mr. W. Fletcher rose——
  Mr. Younger: I cannot give way, as I have only a few minutes left. I would emphasise that, although much has been said about the need for vigour and military support and equipment and all the rest of it, and while we subscribe to that, we must appreciate that it is only a part, and perhaps not even the greater part, of the problem of getting a settlement in Malaya.
  There were some very unjustified attacks unsupported by evidence against the Governor of the Federation of Malaya and the Governor of Singapore and other civil servants engaged there. I think there has been a considerable measure of progress in Malaya. The critics ignored the division between the population of Malays and Chinese and also ignored the strong support given by nearly all the Malays and by an increasing number of Chinese.
  On the Sydney Conference, which was one outcome of the Colombo Conference, there are two principal points that I should like to make. The first is that the occurrence of a conference in this area is something new, and something which has created a great impression in the area. The second thing is that it is a collective Commonwealth effort, and an initiative which is very much to be welcomed, and probably is the first occasion on which a serious attempt has been made to study not merely short-term measures of relief and aid, but also to get a solid basis for long-term development.
  The hon. Gentleman is quite right in thinking that the telegraphic system of the Foreign Office is still in existence, and perhaps I might be allowed to give a very brief summary of the resolutions which we have received, and which, I hope, will satisfy him. The main recommendations were these. A realistic programme should

  2191
  be prepared covering a six-year period to June, 1957, that programme to be submitted by 1st September. Preparations are being made for that in questionnaires, and so on, in the hope that we may get comparable information from all the territories concerned. In addition, there was a recommendation for a Commonwealth technical assistance scheme being established at once at an estimated cost of£8 million for three years, and all the countries at the Conferences are likely to contribute to that in various proportions. Assistance would be available to any country in the area, including the British colonial territory of Malaya.
  There is a Commonwealth bureau to be set up in Colombo immediately to act as a clearing house; that is to say, for putting the people requiring technical assistance in touch with members of the group who can best supply it. It is not an elaborate organisation, and it is the only immediate standing organisation which was set up at this conference. The question of the association of other non-Commonwealth countries is being dealt with at once, and invitations have been issued to the non-Commonwealth countries concerned.
  I have been asked particularly about the association of the United States with this. I think that the Committee are probably aware, in general terms, of what the attitude of the United States has been to this. We have previously stated in the House that they have shown an interest in this area, and perhaps the best thing I can do is to quote two sentences from the American Secretary of State's speech on the subject on 15th March:
  "American assistance can be effective in South-East Asia as elsewhere, when it is the missing component in a problem which might otherwise be solved. When the will and the determination exist, when the people are behind their Government, American help may be the indispensible element required to produce those results."
  I think that makes it clear, this concept of the missing component, that in the view of the United States it is for those concerned with the area first to see exactly what the needs are and to do what they can with them, and then, if that is done, there is an indication—I put it no higher—that if the United States are convinced that the work has been truly accomplished, they may be prepared to
  2192
  associate themselves with the task of finding the missing component. I have not the time to say anything further about the Sydney Conference, but I hope that will give the right hon. Gentleman some of the information for which he asked.
  The other sequel to the Colombo Conference is related to the preparation of a peace treaty with Japan. I think the right hon. Gentleman appreciates the position I am in and that there is nothing very much I can tell the Committee on this problem. We have made it quite clear to all concerned, and I think we are in agreement with all the other members of the Commonwealth, that we think a Japanese peace treaty should be achieved as soon as it can be achieved.
  The right hon. Gentleman indicated that he thought the difficulties were very great—the difficulties of procedure, what sort of conference should be summoned, who is to participate, and so on. My right hon. Friend pointed out that the United States have very special responsibilities in the matter, that the United States must have very special weight, and he indicated that the United States is in some difficulty about precisely what policy should be pursued. We are in discussion on this matter with them, but at the moment I am afraid I cannot take it any further than that.
  As regards Japanese competition, I was asked to deal particularly with the Cotton Textile Mission. That is a non-Governmental mission, and I am afraid that as yet I have no information.
  Mr. R. A. Butler: I will send the hon. Member a copy.
  Mr. Younger: I would point out that this is an industrial mission and not a mission of an official nature.
  There is very little I can say on Japanese competition beyond what was said in a recent Debate by the Parliamentary Secretary to the Board of Trade. It is a matter which will have to be dealt with in any negotiations, whether for a peace treaty or not, with Japan. The problem has to be seen in the light of the Far Eastern situation, the fact that Japan is the only highly industrialised nation in that area and that there is a desire for Japanese goods in the Far East. We hope that in these negotiations with Japan, or the occupying Power we can

  2193
  get safeguards against the malpractices familiar before the war. I entirely agree about the desirability of bringing Japan into international agreements. An Eastern Schuman Plan has been quoted as a possibility, which is the type of way these problems might be dealt with.
  My time is up, and I hope I have dealt in part with most of the questions which have been raised. This is an immense problem, to which there is clearly no quick or easy solution. We think that our policy in China in the long run will prove to be a wise one, and that in South-East Asia we are shouldering our responsibilities to the limit of our powers. We believe that we are gaining increasing good will among the people there as our attitude is appreciated. In the light of the political developments I have referred to, we believe that this may well prove to be the deciding factor.
  Major Tufton Beamish: Can the Under-Secretary reply to the point made by my hon. and gallant Friend the Member for Carshalton (Brigadier Head) about political and psychological warfare in the Far East?
  Mr. Younger: The hon. and gallant Member went very wide and referred to our services all over the world. As far as Malaya is concerned, I can assure him that there is a considerable organisation and that a considerable amount of propaganda has been put out. The question whether that is the best propaganda must be a matter of opinion, but the organisation is there and the propaganda is being put out.
  It being Ten o'Clock, The CHAIRMAN left the Chair to report Progress and ask leave to sit again.
  Committee report Progress; to sit again Tomorrow.

  BACON (RATIONING) ORDER
  10.0 p.m.
  Mr. Bing: On a point of order, Mr. Speaker. I should like to raise a matter in regard to the Motion on the Order Paper in the name of the hon. Member for Eastbourne (Mr. C. S. Taylor), the hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) and other hon. Gentlemen including myself, which reads
  "That an humble Address be presented to His Majesty, praying that the Order, dated 17th April, 1950, entitled the Bacon (Rationing) (Amendment No. 2) Order, 1950 (S.I., 1950, No. 618), a copy of which was laid before this House on 17th April, be annulled."
  In this Motion there is a grave discourtesy to the House and to yourself, Mr. Speaker. Clearly this is a complete task of supererogation, since it asks for the annulment of an Order which has already been annulled. The point which I desire to raise is whether there are any means of giving notice to the House at an earlier stage when a Prayer of this sort raises something which has already been decided.
  Mr. Boyd-Carpenter: Further to that point of order. I would seek your guidance, Mr. Speaker, for the future in regard to any similar Order of the Ministry of Food with reference to any Motion which may appear on the Order Paper. The Motion on the Order Paper today was tabled on 17th May, and I am now informed that subsequent to the tabling of that Motion an Order has been tabled which, while revoking the Order against which this Motion is Praying, made continuous the point of substance—the reduction of the bacon ration from 5 ounces to 4 ounces.
  I seek your guidance, Mr. Speaker, on a point which may be of some constitutional importance. [Laughter.] I hope hon. Members opposite who may before very long find themselves on these benches, will appreciate this point of substance. It is to seek your guidance whether there is any protection in the Rules of this House against the action of a Ministry, after a Motion has been tabled to annul one of their Orders, tabling another which, while preserving the facts, prevents the original Motion from being debated. Further, is there any protection against that procedure being followed again and again, in order to deny

  2195
  to this House the control which it ought to have under the Statutory Instruments Act on delegated legislation.
  Sir Herbert Williams: Order 618 was signed on 17th April. That Order was covered by the Motion, which has been upon the Order Paper for a week. That has the effect of reducing the bacon ration from 5 ounces to 4. As my hon. Friend said, notice of it was given last week. Then on 12th May the Ministry of Food made a new Order, which reaffirmed the bacon ration of 4 ounces and brought in certain other matters, but did not repeal Statutory Instrument No. 618, so that both Instruments ask for the same thing. That Instrument refers to the principal Order, and was signed on 12th May. The principal Order was signed on 19th May, not by the Minister but by the Parliamentary Secretary. On 12th May the Minister passed Order No. 784 which says
  "Bacon is hereby declared to be rationed for the purposes of the principal Order."
  That principal Order is Order No. 1950 C, Statutory Instrument No. 790. Now, No. 790 was not signed till seven days later. We have heard a bit about retrospective legislation but this was anticipatory. [Laughter.] Hon. Gentlemen opposite may laugh, but we are face to face with a matter of constitutional importance. Hon. Gentlemen are very stupid to laugh at it. In the totalitarian States they make laws by decree, and these Orders are decrees in the Continental sense. If one decree can refer to a decree which is made seven days later, we are face to face with a major constitutional issue. If, on the day we expect to debate an Order we find that we cannot have a Debate because—[Interruption.] If hon. Gentlemen go to the Vote Office they can get Statutory Instrument No. 790. They will find, in Regulation 32 (1):
  "The Food Rationing Orders, 1949, (hereinafter referred to as 'the 1949 Orders'), are hereby revoked."
  Then there are all kinds of things. I find that the Bacon (Rationing) (Amendment No. 2) Order, 1950, which is Statutory Instrument 790 was available to hon. Members only on Monday. Unless they got this document and read it very carefully, and had seen the footnote, they would not have realised that the
  2196
  Order against which we were supposed to be praying tonight was repealed. That was done by a footnote in an Order available in the Vote Office only on Monday.
  I think that is a complete abuse of constitutional procedure. The Supplies and Services (Transitional Powers) Act, 1947, and the Statutory Instruments Act which came into operation on 1st January, 1947, were designed to protect the liberty of the subject, even including the liberty of Socialist subjects, although they do not quite understand it. We are face to face with a major constitutional issue in this Order.
  Mr. Speaker: As far as I am concerned the position is clear. The Order which it is sought to pray against now is dead. Therefore we cannot pray against it. Whether the methods of the Ministry in cancelling the Order are right or wrong is not a matter for me.

  TRANSPORT, SCOTLAND
  Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Whiteley.]
  10.8 p.m.
  Mr. Grimond: In raising the problems of transport in the Highlands and Islands of Scotland, I start from the belief that the whole of that great area north of the Clyde and the Forth which stretches up to the Flugga light in the extreme North of Shetland and out to the Western Isles, is a land of opportunity. I reject absolutely the view that it is a tiresome legacy from a bygone age and that it is a land incapable of supporting a population on a modern standard of living. We have only to look at Orkney to see how untrue that is.
  I believe that life in the Highlands and Islands can be a good life. The traditions of the Highlands and Islands are very valuable today. With the help of modern engineering, modern science and modern practices in agriculture, it can also be a very prosperous life, The North should not only be able to support a very much larger population than today, double its present size, but should be able to make a bigger contribution to our wealth and food than it does at present.
  If we are to make the most of the Highlands and Islands we must have help

  2197
  from the Government. That will be nothing new. The Government are already putting a great deal of money into the area as it is into many other areas of Britain by way of subsidy and grant, but not only must they help but their help must be according to a coherent plan or, perhaps I should say plans, because within that area there are great differences in climate, soil and tradition and in the work by which the people get their living. They must recognise the peculiar characteristics of the North of Scotland and the great distances that have to be covered, and they must recognise that in some respects it resembles virgin territory. Like all such territory it requires money to develop it.
  I stress these points because they are fundamental to my argument. I hope that it is common ground that we want to see a large and prosperous population in the North. I believe that it will also be common ground that this will require planning, and good planning—planning adapted to the special conditions of the country. Further, I believe that it is the policy of the Government to disperse industry. If that is accepted, the problems of transport and the problems raised by the very high rates on freight in this area are fundamental and must be tackled in any efficient plan for its future.
  Crofting, by which a large proportion of the population gets its living, has changed its nature. The crofter can no longer live off his crops. He is no longer a self-sufficient human being. He must trade. He must buy and sell in the South. The same is true of the farmer, the knitter, the weaver, and everyone who lives in that area. The ordinary householder and his wife have to meet all the additional charges which are levied because of the high rate of freight charges in and out of that area. If we seek to attract light industries there, they are deterred from coming to the North because of the expense of reaching the southern markets.
  There have been various plans and there are, I know, various plans in preparation for those areas, but all these are now to be wasted if we do not face up to the question of transport and freight charges. Tonight, I do not expect to get a detailed answer from the Minister on the various problems which are raised but I should like to lay the matter before him
  2198
  and I hope that he will be able to give us an indication of his thinking on it.
  I should like to lay the matter before him under three heads. I want, first of all, to give him some examples of freight charges. I will, first, take coal. Admittedly, most of the coal is brought by sea, but a certain amount of it is brought to the area by rail. The charge for a ton of coal brought from the midlands of England to Aberdeen is now 36s. 9d. and to Inverness about 38s. On top of that, in my constituency we have to pay 30s. freight to Kirkwall and 35s. from Aberdeen to Lerwick. If we live in the Outer Isles of Orkney and Shetland—no doubt the same thing applies in the constituency of the hon. Gentleman the Member for Western Isles (Mr. M. MacMillan)—we have to pay additional freight charges of 18s. 3d. to the North Isles of Orkney and 23s. 2d. to the North Isles of Shetland.
  Let us take fertilisers as another example. The freight from London to Mallaig is about 82s. 11d. per ton and to Wick about 105s. a ton or by sea from Leith to Kirkwall about£1 10s. 8d. per ton. Again, we have an additional 18s. 3d. per ton to the North Isles of Orkney and 26s. 8d. to the North Isles of Shetland. The figure for mixed groceries—it is much higher if they are sent by passenger train—is over£14 per ton from London to Aberdeen and about£18 to Wick.
  Take fish. From Aberdeen to London the freight is£8 14s. 7d. on fresh fish and from Mallaig even more—about£14. From all the outer islands, from all the small islands of the Western Isles of Orkney and Shetland, additional rates have to be paid. Only today I had a letter drawing attention to the extra cost incurred by taking it from a remote township in an island of Shetland down to the pier.
  These, of course, are only examples but they can be duplicated in every commodity bought or sold in that area. Petrol now costs 3s. 7d. a gallon in the Island of Unst in Shetland, and if we hope to increase poultry keeping, as indeed we do, then we are faced with freight rates of 55s. for bringing in feedingstuffs from Aberdeen up to the North Isles of Shetland. The same burden faces the tourist industry. Another small point is that there has been a tendency in recent years

  2199
  to close down a lot of the services to the smaller ports and piers in the North, which has the effect of draining off wealth from these communities—places like Stromness in Orkney.
  In quoting these figures, which can be multiplied indefinitely, I am not concerned tonight with blaming anyone. They are largely due to the geographical nature of the islands, and we all know that railways and shipping lines have had to face great increases in their costs. I am told by the North of Scotland Shipping Company that their costs have risen by 300 per cent. since before the war. What I am concerned to do is to stress the tremendous burden which this lays on everybody who conducts ordinary life or trade in these areas. If there is any question of setting up a development area, that is one of the great handicaps under which any industry which comes to that area must suffer. It will be difficult to build up the population, or to maintain the present population, in order to bring in new ones as long as that situation exists.
  I believe that the ultimate and only completely satisfactory solution is to have a flat rate for freight on the lines of the parcel post. If that is considered Utopian at the present moment I suggest that some preferential rates for long-distance haulage must be given. I believe that preferential rates are given on a considerable scale in Sweden today. I would also draw the attention of the Minister to the fact that for some commodities—for instance, fat cattle from Kirkwall to Aberdeen—a flat rate is paid, and, therefore, I suggest there is nothing in principle to prevent similar flat rates being brought in at least for commodities like coal, fish, and some other agricultural products.
  The second subject I want to mention is that of roads because they are of the greatest importance to all the crofting counties and, indeed, all the counties in the North. Railways, after all, are few and, in some counties, non-existent. These counties find the greatest difficulty in maintaing their roads because their rateable value is low. Even if they can get a grant from the Ministry of Agriculture, which covers 75 per cent. or 80 per cent. of the cost, it is almost impossible to raise the balance locally. I want to ask the Minister whether there is any
  2200
  chance that he can give special consideration to areas like my own constituency, or like the constituency of the Western Isles, where we have no trunk roads and where, therefore, the whole burden of the roads falls on the local authorities. None is taken over by the central Government.
  At present the grants for roads in Shetland, for instance, are quite inadequate. They allow only of some repair, and many roads in my own constituency, for instance in Yell and Whalsay, need fundamental reconstruction. If they are not reconstructed, the population will leave these islands and, as there is considerable unemployment in Shetland today, I would urge upon the Minister that this is the time for a long-term scheme for repairing and reconstructing the roads and the piers throughout that area and similar areas.
  The last heading under which I want to say a few words is air services. I sometimes wonder whether the Government appreciate the incalculable advantages which air services can give to the Islands and the remote districts in the North of Scotland, and I wonder whether B.E.A. realise the great field of expansion which awaits them in the north. The pioneers of air services went out for custom. They enticed farmers into their aeroplanes. They flew frequent services in small aeroplanes at suitable times. As a result, a habit of air travel grew up and costs were kept down by having small aircraft, well filled, and by having small staffs on the airfields.
  Since B.E.A. took over, however—although I must admit that the services which they run are perfectly satisfactory—there is a feeling in the north that we are treated rather as though we were a similar problem to that presented by air services between great cities in the south. Large aircraft fly not, perhaps, very frequently, the staffs have increased, and the whole organisation, it is felt, has become rather impersonal, and of course costs and prices have become very much more expensive.
  In a small way my point is illustrated by the sort of advertisements which are to be seen for B.E.A., which are nearly always of gentlemen who, I believe, are known as "business tycoons," flying with brief cases apparently to make astronomical contracts in an atmosphere, if I may so describe it, of cigars and brandy.

  2201
  I have no doubt that these gentlemen exist in some places, but there are not very many of them north of Aberdeen. What we feel most seriously is that there does not appear to be any great anxiety on the part of B.E.A. to increase or even to restore the local services among the Islands.
  Judging from answers to Questions which I have asked in the House, I understand that nothing can be done to improve the landing strips in the North Isles of Orkney, for instance, and that very little can be done in the way of development of suitable aircraft. Such local services are of the greatest value if the population is to be retained in the Islands. They can be of great value, also, in moving lobsters and other perishable freight. Further, if air services are to be popularised, then those who operate them must go out and meet the demand where it exists.
  As has already been mentioned today, I understand that the Dean of Christ-church has been lifted by helicopter out of the quadrangle of his college. I do not for one moment begrudge him his "flip," but I wish that the Minister could assure us that we are to get helicopters in Orkney and Shetland, and in the Western Isles and the western seaboard of Scotland. I am sure that our need is far greater than that of the Dean of Christchurch.
  We may be told that all these matters are under consideration by the Highland Panel, and I hope that they are. I hope that the Government will listen very sympathetically to the recommendations of that panel and that we shall know very soon what action they are taking on this matter, which is of absolutely fundamental and vital importance to everyone who lives in the north of Scotland and to every industry and occupation. The question is, whether we are to keep the population there, and whether we are to allow them to live their lives in equality with people in the south or whether we are returning to the days of depopulation.
  I should like to thank the Minister of Transport very much for coming here and for his incursion with his colleagues whom I see on the Front Bench into the problems of Scotland. In the time-honoured way, I ask the right hon. Gentleman to come up and see us sometime. I can assure him that if he does
  2202
  so we shall be only too glad to see him, and that he and his right hon. and hon. Friends from other Ministries can test the services for themselves and see exactly how important it is to people living in the Islands, and to those who live in remote townships in the north and west of Scotland, to have good and cheap transport facilities.
  10.25 p.m.
  Sir David Robertson: I have pleasure in supporting the eloquent speech made by the hon. Member for Orkney and Shetland (Mr. Grimond) but I should like to put the matter from a different angle.
  I think the day is long past when the Highlands have to ask any Government to do something for them, but the day is here when any Government must use the Highlands, which represent more than half Scotland. They can make a massive contribution to our food supplies. We are already producing 50 per cent. of our food, while our means of obtaining the other 50 per cent. from overseas are diminishing everyday. No one can suggest that the export trade can be sustained now that the hunger of the war period and the sellers' market is diminishing. Every Minister on the Government Front Bench knows that. We have to produce more food at home, and there is no area south of Kintyre which can make the contributions which the Highlands can make; and in this matter transport is vital
  During the recent election, high transport costs were discussed at every meeting. People looked for a reduction, but they are now faced with a serious increase. I appeal to the Minister of Transport, who is a very old colleague of mine and for whom we all have a high regard, to tackle the matter in an entirely different way. I maintain that ever since the beginning of this century, and ever since the motor car appeared on the scene, the railways have been running away from competition. In the early days they faced competition from sea transport and beat it, but the policy carried out by the "big five" when they took the place of the 120 railways, in the 1920's and still carried out by the nationalised railways, is fundamentally wrong.
  I put it to the Minister that 75 per cent. of the total cost of the railways is represented by costs which are incurred

  2203
  before they begin to move a vehicle at all and the only way of recovering those costs is to run more trains with more freight and more passengers. Let me give a example. Instead of running five trains a day and charging£1 per head in fares, we could run 40 trains a day at 6s. 8d. per head and earn much more money. That would run into a huge sum per annum, and it could be repeated all over Great Britain. I am certain that road transport would then have a very stiff task in competing with the railways.
  It would be better to run trains on a policy of abundance than a policy of restriction. Suppose that the shipping companies which take people to Australia and goods to and from distant parts of the world adopted the same policy; no one could afford to travel. Yet it costs more than£10 for my constituents to travel from Caithness and Sutherland to London. If a policy of abundance is embarked on, it will be rewarded by the steps people will take to develop agriculture and light industries in the Highlands. Let the Government cast their bread upon the waters and they will not only solve the problems of the Highlands and food production but their railway problems also.
  10.29 p.m.
  Mr. Malcolm MacMillan: I congratulate the hon. Member for Orkney and Shetland (Mr. Grimond) on his good sense in raising this subject. Under the heading of railway matters, I agree with the hon. Member very strongly because the area does suffer from the geographical and other factors he mentioned.
  I do not think I need say much to the Minister in respect of roads, because he knows from correspondence and personal contacts that that is one of the problems which I regard as absolutely fundamental to all Highland development. Unfortunately, he is in the hands of the Treasury and its present rigid economies in these matters, but I make a plea with him that, having regard to the special difficulties of the area, he will give special consideration to bringing us more or less to an equal position with other parts of the country. Let the Government have regard to the long lag and neglect and the years of underdevelopment which have been a handicap to making up that difference.
  2204
  I also ask my right hon. Friend to bring to the attention of the Treasury the importance of the tourist industry and the fact that without proper transport we cannot develop the tourist industry in the Highlands. That ties up directly with the dollar problem. The former Secretary of State for Scotland, Mr. Tom Johnston, Chairman of the Scottish Tourist Board, is eternally preaching the value of the tourist trade in this respect. I should like to remind the Minister of some of the local problems, like the problem well known to all the hon. Members for the Highland constituencies, of the North Ford Causeway in the Outer Hebrides. The whole weight of the opinion of the members of the Highlands and Islands Panel, representing all the Highland counties, is behind the recommendations of this Panel.
  I will not detain the Minister longer tonight, but I ask him to make a special appeal to the Treasury before we have the pleasure of the company of the Lord President and the Secretary of State for Scotland at the Highland Panel on 7th June so that they can make a statement on Highland transport that will be worth while.
  10.31 p.m.
  The Minister of Transport (Mr. Barnes): The period which we have for an adjournment Motion is all too short for me to deal adequately with a problem of this character, especially as the hon. Member for Orkney and Shetland (Mr. Grimond), who has raised this subject, has covered such a wide field. I think he will appreciate—in fact, his remarks suggested that he does appreciate—that I cannot deal with the problem of the general development of the Highlands in the matter of light industries or other improvements. I have the Parliamentary Secretary to the Ministry of Civil Aviation beside me, and the hon. Member ended his remarks by inviting the Ministers concerned to visit the area. I am able to inform him, because of the intimation which he has already given me, that the Parliamentary Secretary to the Ministry of Civil Aviation will be visiting that part of the country during the Whitsun Recess.
  If I may suggest it, the hon. Member should take full opportunity of this visit to see that the Parliamentary Secretary understands all the problems of civil aviation in that part of the country. But

  2205
  I would like to say, in passing, that handling, as I do, one aspect of transport, I can appreciate some of the difficulties he has to meet. I gather that both capacity and frequency of services are greater now than they were before the war, although certain other services have been stopped. Every hon. Member of this House is fully aware of the difficulty of capital development at present, quite apart from the physical difficulties of that area and the great demands which there are on the development and expansion of civil aviation.
  I can quite imagine that if the present services are maintained, which, in an area like that, are more of a social character than of a commercial kind, those responsible are doing fairly well. But the fact that the Parliamentary Secretary is going into that area is proof that he wishes to see for himself what the problems are. So far as I am concerned, I have, during my period of office, visited the Highlands and the North of Scotland probably more than I have the other parts of the country and I am fully conversant with the problems which have been raised tonight. Both of the hon. Members who have spoken from the benches opposite have emphasised the necessity for transport. I do not in any way disagree with that. But I take particular note of the fact that the hon. Member for Orkney and Shetland emphasised that planned transport was essential. I want just to remind him that the present Labour Government is the first Government since I have been in this House which has really tackled the essentials of the problem.
  When they decided to nationalise transport, they produced a situation in which it was possible to begin to tackle a problem of that character. I cannot give any
  2206
  assurance about the form or line this will take, but how could consideration of equalisation of rates, or flat rates, or preferential rates problems that are involved in long-distance transport from the north of Scotland, be approached adequately unless and until there was a body like the British Transport Commission, which through its principles of charges will enable it to resolve them or contribute to a solution of them? What line it will proceed on I cannot say, but I am certain that the steps already taken in that direction have made a substantial contribution to the solution of the problem.
  On the matter of distance of the producer from his market, this is something which is not peculiar to the north of Scotland. It is a universal problem. After all, in world markets, Australia and New Zealand are further from this country than are Canada or South Africa. I agree that this problem, within the boundaries of this country, is one to which we shall have to pay special attention. In the field of transport, road and rail must now be linked together. I would, however, remind the hon. Member for Caithness and Sutherland (Sir D. Robertson), who appealed to me to add to the railway facilities, that, owing to the necessity for restriction of capital development now, the railways are not able to replace their pre-war rolling stock, let alone expand in the direction he has indicated.
  The Question having been proposed after Ten o'Clock and the Debate having continued for half an hour, Mr. Speaker adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at Twenty-two minutes to Eleven o'Clock

  ROYAL AIR FORCE (CIVILIAN INSTRUCTORS)
  ROYAL AIR FORCE (CIVILIAN INSTRUCTORS)
  EMBASSIES (NON-BRITISH PERSONNEL)
  EMBASSIES (NON-BRITISH PERSONNEL)
  KENYA (WHITLEY COUNCILS)
  KENYA (WHITLEY COUNCILS)
  GAMBIA POULTRY SCHEME
  GAMBIA POULTRY SCHEME
NIGERIA
  Livestock Commission (Report)
  Livestock Commission (Report)
  Riots (Report)
  Riots (Report)
  Sports Stadium, Enugu
  Sports Stadium, Enugu
  NORTHERN RHODESIA (LEGISLATIVE COUNCIL)
  NORTHERN RHODESIA (LEGISLATIVE COUNCIL)
COLONIAL EMPIRE
  Corporal Punishment
  Corporal Punishment
  Animal Slaughter (Humane Methods)
  Animal Slaughter (Humane Methods)
  GOLD COAST (DEVELOPMENT PLAN)
  GOLD COAST (DEVELOPMENT PLAN)
  BRITISH CAMEROONS (ADMINISTRATION)
  BRITISH CAMEROONS (ADMINISTRATION)
FOOD SUPPLIES
  Imports (British Ships)
  Imports (British Ships)
  Ration Books
  Ration Books
  Glucose (Price)
  Glucose (Price)
  Floor (Retail Purchases)
  Floor (Retail Purchases)
  French Meat
  French Meat
  Blood Plasma (Imports)
  Blood Plasma (Imports)
  Points Rationing (Abolition)
  Points Rationing (Abolition)
  Agricultural Workers
  Agricultural Workers
  Chocolates, Coatbridge
  Chocolates, Coatbridge
  Meat Ration
  Meat Ration
ROYAL NAVY
  Fishing Vessels and Fishermen
  Fishing Vessels and Fishermen
  Sunken Wrecks, Pembroke Coast
  Sunken Wrecks, Pembroke Coast
  "Truculent" Disaster (Grants)
  "Truculent" Disaster (Grants)
  Prize Money (Claims)
  Prize Money (Claims)
SHIPBUILDING
  Aberdeen
  Aberdeen
  Investigation (Report)
  Investigation (Report)
  Fishing Vessels (Cancelled Orders)
  Fishing Vessels (Cancelled Orders)
POST OFFICE
  Sales Representatives
  Sales Representatives
  Business Reply Envelopes
  Business Reply Envelopes
  V.H.F. Licences
  V.H.F. Licences
  Capital Development, Blackburn
  Capital Development, Blackburn
  Collections and Deliveries
  Collections and Deliveries
  Telegrams (International Regulations)
  Telegrams (International Regulations)
BROADCASTING
  Reception, Devonshire
  Reception, Devonshire
  B.B.C. (Trade Unions)
  B.B.C. (Trade Unions)
TELEPHONE SERVICE
  Birmingham
  Birmingham
  Kiosks, Buckinghamshire
  Kiosks, Buckinghamshire
  Snowstorm Damage (Repairs)
  Snowstorm Damage (Repairs)
  St. Marylebone
  St. Marylebone
  Barnet
  Barnet
  Battersea
  Battersea
  Wallasey
  Wallasey
TELEVISION
  Aberdeen
  Aberdeen
  Sporting Events
  Sporting Events
  INTER-ALLIED REPARATIONS AGENCY
  INTER-ALLIED REPARATIONS AGENCY
  PERSONAL EXPORT SCHEME
  PERSONAL EXPORT SCHEME
  DOMESTIC COAL ALLOCATIONS
  DOMESTIC COAL ALLOCATIONS
SCOTLAND
  Smallpox Vaccination
  Smallpox Vaccination
  Local Government Manpower (Report)
  Local Government Manpower (Report)
  HOUSING (EX-SERVICE MEN)
  HOUSING (EX-SERVICE MEN)
  RATING (SITE VALUES)
  RATING (SITE VALUES)
TOWN AND COUNTRY PLANNING
  Swansea (Reconstruction Proposals)
  Swansea (Reconstruction Proposals)
  Bombed Cities (Reconstruction)
  Bombed Cities (Reconstruction)
  Ironstone Mining (Inquiries)
  Ironstone Mining (Inquiries)
Preamble
The House met at half past two of the clock, The VISCOUNT SIMON on the Woolsack.
Prayers
Several Lords—Took the Oath.
PRESCELLY WATER BILL [H.L.] MERSEY DOCKS AND HARBOUR BOARD BILL [H.L.]
Read 3a, and passed, and sent to the Commons.

OIL POLLUTION IN ENGLISH CHANNEL
THE LORD BISHOP OF TRURO: My Lords, I beg to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask His Majesty's Government what steps are being taken to prevent recurrences of the inconvenience caused to bathers on the south coast and also the danger to bird and fish life by the increased amount of oil pollution in the English Channel; whether it has been possible to refer the subject of oil pollution to the Inter-Governmental Maritime Consultative Organisation and with what result; and whether the inquiry which it is understood the Ministry of Transport has been carrying out in conjunction with the Chamber of Shipping to ascertain whether the establishment of oil separating barges in ports is the best way of preventing pollution has been concluded and with what results.]
THE PARLIAMENTARY SECRETARY, MINISTRY OF TRANSPORT (LORD LUCAS OF CHILWORTH): My Lords, His Majesty's Government are fully alive to this problem of the pollution of out coasts by oil and are anxious that all practical measures should be taken to prevent it. Under the Oil in Navigable Waters Act, 1922, the discharge of oil within British territorial waters is an offence, and, further, as the right reverend Prelate is no doubt aware, the ship owners of this and a number of other countries have voluntarily agreed not to discharge
474
oil into navigable waters within 50 miles of any coast.
My right honourable friend the Minister of Transport is certainly prepared to arrange for proceedings to be instituted under the 1922 Act wherever adequate evidence is available of an offence under this Act. The difficulty is to get the necessary evidence. Frequently, it is quite impossible to ascertain with any certainty the source of a given occurrence of oil pollution. In some cases it is possible to guess at the origin of the oil from an analysis of a sample, but very often a sample is so stale and polluted with sea water that this cannot be done with any certainty. It is, of course, a fact that a number of wrecks round our coast have been dispersed by explosives and that others have broken up under the action of the sea, and this is the source of a considerable amount of the pollution which has occurred since the end of the war.
During the past twelve months only eight complaints of oil pollution on the south coast have beer traced. In three of these the complaints were of a very general nature and did not relate to any specific occurrence. It was, therefore, not possible to take any useful action in regard to them. In four others the complaints were investigated by officers of the Department (members of His Majesty's Coastguard), but the source of the oil could not be traced. Samples were obtained in these cases, but they were mainly composed of tarry substances, the nature of which indicated that they had been subjected to the action of sea water for a very considerable time, and the probability was that they came from the Atlantic or from some vessel that had been sunk in the Channel during the war. In the last remaining case the matter was one for the harbour authority concerned. Samples were taken and analysed, but the result was such that the harbour authority felt that they could not reasonably institute proceedings against the alleged offender.
This question of oil pollution was recently considered by the Transport and Communications Commission of the United Nations Economic and Social Council, and that body agreed to a suggestion, which was supported by His Majesty's Government, that the Inter-Governmental Maritime Consultative Organisation, when it

475
is set up, will be the proper agency to handle the question. The Organisation has not yet been set up because only the United Kingdom and two other countries have so far accepted the Convention. It is, however, hoped that a number of other countries will accept the Convention in the not too distant future and that the Organisation will begin to operate. As regards the position in relation to the supply of oil separating barges, the right reverend Prelate has no doubt in mind the inquiries which have been directed to discover whether the separating facilities at ports were adequate. These inquiries have shown that such facilities are provided in most of the major ports and that they appear to be more than adequate to meet the demands at present made upon them.
To summarise the position. His Majesty's Government are actively concerned about this problem. They are prepared to take proceedings in all suitable cases, and, from time to time, my right honourable friend reminds ship owners and masters of the provisions of the Act of 1922 prohibiting the discharge of oil or oily water directly or indirectly into the waters within the territorial limits of the United Kingdom, and also of the fact that the ship owners of this country and others have agreed not to discharge oil or oily water within fifty miles of the coast, and urges masters to take every possible step to prevent any such discharge within that limit.
THE LORD BISHOP OF TRURO: My Lords, I thank the noble Lord for his interesting answer. In spite of all that is being done, the fact remains that this distressing defilement continually occurs, and it cannot be beyond the wit of man and the power of natural science to prevent it. I shall study the noble Lord's answer and, if necessary, I shall at a later stage put down a Motion.
EARL DE LA WARR: My Lords, it is apparent that His Majesty's Government take as serious a view of this matter as do other people. The noble Lord, Lord Lucas, referred to the difficulty of obtaining evidence. Can he tell us what steps the private citizen should in fact take if, for instance, he comes across a group of birds on the beach in the horrible condition in which they are some-
476
times found? What steps should the private citizen take to assist the authorities in obtaining evidence?
LORD LUCAS OF CHILWORTH: I am glad that the noble Earl has underlined the concern which His Majesty's Government feel about this matter. We are very concerned. In answer to the noble Earl's question, I suggest that the first authority to be contacted should be the harbour authority, if there is a harbour authority in the vicinity, or, if there is not one, then my Ministry.

THE HUNGARIAN CLUB
2.45 p.m.
LORD VANSITTART: My Lords, I beg to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask His Majesty's Government why they have not closed the Hungarian Club, at 33, Pembridge Square, as a reprisal for the action taken by the Hungarian Government against the British Council.]
THE PARLIAMENTARY UNDER-SECRETARY OF STATE FOR FOREIGN AFFAIRS (LORD HENDERSON): My Lords, His Majesty's Government have already retaliated for the action taken by the Hungarian Government against the British Council by closing the Hungarian Cultural Institute, and no further reprisals are called for. His Majesty's Government have no grounds for taking any special measures in regard to the Hungarian Club, apart from keeping a close watch on its activities.
LORD VANSITTART: My Lords, I note with pleasure the assurance contained in the latter part of the noble Lord's reply. I hope that observation will be continuous.

LIBERTIES OF THE SUBJECT BILL [H.L.]
VISCOUNT SAMUEL: My Lords, I beg leave to introduce a Bill for the preservation of the liberties of the subject; and to move that it be read a first time.
Moved, That the Bill be now read 1a.—(Viscount Samuel.)
On Question, Bill read 1a and to be printed.

SUNDAY ENTERTAINMENTS ACT, 1932
URBAN DISTRICT OF BARNOLDSWICK ORDER
URBAN DISTRICT OF LEES ORDER
RURAL DISTRICT OF BAGSHOT ORDER
RURAL DISTRICT OF THE ISLE OF WIGHT ORDER
LORD SHEPHERD: My Lords, I beg to move that these Orders he approved.
Moved, That the Orders made under the Act by the Secretary of State for the Home Department, for extending section one of the Act to the said areas, be approved.—(Lord Shepherd.)
On Question, Motion agreed to.

THE ECONOMIC SITUATION
2.48 p.m.
Debate resumed (according to Order), on the Motion moved yesterday by Lord Cherwell: That there be laid before the House Papers relating to the Economic Situation.
LORD LAYTON: My Lords, several speakers yesterday gave their diagnosis of the economic situation. There can surely be no doubt that our position is substantially better than when the House discussed it last, and very substantially better than the critics then feared. Devaluation has undoubtedly had a stimulating effect, and its influence has certainly not yet worked itself out. On the other hand, as the noble Lord, Lord Brand, quite properly insisted, our financial reserves are most inadequate. With taxation far too high, personal savings far too low and labour demanding an end of the wage freeze, the equilibrium of our economy is a precarious one. I do not propose, however, to discuss these matters again in detail. With your Lordships' permission, I will ask the House to look farther ahead and consider certain aspects of the long-range problem that faces the industrial areas of the old world. What will be our position when the aftermath of the war has been cleared away, and world production and trade settle down to what may he described as the post-war normal? Will the industries of Europe, including those of Great Britain, be able to sell their products in sufficient quantities in the markets of the
478
world to enable our great industrial populations to earn an adequate living?
In a debate last autumn, immediately following devaluation, I ventured to point out to the House that America's dollar surplus vis-à-vis the rest of the world is not due to her exports of food and raw materials of which she is a net importer, but is entirely accounted for by her net export of manufactured goods. Devaluation has helped us very much by putting what is, in effect, a 43 per cent. tariff wall against dollar imports round a group of countries which together buy something like 40 per cent. of the world's imports, and a rather more moderate tariff round countries which take the somewhat lower proportion of 20 to 30 per cent. of world imports—60 per cent. of the world's trade in which we have a very high preference against the United States. We can do something to close the dollar gap by direct shipments to the United States, but I ventured to put before the House, and I repeat, that our main hope of establishing a stable post-war equilibrium depends on whether Europe's industrial products can compete effectively in quality and price with the products of the gigantic American industrial potential in this large non-dollar area.
In the last few years, the shortages arising out of the war and the absence of German and Japanese competition have made things fairly easy for us as soon as we were able to get our peace-time industries moving again. But the battle for markets is entering a new phase; the sellers' market is passing away. This is true in general, but it applies perhaps especially to coal and steel and the industries built upon steel; and in these cases it is quite evident that the struggle for markets is soon to become more acute. In the case of steel, the Rollman Report, issued not very long ago from Geneva, estimates that there will be a surplus of 8,000,000 tons of production in Europe by 1953, and though the coal surplus is not so apparent, the wide margin between the export and the home prices is getting smaller. The writing is on the wall, even in regards to coal. The steel industry is traditionally a most important and sensitive barometer of economics, and we must take warning in time that there is likely to be a period of keener competition ahead of us, which will have to be faced by Europe as a whole and also by

479
the countries of Europe between one another. Yet coal and steel are the foundations of our industrial existence, as they are also of that of the industrial countries on the Continent of Europe.
That was not always so. Half a century ago, when I first began to study economics, the textile trades were the mainstay of Britain's prosperity. This was still the case in 1920. To-day, however, the picture is entirely changed. In the first quarter of this year—this is approximately true of 1949 also—iron and steel products and manufactured goods made from iron and steel constituted 50 per cent. of British exports. That is a very high figure indeed to be dependent upon two industries—namely, coal and steel—and it is also important in that those are the two main raw materials which we are fortunate enough to possess in this country. That percentage compares with 20 per cent. after the First World War, and the measure of the increase of our exports from 20 per cent. to 50 per cent. shows the economic change which has taken place within the structure of this country. In that situation, it is surely clear that the answers to the questions I pose depend upon the efficiency of the iron and steel trade and of the trades which use iron and steel, and also upon the cheapness and economy with which the iron and steel industry provides the raw material. That is why the Schuman Plan, to which Lord Pakenham made a passing reference yesterday, is of vital importance to this country.
From the political point of view, the proposal to bring the coal and steel of Germany and France under the control of a common authority has quite rightly fired the imagination of people on the Continent, as well as in Britain and America. Indeed, M. Schuman has insisted that its purpose was primarily political. Using his words, if it were possible to devise a plan which will make war between France and Germany forever impossible, it would surely be well worth while for us and for other countries as well to pay a substantial price to bring it about, and we in Britain should certainly foster it. Even if its direct economic effects created difficultes for this country, there would still be big economic dividends from the indirect effects of an act which removed the main source of the friction that has
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plagued Europe for generations. I do not think, however, that even the direct effects on this country would be bad. On the contrary, I suggest that if the scheme is rightly handled it may bring very great benefits to Britain. I therefore suggest that in our own economic interest, as well as in the wider interest of world stability, Britain should support the principles of the plan and take her part from the outset in working them out and bringing the plan into being.
I apologise to your Lordships for emphasising so much the iron and steel industry, because we really had our fill of it in some very long debates last year. I do not pretend to be an expert in iron and steel, with which many of your Lordships are much more directly concerned than I am, but, for the reasons I have given, it does seem to me to be at the heart of the questions I pose. Therefore, if you will bear with me for a moment, I should like to make one or two further comments on it from that point of view. The background in relation to the Schuman Plan can be very quickly sketched. Last year, the United States produced about as much steel as the whole of the rest of the world put together—in fact, I think, a little more. This great American industry has been built up upon ore whose metallic content, though not the highest in the world, is relatively high in relation to the content of the ore from which most of the rest of the world's steel is manufactured. America is therefore favourably situated with regard to the metallic content of the ore, and equally favourably situated from the point of view of coal, because of the much wider seams that are found in that country. Her steel plants are highly efficient, but the high output per worker is more than offset by the high rate of wages.
I give these figures with all reserve, but they are the outcome of the thorough investigation which has recently been made by the Economic Commission in Europe. Labour cost per ton in the United States is as high as it is in Europe, and the advantage of America's cheap raw material is offset from the competitive point of view by the fact that the finished product has to be hauled a long way to seaboard. While, therefore, American engineering industries have cheap steel, the United States has not flooded the world market with actual

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steel exports. Devaluation has made it much more difficult for America to compete either in steel exports or in goods manufactured from steel. But even without this currency advantage, which may not be permanent, it is not beyond the possibility of European steel-making countries to compete with the United States.
The European picture, on the other hand, is much more complicated. No single country in Europe contains all the coke or the iron ore needed for steel making. The greatest concentration of steel production is, of course, in Western Germany and Great Britain, both of which have ample supplies of coking coal but neither of which has any high-grade ore—except for a trifle in Cumberland. Neither country has any substantial amount of high-grade ore. They both make a certain proportion of steel from their low-grade ore. On the other hand, France has all the ore she needs, though it is of low quality, but she is very short of coking coal. Before the First World War, when the Lorraine area belonged to Germany, the ore of Lorraine and the Ruhr coke were developed together by German industrialists as a single unit, some works being placed on the ore in Lorraine and some on the coal. Luxembourg and Belgium, though not actually within the German borders, were closely linked by commercial ties. In other words, before the First World War there existed something like the ground for the unity which is contemplated in the Schuman Plan.
The Peace Settlement of 1919 broke up this system, just as it broke up the economy of the Austro-Hungarian Empire; and, as we know, the fragmentation of Europe has been a vital influence in the subsequent history of recent times. From 1919 onward, no steel-making area has been self-sufficient. Not one of the steel-making areas in Europe has been self-sufficient in both coal and ore, and fresh links between the sources of fuel and raw materials have had to be built up across national frontiers. Since the Second World War, the revival of the various national steel industries has been subject to abnormal conditions. Western Germany's steel production, as we know, has been directly restricted by destruction and by Allied control as a matter of policy. It has also been
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limited by the reduction in the coal output of the Ruhr and by the allocation to other countries of her coke supplies. In these post-war years, also, the output of Lorraine ore has been greatly reduced, and the steel works in Belgium, Luxembourg, and elsewhere have had to replace it, so far as they could, by buying high-grade ore from Sweden in competition with Britain and Western Germany. There are signs of a return to the former pattern of ore and coke production, but the distribution of Swedish ore will remain a matter of great importance to the industrial layout of Europe. There have also been some exceptional features—to which I will not refer in detail—about our own supply of materials, particularly in relation to scrap.
I make those points because it is certain that some further adjustment will be needed in the distribution of the available steel-making materials of Europe in the near future. My thesis is that those changes should be carried out according to an orderly plan, and should not be left to chance or to competitive pressure from rival Governments pursuing their individual national interests. If there is no general plan, or at all events a common point of view about the use of our limited materials and fuel, we run the risk of duplicated plant, faulty location of the industry and uneconomic production. Clearly, Britain is deeply interested in all such plans of reorganisation.
So much for the argument on the supply of material for the steel industry and the need for a plan. But there is another factor which affects all Europe's steel makers. I will not refer to it in detail, but I am speaking of the need for concentrating production in the most efficient areas and works. I mentioned just now the fragmentation of Europe in 1919. That was accompanied by a strong move towards economic nationalism, and in that movement all sorts of small countries endeavoured to establish their own steel works, fearing perhaps to be dependent for steel in the event of war upon a possible enemy. The result has been that there are scattered about Europe uneconomic works. They do not close down, for they are subsidised or protected by tariffs; and all the time they are drawing on available supplies and using them uneconomically. One of the proposals of the Schuman Plan is that of

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concentrating production and getting rid of uneconomic production—in other words, rationalisation of the industry in Europe as a whole. Let me say here that Britain has nothing to fear from the rationalisation of Europe's steel production. She has ample coal of coking quality. That coal lies near the seaboard to which the world's best ores can be brought cheaply. The full study of the steel industry to which I have referred has shown that Britain's prices are thoroughly competitive—indeed, in general they are equal to the lowest prices in Europe.
I will refer only very briefly to one other argument in favour of the international supervision of Europe's iron and steel trade. It is a powerful one. Even the most devoted advocate of laissez-faire would agree that there must be some control both of the localisation and of the extent of armament industries in different parts of Western Europe. Europe's steel industry has provided the munitions for two World Wars. I do not pretend to know whether the atom bomb or the hydrogen bomb will alone determine the outcome of any future war, or whether these weapons will in fact ever be used. But whatever the answer may be to that speculation Europe's arsenal, the central coal and steel area of Europe, with the chemical industries that are in a sense its by-product, is bound to be a most important strategical objective, and in an enemy's hands a very grave danger. I need not elaborate this point. It is sufficient to say that even if there were no other reasons this alone would be justification enough for some international supervision, direction and canalisation of Europe's steel industry. Again, if that is to happen to Europe's steel industry, Britain's voice must be heard from the outset in whatever arrangements are made.
There are, however, certain difficulties. I will not detain your Lordships by discussing them in detail, but it is clear that if the industry is to be concentrated it will involve certain disturbances. That has been discovered by the National Coal Board with regard to the British coal industry. It is impossible to close redundant pits or redundant plants without creating problems. Therefore M. Schuman has produced a series of transitionary regulations. These smack a little
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of the old cartel, with its restriction of output, maintenance of prices and so on, intended to keep high-cost producers in existence; but if in the interests of cheapness there is to be a gradual process of concentration in the economic areas of Europe then some provision must be made for easing the transition. The question is whether regulations of the kind which ease the transition for high-cost producers are transitory or permanent. The test of all these regulations is whether they conduce in reasonable time to the central purpose of the scheme—namely, to cheapen the cost of steel.
It is suggested that if the steel market is opened to the free movement of coal and steel, British standards of living will be reduced by cheap foreign labour. That is the biggest fallacy of all, as history shows. When Britain was a free-trade country, our standard of living was far above that of her protected rivals, and to-day the real competitor is not the country of cheap labour but America, with her highly-paid artisan and immense quantities of machinery. The real test is a comparison between the prices of British steel with those of steel made by European countries. I venture to assert that there is no substance in the argument that we should stand aloof from this scheme in the interests of maintaining the standard of living. I believe that an improvement of our own standard of living is much more likely to follow our taking a reasoned part in what, if it is carried through, will be a radical development in the evolution of Europe's basic industry.
I have touched only the fringe of a great subject. The Schuman Plan is an ambitious and far-reaching one. It may possibly point the way to closer union in other economic and political fields. The machinery for carrying it out raises a number of complex issues, including that of how to entrust executive responsibility to an international body without necessarily creating a super-State. The O.E.E.C. in Paris has so far had little success in influencing the development of the plans of its member States and dovetailing them together. That is largely because each country still looks at its own plan, rather than at its neighbour's and at how the various plans will react on one another. It is also due to the fact that the O.E.E.C. is a body purely for consultation and has no executive authority. How are we to

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obtain more effective executive action than we have had in O.E.E.C.? There are precedents. In the case of the International Bank at Basle, for example, a great measure of autonomy was given to the board of directors in a strictly defined field. The States which set up the Bank reserved the ultimate right to alter the charter, but within the terms of the charter the Bank had a considerable freedom of movement. I do not wish to overstrain the analogy or to pursue the matter further, except to urge that we should not hesitate to carry out an essential purpose merely because the mechanism that is needed seems unfamiliar.
Politically, the Schuman Plan is an historic proposal comparable with, but more lasting than, the plan of Marshall Aid. Economically, it offers the possibility of guiding the coal and steel production of Europe—which is so vital for the flow and exchange of manufactured products for food and raw materials that lies right at the heart of our economic problem—into the most economical channels; and it offers a mechanism that can be adapted both to nationalised industries and industries in private hands. Mr. Schuman said yesterday that he does not think his plan will materialise unless Great Britain takes a hand. I do not ask the Government to accept the scheme as drafted, uncritically and without examination, but I do ask them to accept its purpose with enthusiasm and to confer with France, Western Germany and Benelux, not with a view to creating difficulties but in the determination to carry out the most promising plan that has yet been proposed in post-war Europe.
3.17 p.m.
LORD LUCAS OF CHILWORTH: My Lords, first of all may I apologise to your Lordships for my absence during the debate yesterday? I was fulfilling a long-standing engagement to tour the Development Area of South Wales in readiness for the debate which will engage the attention of your Lordships immediately we come back from the Whitsun holiday. I saw things there which must be an inspiration to anyone considering such a problem as that we are considering this afternoon. The last time I went up the Rhondda Valley was in 1922. When you go up the Rhondda from south to north to-day, you would
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not think you were in the same country or in the same world. There is a hive of industry in the towns where desolation and hopelessness were present before, In the east of South Wales I saw the new nylon-spinning factor, the finest production factory in this or any other country, which now employs 3,500 to 3,750 operatives. When it started the company brought in four key men, apart from research and administrative staff, and these four men trained miners and policemen to be foremen in thirteen weeks. In the west I saw that marvellous project, the new strip mill at Margam. I was brought up in the engineering industry and I have never seen anything so staggering in my life. It is about the seventh industrial wonder of the world. The main part of the mill is a magnificent building stretching a distance of 100 feet short of a mile.
When I came back in the early hours of this morning, I possessed myself of Hansard as soon as I could and read the debate in your Lordships' House. I should like to congratulate my noble friend Lord Lawson (I do not think he is present) on a magnificent speech. I am sure that if he went down and saw what is happening in South Wales as a result of the economic planning of industry, he would be considerably heartened. When I read in one noble Lord's speech a rather slighting reference to planning, I could not help but recall the inspiring two days I had spent travelling 200 miles in an area which is going to contribute an enormous amount to industry in this country. That is why I was not in my place yesterday afternoon.
We have just listened to a speech from the noble Lord, Lord Layton, of his usual high standard. If the noble Lord will allow me, I will leave it to my noble friend the Leader of the House when he winds up the debate to tell the noble Lord what is the policy of the Government with respect to the Schuman Plan. I am sure Lord Layton will appreciate a reply from my noble Leader rather than from myself. Before I address myself to the main part of what I have to say, there is one thing I feel bound to mention in relation to the reference in the speech of the noble Lord, Lord Cherwell, yesterday afternoon to what he called "a gigantic increase in Government spending abroad." I can only suppose that the noble Lord quoted

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figures from the latest balance of payments White Paper (Command 7928) because he said (I quote from Hansard, Column 393):
"But in 1949 it rose by £53,000,000 to £231,000,000, if we discount the non-recurrent war disposals which only confuse the issue."
I would say to the noble Lord, with great respect, that he is quite wrong. I think he has fallen into a rather serious error, which he could have avoided had he turned to the explanatory notes in the White Paper. The first is item 2(a) on page 11. The noble Lord seems to have excluded the receipts under the India Defence Settlement, but not to have excluded the payments on the same very large non-recurrent settlement, which amounted in 1949 to no less than £55,000,000. If we exclude them, as we certainly should, your Lordships will see that the gross Government expenditure overseas, far from rising gigantically, as the noble Lord suggested, actually dropped from £189,000,000 in 1948 to 180,000,000 in 1949, in spite of our continuing heavy military commitments abroad which took up by far the largest part of the total. I would suggest to the noble Lord that if he studies the White Paper and the explanatory notes (first of all, paragraph 2(a) on page 11, and then paragraph 2(e) on page 12) he will see where he fell into error. Coming from anyone like me that would be quite excusable, but I am most surprised to hear it from the noble Lord. However, that is by the way.
To come to the main burden of what I have to say, I would follow my noble friend Lord Pakenham and deal with some of the effects of devaluation upon our export trade. There is no doubt that immediately before devaluation last August the outlook of the United Kingdom balance of payments in general, and our export trade in particular, was far from reassuring. There was a rapid drain on the central dollar and gold reserves, the volume of our exports had fallen away and the economic outlook in the United States was relatively unpromising. Some remedial measures, as my noble friend Lord Pakenham said, had been taken: there was a reduction in our dollar imports and in the dollar spending by the whole of the sterling area. However, devaluation was unavoidable. It is important not to underestimate the value
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of the upturn in American economic activity which took place at much the same time, because the resumption of substantial United States purchases of sterling area raw materials exerted a powerful and beneficial influence upon the sterling area's dollar balance of payments. My right honourable friend the Chancellor of the Exchequer has dealt fully with this matter in another place, and I do not intend to occupy your Lordships' time in repetition of what he said.
However, I feel it may be advisable for me to add to the note of warning which my noble friend Lord Pakenham sounded yesterday, that it would be imprudent to rely too much upon a wholesale continuation of recent improvements. It is quite evident that there have been some temporary factors at work, including, for example, the seasonal peak of sales of a number of sterling area primary commodities. Wool is an instance, and Australian wool prices to-day are up by 15 per cent., which has made a great difference not only, I regret to say, to our wool manufacturers in Yorkshire, but also to the dollar earnings and sterling purchasing power of Australia, of which we indirectly feel the benefit. I feel I can rightly say that a few noble Lords, and many people outside your Lordships' House, appear to have viewed the problem of the dollar gap as falling wholly upon the shoulders of the United Kingdom. They forget that this problem must be viewed as a sterling area problem, of which sterling area we are only a part. The United Kingdom has probably benefited directly least of all, compared to the other members of the sterling Commonwealth.
LORD CHERWELL: Perhaps I may interrupt the noble Lord. It was precisely because we recognise that this is a sterling area problem that I asked to have the figures given to us for the balance of trade of the sterling area with the dollar area.
LORD LUCAS OF CHILWORTH: The noble Lord can get them from the very Paper which he quoted yesterday afternoon. If he will turn to Tables 17 and 18 of the Board of Trade document which he quoted, the noble Lord will find them set out.
VISCOUNT SWINTON: Which document is that?
LORD LUCAS OF CHILWORTH: My noble friend Lord Pakenham mentioned it yesterday afternoon. It is the May Report on Overseas Trade, Volume I, Number 4.
LORD CHERWELL: That does not give the figures for the first quarter of 1949 with which to compare those for the first quarter of 1950.
LORD LUCAS OF CHILWORTH: Perhaps the noble Lord will look at the pages to which I have referred, and if he cannot find all the figures I will undertake to supply those which are missing.
LORD BARNBY: Since interruptions are being permitted, and the noble Lord gave wool prices as an example of how the prices of commodities have risen since devaluation, I hope he will not overlook the burden put upon the domestic consumer by the encouragement not to buy given to British users of imported raw materials by the Chancellor of the Exchequer.
LORD LUCAS OF CHILWORTH: I hope that not many noble Lords will follow the very bad example of the noble Lord, Lord Cherwell, and interrupt during every sentence. If they do, those at the end of the long list of speakers will be here at a late hour to-night. I give that warning only because I think it should be given. While we can say that our present economic recovery has been largely dependent upon an upturn of economic activity in the United States, it would be equally true to say that any weakening of United States internal demand would have a serious adverse effect upon the whole position of the sterling area. As my noble friend Lord Pakenham said yesterday afternoon, the recovery of our gold and dollar reserves to nearly 2,000,000,000 dollars is good, but at this level they are still but a small fraction of pre-war; perhaps but one-fifth in terms of present day prices. We must build up our reserves if we are to face with confidence the quite normal and inevitable fluctuations in the dollar income of the sterling area at the end of the Marshall Aid period.
I will quote one or two figures because United Kingdom dollar exports to-day are less than they were in the comparable period of 1949. In the first quarter of 1949 they were running at a monthly
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average of 58,500,000 dollars; in the first quarter of 1950 they were running at 52,500,000 dollars, and that is a fact which we have to realise. I can assure the noble Lord that His Majesty's Government are very much alive to it. There are one or two other things which stem from our advantageous position following devaluation. I agree with the noble Lord, Lord Brand, and with the noble Lord, Lord Layton, in his opening sentence this afternoon, that devaluation has been a great advantage. It is no good denying that it has put us in a better competitive position. If we compare the figures before devaluation and now, we can see startling evidence of a beneficial effect. In the first quarter of 1949, the monthly average value of total exports was £153,000,000, and in the third quarter of that year—the quarter immediately before devaluation—it was only £141,000,000. In the first quarter of this year, the monthly average value has been £172,000,000, with an all-time record in March of £184,000,000. The noble Lord will agree that there must have been a substantial increase in the volume of exports when I tell him that the average increase in export prices has been in the region of only 4½ per cent. That undoubtedly will go up—we have to face that. But I am just telling your Lordships the position to date. Export prices have gone up 4½ per cent., whereas the volume has gone up very much more.
But if it is prudent to stress these factors which have benefited us immediately after devaluation, I think I should say a word about the splendid effort which this country has made. Our exporters and our manufacturers have made a wonderful effort to take full advantage of devaluation. It is rather invidious to pick out examples, and I hope noble Lords will forgive me if I disclose a rather personal pride in the fact that the leader of this magnificent export trade is the industry with which for many years I was connected. May I just give your Lordships these figures? In 1948 we exported on the average 18,800 private motor cars and chassis a month; in 1949 the number was 21,500, and the monthly average for the first quarter of 1950 was 33,600, with an increase of 100 per cent. in the sterling value of those exports. If we take commercial vehicles, we run from a monthly average of 6,250 in 1948 to

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11,230 in the first quarter of 1950: a magnificent performance.
If we take machinery—and this only underlines what the noble Lord, Lord Layton, had to say about our dependence upon our engineering products—in 1948 the monthly average value of our exports was just over £19,500,000; in 1949 it was £23,250,000, and in 1950 it is £26,750,000; a really magnificent achievement. But it does not stop there because our exports of wool manufactures in 1949—a matter in which the noble Lord, Lord Barnby, is so interested—were £8,680,000 a month, and in the first quarter of this year almost £10,500,000 a month. In 1949 food, drink and tobacco exports were £8,000,000 a month and in the first quarter of 1950 over £10,500,000 a month. The noble Lord, Lord Cherwell, must see that there is a decided upswing which we have to maintain at all costs, because we have not only to pay for our own imports, but we have also to provide for dollar-saving by the rest of the sterling area by being able to export to them goods which must otherwise be paid for in dollars. I think that is one of the things we must not overlook, because our exports to the sterling Commonwealth to-day are virtually 50 per cent. of the total exports of this country, and I believe I am right when I say that our imports from the sterling Commonwealth represent about two-fifths of the total.
I do not want to weary your Lordships with a lot of figures about the course of our exports to the dollar area since devaluation. Progress in the United States has been disappointing but the steady and considerable growth of exports to Canada is most encouraging. It is obvious that the United States market is a most difficult one with the vast output of United States industry, but we have done all we can to push exports there. In Canada as I have said, we are doing much better. We are to-day exporting motor cars to Canada at the rate of about 6,000 a month—over 70,000 a year. Machinery exports to Canada are also very good, and we think that therein lies a great chance. Manufacturers and exporters have really done a splendid job of work in their efforts to secure a much larger dollar market in Canada. The expansion of national income and consumer expenditure in the United States
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has borne little relationship to their demand for imported manufactures. I do not think it is necessary for me to say very much upon that, except that we must express how deeply we appreciate the efforts of the United States Administration and of many leaders in business in that country to persuade the American public and American industrialists that one of their hopes of salvation is to open their doors to more exports, and more exports from this country.
I need not go into the political field and make any comment upon the responsibilities that fall to-day upon creditor nations. We do not like being lectured, and I do not think we should lecture other people too much. But we could say this: that if this duty is going to be discharged in the same high manner as this country discharged its obligations and its responsibilities as a creditor nation for a very long time in the past, with credit to ourselves and advantage to the rest of the world, the result will be to foster the growth of world trade.
I think I need mention only one other point upon which the noble Lord, Lord Cherwell, commented. In terms of sterling our exports to North America are now far larger and even in terms of dollars our exports to North America are down by only 15 per cent. compared with pre-devaluation prices. So there must have been a substantial increase in our sterling prices for many goods. Let me give one or two broad figures: china, 15 per cent.; motor cars, 10 per cent.; worsteds and woollens, 15 per cent.
LORD CHERWELL: Is that for the United States or for Canada, or the average of the two?
LORD LUCAS OF CHILWORTH: The average of the two. I think the noble Lord was under the misapprehension that it was all due to whisky, but it is not; these other commodities have contributed to the situation. Now what have we done to help? I remember that when we had the last economic debate the noble Viscount, Lord Swinton took part—and may I join with my noble friend Lord Pakenham in welcoming him back on the Opposition Front Bench? We have missed him; we even had a debate on films in his absence, which was a terrible thing for this House.
VISCOUNT SWINTON: The film industry, too, has not progressed very rapidly since then.
LORD LUCAS OF CHILWORTH: The noble Viscount's return is going to mark an upsurge in that industry also. I am now going to give a few figures about the Export Credits Department, which I think will be agreeable to the noble Viscount. In October last my right honourable friend the President of the Board of Trade announced that the Department were now in a position to assist firms by guarantees against loss arising from expenditure on various activities undertaken in their efforts to increase exports to North America. Since that time covers have been devised to insure against risk involved in market surveys and product tests, advertising, sales promotion and stock-carrying. Other covers are continually being considered and developed as the Department's officers come across new activities which require this sort of assistance. To date, the total value of the policies issued under these extended facilities is £3,750,000, of which the Department's liability is £2,000,000, and there are outstanding quotations for policies valued at £1,000,000, of which the Department's liability is £570,000. The Department's own representatives have contacted over 2,200 exporters and discussed these facilities with them. That is a very satisfactory result. And with our trade representatives in North America we have done as much as we can and are willing to go on doing as much as we can and as much as is practicable to-day.
VISCOUNT SWINTON: I take it that these sums, for which the Government assumes liability, are repaid progressively.
LORD LUCAS OF CHILWORTH: Yes. I think those noble Lords who warned us that our selling days in quite a number of markets are coming to an end were wise: We must recognise that. I was interested in the comments of the noble Lord, Lord Layton, this afternoon on the growing competition we must expect to receive from Japan and Germany. I do not want to go into any great detail, but Japan and Germany must live and they must export; and we have no evidence to date either that their goods are of lower quality than they were before the war or that their prices will be
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less keen. I think Lord Layton was right in categorically denying the fallacy that Japanese competition is necessarily based on sweated labour. That idea is entirely wrong. I think that some people exaggerate the extent of unfair trade practices. I believe them to be largely a figment of the imagination. If they exist then we shall not hesitate to look at the evidence most closely and carefully and pursue authenticated cases with the Occupation Authorities; but I think we have to recognise that in future we shall have increasing competition from both Japan and Germany. We must expect this but given expansion of world trade, things will he less difficult.
I do not want to say too much on this subject, because I only underline the warnings that have already been given. I do not think, however, that the ingenuity of the British manufacturer will fail to meet this challenge. We are facing many problems, but I believe that our British manufacturers will face up to them—in spite of a number of things that have been said, I do not know for what reason. I refer to the remarks of some people who apparently like to spread the rumour that British industry has not got its back behind the export drive. I suggest that the figures absolutely disprove that. I agree that there is room for greater efficiency in many cases and I think there may be room for lower prices.
I do not want to discuss the question of profits, but if the financial columns of certain newspapers are any guide, profits are not inconsiderable. We have got to tackle the problem of restrictive practices—on both sides of industry. I am sure there are far too many of them. There is too much thought for the short-term view. We have got to have an expansionist trade policy in this country or perish. We may as well perish by being expansionist as by being restrictionist. We have got to get out of the restrictionist habit of mind—and I think we can, with the help of our fellow-countries in the Commonwealth. With their help, and with the help of America, and with their width of vision, we can meet these difficulties and I think we need not fear. I am not one of those who are mournful about what is going to happen in 1952. I am sure the sterling area as a whole is really going to strive to do its job, and if we pull together we shall succeed.
3.49 p.m.
LORD RENNELL: My Lords, you will probably not expect to hear from me, in the new geographical position that I occupy in your Lordships' House, any very different views from those which you have heard in the past, if only for the reason that, on a great many financial matters, the differences which have separated my late colleagues and my present colleagues have always been of the smallest nature. I do not want to pick up the points that have been made before, except in one case where I should like to expand a little what the noble Lord, Lord Brand, said about saving and capital formation, which as your Lordships know is a subject upon which I have addressed the House in the past.
I should like noble Lords opposite to feel, if they can, that in what I say I am not speaking controversially. I want to mention one or two figures that have appeared in various papers, and also some conclusions which I draw from them. The external situation has been fully dealt with by the noble Lord, Lord Brand, and if I say nothing about it it is not that I do not feel it has a bearing on this question of capital formation in the United Kingdom but that that particular issue seems to me fundamental in our domestic economy, and very much in the context of what the noble Lord, Lord Lucas, has just said about the development of production here in the United Kingdom. We are always being pressed in this country, and we are also pressed from abroad, to expand and modernise production. Those two things require the capital necessary to do them, and, until, that capital has been or can be found, that requirement becomes, if not insuperable, then at least much more difficult, and so puts a much darker complexion on the future which lies in front of us.
On that question of capital formation and savings, a number of figures have been published, notably in the National Income and Expenditure Accounts (Cmd. 7933). The accounts in it are incredibly difficult to follow. A great deal of what I say may be based on an entirely erroneous conclusion, so far as I have been able to draw conclusions from the accounts, but I should like to refer to them to-day. May I first of all say that the amount of savings made in the country as a whole have, of course, very little
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bearing on the National Savings or the figures that are published in that context? They may be indices of the direction in which saving is going, but they are not the aggregate figures of saving. A distinction must be drawn between particular sorts of saving and the general saving which is being effected by the country. Here, parenthetically, I should like to say that the National Savings figures which have been published are to some extent misleading, and I believe that they have had an adverse effect abroad.
For instance, National Savings figures are reputed to have fallen last year; in other words, there is supposed to have been an actual dis-saving in National Savings. In fact, the figures that have been brought out show that that is not the case. It is therefore rather regrettable that even spokesmen of His Majesty's Government, in certain recent statements, should have used figures which they themselves perfectly well understand, and which those who have taken the trouble to investigate understand, but which abroad are apt to have a misleading effect. There was, for instance, a statement in the Chancellor of the Exchequer's speech in another place on May 16 last which refers to that particular subject and which would lead anybody reasonably to the conclusion that there was dis-saving going on—in other words, that we were living on capital.
If I may quote from Column 1155 of the OFFICIAL REPORT of another place of May 16 last, the Chancellor of the Exchequer says:
"The number of people who are saving money to-day and the amount they save are almost as great as ever."
that is to say, not quite so great—
"But perfectly naturally people who put aside large sums of money during the war are now withdrawing them in order to spend them as they intended when they put them aside."
The conclusion to be drawn from that is that there is a net dis-saving going on. As a matter of fact, even on the National Savings figures that is not true. It is true in the context in which the Chancellor of the Exchequer made that statement, of course, but it is not generally true, because the figures that are published, I think I am right in saying, do not include the interest accruing. Both in 1948 and 1949, there was in fact an increase and not a decrease in the amount saved. Similarly, the figures of personal savings by

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way of life insurance show very little difference between 1948 and 1949, and certainly do not show a diminution. They run at about £130,000,000 a year. That is the figure which is derived from the net increase of life insurance funds.
The only conclusion that might be drawn is that, whereas figures of new savings in the National Savings schemes have diminished, figures of life insurance have not diminished. It might therefore be suggested by certain people that the general public still prefer to invest their money in life insurance, rather than in the National Savings scheme. But however that may be, those figures have no real bearing on the total amount of saving which is going on. Those are arrived at in quite a different method and are extremely difficult to follow. They appear in National Income and Expenditure of the United Kingdom (Cmd. 7933), notably in Table 14. It is to that particular table that I would like to draw your Lordships' attention, because I think there is here a rather serious and black point. The actual amount of savings is arrived at by taking the national income and deducting from it the known expenditures, leaving, of course, a certain residual figure. That residual figure is the amount which is reputed to have been saved and which is available for capital investment. In 1948 that figure (I leave out of account the effects of investment abroad, and the sale of assets abroad) was £2,440,000,000. By 1948 that figure had shown a steady and, in certain years, a rather spectacular increase. The figure for 1949, however, is £2,395,000,000, which shows a diminution. In other words, it is apparent that there was a lesser amount of surplus available for investment, for capital formation, in 1949 than in 1948.
For a country which is engaged in trying to re-equip itself, in many cases on a more expensive basis because the cost of certain materials has risen, the fact that there is a lesser margin, though by a very small amount, to do all that is extremely serious. The 1948 figure of £2,440,000,000, reduced in 1949 to £2,395,000.000—that is to say, £45,000.000 less—may be either added to or diminished by investment abroad and the sale of assets abroad; but I will come back to that in a minute.
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May I at this point interject that in pure theory it is alleged not to matter whether the margin of savings and capital formation in the country is derived from one or other, or from a third source? Equally, in theory at any rate, it does not matter whether that amount of saving and that amount of capital investment is then turned into actual capital investment by personal initiative—that is to say by private individuals—by corporations and enterprises, or by the Government. We on this side of the House may have rather definite views about which of the three methods is most desirable. Noble Lords on the other side of the House will no doubt have their own views, but in theory there is no difference, provided that the amount saved is used for capital expenditure in one form or another. If we are to secure the capital that is necessary to re-equip this country, my contention is that the amount shown in the published figures is insufficient, from whatever source it may be drawn. The saving is in fact drawn from three sources, and expended by three sources which I will give in a moment. There are only two ways by which the amount available for new capital investment can be increased. Those two methods are either to decrease the amount of fixed charges—that is to say, administrative costs of consumption—or to increase the national income. There are no two other ways about it.
We have had a great deal of discussion in your Lordships' House in the last few years about the proportion of the total national income which is absorbed by fixed charges—Government expenditure, administration and social services. We have also discussed the proportion which goes into consumption—for food, clothing, and so on. It has been the contention of noble Lords opposite that the amount, not the proportion, at present being spent on fixed charges in the way of administration cannot be diminished. That is in fact what the Chancellor of the Exchequer said a few weeks ago in his speech in another place on the Budget Estimates. It is our contention that that amount can be diminished, and that the proportion ought to be diminished. It is very much our contention that, having regard to the available margin or surplus, which shows signs of falling at the present moment because on the published figures it appears to be

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less in 1949 than it was in 1948, it is absolutely essential to diminish the amount of those fixed charges so as to have more of the national income available for new investment. That is one way in which it lies within the power of the Government to secure an improvement.
The second method, that of increasing production so as to increase the national income, is one to which everybody has paid lip service. The national income, in fact, is rising. The noble Lord, Lord Pakenham, was perfectly correct in saying that the total production in this country had gone up. I am inclined to agree with Lord Brand that the amount by which it has gone up over the last year (I think 2½ per cent. was the figure that was mentioned), is perhaps disappointing.
The Minister of Civil Aviation (LORD PAKENHAM): I do not want to interrupt the noble Lord but he is not quoting me correctly. However, I would rather he pursued his argument.
LORD RENNELL: I was quoting Lord Brand on what the noble Lord, Lord Pakenham, said. I personally think that the amount of 2½ per cent. is disappointing, and probably we are all agreed that the rate of production is not increasing quickly enough to carry the capital investment required by this country together with the fixed charges. Though production has increased, and though we are all anxious to see it increase, there are still the restrictive practices to which the noble Lord, Lord Lucas, referred. They are not limited to any one particular class of person but are still, I believe, the main obstacle to-day·a greater obstacle in fact than the difficulty of provision of new plant and equipment to enhance production. If you can get greater productivity on a machine to-day you get a quicker result than you obtain by substituting for that machine a new one which may take two or three years to install. Therefore, in order to get this greater volume of saving and thereby this greater capital investment, I suggest that both a diminution of fixed charges and an increase of productivity are essential now, otherwise next year we shall run into the difficulty to which the Chancellor himself drew attention—that of being in a static position with no
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margin. Lord Brand referred to that matter, too.
I am struck by the obstacles which are interposed in regard to this increase of production. I quote as an example a very sad, in fact almost a tragic paragraph, which I happened to notice in a well-known newspaper, the Manchester Guardian, a few days ago. There are three items in that newspaper which have a precise and direct bearing upon what I have been saying. All three appear in the same issue, two of them actually on the same page. On page 9 there is a long article containing a report on textile production in the United States. The article starts with a reference to an exceptional case where 104 looms to the weaver are being run at 95½ per cent. capacity. The figure of 104 is high, but the number of looms per weaver in America is very high. On the same page, lower down, there is a really tragic item. It is as follows:
"TWO-LOOM WEAVING OPPOSED
Proposals for two-loom weaving in the Huddersfield and Colne Valley district were strongly opposed by workers, supported by their union."
On an earlier page in the same newspaper I find a large advertisement offering Indian textiles for import into this country. That is an example of what ought not to be happening. This country, which used to supply India and half the world with textiles, is now being developed as a market for Indian textiles, and elements in this country are opposing the reform of the textile industry by refusing to work even two looms to the weaver.
May I return for a moment to the question of savings, as there is another aspect which I think is important? I said that theoretically it does not matter where the saving is made, and theoretically it does not matter by whom the capital expenditure is made; it can, in theory, be made either by the Government, by corporations or by private persons, just as the saving can be achieved by any one of those three categories of people. The sources from which savings are made are referred to in the Table of the White Paper from which I have quoted. The savings are those made by the Central Government—that is to say, the surplus of the current account on the current Budget, not the below-the-line account—and the savings made by corporations and enterprises, and personal savings. I will

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not go into the question of net and gross personal savings, but the net and gross personal savings include the very odd item referred to yesterday—death duties. That, as a matter of fact, is a statistical device. It is a residual figure. If, after adding up everything on both sides, there is a gap left, that is usually called "personal savings." That is why it varies from £9,000,000 in one year to £157,000,000, or £175,000,000 in the following year. I do not quarrel with that. They are extremely difficult figures to obtain. Many of them are still matters of guesswork, and all that one can get is a general idea, especially of the aggregate.
There is one very interesting and important figure to which not sufficient reference has been made. One of the elements of saving is the annual surplus in the National insurance Fund. The Chancellor of the Exchequer has introduced here one of the greatest reforms that has been introduced in Government accounting anywhere for a long time past, by budgeting for an above and below-the-line account, having a surplus on current account, hoping to achieve a surplus overall as well—the latter is very small, if it is there at all. I am surprised to find that in the below-the-line account the intake and outgoing from the National insurance Fund is not included. In my submission, there can be no reason why it should not be included, and I can show one very good reason why it ought to be included. Contributions to the National Insurance Fund are statutory contributions. A great many people—some of your Lordships in this House and elsewhere—have referred to them as in any event a direct tax. If the National Insurance Fund were short of assets, the obligation to pay would fall on the Government and could come only out of revenue or from borrowing. There is no distinction between the details of this so-called independent fund and the ordinary intake and outgoing of the Budget on current account, and in my view those items ought to be included in the Budget figures. Had they been included, the surplus overall would have been greater than it was in the calendar year—not the Budget year—by £157,000,000. That is the figure which appears in the White Paper. That means that the fund in the calendar year 1949 received £157,000,000 more than it ex-
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pended. It is likely to go on doing so, naturally, so long as the unemployment figure remains as low as it is.
What happens to that figure is clear from the accounts of the National Insurance Fund. The surplus or excess is invested in Government bonds. That, in fact, means that the Government are repurchasing their own debt. The accounts of the National Insurance Fund which have only just appeared (I think the current ones appeared last week) form a very remarkable document, and if it is not presumptuous on my part I should like to pay a great tribute to the accounting inspectors and all concerned for the clarity with which the accounts are set out. There has been in the past a great deal of criticism about the Fund because of the paucity of the information published. Information is now published in great detail. The accounts also show, incidentally, the holding of the Fund, together with the market values attributable to it. This is an innovation which a great many of us have sought for many years past, and which all of us welcome.
That Fund already shows an accumulation of something of the order of £1,000,000,000. That money invested in Government debt and held in this way in fact represents a sterilisation or diminution of the National Debt. The annual surplus for the year invested represents so much of Government Debt taken off the market and held by the Government under the name of the National Insurance Fund. I believe that if it were realised abroad and overseas, especially in the North American continent, what a very great proportion was being set aside in that Fund for debt redemption every year, it would have a salutary effect on people's opinion about what is taking place in the United Kingdom. I hope that suitable publicity will be given to that point, and the best place to give it publicity would be by the inclusion of those intakes and outgoings of the Fund in the below-the-line account in the Annual Budget. The surplus of £157,000,000 in the calendar year 1949—we may expect at least a similar amount in 1950—is one of the three sources from which savings take place, one of the three sources which make up the fund out of which capital formation is achieved.
But while we are all very gratified that there is at least £2,500,000,000 in that Fund, and while we may still regret, as I

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do, that it is not greater and not estimated to be greater in 1950, we on this side of the House have in previous years differed considerably from some noble Lords opposite about the source from which that Fund is created. I said that that surplus is made up by Government savings on current account, by corporate savings and by personal savings. I have in the past referred to the undistributed profits tax. I propose to do so again, because it has a very direct bearing. Assuming that the total amount in the Fund on the present scale of expenditure can be only about £2,500,000,000 it is important that the people who use that should be of a corporate variety, rather than a Government. The reason is not political, but purely economic and financial. If you have only a certain amount of money to go round, you naturally wish that capital to be utilised in the most economical manner. The most economical manner in which new capital is utilised is probably when a single individual goes out and buys himself a couple of cows, a horse or a plough, and has no overheads connected with the purchase of that capital equipment for his farm. At the other end of the scale, the most uneconomical user of capital is a Government, not merely this Government but any Government, because of the charges of administrative expenditure, especially in connection with public accounting, which make the use of that capital so much more expensive.
It therefore follows—and this is my thesis—that in so far as we have only a certain amount of capital available for reinvestment in this country, as much as possible should be utilised by the people who can utilise it most cheaply. The people who can utilise their own savings in corporate form most cheaply are the companies themselves. It is therefore an entirely uneconomic method to remove part of their savings by means of the undistributed profits tax and transfer it to Government surplus instead of leaving it to them to utilise themselves in their own industry. That has no bearing, or only slight bearing, on what the noble Lord, Lord Brand, said yesterday on the subject of risk-taking capital. But what is clear in my mind is that, quite apart from being of very doubtful economic worth, the transfer of a surplus from corporate account savings to Government
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account savings means that some amount of money is going to be used less economically than it would have been if it had stayed where it was earned.
Finally, I come to Lord Brand's point about risk-bearing capital. Apart from the amount of risk taking by corporations extending their own businesses, the source of the bulk of risk-taking capital is personal savings. The tragic thing about the figures I have been discussing is that the proportion of personal savings to the whole is to-day falling as the result of the personal taxation levied on individuals. Therefore I conclude, first of all, that the amount of capital formation is wholly insufficient at the present time to re-equip this country. It can be increased only by diminishing fixed charges of administration (in other words, Government expenditure) or by increased productivity, against which new obstacles have been interposed—or, of course, by both. Secondly, it is our view that of that small amount, which is insufficient, a larger proportion should be expended by people who are prepared to take risk—that is, in the form of risk-taking capital—and by the corporations which hold that capital rather than that it should be collected in the form of current surplus by the Government and spent by them.
4.23 p.m.
LORD MARLEY: My Lords, I think I voice the opinion of the whole House in congratulating the noble Lord, Lord Rennell, on his maiden Conservative speech. I see no diminution in the quality of the contribution he always makes. I find myself, and I am sure the Government find themselves, in agreement with much of what he has said. In particular, I would say that the amount of capital expenditure should be as large as we can manage, though I would remind the noble Lord that much may be done to increase productivity in our industries by the fullest possible use of existing equipment. I agree with him that the way to provide for more capital expenditure is to increase production. Finally, I agree with him on the exceedingly difficult elucidation of the savings account in the White Paper to which he referred. I believe he has helped those of us who are interested in the subject by the lucidity of the presentation he has made.
I should like to express gratitude to the noble Lord. Lord Cherwell, if for nothing

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else, for the quality of the speeches—among which the last speech stands high—which the annual debate he initiates on economic policy has brought out during the last two days. The noble Lord, Lord Cherwell, is a lucid speaker. He is rather sarcastic; he is often amusing; and I notice that while yesterday he disclaimed any use of what he called potassium oleate, which translated for non-scientific persons is soft soap, he rather imitated what might be called a synthetic detergent, one of those which are sweeping parts of the country in a national battle between the products of one great firm and another—"Wisk" or "Tide." Whichever he represents, he is an admirable example of the value of a synthetic detergent in our debates.
It would seem that almost all the problems that have arisen can be solved by an increase in our national production. Those outside the boundaries of this House who judge our economic position may perhaps form a more optimistic view than has sometimes been shown by noble Lords in their speeches. For example, it is not without interest that the free pound value in dollars in New York has shown a steady rise for the last six months. It has now reached a level of something like 2.65, which is only 5 per cent, lower than the official rate. It has been characterised by the Financial Times in an article some three or four days ago as so satisfactory that it
"eliminates the danger of sterling area dollar earnings being tapped through triangular deals in sterling commodities by non-sterling countries."
This sounds a little complicated, but it has been a constant fear in the past that there should be this leakage, and it is not without considerable importance that the dollar reserves of the sterling area are protected by this rise, though I need hardly say it is not very much at the present time.
May I say a word on the problem of the measurement of production and productivity? A few months ago, on November 2 of last year, there was a dispute about something which the noble Lord, Lord Cherwell, said in criticising the validity of the measurement of production. The measures adopted by various indices in this connection have come much more closely together, and The Times of May 1, dealing with the
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figures then available up to February and comparing the London and Cambridge "B" index and the Central Statistical Office Index, said:
"Over the whole period since their inception the two indices have shown a gratifying and reassuring correspondence; without doubt they are giving a good guide to the trend of production … so far as the past two years are concerned there is no clear sign that the rate of increase in industrial production has been diminishing."
An extremely interesting article by Professor Ely Devons in Lloyds Bank Review for April of this year was mentioned yesterday. He points out that where there are differences in the indices they are often due to the inclusion of different productive factors. In particular, he points out that agricultural productivity is missed out in some indices, and according to the report of the Minister a few days ago agricultural production shows an increase of 138 per cent. over pre-war. That is a factor which would tend to reinforce the figures of the Financial Times index, which takes a rather more optimistic viewpoint than is generally taken by the other two indices. I feel it is worth saying a word on this, because doubts have been thrown on the validity of these indices, and I believe that, by and large, they are as good as we can expect, judging from the quality of brain, mind and knowledge of those who compile them. I was interested to hear the noble Lord, Lord Brand, pay tribute to the value of their work yesterday.
I want to detain your Lordships for a moment or two on the question of increased productivity. Here we have to face the choice between two differing policies—namely, a policy of restriction or a policy of expansion. I feel sure we shall all agree that the noble Lord, Lord Blackford, made an admirable speech yesterday. It was a speech, full of figures and delivered without notes, which the Daily Herald—a paper which, among others, I read every day—describes as "of enthralling interest." I do not agree with all the noble Lord said, but I was glad that he suggested the lowering of the tax on beer. I do not know whether some day that may be possible—the law of diminishing returns may decide that. Perhaps the reason why there has been a diminution in the consumption of beer

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may be that, as Mr. Bernard Shaw said in one of his earlier writings:
"Beer is the chloroform which enables the worker to endure the severe operation of living."
As the operation of living has become less severe during the last five years, since the Labour Government have been in office, that may conceivably account for the diminution in the consumption of this excellent chloroform—to the detriment, I regret to say, of those who live upon the profits from it. I think this has been reinforced by one of the most moving speeches I have heard in this House—namely, the speech of my noble friend Lord Lawson yesterday. This change in the physical and spiritual conditions of the masses of the people is of vital importance, and while it cannot be measured in pounds or dollars, I feel that we should have an additional column in some of the Government publications if it were possible in some way to measure human values.
I would now say a word about something which the noble Lord, Lord Balfour of Burleigh, said in connection with full employment. It is clear that the policy of restrictionism must make for a measure of unemployment, for lower standards of life and, to some extent, for lower production. That is why on these Benches we believe in the alternative policy of expansion, with its result in full employment, in higher production and earnings, and in a higher standard of life. The noble Lord, Lord Balfour of Burleigh, complained that the policy of full employment was really over-full employment. I see his point of view entirely: he feels that we should have a pool of unemployed, so that we should avoid his fear—to use his own words—that "over-full employment means that wages can only move upwards." That is one of the results, and is bound to be one of the results.
But with the rising national income, to which the noble Lord, Lord Rennell, referred—a rise of over £800,000,000 in 1949 as compared with 1948—it is possible to find a means to deal with the rise in wages without inflation, because of the increased production in the country which the increased national income represents. If you increase production, and then increase wages to meet that in-
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crease, you raise the standard of life of the people and you do not cause inflation. I have made a rough calculation (it may be right or wrong) that somehow or other each year there should be available from the value of the increased production of the country something in the neighbourhood of £300,000,000 to deal with increases in wages following upon increased production. I do not know to what extent we can speed up this increase in production, but I suggest that one medium of which we might make fuller use than we have in the past is the reports of the various committees which visit the United States in connection with the work of the Anglo-American Council on Productivity. Lord Brand yesterday used these words—and I make no apology for repeating them:
"I do not believe that there is any insuperable difficulty to much more production than we have now. That is the real hope for the 50,000.000 people in this country. It is not because people must work harder or better, but because the methods of wealth production improve year by year."
These methods of wealth production to which the noble Lord referred are, of course, improvement in the technical methods of productivity, to which the Anglo-American Council on Productivity has contributed so much. I should like to quote two brief extracts from this morning's News Chronicle on the report of the teams which went to America representing letterpress printing and cotton yarn doubling. The printers say:
"The American knows that without high output his standard of living cannot be maintained."
The cotton team say:
"Operatives are conscious of the need for high productivity as the means of maintaining their standard of living."
I think the deplorable example given by Lord Rennell of certain failures in the textile industry can only lead us to believe that there must have been some failure in the development of joint consultation machinery in that particular section of industry to cause such distressing differences between management and operatives in the industry. Every effort must therefore be made to increase our productivity. I sometimes regret that the noble Lord, Lord Cherwell, has devoted himself so much to the political aspects of our problems, rather than developing the close work which he did, and still

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does, with the Parliamentary and Scientific Committee. In particular, he has taken a most enlightened view on the problem of technological universities. He had the courage to come out against the idea of linking on to existing universities small technological training centres. He came right out in favour of institutes such as the Massachusetts Institute of Technology and the Pasadena Institute in California—technological institutions of 8,000 or 10,000 students—which would perhaps make the biggest single contribution to a rapid increase within the next few years of our production and our industrial productivity. Meanwhile, while we are waiting for these plans to eventuate we must use what we can. We have the aid given by the Government to the Department of Scientific and Industrial Research, and we have the carrying out of the recommendations of the Barlow Committee to double the output of scientists from our existing universities, a goal which according to the latest report has in fact been achieved.
I want to add my voice, with what value it has, to the plea, published in The Times of May 2 this year, of the leaders of the teams which went to the United States. They say:
"We declare our profound conviction that the gains to British industry from visits such as these can be vital and enduring. The teams have learned lessons not confined to techniques of productive processes … only uncertainty of the benefits to be derived can explain the failure of many industries to use this generous form of Marshall Aid."
The Times itself, in the accompanying leader on the same day, said:
"The work of the Council is of great value and does nothing to encourage the complacency which tends to be fostered by the steady rise in the production index."
Twenty-nine teams have now been over to the United States, and it is interesting to note that the latest team to go over deals with hop growing, picking and drying. Here we have an example of a relatively small industry in this country which is contributing to our production drive—and this I think will appeal to my noble friend Lord Selborne—by an export of hops this year of well over £1,250,000 in value. That is the contribution which a small industry can make, and I hope it will be followed by others from the smallest industries.
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Finally, I want to remind the House that the vast bulk of our industries in this country are very small industries and very small firms. For example, out of the total of 258,000 firms, factory and non-factory, in Great Britain, 204,000 employ ten people or under; 236,000 employ fewer than fifty, and 246,000 fewer than 100. I think we must make special efforts to encourage the small firms to make their fullest possible contribution to our production drive. The Industrial and Commercial Finance Corporation have done a good deal, and might do a good deal more. Reference has been made to the growth of factories in our development areas—I think it was the noble Lord, Lord Lucas, who referred to them. These factories, I venture to suggest, have made a very real contribution to the diversification of industries in areas whose main contribution to the national economy hitherto has been a large volume of unemployed. I know that purchase tax has been accused of interfering with certain luxury industries, but I think an industry such as the jewellery industry should be congratulated on raising its exports, which are free of purchase tax, by something like £1,500,000 in the last twelve or fifteen months to a total of rather over £3,500,000 a year.
My last suggestion in connection with small industries is with regard to the British film industry, which is in a very difficult position at the present moment. That industry, which was earning something like 8,000,000 dollars a year a few years ago by exhibiting British films abroad, is now earning less than 2,000,000 dollars a year. I read a letter in The Times of yesterday written by a Mr. Ferris from California. He argued that the British Government and Treasury should demand entry into the American exhibiting market. According to him, we are being deliberately kept out by Hollywood producers who are refusing to show British films on the plea that they would not be acceptable to the American public, whereas the American public are not having any opportunity of expressing their desire to see British films and thereby delivering the dollars they pay to aid the satisfactory economic development of this country. I have detained the House too long, but I hope that we shall bear in mind the need for aiding

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industry, particularly the smallest industries, to make their fullest possible contribution to increased production and increased productivity.
4.48 p.m.
THE EARL OF SELBORNE: My Lords, like the noble Lord who has just sat down, I should like to congratulate my noble friend Lord Cherwell on having inaugurated a debate fully worthy of this House, and one which has called forth a number of very notable speeches. But I confess that it is discouraging and dispiriting to hear from noble Lords opposite—and particularly from Ministers like the noble Lord, Lord Pakenham—arguments and statements which one expects to hear on the platform at General Elections, but which one finds it very difficult to think that any intelligent or honest man can really believe. I refer, in the first place, to the argument which we heard again from several noble Lords both yesterday and to-day comparing the condition of the wage earners of this country after the first war with what they are to-day. It was amazing to hear that argument from the noble Lord, Lord Pakenham. Noble Lords must know that the conditions are totally different.
After the first war, what caused the great unemployment (which was just as heavy when there was a Labour Government in office as when any other Government was in office) was the world slump and the collapse of our foreign trade. That has not occurred this time because America, instead of not only standing off and cutting herself adrift from Europe, but also making trade as difficult as possible by raising all her tariffs, as she did after the First World War, has thrown herself heart and soul into solving the world's economic problems. That has made all the difference. It is not merely the enormous assistance that this country has received directly from America; it is the help that we have indirectly received through the assistance given by America to other countries. If it had not been so, if it were not for the Marshall Aid that Europe—and other countries too—received we should never be able to carry on as much trade with those countries as we have. Therefore, when the Government boast about full employment and the absence of unemployment and go on
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to compare that situation with what happened after the First World War, they are making a comparison that every honest-minded man must know to be entirely fallacious.
But I am unjust to His Majesty's Ministers if I do not admit that they have played some part in securing full employment. They have certainly increased the volume of employment—but they have done it by spending a great deal more money than this country can afford. In order to do that, they have taxed the nation at a level that ought never to exist in peace time and that can foe justified only in war time. They have spent in a most profligate manner the money they have 'borrowed and received free from America. They have sold every asset they could lay their hands on, such as the Argentine railways and the like. By that means they have increased the volume of employment in this country. But, surely, their action in that respect is akin to that of the improvident heir who wastes the family estate; he can be very popular with his friends while the money lasts, but the day of reckoning surely comes. When Lord Pakenham was speaking it seemed to me that he and his colleagues are living in a world of their own. They go about in blinkers. They appear to look at nothing except the volumes of statistics with which their own bureaucracy provides them. But when we learn, as we did yesterday from the noble Lord, Lord Brand, that in those statistics death duties are regarded as savings, and personal savings can jump in a few months from £6,000,000 to £195,000,000, we are really entitled to ask what relation those statistics bear to reality.
Ministers come here and tell us that everybody in the country is working harder, when they know perfectly well what the output in the coal mines is as compared with what it was before the war. They know perfectly well that the output per man-shift is not what it was. They must know perfectly well what the output in the building industry is: the same number of men are employed in the building industry as before the war—and something like half the houses are going up. It is so in a great many other industries; wherever you go you will hear people with knowledge of particular industries saying that the output per man is not what it was before the war.

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Then the noble Lord asserted yesterday that the high taxation which this Government have imposed is no deterrent to business initiative, no deterrent to people pushing forward, putting their backs into the job and trying to get the most out of their industries. Anyone in business knows the immense difficulty there is to-day in getting, let us say, new directors to till the vacancies on any board. It simply is not worth the time of any highly-paid man to take on new work. That is one of the great headaches in industry to-day—and the noble Lord appears to be quite unaware of it. Any business man will tell him of the great difficulty there is in getting men to work overtime, because they feel that so much of die money they are earning is going into the pockets of the Government. In the same way I feel that when the noble Lord parades his statistics as to the alleged flourishing condition of our trade, any business man would tell him about the frustrations and impediments that this Government are putting in the way of trade—I do not say willingly: of course not. But these impediments exist because the Government are slavishly following their Theories of a planned economy.
I can give an example of a case which has been in the public eye within the last few weeks. The industry concerned is one with which I am connected, and I can, therefore, give the facts at first hand. There is a shortage of cement at the present moment. The cement industry never had a shortage before the war or during the war. Only since the advent of the Labour Government have we had shortages in the cement industry. Before the war the cement industry was always able to plan its production ahead of demand, and it was always building factories to keep pace with rising demands. In those days it took about eighteen months to build a factory. No building was possible, of course, during the war, but in 1945 and 1946 the cement industry submitted plans and applications to the Government for two or three new factories. Owing to the frustrations, the impediments, the delays, the consents that had to be obtained, the procedure under the Town and Country Planning Act, the priorities, the reversals of policy on the part of the various Ministries who had to be consulted, and permits being given and then withdrawn—as the result of all that,
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only one of those factories is to-day in operation, and the others are still in a building stage. That is the sole reason for this shortage. I quote that merely as an example, but every one of your Lordships who has a knowledge of business could give a dozen other instances. And yet the noble Lord, Lord Pakenham, speaks with the utmost complacency, as if everything were of the best in the best of all possible worlds, and there were nothing for us to worry about in our trade progress.
I am far from decrying the importance of planning in industry or in politics, but the truth is that the extent to which the Government are trying to carry their theories of planned economy is an impossible extent. You cannot plan the economy of any nation, and certainly not the economy of a ration with such a complicated trade pattern as we have, in the detail that the Government are attempting to do. I think part of the evil that this country is suffering from is the fact that, so far as I am aware, there are only two of His Majesty's Ministers who have had practical experience of business in their lives. One is the noble Lord, Lord Lucas of Chilworth, sitting opposite; the other is the present Minister of Works. But I should he very much surprised if they were ever consulted about planning by the Government. If the noble Lord, Lord Pakenham, is right, how can you account for devaluation? If this country was in such a healthy condition, if our trade was booming, if we were living within our income, if we were saving more than we had ever saved before, if everybody was hard at work, does the noble Lord really believe that for the immediate reasons he gave we should have had devaluation? Of course we should not. The pound sterling used to be one of the strongest currencies in the whole world. As bankers, as insurance brokers, as underwriters and as traders, it is essential to our position that there should be confidence in sterling.
THE CHANCELLOR OF THE DUCHY OF LANCASTER (VISCOUNT ALEXANDER OF HILLSBOROUGH): If I may interrupt the noble Earl for a moment, I would say that if he wants to know what is the real reason, it is the very type of speech which the noble Earl is now making. It is typical of many other speeches and writings which have been

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made, trying to create over the whole world an impression which is against our own national interests in relation to the volume of our exports, and trying to blame on to this country everything in connection with the dollar position that applies to the sterling area as a whole. I think that any such action is exceedingly unpatriotic.
THE EARL OF SELBORNE: My Lords, I am very glad that the noble Viscount has made that interruption, because he has raised an interesting issue. I should like to know from him whether he thinks that free speech in Parliament should be prohibited—because that has generally been the next stage in a totalitarian State.
VISCOUNT ALEXANDER OF HILLSBOROUGH: I certainly intend nothing of the kind; but it does not mean that we are prohibited from free speech on our side to point out that the noble Earl's speech is unpatriotic.
THE EARL OF SELBORNE: I suppose we may speak perfectly freely so long as we do not criticise His Majesty's Government. But may I suggest to the noble Viscount that what was said on this side of the House or what was said from the Conservative Benches in another place would carry no weight abroad if it did not happen to be true? It is not what we say that foreigners look at; it is the facts. My complaint is that noble Lords and their colleagues in the Government are blind to the facts. I am trying to point out facts to them which are obvious to every foreigner. That is why the pound sterling is not regarded in the same light abroad as it used to be. I find it deeply humiliating that a little country like Belgium is a hard currency country when our pound is in its present condition.
VISCOUNT ALEXANDER OF HILLSBOROUGH: There is a high rate of unemployment there.
THE EARL OF SELBORNE: The noble Viscount says that Belgium has a high rate of unemployment, but I should like to make two observations about that. In the first place, Belgium's unemployment, so far as it does exist, is due very largely to the inability of her old customers, France and England, who were by far
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her greatest customers, to buy as much from her as they used to buy before. Secondly, Belgium, in grasping its nettles now, is having a far smaller measure of unemployment to-day than we are storing up for ourselves to-morrow. Hard currency is of the utmost value to any country. The fact that our pound has lost so much of its purchasing value is a disaster of the first magnitude. The noble Lord, Lord Lucas, in what I might describe as one of the less realistic parts of his speech, tried to argue that devaluation was of great benefit to our export trade. Of course, it gives an immediate benefit, just as a glass of whisky can make a man feel better for an hour or so. But you can no more live on devaluation than you can live on whisky. At the moment of devaluation we were stocked with raw materials that were acquired when the pound had a higher purchasing power than it has to-day. Everything that we import into this country now has to be paid for in our depreciated currency.
LORD LUCAS OF CHILWORTH: The noble Earl must have missed a passage of my speech where I pointed all that out. I said that devaluation was of immediate importance; I warned noble Lords against thinking that it was of lasting importance. I thought that perhaps I over-stressed my warning note.
THE EARL OF SELBORNE: I am glad that the noble Lord's speech is even more realistic than I have given him credit for. If so, that part of his speech was not one from which His Majesty's Ministers could derive much comfort. We have had the benefits of devaluation, and the troubles of devaluation are in store for us.
The noble Viscount, Lord Alexander, interrupted me just now when I was speaking of Belgium. I should like to resume on that point, if I am not detaining the House too long. Two points seem to me to be insufficiently realised about Belgium: in the first place, her economy is very similar to our own—that is to say, it has a tightly packed manufacturing community which has to export to live. Secondly, Belgium suffered just as much during the war as this country did. It is true that in some ways she did not suffer nearly so much, but in others she suffered a great deal more than we did. In the first place, the country was fought over twice, and that cannot happen

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to any country without a vast amount of miscellaneous damage occurring.
LORD HADEN-GUEST: Would the noble Earl permit me to interrupt? I visited Belgium immediately after the war, and large parts of the country were absolutely intact.
THE EARL OF SELBORNE: The noble Lord does not seem to have gone where the armies fought. But we never had two armies fighting over England, and I suggest that if we had we should have had a great deal more damage than actually occurred.
LORD HADEN-GUEST: I was with the Army.
THE EARL OF SELBORNE: Then the noble Lord was extremely fortunate where lie went. In addition to that, the retiring Germans took away every horse, every cow, and nearly every chicken they could find. I also was in Belgium immediately after the war, and I saw a Great deal of this damage. It is true that Brussels did not get the bombing that London suffered. Brussels was quite intact. But Antwerp was most severely damaged, very largely by ourselves—I think more seriously damned than any British port. Antwerp is the sole port of Belgium, and the comparison is between every port in this country being treated as Antwerp was.
I think, however, that a far greater disaster than all that was that their currency was deliberately depreciated by the Germans who used the printing press to destroy the value of the Belgian franc. If it had not been for the heroic measures taken by the Belgian Government their economy would have been wrecked. They took measures on tae lines of Gladstonian finance. In dealing with these problems, they did exactly the opposite to what His Majesty's Government have done. They used their credits in America to import consumer goods. They did not receive an American Loan as we did. They abolished all controls, thereby killing the black market, and giving an incentive to work. They reduced taxation as far as possible, and they "got going." It is true that they have had some unemployment, but I suggest that in the long run they will have had less unemployment than I fear is in store for this country. They have made their currency a strong currency,
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which is of enormous importance to any country. It is one of the greatest disasters to us as an island nation, dependent as we are for our livelihood on immense imports from abroad, that we have depreciated the value of the pound.
My Lords, another point that has emerged from this debate is that Lord Cherwell's statement that there has been more inflation in England since the war than there was during the war, has not, so far as I am aware, been challenged. If that is so, and I believe it is, that is surely a tremendous indictment against the policy pursued by His Majesty's Government.
LORD PAKENHAM: I do not want to interrupt the noble Earl, least of all to comment on the various criticisms he is making of me, but I did deal with that particular point in my speech yesterday afternoon.
THE EARL OF SELBORNE: I listened with great attention to the noble Lord—I am most anxious not to misrepresent him—but I did not understand him to dispute Lord Cherwell's statement, that whereas inflation during the war had been at the rate of 4 per cent., since the war it had been at the rate of 5 per cent.
LORD PAKENHAM: I do not want to detain the House, particularly as I spoke at great length on this whole issue in the debate on the cost of living not long ago. Yesterday I went into the point the noble Earl is referring to, and I. am on record, though briefly, in view of my earlier and much longer remarks in the debate that I have mentioned.
LORD CHERWELL: May I explain where these figures come from? I said that during the last four years of the war inflation was at the rate of 4 per cent., and that for the first four years of peace it was 5 per cent. Those figures come from a statement made by the Minister of State for Economic Affairs on April 18, 1950, in Oral Answers, in column 32 of the OFFICIAL REPORT.
THE EARL OF SELBORNE: If my noble friend Lord Pakenham does not agree with Lord Cherwell, it appears that the Minister of State for Economic Affairs does. On that, I would say only that I assure the noble Lord. Lord Pakenham, that it is out of no malice that I have referred so much to his speech. I was

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greatly interested in it yesterday. Perhaps I ought to be referring more to the speech of the noble Lord, Lord Lucas, but I found myself in agreement with so much of what he said.
Lord Pakenham made a great appeal yesterday for the National Savings Movement. I think it is about time that someone asked noble Lords opposite whether they really consider it honest to invite poor people to invest their savings in fixed interest Government securities if the Government are not pursuing a policy that is going to maintain the spending power of the pound. I suggest that if the Government ask poor people to put their savings into Government securities with fixed interest they should recognise their moral obligation to maintain the spending power of the pound. This Government have not done that. They have taken the easy path of maintaining full employment by spending money that we really have not got. That process, on top of the American assistance, provides full employment; but one of the results has been that the cost of living has gone up and the spending power of the pound has gone down. Moreover, so far as I can see, there is no halt to that process; it is going on to-day. The costs of living are going up, will continue to go up and must go up, as Lord Brand pointed out, as a result of devaluation; yet Ministers are telling people that they can safely invest their savings in fixed-interest Government securities, and that these savings will be quite safe. Of course, the savings will be safe, but the income that they will bring in will be fixed, and the Government are not taking the steps, which are open to them and which prudent finance would indicate are necessary, to maintain the pound so that those savings will buy as much when they are taken out as when they were put in. For these reasons I cannot take the same optimistic view of our national situation as His Majesty's Ministers apparently do. I view the tremendous level of taxation today as one of the greatest millstones round the neck of British industry, and as a severe menace to our future survival.
Lord Cherwell referred yesterday to the firms founded by Lord Nuffield and Lord Austin. He pointed out that it would be impossible for any man to build up such industries under the present scale of taxa-
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tion. I believe that to be perfectly true. I myself am associated with another industry which was built up in exactly the same way by another man who put back his profits into the business. These are the men who are running British industry to-day. The great industrialists of to-day were the small men of yesterday. The small men of to-day could be the great industrialists of to-morrow, but this Government will not allow them to become so. They are throttling them at birth. That is a disaster to this country.
The Government are living on the moral as well as the physical assets of the old days. Just as they have liquidated the Argentine Railways in order to pay to-day's debts so they are using the ability of our industrial leaders and taking away their earnings. The present generation of businessmen are carrying on in the spirit of Dunkirk because there is nothing else which they can do, and they are hoping for better times. To them idleness would be the greatest evil. But the policy of the Government is preventing the emergence of the new generation of industrial leaders. It is preventing the men who have founded small businesses from building them up into big ones. I cannot see how this country can prosper, how we can secure the increased production which we all agree to be necessary, if the country is to be deprived of its natural industrial leaders.
5.24 p.m.
LORD WINSTER: My Lords, if I may, I would make a very brief comment upon what the noble Earl has said about Belgium. Of course, I entirely agree that impressions derived from a very short visit to a country may not be of great worth, but it so happens that I was in Belgium about three weeks ago. I visited Antwerp, and I know that every word which the noble Earl said about the destruction there is true. But I conferred with trade union leaders and they told me that there is very heavy unemployment in Belgium at the present time. In fact, a figure of 20 per cent. was quoted to me, but I cannot vouch for that, for I had no opportunity of checking it. I can bear testimony, however, to the extraordinarily high cost of living in Belgium just now. I did not seek my meals in luxury hotels or restaurants, I went to very humble establishments indeed, but I was astonished at the high

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prices charged and I was utterly at a loss to understand how, on the wages which are being paid, people could really afford those prices.
As regards the general tenor of the noble Earl's speech, it was laudatory of the part which business men can play in the conduct of the affairs of the country. I have quite recently been reading an extraordinarily interesting book from America called The Aspirin Age. In that book, a series of writers deal with many of the great events which have occurred in America in recent years—the depression, the crash, the régimes of Presidents Hoover, Harding, and Coolidge and the days of the "New Deal." Each of those episodes in recent American history is dealt with by a different writer, yet I find they agree upon two things: that the Presidents who were most acceptable to the business community in America at the time of their election brought about—or at any rate their presidencies were identified with—great disasters in American history, and that, over and over again, advice tendered by business men to the Administration was proved to be absolutely wrong and to have paved the way to great misfortunes and disasters.
I feel that I am guilty of gate-crashing in taking part in an economic debate, because I make no claims to being an economist. Certainly, if I had any claims they would have been dissipated by the speech of the noble Lord, Lord Cherwell, yesterday. That remarkable and close-packed speech revealed to me how very little I know about this subject. On the other hand, I always feel grateful to the noble Lord when he speaks, because he gives me a gratifying sense that I am a member of the Royal Society listening to an extremely learned paper read by an extremely learned man on a subject about which I know nothing at all. Many novel ideas are being introduced into our industries and into our economic and fiscal systems at the present time. I believe I am like many others in finding great difficulty in always following what is going on and what is at the back of these ideas. One reason, I believe, is this. At times when a country is beset with perplexities and difficulties, as ours is just now, Governments tend, like Wordsworth, to speak with two voices. On the one hand, you get a speech in which it is said that the country is in great
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difficulties, that we must do everything we possibly can, that we must do this, that and the other, in order to get the country out of those difficulties. Then, side by side with that, you get a speech in which it is said that things are really going very well indeed, that production has increased, that output per man-hour is increasing, that the dollar gap shows signs of beginning to meet, that reserves are increasing and that nationalised industries are attaining their target deficits. Really, one is left wondering which of those two stories is true.
I cannot help thinking that this may be the explanation. In the bad old days we used to have a General Election every four or five years. During the Election period, there was a "free for all," so far as truth was concerned. The Election being over, we settled down to a period when there was, at any rate, some regard for truth. Now we seem to me to be living in an atmosphere of perpetual General Election, and truth is treated as a poor relation. I am afraid that, in consequence, the individual whom we call the "man-in-the-street" really believes very little of what he is told. I make no comment upon that except to say that I think it would be extremely helpful if, when statistics are quoted to indicate increases in production, increases in output per man-hour, and so on, they were related to some idea of what is possible and to some idea of what is the comparative state Of affairs in other countries. Without some such comparisons, I think that statistics are often rather meaningless. If, after walking along a road at a speed of two miles an hour, I accelerate to four miles an hour, that means that I have made a most laudable effort to increase my speed. But I am still being passed by all the bicycles on the road. Therefore, I think it would be extremely helpful if the statistics to which I have referred could be related to certain other factors.
I will give an instance of what people find confusing. I have been re-reading the speech with which the Chancellor of the Exchequer introduced the Budget. I will not trouble your Lordships with quotations—I think' that this is a fair representation of his position. Revenue shows signs of diminishing and new fields of taxation will be extremely difficult to find, yet at the same time our expenditure must automatically increase. I

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believe people find that extremely confusing. They ask: How do we carry on? As an individual, if it were brought home to me that my income was diminishing, that I had no sources whatever for increasing my income, and that at the same time my expenditure was increasing, I should know that I was walking along Queer Street on my way to Carey Street. People are puzzled to know how the Government can do with impunity something which an individual could do only at the risk of grave personal misfortune.
In reading the Budget speech, I also notice the question of income tax reliefs. What is the principle which lies behind the grant of these reliefs? For the sake of argument I will divide the workers into three categories—it is a rough argument but I think it will serve my purpose. The first category is of workers who are receiving a good pay packet—good luck to them; I am all for it—which is of such a size that, although they are subject to income tax, they can afford to pay it and not be too badly off. There is the second category of workers, whose pay packets are small and to whom income tax represent a burden, and then we come to the third category of workers whose earnings are so low that they are not subject to income tax at all.
It has been decided that the second category should have some relief from income tax. That will cost about £80,000,000, which is being found by a tax upon transportation—that is what it amounts to. Of course, that involves a rise in prices. A fact-finding committee in America have reported that anything up to 75 per cent. of the cost of an article might be represented by movement, so that when we put a tax on transportation we inevitably raise prices. It comes to this: that those who are worst off will find themselves confronted by rising prices and will have to pay for the relief given to those in a better situation than themselves. That is an illustration of the parable of the talents:
"From him that hath not shall be taken even that which he hath."
I can imagine the lowest category of workers saying, "If that is planning, the only remedy is to throw a planner in the works." I agree entirely about fair shares
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—even equal shares are spoken of—but I feel that what is even more important than fair shares is a fair deal. For instance, 170,000 railwaymen who are earning not more than £5 a week, some of them less, must feel that this is rather a queer way of granting relief.
LORD BALFOUR OF BURLEIGH: Did the noble Lord say that 170,000 railwaymen were earning not more than £5 a week?
LORD WINSTER: That is the figure.
LORD BALFOUR OF BURLEIGH: I should like to have authority for that.
LORD WINSTER: Certainly, I will show the noble Lord the paper in which that statement was made, which I checked this morning when looking through my notes.
These matters lead us to the vexed question of wages and wages policy. Superficially, a wages policy seems a good idea, but it is one of real and considerable complexity and difficulty, involving the question of differentials and the possibility of further inflation. I am not surprised that because of these difficulties those who know a good deal about the subject prefer wage regulation by free collective bargaining to some idea of laying down a hard and fast wages policy. To some extent we have had a wages policy. We have had the wage freeze, the policy of stabilisation of wages, which was an attempt at a wages policy. It placed the trade union leaders in great difficulties and the trade unions under severe strain; and it weakened the belief of the workers in the machinery of negotiation and conciliation. It pressed most hardly upon the poorest workers, for the reasons I have given, and it denied any increases in wages to meet the rise in prices, although 1,700,000 workers are in enjoyment of sliding wages agreements by which wages rise automatically with a rise in prices.
These facts illustrate the difficulty of trying to lay down a wages policy. In fact, we have to admit that that policy has failed. I notice that the General Secretary of the Transport and General Workers' Union, speaking over the weekend, said that we have no such thing as a wage freeze policy because wages have risen by £200,000,000 during the past year. If we aim to have a controlled national economy, how can we arrive at

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that when we are unable to control the largest item in the national economy—namely, wages? They are the raison d'être of the trade union movement. Are the trade unions to surrender this field of their work to a planned economy? I think that confronts us with one of the dangers of a planned economy, which is, that it must involve a certain urge towards authoritarianism. If we find that plans are breaking down because we cannot control a certain field of the national economy then there must be a great temptation to take that field under control. We may act from perfectly straightforward and honourable motives. We may think that what we are doing is right, and for the good of the nation and everybody concerned. But if we are held up in our plans only because of one particular field of the national finances, then the temptation to go out and take control of that field also must be very great.
Related to the question of wages is the question of incentives. There is a tendency to-day for the Government to regard incentives as unethical. The spirit is that expressed in Kipling's lines:
"When no one shall work for money and no one shall work for fame …
But each for the joy of the doing."
Your Lordships ought to be commended as being extremely ethical, because we certainly work without any incentive; though from another point of view perhaps we may be regarded as political blacklegs who do not charge the rate for the job. Having quoted Kipling I must in fairness point out to your Lordships that he was talking about the hereafter and not about the present. Incentives in the present remind me of the little boy who was asked to define a lie, and did so by saying: "It is an abomination unto the Lord, but a very present help in time of trouble." Incentives may be unethical, but they do seem to produce great results. I notice that incentives in the building industry are estimated to reduce the cost of a house by £15, which, at any rate, is something: it is an incentive in practice.
If one looks into the past, one is bound to admit that incentives have resulted in some remarkable things being done. Suppose Drake were proposing to sail to-day for the Spanish Main and he was told that he could take only £50 out of the country; that he would have to queue up
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outside a good many squalid offices to get his passport and exit visa and, if his voyage was a success and put him into the surtax class, he would be charged 19s. 6d. in the pound for his Spanish doubloons, and mulcted 95 per cent. of any presents he might receive from dusky potentates. He might say: "I am above that sort of thing; I will sail." On the other hand, he might say: "I think I will stay quietly in Devon playing bowls." I do not think we can lightly set aside the value of reasonable incentives in getting things done. There is one point I would like to mention briefly in that respect. I have been very concerned indeed to notice that some authors are declining contracts at the present moment, not only because they would not reap very much from accepting them, but because they would actually suffer a lost by so doing. I feel that we must be very careful about that. The Welfare State must not be a mediocre State, and it is the duty of the Welfare Slate to encourage the humane arts in every way and give full encouragement to the artists.
I come now to what seems to me to he one of the most important matters of all in a debate upon the national economy—namely, the question of full employment. The Chancellor of the Exchequer, at the end of his Budget Speech on April 18, said:
"So long as we can maintain full employment by whatever measures are from time to time necessary, we shall at least know that our national production is at its highest possible."
I feel that there is some error here. I should find it difficult to believe that that is really what the Chancellor of the Exchequer meant to convey—that if you have full employment it is proof that your national production is at its highest. Surely, such a proposition as that is a complete fallacy. That would leave entirely out of account such questions as markets and competitors. You may have full employment, but you cannot have full production unless there are markets for what you are producing; and not only must there be the markets for what you are producing, but you must be producing the article that your customer wants, of the right quality and at the right price, and be able to deliver it at the time when your customer wants it. However much you may have full employment, unless you are meeting those requirements it is

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surely, impossible to say that your national production will be at its highest possible.
I make no apology for drawing attention to the question of competition. Sir Stafford Cripps said in the same speech:
"Competition is likely to increase in the coming months."
It will increase, and some of it will be from nations which have a very rudimentary idea of welfare. Japan has been quoted to-day. Lord Layton is not in his place, but I should certainly agree with him that we have no right to say that Japanese labour is sweated labour. But I notice that competition is already beginning there. Japan has just secured orders for two turbo-alternators from Pakistan, and has undertaken to deliver them in half the time that was quoted in the British bid. Japan can sell bicycles in Singapore at a price £1 cheaper than we can. As regards factory conditions there, the reports are that there is one cotton factory which is well conducted, with good conditions for the work-people, light and airy, but engaging largely female and young girl labour and paying them £4 a month with board and lodging. There is no question of sweated labour in this factory. Those conditions will make competition from Japan very fierce indeed. No nation in the world can run shipping better than we can—running a shipping line and running shipping is something in which we really are masters—but when it comes to matters upon which the shipping industry depends—that is, shipbuilding and shin repairing costs—I am afraid that as time goes on we shall find ourselves meeting severe competition on the Continent. We need not be too gloomy about the picture, but we must face the fact that there is this competition to meet.
As was stated yesterday, we have the American and Canadian debt service to meet when it begins in 1951; and Marshall Aid ends in 1952. So there is no cause to reproach anybody for expressing anxious concern about the future ability of our trade and industry to meet that competition. Industry must be fully equipped, and able to find new capital for new equipment and modernisation of plant. But I entirely agree with what my noble friend Lord Marley said this after-
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noon, that that is not the whole of the argument and that a great deal better use could be made of existing equipment if it were more efficiently used than it is at the moment; that it is not merely a question of working harder or longer, or of the modernisation of equipment, but that the prime thing is to use efficiently the equipment we have, and to bring all our industries up to the standard of the most efficient, which is a very high standard indeed. Something has been said this afternoon about restrictive practices and price-fixing arrangements. I am sure that they, also, act as a drag upon our industry and our: production. A committee has been sitting for a year to examine this question of restrictive practices, and I hope that we may soon hear something of their findings.
I conclude with a few observations about the Welfare State. The erection of the Welfare State is undoubtedly a most remarkable achievement, when we compare what is being done with what was done after the First World War and when we remember that that war was to be "a war to end all wars" and to give us a "land fit for heroes to live in." It is no good going on too much about the past, but we know what a mockery those promises became. After this war there has been a real attempt to redeem the promises which were made while the fighting was going on. Not only the Government, but everybody concerned, can feel justly proud of what has been done. There are, of course, the cavemen on both sides. On one side you have the relic of the Stone Age lurking in his cave, ready to jump out and club the faintest sign of progress on the head; and on the other side you have tile men whose minds seem to have stopped with the Tolpuddle Martyrs during the Industrial Revolution.
There is common consent that the Welfare State, with its concomitant of full employment, is something of which we can feel very proud—something which is in direct line with the work of the great reformers of this country. It fulfils a social conscience and, without undue conceit or vanity, we can once more say that we lead the world in this matter. It is an achievement which transcends the mistakes and miscalculations which were inevitable in working out such a great and novel conception. Of course, the

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benefits will be abused—benefits and privileges always are abused—but that practice will tend to diminish. The Welfare State depends upon a planned national economy which involves in itself many difficulties, and there should be no resentment—and I believe there is no resentment—if questions about the finances of the Welfare State are examined. It is right that they should be examined, and those people who raise questions about the finances and the system of administration which is involved are doing so because they wish to make sure that the thing is being properly established.
Sometimes when I visit cathedrals I hear other visitors admiring particularly the flying buttresses. In contradiction of what they are told, the fact is that the flying buttress represents an error in planning on the part of the architect, who had to buttress up his work which otherwise, through his faulty planning, might in part have collapsed or at any rate fallen into an unsatisfactory condition. If we examine the finances and other matters surrounding the Welfare State, it is only because we want to make perfectly sure that that State is being erected upon completely sound financial and economic foundations which will enable it to stand secure through the weather in years to come.
5.55 p.m.
LORD HAWKE: My Lords, the noble Lord who has just sat down said that people were wondering why Governments could apparently do with impunity things which ordinary mortals could not do. The answer is that they cannot. The rising prices which we have seen in this country over the last four years are the result of the Government's attempting to do things which the ordinary mortal cannot do without ending up in Carey Street. The Government are great adherents of a planned economy. It is all very well to plan an economy, but the great thing is to bring off the plan; and you cannot make certain of a planned economy coming to fruition unless you have far greater control than the Government have at this moment. You must be able to direct labour, and you must have a close control over consumption in order that you may have a control over savings. Therefore, in the existing system, it is impossible for the Government to make
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certain that any planned economy they propose can work.
Now one of the most important objects of the planned economy is to see that we do not try to spend more than we have; that our resources of material and so on are matched, but not over-matched, by the financial supply. Once a year, His Majesty's Government go into print with an Economic Survey of the nation. His Majesty's Government are "the masters now", but they are modest when it comes to claiming mastery over our economic future. I want to quote from the latest Survey. Paragraph 68, dealing with the national income and the balance of the economy, says:
"The analysis which follows is based on a number of stated assumptions. The selection of these is very much matter of judgment, and the most important depend on the sense of responsibility shown by the people as a Whole to the needs of this situation. With different assumptions, the conclusions themselves would be different."
It then goes on to say that this is what is required if internal stability is to be maintained. It seems to me clear from this Survey, as it was in 1949, and as it was in the Chancellor's Budget speech, that the final residual key to our economy is the matter of the personal savings. But of course that is one thing which cannot possibly be planned in the existing circumstances; it can be planned only with the most rigid control over every other form of financial outlet. The 1949 Economic Survey hazarded a guess that personal savings would be £210,000,000, but said that this was only a balancing item and was not a forecast. For 1950, the Survey does not venture a forecast of personal savings. It lumps together private savings and business savings, and so on, and says that these must go up from £637,000,000 to £805,000,000 if—and again I quote
"a resurgence of inflationary pressure is to be avoided."
The simple truth seems to be at first glance that the nation is not willing to forgo sufficient current consumption to provide for the capital expenditure that it really requires.
I think the matter goes even a little deeper than this. We have put ourselves into a most extraordinary position by our very high taxation. The restraint in spending has kept: Is value of course to the individual, hut it has lost a great

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deal of its value to the community. Over the field where restraint would usually result in saving—drinking, smoking, gambling, entertainment and so on—restraint merely deprives the Exchequer of a very large proportion of that expenditure which would find its way there anyway. In fact, to-day one cannot finance a programme of capital expenditure by the classic virtues. To be really 100 per cent. useful to the community savings have to be brought about by the restraint in expenditure on things which do not bear heavy taxation, are preferably imported and preferably sub-sidised—in other words, utility clothing and food. That is a very narrow margin to-day for any hope of increased savings.
The situation is a very extraordinary one. It would appear to my Victorian ancestors most peculiar and, I think, particularly so to the pioneers of the Labour Party. The man who is really of economic value to the State might almost be described as the man who dissipates all his substance during his lifetime on drinking, smoking and gambling, and then dies of delirium tremens on the day he is going to draw his old age pension. It goes even a little deeper than this, because labour is not mobile, either by geography or by classification. You cannot turn a camera man in Elstree into a bricklayer in Liverpool; so that it does not follow that by saving, by not going to the cinema and so forth, you can finance any building expenditure.
It follows that the plan must certainly fit the expenditure to the savings available; but it must also fit the expenditure to our material resources. I venture to think that it is in the field of public and private works that the real inflationary pressure exists to-day. We are trying to over-reach our resources, both financial and material, in that field, and it is there that the plan is not working. And, unfortunately, inflation in that particular field does not take long to translate itself into the cost of living through higher rents and repairs, and so on. The remedy, of course, is to make certain that the demand upon our resources for capital goods is neither more than the money available for investment nor more than the resources available for carrying out the work. If the Government have difficulty in cutting down the works in the
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private sector, then there is all the more reason why they should be extra careful about cutting down the works in their public sector.
So much for the internal situation. To turn for a moment to the external situation, I would point out that the Financial Secretary to the Treasury was reported by the B.B.C. on May 5 as saying that we were dealing with inflation in this country better than were many other countries. That is true; but what flows from that? One would expect to find the pound buoyant against the currencies of the countries less successful than ourselves. But what is the actual position? Over the greater part of the world, the pound commands an exchange rate no better and in some cases worse than it did in 1945. This has meant that we have received no financial reward at all for being less profligate than many others. Steadily rising costs in these inflationary countries overseas have been translated into rising costs in this country through fixed exchange rates.
Why is this? The answer is that most of the world adheres to the International Monetary Fund. The purpose of that Fund was to give us stable exchange rates based on stable internal financial policy. We have certainly had a measure of stable exchange rates, but the Fund has been totally incapable of restricting the financial malpractices of its members. Many of the exchange rates in the world are at false levels against us to-day. Many countries have found that they can isolate their internal price levels from the competition of our goods by using our invention—the import licensing system—to peg their currencies at false levels. They have obtained from us at cheap prices the capital goods which they badly wanted, and they have "soaked" us heavily for the few monopoly goods we must buy from them. It is a new game—a game of inflation behind unscalable trade barriers. I have seen no evidence that our members on the International Monetary Fund are doing anything about this at all.
There is another factor, to which I will merely refer, and that is a factor making for the weakness of sterling—the release of the war-time balances to the Asiatic countries. I submit that it was a false kindness to have released these balances on any pretext whatsoever. It was only postponing the day when those countries

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would have to make their exports balance their imports; and it has been helping them only to maintain exchange rates which do not sufficiently encourage their exports. We have to pay for it doubly—first, by the release of these balances, which means unrequited exports, and secondly, by having exchange rates against us higher than are necessary. Economists sometimes talk about "importing unemployment." I believe that His Majesty's Government have been importing inflation and have been providing a happy breeding ground for it here. There seem to me to be six factors working for inflation in this country at the moment. First, we are importing inflation. Secondly, we have been shipping abroad goods in payment for war debts. Thirdly, we are permitting more overall demand for resources at home than the size of those resources justifies. Fourthly, His Majesty's Government in their fiscal policy are overestimating the degree of interchangeability between resources which supply consumption goods and resources which supply capital goods. Fifthly', the Government's policy of huge taxation for restricting consumption is resulting in inflation through wage increases. And, sixthly, quite apart from the financial side, His Majesty's Government are not keeping the programme of capital works within our capacity to perform those works both economically and expeditiously.
What is the remedy? First, more realistic exchange rates, preferably with a free pound. Secondly, the funding of the remains of the war-time balances. Thirdly, relief from taxation enough to lower the cost of living sufficiently to stop all demands for further wage increases. Fourthly, a programme of works on Government and private account which will not over-match the resources, both financial and material, available to carry them out. The alternative, of course, is a continual rise in prices.
6.9 p.m.
VISCOUNT SWINTON: My Lords, I should like first to thank noble Lords on the Government Front Bench who have given me, a returned traveller, such a kindly reception. It is very agreeable to me to receive an equally warm welcome from both sides of the Atlantic. We have had a long, wide and informed
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debate. These economic debates give us an opportunity to review the economic situation of the country and the economic policy of His Majesty's Government. After the masterly review given by the noble Lord, Lord Cherwell, yesterday, and the penetrating comments of the noble Lords, Lord Brand and Lord Rennell, little remains to be said upon the former, but perhaps it would be appropriate, in winding up the debate, if I offered a few observations upon the economic policy of the Government.
A number of speakers have drawn attention, and fairly drawn attention, to the great advance which industry in this country has made in production and export. Whatever may be the correct estimates of production there is no doubt that that is a fine achievement. But I must part company with some of the Government speakers when they seek to claim credit for what has been done. After all, what has been their record? We have had the profligate financial expenditure of Dr. Dalton. I was touched yesterday by the way in which his old schoolfellow rallied to his side. This loyalty to the "old school tie" on the Socialist Benches is indeed touching. Then we had the coal crisis which, on a modest estimate, set us back six months. We have had the rising costs of the nationalised industries, each of them, as the noble Lord, Lord Winster, said, achieving "its target deficit"—and I think sometimes exceeding it—increasing the fuel, power and transport costs of every industry in the country. We have had, in the Chancellor's own words, the
"slipping from expedient to expedient."
We have had the maintenance of controls after they have become superfluous. Finally, we have had the crowning mercy of devaluation. Listening to the noble Lord, Lord Lucas, to-day, I had almost begun to suppose that devaluation was the supreme achievement of the Government and not the confession of failure which the Chancellor of the Exchequer over and over again protested he would avoid at all costs.
These, to which others can be added, are the outward and visible signs of an inscrutable planning providence. I ask the noble Viscount the Leader of the House who is to follow me in the debate which of those achievements of His

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Majesty's Government are to be reckoned on the credit side of having assisted our production and our exports? I am quite ready to affirm that the Lord Chancellor is the embodiment of the majesty of British law, but I am not prepared to admit that His Majesty's present Government embody all the greatness of the British people. We have had a great advance, but where has it been made? It has been made in the non-nationalised industries; and it has been made in spite of frequent frustration and threats by the Government, and in the absence of incentive.
Judged on the achievement of our industry, of our shipping, of all that network of services—financial, commercial, insurance—which we provide, we are entitled to command a great measure of confidence in the world. If that confidence is not what we are entitled to claim on our capacity and performance, it is due to lack of confidence in the past performance and future policy of the Government. Surely to-day the whole policy of the Government should be directed to creating conditions in which industry and commerce can expand and take risks, and to fostering the confidence of the world in this country. The noble Viscount the Chancellor of the Duchy of Lancaster, a singer who likes an old refrain, tuned in again yesterday on the rather outmoded motif of denigration, as it is now called. He must learn that foreign countries do not judge this country even by his speeches, and certainly not by ours. He said that the whole of devaluation had come about because people on the Opposition Benches had made speeches. Really, the noble Viscount must get a little nearer to reality and the truth.
VISCOUNT ALEXANDER OF HILLSBOROUGH: I never said that the whole of our difficulty was due to that; I said that it contributed.
VISCOUNT SWINTON: It was a contributory cause?
VISCOUNT ALEXANDER OF HILLSBOROUGH: Yes.
VISCOUNT SWINTON: It certainly is not. They do not judge us on speeches. They do not judge us on White Papers. What they do—and they are sound,
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shrewd judges—is to judge by their own appraisal of the effect, past and future, of Government policy. They judge by what the Government do and what the Government leave undone. They look at our financial policy. It is true that we have a balanced Budget, but they see that we are taxing up to the hilt; they see that we have no reserves available; they see taxation handicapping the initiative and development of business and the enterprise of the worker; they see the Chancellor of the Exchequer preaching economy and reduction of cost to everybody except the Government Departments he is supposed to control. It is quite absurd to say that expenditure cannot be reduced, when £30,000,000 is squandered on failing to grow ground-nuts—and some more is following that; when State farming is losing £6 per acre—which is the figure appearing in the Report of the Public Accounts Committee. Apparently, State farming requires something more than a feather bed. When £140,000,000 is added to the Supplementary Estimates, after the Chancellor of the Exchequer solemnly affirmed in his Budget statement that there would be no, or at least very few, Supplementary Estimates; when engines are converted from coal to oil and then back again to coal because there is no oil; when vast losses are made on State trading because the Government will not let the people do the job who know how to do it—it really is fantastic when we have those examples (and I could quote others) to say that the Government cannot economise and reduce expenditure. A moderately competent Government would be able to economise all along the line.
Then foreign countries look at the economic policy of the Government. There is no doubt that the majority of the people in this country and in the world are opposed to nationalisation. They are opposed to it not on any theoretical grounds but on well-proved experience. The uncertainty and threat of further nationalisation undermines confidence in industry in this country. And it does something more: it deters the investment of foreign capital here, which is the one thing we ought to be encouraging. We still do not know what the Government mean to do about iron and steel. After the speech of the noble Viscount, Lord Alexander, last night. we know even less

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than we did. It was a most entertaining speech, We shall look forward to hearing him frequently. He claimed that the existing policy governing the steel industry—with, I admit, some contribution from the steel masters and the steel workers—was responsible for the outstanding success of the industry.
But what is that policy? It was not invented by the Government. It was a policy of broad guidance and a certain measure of control, which started long before the war, which was practised by the National Government through the war, and which the present Government inherited and had the good sense to carry on. The noble Viscount commented on how admirably it has worked. I agree that it has. If it has worked so admirably, why do the Government want to change it and substitute nationalisation? The industry is efficient by every test, progressive by every test. in production, cost and price, as Lord Layton, with his great experience, said, it is competitive with any other steel industry; and above all, it is a model in its labour relations. I am glad to hear that the noble Lord, Lord Lucas, has had an interesting visit to Wales, during which he was overcome by the beauty and glory of the prospect of the Mangam Steel Works, and he commented "What a monument to Government planning!"
LORD LUCAS OF CHILWORTH: I said "Industrial economic planning".
VISCOUNT SWINTON: Industrial economic planning? Then it has nothing to do with the Government. Let us pursue this. I am sure the noble Lord would not wish to be misunderstood. Industrial economic planning—by whom?
LORD LUCAS OF CHILWORTH: was impressed at the enterprise; I was not concerned as to whose enterprise it was.
VISCOUNT SWINTON: I am delighted. But I am concerned with whose enterprise it was, and I think the people out of doors will be concerned with whose enterprise it was. After what Lord Alexander said, in the prelude to Lord Lucas's speech, I should like to tell him whose enterprise it was. This project is a combined project of Guest. Keen, Baldwin's and Richard Thomas which was conceived in 1936.
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The whole plan was brought to complete fruition in 1944; and the project was launched in 1945, and is certainly a magnificent achievement. But it had nothing whatever to do with His Majesty's present Government. Lord Lucas reminded me of an incident of which I was told—about a distinguished alderman who visited another marine resort. He was so overcome by the beauty of what he saw, that in gratitude he erected a seat, and on it he had written:
"This seat was presented by Alderman Buggins. The sea is his and he made it."
My Lords, to return to steel, why do the Government want to change that which is going so well? It permeates an enormous range of production and export. £840,000,000 of our exports depend directly or indirectly upon steel. Probably the wiser and cooler heads in the Government realise to-day that to nationalise the steel industry would he economically disastrous and politically suicidal, but nothing is done to dissipate the uncertainty. Bet that is the kind of economic policy, or absence of policy, which is undermining the confidence which this country ought to enjoy. Before I leave steel, may I add one word upon the Schuman Plan? The details of that plan have yet to be disclosed and discussed, but I should like at once to reinforce the welcome, and to extend the most sincere good wishes, to this imaginative approach. If economically it were less sound than I hope and believe that it can be in its development and application, we should still look with sympathy on any proposal which can bring France and Germany together and unite them in the co-operative economy of Western Europe. I would ask the Leader of the House, however, to assure us that these connected with the British steel industry, as well as the British Government, will be associated with all the discussions and negotiations which must now take place. This imaginative plan is another example of the wisdom of seeking economic co-operation by practical reciprocal arrangements of mutual and general benefit. I am sure that the cumulative effect of such arrangements, together with others that I am glad to say have been made, freely entered into, will give us quicker and more solid and lasting results than more ambitious schemes for political or economic unification.

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I add one other consideration. Much discussion has centred round sterling balances and the trade in sterling. I do not think that anybody will deny that the greatest boon there could be for the trade of the world would be the convertibility of sterling. That would enable the trade of the world to flow along its accustomed channels and to employ the wide and well-proven facilities of our financial and mercantile institutions and exchanges. But this must depend upon confidence; and confidence depends upon sound financial and economic policy. We have heard a lot in this debate of the "bad old days" and, in particular, of what happened in 1931. It would perhaps be wise if Ministers would recall and tell their followers the whole truth. What did happen then? After we went off gold, a sound economic and financial policy restored the confidence of the world in the pound. The pound steadily appreciated, I think I am right in saying, without drawing a single dollar from the large credits which had been provided for us in America. It was not only a financial appreciation. As confidence was restored, not only did the pound appreciate and foreign money flow in, but production steadily increased, so that in 1938 there were upwards of 2,000,000 more people in work than when the Socialist Government vacated office in 1931.
My Lords, an appeal was made, I think at the end of Lord Pakenham's speech yesterday, to which I would readily respond, as to the spirit in which, whatever our political convictions may be, we should approach our task. But I would add to it just this: that we shall not make a brave new world unless we keep what was good and right in the past as well as change what was wrong.
We may not be able to achieve convertibility in the immediate future, though under a sound economic policy I believe we could do it much sooner than many think. I am quite certain that such a policy would not only maintain but would rapidly appreciate the value of the pound. And what a help that would be all round! The cost of our imports would go down. The cost of living would stop rising and would go down. Production costs would be reduced, and our competitive power would be increased. The dollar gap
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would narrow. Even this Government could reduce the cost of Government expenditure. Lord Pakenham challenged us on the ground that our policy was clouded in obscurity. Is there anything obscure or cloudy in the suggestions—I hope constructive—which I have now made to the House? If the Government would proceed on those lines they would have a clear policy which would command support and confidence, not only in this country but in the world at large.
6.30 p.m.
THE LORD PRIVY SEAL (VISCOUNT ADDISON): My Lords, I should like to join other noble Lords in the House in welcoming back to our debates the noble Viscount who has just spoken. Before he rose, I had made a note to the effect that this debate differed from others that have preceded it in the last five years in that it had been marked by an absence of, shall I say, that determined mournfulness which critics of the Government have imported into their discourses. But the noble Viscount has laid about him with refreshing candour, blaming everything on to the Government and reciting all their sins of omission and commission with considerable satisfaction to himself. On one point, I do not quite follow the noble Viscount. He speaks of the bad impression which, he says, our blunders are making on other nations and declares that the result will be that they will lose confidence in us. He has recited, one after another, a number of incidents calculated to give outside people a poor opinion of us. The questions that crop up in my mind, when I hear that, are these: If that is so, why is it that our trade is improving? Why is it that half the trade of the world is done in sterling? It does not seem to fit. I think we shall have to look for other explanations of this gratifying improvement.
Before I give some of those explanations I would reply—and I am very glad to do so—to the question put to me by Lord Layton with regard to the Schuman Plan. I have sympathy with what the noble Viscount who has just spoken has said as to the approach to that suggestion. As he says, quite correctly, proposals are not yet defined. Naturally, one cannot express any opinion upon matters which are not yet formulated. At the same time, our attitude and approach is as friendly as I am sure the noble Viscount himself

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would wish it to be. I cannot do better at the moment than repeat what the Prime Minister said in the House of Commons. He said:
"The proposals … have far-reaching implications for the future economic structure of 'participating countries; and this aspect will require very careful study by His Majesty's Government and the other Governments concerned. His Majesty's Government will approach the problem in a sympathetic spirit and desire to make it clear at the outset that they welcome this French initiative to end the age-long feud with Germany and so bring unity and peace to Europe."
I do not think I can express our feeling better or more forcibly at this stage. We all hope that some practical, useful and reconciling scheme will emerge.
VISCOUNT SWINTON: Before the noble Viscount leaves that matter, I wonder whether he could answer the other question which I put. I said that I trusted that in the discussions which will have to take place, the steel industry as well as the Government will he brought in.
VISCOUNT ADDISON: I am afraid that I am not in a position to give a definite reply to that question at the moment, because matters have not yet advanced as far as the consideration of who will join in the discussions. It is undoubtedly a very important and practical suggestion and the noble Viscount may be sure that we shall give it most sympathetic consideration. I cannot say more than that.
Perhaps I should now try to summarise, as best I can, some of the criticisms and comments which have been made in the discussion. In the first place, let me refer to one remark which I think fell from the lips of the noble Viscount who has just spoken. He referred to the "precariously balanced Budget." I think those were his words.
VISCOUNT SWINTON: Forgive me, but what I said was that we had a balanced Budget but we had no reserves of taxation against the future.
VISCOUNT ADDISON: I must have misunderstood the noble Viscount, but I will not pursue the point. I may observe, however, that I should not call a Budget with a surplus of £400,000,000 precariously balanced.
VISCOUNT SWINTON: Nor did I.
VISCOUNT ADDISON: I am sure you did not. Let me now say a word with regard to matters dealt with by my noble friend, Viscount Alexander of Hillsborough. He has been taken to task by one or two speakers for his censure of the campaign of more or less denigration in this country. He said that he felt sure—and I entirely agree with him—that it has done a great deal of harm. That sort of thing has, I am very glad to find, been largely absent from this debate. The difficulties of the present situation are fairly obvious. The noble Lord, Lord Cherwell, said—and I took down his words—that never has our situation been so vulnerable. I do not agree with him at all. I think that that is a statement which cannot be supported by the facts. I will deal with the facts in a few moments. Just now I want to quote Lord Brand. I am sure he will not want to question his own diagnosis. This was his diagnosis. It is reported in Column 435 of yesterday's Hansard:
"Despite the dangers of inflation, I fully agree that we see some encouraging symptoms. The increase in our reserves is striking; the improvement in our balance of payments is great and the increased production is also encouraging, though I personally am not so enthusiastic about what we have done as the noble Lord."
That last reference was to my noble friend, Lord Pakenham. I think what Lord Brand said is, on the whole, rather a good testimonial. I was very glad that the noble Lord said that. It is the kind of thing that I should have expected him to say, for I know that he always has a strict regard for the facts. At all events, it does not fit in with the diagnosis of the noble Lord who opened the debate, that never has our situation been more vulnerable. Let me say that I do not wish for a single moment to underestimate the seriousness of the situation or the difficulties that lie before us. We have had the desolate experience of more loss and ruin in war time than any other of the Allies on our side. Considering that and where we started from in 1945, I should say that the position as described by the noble Lord, Lord Brand, is a distinct cause.for encouragement. I will not put it higher than that.
Let me say a word about the increase in production. It has been most notable. I will not pretend to analyse the figures

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too closely, but in the first quarter of this year the increase is really remarkable. I believe it is something like 9 per cent. The noble Lord, Lord Brand, anticipated that if we obtained an increased production of 2½ per cent.—he thought we might not get much more—
LORD BRAND: I thought we ought to get more.
VISCOUNT ADDISON: I was bringing out that point in order to agree with the noble Lord. I think present indications are that the increase will be more than 2½ per cent.; I think we may reasonably expect it to be 4 per cent. I am putting it deliberately at a modest figure, but I am informed that we have reasonable ground for anticipating that it will be increased somewhere in that neighbourhood, if not considerably more. The noble Lord also said that we must have either diminished public expenditure or increased production, preferably both. There are three sentences in the noble Lord's speech which I have marked and which have already been quoted by the noble Lord, Lord Winster, in which the noble Lord says:
"I do not believe that there is any insuperable difficulty to much more production than we have now. That is the real hope for the 50,000,000 people in this country. It is not because people must work harder or better, but because the methods of wealth production improve year by year."
That is true. It is the immense expenditure on capital equipment which has characterised the last four years which is now beginning to bear fruit. I think that is a fair statement. And in the course of the next year or two, with the still further increase in the capital equipment of industry and the coming into operation of new power stations and other enterprises, I think we can reasonably expect an increase in the facilities for increased production. We ought to take credit for them. The noble Earl, Lord Selborne, was rather hard on us in that respect.
The noble Lord, Lord Rennell, produced some rather disconcerting stories about the refusal to make progress in the textile industry. I agree that the increase in textiles has not been by any means so great as we should like, or as we think it ought to be, but this Government surely cannot be blamed for that. We have
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made persistent efforts to induce all parties in the textile industry to improve their methods and increase output. We have undertaken, as the noble Earl may perhaps have forgotten, to provide 25 per cent. of new capital for machinery and equipment in the textile industry, tip to the extent of £14,000,000. The response of the industry to that has been disappointing; the total taken up is something in the nature of £4,500,000. But it cannot be laid at the door of the Government. It cannot be said that we have not done everything we can to encourage increased production in this industry.
In an entirely charming speech, the noble Lord, Lord Blackford, unbosomed himself with great and refreshing frankness. I think his animadversions upon the programme of his own Party were interesting. Frankly, and I speak with the same frankness as the noble Viscount, Lord Swinton, would do if he were in my place, I studied the Election programme of the noble Lord's leaders—I do not think he was guilty of any particular programme—and I could not make head or tail of it. The great reductions in expenditure which Lord Blackford boldly stated that he wanted—and we all admire him for saying what he wanted—are mixed up in the Conservative programme with increased benefits to all sorts of people—widows, children, old people, and many others. Though I am sure I studied the programme with as great care and impartiality as I could, I could not see what it meant, and I do not understand it now. But I admire the spirit in which the noble Lord, as a frank Back Bench Conservative, said what he thought about it.
There is another encouraging fact of which I think we are entitled to make something. The noble Lord, Lord Brand, put the percentage of the investment of national income at 20. The figure given to me was 22 per cent. I am not cavilling about the difference. Whatever the figure is, it is an unprecedentally high figure and a cause of satisfaction. The noble Lord could not give us credit for the maintenance of full employment. When we succeed, noble Lords say it is due to private enterprise; and when any failure occurs, then it is all our fault! We might get a little crumb of comfort sometimes, but noble Lords refuse it. We say, without any qualification at all, that

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the policy of the Government with regard to.priorities of materials, facilities for finance and a hundred other matters which I will not detail, has been largely responsible for the maintenance of full employment, and we take credit for it. And we propose to continue to claim the credit. It cannot be denied that these measures, taken altogether, have greatly contributed to the maintenance of full employment.
VISCOUNT SWINTON: Marshall Aid helped a little.
VISCOUNT ADDISON: I am glad to hear even that; that is something. With regard to the reduction in the weight of taxation, the noble Lord, Lord Winster, who I do not think had studied his case carefully, made some disparaging reflections, and I should like to give the House the facts about the relief in taxation on the lower paid ranks of the community. In the first place, 4,000,000 people who paid income tax in 1945 now do not pay any at all. That is not an inconsiderable contribution—to relieve 4,000,000. I do not suppose they paid very much, but they paid something. Then let me take one or two test cases which I have had worked out for me. Take a man and his wife with no children who have £500 a year. When this Government came in, the tax payable was £126 a year. It is now £49 a year. If the man had two children in 1945–46 he paid £76 in income tax, and at the present time he pays £19. That is the difference for a man with an income of £500 a year. I take now a man with £1,000 a year. It is said that we have no sympathy with the middle classes, and there are all the other aspersions to which we are so accustomed. The man with £1,000 a year, with a wife and two children, paid income tax of £301 in 1945–46. At the present time he pays £169. So those classes of income taxpayers have had substantial reductions in income tax, and they are in the lower income groups.
The noble Lord, Lord Winster, formulated a most remarkable thesis. It was that we did not believe in incentives—or words to that effect. This is the first time I have heard that. I believe that something like half the working classes of Great Britain are on piece rates—and what is that but incentives? I looked up the operations of the recent Budget with regard to incentives, and this is how
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they work out. The average tax for a steelworker earning £7 2s. 8d. a week has been reduced to 1s. 2d. in the pound with a rate of only 4s. in the pound on his extra earnings. If he has one child, the income tax on his extra earnings above that figure is 2s. in the pound. If he has two children, and earns part of the money by piece rates, or otherwise, he does not pay any income tax on it at all. Those are material contributions to improving the incentive, and I feel that we are entitled to claim a little credit for that.
Here let me say that I hope your Lordships will keep for reading the speech made by my noble friend Lord Lawson, yesterday. It was, on the whole, one of the most moving speeches I have ever heard in this House—and it was a maiden speech. When we have this denigration—to use this horrible word which now seems to be coining into use—
VISCOUNT SWINTON: The noble Viscount invented it.
VISCOUNT ADDISON: I did not.
VISCOUNT SWINTON: Then his Party did.
VISCOUNT ADDISON: I can assure the noble Viscount that I did not commit such an atrocity as that. However, let me make use of the word for this purpose. There is this denigration of the Government—and the noble Viscount opposite is adept at it—but I think the story that Lord Lawson told us yesterday of the transformation (because it is a transformation) of many poor districts where thousands of people have food, clothes and hope for the first time in their lives should be borne in mind. It is wrong to lose sight of that.
I should like to say a word about the dollar gap. The dollar gap for this quarter—I am not going to be oversanguine—has been closed, and there are 40,000,000 dollars to spare I think it is fair to say that one of the main causes of the gradual approach to the closure of the dollar gap, and its closure this quarter, has been the readiness of the people in the whole Commonwealth, partners in the sterling area, including ourselves, to restrain their dollar purchases. Our own scheme of reduction of dollar purchases, which was decided on some months ago, could not affect the balance quickly, because there were continuing contracts in

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operation. But it is now beginning to have its effect. Another contributory cause is that, notwithstanding this denigration (I will use the word) to which we have been exposed, there is a much greater confidence in sterling arising from the success with which operations are being conducted. These matters should contribute to an improvement in the position and I am glad to say that they are having their effect upon our reserves. We have now happily begun to build up the reserves a little, but I would not by any means suggest that we do not want to go much further—of course we do. However, it is gratifying to be able to say that the reserves in the first quarter of this year have increased by 296,000,000 dollars. That is a very important contribution. Of course that does not bring the total reserves up to what they ought to be. We want them to be much more; but that is, at all events, a gratifying contribution, and it shows that we are moving in the right direction. I do not put it higher than that.
I do not wonder that (apart from the noble Viscount, to whom I give full credit for his faithfulness to his traditions), with these things in mind, the attitude of determined mournfulness which has previously characterised these debates has been rather absent on this occasion. These are good reasons for that. I do not think it can be denied that we have had a large measure of success in controlling inflation. On this there is a matter to which I should refer. It was the noble Earl, Lord Selborne, who complained particularly of the rise in prices. If the noble Earl compares this country with some others he will find that they are considerably worse off than we are. Since the noble Earl made his statement I have made inquiries as to the rise in prices, and the purchasing power of the pound as compared with that of the dollar between 1946 and 1949, and I find that the comparison is in our favour. The statement given to me is that the price of the goods which a consumer buys rose rather less in the United Kingdom between 1946 and 1949 than it did in the United States. While we all deplore any increase in the cost of living, I do not think the noble Earl is entitled to blame this country, because this is a phenomenon which has occurred all over the world. All things considered, I think
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we have kept it in check remarkably well. Since devaluation the cost-of-living index has gone up only about two points, which is a good deal less than some of us expected.
It is obviously right that we should do everything we can to keep down costs. Here we ought to pay tribute to the action of the trade unions. I am not talking about the wage freeze or wage policy—I am not dealing with that kind of thing at all. They are vague phrases. But it is a fact that the leaders of the trade unions have courageously taken upon themselves to restrain demands for increase of wages, particularly for the higher paid workers, because they knew it would tend to increase prices. The nation is greatly in their debt for their action. I am not forgetting that there are a large number of workers who receive the smallest wages and for whom a different consideration should quite rightly apply. But I think it right that we should pay tribute to the trade union leaders for the patriotic action that they have taken in this respect.
As a matter of fact, notwithstanding all the discouraging comments of some noble Lords opposite, I think the country has pulled together in a remarkable way in the last three or four years, and I gravely question whether, if noble Lords opposite had been in Government, their policy—whatever it is—would have commanded the co-operation of the working, organisations in the same way as has this Government. At all events, I think this debate has been encouraging. We have had some signal and valuable contributions, and I particularly express my gratitude to the noble Lord, Lord Brand. I am not going to follow him into the question of savings or the different types of savings. I spent a considerable time this morning trying, to unravel these matters, and I frankly admit that I did not succeed. But it is a fact that these notable improvements in our financial situation are characteristic of the present year's efforts, and there is every reason to believe that they will continue. I think they should afford us, without any Party considerations, real satisfaction.
7.3 p.m.
LORD SEMPILL: My Lords, I hope your Lordships will be good enough to bear with me for a minute or two while I make some observations. I was very

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pleased to stand down at an earlier stage in this debate for the convenience of the noble Viscount who leads your Lordships' House. I join with your Lordships who have already spoken in thanking my noble friend Lord Cherwell for once again initiating this "vital annual spring exercise" in the economic field. Your Lordships have listened to remarks from noble Lords with immense experience in the scientific, economic and administrative fields. My few words will be those of a production engineer. Our national economy remands more effective and efficient production, but such can only be achieved by a more rapid adoption of the science, art and practice of production engineering. As one who has spent several happy years working at the bench, I yield to none in appreciation of all that is being done to-day on the floor of the shop. That we are not making the fullest use of the techniques available, both psychological and practical, is emphasised by the reports of the productivity teams which have recently visited the United States of America. There, for example, excess productivity over Britain in steel founding was between 50 per cent. and 90 per cent., and in drop forging as much as 400 per cent. These figures surely explain why the United States national income per head is roughly twice as much as ours.
Just why is this? Do we exert ourselves less? I think not. A leading official in the Bureau of Labour Statistics Department recently wrote:
"When you compare the personal productivity in the two countries, there is nothing in it."
The quick and almost complete answer with regard to this question is our slowness in applying the equipment for power production—in other words, there is not enough horse-power for the man on the floor of the shop. Just consider that matter for a moment. The United States provides him with seven horse-power, Canada with five horse-power and Great Britain with three horse-power. In short, in the United States of America high productivity is conscientiously sought under the compulsion of a keenly competitive spirit and encouraged at all levels by real, and not imaginary, incentives. More horse-power per man is needed and the abandonment of all
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restrictive practices, so that, as in the United States, operators can work more than one machine.
Your Lordships may have noticed that Mr. Perkins, the Chairman of the Association of Supervisory Electrical Engineers, said in a speech to his Association on Saturday:
"Restrictive practices are now more prevalent than at any time."
Obviously, that situation has to be remedied. The Hoover Company, with factories on both sides of the Atlantic, provides a unique example from which we should all learn. If, therefore, production in the United States were to remain static—which of course it will not—at our present target of 5 per cent. increase in productivity per annum we should catch up with them in 1980. By our making the figure 10 per cent. instead of 5 per cent. per annum we could be level with them by 1960. We can do this by the realistic and effective approach which I have suggested, by using the production engineer techniques and providing incentives. I would say, in conclusion, that the greatest challenge to our achievements to-clay is the fact that we still persist, with complacency, in assessing what we are doing as against what has been done, rather than accepting ourselves—as we must—the challenge of comparison with what could be done.
7.8 p.m.
LORD CALVERLEY: My Lords, I have the very unenviable task of winding-up, and I promise your Lordships I will not keep you long. I have listened attentively to practically every speaker during the last two days, and I have learnt a great deal. I want to bring before His Majesty's Government the position of the woollen and worsted textile trade in this country. The noble Lord, Lord Layton, said that in 1921 textiles were the largest exportable product of this country. I want to remind your Lordships that today, in proportion to the number of operatives employed, it is the largest dollar earner.
Our exports to the United States of America and Canada have been increasing over the last four or five years. I have some figures here, and, having listened to the noble Lord, Lord Cherwell, for five years, I know that if you mention money he asks, "What is money worth?" I have brought details of the yardage of

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the wool textiles exports to Canada and the United States, but it would be cruelty to your Lordships if I inflicted the figures upon you. All I want to say is that we in the textile industry are proud. I suppose that I am the only operative textile worker in this House. I admit that I am out of practice, both as a spinner and as a weaver, but I have always been proud that we in that industry produce beautiful cloth. I want to ask His Majesty's Government to realise the difficulties facing the wool textile industry. In 1939, a bale of Australian wool cost £5. In 1945 it cost £20. And last week Australian crossbred wool—not a wool of the finest texture—was sold in Australia at £55 per bale. I want His Majesty's Government to try to understand the problem of these people, with no additional capital, in having to produce cloth when the cost has increased in such a degree.
Before I give my next example, perhaps I may explain what a "top" is. A "top" is the finished article in the wool-making industry, but it is the raw material of the spinning and, afterwards, the weaving industry. A certain merino top of fine texture in 1939 cost 26d. per pound. Last week in the West Riding that same top was sold for 168d. per pound. That is one reason why the cost of living has gone up. When the cloth is produced for our own people, if it is non-utility cloth such as that in which some noble Lords are clothed, they pay 66⅔ per cent. purchase tax, and 18⅔ per cent. in addition for what is called "uplift"—though I dare say the Board of Trade description of this cloth as "uplift" causes the average purchaser a sinking sensation.
I want to impress upon your Lordships that the textile industry, woollen and worsted (there is a difference between the two), has been set a target of increasing its exports by at least 4 per cent. We shall accomplish that easily. When I say "we," I do not mean that I have anything to do with the trade at the capitalist end; but one cannot lose one's interest in a trade such as this when one has been brought up in it. We are already surpassing the 4 per cent. increase target. I notice from the March figures that to Canada and the United States £567,000-odd worth of woollen fabrics
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were exported. Woollen fabrics are different from worsted fabrics, which usually men, as distinct from women, wear. Worsted fabrics amounted to £562,000-odd of export value. There was a slight slump, which was called 4: frustrated exports," in woollen goods before devaluation; but now the export of woollen goods is taking a new lease of life.
In order to impress the point upon your Lordships I should like to follow the example set the other day by the noble Lord, Lord Sempill, when he produced for your Lordships' edification some loaves of bread. I should like to show your Lordships in passing a sample of a woollen fabric which is manufactured by a firm known to me, though I have visited them only twice. They started to manufacture it three years ago. If your Lordships will give me your indulgence I would mention that this is called a "Royal Standard" tartan. In three years this firm have designed another hundred-and-one tartans. I will not indulge in detailed figures, but I should like to tell the House that during the last three years six hundred miles of this cloth has been sold in New York for making into dinner jackets for the aristocracy of that city. I understand that that custom is going to spread to this country. I should like to offer my services to the Conservative Party and say, in view of the fact that there were eleven different descriptions of the candidates of that party at the General Election, that if they give me the order I will produce a tartan bringing in all the colours—it might be called the Woolton tartan.
I thank your Lordships for listening to me. I ask His Majesty's Government to see whether they can help the wool textile trade. The United States have bought £43,000,000 sterling worth of Australian wool, and this enabled the Australian Government to obtain sufficient dollars to provide petrol for anybody who wanted it—though at a much higher price than they would have to pay in this country. This figure of £43,000,000 represents an increase from £33,000.000 worth in the purchase of wool in the United States. And last week the Russians, by spending golden roubles, have sent the price of wool well up. It has in fact reached danger point. I should like to warn the House that if there is not a reservoir of

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at least 300,000 bales of Australian wool in this country, as it were on tap at the London Docks, there might be very serious unemployment, not only in Yorkshire but in the South of Scotland and the West of England also. It would be a crying shame if we had unemployment in a flourishing industry capable of earning dollars and were to allow unemployment o creep in merely because the Australians do not find themselves in a position to verve the old country with sufficient wool to keep things going.
While listening to the debate I made copious notes. I will not use them to reply to some of the points made; but I say in passing that there is one lopsided aspect of our economy—that is, the expenditure of £700,000,000 on gambling. I could mention others, but I will not pursue the matter further. I earnestly beg His Majesty's Government, however, to see what can be done to help an industry where both the operative side and the management side are working in the closest harmony, for in these days that is something to he proud of. I conclude with the slogan of the noble Lord, Lord Woolton, when he set off for America last Friday. He said that he went to America not to apologise for this country of ours but in fact to boost it. I want to do the same.
7.21 p.m.
LORD CHERWELL: My Lords, I am glad that my analysis of the way the dollar gap had been closed was confirmed by the noble Viscount the Leader of the House. I was not surprised to hear him claim credit for our full employment; it is open to anyone to do so. I believe that the witch-doctors, who used to claim credit for the good weather which they had brought, were also thanked and admired by the tribe so long as they were kept in office. The noble Viscount said he did not think that our situation was vulnerable. I listed five contingencies all of which had to come into a favourable conjuncture in order that we should be all right. They were not challenged and even those who—
LORD PAKENHAM: I apologise for interrupting, but the noble Lord opposite is not quoting the Leader of the House correctly. He did not say that our situation was not vulnerable. He disputed the statement of the noble Lord opposite that
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it had never been more vulnerable than it is now.
LORD CHERWELL: I should be glad to hear when in the historical record it was more vulnerable. If you back five horses and they have all got to win for you to get your stake back, I call that a pretty bad bet. Government speakers have their emotional ups and downs. Sometimes they are cheerful and sometimes, as I pointed out yesterday, they are depressed. In the spring the noble Lord's fancy lightly turns to optimistic views—and we are all glad to see it.
It is so late that I do not wish to detain your Lordships long. I was pleased to hear the noble Lords. Lord Marley and Lord Selborne, say that we should help the small industries and the small manufacturers. I also think it most important that they should be encouraged and fostered. The noble Lord, Lord Lucas, is unfortunately not here, and after his late night about which he has told us I do not complain that he should have read my speech rather superficially. If he were to waste his time on re-reading it, I think he would find that he said very little that was cot stated in my speech. He complained that Government expenditure abroad was quoted by me without my mentioning the fact that one of the items was reputed not to be likely to recur. I hope he is right in that, but I have known items of that sort to come up year after year. I trust that he may be right and that this one will not appear again.
Like the noble Viscount, Lord Alexander, I have so many agreeable recollections of our collaboration in the war that I hope and trust we shall never clash in this House, certainly in ally personal way. He agrees that our economic situation is grave—inched, he compared the position to the critical periods of the war. That is my view. He told us that international bodies had all praised Britain's contribution. I am not surprised, considering the hundred; of millions of pounds we have contributed to their recovery. He told us that the taxes on lorries and petrol were imposed in order to restrict their use. In other words, controls have proved inadequate and rationing by the purse, which is so often condemned, has had to be called in.
He gave credit to the Socialist Government for the fact that in the first five

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years of peace after the last war there were sixteen times fewer man-days of work lost through strikes than after the 1918 War. I must point out that there are two very big differences. Since 1945, as the noble Earl, Lord Selborne, said we have received nearly £400,000,000 a year in generous gifts from America and the Dominions. This did not happen after the 1918 War. Even more important probably is that this time the Conservative Opposition have assisted the Government in maintaining industrial peace. After 1918, the Socialist Opposition supported the strikes and encouraged them. Indeed, I am not at all sure that the Foreign Secretary was not amongst the leaders in some of the great industrial disputes. As for the speech of the noble Lord, Lord Pakenham, I am afraid that I do not agree that Parliament has had a proper opportunity of discussing the transfer of sterling to various foreign countries. Whether sterling balances should be released or not has been raised in debate, but in America the amount to be transferred to each country is published in advance, and Congress decides whether or not to approve. Surely something like this should happen here.
I am surprised that the Government cannot tell us the import and export figures to the dollar area of the various sterling area countries. Since we hold the gold and dollar reserves of those countries, I should have thought we would know what is happening, but I shall be grateful if the noble Lord will give the best figures available, without necessarily guaranteeing their accuracy
LORD PAKENHAM: Perhaps the noble Lord will wait to receive the figures, which I will send him forthwith, before he decides whether or not he finds them adequate.
LORD CHERWELL: I thank the noble Lord. I am sorry if I hurt the noble Lord's feelings yesterday by failing to keep a straight face when he used the terms "fair shares" and "social justice" with such fervour. But honestly I think he would find it difficult to define what is meant by either term. Who is to decide what shares are fair? I consider it perfectly fair that the noble Lord should get £100 a week for his work, as
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opposed to the £5 a week that an unskilled labourer may get. The Daily Worker considers that this is a most unfair distribution. For a scientist, terms of this nature, which suggest something accurate that can be measured yet which in reality depend merely upon the impressions of different classes of people, have very little meaning. A similar instance of an abstract noun qualified by an abstract adjective is "social justice" Justice is something inherent, in my view, which has a deep ethical and, indeed, religious significance which everybody recognises. Social justice appears to be something different which has to be invoked when people are not content with justice and want to override it. I think that the noble Lord's analogy saying that social justice compared with justice is as social credit compared with credit is quite sound. For the Douglas Scheme, or whatever we like to call it, is now rather discredited.
LORD PAKENHAM: Since the noble Lord has returned to that subject, may I say that I am very good at appreciating his jokes, which are excellent? I only wish that occasionally he could appreciate one of mine, even if it is not quite so good. I would place that before him. As regards social justice, I would point out, since the noble Lord has wisely climbed on to an ethical plane, that all Christian theologists may agree that such a thing as social justice exists. The next time we return to this perhaps we can consider it along that line in particular.
LORD CHERWELL: I will not dispute with the noble Lord about the views of all Christian theologians—I daresay he is an expert—but I do dispute about the meaning of the words. If justice is to be over-ridden by social justice, then I think we ought to have a definition of what the words mean.
LORD PAKENHAM: It is not over-riden by social justice.
LORD CHERWELL: Perhaps the noble Lord is really talking about Socialist justice.
LORD PAKENHAM: May I say that it is reported that way in the Daily Express, if you look at this morning's issue. It is not the same thing. There is a distinction between the two. Social

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justice, as I explained quite clearly yesterday, means justice in the distribution of wealth. That is one particular kind of justice. There are other kinds as well. Social justice has, of course, to be compatible with justice in general. Socialist justice, of course, is the justice which is applied by a Socialist Government, and, therefore, certainly in the political field, the purest form of justice of all.
LORD CHERWELL: The noble Lord is evidently extremely pleased with his purity. I hope his friends will agree with him on that. It seems to me that these are all phrases designed not so much to convey thought as to induce a comfortable frame of mind. In fact, they are slogans which, on analysis, cannot he shown to mean anything definite at all. I hope the noble Lord will not mind my saying this in a friendly spirit.
LORD PAKENHAM: Not in the least, so long as I am allowed to reply next time.
LORD CHERWELL: I listened to all the speeches with great interest, with the exception of one or two, which I was compelled to miss. I still believe that the fact that we devalued was most unfortunate, that it was not to the advantage or credit of the country, and that it could have been avoided. In the old days people used to hold pounds as they now hold dollars, and considered them as good as
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gold, which is something they no longer do. That, I think, is a disaster. But, having listened to the debate and having gained a good deal of knowledge and information from it, I now beg leave to withdraw my Motion.
Motion for Papers, by leave, withdrawn.

BUSINESS OF THE HOUSE
7.32 p.m.
THE EARL OF LUCAN: My Lords, it is not proposed to sit for public business to-morrow, but it will be necessary to sit on Friday morning, May 26, at 11.30 a.m., to give a First Reading to two Consolidation Bills and to receive some other Bills from another place. After the House rises on Friday we shall not reassemble until Tuesday, June 13.

SOUTH STAFFORDSHIRE WATER BILL
Reported, without amendment.

PLYMOUTH EXTENSION BILL [H.L.]
The King's consent signified, and Bill reported with Amendments.
House adjourned at twenty-seven minutes before eight o'clock.