Sitting of 20 February 1952

Preamble
The House met at Half past Two o'Clock
PRAYERS
[Mr. SPEAKER in the Chair]
DEATH OF KING GEORGE VI

  Message of Condolence
  Mr. Speaker: In addition to the messages of condolence which I read to the House yesterday, I have received from His Excellency the Irish Ambassador a copy of the following Resolution:
  Resolution passed by Dáil Éireann at its meeting on 13th February, 1952
  That Dáil Éireann extend its deep sympathy to the Royal Family, the Parliament and the people of Britain on the death of His Majesty King George VI.
  Mr. Speaker: No doubt the House would desire me to send a suitable reply to this message.
  Hon. Members: Hear, hear.

  Message of Condolence
    PRIVATE BUSINESS
      BRITISH TRANSPORT COMMISSION BILL (By Order)
      Second Reading deferred till Tomorrow.
      CITY OF LONDON (GUILD CHURCHES) BILL (By Order)
      Second Reading deferred till Monday next.
      CITY OF LONDON (VARIOUS POWERS) BILL (By Order)
      Read a Second time, and committed.
      COMPANY OF WATERMEN AND LIGHTERMEN BILL (By Order)
      Second Reading deferred till Wednesday next.
      EALING CORPORATION BILL (By Order)
        ESSEX Cowry COUNCIL BILL (By Order)
        Second Reading deferred till Tomorrow.
      FAREHAM URBAN DISTRICT COUNCIL BILL (By Order)
      Second Reading deferred till Tuesday next.
      GLAMORGAN COUNTY COUNCIL BILL (By Order)
        LONDON COUNTY COUNCIL (GENERAL POWERS) BILL (By Order)
        Read a second time, and committed.
      NORTH WALES HYDRO-ELECTRIC POWER BILL (By Order)
        ROCHESTER CORPORATION BILL (By Order)
        Second Reading deferred till Tuesday next.
      WEST HARTLEPOOL EXTENSION BILL (By Order)
      Second Reading deferred till Monday next.

      GLASGOW CORPORATION ORDER CONFIRMATION BILL
      "to confirm a Provisional Order under the Private Legislation Procedure (Scotland) Act, 1936, relating to Glasgow Corporation," presented by Mr. James Stuart; and ordered (under Section 7 of the Act) to be considered To-morrow, and to be printed. [Bill 57.]
      Later—
      The Chairman of Ways and Means (Colonel Sir Charles MacAndrew): I should like to make a most sincere apology to the House. At Private Business time today, I made a mistake with regard to the City of London (Guild Churches) Bill and the West Hartlepool Extension Bill. I deferred them to next Friday, but under a Standing Order I am not able to do that. My excuse, if any, is that Private Business comes under one Public Business Standing Order which had escaped my attention. With the leave of the House, I should like to defer the two Bills mentioned to Monday next instead of Friday next.
      Sir Herbert Williams: I should like to know what happened about Private Business today. A number of Members objected to the Glamorgan County Council Bill, of whom I was one. Several Members around me objected, but you proceeded to put the Question that it be read a Second

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      time. There was a good deal of noise and I turned to the hon. Member sitting next to me and said, "Is he putting the Question on the Glamorgan County Council Bill?" He said, "No," and, because of the noise—[HON. MEMBERS: "Oh"!] I do not know why my comments should give rise to hilarity. The point is that this Bill did, in fact, receive a Second Reading, though it had been objected to, and I want to know what remedy we have, because a number of us are considering the possibility of debating this Bill on Second Reading because of certain Clauses contained in it.
      Mr. James Griffiths: On a point of order. I took particular notice of what happened when the Glamorgan County Council Bill was called, and there was no objection at all.
      Mr. Speaker: I am perfectly certain that if I had heard any hon. Member object I would not have put the Question. The remedy which the hon. Member for Croydon, East (Sir H. Williams) had was to vote against the Bill when the Question was put, and I am afraid that at this stage there is nothing more I can do about it.
      Sir H. Williams: Further to that point of order. It is not competent to vote at that time because it is the time of non-contentious Business. [HON. MEMBERS: "No."] It is Business which cannot be voted against. The difficulty was that there was so much noise from that end of the Chamber—[HON. MEMBERS: "No."] I do not know why hon. Members are not concerned about the conduct of Parliamentary Business. There was so much noise that many of us did not hear you put the Question, Mr. Speaker, and it is perfectly clear that several hon. Members said the word "Object."
      Mr. Speaker: I can only reply that I did not hear the word "Object." The remedy of the hon. Gentleman was to say "No." when I put the Question. If the hon. Gentleman did not hear me I must try to speak a little louder in future.

ORAL ANSWERS TO QUESTIONS

  TYNESIDE SHIPYARDS (STEEL ALLOCATION)
  Miss Irene Wardasked the First Lord of the Admiralty if he will make a statement on steel allocations to Tyneside in order to ensure that the shipyards and ship-repairing yards are kept fully employed.
  The Civil Lord of the Admiralty (Mr. Wingfield Digby): I would refer my hon. Friend to the reply given to the hon. Member for Sunderland North (Mr. F. Willey) on 4th February.
  Miss Ward: May I have an assurance that my hon. Friend appreciates the importance of maintaining shipping and ship-building as part of our national assets and that we shall never be faced with a shortage of steel for this essential industry?
  Mr. Digby: I regret that I can give no assurance on his point, but I hope that the curtailment of the industry necessitated by the shortage of steel will be only temporary.

  TELEPHONE SERVICE

    Oldham
    Mr. Leslie Haleasked the Assistant Postmaster-General whether he is aware that the Post Office expressed the view last year that the large waiting list for telephones in the county borough of Oldham would be substantially wiped out by the middle of 1952; and what effects the recent economy cuts on telephone installations and cables are likely to have with reference to the Oldham programme.
    The Assistant Postmaster-General (Mr. David Gammans): I hope that, with the additional plant now being provided, we shall be able to meet a high proportion of present outstanding applications by the end of 1952.
    Mr. Hale: Whilst congratulating the Minister on the very able way in which he makes a disagreeable announcement, may I ask if that means that the promise will not be carried out and that Oldham is going to get a lot less than was promised

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    by the Post Office a few months ago? Will that also apply throughout the country?
    Mr. Gammans: The hon. Member made a statement that a promise was made for the middle of 1952, but I can find no trace of that whatever.

    Aberdeen
    Mr. Hector Hughesasked the Assistant Postmaster-General if he is aware that there is a lack of automatic equipment in the two telephone exchanges serving the central and northern parts of the city of Aberdeen; that Messrs. Siemens, Brothers, who are working on extensions of these exchanges, cannot complete them for about 18 months from now; that there is a long list of businessmen and others awaiting telephones there; and if he will expedite the work, so that these extensions can be completed earlier.
    Mr. Gammans: The extension of the North Exchange should be completed in August, 1952, and the Central Exchange in January, 1953. I am satisfied that the work is proceeding as quickly as possible.
    Mr. Hughes: Does the Assistant Postmaster-General realise that the absence of these telephones is impeding national production in the shipbuilding yards, and will he take some steps to expedite the completion of this telephone system?
    Mr. Gammans: I quite realise what the hon. and learned Gentleman says, but I can hold out no hope that these exchanges will be finished earlier than the dates which I have given him.

    Stocking Farm Estate, Leicester
    Mr. Barnett Jannerasked the Assistant Postmaster-General whether he is aware that, despite requests by the residents of the Stocking Farm Estate, Leicester, no telephone kiosk has been installed on the estate; and if he will have one installed immediately, as there are no means at present of calling the police, the fire brigade or an ambulance in an emergency.
    Mr. Gammans: I hope to provide this soon after the new Belgrave Exchange is opened next May. An earlier date is not possible because of the shortage of equipment at the present exchange.
    Mr. Janner: Is the Assistant Postmaster-General aware that there are some 2,500 people there, of whom about 1,500 are children, and that the nearest kiosk is about three-quarters of a mile away from the estate down at the bottom of a hill and barely accessible on any urgent occasion? Will he please press the matter forward?

    Orkneys
    Mr. Geoffrey Hirstasked the Assistant Postmaster-General what steps have been taken to restore telephone communication to the Orkneys; and what is the present position.
    Mr. Gammans: My hon. Friend no doubt refers to the hurricane which occurred on 14th and 15th January. Within a day groups of Post Office engineers with repair stores were flown to the Orkneys, and other staff and heavier equipment were sent out by ship. Repair work, in very bad weather conditions, went on continuously and I am glad to say that service was restored to all the Islands by 21st January and all subscribers' damaged lines were repaired by 4th February.
    I should like to take this opportunity to acknowledge the ready help received from local air and shipping organisations.
    Considering that some 60 exchanges were isolated and 2,000 subscribers' lines were affected, I feel sure the House will agree that this achievement reflects great credit on all who assisted in the work.
    Mr. Hirst: Is the Minister aware that the action of the Post Office has caused great satisfaction? Can he add to that assurance that their development work is not being held up?
    Mr. Gammans: I cannot yet give that assurance. The repair work that had to be done as a result of this hurricane is bound to affect to some extent development work in Scotland this year, but I cannot yet state the extent to which such work will be affected.

    Enfield
    Mr. Ernest Daviesasked the Assistant Postmaster-General when the conversion of the Enfield telephone exchange from manual to automatic operation will be completed.
    Mr. Gammans: It is impossible to forecast, in view of present shortages, when it will be possible to convert the Enfield Exchange to automatic working. As the hon. Member is aware, the existing manual exchange at Enfield has been extended, increasing its capacity by nearly 1,000 lines and a further extension providing for about 1,600 lines will be made during the next 12 months.
    Mr. Ernest Daviesasked the Assistant Postmaster-General the number of applicants for telephone installation on the waiting list in Enfield and the net number connected since 1st January, 1946.
    Mr. Gammans: One thousand eight hundred and seventy-one applications are on the waiting list and 32 are being investigated. Exchange connections have increased by 2,811 net since 1st January, 1946.
    Mr. Davies: In view of the large number of outstanding applicants, will not the Assistant Postmaster-General look once more into this matter of the conversion of the exchange? Two years ago I was given an undertaking that this matter would be examined, and nothing seems to have been done.
    Mr. Gammans: I can hold out no hope that this exchange will be converted to an automatic exchange in the near future.
    Mr. C. R. Hobson: Does the hon. Gentleman's reply mean that Enfield Exchange is to be permanently a manual one?
    Mr. Gammans: It does not mean anything of the sort.

    London Telephone Directory
    Mr. Ian Harveyasked the Assistant Postmaster-General what arrangements are being made for the future issue of London telephone directories to people living in the Harrow Urban District Council area.
    Mr. Gammans: Shortage of paper has made it necessary, for the time being, to stop the supply of new issues of the London telephone directory to existing residential subscribers. Business subscribers and new subscribers will get the new issues as usual. This measure will result in substantial savings in money and
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    paper, and my noble Friend feels confident of its ready acceptance by the public.
    Mr. Harvey: Does not the Minister realise that, as a result of this, many users of telephones will be out of touch with one another and that it is a most unsatisfactory arrangement? Further, is he aware that this arrangement was made without any warning to the subscribers concerned, and will he look into the matter?
    Mr. Gammans: Only last year a survey was made among residential subscribers who were asked whether or not they wanted more frequent issues of the directory, and 91 per cent. said that they did not. But any private subscriber who particularly wants a copy of the directory can ask for it.
    Mr. R. J. Mellish: Would it not have been better if the people of Harrow had voted Labour? They would have got a telephone directory then.

    WIRELESS LICENCES (OLD AGE PENSIONERS)
    Mr. Hector Hughesasked the Assistant Postmaster-General if he will now take steps to enable old age pensioners to obtain wireless licences at a rate less than that charged to other citizens.
    Mr. Gammans: The Government regret that they are unable to give old age pensioners preferential treatment in this respect.
    Mr. Hughes: Has the Minister taken any trouble to inquire what the cost of this concession would be? Does he realise that this class of the community is very hardly hit by the present high cost of living?
    Mr. Gammans: Successive Governments have had reluctantly to come to the same conclusion in regard to granting any concession to old age pensioners.
    Mr. Tom Brown: In view of the fact that this Question has appeared so frequently on the Order Paper, does not the Assistant Postmaster-General think it about time the Government gave some sympathetic consideration to the plea put forward by old age pensioners?
    Mr. Gammans: Both this Government and the previous Government gave very careful consideration and sympathetic consideration to the matter but, for the reasons given in this House on many occasions, they have been unable to do anything about it.

  POST OFFICE

    Christmas Mail
    Wing Commander Eric Bullusasked the Assistant Postmaster-General the volume of mail dealt with by the Post Office at Christmas, 1951, compared with Christmas, 1950, and 1949.
    Mr. Gammans: During the Christmas period the estimated number of letters and parcels posted were:

    Letters

    Parcels

    1949

    550,000,000

    14,750,000

    1950

    580,000,000

    14,250,000

    1951

    590,000,000

    13,750,000

    Wing Commander Bullus: While congratulating the service on the achievement, may I ask the Minister whether he will ensure that at periods of peak postal traffic the 2½d. letter will be given priority over the printed letter?
    Mr. Gammans: That is a different point to the one which my hon. and gallant Friend asked, but we have had no complaints this Christmas about late deliveries in particular of the 2½d. letters.
    Mrs. Jean Mann: Does the Assistant Postmaster-General not consider that the decrease shown in the number of parcels and the increase in the number of letters indicates that people were very hard-up at Christmas, 1951?
    Mr. Gammans: If the hon. Lady wishes to take that as a criterion of being hard-up, she may note that the decrease in parcels in the previous year was even greater.

    New Post Office Sites
    Brigadier R. Medlicottasked the Assistant Postmaster-General how many sites, in addition to those already acquired, he has requested the Ministry of Works to obtain for the erection of post offices.
    Mr. Gammans: Eighty.
    Brigadier Medlicottasked the Assistant Postmaster-General how many sites the Post Office at present possesses for the erection of Crown and branch offices; what is the estimated capital cost of the post offices it is proposed to erect on them; and the estimated annual cost of the maintenance and administration of such offices.
    Mr. Gammans: One hundred and twenty-two sites. The capital cost of the buildings to be erected on them will amount to about £6 million—spread over many years. The cost of maintenance and administration cannot yet be estimated, but my hon. and gallant Friend may rest assured that we shall pay careful regard to these costs before embarking on each scheme.
    Brigadier Medlicott: Is the Minister satisfied that this expansion of the system of Crown offices is really justified at present? Can the work not be left in the good hands of the sub-post offices, who do a good job in spite of not being awfully well remunerated?
    Mr. Gammans: That point is very carefully in our minds at present, but the Question which my hon. and gallant Friend asked was the number of sites that have been acquired. Some of those included in the figures I have given him were acquired before the war. I ask him to note the assurance I have given that we are not proceeding with these at present, except in so far as they have been started.
    Mr. W. R. Williams: Is it a fact that the accommodation provided at a large number of these sub-offices is totally inadequate to meet the needs of the public and is certainly inadequate to meet the normal and reasonable standard of welfare required by the staff employed by the Post Office?
    Mr. Gammans: I agree with the hon. Gentleman. One of the things we should very much like to do now is to improve the standard of comfort in all post offices, many of which are out of date and were built many years ago.
    Mr. Williams: Will the Assistant Postmaster-General take note of the emphasis I am placing on it in contradistinction to the emphasis being placed by the hon. and gallant Member?
    Brigadier Medlicott: Would it not be fairer to the sub-postmasters for them to be given greater remuneration and support so that they would be able to provide better facilities?
    Mr. Hobson: They have just had an increase.
    Mr. Gammans: I do not think that a controversy as between Crown offices and sub-post offices really enters into this question.

    New Stamps
    Mr. Hector Hughesasked the Assistant Postmaster-General if, in considering new stamps for the new Reign, he will take into account the benefit to the trade and industry of Scotland and the profit to his own Department which would enure from an issue of special and individual designs in stamps for Scotland; and if he will therefore make such an issue accordingly.
    Mr. Gammans: No decision has yet been reached about new stamps; but as regards the possibility of a special issue for Scotland, I would refer the hon. and learned Member to the reply I gave him on 21st November last.
    Mr. Hughes: Does the Assistant Postmaster-General not realise that the granting at the present time of such new stamps to Scotland would be a gracious gesture to Scottish sentiment, especially in view of the anomalous position in regard to the Royal styles and titles in Scotland, and that he could do that with profit to the Post Office and with advantage to the Commonwealth?
    Mr. Gammans: I explained to the hon. and learned Member last November the difficulty of issuing a special stamp for Scotland or any other part of the United Kingdom.

    Sub-Office, Edgwarebury Lane
    Mr. Charles Ian Off-Ewingasked the Assistant Postmaster-General what is the present cost of running the sub-office at Edgwarebury Lane under Crown Office management, and what was the cost of maintaining it as a sub-post office.
    Mr. Gammans: The cost of running this office temporarily on a Crown basis is £114 a month. The corresponding sum payable to a sub-postmaster would be £96 10s. a month.

    Brownswood Park, Stoke Newington
    Mr. David Weitzmanasked the Assistant Postmaster-General whether he is aware that, since the closing of the Brownswood Park sub-post office on 14th June, 1950, despite repeated representations, the Brownswood Park area of the Metropolitan Borough of Stoke Newington has been without suitable Post Office counter facilities; and what action he proposes to take in the matter.
    Mr. Gammans: I much regret the inconvenience caused by the closing of the Brownswood Park sub-post office. The intention is to re-open it as soon as a suitable candidate and premises can be found. Repeated advertisement has so far been unsuccessful. I will write to the hon. Member as soon as information is available.
    Mr. Weitzman: Is the Minister aware that, by reason of the failure to supply these facilities, many people, including many old age pensioners, have suffered great inconvenience? Is not the last excuse given by the Department that they had the premises and the person to occupy them but that they had not got a trained assistant; and is it not rather disgraceful that, because a trained assistant is not available, the public should suffer in this way?
    Mr. Gammans: The hon. and learned Gentleman is misinformed. We intend to open this sub-post office as quickly as we can, and we should be grateful for any help which the hon. Gentleman can give us either in finding suitable premises or in getting someone who is prepared to do the job.
    Mr. Weitzman: Is not the Minister aware that his own Department wrote a letter to the Town Clerk of the Borough of Stoke Newington on 7th November last, in which it was said that a suitable candidate for the vacant appointment of a sub-postmaster had been obtained but that until he was able to secure a trained assistant it would not unfortunately be possible for him to take up the appointment? In those circumstances, and as I understand that there is a pool of trained assistants, why cannot this matter go forward so that the people do not suffer?
    Mr. Gammans: I should be glad of any help which the hon. Gentleman could give in this matter. We are as keen as he is to put the situation right.
    Brigadier Medlicott: Does not the Minister's answer underline the fact that the remuneration offered to sub-postmasters is nothing like enough to attract people into this occupation?
    Mr. W. R. Williams: Does not the Assistant Postmaster-General agree that this is just a case where conversion seems to be the only remedy if the people are not to suffer?

    Employees (Sick Rate)
    Mr. Anthony Fellasked the Assistant Postmaster-General the average sick-rate amongst Post Office employees for the year before Post Office employees came under the National Health Service administration; and what was the sick-rate figure for the last year for which figures exist since Post Office employees came under the National Health Service administration.
    Mr. Gammans: The average rates for non-disabled established staff were as follows:
    in 1947, 11.6 days for males and 14.9 days for females;
    in 1950, 13.4 days for males and 17.3 days for females.
    Mr. Fell: Can the Minister state what effect on the Post Office staff situation this most disturbing increase in the sick-rate has had?
    Mr. Gammans: The increase in the sick-rate is certainly disturbing, and even more so in comparison with pre-war figures. If we could get the sickness rate down to what it was before the war, it would be possible to make an economy of 5,000 people in the Post Office service.
    Mr. I. Mikardo: Is not the hon. Gentleman aware that these changing figures do not necessarily mean that more people are sick, but that before the National Health Service came into operation many people went on working when they ought to have stayed away because they could not afford to be sick and to pay the doctor?
    Mr. Gammans: That was certainly not true so far as the Post Office service was concerned.
    Captain J. A. L. Duncan: Can my hon. Friend give the pre-war figures for comparison?
    Mr. Gammans: In 1938 the comparable figure for men was 8.1 days and for women 9.3 days.
    Mr. W. R. Williams: I should like to ask two questions. First, how does the average sick-rate in the Post Office compare with the national figure in industry generally? Secondly, to what extent have war disabilities and the lower physical standard of recruiting affected the situation?
    Mr. Gammans: In reply to the first question, I must say that I do not know. The hon. Gentleman ought to put such a question to the Minister of Labour. On the second point, it is perhaps too early to say except that the general health of the Post Office service as reckoned from the death-rate or the number of retirements has fortunately not deteriorated.
    Mr. Ness Edwards: Will the Assistant Postmaster-General exercise care to ensure that he is not casting an undeserved reflection on a most excellent body of people, in view of the fact that disablement on the part of applicants for jobs in the Post Office is one of the first considerations in employing them? We ought to keep that in mind.
    Mr. Gammans: I am not casting any aspersions on anybody. I think the whole House should be disturbed to find this increase in these figures, whatever may be the reason for it.

    Scales (Inspection)
    Mr. William Shepherdasked the Assistant Postmaster-General to what extent Post Office scales are examined by weights and measures inspectors.
    Mr. Gammans: As Crown property, Post Office weights and scales are exempt by statute from examination. The Post Office has, as a normal procedure, arrangements for the testing of its weights and scales by its own staff. Agreement has however been reached with the Board of Trade under which this regular inspection will in due course be supplemented by periodical visits by Inspectors of Weights and Measures. As an initial step all new weighing equipment is already subject to verification by the inspectors.
    Mr. Shepherd: While I appreciate that small improvement, can my hon. Friend say why it is that these scales are not subject to exactly the same procedure as the scales of ordinary traders? Does he realise what inaccuracy there is in Post Office scales, and does he know that many people who have parcels for troops in the Far-East visit three or four post offices and leave the parcels at the one where the scales show the lowest charge?
    Mr. Gammans: We have no verification whatever of the last statement made by my hon. Friend. If he will let me have details I shall be only too glad to examine them. If anything, the Post Office's scales are inspected more regularly than the scales of most private businesses. I think the hon. Gentleman will agree that, with the additional safeguards I have mentioned, customers will have very little to grumble about.
    Mr. Shepherd: Would there not be much more of a safeguard if the Post Offices were fined if they have scales out of order, just like the ordinary trader?

  ROYAL AIR FORCE

    Meteorological Information
    Mr. Jannerasked the Under-Secretary of State for Air what arrangements are planned during the current year for the better development of obtaining and supplying stratospheric meteorological information in connection with the main Empire air routes.
    The Under-Secretary of State for Air (Mr. Nigel Birch): The air terminals in the United Kingdom are already given more detailed information about meteorological conditions at high altitudes than is available anywhere else in the world. There are at present nine stations on the Empire air routes making regular observations up to a height of 60,000 feet, which are analysed and published by a special branch of the Meteorological Office. It is hoped that during 1952 several more stations will be set up along these routes.

    Welford Aerodrome (Land Cultivation)
    Mr. Anthony Hurdasked the Under-Secretary of State for Air if, in view of the Government's decision to secure the
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    utmost possible production of grain for this year's harvest, he will now authorise the continued cultivation of 200 acres between the runways on Welford Aerodrome, Berkshire, and give general instructions that all land held by the Air Ministry which can be spared for cropping shall immediately be offered to local farmers.
    Mr. Birch: It is already the policy of the Air Ministry to make as much land as possible available for food production, and my noble Friend is at present seeking ways and means of increasing the yield. The airfield at Welford, however, is to be used as a storage depot, and it is planned to start preparing the site early this summer. This will, I am afraid, make it physically impossible for farmers to cultivate any of the land there.
    Mr. Hurd: If this airfield at Welford is only to be used for storage, is there any reason why the ground between the runways should not be cropped for the 1952 harvest?
    Mr. Birch: The airfield will be used as an ammunition depot. Railway lines are being laid down criss-cross and concrete traverses are being put down. I do not think that the hon. Gentleman's suggestion is possible.
    Mr. Hurd: Will the Minister see if he can find a few acres instead of sterilising the whole of the airfield?
    Mr. Birch: I am in sympathy with my hon. Friend's suggestion and will do what I can.
    Colonel Alan Gomme-Duncan: Can the Minister make sure that such acres as are not covered by works will at least be kept clean so that they will not distribute weeds over good agricultural land?
    Mr. Birch: I will take note of that suggestion.

    Maintenance Unit, Market Drayton
    Mr. Stephen Swinglerasked the Under-Secretary of State for Air if he is aware of the wastage of manpower, machine tools and building materials, at No. 30 Maintenance Unit, Royal Air Force, near Market Drayton; and if he will take action to secure more economical employment of resources at this station.
    Mr. Birch: I take it that the hon. Member has in mind the building being done at the unit. I will certainly look into any evidence of waste which the hon. Member sends me, but I should like to make it clear that this work is being done under a contract which was let after competitive tender. It is in the interest of the contractor to avoid waste.
    Mr. Swingler: Is the Minister really satisfied that the carrying out of this £80,000 contract is being properly supervised? Is he aware, for example, of the allegation of the burning of large quantities of linoleum and of men being kept idle for weeks? Will he cause his Department to make a strenuous investigation?
    Mr. Birch: I am obliged to the hon. Gentleman for raising this matter. I am not altogether satisfied with what is going on, and I noticed with interest the interview which the hon. Gentleman gave to a local paper on the subject. I also think that this scale of building work is very big. On the other hand, that was done by His late Majesty's advisers, and not by the present Government.
    Mr. Arthur Colegate: Is my hon. Friend aware that there are many complaints from other depots in Staffordshire with regard to the wastage that is going on, and will he not ask his officers to make a special investigation into this matter, which is causing great public anxiety?
    Mr. Birch: I am aware that there are a number of complaints, and the matter is under investigation.

    Personal Case
    Mr. John McKayasked the Under-Secretary of State for Air why 2537878 A.C.2 Stanley Bewick, Royal Air Force, Credenhill, Hereford, with only eight weeks' National Service, and only five weeks' actual training, one of the youngest with the least training was selected against his own personal wishes when interrogated, and was given embarkation leave and informed he was to be posted to the Middle East.
    Mr. Birch: This airman is over 18 years and 3 months of age and has completed more than 12 weeks' service. As the hon. Member has already been informed by my noble Friend, he is
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    therefore eligible for posting to the Middle East in accordance with the rules announced in this House in December, 1950.
    Mr. McKay: Is the Minister aware that the parents of this boy are very much disturbed about what has happened? Is he not aware that, when we permit these boys to be conscripted for two years, we expect that they will receive a fair crack of the whip, and that, when men are selected to go out to the Middle East, the parents of these boys expect that those with the longest service and training will be taken?
    Will the Minister say what is the basis on which the selection is made, because my information indicates that the methods of selection are unsatisfactory and do not take due consideration of all the factors concerning each individual?
    Mr. Birch: I am aware that parents are naturally very often unhappy when their sons are posted abroad. On the other hand, men join the Royal Air Force or are called up to it in order to serve their Queen and country, and the exigencies of the Services must have first call. This man was eligible to go, and a great many other men of the same age have gone and are going. There were no compassionate grounds for taking him off the draft.
    Mr. McKay: Is it not the fact that in the same district there are many other men who are older and have had more training than this particular boy?
    Mr. Birch: Obviously, we cannot arrange that all the young men should stay at home and all the older men should be sent abroad, because in that case we would not get personnel sorted out in the right order and categories.

    BURMA (CHINESE NATIONALIST TROOPS)
    Mr. Woodrow Wyattasked the Secretary of State for Foreign Affairs the nature of the request he has received from the Burmese Government for assistance in removing the Kuomintang troops from Burmese soil; and what action he proposes to take.
    Mr. A. Fenner Brockwayasked the Secretary of State for Foreign Affairs what

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    action he has taken, following the official representations which have been made to him from the Government of Burma, in regard to the presence of Chinese Nationalist troops on its territory; and the despatch of arms from Formosa to these troops.
    The Joint Under-Secretary of State for Foreign Affairs (Mr. Anthony Nutting): We have received no request or representations on this question from the Burmese Government.
    As for the action which Her Majesty's Government propose, I would refer the hon. Members to the statement which my right hon. Friend made in his speech in this House on 5th February.
    Mr. Wyatt: Will the Minister bear in mind that there is very little point in sending a U.N.O. Commission to Burma, because, first of all, the area in which these troops are situated is very inaccessible, and, secondly, there is no dispute whatever that there are Nationalist forces in Burma, which fact could not be established any more exactly than is now admitted; and that the solution of this matter is for the Nationalist troops to be removed, and that what is required is pressure from the Government of this country and the Government of the United States on the Nationalist authorities of Formosa to have the troops removed?
    Mr. Nutting: It is not for me to anticipate the answer which we shall, no doubt, in due course receive from the Burma Government on this matter. My right hon. Friend made it quite plain that, provided it was generally acceptable and that the Burma Government thought it was a good idea, we should participate and help in a fact-finding Commission.
    Mr. Brockway: May I ask the hon. Gentleman, whatever the technical character of any conversations which have taken place, whether it is not a fact that the leader of the Burmese Delegation in the First Political Committee of the United Nations, on 28th January, said that Kuomintang aggression was taking place in Burma and made a direct appeal to the British Government for action?
    Mr. Nutting: I have nothing to add to the answer I have given to the hon. Gentleman, which is to the effect that we
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    have had no request or representations on this question from the Burma Government.

    JAPAN (EX-PRISONERS OF WAR)
    Brigadier Medlicottasked the Secretary of State for Foreign Affairs if he is now able to make a statement as to the setting up of a fund for former Far Eastern prisoners of war or their dependants under the Treaty of Peace with Japan.
    Mr. Nutting: No, Sir. No funds will be available to the International Committee of the Red Cross under Article 16 of the Japanese Peace Treaty until the Peace Treaty has come into force and Japan has transferred her assets in neutral and ex-enemy countries and in Germany and Austria to that Committee.
    Japanese assets in the United Kingdom will likewise not become the property of Her Majesty's Government, under Article 14 of the Japanese Peace Treaty, until the Japanese Peace Treaty has come into force.
    Brigadier Medlicott: May we have an assurance that the Government will do all they possibly can to expedite the implementation of this scheme, and that it will not be held up unduly by legal discussions?
    Mr. Nutting: There will certainly be no delay as far as the Government are concerned, but it is, of course, a matter for other States to ratify the Japanese Peace Treaty before it can come into force.

    FOREIGN SERVICE (MISSING DIPLOMATS)
    Mr. Ernest Thurtleasked the Secretary of State for Foreign Affairs if his Department is still pursuing its inquiries into the unexplained disappearance of two members of its staff, namely Messrs. Burgess and Maclean; and what indications the evidence already in his possession regarding their movements gives as to their intended destination.
    Mr. Nutting: The investigation into the disappearance of Messrs. Maclean and Burgess is not yet closed. The only firm information about their movements so far obtained is that they disembarked at

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    St. Malo on 26th May last, which, however, provides no real indication as to their destination.
    Mr. Thurtle: Does not the existing information suggest that these men, like all fellow-travellers, were looking to the East?

    HUNGARY (MR. EDGAR SANDERS)
    Mr. Harmar Nichollsasked the Secretary of State for Foreign Affairs if he will consider taking steps similar to those taken by the United States Government on behalf of their nationals in order to obtain the release of Mr. Edgar Sanders from his imprisonment in Hungary.
    Mr. Nutting: Her Majesty's Government will not neglect any practicable steps that may be open to them to secure Mr. Sanders' release, which they continue to regard as a major question affecting Anglo-Hungarian relations. But the release of the American citizen, Mr. Vogeler, was obtained in return for certain concessions by the United States Government which Her Majesty's Government have never been in a position to offer.
    Mr. Nicholls: Will the Minister keep in mind the fact that the position at the present time is certainly most embarrassing, so far as this country is concerned, and that it places us in a position of apparent humiliation? Will he give the House a description of the concession which the Hungarians obtained from the United States of America and which we ourselves cannot give?
    Mr. Nutting: The main concession which the United States were able to offer in order to get Mr. Vogeler released consisted of the re-opening of the Hungarian Consulates in New York, and I think Cleveland, Ohio. These had previously been closed in January, 1950, in retaliation for the treatment of Mr. Vogeler by the Hungarian authorities, but there are, and have been, no Hungarian Consulates in this country which could be re-opened in return for a similar concession.

    N.A.T.O. MEETING, LISBON
    Mrs. Barbara Castleasked the Secretary of State for Foreign Affairs what is the agenda for the meeting of the North Atlantic Treaty Council in Lisbon this month.
    Mr. Nutting: The detailed agenda for the Council meeting will be decided by the Ministers concerned at the outset of the meeting, and it would not be proper for me to anticipate their decision. My right hon. Friend gave the House on 5th February a forecast of the principal matters which would be discussed, and which are likely to include the reorganisation of the North Atlantic Treaty Organisation machinery, the report of the Temporary Council Committee and the report of the Paris Conference on a European Defence Community.
    Mrs. Castle: Is the hon. Gentleman aware that contrary to the desires of other members of N.A.T.O., the United States Government are pressing ahead with these negotiations with the Franco Government for military air and naval facilities in Spain without any assurance of the restoration of elementary freedom in that country, and would Her Majesty's Government take steps to see that this matter is put on the agenda at the Lisbon Conference?
    Mr. Nutting: That is a very much wider question. I am dealing with the agenda so far as it has been decided. I should like notice of the hon. Lady's supplementary question.
    Mr. Desmond Donnelly: Will the hon. Gentleman bear in mind the extreme undesirability of entering into military relationship with Spain at the moment, especially in view of the execution of nine political prisoners there in the last few days? Will he give the House a firm assurance that the British Government do not approve of that kind of thing?
    Mr. Nutting: It has, I think, been frequently stated in this House that the British Government are not in favour of the inclusion of Spain in the North Atlantic Treaty Organisation.
    Mr. Michael Foot: Does not the hon. Gentleman think that the question of the association of any of the Powers in the

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    North Atlantic Treaty Organisation with the Franco Government is a matter for consideration by all the 12 Powers in that Organisation? Will he not, therefore, make efforts to see that this matter is put on the agenda as soon as possible and press it even more urgently in view of the atrocities which have been taking place in Spain during the last few days where innocent men have been sent to their death for political crimes?
    Hon. Members: Answer.
    Mr. Foot: In view of the complete callousness of the Government in this matter, give notice that I will do my best to raise it on the Adjournment.

    EGYPT (DISMISSED BRITISH OFFICIALS)
    Mr. F. Blackburnasked the Secretary of State for Foreign Affairs how many British officials dismissed by the Egyptian Government have now returned to this country; and how many have secured alternative employment.
    Mr. Nutting: Since former British employees in Egypt are private persons, they do not necessarily notify Her Majesty's Government of their arrival in this country nor of arrangements they may make for alternative employment. I cannot therefore provide the figures requested. Her Majesty's Government have, however, made arrangements to interview those who ask for assistance in obtaining employment, and are, as has already been stated in the House, doing their best to help. These arrangements are under the general control of my right hon. Friend the Minister of Labour.
    Mr. Blackburn: Would not the hon. Gentleman agree that we have a responsibility towards these officials, and that this information ought to be in the hands of the Government?
    Mr. Nutting: I certainly admit that we have a responsibility towards these officials, but I thought I explained in my answer that we cannot be informed as to who of these individuals, who are private persons, have come back and when?
    Mr. Godfrey Nicholson: Can my hon. Friend say how many of these former officials have returned to this country and are suffering in this way?
    Mr. Nutting: So far as I am aware we have not yet been notified of any who require the assistance to which I referred in my answer, but should we be so informed we shall take active steps to see that they are assisted.
    Sir H. Williams: Is my hon. Friend aware that the secretary of the association of these people resides in the constituency of the Minister of Labour, and will he therefore make inquiries of that Minister?

    NIGERIA LIVESTOCK MISSION (RECOMMENDATION)
    Mr. Hurdasked the Secretary of State for the Colonies if consideration of the recommendations of the Nigerian Livestock Mission has now been completed; and if he will state the decisions reached in agreement with the Nigerian Government.
    The Secretary of State for the Colonies (Mr. Oliver Lyttelton): I have not yet received a considered statement of their views on this matter from the Nigerian Government, who have been heavily engaged with the recent constitutional changes. I do not expect to receive them for some time. The problems involved are so large that some delay must, I fear, be condoned.

  KENYA

    Hartwell Report
    Mr. H. Hyndasked the Secretary of State for the Colonies what action has been taken in connection with the Hartwell Report about Kenya.
    Mr. Lyttelton: The Hartwell Committee was one of a number of committees which presented reports on various aspects of educational policy in Kenya. A general review of policy followed in which these reports were considered as a whole and not separately. The decisions which have since been taken have incorporated some of the measures recommended in the Hartwell Report.
    Mr. Hynd: Will the right hon. Gentleman give the House an opportunity to discuss this report at an early date?
    Mr. Lyttelton: If the hon. Gentleman put down that question a little later on I might be able to give him a satisfactory answer. I have not yet received any definite information from the Kenya Government.

    Trade Unions Bill
    Mr. Harry Wallaceasked the Secretary of State for the Colonies what consultations have taken place between the Government and the trade unions in Kenya on the drafting of the Kenya Trade Unions Bill.
    Mr. Lyttelton: The Bill has been under consideration for the past two years by the Kenya Labour Advisory Board, on which there are employees' representatives. It was published on 8th January for public comment and copies were specially sent to the trade unions.
    Mr. S. S. Awbery: Will the Minister give consideration to the advisability of sending out to Kenya a few trade unionists in conjunction with the T.U.C. so that they may give advice to workers in this Colony?
    Mr. Lyttelton: The present situation is, I think, that public opinion is being formed upon this matter in the consultations which are taking place with various trade union leaders, and I do not at all exclude the possibility which the hon. Gentleman has in mind.
    Mr. Wallaceasked the Secretary of State for the Colonies why the Kenya Trade Unions Bill include a provision that the secretary or treasurer of a trade union applying for registration must be literate in English; and if he will make representations, with a view to the deletion of this provision.
    Mr. Lyttelton: I am consulting the Governor of Kenya on this matter and will communicate with the hon. Member when I have received his reply.
    Mr. Wallaceasked the Secretary of State for the Colonies whether he is aware that the Kenya Trade Unions Bill lays down that all officers of registered trade unions must be actually engaged or employed in an occupation with which
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    the union is concerned; and if he will make representations with a view to the deletion of this provision, thus leaving this matter within the competence of trade union rules.
    Mr. Lyttelton: The hon. Member's information is not quite correct. The requirement to which he refers is modified by a proviso giving discretionary powers to the Registrar of Trade Unions and the Member responsible for labour matters to permit persons not so qualified to hold office. The reply to the second part of the Question therefore is "No, Sir."
    Mr. J. Griffiths: Will the Secretary of State for the Colonies place this Bill before the Secretary of State's Advisory Committee on Trade Unions for their comments and advice?
    Mr. Lyttelton: I have not thought of that one, but I am very willing to consider it.

  WEST INDIES

    British Honduras (Hurricane Fund)
    Mr. H. Hyndasked the Secretary of State for the Colonies what part of the hurricane fund granted to British Honduras in 1931 is still outstanding; and whether this debt can now be cancelled in the interests of the Colony.
    Mr. Lyttelton: No part of the hurricane loan is outstanding. Outstanding capital and interest was remitted by His late Majesty's Government in 1949.

    Pioneer Industries (Legislation)
    Mr. H. Hyndasked the Secretary of State for the Colonies which Colonies in the West Indies have now passed pioneer industries legislation; and to what extent the resultant legislation conforms to the standards he has required in this respect.
    Mr. Lyttelton: Laws to encourage new industries by the grant of Income Tax and Customs Duty concessions have been enacted in Barbados, British Guiana, British Honduras, Jamaica, Antigua, Montserrat, Trinidad and St. Lucia. No directions about the form of such legislation have been given to Colonial Governments.

    MALAYA (WAR DAMAGE COMMISSION)
    Mr. F. A. Burdenasked the Secretary of State for the Colonies (1) if the number of persons employed by the War Damage Commission, Kuala Lumpur; and the annual expenditure thereon for the year ended 31st December last;
    (2) the average administrative cost involved in the settlement of claims for war damage already completed by the War Damage Commission, Kuala Lumpur;
    (3) the number of claims for war damage lodged with the War Damage Commission, Kuala Lumpur; and how many of these claims have been settled.
    Mr. Lyttelton: Two hundred and ninety six persons are employed in the Federation of Malaya and Singapore, including 183 subordinate staff, at a total cost of £218,000 in 1951. Up to the end of 1951 administrative costs were 2 per cent. of the total value of awards assessed. About 200,000 claims have been lodged in Singapore and the Federation of Malaya Final awards have been assessed on 80,000 claims, on which divideneds between 30 per cent. and 60 per cent have, so far been paid.
    Mr. Burden: Will the Minister give an undertaking that the investigation into these claims will be expedited as much as possible because many people in this country with claims outstanding in Malaya are very concerned at the delay in settlement?
    Mr. Lyttelton: I have already promised to see if I can accelerate the settlement of claims.
    Mr. Awbery: Will the Minister state how many claims have been submitted by tin and rubber companies whose offices are situated in this country?
    Mr. Lyttelton: No, Sir, I have not the information. Perhaps the hon. Gentleman will put down a Question.
    Mr. Walter Fletcher: In view of the fact that many of these claims have been outstanding for over 10 years and that both my right hon. Friend's predecessors promised they would accelerate their settlement, will my right hon. Friend see if he can do better than either of them?
    Mr. Lyttelton: That will be my constant object.

    MINISTERS' OVERSEAS VISITS (TRAVEL FACILITIES)
    Mr. George Wiggasked the Prime Minister (1) what regulations have been laid down to govern the acceptance of gifts and services from commercial undertakings to Ministers of the Crown in their capacity as Ministers; and what other gifts and services similar to that of the Cunard Company have been provided to him and the Foreign Secretary since the present Government assumed office;
    (2) what estimate was made of the amount which would be payable by the Treasury to cover the expenses of himself and the Foreign Secretary previous to acceptance of the offer of the Cunard Company to provide free travel facilities to and from the United States of America.
    The Prime Minister (Mr. Winston Churchill): No specific regulations have been laid down: but it is well understood that no Minister or public servant should accept gifts or services which would place him under an obligation to a commercial undertaking.
    The cost of the two passages by me and one by my right hon. Friend, the Foreign Secretary, which were given by the Cunard Company would, I am informed, have amounted at normal rates—that is to say, three passages—to £1,752. Some similar facilities were provided by the United States and Canadian railways.
    The gifts and services of the Cunard Company as well as those of the United States and Canadian railways were not to Ministers but to the British taxpayers. I appreciate the courtesy and compliment implied in the action of the British, Canadian and United States bodies concerned. I cannot feel that there is anything discreditable in what happened, except perhaps the spirit that prompted the Questions.
    Mr. Wigg: Is the right hon. Gentleman aware that the spirit that prompted the Questions was a zeal for public efficiency? Is he not aware that if he had been prompted by the same spirit he would have declined to accept this gift and would have informed the Cunard Company that if they wish to make a donation to relieve the British taxpayer there is nothing whatever to prevent their making an anonymous contribution to the Exchequer?
    Mr. E. Shinwell: Apart from this particular incident, may I, on the question of principle, ask if the right hon. Gentleman can recall the case of the late Mr. Ramsay Macdonald many years ago when the right hon. Gentleman was a member of the Government or of the Opposition—at any rate a Member of this House? Mr. Macdonald was alleged to have received from Sir Alexander Grant a sum of money and a motor car, acts which were regarded by the Conservative Party as reprehensible. In these circumstances, will the right hon. Gentleman make it abundantly clear that it is equally reprehensible for members of the Government to receive gifts of any kind, either from commercial undertakings or from private individuals?
    The Prime Minister: It happened that the ship was delayed for a day and so I got the day's papers, which otherwise I should not have seen. I saw in those newspapers—in a certain class of them—elaborate accounts of the extraordinary luxury prevailing on board these liners which compete for world traffic with great advantages to us.
    Knowing the kind of mood that is about in certain quarters, I proposed to pay all my own expenses for entertainment myself, apart from transportation, but when I made this proposal to the Company they brushed it aside and made this offer. I was not to be financially affected in any way, and I considered in the circumstances it was a public spirited action on their part and one which I was fully justified in approving. I may say there are precedents for Ministers accepting the hospitality of this company, but as they would carry me down to the depths prevailing in some quarters I will not attempt to call them to mind.
    Air Commodore A. V. Harvey: Will my right hon. Friend say how the figures he has just given compare with those of his predecessor when he chartered a Stratocruiser airliner, which took him and his staff to America and remained there for several days and brought him back at the market rate?
    The Prime Minister: It is well-known that a special aeroplane for travel across the ocean is a very expensive thing, but the occasion on which the right hon. Gentleman had to go was one which was
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    considered, most important and critical and good results followed therefrom, and I do not remember that anybody on the Opposition side of the House raised any questions of this character.
    Mr. F. J. Bellenger: While not wishing to deter the right hon. Gentleman from accepting any properly offered hospitality, may I ask whether he does not think that Her Majesty's Prime Minister should be provide with adequate travelling facilities when on official business from funds voted by this House?
    The Prime Minister: If there was a very strong sentiment that the money should be refunded to the company by the Exchequer I should be willing to consider that, but I really think the House would be behaving in an unwise way to insist upon that. There were luncheons and so forth given at which prominent members of the Front Bench opposite sat. Ought they not to have accepted those spontaneous offers of hospitality? I had no interest of any sort or kind in the matter.

    RE-ARMAMENT PROGRAMME
    Mr. George Chetwyndasked the Prime Minister how far the actual expenditure on the re-armament programme for 1951–52 will fall short of the expenditure originally proposed.
    The Prime Minister: I cannot give an exact figure, but the present indications are that expenditure will fall short by about £120 million of the £1,250 million which it was hoped it might be possible to spend in the current financial year.
    Mr. Chetwynd: Will the right hon. Gentleman say whether that will mean that the programme will have to be extended over four or five years instead of the present three?
    The Prime Minister: It will certainly take longer than three years, but we are going to have a debate on this subject next week.
    Mr. Arthur Lewisasked the Prime Minister the extent of the shortfall in th0 re-armament programme, due to lack of materials and other causes, and the revised overall expenditure necessary to maintain the previously announced £4,700 million quantity of supplies, due

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    to the decrease in the purchasing value of the £; and how far he intends to extend the period of fulfilment of this programme.
    The Prime Minister: It is not at present possible to forecast over what precise period it will be necessary to spread production of all the equipment included in the original three-year programme, and therefore to estimate what is likely to be the total expenditure on defence during the revised period of the programme.
    The White Paper on Defence Estimates and policy will be circulated tomorrow, and we hope there may be a debate on defence on the Thursday following.
    Mr. Lewis: Will the right hon. Gentleman give an assurance that as soon as he has the facts and figures available he will make a statement to the House or give us an opportunity of putting a Question?
    The Prime Minister: I hope the hon. Member may be fortunate in catching the eye of the Chair in the debate on defence.
    Mr. Lewis: I asked the Prime Minister a simple question. He said the facts and figures are not yet available. I am asking that when they are available he will either make a statement to the House or, through the usual channels, make arrangements for a suitable Question to be asked so that he can give the facts and figures to the House.
    The Prime Minister: The facts when they are apparent will be made known.
    Mr. Emrys Hughes: Could the right hon. Gentleman tell us whether this estimate includes the new expenditure likely to arise as a result of new policy on the discovery of the atom bomb?
    The Prime Minister: I should be very sorry to put myself forward as seeking to deprive the right hon. Gentleman the Leader of the Opposition and his colleagues of the credit that is due to them for the progress that has been made.
    Mr. Sydney Silverman: Can the Prime Minister say whether any estimate has been formed to show how much we will get for such money as we are able to spend as compared with what we could have got for the same money at the time when this re-armament programme was framed?
    The Prime Minister: I think that is a very fair point to raise in the forthcoming debate.
    Mr. F. Beswickasked the Prime Minister when he proposes to announce the revised expenditure on armaments to replace the late Government's programme of £4,700 million over three years.
    The Prime Minister: The programme has not been replaced. On the contrary we are pressing forward with it to the best of our ability though inevitably it must now be spread over a somewhat longer period.
    Mr. Beswick: Would the right hon. Gentleman not agree that we should be more likely to get a greater quantity of effective units for a given sum of money spent if revision were planned ahead rather than a reduction left to the free play of material shortages?

    .280 RIFLE
    Mr. Wyattasked the Minister of Defence whether he will make a statement, consequent upon his conversations in the United States of America, on the future of the.280 rifle.
    The Prime Minister: As was indicated in the Communiqué which was issued after my talks in Washington on 9th January, neither we nor the United States consider it wise to take the important step of changing our rifles at the present time, and we shall both continue to rely upon rifles and ammunition which are now in stock or are being produced. Both countries will produce new rifles and ammunition on an experimental scale only, and this will apply to the production of the.280 rifle in the United Kingdom. Every effort will be made to produce a standard rifle and ammunition for all N.A.T.O. countries.
    Mr. Wyatt: Does that mean that Her Majesty's Government have now abandoned the hope of persuading the Americans that our rifle is better than theirs?
    The Prime Minister: I see no prospect of carrying out that process of conversion.

BRITISH LEGION BRANCH (Mr. SPEAKER'S PRESIDENCY)
Mr. C. R. Attlee: May I raise a matter of which I have given you notice, Mr. Speaker? I understand that it has been the practice of Mr. Speaker to be the President of the House of Commons Branch of the British Legion. I also understand that a meeting of that body was held yesterday at which you were duly elected President; but a report appears in the Press which would seem to make you a party to actions by that body in urging increases of pensions on the Government and in sending a deputation to the Government.
I think one would realise that it is very wrong that the impression should get abroad of Mr. Speaker supporting or taking part in activities of this kind. Perhaps you would be good enough to make a statement in order to clarify the position?
Mr. Speaker: I am grateful to the right hon. Gentleman both for giving me notice of this matter and giving me an opportunity of removing any misunderstanding which may exist. I was asked to take the chair yesterday at a meeting of the re-constituted House of Commons Branch of the British Legion. The business was to elect office bearers for the year and to hear an address from the National Chairman of the Legion.
I was told that my predecessors in the past had acted similarly and had accepted the Presidency of the Branch. The meeting was attended by Members of all parties and the discussion was quite non-party. The officials elected were of both the main parties in equal numbers, each party proposing and seconding candidates of the other side, who were elected without opposition.
In accepting the office of President I made it clear that—to use my own words—I would be a singularly useless member because I could take no part in discussions. I took no part in the subsequent discussion and I expressed no opinions of any kind, confining myself strictly to the calling of members and putting the questions proposed.
It is customary for the Speaker to accept the presidency of certain nonparty organisations. One might instance
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the Commonwealth Parliamentary Association, the Empire Parliamentary Union and so on, in addition to the British Legion, and he does that in order to emphasise the non-party character of the proceedings. I do not think anyone present at the meeting yesterday or at any similar meeting I have addressed would associate Mr. Speaker's opinion with any resolutions come to by the meeting.
Mr. Attlee: I realise that that has been the position, but the fact, as understand it, was that at the meeting a decision was taken to send a deputation to the Chancellor of the Exchequer in order to seek an increase in pensions. I would respectfully suggest that that should have been done at a meeting at which you, Sir, were not in the chair because, although this is a non-party organisation, there are a number of nonparty organisations of old age pensioners and ex-Service men who are engaged on pressing their claims on the Government, and while it is a perfectly legitimate thing to do, I suggest it should not have been done when you were there in the chair, as President, because of the strictly nonpolitical and non-party nature of this organisation.
The Prime Minister: On a point of order. Might I ask you, Sir, whether the comments on and criticisms of your conduct as Speaker should not—if it is thought right to bring them forward—be made the subject of a Motion placed in due form upon the Order Paper?
Mr. Attlee: On that point of order. I did not offer any criticism of you, Sir. I do not think the right hon. Gentleman heard what I said. I criticise those who put this forward when you, Sir, were in the chair.
Mr. Speaker: I would say to that, of course, that when I took the chair I did not know what resolution would be proposed; but I am bound to say that my own recollection of the meeting and its harmonious non-party character was such that I saw nothing very dreadful in a decision being come to to send the deputation to the Minister. There is nothing in that that commits one to policy one way or the other.

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I do not think, myself, that I did anything wrong; but one has to be careful in these things, and perhaps we can dispose of the matter in that way. Certainly the right hon. Gentleman the Prime Minister is perfectly right in saying that if there is any desire to criticise my action in the matter, that can only be done by a substantive Motion.

BRITISH LEGION BRANCH (Mr. SPEAKER'S PRESIDENCY)
  BALLOT FOR NOTICES OF MOTION
    COAL UTILISATION (EFFICIENCY)
    Mr. M. Philips Price: I beg to give notice that, on Friday, 7th March, I shall call attention to the need to utilise coal to the best advantage and the failure of many users to adopt the most efficient method of fuel utilisation, and move a Resolution.
    PRODUCTIVITY
    Mr. Raymond Gower: I beg to give notice that, on Friday, 7th March, I shall call attention to the necessity for a rising level of productivity as the only means of achieving full employment and a rising standard of living, and move a Resolution.
    INCENTIVE PAYMENTS
    Mr. Robert Crouch: I beg to give notice that, on Friday, 7th March, I shall call attention to the desirability of encouraging a system of incentive payments in industry, and move a Resolution.

DISPOSAL OF UNCOLLECTED GOODS
3.42 p.m.
Miss Elaine Burton: I beg to move,
That leave be given to bring in a Bill to authorise the disposal of goods left with shopkeepers for repair or other treatment but not collected; and for purposes connected therewith.
Until the matter was brought to my attention by the secretary of the Coventry Boot Trade Association, I had no idea that so many people left behind so many things. If we take the footwear industry to start with, the National Association state that their members today have at least 450,000 pairs of uncollected repairs on their shelves, and they estimate that these are worth at least £166,000 in labour and materials. Examples could be taken
238
from all over the country. Last year there was a shop at Southend which had three sacks of uncollected repairs estimated at £400. In my own city, Coventry, today 24 traders are owed amounts varying from 25s. 6d. to £35, with an average of £13 11s. 2d. and a top figure of £100.
Various reasons are given for this non-collection of goods. Quite recently, a customer did not return for her child's shoes because the child had grown out of them. Going back a good deal further, some 23 years ago a shoe repairer in Rochdale had a pair of button boots brought in for repair and the unfortunate man still has them. The footwear repairing industry has always worked on a low margin of profit. It is essential therefore, that repairers should be paid for their work immediately. Today many small traders are running into debt because they have to purchase quantities of material and they are owed this money from customers who have not collected their goods.
During the past two months I have made it my business to go into various small shops and I have not found one boot repairing shop where the repairer had not uncollected repairs on his shelves.
This matter is not one that affects the footwear industry alone. Practically every jeweller in the country is faced with the problem of uncollected repairs. The National Association of Goldsmiths state that the position is that, as a bailee for reward, the retail jeweller is not entitled to sell goods left with him on trust. Indeed, only the other week a well-known watch and clock firm in London had a customer who came for a clock which it had held for 21 years. People leave tennis rackets behind after restringing, holiday makers' clothes are left uncollected and unpaid for at cleaners at holiday resorts long after the holidays are over, electric irons and radio sets are repaired in all good faith for the customer who just does not come back.
This Bill is an effort to remedy a position which is unfair to the trader. It is a general Bill, covering all repairers, supported by many trade associations and opposed by none, to our knowledge; it is a non-party Bill and is sponsored by both sides of the House. Legally, the position seems to be that where goods are left by a customer for repair, in the

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absence of any agreement to the contrary the property in those goods does not become the property of the repairer. Any attempt to dispose of the goods or to convert them to the repairer's own use would seem to be an unlawful act.
I know, of course, as do other hon. Members, that some traders print conditions on the back of receipts—conditions under which they are prepared to accept things for repair; but the general consensus of traders' opinion, and certainly of all the legal opinion which we have taken, is that those conditions are not enforceable as a result of their being printed. I have tried to find out the position from various trade associations. Each and all have informed me that their members are under no delusion and realise that if they dispose of goods after the expiration of the time limit on the back of those receipts, they are not immune from legal action.
Pawnbrokers, of course, can dispose of uncollected pledges. They are covered by the Pawnbrokers Acts of 1872 and 1922. Pledges of 10s. and under, if not redeemed within 12 months and seven days from the date of pledging, become the property of the pawnbroker. Pledges of 10s. and over, if not redeemed within 12 months and seven days of the date of pledging, may be sold by public auction by the pawnbroker. The House may be interested to know that within three years of the date of a sale the pawner may, on demand and on payment of a penny,
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see the books of the pawnbroker and receive any surplus produced by the sale.
The trade associations and the sponsors of the Bill have made every effort to safeguard both the trader and the customer. No goods may be sold under 12 months, and before they could be sold the repairer would have first to inform the customer that the goods were ready, and secondly, 12 months from that date, would have to inform the customer that the goods would be sold to defray the cost of the repair. It is suggested that the second communication should be by registered post as proof of postage. Records would be kept and the customer would be able to claim from the shopkeeper any surplus resulting from the sale. Equally, the shopkeeper would be able to claim from the customer any deficit resulting from the sale. I think this is fair. We have tried to make it so, and I hope the House will give leave for the Bill to be introduced.
Question put, and agreed to.
Bill ordered to be brought in by Mr. G. Lindgren, Sir Lynn Ungoed-Thomas, Mr. Robert Crouch, Mr. George Odey, Mr. Derek Walker-Smith and Miss Elaine Burton.

DISPOSAL OF UNCOLLECTED GOODS
  DISPOSAL OF UNCOLLECTED GOODS BILL
  "to authorise the disposal of goods left with shopkeepers for repair or other treatment but not collected; and for purposes connected therewith," presented accordingly, and read the First time; to be read a Second time upon Friday, 29th February, and to be printed. [Bill 56.]
ORDERS OF THE DAY

  AGRICULTURE (FERTILISERS) BILL
  Order for Second Reading read.
  3.50 p.m.
  The Minister of Agriculture (Major Sir Thomas Dugdale): I beg to move, "That the Bill be now read a Second time."
  This short Bill carries out an undertaking which I gave to the House on 29th November last that I would ask Parliament to make the necessary provision for the fertiliser subsidy, the introduction of which I then announced. The House will recall that at that time some farm price adjustments were made arising out of the Special Review held under Section 2 of the Agriculture Act, 1947. This review was occasioned by an award of the Agricultural Wages Board for England and Wales; but, in addition to the increase in the wages of agricultural workers, the Government also agreed to consider an unexpectedly large increase in the price of fertilisers.
  It had been estimated that the withdrawal of the second half of the war-time fertiliser subsidy on 1st July, 1951, would increase the farmers' bill for fertilisers by about £10 million—that is to say, if the fertiliser consumption remained at the same level during this year as during 1950 to 1951. This increase was taken into account in the Annual Review in the early months of 1951.
  Following that Annual Review, steep and quite unexpected rises in freight rates and the costs of imported materials, combined with other higher costs, turned the estimated increase of £10 million into one of a little over £19 million. The increase was particularly heavy on phosphatic fertilisers, and on behalf of the Government I promised that the excess of just over £9 million would be dealt with separately by means which would more effectively encourage the proper use of fertilisers on crops and grass, and this was to be done through payments of contributions to farmers towards the cost of acquiring phosphatic fertilisers in the United Kingdom.
  Further increases in the costs of fertilisers have recently been announced, and they were included in an Order made
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  by the Minister of Materials which came into force on 1st February this year. These increases have been taken into account by the Agricultural Departments in considering the details of this particular subsidy. It is now estimated that the rise of just over £9 million, to which I referred in my statement in November, 1951, is now a shade over £10 million, and it is this figure which the Government had in mind in fixing the rates at which the new subsidy would be paid during the first year of operation, that is, the year starting on 1st July, 1951. I should like to remind the House, in connection with that calculation in regard to fertilisers, that the fertiliser year runs from 1st July of one year to 30th June in the following year.
  It has been thought expedient in dealing with this problem, in drafting this Bill, to look beyond the implementation of the promise that was given in November last and to prepare a Measure which contains powers to enable—and I stress that word "enable"—should occasion arise, contributions to be made to farmers which would not be limited as regards the type of fertilisers. The Bill is so drafted that a fertiliser subsidy amounting to one-half of the cost of any or all fertilisers bought by farmers could be brought within the scope of a Statutory Instrument made in accordance with its terms, and with the approval of the Treasury.
  At this point I must make it perfectly clear to the House that for the first fertiliser year that the subsidy will operate—the year extending from 1st July, 1951 to 30th June, 1952—it will be limited to phosphatic fertilisers, and the amount of the subsidy will be calculated on the basis of the £10 million increase in cost based on the 1950–51 usage which I have already mentioned to the House. The House will observe from the Bill that the powers taken in this Bill have a life of five years and expire on 30th June, 1956—
  Mr. Frederick Peart: The Minister mentions the limitation to phosphates. However, the Bill itself does not make the limitation to phosphates. I think the Minister is giving the impression that it will. Am I right in saying that?
  Sir T. DugdaleThe hon. Member is perfectly right there. The first scheme

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  which will be introduced as a result of the passage of this Bill will be limited to phosphates.
  As I was saying, the House will observe that the powers taken in this Bill have a life of five years and expire on 30th June, 1956, unless they are extended for a period or periods by Statutory Instrument subject to affirmative Resolutions by both Houses of Parliament.
  Here again, I wish to make it perfectly clear to the House that, while the Bill contemplates that these fertiliser subsidies may be continued up to 30th June, 1956, or even longer through the procedure of affirmative Resolution, nevertheless the Government have given no undertaking that the fertiliser subsidies will in fact continue for so long a period. The power thus taken is permissive, and what use is made of it will depend on the needs of agriculture and the prevailing financial circumstances during the next few years. I hope that I have made that position clear to the House.
  The House will realise that, when I made the announcement last November, which was a result of the Special Review, to which both sides of the House were, I think, agreed in principle, I was dealing with the situation as we found it at that time, but when the Government found it was necessary to legislate, the only right and sensible course to take was to see that we took powers, with the approval of the House, to continue this kind of help to the agricultural industry, if the House, in its wisdom in due course of time, thought it was the right and proper thing to do. That is why we take these powers in this Bill.
  During the last three years—I ask the House to mark this particular fact—the costs of fertilisers to farmers have almost doubled, and as a result, not surprisingly, many farmers today are ordering much smaller quantities. If this tendency is not checked—and I am quite certain that many of my hon. Friends in all parts of the House will agree with me in this—a reduction of crop yields will inevitably follow. I have enough faith in the farming community to trust them to realise that it is a false economy to cut down on fertilisers, and I believe that they will respond to the suggestion and the provisions of this Bill, which will materially assist them to buy the fertilisers that are
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  so necessary if productivity is to be maintained and, indeed, increased.
  Mr. George Brown: The right hon. and gallant Gentleman has told us that the first scheme he introduces will be limited to phosphatic fertilisers, and yet he now says that he hopes that the Bill will encourage farmers to use more. Will he tell us what is the current supply of phosphatics against the present use of them?
  Sir T. Dugdale: I should not like to go into any great detail at this stage, other than to assure the right hon. Gentleman that the supply is adequate for the need that may arise for these particular manures. I can give him that very definite assurance.
  Many hon. Members will remember the criticisms that were made in the House against the removal of the old fertiliser subsidy, which had maintained the price of fertilisers at a low and steady level for a number of years by means of subventions paid by the Board of Trade. The Government's proposal will provide a useful means of dealing with the fertiliser situation as circumstances change, and will allow assistance to be given from time to time when it may be most needed and where it will do most good in the way of increasing food production.
  I turn now from the general principles to the immediate future. In regard to the immediate future, should the House, as I hope it will, give its approval to this Measure, a scheme will be laid before Parliament, without delay, as a Statutory Instrument setting out details of the contributions towards the cost incurred by farmers on buying phosphatic fertilisers, and indicating the amount of contributions which will be paid. It is our intention that payments should begin immediately thereafter. Meanwhile, farmers—I wish to emphasise this—should continue to preserve their receipted accounts for fertilisers, or, indeed, their accounts even though they are not receipted.
  Mr. M. Philips Price: As from what date?
  Sir T. Dugdale: As from 1st July, 1951.
  The Agricultural Departments will make the fertiliser subsidy scheme as straightforward and clear as possible, so that it can be readily understood by farmers and agricultural merchants alike.

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  The scheme proposed for Great Britain will, for the first year at any rate, follow very closely the procedure of the lime subsidy scheme, which has been easily worked and readily understood by those for whose benefit it was devised.
  Included in the scheme which we shall make will be a schedule giving in detail the rates of subsidy that will be paid in respect of each kind of phosphatic fertiliser, and, subject to the Statutory Instrument being accepted by Parliament, farmers can expect to receive a contribution amounting to nearly one-third of the cost of any purchases made since 1st July last of superphosphates and other phosphatic fertilisers.
  Contributions will also be paid in respect of phosphates contained in compound fertilisers, except where that phospate element is wholly derived from organic material. I have with me a copy of the schedule, which is, of course, provisional until the Bill is passed and a Statutory Instrument is made, but I thought that the House might wish to have some examples of the actual subsidies which it is proposed to pay if hon. Members in their wisdom decide that the Bill shall go forward in its present form.
  To give examples of what the actual effects will be: A ton of superphosphates costing £14 19s. would attract a subsidy of £4 17s., while a grade of basic slag at £6 8s. 6d. a ton would attract a subsidy of £2 2s. A ton of ground mineral phosphates costing £12 11s. would be subsidised to the extent of £4, and in the case of a compound fertiliser containing 12 per cent. P2 O5, in soluble form, the contribution would amount to £3 18s. per ton, whilst a national compound fertiliser containing 12 per cent. of P2 O5 partly soluble and partly insoluble, costing, at the present controlled price, £19 10s. 6d. a ton, would attract a subsidy of £3 9s.
  I hope that the House will forgive me for giving these figures this afternoon, but I know that the agricultural community will be interested to have examples, and it will give an opportunity for the House to consider the effects of the Measure before we debate at a later stage the actual scheme; and it may, perhaps, facilitate the passage of the original scheme through the House, because I am very anxious that not only the Bill, but the first scheme, should be
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  on the Statute Book at the earliest possible moment.
  I repeat that for the first fertiliser year beginning on 1st July last, the subsidy will be on phosphates only, while the contributions will be at the rate indicated in the schedule of the Statutory Instrument setting out the scheme, from which I have already quoted. I recognise, of course, that other fertilisers, especially nitrogen, are at least of equal importance, but the exceptional price rise that occurred in July last year, for which insufficient allowance was made at the previous Annual Review, affected phosphatic fertilisers very much more than either nitrogen or potash. The limitation of the subsidy to phosphates is designed to bring prices of the several fertilisers into something like their previous relationship.
  The Bill is so short and simple that it is hardly necessary to deal with it Clause by Clause at this stage other than to say that Clause 1 provides power to make contributions to farmers towards their fertiliser purchases, Clause 2 prescribes the maximum rates of contribution, Clause 3 sets a limit to the period in respect of which the subsidy can be paid, and Clause 4 lays down supplementary provisions which may be included in any particular scheme.
  The Bill extends to the United Kingdom, but under Clause 6, which I should like the House to note, my right hon. Friend the Secretary of State for Scotland may, if he so desires, produce a different scheme for Scotland, and a separate and different scheme may also be made for Northern Ireland. It is hoped that, in regard to England and Wales and Scotland, it will be possible, in order to avoid complications and difficulties to agricultural merchants and others who deal in fertilisers, to make joint schemes for these countries.
  Captain J. A. L. Duncan: When my right hon. and gallant Friend talks of separate schemes for England and Scotland, is it contemplated that there will be separate schemes for England and Scotland during the fertiliser year 1951–52, because that would make a lot of difference to the producers?
  Sir T. Dugdale: Perhaps I did not make the position quite clear. I will repeat that it is hoped that, in regard to England and

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  Wales and Scotland, it will be possible, in order to avoid complications, to make joint schemes for these countries.
  Mr. Maurice Webb: In the first year?
  Sir T. Dugdale: Yes. To sum up the Bill, it is designed, first, to implement the undertaking which I gave to the House on behalf of the Government on 29th November, 1951, to ask for the necessary legislative authority for the subsidy on phosphates to which I then referred, and secondly, to place on the Statute Book a Measure sufficiently flexible to enable, subject to the approval of Parliament, schemes to be introduced which may be essential in the interest of maintaining the national food supply.
  I believe that financial assistance towards the cost of the fertilisers they buy is a sound way of encouraging the adequate use of fertilisers by farmers, thereby ensuring high crop yields from the limited area of land in this country. May I emphasise that the ultimate beneficiary is the consumer, whose supplies of food would be diminished and costs increased if the use of fertilisers by farmers were restricted through excessively high prices.
  I hope that this small but important Bill will commend itself to the House, that not only will it receive an unopposed Second Reading but that the House will be prepared to give early consideration to its further progress, so that it may receive the Royal Assent at an early date. The first scheme can then be considered in detail.
  4.14 p.m.
  Mr. Thomas Williams: The first thing that I ought to do is to congratulate the right hon. and gallant Gentleman upon introducing his first Measure since becoming Minister of Agriculture. I am equally sure that the highly-complex nature of the Bill, and particularly the components of various fertilisers, has been made transparently clear to us by the right hon. and gallant Gentleman this afternoon, but if not, it will be when we have had an opportunity of reading his speech tomorrow morning.
  I should like to ease the Minister's mind at once by telling him that it is not our intention to divide the
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  House against the Bill. It is possible that there may be different points of view on the wisdom or otherwise of this method of encouraging the industry, but it is true to say that a fertiliser subsidy in some form was in existence from 1937 to 1951; and I think that it was largely due to the price-fixing procedure of the 1947 Act, and possibly a desire to remove misunderstanding about the nature of some subsidies, that it was decided to abolish the fertiliser subsidy in two stages during 1950 and 1951, and add whatever the cost of the subsidy had been to the commodity prices under the first Schedule of the 1947 Act.
  It therefore makes no difference whatever to the Treasury or to consumer prices whether we make this fertiliser payment or whether we increase prices to the extent of the same sum of money. I know that there were many doubts expressed when a decision was reached to remove the subsidy. It was first argued that if maximum production was really our aim, it was folly to remove the fertiliser subsidy. It was also urged that we knew that the subsidy was paid only on fertilisers used, whereas an addition to the prices of commodities of the same figure would give no guarantee that the fertilisers would be used, and certainly no guarantee that we would get the maximum output of the food which we require.
  On the other hand, it was argued, not unnaturally, that farmers ought to be fully appreciative of the value of the use of fertilisers, and that, in fact, wise farmers would use fertilisers in any case. There is, surely, logic on both sides when we are thinking in terms not of two or three dozen large farmers but of anywhere between 360,000 and 370,000 farms of all types and sizes. The best farmer does and will use fertilisers because he knows and appreciates their full value, and because he always, or nearly always, has capital behind him.
  There is, however, one thing upon which every hon. Member will be agreed; it is that we require the maximum production of food from our own soil. That certainly involves the use of the right quantity and the right quality of fertilisers at the right time. It has been said very often—and I do not want to go into this question of food production on a wide scale—that large, cheap, imported supplies

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  of food are no longer available and will not be available for a very long time ahead. One only needs to think of the Argentine, where 50 years ago two-thirds of the population were engaged in agriculture, whereas today only one-third are so engaged. Industrial development means that there is more spending power in the hands of the multitude, and therefore they consume more of their own produce than they did before That means less for export.
  We see a similar situation in Australia. As the population grows and industrialisation grows, agriculture becomes less and less primary, and they are unable to export the quantities of food which they did previously. We know that in India, Pakistan and some other countries the position is either more and better food or Communism Therefore, we must, as far as we possibly can, make the best use of our limited acres to get all the food we can from them.
  As I understand this small but fairly important Bill, it does two things. As the right hon. and gallant Gentleman truly said, it corrects an unforeseeable miscalculation of the price of fertilisers on 1st July, 1951. The calculation, of course, was made in the February Price Review, and therefore the blame cannot be laid on anybody in particular. Unfortunately, because of the miscalculation, there has been a noticeable decrease in the utilisation of fertilisers since that time. Secondly, instead of recouping farmers by means of increased prices, we are to recoup them by means of the fertiliser payment. This costs the Treasury no more and the consumers no more, and it leaves things financially just as they were.
  Under the 1947 Act there was a prima facie case for a Special Review last October because of the sudden substantial increase in the cost of production, involving wages, fertilisers, transport charges, petroleum and many other things, but it was left to the Government either to agree or disagree upon the facts once an examination had taken place. As the right hon. and gallant Gentleman has said, he made an announcement of the Government's decision in November last. In effect, the decision was that the Government felt that the industry was entitled to something like £26 million, £16 million of that to be in respect of prices and £10 million in respect of fertiliser payments.
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  I do not believe there is a party in the House which is really in love with subsidies as such, although over the past 11 years all kinds of subsidies have been used for certain purposes and have not been wholly unsuccessful. The Labour Government were criticised very severely in 1947 over the calf subsidy, but if it had not been for the calf subsidy we should have had much less red meat in this country in 1951. While many forms of subsidy have been used, many have also been allowed to lapse. Still, it may be that a subsidy here and there will prove very useful.
  In any case, the position in 1952 is very different from what it was pre-war. If a subsidy was provided pre-war, it was done just to keep the farmer's head above water or it was given to the farmer without there being any central long-term policy at which the nation was aiming. Now the machinery of long-term policy is firmly established in the 1947 Act, and the gross income and the net income of farmers are decided in the Annual February Review, which embraces any subsidy that there may be. Therefore, any aids to increased production which impose no further burdens on the consumers will not be opposed by the Opposition for the sake of opposition. We shall, however, watch every instalment very carefully with our minds on both the size of our weekly ration and consumer prices.
  I believe that a case can be made, on grounds of agricultural production, for this small Bill. We certainly want maximum production from our own soil, and because of that, and because we think the Bill may help to stop the reduction in the use of fertilisers and may help to increase our food supplies and may help the right hon. and gallant Gentleman to reach the target which we ourselves set in 1947 of 50 per cent. above the 1938 production, we shall not oppose the Bill.
  4.24 p.m.
  Mr. Gerald Williams: I am glad that the former Minister of Agriculture has started so well and been so conciliatory, and has approved the introduction by my right hon. and gallant Friend of this very excellent Bill. I welcome the Bill particularly. It is bound to increase the crops of this country in a business-like way. We are extremely hard up at present and it is very difficult to know how best to spend our money

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  but when one is hard up is the very time that it pays to put out money in order to bring in more money. That is precisely what the Minister hopes to do by means of the Bill.
  More especially, I hope that the extra fertilisers which the farmers will use as a result of the subsidy will enable them to grow more cereals to feed our pigs and other livestock. There is only one way of getting rid of the objectionable rationing scheme, based on pre-war quotas, which we now have. We all want to get rid of it, but if we are to do so we must find a better scheme, and nobody has yet done so. However, this is a step in the right direction because it will at least produce a great many more cereals at home. If it is as successful as we hope it will be, I shall urge the Minister of Agriculture very strongly to see whether he can get rid of the present quota scheme.
  I should like to know whether the Bill applies to horticulturists. I imagine that it does. I do not know where the line is drawn.
  Sir T. Dugdale indicated assent.
  Mr. Williams: Evidently the Bill does apply to horticulturists. I should like also to know the size of the horticultural concerns to which the scheme will be applied. It is obvious that we cannot give a subsidy on half a sack of fertiliser. It would be useful if the Minister would tell us the size of the smallest concerns to which he intends the subsidy to apply. Also, I should like to know why Clause 1 enables a subsidy to be given to distributors. I am sure there is a very good reason for it, but the Minister did not tell us what it was. I hope we shall hear about this later.
  My right hon. and gallant Friend said that the scheme would apply retrospectively to 1st July last and said that the fertiliser year began on 1st July. I am not quite sure what he means by the "fertiliser year." It seems to me that the Bill should encourage the use of fertilisers by people who would not otherwise use them. Surely people who have been applying fertilisers since 1st July last do not need a payment now. They may complain that they have been badly treated and ask why they should
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  not receive for the fertiliser which they used earlier the subsidy which is now being paid to people who applied fertiliser later; but there is always an anomaly in this sort of thing, and the whole point of the Bill is to encourage the use of fertilisers in future by people who would not otherwise use them. It seems to be throwing money away unnecessarily to make the payment retrospective as far back as 1st July.
  Sir T. Dugdale: I should like to make this point quite clear right away. It was decided that the payment should be retrospective to 1st July as a result of the Special Review in regard to the prices for the year 1951–52. This subsidy was decided upon by the Government after an examination of the facts as a result of the Special Review which took place in October last.
  Mr. Williams: I thank my right hon. and gallant Friend. The only other criticism I wish to make concerns the scheme. The Minister says that this year he will apply it only to phosphatic fertilisers. He gave as his reason the fact that the price of phosphatic fertilisers had risen. This may well encourage farmers to use phosphatic fertilisers when nitrogen or potash would be better, and I cannot agree that he is being very wise in not leaving the choice of fertiliser to the discretion of the farmer. We should give the farmers a 33 per cent. subsidy on fertilisers in general and let them decide which is best for their land.
  I see this danger in the present arrangement. Phosphatic fertilisers are chiefly used for grassland because grassland is chiefly lacking in phosphate. The new grass in this country in May, June and July, when it is full of protein, is created in such abundance that there is a good deal of wastage because in those three months we have not got the stock to consume the grass. It seems that if we are going to encourage more grass to grow by using phosphatic fertiliser, we may be on the wrong lines. I urge the Minister to consider, at any rate in future, schemes which would leave this to the farmer's own discretion. If the Minister will do that, I shall not have spoken in vain. Otherwise, I welcome the Bill, and I hope that it will be given a speedy Second Reading.
  4.30 p.m.
  Mr. A. J. Champion: I welcome this Bill. I had very serious doubts about the late Government's policy in bringing the fertiliser subsidy to an end, and that doubt was considerably strengthened during the short period I was at the Ministry of Agriculture.
  I would agree that the logical method is that of no subsidy on a part of the means of production. Such a subsidy seems to me to be as illogical, as it would be to give a manufacturer subsidy for the oil which he uses for the running of his machines. Logically, it is difficult to justify this sort of subsidy on one of the factors in the means of production, but men—farmers are not excluded from this category—are neither wholly rational nor logical beings, and I regard this subsidy as doing something to encourage the increase in productivity that we so much want.
  Fertilisers happen to be one of the things that farmers are inclined, when prices of fertilisers are high, to put off using in order to save money in the hope that times will improve. What farmer would ever agree that times could not possibly improve? As a matter of fact, they are always living in the state of hoping that next year will be a better year than this year, and so on, even though they happen, at the moment, to be living in fairly good times.
  I do not want to cover all the reasons why this fertiliser subsidy should be paid. It is a fact that the West Midland province of the National Agricultural Advisory Service, in examining a number of farms with a low output, found that many were not using a sufficient quantity of fertilisers, and that points to one of the reasons for the low output. Those farmers were not receiving the returns which their acreage and, indeed, their initial capital outlay would justify. One of these lower output farmers had not applied any fertiliser since 1939. That man is doing a disservice to the nation. He ought to have been dealt with under Part II of the Agriculture Act and have been deprived of the farm he was holding. That is the sort of thing that is going on in some cases and we ought to do everything in our power to encourage farmers to expend more on fertilisers,
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  even if we have to resort to a subsidy to do it.
  It is also said that the National Agriculture Advisory Service is spending half of its time persuading farmers to use more fertiliser in order to increase productivity. The Service might well be using that half of its time advising farmers about so many other things upon which they need advice, assisting them in education on the many subjects about which they need education. I was surprised when, in the debate on 31st January of this year, I heard my right hon. Friend the Member for Ebbw Vale (Mr. Bevan) use these words:
  "…we have consumed the least potash per acre than in any part of the Continent of Europe."—[OFFICIAL REPORT, 31st January, 1952; Vol. 495, c. 399.]
  I was inclined to doubt that statement, but this morning I spent some time looking up the figures and I was surprised to find that that statement is largely correct, taking the more important parts of Western Europe. In 1949–50 we just managed to catch up with France in the amount of phosphatic fertiliser that we used. Germany is using three times as much per acre as we are, Holland six times as much, Denmark just over three times as much per acre, but Italy is one of the countries which happens to be below Britain. Perhaps that is one of the reasons why it is such a poverty-stricken country.
  I particularly welcome this Bill from the point of view of the market gardener. Market gardeners—I happen to represent a few—are part of the farming community which did not get as much benefit from the 1947 Act as did other types of farmers, and for that reason I give a special welcome to the Bill.
  The cost of fertilisers is an important factor and a subsidy is, I think, the right idea. But there is not much use in subsidising with the one hand if it is taken away from the farmer with the other. The use of fertilisers to a great extent depends upon the credit facilities which are granted to the farmer both by the banks and by agricultural merchants. The Government's action in connection with this very important aspect of farming may go far to outweigh the benefit conferred by the price review and the subsidy. Bank advances to agriculture and fishing increased by £25 million

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  between February, 1951, and August of that year, and the amount granted to farmers by the banks reached the record figure of £202 million by August, 1951.
  The Government raised the Bank rate by a half of 1 per cent. soon after they came into office. That increase will cost the farming industry at least £1 million per annum. That, of course, is an important factor. If we give £10 million with one hand and take away £1 million by action such as this with the other obviously the farmers will not receive the full benefit of the subsidy.
  Mr. S. N. Evans: My hon. Friend has been telling the House something about the farmers' current accounts. Can he give us any information about their deposit accounts?
  Mr. G. Brown: Ask him about the sand and ballast industry's deposit accounts.
  Mr. Champion: That is hardly a fair one. Perhaps I ought not to go into the state of the banking accounts of such merchants. I must confine my remarks to the farming industry. It would be stupid of farmers to pay interest on loans if they had standing to their credits in the banks amounts which they could use for purchasing fertilisers, capital expenditure, and so on. I do not regard the farmers as living in dire poverty or, on the other hand, as being engaged in an over-fed and much "feather-bedded" industry. I do not want to see times return such as those in which farmers were living, and of which I had some experience, during part of the period between the two wars.
  The £202 million to which I referred does not take into account the tremendous sums advanced by agricultural merchants, who, undoubtedly, will be affected by the increase in the Bank rate. They will begin to contract the amount of credit that they will give, and I fear the result of that contraction upon agricultural production. The use of fertilisers will be especially affected by credit facilities being restricted at the request of the Government. One other factor in this connection which is of importance is that the Agricultural Mortgage Corporation has raised its rate from 4¼ per cent. to 4¾ per cent. The sum on loan here is about £5½ million, and the increased rate of
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  interest will take a considerable amount of money out of the industry.
  Mr. Coldrick: Can my hon. Friend indicate whether those factors, including the Bank rate, are taken into consideration in the price fixing that takes place, and thus appear in the total cost?
  Mr. Champion: They are not taken into consideration, unless I am very much mistaken.
  I hope that the Minister who replies to the debate will deal with some of the points I have raised. They are matters which will affect the agricultural production rate of this country. I hope that the Minister of Agriculture will make representations to his colleagues within the Government, after considering these things, which are factors of some importance in relation to aims which he and all of us are trying to achieve.
  4.43 p.m.
  Mr. Robert Crouch: I give my support to the Bill, which has become necessary on account of Her Majesty's Opposition failing to take the advice which was given to them against withdrawing the fertiliser subsidy. What has happened as the result of that withdrawal is what we anticipated and what the Minister of Agriculture told the right hon. Member for Don Valley (Mr. T. Williams) would happen. I believe my right hon. Friend suggested that the withdrawal of the subsidy should be postponed until 1952.
  No one in the House regrets more than I do the necessity of introducing another subsidy for agriculture. I look forward to the day, which may be distant, when our industry can stand upon its own feet, but I cannot see that that will be possible until we get outside the system of fixing prices within a global figure. For far too long it has been considered by certain politicians a crime for the producer of food to get a fair profit for the work and energy that he has put into production.
  A right hon. Gentleman on the benches opposite has drawn attention to the possibility of shortage of food as a result of what is happening overseas. It therefore becomes more and more necessary that we should produce all the food that

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  is possible in this country. As a result of the withdrawal of subsidy there was an immediate fall in the sales of fertilisers.
  Mr. G. Brown: The hon. Member has several times used the phrase "withdrawal of the subsidy for fertilisers." Will he make it clear that when the element of price was taken out by way of subsidy the increase in cost was taken into account in fixing prices?
  Mr. Crouch: The subsidy was removed in July of last year and there was a greater advance in the price of fertiliser than was expected at that time. It would have been wiser to leave subsidy removal until this year. Last autumn there was an immediate cessation of sales of fertiliser, and that was reflected elsewhere. Looking through the Supplementary Estimates, I noticed a surplus of £1 million in the lime subsidy. That means that last year £2 million worth of lime was not applied to our land. When farmers seek advice from research workers about how to get better crops from their land, more often than not the first suggestion is that lime should be applied to it. We shall feel the effect of that loss of £2 million worth of lime during the next year.
  During the last 30 years there has been a very great increase in the amount of fertiliser used in this country. Through the use of that fertiliser we have been able to increase the yield per acre of our major crops. It was a great disappointment to our research workers, who have done so much to encourage use of fertiliser and to ascertain a better way of making it and applying it to our land, when suddenly, last autumn, fertiliser became almost unused on a great number of farms in this country.
  Among the smaller farmers this withdrawal of subsidy has been more serious because it is they who farm the greatest amount of land. They have been finding it exceedingly difficult for several months to buy what is required to keep up production on their farms. The interjection by the hon. Member for Wednesbury (Mr. S. N. Evans) indicated what I have suspected for a long time, his lack of knowledge of the agricultural industry. He suggested that although the farmers are running overdrafts they have something on deposit account in the Banks. Our farmers are just not built that way.
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  It is not only the application of fertilisers that will bring about the increase in crops that is required. It is no use just scattering fertiliser on the land and hoping that all will be well. What is wanted also is proper drainage of the land to which the fertiliser is to be applied. There is a great deal of waterlogged land in this country. In many instances there is need of the assistance that can be given by the research workers if the drainage is to be carried out.
  Mention has been made of the increase in the amount of coarse grains that we hope to get next autumn as the result of the subsidy. I also hope that as a result of this subsidy we shall get an increase in the amount of fodder beet to be sown this spring. That crop will be exceedingly important in the future, and I look to it more than I do to cereals, as far as the West Country is concerned, to help us have more carbohydrates available for feeding our pigs. In conclusion, may I say that I have appreciated the way in which Her Majesty's Opposition have indicated their support of the Second Reading of this Bill. I know it will be appreciated by the entire agricultural community and, in particular, will be appreciated by the small farmers of this country.
  4.51 p.m.
  Mr. S. N. Evans: As the hon. Member for Dorset, North (Mr. Crouch) has made some reference to my knowledge or lack of knowledge of the agricultural industry, perhaps I had better deal with him first. For the last 32 years I have worked in a hard and tough field where the price of apathy, inertia and inefficiency is bankruptcy, with all the social stigma attached to it—no subsidies, stand on your own feet or go to the wall.
  The second thing that gives me a vested interest in this subject is the fact that I represent 70,000 hard-working Black Country people who are very much affected by the price of the contents of the housewife's shopping bag. Thirdly, let me tell the hon. Member that my quarries are six miles from the nearest railway, that I have been surrounded by farms and farmers for the last 30 years, that some of my best friends and closest political associates are farmers and that I am not in ignorance of agricultural economics.

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  Let me say at once that if there is to be another shot in the arm, another financial blood transfusion, further public assistance, then perhaps this is the best way of giving it. I challenge, however, the contention that this industry is in need of financial assistance. Further, I challenge whether the nation is getting value for money. I do not mind what the farmers have. They can have the shirt off my back if it helps the recovery of our economic independence and financial self-respect. But I am suggesting to the House that the present policy is having exactly the opposite effect. In 1938 the profits of this industry were £55 million; last year they were £302 million and the year before they were £304 million—an increase of 500 per cent.
  I want to find out what we have had for this substantial increase in profits—
  Commander J. F. W. Maitland: A good deal of taxation.
  Mr. Evans: We are told that the increase is 40 per cent., but we have never had yet a contrast in goods between prewar production and the production in these post-war years. The first thing I want to ask the Minister is this: Will he give an undertaking to prepare a statement of the production of the industry in goods in 1938, 1937 and 1936 and also for the last three years? Then, and not until then, shall we be able to assess whether the nation is getting value for money.
  This industry is what somebody once described as an enigma wrapped in mystery. I have been trying to get the number of A, B and C farmers and their respective acreages. As I recall it, this was to be done during the war. The industry was to be analysed in terms of efficiency of A, B and C farmers. In these past few years we have paid out hundreds of millions of pounds in direct subsidies and subsides on home-produced food through the Ministries of Food and Agriculture, yet, when a Member of Parliament asks for the information without which he cannot determine whether or not this industry is improving its efficiency and productivity, he is told that it is not available and, furthermore, that it is highly improbable that it ever will be available.
  This is a scandalous thing. We were given a promise that information would
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  be made available with regard to A, B and C farmers and the acreages farmed by each. If we do not know how many C farmers there are and the acreage they are farming, how shall we be able to get rid of the agricultural drones, misfits and workshies? How shall we be able to make this industry efficient unless we have the relevant information which is the necessary pre-requisite?
  I suggest that in voting this industry further assistance we shall not promote increased production and that the effect will probably be the very opposite. What has happened already? With all the assistance given to the industry we are getting the following situation. At the top there is the good farmer who, farming the land scientifically and because of the assistance given by this and other Bills, is brought into the higher Surtax brackets too early.
  I speak here as a business man running a business with a six-figure turnover and I know of no more serious deterrent to effort and production than being brought into the higher Surtax groups too early. Furthermore, those farming good land scientifically and energetically find themselves regarded as profiteers. This is inevitable when the policy is to give such assistance as enables the drones, the misfits at the bottom, to survive.
  I believe that the sooner this industry experiences a few healthy bankruptcies, the better it will be for the country and for the industry itself.
  Mr. G. Brown: Would my hon. Friend also give his view of the result of that situation upon those who work in the industry?
  Mr. Evans: In present circumstances the efficient producers in any industry, not only this industry, can absorb any temporary unemployment almost overnight. It is very important that my own party should not start mixing what I call sociology with economics. I would regard providing crutches for "Tired Tims" in order that they can maintain employment in their own field as a disastrous policy.
  Mr. Crouch: The hon. Gentleman has referred to the fact that there are certain farmers with good farms who make very large profits. He then referred to those at the other end of the scale. I admit that there is some land on which, under

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  any conditions, whether through good or bad farming, a profit can always be made; but would the hon. Gentleman tell the House the proportion of that exceedingly good land which is always safe in comparison with the amount of poor marginal land which forms the majority of our land?
  Mr. Evans: If the hon. Gentleman had been listening to my argument he would know that it is precisely this absence of information about which I am complaining. I started my speech by deploring the fact that there was no means of knowing how many A, B, and C farmers there were, or the acreage farmed in the various categories. I am quite satisfied that this industry is not in need of further assistance. Last year and the year before the profits of the industry were £120 million more than the total wages paid to 640,000 full-time agricultural workers working a 47-hour week.
  Mr. G. Brown: If one is to answer my hon. Friend's case, as I have discovered in the past, it is important to take the points as he makes them, so perhaps I might be allowed to interrupt. He says that the profits were £120 million more than the wages paid to the full-time agricultural workers. Over half the farms employ no agricultural workers; the labour is entirely that of the farmer and his wife. In my hon. Friend's own £6 million turnover business, the managerial salaries are charged before assessing the profits. Would he therefore tell us what proportion of the £120 million he is prepared to allow for the labour of the farmer and his wife, who are not paid? Their profits on agriculture include the whole of their managerial services.
  Mr. Evans: If my right hon. Friend will insist on interrupting and then making a speech himself he cannot expect me to answer him at length. If I were to do so I should be told to sit down; and I should certainly be very unpopular with other of my hon. Friends who wish to speak.
  The profits were £120 million more than the total wages paid to 640,000 full-time agricultural workers working a 47-hour week. Is my right hon. Friend suggesting that there is a good deal more labour in this industry other than the 640,000? The farmer is in precisely the same position as I am on the question of
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  profits. [HON. MEMBERS: "No."] Oh, yes. Friends of the agricultural industry should not be in such a hurry to silence an opposition point of view. The industry has enough friends in the House to stand one or two hon. Members having a different point of view.
  The bovine complacency of the dinner-jacket farmers of 45, Bedford Square is such that I am terrified. I therefore hope that my hon. Friends will not mind my putting a different point of view. The farmer is in the same position as the proprietor of a one-man business, someone running a factory, a grocer's shop or a wholesale business. He has not made it a limited liability company.
  Now I want to give further evidence to substantiate my contention that the farmers do not need this assistance, and that it will, in fact, do them no good. My right hon. Friend the former Minister of Agriculture, speaking on 20th May, 1950, as reported in the "Manchester Guardian" said:
  Farming capital before the war was £350 million. Today, it is nearly £1,000 million. Out of their much-criticised net profits the farmers have put back £650 million into the industry."
  I am not complaining about that, but do say that there must be a lot of fat/upon which they could survive, for a time at any rate, while we get through the very serious financial crisis with which the nation is faced.
  They are to be given another £10 million for fertilisers. Well, if anybody wants the real truth about the financial health, or lack of it, of the agricultural industry at the moment he need only look at the scramble for land which is taking place. There has never been such a scramble. Heavyweight boxers, international footballers, radio commentators and television stars are all taking up farms. Indeed, before long there will only be Muffin and myself out in the cold.
  Mr. Ellis Smith: And the workers.
  Mr. Evans: And the workers. Recently, a dozen miles from where I live, there was sold a 31-acre farm; the only accommodation was a three-bedroom bungalow—it was not a palatial mansion—and the cost was £7,400.
  Mr. W. M. F. Vane: It must have been because of the gravel under it.
  Mr. Evans: I should have had it if there had been. That was £239 an acre.
  Mr. Anthony Hurd: Did a farmer buy it?
  Mr. Evans: As I work it out, that means there is about £11 interest on every acre before the man puts the plough to the land.
  Mr. Hurd: Who bought the farm?
  Mr. Evans: It was bought as a farm.
  Mrs. Jean Mann: Is the three-bedroom bungalow included in that figure?
  Mr. Evans: Certainly; the bungalow was the living accommodation. We now have the spectacle of industrialists, financiers, professional footballers and radio and television stars climbing on the agricultural bandwagon. I should have thought that that in itself was evidence of the extraordinary prosperity of this industry at the moment.
  Mr. Archer Baldwin: Not a bit of it. It is evidence of the prosperity of the footballers, the radio stars and everybody else. It is not evidence of the prosperity of members of the farming industry, because they are not buying the farms.
  Mr. Evans: I would like to go on at some length, but I dare not. [HON. MEMBERS: "Go on."] I was interested in the remarks of a professional international footballer, Kirchen, an outside-right, who was interviewed by the "Daily Express" and said:
  "There were five good years…then I sold my 150 acres for three times what I had paid."
  The "Daily Express" agricultural correspondent, Kenneth Pipe, commented:
  "Remember, this country lad started life as a carpenter's apprentice—not on a farm."
  It is quite obvious that this industry is taking the nation, taxpayers, and the housewives for a Piccadilly hayride. I think it about time that this House of Commons got down to the problem. I am tempted to believe that we are now
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  to have a rather more regular and careful examination of the very large sums that are passed into this industry than we have had in the past.
  I wish to ask one more question about whether this assistance is really needed. I remember that in December, 1950, the President of the N.F.U. said that in five years we would be getting 375 million gallons more milk from the same number of cows. That is an extraordinary things because when I suggested that the kind of treatment this Bill continues was concealing a good deal of agricultural inefficiency and inertia, the "balloon" went up. I have come to the conclusion that I made a terrible mistake and that I should have blamed "Bluebell and "Buttercup."
  Mr. Philips Price: Does not that prove the efficiency of the dairy farmer?
  Mr. Evans: No. What I was suggesting was that there is this vast amount of inefficiency to be overcome and that this method of bribing people to get their own living—because that is what it is—will not lead to that healthy, stable agricultural industry which we all want. I think we have to get down to this. I do not think there is anybody so successful as the British farmer at growing one blade of grass where two ought to grow. We have the best farmers in the world, hut we have not enough of them. We have too many drones, too many misfits and too many workshies.
  For so long as this sort of policy is carried on these people will be frozen to the land at a time when literally thousands of young, strong, able, knowledgeable men and women are hungry for land. Recently, when Birmingham Corporation advertised for a tenant farmer, they received more than 400 applications and the estates department told me that 87 of them were fully qualified to farm any kind of farm, of any acreage. Yet we are pursuing policies—of which this is another step—of freezing to the land people who are too slow to walk last.
  There are many of them. No one has yet explained to me how it is that we have to pay the British farmer more money for a gallon of milk than the Dane charges for a pound of butter—
  Mr. Baldwin: Might I explain?
  Mr. Evans: Just one moment—when, in fact, it takes two and a half gallons of milk to make one pound of butter. Yet the Dane sells one pound of butter for less than we pay the British farmer for a gallon of milk, with no advantage of soil, climate or wages.
  I am opposed to this "featherbedding" I think it has gone on long enough. A lot of people in this industry are not pulling their weight. We are at a very critical period of the nation's history. We shall all have to make a tremendous effort if we are to get by. One of the first things we need is a Saint Bartholomew's Eve of the Shibboleths throughout all our industries and it would be a very good thing to make a start with the agricultural industry.
  5.15 p.m.
  Mr. Anthony Hurd: It is rather bewildering to have to follow the hon. Member for Wednesbury (Mr. S. N. Evans) because he gets intoxicated with figures which obviously he does not understand. I am not going to attempt to lift the veil for him. He says he lives in an agricultural district, passes farms every day of his life, and has many close friends among the farmers. All I say to him is, "Keep your eyes open and use your common sense and very soon you will talk more sense in this House and in public."
  The hon. Member asked, in connection with the subsidy which we are to vote this evening, whether there is any evidence that this kind of Measure has increased productivity in this country. There again, I say to the hon. Member, "Keep your eyes open and you will see the condition of fields which have benefited by lime subsidy, the basic slag subsidy and so on." He will see much better crops growing in this country today than he would have seen 10 or 15 years ago. They beat the world and there is no doubt, either in terms of tons of food or gallons of milk, that the production of British agriculture has risen in the last decade. The hon. Member asked why he cannot have figures showing how production has changed. He has only to look at the Digest of Statistics in the Library of the House to satisfy himself. I will take him along there after the debate and show him the figures.
  We have been told that the agricultural industry does not need this Measure and
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  that it is time farmers either stood on their own feet, or went bankrupt. The hon. Member has told us that the farmer is in just as good a position as a quarry owner to make a six-figure income. That just is not true.
  Mr. Evans: To make himself efficient.
  Mr. Hurd: That the efficient farmer is in just as good a position as the quarry owner to make a six-figure profit a year —[HON. MEMBERS: "Turnover."]—the hon. Member confused us with his figures. A man in the position of the hon. Member does not work to a price ceiling as the farmer has to. We have heard a lot about guaranteed prices, but, make no mistake, the guaranteed prices allowed to the British farmer have created a ceiling, and if he were as free as the quarry-owner to exploit his customers, he would not need that guaranteed price.
  Mr. Ellis Smith: That is quite unjustified.
  Mr. Hurd: I have to buy stone and gravel and I know what it costs.
  Mr. Ellis Smith: That is below the belt.
  Mr. Hurd: There is really no question of further assistance to the agricultural industry being given by this Measure. I wish hon. Members opposite would get that into their heads. What is happening is that the price of fertilisers has risen very sharply, more than was expected by anyone a year ago. The Government—I think the previous Government would have taken the same view—consider that, as we must not only maintain but increase food production, which is vitally important, the cost of fertilisers to farmers should not get so out of proportion to their other costs that they cut down the use of fertilisers, and that it is in the national interest that the use of fertilisers should not only be maintained but, if possible, increased.
  I am certain, and I think it is well known to the hon. Member for Wednesbury, that this subsidy of £10 million to relieve the farmer of part of the increased cost of phosphatic fertilisers will be taken fully into account at the Annual Price Review and we shall get correspondingly less than we should otherwise receive for potatoes, wheat, barley and other crops.

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  It is not any further assistance to farmers, but a matter of assuring those farmers who are not well-to-do—some, I grant our critics, are not very energetic or skilful farmers but they are just the people whose land will benefit most from the use of these fertilisers—that they will be enabled by reason of this assistance to continue to increase the use of fertilisers.
  This Measure will raise our productivity. As the hon. Member for Wednesbury goes about with his eyes open, he will see grass fields which need phosphates particularly in order to stimulate more growth so that they can carry more livestock to get some of this extra 375 million gallons of milk about which he spoke. One builds up farm fertility, increases livestock output on the land and in turn one gets better wheat crops and barley crops. The whole standard of one's production is raised. That is what we must do. It is what the late Government were seeking to do, and I am sure that the present Government will continue to do that. It is the right course for our country at present.
  I fully concede to our critics that we have some who should make way for younger men, and I am hopeful that the new Government will be courageous in tackling that problem. We must first see that we have the level of prices that is needed and then we must make quite certain that everyone farming land in this country is taking not only his opportunities as a business man but is producing to the full.
  The subsidy which we are discussing will not add to the profitability of individual farms but it will add to the production of food to this country. That is something which I am sure all Members of the House want. We farmers—and I would speak for the farm workers in this —can disregard with a good heart ignorant criticisms that show too much sectional bias and too little good sense in the public interest.
  We do ourselves no good today by one section of the community continually carping at another. We have to pull together, and I assure the House that this small Measure will help the agricultural community to do what the country wants. It will not line the purses of farmers who are already doing quite
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  well enough in the ordinary course of business.
  This Bill has my full support, and I am pretty certain that it will have the full support not only of the agricultural scientists to whom one of my hon. Friends referred, but of everyone who knows what is really needed in British agriculture today to get what the country wants, which is still higher production from our own soil.
  5.25 p.m.
  Mr. George Brown: I am glad to have an opportunity, for which I have been waiting for some time, to be called upon to speak in an agricultural debate just after my hon. Friend the Member for Wednesbury (Mr. S. N. Evans). We are discussing a Bill to which I am not prepared to give the wholehearted support that was given by my hon. Friend and political neighbour the Member for Derbyshire, South-East (Mr. Champion). I have some reservations about it which I shall mention in a moment. I am not sure that we were completely wrong to remove this particular payment from the subsidy and put it in the end price of the product, but I will say a word about that later.
  What I think my hon. Friend the Member for Wednesbury has never been clear about is that what we are discussing is not the sort of thing he talks about so freely in terms of slogans—"Another shot in the arm," "another blood transfusion," and "more public assistance." By the way, he seems to be running out of slogans; he is now repeating the previous ones. It is not that at all. If he would be a little less interested in the news value of slogans and a little more interested in the needs of this industry, he would learn that what is under discussion is the best way to pay a proper price for the article.
  Mr. S. N. Evans: May I make just this one comment of a most inoffensive character? When dealing with bovine complacency of this magnitude, one has to paint pictures in a very broad canvas.
  Mr. Brown: I am not responsible for my hon. Friend's bovine complacency. I am sorry that he suffers from it and that it causes him to use a certain extravagance of language.
  What is under discussion is which way is the price to be paid for the article;

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  do we pay it wholly in the end price or do we pay part of it in the end price and part by way of a special payment for a special part of the job? The question is, how do we provide the best incentive?
  My hon. Friend is perhaps surprised that some of us on this side of the House do not share his amusement at this kind of attack on the industry. I am not a farmer but I have a number of personal friends among farmers of all political views. I have very few political supporters among the farmers of my constituency, and it may seem to my hon. Friend that I ought to join in the hilarity which he himself derives.
  I do not do so because as an agricultural workers' organiser I spent a good deal of time in this industry when we had the "healthy bankruptcies," when we had the outlook which my hon. Friend is now urging. I know what happens if we do not introduce sociology. Why did the party to which we both belong come into existence if not to introduce sociology so that the industries of the country would be good enough to afford a proper return to our workers in them?
  This continual attack on the agricultural industry as though it consisted of inefficient and incompetent farmers, as though the industry were, as he puts it, "living on the back of the nation," is doing us no good because it is bound to throw us back to the outlook of mind of the urban dweller in this country which produced the results we saw in the farming industry and on the workers in it in the 'thirties.
  My hon. Friend tells us that £55 million was the profit of the industry in 1938. I shall have a word to say about profit my hon. Friend clearly does not understand it now. In the industry in 1938 the wages of the members of my organisation were 34s. per week—indeed, we only got 34s. just before the war broke out in 1939. Therefore, I am not amused, and those of us who are concerned with the industry are not amused, because the result of this attitude to any industry, particularly one which shares the particular difficulties, insecurities and uncertainties of agricultural food production is disastrous for our friends who work in it.
  I share another interest with my hon. Friend. I have a constituency which is
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  one-third agricultural in industrial makeup but which includes, like his, very nearly 70,000 consumers. The major interest of my consumers today—and, with great respect, of his—is how they are to be sure of getting the supply of food they want.
  The hon. Gentleman and his friends must really get this matter clear. We are not again likely to get the cheap food that was the catchword in this country before the war. We are not likely to get it from abroad. As time goes on, we shall not get it from abroad anyhow, because the people of Australia, New Zealand and other places will eat more of what they produce. The only certain way of getting it is to produce it here. What we must consider—and this is the spirit in which we must approach this Bill—is whether what we are doing agriculturally will enable us to get the food we want from the fields of this country, because this is the only certain place. That is the interest of my constituents. It is the interest of the hon. Gentleman's.
  Mr. S. N. Evans: As the right hon. Gentleman is so critical of me and the comments I have seen fit to make on the efficiency of this industry, I wonder whether he would care to comment on the leading article in the "Farmers' Weekly" of 18th January, which says:
  "At such a time one might expect N.F.U. thought and action to be positive and progressive, matching both the needs of the hour and the parlous condition of the agricultural industry. But there is little hope of this. County resolutions are like a dismal gramophone record with the needle stuck in a groove made at 45, Bedford Square."
  That is not the Member for Wednesbury speaking: that is the leading article of the "Farmers' Weekly," the leading farm journal.
  Mr. Brown: But that leading article is criticising the National Farmers' Union of 45, Bedford Square. I am not disposed to defend them. Let them do that. The hon. Gentleman must address that query to them. That has nothing to do with my argument. It may well be that Bedford Square is slothful and backward and all that the leading article says. I do not know. I do not pay them. I do not belong to their union. If that journal had made similar comments about the Transport and General Workers' Union, I should have had a lot to say about it,

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  but I have nothing to say about the National Farmers' Union.
  I am dealing with the economics of the industry. The hon. Gentleman should get it out of his head that I am dealing with the N.F.U. He set out to attack the industry and to attack those who, by implication, have been concerned with a certain policy. I am not attacking him. I am defending the ground that he chose to attack.
  I should like to deal with another of his comments. There was this business about apathy, inertia and inefficiency in this industry. My hon. Friend says that he comes from a tough field in which one has to be efficient in order to live and to get on. That just is not true of all other industries except agriculture. It just is not true.
  Mr. Evans: I did not say that it was.
  Mr. Brown: And it is not true of sand and ballast merchants either, as I can testify. Of all industries theirs is one of which it is not true. It is not true, and in this respect—
  Mr. Ellis Smith: Do not get personal.
  Mr. Brown: This is not a question of getting personal. If someone chooses to allege that the fanning industry is in a certain condition, then I am entitled to reply by reference to other industries. I happen to know the sand and ballast industry, and what the hon. Member said is not true of them.
  It is not our view that in order to get an efficient industry of any kind, we must have prices and conditions that will force out all but the toughest, all but the most aggressive and the most ruthless. In every industry that I know, prices are fixed in a way in which the small man, whom we need as much as the big man—and that is particularly true in farming—is able to provide his service to the community in the job that he is doing.
  My hon. Friend used one revealing phrase which shows how little he really knows about this industry which he chooses to attack so much. He spoke of the good farmer farming on good land. But the good farmer is by no means always farming on good land. It is a condition of this country that our land is simply not divided like that. Nor is
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  the farmer able to produce, nor can we allow him to produce, only those crops which he is most capable of producing and for which the land is most suitable.
  It is a condition of modern farming that we have to lay on all sorts of farmers on all sorts of land the obligation to produce crops in the quantity and in the order of priority that consumers need regardless of the fact that their land may be better suited to the production of something else. There are a whole lot of farmers, many of them on anything but good land, with enormous differences in rainfall, and two-thirds of them farm under 50 acres. Not the few but the bulk, over 80 per cent. of them, farm under 100 acres and two-thirds farm under 50 acres. Two-thirds of them are tenant farmers. They are not the chaps who are selling land. This scramble for land does not prove what my hon. Friend thought that it proved.
  Mr. S. N. Evans: Then what does it prove?
  Mr. Brown: It proves that there are a whole lot of people in other industries who, on the few limited occasions when the possession of land comes into the market, prefer to use their money in this way rather than in some other way.
  Mr. Evans: Of course. That is what I said.
  Mr. Brown: No, with great respect, it is not. My hon. Friend does not follow his own argument. To the two-thirds who are tenant farmers that scramble for land means nothing at all. To the few of these dinner-jacket farmers whom he talked about that is a very small problem, and I am not sure how much of a problem it is.
  I have always taken the view that if a fellow comes into farming from an outside industry, he may well come in with the intention of losing some of the profits from the other industry; but if he has been good in another industry, before very long he is usually good in the new one. What is more, it is particularly true of Warwickshire and Stratford-upon-Avon, which always seems to attract these chaps, that if they go out of farming they leave behind them a holding which is very much better equipped than it was before they came in. They have done something of permanent value.

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  Our industry is one largely composed of tenant farmers on small holdings to whom this alleged scramble for land is of no interest whatever. Since we have protected them—and that is what has made the land valuable—since we have prevented the holding from being sold over their heads, since we have prevented them from being kicked out, they cannot be affected by the scramble for land. Therefore, the few holdings which come on the market have an increased scarcity value. That is really the essence of the matter.
  But it is not that part of the Act with which this Bill is concerned. I could continue with a whole lot of these points. Let us look at the profitability figure of £55 million rising to £304 million last year. Actually it will be less than that when the latest figures come out. We are always considering figures which are behind the event because of the time it takes to get out the up-to-date figures. We are considering this year the figure for a previous year.
  My hon. Friend said at first that the small farmer was in the same position as be was himself. Then, after some interruption, he amended that to say that the small farmer is in the same position as the owner of a small one-man business anywhere else. He is not.
  Mr. S. N. Evans: Why not?
  Mr. Brown: He is not because the alleged profits of this industry make no allowance at all for the labour—not the management, but the ordinary labour of the farmer and his wife. Not only do they make no allowance for the management services or for interest upon capital, but all those matters ought really to be taken out of account before we get the figure which is labelled as profit.
  In addition, what happens to the man who this year has bought a calf, which he will keep to sell three years hence for fat meat? That calf cost him more money. I do not know the current price —[An HON. MEMBER: "About £8."] All right, about £8. Between now and the end of the year, that calf will have done nothing but cost him still more money; yet, at the end of the year, it will have come into his profitability figure as being worth £10 or £12, and a profit is assumed. There is no machine in business or industry that eats and
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  grows like that during the year. Machines depreciate during the year.
  Mr. Evans: Really, I must be allowed to say a word about that. The right hon. Gentleman has great gifts and is a very charming fellow, but quite obviously what he knows about accountancy might have passed in the time of the First World War, but is not good enough now. The fact of the matter is that the farmer is in precisely the same position as the proprietor of any small business. He receives the same allowances for managerial functions and for whatever work he does, just the same as I said earlier I would receive myself. There is no difference at all, and there is no hardship by comparison.
  Mr. Brown: The hon. Gentleman has said all that once before. This is the first time that I have answered him. I have listened to him four or five times, and I beg of him to follow my argument and not to be in such a hurry to repeat his own.
  Nowhere in his business has he got anything like that calf, which does nothing but cost more money, but which is alleged to add to his profit figure at the end of the year. This situation is peculiar to agriculture. It may well be that the Minister of Agriculture ought to do what I know his predecessor would have done, and which I myself urged several times at 55, Whitehall, should be done.
  I think we ought to look at the form in which we use these accounts. I think they are lending themselves to a good deal of quite honest misunderstanding which should be cleared away. These alleged profitability figures are really quite misleading. They are wrong because they leave out the labour content, the management content and the element of interest upon capital, and they are misleading because the more cattle the farmer keeps, even though they are giving him nothing, the higher seem to be his earnings, whereas the fact of the matter is that he has increased liabilities and has made no profit at all.
  Even so, the figure has gone up, we are told, five or six times. Wages of farm workers have gone up by three times. I will not weary the House with figures, although I have come prepared with them. Of course, the commitments of the industry have also gone up. We

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  had to face the fact, when we became the Government in 1945, that we were asking for a substantial urgent and sudden expansion of this industry, when, behind us, we had a whole period of years during which the industry had earned nothing which could make provision for that expansion. It is out of these earnings since the war that we have had to finance this immediate and current expansion, and, if the industry had not had that money, the expansion could never have been financed.
  Let us remember, too, as my hon. Friend said, that growing food is very much a long-term business, and particularly the element of food production. We want our chaps to produce more beef, but there is nothing slower in terms of return, and nothing more long-term, than raising cattle for beef, and the farmer has got to put in a whole lot of money before he can get the output and his reward in terms of production.
  My hon. Friend said how much better it would be if we could see the figures. If I had known that he was going to raise that question I should have brought them for him. He has no idea of the number of figures which I have collected in order to answer the questions I expected him to ask, but I did not bring this particular one. I have no doubt that the figures can be obtained, and, if my hon. Friend is more interested in developing an argument and following it through than he is in sloganising, he will find that the figures are there to be had. I invite him to get them. Sloganising is all very well, but what value has it to the 70,000 people of Wednesbury who want food? While they cannot eat the hon. Gentleman's slogans, they could eat the output of the agricultural industry.
  The returns for last June which I got last week are now fairly up-to-date, and show progress in terms of cattle and livestock and the output of crops. My right hon. Friend the previous Minister of Agriculture has several times answered Questions in this House giving comparative figures in terms of beef, mutton, lamb and milk production compared with previous years, and the figures are all in HANSARD and can be compared. No doubt, one can get them from the present Minister, if the hon. Gentleman wants them.
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  I could go on for a long time answering these statements by my hon. Friend. He talked of agricultural "drones and work-shies" just as the present Prime Minister once talked about "weary Willies and tired Tims." We objected to that expression at the time, just as we object to these expressions from my hon. Friend.
  My hon. Friend says that the figures do not tell him what the farmers are doing, but the figures of the supervised farmers and of those concerning dispossession orders are available. Again, I wanted these figures last week; I rang up and asked for them, and I had them. The figures are available of the number of farmers placed under supervision, the number of orders made, the time of revocation and the number dispossessed, and my hon. Friend may be surprised to find how many there are in each category.
  Mr. S. N. Evans: But the figures for which I asked are not available. My right hon. Friend is a very eloquent defender of inefficiency and inertia within this industry, but the fact of the matter is that the figures for which I have asked and which I am hoping to get—figures of comparison between the pre-war period and now—are not available, despite what the right hon. Gentleman says.
  Mr. Brown: The hon. Member is proceeding now from inaccuracy by misunderstanding to inaccuracy by repeated assertion. The figures are available, and, if my hon. Friend will not do it, I will myself put down a Question to the Minister and obtain the figures for him. They are available on meat, milk and egg production, on crop output, cattle and so on. It is no use the hon. Gentleman continuing to assert that these figures cannot be obtained; they can. Indeed, with a little energy in 55, Whitehall, they might even be produced tonight.
  Now I come to the hon. Gentleman's reference to myself as a "defender of inertia" in his attack on an industry which I have come to love very much and with which a great part of my life has been concerned. It is no good abusing a comrade by calling him a "defender of inertia." I believe that the hon. Gentleman is sincere in his attack on the industry, but I also believe that he is misinformed and that he also misunderstands

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  the situation. If he will discuss these things with the rest of us, we may get somewhere and be able to remove the misunderstandings.
  I really ought to leave the hon. Gentleman now, but with very great reluctance, because there was so much that I have been wanting to say about these matters. However, I think I have said enough to show that the hon. Gentleman is as misinformed as he was on a previous occasion when he spoke of a man who had grown potatoes at £10 an acre. The hon. Gentleman makes use of these inaccurate figures, but they are never withdrawn.
  Mr. Evans: If the hon. Gentleman is to make statements of this kind, he really should look up HANSARD in advance. I did not say that; the words which the hon. Gentleman has quoted were not used by me.
  Mr. Brown: I know very well what is in HANSARD. The hon. Gentleman said he had received a letter from a farmer saying that he got £1,000 for planting 100 acres of potatoes, and that he sold them for £5,000. If that does not mean that it cost him £10 an acre to plant, then it is difficult to see why the figures were put in that form, because the hon. Gentleman did not say it cost him so much to plant. He used the £1,000 which everybody took to mean the cost, despite the actual form of words he used. If it was not, then the whole example was meaningless because the cost was not given. In that case the deduction drawn would not exist. Therefore, if the hon. Gentleman is being wrongly quoted it is due to the way he put it. I knew the kind of retort he would make, and therefore I came prepared for it.
  Whilst leaving the rest of the hon. Gentleman's argument until the next time he gets involved in this House, I would mention that I heard one of my hon. Friends, who I know is associated with the Co-operative movement, expressing agreement with the hon. Gentleman when he was speaking. I ask any who are associated with the Co-operative movement to have a word with those societies who have been or are running farms, to have a word with Mr. Walworth, with Mr. Gemmill, of the London Society, or with the Lincoln Society. They should ask them what has been their experience in the years when there is
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  supposed to have been so much inertia. They will find the story does not back up what is being said.
  One last word to the hon. Gentleman. We have had quotations from the N.F.U. journals, but I now invite his attention to the "Economist" for 16th February, which states:
  "It is an exaggeration"—
  and the "Economist" is not noted as being a particular friend of the farming industry—
  "It is an exaggeration to say that the ordinary farmer is feather bedded; his prices have been high enough since the war to enable him (except in one or two bad seasons) to make an adequate living out of a moderate turnover."
  In the good seasons farmers make no more than an adequate living out of a moderate turnover, and therefore the whole of the hon. Gentleman's case falls to the ground.
  I will now turn to the comments I want to make to the Minister on the Bill. I asked him just now a question about the supply of fertilisers. He has told us that the first scheme to be issued under this Bill will be limited to phosphatic fertilisers because that is where the largest part of the increase has fallen. But the argument in favour of the Bill is not so much that. It is that, paid in this way, it will encourage farmers to make better use of fertilisers than they are doing at the moment. It is no use encouraging them to use more than there is available of a particular kind of fertiliser.
  The Minister nodded his head, and then said he had not got the figures, but could assure the House that there was enough available for whatever it was. I hope that the Under-Secretary of State for Scotland will give us the figures when he winds up the debate. If they are not available today—I know how the mechanics work in the Ministry, after having been there for five years—let us have them at some other time. I doubt it very much. The only statement I could get hold of today was that of the N.F.U. at the end of last year. It said:
  "There is no immediate threat to supplies of nitrogenous fertilisers. The superphosphate position is serious,"
  and they went on about potash, and said there was only enough for current supplies.

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  Such inquiries as I have been able to make lead me to believe that the position of phosphatic fertilisers is still serious and that we cannot jump up the demand for them without running into difficulties. This is important, because if we reduce the price and there is cornering of this fertiliser by the bigger men who are able to produce the money quickly, the result of this subsidy could easily be that the small man got less and not more. Therefore, I hope the hon. Gentleman will put our minds at rest either tonight or in Committee regarding this point, because I personally shall not be very content until it is cleared up.
  There is one small point in the Bill on which I want to return to the Minister some of the brickbats I had from him over the course of the last few years. Clause 4 (5) provides that:
  "A statutory instrument making, varying or revoking a scheme under this Act shall be subject to annulment in pursuance of a resolution of either House of Parliament";
  in other words, shall be subject to negative procedure. I warn the right hon. and gallant Gentleman that on the Committee stage I shall come armed with quotations from his speeches made in earlier years unless he takes out the negative procedure and puts in the affirmative procedure. In the past he has been one of the greatest fighters for the affirmative procedure. What is good for the goose is good for the gander, and he will have to do some eating of his own words, because I think that provision ought to come out of the Clause.
  I said at the beginning that I have some reservations about the Bill in general. Indeed I have, and this, in part, is because, after a period in the Ministry of Agriculture, I came to the conclusion that there is a tremendous amount of misunderstanding and distortion about the agricultural industry which is encouraged every time we pay half the price in this way. It is not only the urban-minded man who thinks in this way. The hon. Member for Dorset, North (Mr. Crouch) repeated it today. He said—I remember his exact words—that the industry must stand on its own feet. The fact that we are proposing to give this subsidy does not mean that the industry is not standing on its own feet. This is part of the price which would
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  otherwise have had to be paid to maintain the Price Review settlement.
  It is that attitude—which comes from within the industry as well as from without—which makes me very doubtful about this sort of thing. It looks expedient, but I am not sure how much good it does in the long run. We have had not only a fertiliser subsidy running since 1937, but 11 or 12 years of the fullest agricultural advisory service which exists anywhere in the world. We have been telling the farmers, not as ex cathedra pronouncements, but from their own experience, that by fertilising the soil to the proper extent they will increase their output and at the same time their income.
  It is a sad commentary that we have to risk distortion of this kind and arouse a great deal of misunderstanding simply because all the educational work done so far has gone over the heads of a minority of the farmers. I am not going to oppose the Bill, but I think there is something to be said for the point of view that it would be well to do less of this, however politic it may seem, and drive home the advisory information harder and make the farmer understand that he must do something in his own interest as well as in ours.
  There are two other points I wish to make. No one has said a word about the position of the manufacturers of these fertilisers. They have a fairly powerful lobby, and I sometimes wonder how much this is a case of "feather-bedding" the manufacturers of fertilisers rather than the users of them. I have some figures relating to the main manufacturers in this field. These figures do not lead me to believe that those people could not have borne some part of this price increase themselves. Their profits and earnings are substantial and there are a large number of free capital bonus issues involved. They have been doing very well. Before he brings more than the first scheme into operation, I ask the Minister to have a look at the financial position of the manufacturers.
  It is not good enough only to say that prices have gone up and therefore we have to subsidise the farmers. It is much better, if there is room for bringing down prices at the source, to do that, and my suspicion is that there is a fair amount of room for that to be done. I hope the

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  Minister will bring some pressure to bear in that direction. That is another reason why I have a reservation about this kind of Measure now.
  An old and besetting sin of the Ministry of Agriculture, which the Minister will find will take the most vigorous and energetic work on his part to eradicate, is their habit of putting out fairly bald announcements about a change of policy which then bring in a great flood of inquiries from farmers to the county committees. Then there is a long delay before it is learned how the change of policy is to be brought about.
  November was the date of the announcement of this scheme and I know from friends I have in the county committees that they have been driven nearly barmy in trying to answer the tremendous number of applications they have received in respect of it, and a whole lot of confusion has been caused. I suggest it would not have been at all difficult, even though we could not have had the Bill for other reasons any sooner than this, to put the county committees in a position to answer the kind of inquiries which on past experience Government Departments must know arise. The same delay will occur with the ploughing-up subsidies if we are not careful.
  I apologise for the length of time I have taken and for perhaps abusing to some extent the hospitality of the House, but I felt that what I have said had to be said and I hope that those who take the other view will reconsider the position. While I am not giving the Bill a warm welcome, because I have certain doubts about it, I support its Second Reading.
  6.3 p.m.
  Mr. J. Grimond: After the eloquent defence of farmers by the right hon. Member for Belper (Mr. G. Brown) I do not think there is much need for me to enter into controversy with the hon. Member for Wednesbury (Mr. S. N. Evans). I listen to his speeches on agriculture with interest, if with surprise and disagreement, and I must confess I sometimes hear in them echoes of what might be thought old-fashioned Liberalism coupled, also, with the financial views which I think were held by Mr. Bernard Shaw about the undesirability of Surtax or, indeed, of any tax which affected him.
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  I should like to support what has been said in the debate about the smaller farmers and those who farm the poorer land. Lately, in the Orkneys, we have looked into the circumstances of these farmers, following the damage they suffered from the gale. I think it would surprise even the strongest advocates of farming in this House to find how untrue it is to say that those farmers are in a particularly prosperous condition today. Far from it. Many of them have extremely little capital and not a few of them are seriously indebted not only to the banks but also to agricultural merchants.
  The idea that they are people living on large profits that they can put away on deposit or in some other way is totally untrue in my experience of my constituents. It may be said by the hon. Member for Wednesbury that since they are not making large profits they are idle drones, who ought to make larger profits. The fact is that they are working poor land in a difficult climate. If the crofters in the north of Scotland were put in the easier conditions of the south they would more than hold their own. Indeed, even in the sand and gravel trade they would more than hold their own. It is by no means the case that they are idle drones. It is the case of their having poor land and working it very hard.
  If we are to have greater agricultural production that land must be worked and we must make it possible for those men to obtain some livelihood. As has been said in this debate, the assessment of profits on these farms can be totally misleading because on most of them the work is done by the farmer's family and the cost of that labour is not calculated in assessing profits.
  I regret that when the Minister introduced the Bill he made it clear that at least in the first year it would apply only to phosphatic fertilisers. He gave the reason, a perfectly true one, that their price has risen very considerably. But the price of other fertilisers has also risen. He himself mentioned one factor making for those increases in price, namely, the continuing rise in freight charges. That applies to all fertilisers. I ask the Minister whether it would not at least be possible for him to review his decision to apply the subsidy only to phosphatic fertilisers; if the price of other fertilisers and the cost of freight continue to rise.

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  The Bill is designed to encourage the use of fertilisers and if it is to succeed advantage of it must clearly be taken by small farmers and the crofters who make up such a large proportion of our farmers today, as well as by the bigger farmers. I suppose most people would agree that it is particularly on the smaller and poorer farms that fertilisers are needed. Certainly, in some parts of the Highlands of Scotland we have suffered very greatly from the lack of proper manuring of land not only in the last year or two but for generations.
  Bearing that in mind, I should like to put two or three things to the Joint Under-Secretary of State for Scotland. The first is that under the previous scheme for a subsidy for fertilisers a minimum amount of fertiliser was fixed, and a minimum can be fixed under this Bill. Crofters have brought to me many cases where they have been prevented from obtaining a subsidy because the amount of fertiliser which they wanted was too small. A croft is a very small holding and a crofter a very poor man, and in many cases he has no use for that amount of fertilisers as he would have to obtain a subsidy and cannot pay for them.
  I should have thought that it was just these men, who, in many cases, have not benefited to the same extent as the bigger farmers from the general agricultural policy, who ought to be helped by this Bill. Even guaranteed markets have not been of the same use to crofters as to the big farmers. There is a very great need for more fertilisers to be applied to the land in the crofting counties and when schemes are drawn up under this Bill I ask the Under-Secretary either to strike out the minimum and leave it to the discretion of those administering the scheme or else make special provision for the small crofters.
  Am I right in supposing that under this Bill a subsidy can be claimed for fertiliser no matter to what sort of land it is applied? Under the previous scheme one could only claim a subsidy if one laid the manure on certain types of land. Is that the case under this Bill or not? There is every room for the improvement of hill pastures in Scotland and of common grazings or "scattold" as they are termed in Shetland.
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  Are any experiments being carried out in the spreading of fertilisers from the air? I believe there have been experiments in the past. I believe an experiment was carried out or projected at a farm called Burg in Mull, sponsored by Sir David Russell for the National Trust of Scotland and, of course, there have been other experiments. I know it is extremely expensive to do this, but I see that the New Zealand Government, or the New Zealand farmers, are facing the expense of fertilising marginal or hill land from the air and, as far as I know, there is no cheaper or better way of doing it. I do feel that when we have to make more and more use of the poorer and higher land we should at least carry out some experiments to see if we can improve these hill grazings by this method of fertilising from the air.
  6.11 p.m.
  Mr. Denys Bullard: I should like to welcome this Bill as an opportunity to tackle the problem of increased food production, which is one that is exercising the minds of everybody so much at the present time. It is an extremely complicated process and, while it is very easy, by agricultural policy, to shift the emphasis from one line of production to the other, it is not always easy to devise means of increasing production all round.
  I believe that if we can find a means of increasing the rate of fertiliser application we shall not only increase the production of crops but increase the production of livestock as well. That is why I think this Bill is so vitally important at this time. It seems to me that the point which we are discussing is not whether the price should be paid for the agricultural production, but the way in which it should be paid. I think the arguments for paying it by way of subsidy are very convincing as regards fertilisers.
  I should like to instance to the House one or two examples. I think that everyone who follows agricultural production knows the risk of a decline in the production of potatoes. In addition to growing potatoes on the best land a certain acreage has to be grown on the poorer land, for instance, on the lighter fens in my own constituency. Those people who undertake the very expensive job of potato growing at the present time, where the cost can rise to £80, £90, or even £100 an

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  acre—and not £10 which has been quoted earlier in this debate—are taking a very great risk and, in so far as we are able to help them with the purchase of their fertilisers, we are contributing to a certain extent to the decrease of that risk.
  I think that a great number of small and poor farmers on these lands will look twice before they undertake such an expensive crop as potatoes when they find their fertiliser bill, at the prices which have been running, can easily run them into almost £20 an acre for fertilisers alone. Therefore, it is not only from the point of view of increased production that this subsidy is justified, but also to prevent a decreased production of those expensive commodities which we cannot do without at the present moment.
  I think everyone agrees that, as regards the use of fertilisers on grassland, we are only at the beginning of what can be achieved. By intensive management and heavy application of fertilisers it will be possible to get a still further increased production from our grassland and so, from the point of view of both arable and grassland farmers, I think this subsidy is a very desirable thing.
  Mention has already been made of horticulture. Horticulture is not just an isolated section of the farming community, because all farmers—or many farmers—are engaged more or less in horticulture and, in so far as we can assist them with fertiliser applications to those crops which are also expensive crops, I think we shall do good not only to the horticultural industry but to agriculture as a whole.
  There is one point which was mentioned by the right hon. Member for Belper (Mr. G. Brown) which, I think, is of importance in connection with this subsidy and which ought to be made; that is, the charges made by the manufacturers. I do believe it is a fact that when the fertiliser prices were increased after the removal of the subsidy the increased prices charged were not only contributed to by the cost of raw materials, but by the fact that manufacturers did take the opportunity of claiming very substantially increased margins for their process of manufacturing compounds, and there is a widespread feeling within the industry that the margins claimed at that time were in excess of what they need have been. I think that
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  is a point which should be very closely watched.
  From all points of view, especially from the point of view of increased production and of preventing a decrease in very expensive cropping at this time. I welcome the Bill.
  6.17 p.m.
  Mr. M. Philips Price: I am glad that this debate has got back to the provisions of the Bill. I am sorry that the hon. Member for Wednesbury (Mr. S. N. Evans) succeeded in diverting the attention of the House for quite a considerable time. I very much regret that he should have thought fit to say so much which would have been much better said on a general agricultural debate.
  Mr. S. N. Evans: This is a Second Reading.
  Mr. Philips Price: Yes, but up to an hour ago we were having a much more general debate. I know that people like me do not count very much. The hon. Gentleman is more important than I am. But it happens that I am one of the "useless drones" who is trying to produce a little food, and I think that the least thing the hon. Gentleman might have done was to have come along yesterday and discussed the provisions of this Bill with some of us who are interested in the industry, before sailing into the House and delivering an ignorant tirade against the agricultural industry in the way he has done.
  Having said that, I proceed to the Bill. I wish to say that I think the Government have done the right thing in assisting the industry in this particular way. Although I agree with practically everything my right hon. Friend the Member for Belper (Mr. G. Brown) said in his most interesting speech, I did not agree with one point he made at the end. He seemed to think that this was not the best method of helping the industry. I am sorry that he is not in his place at the moment, but if I understood him aright he thought it better to give the assistance by direct help to prices. I do not think that is so.
  Rather than giving direct subsidies to the end-product of agriculture I think it is much better to do it in an indirect way, by lowering the cost of production. My reason for saying that is that I am

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  certain that this method assists the better type of farmer—the progressive farmer —rather than the one who is not so progressive—and, of course, there are some who are like that, and it is upon those whom we have to put pressure in order to bring them up to scratch.
  The non-progressive farmer would much prefer to receive the help in his prices and not bother about his method of cultivation, but those of us who know something about the industry know that the planning and systematic use of fertilisers takes a lot of trouble but it does bring about, in the long run, much greater returns than direct subsidies of the type I have just mentioned, because for a given expenditure of money by the State—or by the consumer in this case—a twofold or threefold return is given for the outlay. It is, in fact, an investment.
  I am sorry that the subsidy was taken off 18 months ago on this very thing. Again, I do not agree with my right hon. Friend, who seems to think it desirable, because the effect has been a bad one. I do not know the exact figure, but I think that the decrease in the use of artificial fertilisers in this country since the subsidy was taken off has been in the neighbourhood of 30 per cent.
  Moreover, this is not confined to phosphates. It also covers potash and nitrogenous manures. I find in my costings accounts that a good dressing of artificial manure might involve an expenditure of up to 25 per cent. of the cost of producing a crop. If that is raised from 25 per cent. to 35 per cent., which was the result of the removal of the subsidy, farmers will think twice before they put on quite so much artificials. That is what happened. It is a wise policy to restore the subsidy and to encourage farmers to add more fertiliser.
  The work of the National Agricultural Advisory Service in this respect has been very good. The tendency in my county has been largely in the direction of getting farmers to analyse their soil. That has been done on an extensive scale. I have done it myself, and some fields which I did not realise were deficient in certain ingredients were found to be deficient in them.
  It has been said that potash has not been used as much in this country as on the Continent. The answer is probably
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  this. I do not think our soils—at least, our heavy clays—are as deficient in potash as are the lighter sandy soils of the Continent. That is probably the reason why it has not been used so much. The soil analyses which the Agricultural Advisory Service is helping farmers to undertake on their farms is finding out just where deficiencies exist. An astonishing thing is that not only are some fields deficient while adjoining fields are not deficient, but, also, some parts of the same field show deficiencies while other parts do not.
  In this way, scientific research and the encouragement of the application of its results to the industry, will bring about increased food production. In this respect, the experiments made by the Imperial Chemical Industry about two years ago—the so-called "early bite" experiments—showed that an application of 2 cwt. of nitro-chalk on one acre of land increased the grass growth by 6.5 cwt. and the crude protein content went up by 17.5 per cent. The total cost was £1 10s. per acre and the product would keep a dairy cow for three months, giving between three and four gallons of milk a day.
  If we wanted to achieve the same result with feedingstuffs the cost would be £3 10s.—and they would be imported feedingstuffs at that, which would involve a burden on this country. I contend, therefore, that by the scientific use of these fertilisers great value can be found for the nation through savings in dollar imports or in expensive imports from outside the Sterling Area. We can produce them here as a result of these scientific methods, about which so much more is known today than was known in the past.
  The Minister has told us that the scheme which he proposes to put into operation will concern only phosphatic manures. It is very important to have balanced dressings, not only of phosphates but, in some cases, of potash and, particularly, of nitrogenous manures. Quick returns will come with nitrogenous manures. If we want quick returns to help us in our difficulties, I hope we shall take action to include in a subsequent scheme, which, I hope, will not be long delayed, nitrogenous manures or balanced artificial manures which, I am sure, will give good results. I am very glad that the Government have taken this

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  way of carrying out assistance for agriculture, because I am sure it is much better than giving the direct subsidy in food prices.
  6.26 p.m.
  Mr. Archer Baldwin: I should have had no intention of speaking in the debate but for the fact that the hon. Member for Wednesbury (Mr. S. N. Evans) "had a go." Before I deal with what he said, however, I want to express my views on the Bill. As many of my hon. Friends know, I have spoken against subsidies—whether subsidies for the farmer or for the consumer—on almost every possible occasion in the House, but of all the subsidies which have been paid to the farming industry I think this is the best, because it is one which will help the marginal land farmer who cannot afford to buy artificial manure. If we are to get the increased production which is necessary in this country, it must come from marginal land. I give this Bill my blessing, therefore, and I hope my right hon. and gallant Friend will give me credit for that, because I do not always have a good word for subsidies.
  I want to say a few words about the speech of the hon. Member for Wednesbury. Perhaps it is not necessary; he has already had a good milling from his own side. I thought the speech of the right hon. Member for Belper (Mr. G. Brown) was an excellent one. He and I have not agreed on many occasions, but on this occasion I agree wholeheartedly with what he said, and also with what was said by the hon. Member for Gloucestershire, West (Mr. Philips Price).
  One thing which terrifies me in the House, and possibly in the country, is the absolute division between town and country. That division is fostered by speeches such as that which we heard today from the hon. Member for Wednesbury, who often makes that sort of statement which, although it may give many of us a certain amount of light amusement during the afternoon, will probably make headlines in the newspapers tomorrow and will be believed by many people who do not know the facts any more than does the hon. Member for Wednesbury. I wish he would accept the advice which I have given him on many occasions, which is to take a farm himself and let me see the accounts. I have invited him to my farm, and I do so
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  again. I will show him my accounts for the last 45 years and he will find no feather-beds there.
  What are the facts of the case? There is not one single commodity for which the farmer is getting what is called a guaranteed price today which he could not take into the open market and sell at a higher price—not one single commodity; and I challenge the hon. Gentleman to tell me of a single commodity for which I am getting a guaranteed price and on which I could not make more money in the open market.
  Mr. S. N. Evans: As the hon. Gentleman has challenged me, may I tell him that my barber's complaint is that he is having to pay 12s. a dozen for black market eggs. He thinks the price should be frozen, so I think the hon. Gentleman is right.
  Mr. Baldwin: I am not talking about black market eggs. The hon. Gentleman talks about guaranteed prices and about feather-beds and says that farmers can sit on a deck chair to do their farming; and he says they spend most of their lives in dinner jackets. The farmer has just as much right to a dinner jacket as a gentleman connected with sand and ballast. I want the public to know the facts. Today, farmers are compelled to sell 75 per cent. of their wheat to the Ministry of Food at £10 a ton less than they have to pay for the food with which they feed their pigs. The farmer is being paid £10 a ton less for wheat than we are paying to the other countries of the world. Barley is being bought in the world at as much as £20 more than the British farmer is getting. Is that much of a feather-bed? Is that much of a guaranteed price?
  The hon. Member should remember this. What we are getting is not a guaranteed price: we are getting a controlled price. We have fed the public for the last 12 years at something less than the food has been costing from abroad. What has in fact been happening is that a subsidy is paid to the consumer, and that subsidy is charged up against the farmer. I think it is a great mistake. I am against guaranteed prices, and on this I am against my right hon. and hon. Friends. This policy of a guaranteed price leads to all sorts of misunderstandings. I say that if the farming industry were given the same protection as any other industry gets

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  in this country, guaranteed prices, so called, would go by the board. We farmers can fight our own battles under the same protection as other industries have.
  If we in the farming industry are not entitled to that protection, we must have something else, and we want that guaranteed price. We cannot pay our workers good wages unless we get that price. It is about time the consumers of this country realised they have got to pay more for their food. They will never get cheap food again. If there were cheap food available in the world, we would not have the money to buy it. Therefore, the day of cheap food has gone. The sooner we begin to realise that the better it will be for the country.
  I hope that in the February Price Review that is taking place, instead of talking of giving subsidies and all that sort of thing, they will give us the price for the articles we are producing and let the best man win it. I think that guaranteed prices and these controls, and all these sorts of things, ought to go by the board, and if they were to go by the board we should get rid of that misunderstanding that people have that the farmers are cosseted—as the hon. Member for Wednesbury has suggested. I should have liked him to come down into the country—
  Mr. S. N. Evans: I am coming.
  Mr. Baldwin: —in January when I invited him to my farm. I could have shown him my men and women pulling sugar beet, up to the neck in mud. I do not think that is much of a feather-bed.
  Mr. Evans: Now, now.
  Mr. Baldwin: Before the hon. Member makes any more speeches in this House, I hope he will acquaint himself with the true facts about the farming industry. There are hundreds and thousands of farmers who are farming today and not making farm labourers' wages. There was a case that occurred very recently in my district. There were two brothers who were farming, and when the farm wages went up to £5 8s. they could not earn this wage on their farm. One of them took a job as a stockman and left his brother to carry on with casual labour. That is the sort of thing that will go on happening if we do not meet the increased cost
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  of production, particularly on the marginal land from which increased production must come.
  6.33 p.m.
  Mr. Maurice Webb: I think it will be agreed on all sides of the House that we have had a lively debate. I do not think that any of us, before the debate began, could have thought that fertilisers would have provoked so much interest and discussion; but I am afraid that the debate has gone into realms that do not quite belong to the Bill, which is a simple Bill—a modest Bill concerned with a very limited field. Although I want to make one or two points on the general case I want, if I can, to confine myself to the Bill in the short time I propose to speak.
  The debate has ranged over those wider issues for very obvious reasons. I think all of use feel some concern about the future of agriculture, and it is a pity that we should allow any exaggerated terms to divert us from the actual technical problem we have got to face. The technical problem is quite a simple one. How can we get more food out of our soil? It is not a matter of going back to the old days of cheap food at the expense of the livelihood of the farmworkers or of the farmers.
  It is a matter, however, of getting food at the most economic cost—of getting food as cheaply as we can. That is the practical problem in front of us, and it is my view—and I think it is the view of all of us on this side of the House—that this Bill does make a contribution to that end. It does, in fact, provide some means whereby we can improve our crop yields.
  It is quite clear to all of us—and there is no need for us to make the case over and over again, but it has to be said—that our food supplies present a problem of increasing gravity, and it is quite clear that we have got to get more food from our own soil. How are we to do that? We certainly cannot do it by just throwing money away recklessly. After all, the money involved in this operation, as in all the operations in which we have been concerned in the support-price policy in recent years, is public money, and it is our duty in this House to see that it is directed to the most productive needs. That is the simple technical problem in front of us tonight and I am sure that

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  this Bill will, in fact, make productive use of that element of public money which is involved—the sum of £10 million.
  Nevertheless, the general issues do require some examination. I do not think any of us can sit back and think that all is well. I recall reading a most interesting letter from Lord Bledisloe in "The Times" recently, where he complained about 15 per cent., as he put it—it may be a guess: I do not know on what basis he was calculating, but he is a responsible man who knows this industry—and he said that about 15 per cent. of the farmers in this country are inefficient and are not doing their job and ought to be cleared off their farms. I do not know what is the order of the inefficiency, but in so far as there is inefficiency in the industry it ought to be the common concern of both sides of this House to try to root it out, because we want to make the industry efficient.
  My feeling is that we have reached the point where it would be a useful thing to examine afresh the whole basis on which we are conducting this system of guaranteed prices. I was interested to see that the Lincolnshire—I think it was—branch of the National Farmers' Union, in a resolution that, I think, they sent to their annual assembly, complained that the present method of paying out the money was not an incentive to the efficient farmer. They wanted—I cannot actually say what they wanted, but I think they probably wanted—to go back to the old acreage system of payment.
  There have been a lot of complaints about that. A lot of people think that that is a bad system. What is clear is that a lot of people in the farming industry, in the House, and in the various Ministries connected with the supply of food, are concerned about the mechanics of the administration of the system of supporting farm prices. Let us think about this clearly, without any prejudice, and consider what is the best way of applying this method to the public advantage.
  With that in mind all I want to do is to ask one or two questions which, I hope, the Minister will be able to answer, although if he cannot I shall not complain. I wonder if he would tell us what steps are being taken to reduce the pro-
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  duction costs of fertilisers? After all, here is a plan to extend the use of fertilisers, which gives great guarantees to the people engaged in the production of fertilisers. They are getting the subsidy, and I think we are entitled to ask what they are doing to reduce the economic cost of their production.
  I think that is something we may explore. I do not want to press the point, but it is a question that seems to me to be reasonable. After all, we should not always expect the taxpayers to pay. If we do, that is the road to ruin. We must, in the end, find out what is the economic result of the use of the taxpayers' money.
  Another question I would put is: What is the effect of this on the global food subsidies? I do not want to argue this on any party basis. It is a much wider issue, in the end, as to whether or not the present ceiling of £410 million is too high or too low. It is a much wider issue than this Bill raises, but it is important for us to be quite clear what is the effect of this particular operation on the amount of money available for food subsidies.
  Is it not a fact—I am merely putting it as a question, and seeking information —that the Ministry of Food, which is the Department concerned with the payment of food subsidies, will have less credit for subsidising rationed foods to the extent of £10 million? I should like to know, merely for the purpose of clearing up this position, what will be the effect of this operation on the subsidy ceiling.
  The issue of what is the best way to inject this subsidy into the industry has been raised in earlier speeches. This is a matter upon which we can, quite honestly, take contrary views, without having any prejudice about it. Is it better to use the subsidy directly in price subventions on the crops completely? Is it better to reduce the subsidy by putting up the price to the farmer or putting up the price to the consumer, by in any way directly using the subsidy to affect the actual price of the commodity, either to the farmer or to the consumer? Or is it better to use the element of subsidy in operations of this kind, in subventing and supporting actual elements in production, such as we are now doing with fertilisers?

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  We might do it with tractors and in all sorts of ways. That is a matter for argument and discussion. All I hope is that we do not begin to develop a policy that has not been thought out. Whether we go one way or the other, it should be subject to examination. It raises such important principles that we should not slip into one method or another by accident, just by feeling our way. I wonder whether the Minister could tell us whether there is to be some examination of the way in which, generally, the Government will approach the use of this subsidy for the better production of food?
  I think the answer to my next question is in the Bill itself, but it is not very clear. It may be made clear in the scheme the Minister is to produce later. To whom will this be paid? Clause 1, I think, makes it fairly clear that it will be paid to suppliers, distributors or to groups of farmers. That is not very clear, and it may be that the scheme itself will clear up that point. However, it would be useful to the House to have rather more information about that, because it involves an important aspect of administration.
  Captain J. A. L. Duncan: My right hon. and gallant Friend explained that it would be done on the same lines as the lime scheme.
  Mr. Webb: I am going by the Bill and not what the Minister said. I think that there is an obscurity here which might be cleared up; there is no great issue in it, and I think it can be cleared up as we go along.
  Those are the only points I wish to make. I do not want to enter into any great controversy about this Measure, because it is obviously a useful Measure. If we are to use public money in this way, this is one of the most useful ways of using it. It will give a direct incentive to those farmers who will grow more food. We need to grow more food, and on that basis I commend the Measure to the House.
  6.44 p.m.
  The Joint Under-Secretary of State for Scotland (Mr. McNair Snadden): I should be lacking in courtesy, and perhaps also a little in my duty, if I did not say that on the whole this has been a very helpful
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  debate, during the course of which we have had one or two interesting incidents. I found the debate extremely interesting, because I confess that we were not very sure what the attitude of hon. Members would be when we recalled the reception accorded to my right hon. and gallant Friend's announcement on 29th November, when he indicated that a subsidy of the kind embodied in this Bill will be provided.
  Tonight, as on that occasion, the hon. Member for Wednesbury (Mr. S. N. Evans) has had a day out. He enjoyed himself very much trying out a series of new phrases which seemed to come trippingly to his tongue, and we now have the picture of "feather-bed" farmers with dinner jackets thrown in.
  Although some of the debate has been irrelevant, it does give me the opportunity to say at least two things which I very much want to say. The critics conveniently forget—and in justice to the farming industry it is necessary to make this clear—that since the last February Price Review, in 1951, the costs of production have risen phenomenally; so much so that before the General Election the Labour Government recognised that a Special Price Review was necessary to meet the situation.
  When the results of the Special Review were announced last November, some critics seemed to jump to the conclusion that farmers were getting away with something; that they were, as we say in the North, getting away scot-free, with a sort of extra dole of £26 million provided through the medium of a subsidy on fertilisers and higher commodity prices. The fact is that their annual expenditure on inescapable charges over which they have no control had risen, even at that time, by no less than £40 million. That is since the last February Review. Since then the figure has again gone up considerably. Farmers are accordingly at present meeting the difference out of their own resources. It must be emphasised that the arable crop farmer will have to wait until the crops of 1952 are harvested, stored and threshed before he gets recoupment through the price machine in respect of the rise in costs resulting from increased wages as apart from fertilisers. It is just as well that these facts should be emphasised.

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  When my right hon. Friend replied on 29th November to a supplementary question asked by the hon. Member for Wednesbury, he said:
  "The Government are very well aware of the extremely difficult financial position, but they are equally aware of the danger of a fall in production from the farms of Great Britain."—[OFFICIAL REPORT, 29th November. 1951; Vol. 494, c. 1730.]
  Unfortunately, statistics show that there is a distinct danger of a decline in the overall production of food in this country Our tillage acreage is falling, and we have had to come forward with a scheme quite recently offering a subsidy of £5 per acre in order to get more tillage for the coarse grain feedingstuffs pool. The number of cattle is also less than a year ago. Yet circumstances are such that the need for British agriculture to produce all the food it can economically produce was never greater than it is today.
  We want more coarse grains for the feedingstuffs pool so that we can increase the pig population. We want better grass management and better grass conservation; and we want better utilisation of the result of intensive grass management Finally, in the background behind it all, there is the not unimportant question of the maintenance of soil fertility itself.
  All these things call for the greater use of fertilisers, but the increase in prices arising from the removal of the remaining half of the fertiliser subsidy on 1st July last, has resulted in a drop in demand, which until then had been well maintained. This, in turn, has created a serious storage problem for the trade. It is hoped that this Bill, with the reintroduction of a subsidy on phosphatic fertilisers, will dissuade farmers from attempting to economise by reducing their fertiliser intake, and we hope it will encourage them to maintain, and even increase, their applications in the interests of maximum production from their farms.
  In the course of this debate, various hon. Members have asked for information and I will do my best to deal with certain of the questions. The right hon. Member for Bradford, Central (Mr. Webb) asked what steps we were taking to reduce the production costs of fertilisers. We are doing everything that can be done in that connection. He will know that fertiliser prices are controlled. The controlled prices are decided upon
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  only after a very careful and detailed costing inquiry carried out by the Ministry of Supply. The recent rise in July last was allowed only after such an inquiry. I can say that we are watching that position very closely.
  Mr. Frederick Peart: The hon Gentleman's right hon. Friend mentioned that one of the reasons for thescheme for phosphatic fertilisers coming to an end was the increased cost relative to nitrogen fertilisers. I should have thought that both types would have felt this impact of the rise in costs, because the manufacturing processes are practically the same and freightage costs are practically the same.
  Mr. Snadden: In the case of phosphates, of which phosphatic manure is composed in the main, they are to a very large extent imported into this country. The other question put to my right hon. and gallant Friend is one which I do not think I can be expected to deal with, namely, the guaranteed prices structure. Naturally, that is often thought about, but I cannot say anything about it, except that any approach to that question needs to be very cautious indeed.
  The right hon. Member also mentioned the question of the efficiency of food production. On the question of efficiency, we are aware of the need to make sure that we have the most efficient system of farming possible. The machinery exists already under the Agriculture Acts both for Scotland and for England and Wales, and it is up to us to see that it is properly administered. The hon. Member for Tonbridge (Mr. G. Williams) also asked several questions. I think that his first question has been fairly generally put by several hon. Members, and if I deal with it in one reply, I hope that they will not feel that I have forgotten to mention them individually.
  I was asked: What is the smallest amount on which the subsidy will be available?—that is to say: What will be the minimum quantity for which a contribution will be made under this Bill? We intend to make that minimum 10 cwt., and we think that is quite a reasonable thing to do. It should be remembered that under the Bill the small people are looked after by a special provision—that is to say, they can, through the various

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  associations which buy fertilisers in bulk, take advantage of the provisions in the Bill; so the small man will be looked after.
  The hon. Member for Orkney and Shetland (Mr. Grimond) asked about retrospective payments to the people who had already bought fertilisers since last July in small amounts, and what would we do about them. All I can say is that, so far as the Department of Agriculture in Scotland is concerned we will look very sympathetically at any application, but I would throw out a warning that this dealing with many applications in respect of small amounts would involve considerable costs in administration.
  Then there was a general question put by many hon. Members, including the hon. Member for Tonbridge: Why does this Bill provide only for phosphatic manures? The hon. Member made the rather astonishing statement that phosphates were not by any means the most important manure. I do not know how one can differentiate, because they all work together, but phosphates are required for all plant growth, whereas other fertilisers are not necessarily required for all plant growth.
  Mr. Peart: Surely this Bill applies to other fertilisers which may come from non-organic materials; it is not a specifically phosphatic Bill? The scheme in the Bill applies to phosphatics, but surely that does not prevent the Minister from introducing a scheme affecting other non-organic fertilisers.
  Mr. Snadden: The Bill is intended to cover schemes for any kind of fertiliser subsidy, but what we are introducing in the first scheme is a subsidy payable only on phosphatic fertilisers. I am dealing with a specific scheme under this Bill, and the question is: Why are we paying a subsidy for phosphatic fertilisers only and not for nitrogenous and other manures?
  In so far as phosphatics form the basis of all manures for farm crops—for every hundredweight of nitrogen put on the land, there are probably two of phosphatics and one of potash—they are of very great importance; and also we felt when we decided upon the scheme that this was the way in which we could best
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  assist farmers to meet the increased costs of fertilisers, since the increases have been, broadly speaking, greatest for phosphatic manures. Another point is this: Had we extended the scheme to cover nitrogen, we might not have been able to meet the demand that might arise through a subsidy.
  The right hon. Member for Belper (Mr. G. Brown) asked a question about the supply position. We believe that our resources will be sufficient to meet any foreseeable increase in the demand for phosphatics of any kind arising out of the subsidy. We could not say that in regard to nitrogenous fertilisers.
  Mr. G. Brown: The hon. Gentleman used the words "we believe." I am not casting any reflection upon the Ministry of Agriculture, but may we have the figures on which the belief is based? There are, I think, some who are not quite so strong in that belief.
  Mr. Snadden: I do not think that it would be possible for anyone to produce the figures. I certainly have not got them here, and I do not think that they can be got. It is true that because of the abolition of the subsidy, or the removal or relaxation of it last July, production tended to fall, but the point I am trying to make is that phosphates, we believe, are available to meet any increased demand that may arise out of this Bill, whereas an increased demand for nitrogenous manures would put us in very great difficulty indeed. The hon. Member for Tonbridge also asked why 1st July was chosen. That is really because, as my right hon. and gallant Friend explained, it is the beginning of the period that has always been taken as the fertiliser subsidy period.
  The hon. Member for Derbyshire, South-East (Mr. Champion) welcomed the Bill on behalf of the horticultural industry in a very interesting speech, and I think that he will appreciate that this Bill deals with the horticultural industry as well as the agricultural industry, in that the horticultural industry is to be assisted in regard to phosphatic manures in exactly the same way as the farming industry. I think that I have dealt with his point about the 10 cwts. in reply to the hon. Member for Tonbridge.
  The hon. Member for Dorset, North (Mr. Crouch) referred to drainage, and I

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  agree with the points that he made. The hon. Member for Wednesbury is, I see still waiting here—
  Mr. S. N. Evans: I am not waiting.
  Mr. Snadden: The right hon. Member for Belper dealt with him so well that I do not think that it is necessary for me to take up the arguments which he made. There is one point which he attempted to make, rightly or wrongly, when he quoted the figure of £300 million as the net aggregate income. Comparing that with the figure of the national income of over £11,000 million, it represents about 2.8 per cent. on the recent calculation of the national income, and, considering that agriculture: is a basic industry, I do not think that anyone can say that 2 per cent. or a little over is an unreasonable proportion for that industry to take of the national income.
  The hon. Member asked why we could not produce a statement of the production of the agricultural industry in the various commodities. That statement is in existence. I have a copy here. In the Annual Review of the Fixing of Farm Prices, 1951, we have the particulars for every commodity which is produced in this country.
  Mr. Evans: In terms of quantities?
  Mr. Snadden: The hon. Member will there find all the facts for which he is asking. If he should not get them all there, it would not be very difficult to go to the Library to obtain from the Statistical Digest all the details which could not be given in the Review because of lack of space.
  Mr. Evans: I have asked for the quantities in terms of goods. I know that the amounts are available in terms of depreciated currency, but I am not satisfied with that. I want the quantities in terms of goods for 1936–38 and for the last three years.
  Mr. Snadden: If in referring to "goods" the hon. Gentleman means products of the agricultural industry whether in tons or in acres, all that is available to everybody. At home I have statistics going gack to about 1924. I do not think there is anything at all in the point he has raised.
  The hon. Member for Orkney and Shetland (Mr. Grimond) was the only hon. Member to speak for a Scottish
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  constituency. We all sympathise with him about the terrific gales in Orkney, and we hope that things are a little better there now and that the damage is being repaired. When the news came through, the Scottish Office did everything it could to press button A or button B to try to help Orkney. The hon. Member asked whether we would review prices if other fertilisers and freights increased in cost.
  Mr. Grimond: If the price of other fertilisers rose.
  Mr. Snadden: We shall certainly keep this under review. As I have said, the Bill gives power to produce any kind of fertiliser scheme. The hon. Member also asked about the minimum quantity to be considered, and I have said that it is 10 cwt. If the hon. Member has any cases to submit to the Department of Agriculture for Scotland, he will get sympathetic consideration. He also asked what kind of land would rank for the subsidy, and the answer is that any land will.
  The hon. Member also referred to air experiments. I believe he was referring to lime spreading experiments carried out by aircraft. I understand that this is in the hands of the Agricultural Research Council. A committee is looking after the matter at the moment and experiments have been carried out. I do not know what progress has been made, but I can make inquiries. I believe that the great trouble, as one would expect, is to find a method of distribution which is economical.
  We have had a year of very steeply rising costs. Labour, feedingstuffs and fertiliser costs have all gone up, and the sharpest advance has probably been in the case of fertilisers, which has adversely affected sales and, in turn, storage space. It ought to be said that the trade has gone to all sorts of lengths to increase storage space in order to meet the spring demand. The production of fertilisers has necessarily had to be curtailed. In these circumstances, the only wise course for us is to do everything we possibly can to reverse this very serious tendency.
  We are trying to do that by means of this Bill. We believe that the provisions in the Bill to provide a subsidy for phosphatic fertilisers with retrospective effect to 1st July should bring about the desired result of stimulating sales of what every-

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  one agrees is an indispensable raw material for agriculture. Without it we cannot possibly hope to secure the high level of production we need today.
  Question put, and agreed to.
  Bill accordingly read a Second time.
  Committed to a Committee of the whole House.—[Mr. Heath.]
  Committee Tomorrow.

  AGRICULTURE (FERTILISERS) BILL

    AGRICULTURE (FERTILISERS) [MONEY]
    Considered in Committee of the whole House under Standing Order No. 84 (Money Committees).—[Queen's Recommendation signified.]
    [Colonel Sir CHARLES MACANDREW in the Chair]
    Resolved,
    That, for the purposes of any Act of the present Session to authorise the payment out of moneys provided by Parliament of contributions for relief of occupiers of agricultural land in respect of expenditure on fertilisers, it is expedient to authorise the payment out of moneys provided by Parliament—

    (a) of contributions for relieving occupiers of agricultural land of a part of the expenditure which they would otherwise have incurred in respect of fertilisers acquired before or after the passing of the said Act, being contributions made in accordance with a scheme securing so far as practicable that the making of contributions in accordance with the scheme in respect of fertilisers of any kind will not relieve occupiers who acquire fertilisers of that kind of more than one-half of the expenditure which they would have incurred in respect thereof if there had been no provision for the making of those contributions; and

    (b) of any expenses of administration incurred by a Minister for the purposes of the said Act of the present Session, or of any scheme made under that Act.—[Sir T. Dugdale.]

    Resolution to be reported Tomorrow.

  AGRICULTURE (PASTURE ACREAGE)
  7.7 p.m.
  The Joint Parliamentary Secretary to the Ministry of Agriculture (Mr. G. R. H. Nugent): I beg to move,
  That the Agriculture (Special Directions) (Maximum Area of Pasture) Extension of Period Order, 1951 (S.I., 1951, No. 2262), dated 17th December, 1951, a copy of which was laid before this House on 20th December, be approved.
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  Section 95 of the 1947 Agriculture Act gave the Minister power to make an Order
  "…which must be approved by affirmative Resolution of both Houses within 28 days of Parliament's re-assembling."
  The Order was first made in 1948 and it was renewed in December, 1950, to be effective in 1951. The duration of the Order now before the House is for the current year, 1952.
  The effect of the Order is to give the Minister power to limit the maximum pasture acreage on a holding or, by implication, the minimum tillage acreage. In practice, the Order is operated by the county agricultural executive committees to whom the Minister delegates these powers. As to the past operation of the Order, up to 31st October last year there were about 400 directions which had been served by county committees. Most of them were fully or substantially complied with, and in only 14 cases were prosecutions necessary.
  The case for continuing the Order in 1952 was stated by my right hon. and gallant Friend when he announced the introduction of the new £5 per acre grant for ploughing for the 1952 harvest, and there is a continuing need for the greatest possible production of all tillage crops, particularly coarse grain and potato crops, and in the present critical state of the nation's economy this need is greater even than it was before.
  Since 1947 there has been a serious decline of more than 500,000 acres of tillage, mostly in 1951, which is serious enough in itself. A further decline now cannot be contemplated. I believe that most farmers are maintaining the maximum possible tillage acreage in response both to their own interests and the nation's needs. But there are some who could do more, and it is to provide the county committees with means to deal with those people that I am asking the House to approve this Order.
  7.10 p.m.
  Mr. George Brown: I must apologise for having so rapidly been translated from below the Gangway to above it, but in the absence of my right hon. Friend the Member for Don Valley (Mr. T. Williams), for reasons that we all understand, there are one or two things which I should like to say. I do

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  not believe that the Government side of the House expect to get away with this Order like this.
  This is the Order which the present Government fought so bitterly when it was introduced in 1948. This is the Order which the present Minister of Agriculture voted against. This is the Order against which the present Leader of the House made such a violent speech. The hon. Member for Harrogate (Mr. York) made a wonderful speech against this Order, and the hon. Member for Thirsk and Mallon (Mr. Turton), who is now the Parliamentary Secretary to the Ministry of National Insurance, put forward many reasons why we should not have this Order.
  We on this side of the House are prepared to consider the circumstances and the facts and to vote consistently. We shall vote the same way as we voted when the Order was brought in, but what about the Government side of the House? I cannot attack the Joint Parliamentary Secretary to the Ministry of Agriculture, because he was not then in Parliament, but other Members on the Government side of the House are to vote in a way opposite to that which they voted before when they would not accept the Order we proposed.
  The Minister of Agriculture and the hon. Member for Thirsk and Malton must have some reason for changing their minds. It cannot be the economic situation because I read that the Leader of the House, when speaking of this subject in 1948, said:
  "Although we are aware, that, in general, the international background and the national economic background are extremely serious today, that is not enough for this argument."
  He said, in fact, that we could not use that argument, but that we must use something better. So, today, it cannot be because of the serious economic position, and something else must have happened in the interval to make him change his mind.
  The hon. Member for Harrogate asked why is it we had to use this kind of sanction, and said:
  "Why cannot the same sanction of public opinion be used now as was used before? The Minister is using a legislative sanction and not the sanction of public opinion.…This Order is a very serious error. It certainly has, and will further, upset the industry."
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  We ought to be told why a very serious error that would upset the industry is being carried on now.
  Let us have a look at what was said by the hon. Member for Thirsk and Malton:
  "I do not object to any Order against a man who is not farming in the interests of his land or country, but the men who are going to be attacked by this Order are farming in the interests of their land and are producing a good crop, which is grass."
  He went further and he described the Order—the same Order as this with the same wording—in this language:
  "If that is right…it means that this Order besides being oppressive, is also nonsense."
  We are entitled to know why we are being presented tonight with an Order which, in the opinion of a Member of the Government, is nonsense. This Government have had sufficient time now to know the answer to that.
  I could go on with further extracts. The hon. Member for Leominster (Mr. Baldwin) also made a speech against it, but I think it is hardly right to read out portions of that speech when the hon. Member is not here. The right hon. Gentleman the Leader of the House is not here. I understand that he could not be present. I mentioned to him that I was going to raise this matter, so that I gave him notice of my intention. He began his speech in 1948 by saying:
  "I will say that most sensible people in the country object to being ordered about by directions."
  He then went on to give the argument which I have already read to the House about the economic situation:
  "Although we are aware that, in general, the international background and the national economic background are extremely serious today, that is not enough for this argument…That is the Labour Party and the Labour Government all over again—the big instrument for the little necessity."
  It is not the Labour Party or the Labour Government now. It is the Conservative Party and the Conservative Government who are introducing this Order.
  The right hon. Gentleman said:
  "What is being done by this order is typical of that mentality…the Government are making a terrible psychological blunder for which the whole farming community, who have done everything they can to increase production, as was asked for by the Government last year, will suffer."

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  The Government ought not to perpetuate terrible psychological blunders. They have had time to put these things right. The right hon. Gentleman also said:
  "It is an absolutely stupid thing"—
  this Government are carrying on doing a stupid thing—
  "when an immense voluntary effort is needed and is being accorded, to introduce this great hammer of compulsory direction."
  As I say, I absolve the Parliamentary Secretary from any blame, but the farmers of Guildford ought to be told that their representative is introducing what the present Leader of the House once described as a
  "great hammer of compulsory direction."
  and that he also said that this was
  "an absolutely stupid thing to do."
  The farmers of Thirsk and Malton and of Richmond, in Yorkshire, ought to be told what the Government are up to tonight; indeed, the farmers of the country should be informed. We on this side of the House are entitled to an explanation, in view of the fact that the Leader of the House said:
  "Surely we are not in the very parlous condition that we have got to have peace-time powers of direction which are admittedly against the rules of good husbandry throughout the country."
  The Parliamentary Secretary is bringing in an Order which a member of the Cabinet, which he supports, has admitted as being against all the rules of good husbandry. As the right hon. Gentleman went on he worked himself up into a real passion:
  "It is a monstrous thing to bring this great weapon of direction into force for what is admittedly to be a comparatively small majority."—[OFFICIAL REPORT. 19th July, 1948; Vol. 454, c. 123–152.]
  So we have an absolutely stupid thing, which is quite monstrous. He said that the only reason the Order was introduced was because the gentlemen in Whitehall knew best. He ended in much the same way as he had begun.
  So we have the Leader of the House of Commons, the hon. Member for Newbury (Mr. Hurd), who used to wind up debates in those days, the hon. Member for Harrogate and the hon. Member for Thirsk and Malton supporting this Order tonight. None of them is completely inarticulate or a "yes man" for this
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  Administration, but they are being asked here tonight to support what was once described by them and by leading members of their party as a stupid, monstrous, cruel, and dictatorial thing. I do not think the Government can get away with it.
  It is true that the present Minister of Agriculture, on that occasion, kept out of that discussion. I remember trying to get him to make a speech that night. I did not succeed, but he went into the Lobby and voted against the Order. Several other hon. Members opposite voted against the Order then with the hon. and gallant Member for Rutland and Stamford (Major Conant) and the hon. Member for Honiton (Mr. Drewe) acting as serjeant majors and whipping them up and getting them into the Lobby.
  I shall advise my hon. Friends tonight to be consistent and vote the same way as they voted in 1948. We regard the economic situation as serious, but here tonight we see a Government going to do the very thing which they described as wrong in 1948, and I think we are entitled to an explanation.
  7.19 p.m.
  Mr. Christopher York: It was a very good thing that in 1948 my hon. Friends and I made such a fight against this Order. The result was that the Ministry of Agriculture were forewarned that if there was an abuse of their powers, arising out of this Order, there would be serious consequences. To many of my hon. Friends direction of this kind is reprehensible.
  Many of the things in this Order are objectionable to us, but hon. Members opposite must realise that we have received a legacy from them which we cannot digest in five minutes. We have to continue a considerable number of wholly objectionable Measures that we hope in due course to obliterate. I confess that the Government thoroughly deserve the barracking that they have had. I do not think that we ought to extend this Order for a future year. I shall not support a similar Order for another year.
  7.21 p.m.
  Mr. Frederick Peart: Many hon. Members remember the action that has been taken by the hon. Member for Harrogate (Mr. York) on many occasions, and not just on this

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  Order. I remember the discussion that took place on many proposals in the main Agriculture Bill of 1947. In the Committee stage on that Bill, the hon. Gentleman used to argue his point very forcibly that we were interfering with the freedom of the individual and were taking powers that we ought not to have. That was his attitude when he opposed this Order. He ought to say now that his party was wrong and admit it, instead of trying to make an excuse for the action which it is taking.
  Mr. York: To what particular Clause of that Bill is the hon. Gentleman referring?
  Mr. Peart: I am not referring to any particular Clause, but if the hon. Gentleman will read his own speeches on the Clauses of the Agriculture Bill—
  Mr. York: Which Clauses?
  Mr. Peart: Any of them. Take the Clause on direction. The hon. Gentleman may take pride in the fact—
  Mr. Speaker: I must point out to the House that discussion on a statutory Order must be strictly limited to the contents of the Order.
  Mr. Peart: I apologise, Mr. Speaker, but I was drawn into an argument by the hon. Gentleman. I merely ask that the Opposition should come clean on this point. [Laughter.] I mean the opposition—which is still there on the Government side of the House—to this Order. The hon. Gentleman has said that he has not changed his opinion. He should be prepared to say that his colleagues are wrong, and particularly the present Minister of Agriculture, who was against this Order. We support the Order because we believe that it is necessary in the interests of food production. I am very glad that my hon. Friends on this side of the House are taking a much more responsible attitude to British agriculture than the Tory Opposition did when we were in the Government.
  7.23 p.m.
  Mr. Nugent: I must congratulate the right hon. Member for Belper (Mr. G. Brown). He has really had a field day today. Considering that his hon. Friend
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  the Member for Wednesbury (Mr. S. N. Evans) has also tried to restore the confidence of the country in the agricultural intentions of his party he has had a good day.
  Reading past copies of HANSARD is a fascinating occupation. I daresay there are speeches that could be taken out of it, not necessarily referring to the right hon. Gentleman, but to other hon. Members, that would fill them with embarrassment. If we have many more speeches of the kind we have had in the last few weeks, the Opposition, if they find themselves back on this side of the House again, may be very much embarrassed at them.
  Mr. G. Brown: The speeches were not made from that Front Bench.
  Mr. Nugent: Well, we shall see.
  It is a point worth making that the greater part of the decline in the tillage acreage in this country took place in 1951 and to a certain extent in 1950. The right hon. Gentleman did not know that, when this Order was renewed at the end of 1949. At that time the Order went through on the nod. He did not at that time charge hon. Members of the Government, who were then in the Opposition, with any inconsistency. It was very significant that the Order went through so easily. The greater part of the decline has taken place in the past year. We have something like 500,000 fewer acres of tillage in 1952.
  The cogency of this Order is very much what it was before. We have always been prepared to look at the facts of a case and to apply what we think the best practical measure to deal with the situation. In the circumstances, my right hon. Friend was more than justified in taking the view that, in the circumstances and the present position of the country, it was necessary to extend this Order for another year. I trust that the House will give this Order its approval.
  Question put, and agreed to.
  Resolved,
  That the Agriculture (Special Directions) (Maximum Area of Pasture) Extension of Period Order, 1951 (S.I., 1951, No. 2262), dated 17th December, 1951, a copy of which was laid before this House on 20th December, be approved.

  AGRICULTURE, SCOTLAND (PASTURE ACREAGE)
  Motion made, and Question proposed,
  That the Agriculture (Maximum Area of Pasture) (Extension) (Scotland) Order, 1951 (S.I., 1951, No. 2199), dated 12th December, 1951, a copy of which was laid before this House on 14th December, be approved.—[Mr. Snadden.]
  7.27 p.m.
  Mr. Thomas Fraser: The Joint Under-Secretary of State for Scotland should say a word about this Order before the House is asked to approve it. He did not commit the error which the Leader of the House did in 1948, because we did not then have the Scottish Order. We had one in December, 1949. He did not make such a speech as did the right hon. Gentleman when the English Order was brought forward in July, 1948. The Under-Secretary was not very enthusiastic about the scheme. He said that it was necessary only because of the maladministration of the Government. Is the Order now necessary because of the maladministration of the late Government or the maladministration of the present Government?
  This process of education of the Conservative Party is interesting. In 1948, the House was, we were told, doing a stupid thing, a monstrous thing, a dictatorial thing, which ought not to have been done at all. The Conservative Party voted against the scheme. By 1949, as the Parliamentary Secretary to the Ministry of Agriculture has just told us, the Conservative Opposition did not make any speeches at all about the renewal of the English scheme. When we had the Scottish scheme in 1949, the right hon. and gallant Member for Kelvingrove (Lieut.-Colonel Elliot), speaking from the Opposition Front Bench on behalf of the Conservative Party, said:
  "These powers must be watched with caution and must be withdrawn at the earliest possible moment."—[OFFICIAL REPORT, 5th December, 1949; Vol. 470, c. 1670.]
  As a matter of fact, they die a natural death if they have not been used. The Government are now saying, "Please support us" in renewing this scheme and continuing its operation. Surely, in the circumstances the Under-Secretary should tell us what has happened since 1949 to convince him that this sort of thing is now good. I am not surprised that he did not volunteer a speech,
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  because he must be suffering a little from embarrassment.
  We are all glad, notwithstanding all that, that the Government appreciate that it is desirable that farmers should not be permitted to allow too much of the land of Scotland to go back to grass. In my view a lot of the land that has been allowed to go back to grass, or is under grass at the present time, is producing a most valuable crop. Those acres that are given over to grass, which is cut two or three times in the summer and is used for grass drying or silage-making to feed to cattle in the winter, are producing a most valuable crop. It may well be that such acreage ought not to be listed in the acreage of pasture at all, but in the acreage of tillage-producing crop.
  However, it is undeniable that farmers in many parts of the country have allowed too much of their land to revert to semi-permanent or permanent pasture. It is, unfortunately, true that farmers with good arable land, suitable for producing crops, but whose main industry is that of feeding or raising beef, are satisfied with producing only that quantity of grain necessary for their own requirements, and are not interested in producing that little extra to help the fellow next door who has not the land to put to the production of those cereals necessary for animal feeding. It is right and proper that the Government should give to the executive committees power to say to the farmer, "You are not ploughing enough land," and that, of course, is precisely the power which this scheme proposes to give to the executive committees.
  Since the Under-Secretary of State for Scotland must, by now, have appreciated that he really owes it to the House of Commons to make a speech in justification of this scheme, I wonder if he could also tell us something about the need for this scheme in Scotland? Could he tell us at what rate tillage has been going down in Scotland in 1951 or during 1950? Could he tell us what use has been made of the scheme from the time it was first introduced in December, 1949, until the most recent convenient date for his purpose?
  Could he tell us how many directions have been issued under the scheme? Can he tell us, as he probably can, that there have been no prosecutions at all? In any

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  case, he can tell us how many directions have been issued throughout the whole of Scotland, and I think he can tell us the extent to which the acreage under pasture has increased during the past year and to what extent we have fallen short of reaching our tillage target.
  If he does that, he will go a long way towards showing us that there is a need for this scheme. In any case, in view of his lukewarm attitude to the scheme when it first came before this House, and in view of the conversion of the Conservative Party to the use of these Statutory Instruments for bringing about more production and higher efficiency in agriculture, I think he will wish to make a speech to the House in justification of this scheme.
  7.34 p.m.
  Mr. J. Grimond: Before the Under-Secretary of State for Scotland replies, may I put to him, shortly, one or two points which are entirely agricultural and not dialectical? As I understand it, the need for this scheme is largely due to the fact that we cannot now import and pay for the feedingstuffs which we used to get from other countries. That in itself must take a considerable amount out of the fertility of our soil.
  I should also like to ask him whether he, with his great knowledge, and his Department are satisfied that the continual ploughing up of land in this country in the long term will not have deleterious effects not only on the soil but on the stock raised on the soil? Also, how far is he satisfied with the progress made in the introduction of new grasses and the treatment of grass for fodder? The hon. Member for Hamilton (Mr. T. Fraser) mentioned that in some cases grass silage, dried grass, and so on, is an important product. I wonder how far the Department is satisfied with regard to that, as far as Scotland is concerned.
  Further, is there not a danger in the method by which this Order is applied through the agricultural committees? Is there not a tendency for each committee in its own county to insist on the maximum acreage being ploughed, regardless of the special suitability of that county to particular form of agriculture? In Ayrshire, for instance, is there not a
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  tendency to order each farmer to plough up a certain amount of his land? In that process there may be encouragement of mixed farming which, while it may have many advantages, may not be the most efficient way of farming in a specific county, bearing in mind the shortage of labour and the high results in food which can be achieved only by specialisation. If the hon. Gentleman could outline those points I should be grateful.
  7.36 p.m.
  The Joint Under-Secretary of State for Scotland (Mr. McNair Snadden): In answer to the hon. Member for Hamilton (Mr. T. Fraser) may I say that as there had been a debate on the previous Order for England and Wales, whose purpose is identical with that of the Scottish one, with exactly the same background, I thought it would not be necessary for me to go into the question of why we wish to have a similar Order. However, I expected that the hon. Member would probably raise a few points on it. If the hon. Member will refer to the OFFICIAL REPORT Of our debate on the previous Order—and he mentioned what I said on that occasion—he will find that I did not oppose the Order or even criticise it. I asked for the reason why it was found to be necessary, which is rather different.
  Nobody likes the service of directions, least of all myself, but in that connection the same can be said of Scotland as can be said of England and Wales. We do our best in Scotland, through our agricultural executive committees to persuade the very small minority of farmers who have not done so to play their part in the food production programme. It is only when persuasion has failed that an agricultural executive committee reverts to compulsion. I think I am right in saying that this is the only Order under the Agriculture Act of 1948 which is now in operation, apart from the general powers that exist in that Act.
  We have to take into account the very serious figures that are available now. I will give the hon. Gentleman one or two of them to show how even I, who dislike directions, feel that it is now in the national interest to see that the maximum area of our land is ploughed up. Since 1947 we have lost 128,000 acres of tillage, and considering the smallness of our arable acreage in Scotland that is a

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  very big figure. We have lost over 84,000 acres of cereals and over 33,000 acres of potatoes.
  The Government, therefore, recognising the need for more tillage, more coarse grains, have recently offered a new subsidy of £5 per acre for ploughing up grassland which was sown out in 1948 or earlier, to try to bring in the coarse grains that we feel are necessary if we are to maintain, let alone increase, the head of livestock which we have at present in the country.
  Mr. Fraser: I am sorry to interrupt the hon. Gentleman, but could he tell us the rate at which this tillage acreage has been running down in more recent years? He gave us the figure since 1947. It was precisely because the tillage acreage was running down after 1947 that we brought in an Order, first of all, in 1949. I do not want to press the matter, but if the hon. Gentleman has separate figures for last year we should like to hear them.
  Mr. Snadden: I gave the overall figure from the 1947 expansion programme, quite apart from any party point, to show that we have not reached our target and, rather, that we are moving downward. As regards the actual fall of tillage—the hon. Member, who was in the Scottish Office, will know what I mean by "tillage"—the latest figure is that we have lost 38,000 acres since 1950. I could give the figures for all the commodities if the hon. Member wishes—wheat, oats, barley and all the rest—but it would take some time to read them out. The figure I have given is the one that really matters.
  The hon. Member for Orkney and Shetland (Mr. Grimond), asked one or two questions which I hurriedly wrote down, and I may not have noted them all correctly. One of his questions concerned the putting of such powers as these into the hands of agricultural executive committees. I agree that some risk is run by allowing the A.E.C.s to use powers of direction, but throughout Scotland the evidence in my possession, at any rate, shows that, generally speaking, these powers are very sparingly used. They are used after every factor is taken into account. If the farm in question is a dairy farm, the nature of the farm, the acreage that is under grass, and so on, are taken into account. It is only when a
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  committee feel that the farmer is not pulling his weight in the national production drive that they serve directions.
  As regards grass, a lot has been done in this direction, especially in Ayrshire. Recently, I visited the various research institutes there and was very much impressed by what I saw. There are tremendous possibilities in increased intensive manuring of grass, strip grazing with electric fencing, and better conservation, and it may be that in the course of time there may be no such thing as imported feedingstuffs. I am very hopeful that we will make real progress.
  On the question of the danger to stock from ploughing up, I do not think that scientific advice would show that there is any danger at all in this respect.
  Mr. T. Fraser: Can the Under-Secretary say how many directions have been issued under the Order?
  Mr. Snadden: I am sorry I meant to give that figure, but I forgot. To date, 91 directions have been served under the Order since its inception, or a little over one farmer in 100. That is not a very high proportion, and it says a good deal for our efficiency in Scotland. Those 91 directions involved a total of 1,680 acres brought back into cultivation out of grass, and is a very small figure when the full total is taken into account.
  7.43 p.m.
  Mr. A. Woodburn: Is the Joint Under-Secretary aware that in one or two of the beef producing areas, there is a reluctance on the part of farmers to make any contribution whatever to the producing of winter feed? They tend to depend on somebody else outside their own area—I do not want to mention any area in particular—and some of the agricultural executive committees have had great difficulty even in pursuading some of the farmers to do their duty in this matter.
  In one place, where the farmers were rather different even from the economic point of view of the returns from the farm, they were prepared to go through the motions of ploughing up and playing with the job but not really producing the crops. It may not be a matter for congratulation that so few directions have been issued, and I hope that not only will there be discrimination in dealing with

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  the type of grass that should not be ploughed up but should be used as an equivalent to crops, but that careful supervision will be given by the agricultural executive committees, with backing to them from the Scottish Office, to see that farmers in areas that can produce crops actually produce them.
  I could mention places where some of the good farmers of the area were very disturbed that the crops of which the land was capable were not being produced. It may be, therefore, that some parts of the country remain too sparsely used in the sense that farmers treat their colleagues with too great delicacy in getting the job done. If the feeding is to be produced for the winter, the farmers who are to use it for beef must play their part as well as the others in trying to plough up the necessary ground.
  Question put, and agreed to.
  Resolved,
  That the Agriculture (Maximum Area of Pasture) (Extension) (Scotland) Order, 1951 (S.I., 1951. No. 2199), dated 12th December, 1951, a copy of which was laid before this House on 14th December, be approved.

  EXPORT GUARANTEES BILL
  Order for Second Reading read.
  7.45 p.m.
  The Secretary for Overseas Trade (Mr. Henry Hopkinson): I beg to move, "That the Bill be now read a Second time."
  The House will be aware of the series of Acts which have been passed over a period of years for the purpose of developing a system of encouragement of our export trade. Credit insurance by the Government was first introduced after the First World War in a very modest form under the authority of the Overseas Trade Credits and Insurance Act, 1920. The scheme took the form of cash advances, and credits were limited to£26 million a year.
  This system was discontinued in 1929 in favour of a system of guarantees, which is the basis of the present scheme. The powers given to the Board of Trade under the original Act were exercised by the Department of Overseas Trade until April, 1930, when the Export Credits Guarantee Department became a separate unit under the Secretary of the Department for Overseas Trade. Before and
  318
  after the Second World War, there were further extensions by Acts of Parliament both in regard to the scope of the Department's activities and its financial powers.
  In 1949, the Export Guarantees Act was passed with the general approval of all sections of the House. This Act, which was introduced by the right hon. Member for Huyton (Mr. H. Wilson), was, broadly, a consolidation Act, modifying and simplifying existing legislation; but it also took powers to increase the amount of the liability of the Board of Trade in respect of guarantees given by the Export Credits Guarantee Department. There was also a further short Export Guarantee Act in 1951, which conferred certain minor additional powers on the Department covering overseas subsidiaries of British companies. That is the legislation up to date.
  The object of this Bill is to secure a further extension of the aggregate limits of liability of the Board of Trade, acting through the Export Credits Guarantee Department. This is for the purpose of meeting the still further expanding demand for guarantees. Before dealing in detail with the need for this, it would, perhaps, be for the convenience of the House if I were to outline the way in which the Export Credits Guarantee Department operates.
  The guarantees given by the Board of Trade can be divided into two main groups: First, the commercial guarantees, which are in practice a form of insurance given on a broad, commercial basis. I must, however, make it quite clear that it is not a question of the Department giving credits or providing money in any form. They simply give guarantees of payment. These guarantees are given with the consent of the Treasury and after consultation with an Advisory Council, which consists of eminent bankers and business men and representatives of organised labour. Guarantees are only given in cases where the Council considers that a guarantee can be offered as a reasonable commercial risk.
  The guarantees are divided into short-term credit contracts, which mainly cover consumer goods and raw materials, and medium-term contracts, which are directed towards capital goods and where the terms are different in each case and, generally speaking, longer than in the

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  case of consumer goods. In the majority of cases in this second category, the buyer is a public authority. In both cases, the risks covered include such matters as the insolvency of the buyer, difficulties over the transfer of sterling, the risk of war or civil disturbance and a number of other contigencies. Under the 1949 Act, the limit of liability of the Board of Trade for the commercial guarantees was fixed at £500 million.
  The second group consists of special guarantees given, again, with the consent of the Treasury under Section 2 of the 1949 Act, for specific transactions which are considered to be desirable in the national interest. They are not necessarily acceptable as reasonable commercial risks, and consultation with the Advisory Council is not required. These guarantees cover a wide number of projects, such as certain aspects of the dollar drive and such things as the export of herring to Poland and many other projects.
  In the case of North America, there are all sorts of new schemes which have been devised, including policies covering losses involved by market research, advertising or other forms of promotional activity. Special guarantees also include trade with the Iron Curtain countries amounting to £13,240,000 on 31st December last. They also included recently £10 million for the sale of buses to Cuba, to provide transport for the city of Havana, as the right hon. Gentleman the Member for Rochester and Chatham (Mr. Bottomley) knows very well. The liability of the Board in the case of the special guarantees is at present limited to £100 million.
  It is the object of the present Bill to increase the limits for the commercial guarantees and the special guarantees to £750 and £150 million respectively. It has always been the practice of the Export Credits Guarantee Department in administering its policy to seek increased limits as and when they are needed, rather than to obtain from Parliament sanction for powers which would be sufficient for all contingencies and circumstances for a long time ahead.
  When the limits were last raised in 1949, I doubt whether anyone expected that the Government would be obliged to ask for a further large increase quite
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  as soon as this. At the same time, I hope to be able to make it clear to the House this evening that, if the Export Credits Guarantees Department is to have the flexibility to operate which it requires, these increased limits of liability are necessary.
  I shall first take the commercial guarantees. The volume of business under this heading has been constantly expanding since before the war. The average annual value of policies for the three years before the war was £43 million. By the year 1945–46, the value of policies issued had reached £71,800,000. This figure again rose each year until, for the year 1950–51, the total volume of business was valued at£511,200,000. The value of policies issued for the nine months up to the 31st December. 1951, amounted to£470,600,000.
  I should explain that, broadly speaking, guarantees given by the Department cover a percentage only of the loss which an exporter may incur. The percentage in the case of individual guarantees is a high one, up to 85 per cent. in cases of the buyer's insolvency and 90 per cent. for other risks. On this basis, the total value of the Department's commercial liabilities was fixed in 1939 at£75 million. In 1945, it was raised to£200 million, and in 1948 to£300 million.
  In 1949, when the right hon. Gentleman the Member for Huyton asked the House to agree to raise the figure from £300 million to£500 million, the maximum liability outstanding at the end of the previous year was £224,500,000. The right hon. Gentleman said that, in seeking this increase, he was asking the House to agree to make provision for further increases in business.
  These increases have now occurred, with the result that, by October last year, the maximum liability of the Department in respect of these commercial guarantees had reached the figure of£415 million. The House will realise that, at this point, officials of the Department were inevitably becoming nervous about the possibility that they might be faced with the necessity of turning down business as a result of the present statutory limit of liability.
  At the end of December, 1951, the latest date for which figures are available, the liability in respect of guarantees given and

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  offered under Section 1 of the 1949 Act had fallen to £387 million. This fall, however, must be regarded as fortuitous and to some extent seasonal, and it must be assumed that the figure will rise again sharply. It is possible that the extra £250 mill ion now in question may not be required in the immediate future, but it would be dangerous to assume this in view of current high prices and an increasing number of applications at this particularly difficult time.
  Mr. Harold Wilson: I did not catch the exact figure of the fall under the Section 1 guarantees. Will the hon. Gentleman now repeat the figures?
  Mr. Hopkinson: Over a period of years?
  Mr. Wilson: No. When the hon. Gentleman said there was a fall, which he said might be temporary or fortuitous, what was the date to which he referred?
  Mr. Hopkinson: The fall was from a figure of £415 million in October last to £387 million at the end of December.
  I now turn to the position regarding the special guarantees, which is a matter of real urgency. These guarantees, as I have explained, refer to transactions which are undertaken as a matter of public policy. The House will realise that, in regard to certain of these guarantees, the risks are far heavier in relation to the premium receipts than in the case of the commercial guarantees, and claims, when they arise, may be substantial.
  Special guarantees given under Section 2 of the 1949 Act are also generally of long duration, and most of them have not been running long enough for a sound judgment to be formed of claims experienced. In the year 1949–50, the volume of business was £1,600,000. By the following year, it had risen to £45,200,000, and for the nine months to 31st December, 1951, it amounted to £55,800,000.
  As regards the liability of the Department for the special guarantees, the figure at the end of December, 1951, stood at £63 million. In October, it had been as high as £70 million, and I understand that, at that time, there was a question of a guarantee of £15 million which, in fact, did not materialise, but which would
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  have brought the figure up very close to the maximum limit. Having regard to the nature of this type of business, notably the size of the transactions and the short notice at which demand for facilities may arise, this figure was regarded by the Department as dangerously high in relation to the total statutory liability of£100 million.
  There is another point, which is that credits under this Section do not revolve as quickly as those under Section I, and each has a cumulative effect. Once the balance available is near exhaustion, as might happen at any time now, credit proposals of real urgency and of national importance might have to be abandoned, or, alternatively, the Government might have to come to Parliament for emergency legislation.
  It is in the light of these facts which I have described that the Government consider that it is prudent to ask the House to agree to raise the maximum liability in the case of commercial guarantees from£500 million to£750 million, and in the case of the special guarantees from£100 million to£150 million.
  The reasons for the increase in business which has rendered this action necessary are not far to seek. It is partly due to the rise in prices and partly to the success of our export drive, or perhaps I should more properly describe it as a combination of both. The total value of United Kingdom exports rose from £2,171 million in 1950 to £2,580 million in 1951, an increase of 19 per cent. Moreover, the United Kingdom export prices also rose quite sharply during the past year.
  Average export prices during the year were nearly 20 per cent. above the 1950 average. We must expect this trend to continue during 1952, and it is quite possible that the 1952 average export prices will be nearly 30 per cent. above the 1950 average. The volume of United Kingdom exports in 1951 was some 3 per cent. greater than in 1950, and, given the Government's determination to increase the resources devoted to production for export, there is no reason to suppose that there will be a reduction in export volume. On the contrary, we must devoutly hope that there will be a further increase in volume.
  In the engineering field, all the Government's policies are now directed to increasing the proportion of total output

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  devoted to the export trade, and therefore we must expect that capital goods and machinery will form an even larger proportion of total export earnings than in 1951. This will inevitably have a substantial influence on the Export Credits Guarantee Department's medium-term operation.
  This fact, coupled with the expected increase in export prices, makes it clear that the conditions governing the flow of our export trade will almost certainly be such as to require a very substantial increase in the use of the facilities offered by the Export Credits Guarantee Department.
  Her Majesty's Government are satisfied that in the circumstances the proposed increases to a limit of£750 million for commercial guarantees and £150 million for special guarantees, which I have explained and which includes the dollar export drive, are not too high. I must, however, say that the increases which we expect to occur in the business of the Department cannot be solely attributed to higher prices of exports or to the initiative and performance of our exporters. Part of the credit—for it is a matter of very great credit—must go to the officials of the Department itself.
  Generally speaking, the history of the Export Credits Guarantee Department is a success story. Since the Department became independent in 1930, its staff has increased from 79 to 580. The amount of business transacted, however, has increased at least 50 times. I feel certain that hon. Members opposite who speak in this debate this evening will be tempted to describe the success of the Department in building up this large and prosperous business as a perfect example of what a publicly-owned enterprise, and indeed an actual Government Department, can do in the commercial field. We on our side of the House would argue no less vigorously that the Departments success lies largely in the fact that in its 22 years of independent existence it has deliberately based its operations on the methods of operation of private enterprise in its most modern and efficient form.
  This policy has been encouraged by successive Secretaries for Overseas Trade of all parties. They have all given this Department their warm support. From its earliest days its headquarters have
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  been in the City of London where the officers are in daily contact with bankers, brokers and merchants. In addition, there are six district offices and six branch offices from which the operations of the staff completely cover the British Isles. These people in the branches particularly are responsible for selling insurance like any other insurance agent, and providing a constant service to policy holders.
  To further the export drive and to consolidate its resources, the Department must increase its spread of risk, its gross income and its service to exporters. It must satisfy its existing clientele, and at the same time it must make sure that no export effort fails because its legitimate services are not exploited by potential new policy holders.
  I feel that the whole House would wish me to take this opportunity of paying a tribute today to the success of members of the Department from the highest to the lowest in achieving these aims. The Department's commercial success may be measured by the fact that not only has it succeeded in affording this remarkable assistance to the British export trade; it has also been a source of revenue to the Treasury.
  Since April, 1930, until the present time it has made a contribution to the Exchequer of no less than £7,387,568. This in the case of the normal insurance company would be regarded as part of its reserves against future contingencies, but under the system operated here it goes into what is known as a "notional reserve" in the Treasury, and the Department has never had access to it again, and probably never will. This figure covers payments on claims as well as the administrative expenses of the Department.
  The House may be interested to know that since 1930 the gross payments on claims have amounted to £9,400,000. Of that, £5,800,000 has actually been recovered, leaving £3,600,000 outstanding. A part of this has been written off as irrecoverable, but it is quite possible that at least a part of that sum of £3,600,000 will be recovered and will go to swell the notional reserve in the Treasury.
  There is one final aspect of the Department's work to which I wish to refer. A good export is an export paid for. It

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  is almost a platitude to say that our whole future depends upon the development of our export trade. But it is not enough merely to register an increase in physical exports listed in the Trade and Navigation Returns. What you have to do is to get your money.
  In this connection, the Export Credits Guarantee Department make two important contributions. In the first place, their assessment of the credit risk involved does in many cases make the difference between a good and a bad export. In the second place, it is the duty of the Department to follow up particular transactions for which they have given guarantees so as to assist exporters in obtaining the ultimate cash recovery, even though in some cases the immediate payment has been frustrated. The Department has special facilities for dealing with this type of work which it carries on in close consultation with our commercial diplomatic officers abroad and our trade commissioners in the Commonwealth which undoubtedly results in recoveries being made which would otherwise be lost.
  After this explanation of the operations of the Export Credits Guarantee Department and of the possibility, and, I would say, the necessity, of its extending its activities, I hope the House will feel able to give a Second Reading to this Bill today. If there are any questions on which hon. Members require further information, my right hon. Friend who will be speaking later in the debate will be glad to answer them.
  I hope, however, that I have succeeded in convincing the House that the Department is doing valuable work which is increasing in importance, and which is, indeed, becoming of overwhelming importance at this particular time. Its success over a very long period is something of which all parties and, indeed, the whole nation can feel proud, and I hope that the confidence which the Department has earned may be rewarded by the extension of its financial powers and scope which I am asking the House to accept tonight.
  8.10 p.m.
  Mr. A. G. Bottomley: Upon the subject matter of the Bill I think there will be unanimity, but upon the comments made by the Secretary for Overseas Trade I am sure there will be some differing opinions from
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  this side. My hon. Friend the Member for Hamilton (Mr. T. Fraser) earlier today talked about educating the Conservative Party. This is part of that process.
  The Secretary for Overseas Trade said that the State entered this insurance business after the First World War. It is in the midst of war that the Conservative Party generally thinks of putting the national interest first. In the First World War, bearing in mind that we had to reestablish our overseas trade, a Measure was introduced and the Export Credits Guarantee Department was established. It carried on smoothly for a time, but it was not long before the Conservative Party were out to destroy that newly-created organisation and it was necessary for the Labour Government to be elected before it was possible for the Department to be put on a sound and reliable basis. In 1930 a Committee was established and as a result the Export Credits Guarantee Department carried on the work it was originally set up to do.
  One of the ways in which the Department does its work is by the aid of an Advisory Council, a body of men who have done a very good job. In the days of a Conservative Government the Advisory Council was made up of nine financiers and one manufacturer. Things are different today. There are not so many financiers on the Council, but there is an exporter and a trade unionist. I think it will be agreed that that has given the Council a broader view and some of the success of which we have heard tonight has resulted from that change in the membership of the Advisory Council which has given better service than was given by the earlier body. I should like to say to the Advisory Council that they have done a good job and we appreciate it.
  As the Secretary for Overseas Trade said, the Export Guarantees Act was consolidated and we raised the amount of money available in order that credit should be given. Since then, as the hon. Gentleman rightly said, there have been many other additions, such as special arrangements for boosting the dollar export drive, which was so necessary, the holding of stocks and the provision whereby overseas subsidiary companies are able to obtain credit insurance, too. All this has been very useful and worth while.

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  The Secretary for Overseas Trade said that the value of exports has gone up by so much and that the volume had also risen but that he was not able to give the figures of volume. If it is possible for the President of the Board of Trade, when he comes to reply, not only to give the value but also some idea of the volume we shall be in a better position to judge whether the amounts asked for tonight are those that can be reasonably sought at this time.
  I should like to join with the Secretary for Overseas Trade in congratulating the staff of the Export Credits Guarantee Department. They have done a very good job. I should like to know from the President of the Board of Trade whether the Government economy drive will affect the Export Credits Guarantee Department in any way. I struggled a long time ago to obtain and increase the staff and eventually secured it. I hope the Department will keep that increased staff, because it is by having a high standard of service from those employed that the work can be carried on. Any interference with the staff might result in Government economies on the export drive and that would be most undesirable.
  I should like to know how the export drive generally is being covered by credit facilities. I do not know how successful the dollar drive has been and what proportion of credit it takes. I should like to know what has happened in Asia and Europe and how the Commonwealth countries are affected. We should like to know how the credit facilities are operated in different parts of the world. That knowledge would be useful for some of us in doing all we can to help along the work of the Department.
  I understood that when the Secretary for Overseas Trade said that the money had gone in the past to the Treasury the President of the Board of Trade said, "Never again." Is this a new policy? If so we should like to know something about it; perhaps the President can give us more information.
  The Export Credits Guarantee Department helps our traders to do overseas work, to export and to enable this country to secure a viable economy. The
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  resources and craftsmanship of our industry merit that, but the oil is provided by the Department in the form of credit facilities. It is most essential that the export trade should be maintained at the highest level. This Department helps to do that. It is the best compliment that can be paid, and again a very strong reason why the Conservatives should take more notice than they do of the Labour Government that here are a body of civil servants doing a thoroughly commercial and technical work with great success. We on this side of the House will do all we can to foster that work and help its development.
  8.16 p.m.
  Mr. Edwin Leather: I should like to make three points, very briefly. As it is the custom of the House when we discuss these Export Guarantees Bills—the third with which I have been concerned—to declare one's interest, I must tell the House that last year I said I was one of the Department's customers. Today I am far and away its biggest customer, and I have had the pleasure of negotiating with it on matters involving millions of pounds.
  First, in reply to the right hon. Member for Rochester and Chatham (Mr. Bottomley) the development of this Department had nothing to do at any time with any political party. To endeavour to take credit to his friends for its development was a great deal less than generous and somewhat unusual for him. The most notable of the people responsible were the present Comptroller-General and his predecessor, Sir Frank Nixon. It will be a great pity if it went out of this House that any group of politicians was endeavouring to steal the credit.
  Mr. Bottomley: I gave praise to the work of the Civil Service, but what I said was that the policy as a result of which they carried out that work was decided ultimately by the Labour Government.
  Mr. Leather: It was, of course, decided by the Government in power, but only after the greatest pressure had been brought to bear upon them by the two gentlemen I have named.
  Mr. H. Wilson: I am sure the hon. Member would wish to be fair to the successive Comptrollers-General. I am sure he would wish to list the

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  Comptrollers-General who preceded the present Comptroller-General. I am sure he did not intentionally wish to miss them out.
  Mr. Leather: I am much obliged to the right hon. Gentleman for that intervention. I want to be fair to them all.
  This Bill gives an opportunity of a general review. I probably deal with the Department a good deal more than the Minister does or his predecessor did and I am always glad to pay my tribute to the staff. I know them all personally and we know what we think of each other. They are going through a very difficult time and would ask the Minister to take a careful note of that fact. In the course of the last year or two they have become so overloaded for domestic reasons that there are dreadful delays in getting decision from the Department. It has been said rightly that the Department is a successful Department because it operates on a commercial basis.
  The Secretary for Overseas Trade has given a very clear illustration of how the Department works and of the job it does to help the export drive, but when an exporter has an offer it is most important that he should be able to give a decision. Somebody sends an order from Bombay or an agent arrives from New York and wants to place an order. It is absolutely no good whatever if we have to wait five, six or even seven weeks to hear whether or not we can do it.
  I have here detailed figures if my hon. Friend would like to see them. I do not intend to burden the House with them. They concern technical matters. But the average time for getting decisions is over four weeks and for getting approval for particular credit limits—a technical matter of great importance—it is running from two to three and even four weeks. This does very real harm. I believe that one of the reasons is because of the shortage of staff, and in case anybody on the other side of the House should hasten to make capital out of a Conservative argument for more civil servants, may I say that that is precisely what I am doing, because this is a commercial Department and not an ordinary Government Department.
  It is quite unlike all other Government Departments. This particular Department operates as a commercial
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  concern. [Interruption.] Hon. Members opposite have very little experience of commerce and perhaps they do not understand. This Department does operate as a commercial concern, and whatever extra staff it has it will not cost the taxpayer anything. On the contrary, it will earn more money for the Government and give a greater service to the taxpayer. I hope that the Minister will very seriously consider this question of the shortage of staff and also the question of delays.
  There is one further point which I had not intended to raise, but which I think comes up in view of some of the very interesting figures which my hon. Friend gave the House. He noted the volume of business which has been turned over in the last 10, 15 and 20 years. He also noted the amount of claims paid and the amount of recoveries from the claims. In other words, one gets a comparison of the net loss of this Department, compared with the turnover from which I, knowing something of that turnover, can make a fairly quick calculation of the premium earned. I would say that it indicates that the rates are far too high.
  This is a point which I have frequently argued with the Civil Service. They say that in relation to the liabilities on their books the rates are not too high; that, if anything, they are too low. But insurance is a commercial proposition and the loss ratio in any insurance should bear some reasonable relationship to the volume of business done; and when the loss ratio is about 5 per cent. far too much money is being made.
  These figures—which I had not heard before and about which I did not know—indicate to me, as an insurance man, that there is a real argument for reviewing these rates, not only as the Civil Service must do in relation to the liabilities on their books but, over a 30-year spread, in relation to the profit margin during that time, because it is fair to say that the more we can get the rates down the more business will be done and the more service this Department can give, as it has done in the past, to exporters in this country.
  8.25 p.m.
  Mr. Harold Wilson: The hon. Member for Somerset, North (Mr. Leather), with his customary vigour, has this time turned the usual Conservative

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  argument right over on to its head. The thing we usually hear from the Conservative Party is that the Civil Service are all right doing a job such as that of the Prison Commissioners and the usual things which they allow Government Departments to exist for, but that when one gets the Civil Service running a commercial department they cannot do it efficiently—that is a job only done by private enterprise. But the hon. Member now says that it is only when one gets the Civil Service running a commercial department that they can do an efficient job—
  Mr. Leather: I did not say that.
  Mr. Wilson: And the other Government Departments are—
  Mr. Leather: I did not say that.
  Mr. Wilson: If I misrepresented the hon. Member, I apologise.
  Mr. Leather: The right hon. Gentleman did.
  Mr. Wilson: I do not intend to spend much time on the speech of the hon. Gentleman, because I hope to hear a little more about the Bill—what the Bill is for and whether it is necessary. I must say that it gives me very great pleasure to support my right hon. Friend the Member for Rochester and Chatham (Mr. Bottomley) in expressing a welcome to this Bill. I was at the Board of Trade for four years in both the capacities represented on the Front Bench opposite, and I saw a good deal of the Export Credits Guarantee Department.
  As the hon. Gentleman said, it has been the desire of both parties in this House to further the work of that Department, and we have had successive Acts, of which the Overseas Trade Act, 1929, was quite a remarkable Act in its way. Then there was the Export Guarantees Act, 1937, the Export Guarantees Act, 1939, the Overseas Trade Guarantees Act, 1939, and the Export Guarantees Acts, 1945, 1948, 1949 and, of course, the latest Act of 1951, which confirmed and extended certain of the powers of the Department.
  I think that the success of the Department has been shown by the tremendous growth in the volume of business transacted by it. The hon. Gentleman
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  gave some figures but I do not think he gave them all. Before the war this Department was handling business to the tune of about £61 million. In 1941–42—the war years—that had risen to £108 million; in 1947–48 it was £186 million; in 1948–49 it was £280 million; in 1949–50, £362 million, and last year, 1950–51, it was £466 million. This is a tremendous development in the work of this Department.
  There is no doubt—and the hon. Gentleman is quite right in saying this—that it has played a very large part in the development of our post-war export trade. The Secretary for Overseas Trade gave the figures of exports in 1951 and showed how much they had increased compared with 1950. There was an increase of £500 million. I could not help thinking, when he gave those figures, of the broadcast of the Prime Minister on 11th February, 1950, at the time of the Election, when he said that our native enterprise, contrivance and genius was paralysed by a Socialist Government. Yet we saw under a Socialist Government the tremendous increase in export figures referred to by the hon. Gentleman.
  Mr. Leather: Despite it.
  Mr. Wilson: I will not enter into a discussion of a doctrinaire nature with the hon. Member for Somerset, North, but it was because of and not despite the work of the Export Credits Guarantee Department that this great success was achieved. One reason the volume of business done by this Department has risen so much in post-war years is that post-war trade has been so much more risky all over the world and there has been far more risk to insure against. The Export Credits Guarantee Department have not merely provided their traditional service for dealing with those risks, but they have expanded their service as the risks became greater and more widespread.
  Though the hon. Gentleman said little about this—and I hope the President of the Board of Trade is going to say more about it—I think the interesting development is the support given by the Department to third-country trade, that is, export merchants based on this country trading between second and third countries abroad, and—something which was dealt with in the last Bill before the House—

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  the development of trade through subsidiary companies operating in this country.
  I am sure the whole House will join the Minister and my right hon. Friend the Member for Rochester and Chatham in paying credit to the staff of the Export Credits Guarantee Department and especially to the Comptroller General, Mr. Somerville Smith. I think it is right to say that all the staff of this Department —and this is equally true of their regional offices, which are a very important development—are a complete denial of the usual Tory Press cartoons of the Civil Service. They are enterprising, business-like, commercial-minded, and not at all like the cartoons one sees in the "Daily Mail" and other newspapers favoured by hon. Gentlemen opposite. I have never met civil servants like those. One only sees them on the benches opposite. As my right hon. Friend has said, it is the success of public co-operation, carrying out a job of public enterprise in a field in which private enterprise has not dared to tread.
  The Department has not only done that, but it has consistently covered its costs, taken more and more risks over a period of time and yet has provided something in the nature of a profit for the taxpayer. It has given good service. I think the hon. Member for Somerset, North, is almost alone in his complaint of excessive premiums. I have heard quite the reverse from many business men all over the country, and certainly in the matter of dollar exports, about which I wish the Secretary for Overseas Trade had told us a little more, they have been extremely enterprising and have taken far more risks than many firms in private enterprise who are supposed to be venturing into the dollar markets.
  Mr. Leather: I am sure the right hon. Gentleman appreciates that I speak with some knowledge in that I deal with several hundred exporters, and I speak not just for myself but for many others. I can assure him that my remarks about the premiums are quite justified.
  Mr. Wilson: I am well aware of the hon. Gentleman's activities and the particular form of insurance work which he carries on. It is perhaps significant that he, one of the largest private enterprise operators in this field, has to underwrite
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  himself with the Export Credits Guarantee Department, even at this high premium about which he complains.
  In the export drive of 1949, 1950 and 1951, obviously the thing on which this country had to concentrate above all was dollar exports, and one of the biggest tests which we could apply to the Department is—how did it co-operate in the field of dollar exports? The Department itself thought up one or two extremely enterprising ideas for giving aids to exporters. The Board of Trade suggested one or two ideas to that Department. I myself produced one or two ideas which I thought were extremely risky and venturesome to see what the Export Credits Guarantee Department thought of them, and the Department took them up, worked them out and put them into effect.
  There have been facilities to finance, or to guarantee against the risks involved in, building up stocks in dollar markets; market research—referred to by the hon. Gentleman; even the financing of risks in connection with sales and advertising campaigns, which is a very risky development, as I think the hon. Member for Somerset, North, would agree; and in special cases assistance with tenders and insurances in respect of tenders for public works contracts abroad.
  I will admit to the House quite frankly that I expected there would be losses on this kind of activity by the Export Credits Guarantee Department. I thought that at best they would be able to make up those losses from profits made on other sides of their business. I was quite prepared, if necessary, to come to the House for a vote of money to cover those losses, because this export trade was so important. What happened in fact was this—and I may not be quite up-to-date with this, and I hope the President of the Board of Trade will bring the House upto-date—that the Department has rendered most valuable service in the dollar market and has not involved itself in losses in its business with the dollar market. If that is so, I think it is a tremendous tribute to the work of the Department.
  What we did not get from the Secretary for Overseas Trade was some statement of what the policy is to be for the future, especially with regard to the dollar export trade. Is it still the policy that

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  the Export Credits Guarantee Department should provide this special form of assistance for dollar exporters? Are they still being as successful as they were? Will the President tell us how many dollar exporters there are now registered with the Export Credits Guarantee Department and enjoying these special facilities, and how they are getting on?
  There was a rather disturbing letter in "The Times" this morning from a prominent business man who referred to his experience in the United States market. He said:
  "The United States exports heavily to the rest of the world but has surrounded herself by high tariff walls."
  We all know that that is so.
  "She requires to import only a few commodities like rubber and tin, and a few luxuries. A company, of which I am chairman, has established its own selling organisation in the United States for the sale of British textiles. But we are closing this down as we find that the expense of building up one's own sales organisation is not justified by the results, for the slightest trade recession cuts off foreign imports into the United States."
  That was a very determined letter to be in "The Times." I do not know whether the firm in question were aided by the Export Credits Guarantee Department, and it would be wrong of me to ask the President to tell us, because it is not right for the House to be told details of the transactions of individual companies with the Department; but I think the right hon. Gentleman should tell us whether that kind of letter is symptomatic of what is going on in the dollar market today. Is it general? Are firms which established themselves in 1949 and 1950—in some cases not without a good deal of pressure—now closing down their sales organisation and deciding that the dollar export market is too risky a market in which to stay?
  Perhaps the right hon. Gentleman will tell us how many organisations which have been specially aided by the Department have had to close down their activities, perhaps in the past few months. I am sure he will tell us that the Board of Trade are giving both help and advice to dollar exporters and especially to new dollar exporters, and, in particular, encouraging people to get away from the New York beachhead and to get to New Orleans and the Middle West and the
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  Far West, and so on. I have no doubt that he will be able to tell us that the Export Credits Guarantee Department is in a position to help with developments in those parts of the United States as well as in New York and in the principal selling areas in Canada.
  I hope the President will not fail to tell us what progress is being made with the third country trade and trade with subsidiaries to which I referred earlier, because these are forms of trade which are very important to this country. I think the last two Bills before the House enabled the Department to give some very valuable help to that kind of trade.
  There is one point which I am sure the hon. Member for Somerset, North, has come across many times in the course of his work. It is often said that the Department is unable or unwilling—that is often the suggestion—to make longer-term credits available for trade covering some little period ahead. It is pointed out by our exporters, and quite fairly pointed out, that other countries provide longer-term credit than is possible, for instance, with E.C.G.D.
  I am not suggesting that E.C.G.D. would ever be in a position to compete with the American Export-Import Bank and offer a 15 to 20 years' credit for trade with South America. It is important, however, that there should be elasticity in individual cases. There have been such cases. I remember a year or two ago when it was important to get a development of trade in equipment with South America, which would involve a considerable amount of replacement and spares. That is a kind of trade which it is desirable to press and in which it is necessary to have some of these special credit arrangements.
  Medium-term credits are obviously of importance, especially in trade with the Middle East. It is perhaps right that I should mention to the House that I brought such a problem to the attention of the Department some time ago. In the development of trade with Israel, I think we shall need a good deal more extension of the period of credit available to British exporters through the Export Credits Guarantee Department. There are other European countries, no better off financially than the United Kingdom, which are making credits for one year and two years for shipments to Israel and

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  to certain other Middle Eastern countries—particularly shipments required for the development of those Middle Eastern countries, for constructional work and so on.
  Obviously, everyone who knows anything about Israel appreciates that the biggest problem they have at the present time is their housing problem. It is common knowledge in this respect that there are firms in this country which have developed techniques of prefabrication which could give tremendous help in developing housing in Israel with no loss at all to the housing programme in Britain. I am thinking of some of the firms dealing in concrete which could provide the "know-how" to Israel and could also provide some of the equipment without any loss to our own housing programme. It is most desirable that this should be done.
  In saying this about the Department, I am making no reflection whatever on the Department. Anyone who has had anything to do with them knows perfectly well that they are allowed no elasticity in this matter whatsoever. They are completely regulated by the Treasury. I hope the President will be prepared to fight the Treasury on this time and time again, for it is important. I hope he will be prepared to put up a fight for British trade and industry sometimes against the Treasury, whose interests are a little restricted and whose ideas, too, about this sort of thing are a little restricted.
  I hope that more facilities will be given to the Export Credits Guarantee Department to provide rather longer-term credits in appropriate cases. I know that the country is not in a position to go in for any large overseas investment or any credits over a long period of time, but I mentioned the case of Israel just now, and Israel has obviously got a very great future in its industrial development and trade development, and it is right from every point of view—the political and diplomatic points of view, and from every other point of view, and not least from the point of view of the trade of this country—that this country should be closely integrated with Israel's great development, and we should not throw away this great opportunity because of the credit policy dominated by the Treasury's conception of what Wordsworth called
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  "The love of nicely calculated less or more."
  This Bill increases the limit to £750 million. We shall all welcome this fact. We shall all welcome it if the President comes back to the House—if he does: I do not think he ever will, though I am not referring to his expectation of political life, but to certain other considerations, so that I do not think that he will so come back—to ask for an extension of this figure of £750 million; but if anyone does come back to ask for it, we shall welcome that extension.
  The reason we shall not see anyone come to ask for that in the near future is the doubt whether they will need this £750 million. In the first place, are exports going to go on increasing at the same rate as they have been increasing over the last two or three years? I know that the January figures were good. No doubt they sent the President home to bed happy the night he announced them, but it will not be long before he finds that there are seasonal variations and that usually January is a very good month. But we are, of course, facing greater difficulties in the export trade. Hon. Gentlemen opposite and on this side who are closely in touch with British industry know what difficulties we are facing now in the export trade.
  The post-war development of exports, and the figures quoted by my hon. Friend, have been dependent as to about 50 per cent. on engineering exports. Can the President tell us whether he thinks that engineering exports will or will not continue? That has a direct bearing on the need for this Bill. I saw in the "Manchester Guardian's Commercial Review" one of the best reviews I have seen of the new industrial situation, and it said:
  "It would be useful to be able to say whether business opinion as a whole, believes that British engineering exports can be maintained in 1952. We cannot draw any honest conclusion. In our own inquiries the majority of answers was undoubtedly against the maintenance of such exports. A number of firms expect defence contracts to divert some part of their output from exports. In some cases this has already happened. Others fear that raw material or labour shortages will reduce output, or at least prevent any growth."
  It stated lower down that a minority considered that engineering exports will increase, but it went on to say:
  "It is useless to hope that re-armament will not interfere with exports."

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  One firm was quoted as having said:
  "The Ministry of Supply frowns on our exports."
  I hope that the right hon. Gentleman will wipe that frown off the face of the Minister of Supply and get all Departments to encourage engineering exports even if it may mean some interference with the re-armament programme, about which he made eloquent speeches in the country not very long ago.
  It will be interesting to know whether the right hon. Gentleman expects engineering exports in 1952 to increase markedly above the 1951 level, because by this time he must have given up much hope of a big increase in textiles, clothing, and other consumer goods. There is a world slump in those commodities, and if engineering exports are to be limited he has really got to make a second speech to make a case for this Bill and to make a case for the extension up to £750 million.
  My right hon. Friend asked for a little more information about the facilities being provided for trade to individual markets or groups of markets. I think that is important, and I think it is a deficiency on our part not to have asked more. We ought to have more information, and have it broken up by groups of countries, about the work done by the Department. It would be interesting to know how much is going to South America, the Middle East, the Commonwealth, and so on.
  One of the things that disturbs many of my hon. Friends as regards this Bill is the use that is to be made of the Department in financing trade to Eastern Europe. When I moved the Second Reading of the previous Measure on 2nd February, 1949, I said:
  "I know that those who have experience or knowledge of trade with Eastern Europe at present realise how valuable the Export Credits Guarantee Department has been, and how much more valuable it might be under this new Bill, in helping trade with that part of the world."—[OFFICIAL REPORT, 2nd February, 1949; Vol. 460, c. 1688.]
  I mentioned capital goods to Eastern Europe at that time. It would be interesting to know what assumptions the right hon. Gentleman is making about the exports to Eastern Europe in 1952. It is a problem of capital goods
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  and of the strategic controls which were put on, and for which I take my share of responsibility, though I still say that it is wrong and would be wrong to aid the shipping of munitions equipment. I say that, in the present state of world affairs.
  But I hope the right hon. Gentleman will look at this from the trading point of view of this country and not the international political point of view. I suggest to him that the time has now come for a thorough, expert, practical review of the controlled list of shipments to Eastern Europe. I think he ought to look, for instance, to shipments of rubber, because this is at the present time restricted by certain controls. It is really very hysterical to say that, because this might be used strategically, we ought not to let them have it, since in return for it we are getting timber which is going into our strategic reserves.
  The Government made a Supplementary Estimate which had the purpose of putting Russian timber into our strategic reserves. The Russians are sending us strategic material, and really some of the controls that we have on shipments at the present time are very pedantic indeed, and at this time, when our dollar problems are so greatly affected by the demand for rubber and by the price of rubber, obviously to open up a new market for rubber at this time would not only be useful in itself but would help to put up the price of rubber and to increase the dollar earnings of the sterling area.
  We have had—and the Board of Trade have always been very closely identified with this—during the past two or three years about 350,000 standards of timber from Russia coming into this country—the equivalent of about 250,000 houses. In 1948–50, in three years, we have had £38 million worth of feedingstuffs from them —about one-third of all the feedingstuffs coming to this country—and hon. Members who earlier today were debating agriculture know how important that is. That was in 1948–50, and there has since been about another £20 million worth. That is a total of about £60 million worth of grain from Eastern Europe. If the right hon. Gentleman would divert his attention—when the Chancellor will let him—from some of the irrelevant Measures which are to be introduced, and which it

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  would be out of order to discuss tonight, and pay more attention to the prospect of trade with these countries and other parts of the world, he would be doing far more for the industrial and economic recovery of Britain.
  I hope that he will tell us something of the guarantees required for commodity trading, particularly between third countries. There is the question of Hong Kong —obviously an important centre for the activities of the Export Credits Guarantee Department. I hope that the right hon. Gentleman will tell us tonight that his influence is such that all these paralysing restrictions on Hong Kong trade are to be removed. He has had plenty of time to get down to that by now, and I hope he will make that announcement tonight.
  Recently "The Economist" carried a very disturbing article on the Hong Kong trading situation, which I am sure he has read, showing a decline in the quantity of their trade of 30 per cent. over the past year, and a decline in their trade with China of 80 per cent. over the past year. I commend to the right hon. Gentleman some of the things "The Economist" says about that, and about the very serious effect it is having upon the trade and prosperity of Hong Kong, the earnings of the sterling area—which are of great importance to this country at the present time—and also the growth of unemployment in Hong Kong because of these paralysing restrictions. "The Economist" says particularly:
  "There is acute mistrust in Hong Kong of Japan and growing fear that Japanese trade competition, encouraged by the United States, may deal a heavy blow to the Colony's interests.
  It is felt to be unfair that the Americans should strongly condemn British or other Allied interests suspected of trading with Communist areas; but if the Japanese do the same thing it is always considered a necessity, and even sometimes a virtue. Recently, for instance, $1 million worth of Japanese grey sheeting was sold to Communist China, and the deal was financed through Hong Kong."
  I do not know whether that deal was financed by the Export Credits Guarantee Department, but if it is financing trade of this kind with China it ought to be financing Hong Kong trade and not Japanese trade.
  The other thing which I hope the President of the Board of Trade will tell us is something about which I asked him in the last debate, when I was very disappointed not to get an answer—although
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  I am sure he intends to make that good tonight. What is he doing about shipments of rubber to China, because that is of direct importance to this Bill? If he says "No" to all these things, or that he does not know, then he is not making his case for this £750 million. If, on the other hand, he says there is to be some resumption of rubber shipments to China, then he is making a very good case for these facilities being voted to the Export Credits Guarantee Department.
  In the famous debate when the Prime Minister used those alarming words about following America at all cost, I was disturbed and concerned that my right hon. and learned Friend the Member for St. Helens (Sir H. Shawcross) should have announced a policy of cutting off supplies of rubber to China until the end of 1951. We are now past the end of 1951 and into 1952, and as far as I know there has been no statement from the Government about whether rubber shipments are to be resumed. If we are not told that rubber shipments are to be resumed, even on a restricted scale, they are in effect announcing a change in policy, because the policy was a stoppage until the end of 1951. If shipments are not to be resumed in 1952 there is a change in policy, and the right hon. Gentleman ought to come to the House and tell us about it.
  I have asked a number of questions, and I wish to leave sufficient time for the right hon. Gentleman to reply to them, as I am fully confident he will. I am not opposed to the Bill. I very much welcome it. However, I am not yet convinced that the right hon. Gentleman's policy is such that he will need the Bill. I am sure we should all like to be certain that he will alter his policy so that the money voted for the Department will be needed. All parties in the House have welcomed what the Department have done, and have complete confidence in those who run the Department. But I, for one, have not confidence that the Department and Britain's export trade will be allowed a clear run to do everything they are capable of in the export market.
  On the specific question of trading facilities of particular kinds with particular countries, and the granting of credits for a period of time, I hope that the Treasury will allow more elasticity,

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  both to the Board of Trade and the Export Credits Guarantee Department. The right hon. Gentleman used the phrase "operating with freedom and flexibility." He should make those words mean something, but to do so he will have a fight with the Treasury first, and I wish him luck. The Export Credits Guarantee Department know more about trade than the Treasury will ever know; they have a vast experience.
  It has been interesting in these postwar years that the commercial diplomatic service, of which the right hon. Gentleman has had experience, has been expanded, and has drawn on staff provided from the Export Credits Guarantee Department. There has been recently an ambassador, much admired by everyone in this House, who served his apprenticeship in the Export Credits Guarantee Department, and we all deplore his passing a few months ago.
  That fact has shown that the Foreign Office, at any rate, have recognised the great commercial knowledge and experience of the Export Credits Guarantee Department, and if only the Treasury will for once recognise that the Department—even if they will not recognise it in the case of the Board of Trade—know more about trade and industry than they do, then the export trade of the country will be given a freer hand. If that happens, then the £750 million which the House is being asked to approve will be an instrument in the hands of the Export Credits Guarantee Department of inestimable value to the trade and future of this country.
  8.56 p.m.
  Mr. William Shepherd: I am sure that the right hon. Gentleman the Member for Huyton (Mr. H. Wilson) has gone out of his way politically to make much heavier weather of many things than is really necessary. I do not believe for one moment that he thinks that the need for the increased figure for which my hon. Friend has asked depends upon whether we free to some extent our trade with the East and with Eastern Europe. I agree that all these problems are of great consequence to this country and to the whole world, and that they admit of far more than one point of view; but I am certain that he is running a political hare in this discussion.
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  My sole reason for rising tonight is to plead with the Board of Trade to do something for my part of the Manchester area. We are, as I think the House knows, a very substantial trading area and we have particular problems, especially those connected with the textile industry. We have tried for some time to get a representative on the Advisory Council but we have not so far succeeded. I hope that my right hon. Friend the President of the Board of Trade will take an early opportunity of getting a Manchester representative on the Council. The Council has become very important, and the Manchester area and the textile trade would be extremely gratified if this could be done.
  I approve wholeheartedly of the Bill. I doubt, as did the right hon. Member for Huyton, whether this total amount will ever be needed, but I do so, perhaps, for rather different reasons, and I hope that the Department will continue to give the service to trade which it has done in the past.
  8.58 p.m.
  Mr. I. Mikardo: I, too, should like to intervene briefly to give support to this Bill, which is designed to extend the activities of a nationalised enterprise which, in the first place, does a considerable service to private industry which it is either unwilling or unable to do for itself, and, in the second place, makes a handsome profit in the course of doing it.
  I do not understand how right hon. and hon. Gentlemen opposite who have today paid tribute, and well-justified tribute, to the helpful and profitable activities of the Department can reconcile what they have said now with all the things which they have said in public in the past, especially during the Election in October last, about nationalisation always resulting in losses. I heard a great deal about that, and about anything which is run by a Government Department being bound to be inefficient.
  I listened with great interest, during that hectic period, to many people now sitting upon the benches opposite discoursing upon industry, both public and private, and I confess that for so long and as carefully as I listened I did not hear anyone pay any tribute at all to the work and performance of the Export Credits Guarantee Department. They

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  seem to have discovered it for the first time.
  I am sure that the President of the Board of Trade knew of the existence of the Department before he brought this Bill along. I am sure he knew about it between 5th and 26th October last, but, though I read with great care reports of many of the orations he made, and even went to his constituency to get some first-hand account of what he was saying, I found no record whatever, in his speeches to the good people of Monmouthshire, of any tribute to the work of the Export Credits Guarantee Department. The right hon. Gentleman's interest seemed to be road transport and something of which I never really got the hang—analgesia.
  It is good to see the education of right hon. and hon. Gentlemen opposite proceeding at this fast pace. It will be a sheer delight, the next time some of them rant about the inefficiency of people in the public service, to quote some of the delightful and flowery language which they have used tonight. They will find that equally difficult to reconcile with whatever it is they keep in the place where other people keep a conscience.
  We always listen with great interest to the contributions by the hon. Member for Somerset, North (Mr. Leather), which are sometimes well-informed and always lively. His principal complaint against the department was that its premiums are fixed too high. One is entitled to ask two questions of anyone who takes that view. First, if the premiums are too high, how does it come about that the business which the Department has done has shown this enormous increase in almost geometric progression from year to year?
  Surely this is a matter in which the proof of the pudding is very much in the eating? If the premiums had been such as to injure the prospects of doing export trade—that is the only thing that can be meant by saying that they are too high—one would have expected the amount of insurance placed with the Department constantly to decrease; but, as we have heard, instead of doing that, it has increased very sharply.
  The hon. Member for Somerset, North, said that he was not alone in thinking that the premiums are too high and that many other people thought it. The hon. Member is not only an honourable but
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  also a very persuasive Gentleman, and I daresay that the opinions of the other exporters to whom he has referred have not been formed without some influence from the hon. Gentleman. If that is what is thought by these people, one is entitled to ask them: If the premiums charged by the Department are too high, how does it come about that other insurers do not cut into this highly valuable business? where is the law of supply and demand?
  Mr. J. R. Bevins: The hon. Member has put the question which the right hon. Gentleman the Member for Huyton (Mr. H. Wilson) also put: Why do not private insurers come into the market to compete with the Department? I should have thought the hon. Member would have known that the principal reason for that is that private insurance companies do not cover the same risks as are covered by the Department.
  Mr. Mikardo: Why not?
  Mr. Bevins: I will tell the hon. Member. One of the risks they do not cover is loss to traders as a result of war. I do not suppose that any hon. Member would suggest that war risk is a legitimate risk for private insurance to cover.
  Mr. Mikardo: I am deeply grateful to the hon. Member for making for me in advance the point I was about to make. I am glad to have his support. I am making precisely the same point, that here is a class of business which the private insurance companies were unwilling to take and are still unwilling to undertake.
  There is no law which limits the risks which private insurance companies should cover.
  Mr. Bevins rose—
  Mr. Mikardo: If the hon. Gentleman will wait a moment I will give way as much as he wants. I am enjoying his interventions.
  Insurance companies can cover anything they want. There is very little they are statutorily debarred from covering; indeed, in the past they have shown no reluctance to extend the type of risks which they would cover when they decided so to branch out. They went into one class of insurance, then into another and then into another. They

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  agreed on each extension at the moment when they decided the extension was profitable or had a lot of cream in it. There is nothing to prevent an insurance company insuring any man against his wife having triplets or against the Conservatives winning the next Election. That can be insured for about Is. 6d. per £100. I have never known the insurance companies to be very diffident about dipping into any gravy that was lying about.
  Mr. Bevins: I can clarify the hon. Member's mind by putting to him a simple question. Most of the insurance companies in this country are proprietary companies which are doing a wide range of insurance business. Would the hon. Member like the company which had a life assurance on his wife and was looking after his money to undertake war risks?
  Mr. Mikardo: The company which insures my wife does not ask my permission to undertake any new sort of insurance. The hon. Gentleman's question clarifies nothing, which, in advance, is what I feared.
  It really does not matter what the policy holder thinks about the scope of the activity of the insurance companies. It is the directors, the shareholders and the managers who decide upon this scope. I see that the hon. Gentleman does not controvert the statement that I made, that in the past insurance companies set out to cover one sort of risk and never hesitated to add fresh sorts of risks without considering the feelings of the policy holders, the policy holders' husbands or any other single factor other than the simple question of how much profit there was in the business. I do not blame them for it, and I do not make any criticism of it. The insurance companies were set up to insure and to make a profit, and they never launch out into any new venture if it is not profitable.
  I am quite sure that if they thought there was any undue amount of gravy in this business of E.C.G.D. they would have been in it first. If it were a fact, as the hon. Member for Somerset, North, has said, that E.C.G.D.—let us not mince words—were profiteering there would be a queue of prospective profiteers all the way from here to the head offices of every
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  insurance company. In fact, the absence of any competition in this difficult field indicates that the rates fixed by E.C.G.D must be about right.
  Here is this law of supply and demand, which hon. Gentlemen talk about as a classical feature of free competition. They argue that nobody would be able to exploit the community, because as soon as anyone began to demand more for his commercial services than they were worth, along would come some other person and offer the same commercial services for less money. No competitor has come along and offered the same services as E.C.G.D. for less money, so I am prepared to be sufficiently, if temporarily, an apostle of the doctrine of free competition in order to accept it as a fact from that premise that there cannot be any exploitation of the commercial community by the Department.
  I had not expected to dwell so long on that topic, Mr. Speaker, but, as you will have observed, I have been subjected to a certain amount of provocation, and of confusion which arose undoubtedly out of a well-motivated but somewhat ham-handed attempt to clarify the situation.
  Another point arises—it was raised by my right hon. Friend the Member for Huyton (Mr. H. Wilson)—about the desirability of encouraging, as far as possible with the help of E.C.G.D., exports to the Middle East, and particularly to Israel. I spent some time in the Middle East a year ago and I found almost everywhere there a passionate desire to buy British capital equipment. In some cases they wanted capital equipment which we could not have supplied, or would not have wanted to supply because it was of greater use in this country. In other cases they were willing and anxious to buy British capital equipment of types which British manufacturers are anxious to export, but they found themselves using equipment from Switzerland, Sweden, France and the United States of America.
  They were doing so unwillingly and would sooner have had the British equipment. They believed that in many cases they would have got more reliable equipment and, equally important when you are using capital assets in the shape of machinery from overseas, a more reliable spares service. Over and over again I went into a factory and found

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  equipment being used which was less suitable for the purpose than British makes, such as machine-tools and woodworking machinery. In one great plywood factory they were using American veneer cutters much less suitable than British cutters. I asked them why they had chosen the less suitable type of equipment. They replied, "We know it is less suitable and we are not very keen about using it. We have to run it below its proper speed for the job. We use it because we get some credit in respect of the American machines and none on the British machines."
  In fields like this, a single capital sale is valuable—I am sure that the Secretary for Overseas Trade appreciates this point —because it results in continuous spares sales. The machines I have mentioned use quite a lot of spares. We may get a one-time sale worth £50,000, and thereafter a steady, and probably cash, business of £4,000 or £5,000 a year in spares for the one machine. It seems a pity to lose this trade from unwillingness to give credit, or willingness to give it only for periods very much shorter than it is given by other nations, including some whose economic stresses and strains are no less great than our own.
  One has to keep a sense of proportion in all these matters and to weigh up relative priorities and needs, but other countries do the same as well and I have the feeling—if I am wrong, I hope I shall be corrected—that in some of these matters we are taking a slightly less longterm view than some of our competitors in other countries. That is not because the manufacturers and suppliers take a less long-term view, but because it is taken by those who have it within their power to create and to grant the credit facilities without which so much of this business cannot be done at all.
  In spite of the general welcome which this Bill has received, I hope that when the President of the Board of Trade winds up the debate he will give us the information for which he has been asked. I hope, in particular, that he will be able to tell us that there is some hope, not even of increasing but of maintaining our exports overseas and the exports for which the services of E.C.G.D. are required.
  It now becomes all too patently evident that those who were saying rather
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  less than 12 months ago that the rearmament programme was an economic possibility for this country, that our export drive was an economic possibility for this country, but that the two taken together would be like trying to get a quart out of a pint pot, were right in their forecasts. It is now all too sadly evident that those who were saying then that one effect of the re-armament programme would be to slow down enormously our rate of exports were right in their forecasts. Nobody takes any pleasure in having been right in those forecasts, but it is a fact which we have with us and which we have to face.
  Perhaps the best way to face it is for the right hon. Gentleman to do something to reverse it. If it is the fact, as has been said publicly in the "Manchester Guardian Review," from which my right hon. Friend the Member for Huyton (Mr. H. Wilson) quoted, that the Ministry of Supply are telling firms to stop manufacturing for export in order to release capacity for the armament programme, then that is something about which the President of the Board of Trade ought to roll up his slevees and go running into the Cabinet room.
  One hopes very much that in these matters he will see that the interests of the British export trade are not too readily sacrificed to those who are willing to sequestrate an undue proportion of the engineering output of this country to so called Defence purposes.
  As a last point I want to repeat one which I made in another context and in another debate which, if I may say so, is highly relevant to the matter we have under discussion now, because we are trying to discover ways of compelling E.C.G.D. to use all its £750 million of new limit that we are giving them in this Bill. If it were a fact that we were losing engineering exports because engineering exports were being taken off machine tools in order to make room for armaments goods going on to those machine tools, that would be bad enough. In fact, the situation is much worse.
  I have myself been in to many factories in the last three or four months in which the situation is that engineering export goods have been taken off machine tools to make room for defence goods going on to those machine tools. However, because of the dislocation and the failure

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  to plan adequately, the defence goods have not been ready to go on to the machine tools. And so we get all our kicks and we lose all our halfpennies; we lose our exports in the interest of defence goods and then do not get the defence goods for which we have lost our exports.
  I know that the Minister is concerned about these matters. I know he is anxious to make a success of his job—someone on that Front Bench had better make a success of a job anyway. I know that he has this matter at heart and I plead with him to find out not how much engineering export capacity he is losing in substitution for defence goods but how much engineering export capacity he is losing every day with nothing to substitute for it because of the dislocation caused by an ill-digested defence programme. I do not doubt that he will remind me it was a programme initiated by a Government of which I was a supporter. I will take that one, and take it right on the chin. It may give him a moment of satisfaction, but the problem still remains.
  I join in welcoming the Bill, but I hope that the Government, and the Minister in particular, will face boldly and with courage the very many problems which at the moment face the Department, because they also face our export trade.
  9.21 p.m.
  Mr. Geoffrey de Freitas: The whole House was interested in the firsthand account given by my hon. Friend the Member for Reading, South (Mr. Mikardo), of seeing in the Middle East certain evidence of a decline in our export drive. I shall not detain the House long, but I must refer to something that I saw myself in the Middle West of the United States on two visits in 1949 and 1950.
  At the Chicago Trades Fair in 1950, for instance, one of the lines which was selling best was some hideous furniture made in this country. It was selling best because the man who made it went out and spent many months in the Middle West, going to the towns of about 10,000 population and finding out what they wanted, and not relying on reading the "New Yorker" and thinking that that was evidence of the taste of 150 million people in the United States. He was a
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  man in a small way of business. He happened to be a man of enterprise, a man who went out and got the business.
  We all know that the large exporter can run his own organisations in market research and finds no difficulty. The small exporter, the man who has not the facilities and the great knowledge which is required even to know the need for market research, is the man who must be encouraged by the Government to sell his goods, especially in the dollar area.
  What was the organisation to which it was most appropriate for this small man to turn? It was the organisation of the British Export Trade Research Organisation. B.E.T.R.O. was an organisation set up partly with Government money and partly with money from industry and commerce. Gradually, it decided to do without the Government money and it concentrated entirely on the money coming from industry.
  B.E.T.R.O. died at the end of last month, because it was let down by businessmen in this country. It died because these men would not realise that the sellers' market was not going on for ever. They would not realise that it needed enterprise, drive and imagination to continue in the battle for markets.
  Mr. F. A. Burden: Does the hon. Member at last admit that while exports have been so high, it has been very largely due to the fact that there has been a sellers' market in the world and not due to the activities of hon. Members opposite when in power, as they so often claimed?
  Mr. de Freitas: No, I would not admit that for a moment. I am trying to compress my remarks, and I may have slipped over this rather lightly, but I am reluctant to go back and develop the point at greater length—that it was really the larger firms to which I was referring as successful, particularly the motor car firms, who have their own expert knowledge of marketing conditions and are able to provide those things that will sell in a particular country.
  I suggest that it is the Government's duty to prod the businessman who does not realise the importance of market research, and to see that he continues working in the country's interests by exporting. I want to know what the Government are going to do to help the small

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  exporter now that B.E.T.R.O. has been allowed to die. I would remind them that, just as B.E.T.R.O. died, there was born on the other side of the world an organisation copied exactly from B.E.T.R.O.—the Japanese Export Trade Research Organisation, and that, as the Director-General of the British organisation announced at his Press conference, when he stated that B.E.T.R.O. was to be wound up, the Japanese organisation has paid him a compliment by electing him an honorary vice-president.
  9.27 p.m.
  The President of the Board of Trade (Mr. Peter Thorneycroft): The Bill which we are discussing is the special responsibility of the Secretary for Overseas Trade. Those associated with this matter will know that a certain statutory responsibility is placed upon his shoulders for the work of the Export Credits Guarantee Department. I certainly do not want to add to the very illuminating survey which he gave of the background of this particular department, because I think the House will agree that he developed it at proper length and gave a very clear picture, both of its history and present technique.
  We have had a short debate upon it, and it is, after all, an important subject. It covers the export trade from this country to the whole of the world.
  Mr. Geoffrey Bing rose—
  Mr. Thorneycroft: Perhaps the hon. Gentleman will allow me to continue my speech. It covers a wide range of our export policy, and the Bill which we are now discussing contemplates an increase in the total liability of some £300 million, which is no small sum of money. I think the fact that we have had a fairly short debate is not due to the lack of importance of the subject, but to the fact that hon. Members on all sides of the House are really in a large measure of agreement about the proposals which we are putting forward.
  Most politics are inseparable from controversy, but there do come instances where, perhaps fortunately, we do find ourselves momentarily in agreement, and I think this is one of them. The Conservatives like this sort of enterprise, which is that sort of Government activity which assists the private trader. The
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  Socialist Party are equally proud of it. It is, after all, a public enterprise, and, perhaps what is still more remarkable about it, a successful public enterprise.
  It is remarkable in the sense that the Minister responsible has been accused of making it too profitable, and I know of no other Minister responsible for public enterprise who ever had that accusation made against him. [HON. MEMBERS: "What about the Post Office?"] It seems to me that the Post Office is just another matter with which the Conservative Party has been associated in its development, and which has also proved a profitable one.
  The right hon. Member for Rochester and Chatham (Mr. Bottomley) asked me a number of questions to which I would like to reply. He asked me whether it was possible to describe or divide the various activities of these export guarantees between the Commonwealth, the United States and the Iron Curtain countries. What I can say is that so far as the Commonwealth are concerned, excluding Canada, we cover through the activities of that body 8 per cent. of the total trade. In the case of the United States and Canada, which I put together as both being dollar countries, we cover 9 per cent., and in the case of the Iron Curtain countries we cover 10 per cent.
  But I think the most illuminating fact is that since 1945, when we covered 5 per cent. of the total United Kingdom exports, the figure has increased to 13 per cent., which gives a clear indication of the extent to which traders are increasingly using the facilities available to them through this organisation.
  Mr. Bottomley: Perhaps the right hon. Gentleman would give me the information for which I asked later. I did not ask about the Iron Curtain countries. I asked especially about Asia and Europe as a whole.
  Mr. Thorneyeroft: There are many ways in which one can divide up these figures, but I will find the information about the Asian countries separately if the hon. Gentleman wishes.
  My hon. Friend the Member for Somerset, North (Mr. Leather), said he had one complaint to make about the activities of this body—the delay which took place in the giving of quotations.

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  I want to say right away that the Department themselves are conscious that sometimes they cannot give a quotation as early and as quickly as they would wish to do. It is not easy to give quotations on some of this business. The rapidly changing terms of trade and the import and export regulations throughout the world which are constantly changing make the giving, of quotations on this type of insurance quite a difficult matter. In fact, the average delay in issuing quotations is between 15 and 21 days on the initial quotation.
  The Department are not satisfied with that. They intend to use every endeavour to speed it up. But their credit service, that is to say, the information service which they have about buyers throughout the world, is not only a great facility, but takes time to extend. They have current information about some 120,000 buyers, and there are about 2,000 new buyers' files opened each month. Then there are about 12,000 applications for credit limits every month. All those things mean some delay in giving a quick quotation to a trader who wishes to do business. We are conscious of it, and may I say on their behalf that, on balance, I think they have done a very good job. By every means within their power they will seek to increase the speed of these quotations.
  My hon. Friend also went on to say that the premiums were too high. He was speaking as a customer, and that is a perfectly legitimate thing for a customer to say. He also said we were making too much money. I do not want to repeat what I said before, because it created a certain amount of irritation, but I do not think there is any harm in a public undertaking making money. It is certainly better to make it than lose it. If we look at the reserves built up we find that they now amount to only 31 per cent. of the liabilities. Compared with commercial undertakings of that type, I do not think that figure could in any way be said to be excessive.
  The right hon. Gentleman the Member for Huyton (Mr. H. Wilson), addressed the House and he, too, paid a tribute to the staff, in which we all join. He asked me about the cover which was given on the external trade policies. I attach great importance to the external trade policies.
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  I think it was a substantial and useful advance that that type of insurance was introduced. He will be interested to know that they have grown from a total of £37 million in 1950–51 to a rate of £60 million in 1951–52, which, I think, shows there was a need for that type of insurance, that it is appreciated by industry and merchants and is in fact being used.
  The right hon. Gentleman asked me about the dollar drive. The Department has insured over 500 exporters and it has 218 guarantees current. I think everyone who has studied it would agree that the type of insurance they have developed in their joint venture policies is an imaginative and adventurous type. It has been widely used. I do not wish to exaggerate in this matter, but it has made a substantial and useful contribution in giving confidence to those exporters who wish to export to that very difficult market.
  The right hon. Gentleman went on to ask me about certain types of guarantee to certain countries, and, in particular, he and the hon. Member for Reading, South (Mr. Mikardo), mentioned Israel. This Department is perfectly ready to consider and examine any insurance proposition of that character that is put before it. Their job and their desire are not to shut out insurance projects. But they cannot bind themselves in advance to accept any particular one and, as the right hon. Gentleman the Member for Huyton, knows very well, these things need very close examination before they can be entered into. But if either the right hon. Gentleman or his hon. Friend the Member for Reading. South, have any propositions, or anybody they know have any, let them come forward and I assure them they will be received with sympathy and that they will have detailed examination as in any other case.
  Mr. H. Wilson: I do not think the right hon. Gentleman has quite got the point I was making. I know the Department would consider any proposition, however unorthodox, if it was going to help the export trade. But in certain cases which I remember when I was in his Office—and there have been some since—the Department were prevented by the Treasury Regulations from entertaining certain propositions because they involved credit over a period of time rather longer than the Treasury considered desirable. I should like the right hon. Gentleman to

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  look into that. Perhaps he cannot give an answer tonight but I should be glad if he would try to persuade the Treasury to allow more elasticity than they do at present.
  Mr. Thorneycroft: Whatever the right hon. Gentleman's experiences have been, my experience of the Treasury is that they will do anything they reasonably can to assist us in promoting the export drive. I do not think he will find any obstacle in that way, provided the proposition put forward is a reasonable one. If there are these proposals let them be placed before the Export Credits Guarantee Department and let them be examined on their merits.
  Mr. G. R. Mitchison rose—
  Mr. Thorneycroft: Perhaps the hon and learned Member will allow me first to deal with the points made by his right hon. Friend the Member for Huyton.
  The right hon. Gentleman went on to ask me whether I would forecast the future of exports in this country during the coming year. Well, I will not say that I would learn everything from my predecessors, but there is one thing, at any rate, which I could learn and that is the danger of making forecasts or of setting targets. These forecasts are, in practice, liable not to be fulfilled. [HON. MEMBERS: "Hear, hear."] If I might say so, the success or failure of the export drive will depend in no small measure upon the attitude of the party opposite—how far they are prepared to assure and to persuade people that sacrifices are necessary if goods are to flow out of this country.
  Mr. Wilson: I am sure the right hon. Gentleman would not like to suggest to the House that in the matter of export forecasting the Labour Government did go badly wrong. On a number of occasions I think our forecasts were exceeded, and I do not think the right hon. Gentleman can complain when, particularly recently, we have been emphasising the importance of exports.
  The question I asked was—and I did not ask him to make a clear or specific forecast—is he asking for this £300 million from the House because he expects exports to go on increasing considerably over our present figures—and,
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  if so, by roughly how much—or is he simply saying that exports will not increase, but that a higher proportion of them will have to be insured through the Export Credits Guarantee Department because the world is getting riskier, and so on?
  Mr. Thorneycroft: The answer is, quite simply, that the figure in the Bill—the extra £250 million in the case of commercial credits or £50 million in the case of special credits—is due not to one, but to several factors. It is due to the fact that prices are going up; it is due to the fact that trade risks throughout the world have increased rather than diminished over recent years and, therefore, traders increasingly seek services and facilities of this kind; and it is due also to the fact that if the measures we have put in train are successful the volume of exports will increase.
  The right hon. Gentleman went on from that to develop a case which I must say I thought went a little wide of our discussion—about the future of our trade with the Iron Curtain countries. If I may say so with respect, I admire the skill with which he hung this argument upon the rather narrow thread of the two Clauses in this Bill. I think he was a little doubtful himself whether he would in fact get the speech over, because he had taken the precaution of having it published in the "Daily Worker" this morning, in advance. That paper said:
  "Mr. Harold Wilson, former Labour President of the Board of Trade, plans to break the political truce in Parliament today. He will call on the Government to defy the American ban on East-West trade when the Export Guarantees Bill is debated.…A miniature foreign affairs debate will now take place, in which the Government and ex-Labour Ministers policy"—
  do not imagine that the Front Bench opposite get away with it altogether; they are going to be arraigned as well—
  "will be challenged. Labour M.P.s will emphasise the need to do more business with the Soviet Union, China and the Peoples' Democracies."
  Mr. Wilson: It is rather extraordinary for the right hon. Gentleman to accuse another Member of this House of circulating a speech in advance in any newspaper, particularly that one. I assure the right hon. Gentleman that I have not seen that newspaper today, and that until he read that extract I did not know it was in the newspaper.

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  I had no intention of intervening in the debate tonight because, if the right hon. Gentleman will read the public Press, I was billed to speak at a public meeting in Great Windmill Street—[Laughter.]—a perfectly respectable meeting. I do not know Windmill Street as well as hon. Members opposite. I was due to be there and it was only at 5 o'clock this afternoon that one of my hon. Friends agreed to deputise and, therefore, I was able to be present at this debate tonight; so perhaps the right hon. Gentleman will withdraw his statement.
  Mr. Thorneycroft: I assure the right hon. Gentleman that I had no intention of accusing him of any impropriety in this matter. I know the energy with which the Press pursue these things, and in this case they certainly seem to have had a mind reader in the office, because they succeeded in producing something which had a remarkable similarity to the speech which the right hon. Gentleman decided, at the last moment, to give in the House. In any event, although I accept the right hon. Gentleman's argument that he did not give it to the "Daily Worker," I think he might almost have been well advised to have done so, because part of his speech went so wide of the subject matter of the Bill that I think we should scarcely continue into what—
  Mr. A. C. Manuel: That is a reflection on the Chair.
  Mr. Thorneycroft: —would be virtually a miniature foreign affairs debate at this stage in our proceedings.
  Mr. Mikardo: On a point of order. Surely what the right hon. Gentleman has just said reflects very gravely on the occupant of the Chair at the time when my right hon. Friend was speaking. What the President of the Board of Trade has said—and I think I quote his words accurately—was that my right hon. Friend's speech was very wide of the Bill. In fact, Mr. Speaker, your predecessor in the Chair made no intervention at all during my right hon. Friend's speech. Surely the President ought not to say such things about the Chair.
  Mr. Speaker: What is wide of the subject in the debate is a matter of degree. I was not here at the time to hear what
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  was said, but what I am quite clear about now is that both right hon. Gentlemen concerned are tending to go very wide of the Bill before the House.
  Mr. Thorneycroft: I fully accept that warning which you have given us. Mr. Speaker, and I will therefore conclude by saying this: that I am glad that this Measure has received a general welcome from both sides of the House. The Bill and this Department certainly provide useful facilities for the traders of this country and enable them to carry on exporting goods in difficult circumstances and to do business in parts of the world, from which they might otherwise in some cases be precluded. I think it is a valuable contribution to our export drive, and I hope the House will give the Bill a Second Reading.
  Mr. Bottomley: Would the right hon. Gentleman say whether there is any change in our financial arrangements? In an interjection in the speech of the Secretary for Overseas Trade he said he would explain that and he said the Treasury would get no more money.
  Mr. Thorneycroft: The system of the financial arrangements remains exactly the same as it has ever been. That is to say, if the Department makes some money that goes into the Treasury in the form of notional reserves. If the Department loses money it has to come to the House. If its income does not equal its liability the Department has to come to the House and ask for a Vote on account.
  Mr. de Freitas: Will the right hon. Gentleman deal with the simple point which I put to him, even if he thinks it may have been a little wide of the debate? I merely followed his hon. Friend the Secretary for Overseas Trade, who mentioned insurance against losses incurred in market research.
  Mr. Thorneycroft: I should not like to start a debate on what is an entirely different organisation and, indeed, a defunct organisation, and which is separate from that we are discussing.
  Mr. de Freitas: What I was asking was what the Government will do to help the small exporter now that B.E.T.R.O. has been allowed to die.
  9.49 p.m.
  Mr. Geoffrey Bing: I had no intention of intervening in the debate, but after the speech of the President of the Board of Trade, it would be quite wrong if some hon. Member from this side of the House did not say a few words. The President of the Board of Trade complained that my right hon. Friend the former President had gone very wide of the Bill, but what he did was an abuse of all that is understood in this House when it is generally agreed, as it seemed to be in the House, that we should allow a very short debate.
  The President of the Board of Trade gleefully said that it had been a very short debate. He knew perfectly well that, in view of its shortness, he could not have got the Closure. He took advantage of the fact that my hon. Friend the Member for Acton (Mr. Sparks), who was here with a speech ready, did not deliver that speech in order to give the right hon. Gentleman time to answer the debate. What did the right hon. Gentleman do? He took the opportunity to make a series of party points. In those circumstances, I think the House will be well advised to carry on this debate on another day, and in order that we may then have something to discuss—and the right hon. Gentleman, no doubt, will find someone else to reply—let me put to him one or two questions in regard to the matter, so that when we come to the second occasion for dealing with this matter, the Government spokesman will have something to which to reply.
  Let him first of all give us some sort of analysis and some sort of break-down—a far greater breakdown than he has given us—of where the guarantees go to. Which are the countries for which we require the most guarantees? Which individual countries? And which country is the worst risk? That, after all, is a very important thing for us to know. What is the point of sending a trade mission somewhere or other if one out of every five of our debts there is a bad one? Why should we send a trade mission somewhere else if, in fact, every contract is met? I can understand that, possibly for political reasons, the President of the Board of Trade does not wish so to do.
  Some of my hon. Friends have been described by the President of the Board of Trade as going wide of the subject
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  when they dealt with the purposes for which this Measure was intended. But were they really? Is the right hon. Gentleman not going to give us any indication of how we need to cover some areas? Are we to have a global figure of the extension of our trade? Are we not to have any expansion, any figure?—[Interruption.] Hon. Members should not interrupt me. I am trying to conclude within a reasonable space of time in order to give several hon. Friends of mine an opportunity.
  Several came here, like myself, prepared to speak in this debate, and because we did not do so, in order to get this important Measure through, what happened? We were immediately attacked by the right hon. Gentleman, who made a most unfair political attack, when he knew he could not reply to him, upon my right hon. Friend the Member for Huyton (Mr. H. Wilson). It is, after all, only a reasonable surmise that any journalist can make when he sees a Bill of this sort, of what hon. Members opposite, if they follow their usual principles, will talk about.
  There have been extremely good forecasts in the Press about what I believe will be the future of various hon. Gentlemen. I see the Leader of the House sitting there. I do not know whether to refer to him as the Minister of Health or not, but one can easily see—it does not need a leak of information to know it—that sooner or later he will have to give up one or the other of those offices. Possibly—it does not need any leak of information to know this—he may have to give both up.
  That type of attack is particularly unworthy when it is made on an occasion such as this. Here we had a debate which went straight ahead, in which everybody attempted to deal with the matter in a very short space of time—and then the President of the Board of Trade indulged in the sort of behaviour to which I have referred.
  Let me come back for a moment to this question of what is going to be the division. How are the percentages divided? What is the percentage expansion which we expect to order to trade with Eastern Europe—the countries behind the Iron Curtain? Are we to earmark a certain amount of extra currency for the expansion of that trade? If that is so, we ought

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  to know whether this policy is really in line with that of the Foreign Office. If we do not want expansion there, where is it that we do desire to have this expansion? In what particular area of the world are the Government seeking to secure the additional trade? For Western Europe, so far as we understand it, is in a position in which we are all competing one with another in the whole area in taking in one another's washing. If we suddenly increase our credits for exports to Western Europe, we shall find that the very next day the French Chamber will meet in order to make it easier for them to export to us.
  My right hon. Friend the Member for Huyton said, I think very wisely, that it is not a question of money, but of what the money is to be spent on. If the President of the Board of Trade, instead of making such a facetious and lighthearted speech on such a serious subject, had given us some indication of both—if I might use a phrase which might have been used by my right hon. Friend the Member for Ebbw Vale (Mr. Bevan)—the horizontal and vertical splitting of this sum, he would have helped us more. Looked at in that way, what are the principal products to which we want to advance money in order to promote exports? What are we doing, for example, in attempting to sell consumer goods? What are we trying to do about heavy industry?
  How far is the machinery of export credits to be used, not merely as a lay organisation which just allows any individual businessman to come to it, and which looks at the propositions one by one, but on the basis of what we can do to encourage a particular sort of export? Let me give the right hon. Gentleman one practical example. In this country we make heavy engineering equipment better than any other country in the world.
  Mr. de Freitas: Especially in Lincoln.
  Mr. Bing: We have discussed this question before, and it is quite impossible to have a credit of the type about which the right hon. Gentleman is talking, a short-term credit, for a long and complicated transaction consisting of the supply of all the generating machinery we have to send out of this country. I dare say the right hon. Gentleman has learned, in his four or five months at the Board of Trade, that 52 per cent.
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  of our exports are engineering goods, and when dealing with half our exports one would at least think that there would be some special provision to deal with engineering exports.
  I do not know whether the right hon. Gentleman wants to stop this sort of discussion; whether he is trying to persuade his hon. Friend to move the closure so that we cannot discuss the trade of this country. If he wishes to do so, that is up to him, but I suggest to him, in view of his speech and of the light way in which he treated the subject, that he leaves the matter for the time being; that he has an opportunity to think things over so that we may have an opportunity of discussing these matters a little more fully.
  I do not want to delay the House, but I should like to put to the right hon. Gentleman a question which I wanted to ask in the course of his speech. When I rose to ask it, he was guilty of a trick which I really did not expect from him. When I rose to interrupt, he said "Perhaps the hon. Gentleman will allow me just a moment to finish my sentence." After a while I rose again and he said, "I will give way in a moment if the hon. Gentleman will let me finish." Then my hon. and learned Friend the Member for Kettering (Mr. Mitchison), who also wanted to speak, rose to interrupt the right hon. Gentleman, who said the same thing to him.
  That really is not the way to treat the House. The right hon. Gentleman should remember that the Government have only a minority of the votes of this country, and in those circumstances they ought to accord as much credit to the views expressed from this side of the House as to the views expressed from their own side. But the right hon. Gentleman thinks "This has been a very short debate and I can therefore be as rude as I like. I will take advantage of the good nature of the Opposition"—a most deplorable procedure!
  Let me again put to the right hon. Gentleman the points that I have made to him, so that when we come to this matter again he will have had an opportunity of considering them and dealing with them.
  It being Ten o'Clock, the debate stood adjourned.
  Debate to be resumed Tomorrow.

  PNEUMOCONIOSIS AND BYSSINOSIS BENEFIT SCHEME
  10.1 p.m.
  The Parliamentary Secretary to the Ministry of National Insurance (Mr. R. H. Turton): I beg to move,
  That the Draft Pneumoconiosis and Byssinosis Benefit Scheme, 1952, a copy of which was laid before this House on 29th January, be approved.
  I ask the House to give their approval to the draft scheme under the Pneumoconiosis and Byssinosis Benefit Act, 1951. The Act itself set out in considerable detail the provisions of this scheme. The scheme embodies those provisions. Briefly, the scheme puts uncompensated men and their dependants in the same position as if they were entitled to workmen's compensation for total disablement or death from either disease. It provides for a basic weekly allowance of 40s. for total disablement. This allowance will be a life pension additional to any payments, such as sickness benefit or retirement pension, under the National Insurance scheme to which a beneficiary may be entitled.
  The scheme also provides for a capital sum of £300 for the benefit of members of the family of the deceased who were wholly dependent on the deceased. The scheme also provides, in view of the request made by hon. Members of all parties, that where there is no person who was wholly dependent on the deceased there will be a death benefit for those who were partially dependent, the amount to be made available by variable sums, not exceeding £300, to be determined by the administrative board. Following the practice under the Workmen's Compensation Act, the benefit in either case will be paid into a county court and administered by the court for the benefit of the dependants.
  The scheme will be administered by an administrative board, as in the 1951 Act, which the right hon. Member for Fulham, West (Dr. Summerskill) introduced, and their decision will in all cases be final, but they will refer certain questions to other statutory authorities for decision. In particular, the question of whether a man is totally disabled or not or of whether death resulted from the disease will he referred to a medical board for their decision. I would remind the House that
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  where the medical board's decision is that a man is totally disabled, that decision is final, and even if the man obtains work of any nature that decision still stands and cannot be rescinded.
  I think that the House would like me to mention two points. First, the timing of this scheme. Directly this draft scheme has been approved by both Houses, it will be signed, and 14 days from the signature of the scheme it will come into operation. On the Thursday following the 14th day, payments will be made, and, in the case of the 800 men who are covered at present by the 1943 pneumoconiosis scheme or the National Coal Board scheme or the 1941 byssinosis scheme that payment will come on that Thursday.
  In a certain number of cases, further inquiries will have to be made into such matters as unemployability supplements. In other cases, where men are outside the 1941 byssinosis scheme and the 1943 scheme, we shall have to try, and we are now trying, to discover those men.
  I want to say a word or two about publicity. During the passage of the Act the hon. Member for Ince (Mr. T. Brown), my hon. and gallant Friend the Member for East Grinstead (Colonel Clarke) and my hon. Friend the Member for Handsworth (Sir E. Boyle) requested us to try to make the scheme easily understandable to everybody and to undertake publicity to see that everybody understood it. Frankly, I cannot say that the scheme is light literature for the ordinary working man, but I claim that the scheme as drafted will be readily understood by every union official.
  We are taking steps to see that every man affected has the scheme brought to his notice. We shall arrange through the B.B.C. that due publicity shall be given to the scheme so that everybody can hear it over the air. We are arranging for a full advertisement of the scheme in the national and local Press. We have also prepared a leaflet, now in draft, which will be available directly the scheme comes into operation. I have gone through the draft carefully and I can assure hon. Gentlemen that the draft can be classed as light literature as no legislation can be.
  Therefore, we hope that the scheme will be brought to the attention of everybody who is likely to be concerned with

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  it, in particular to those dependents of men who died after 31st December, 1949. We are relying on the unions for the details of men who died after 31st December, 1949. We have enjoyed great cooperation on the part of the unions in this matter. All the unions concerned will receive a copy of the draft leaflet immediately it is printed.
  I ask all hon. Members to help us in securing that the scheme is brought at the earliest possible date to the notice of all their constituents who are affected. We mean to make this a success, and, with the help of hon. Members on both sides of the House, it can be made a success. I hope the House will give the scheme its approval tonight.
  10.8 p.m.
  Dr. Edith Summerskill: As the scheme derives from the Pneumoconiosis and Byssinosis Benefit Act, for which, as the Parliamentary Secretary agreed, the Labour Government were responsible, I can only give it a very warm welcome. I have no intention of being critical, but I should like to make a few general comments.
  The Parliamentary Secretary and his right hon. Friend have during the last few months had an opportunity of examining the whole question and of considering in some detail the needs of totally disabled men suffering from pneumoconiosis and byssinosis. The scheme provides only for the totally disabled and the families of those who have died from these diseases.
  I should like to know whether the hon. Gentleman has also considered the partially disabled. He knows as well as I do that the Department have endeavoured to devise a scheme which would help the partially disabled. Not for one moment am I trying to minimise the difficulties. In the comparatively short time that I served in the Department, we tried to devise a scheme to cover both the totally disabled and the partially disabled. I recognised full well that it would be a mistake to wait until we had arrived at some comprehensive scheme and by so doing allow the totally disabled to suffer. Therefore, the Bill was introduced last July, and I am pleased to see this scheme today.
  However, it deals only with the totally disabled. I know that the difficulties in
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  regard to the partially disabled are very great. It is argued that it is very difficult to assess the needs of the partially disabled because there are so many degrees of partial disablement, but I feel that now that this scheme has been presented and the administrative machinery has been built up, this might offer an incentive to further investigation.
  Another thing I want to say is that this scheme could be used for other diseases and I should like to ask the Parliamentary Secretary to consider such diseases as epithelioma, which is skin cancer. Many of my hon. Friends, who have worked in those industries where skin irritants are used which are responsible for skin cancer, know that there are totally disabled men who will come within the scope of this scheme. I do not ask the Parliamentary Secretary to find out now. What I am trying to do is a little probing.
  I ask the Parliamentary Secretary to read the speeches tomorrow and consult with his officials who know all about it—he is well served—to see whether skin cancer could be included. I cannot think that there can be any question of not being able to diagnose skin cancer. Therefore, the Parliamentary Secretary has a first-class piece of work in front of him. I might add that the reason I mention skin cancer is that it is one of the time-barred diseases. As the Parliamentary Secretary knows, this scheme is particularly concerned with time-barred cases.
  The Parliamentary Secretary mentioned publicity. I see in Part IV that it is said that the patient must apply in writing. The Parliamentary Secretary said that the B.B.C. will be asked to broadcast the news that at last a scheme is in being. I must remind him that we are dealing with men who are totally disabled, and have been totally disabled for many years and have been living at subsistence level. Many of those men cannot afford a radio, and many of them cannot for economic reasons have a daily paper; they have one only at the weekend; and I am conscious of the fact that the very words "pneumoconiosis" and "byssinosis" are not words which friends or relatives could pronounce easily or indeed remember.
  There is a chance that this news might not reach the men who are in the very greatest need. It has occurred to me that the Parliamentary Secretary might ask

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  the excellent officials of the National Assistance Board to co-operate in spreading the news. If one could try not only the conventional publicity media but also those people who may be in touch with totally disabled men, bearing in mind that the totally disabled will have only a very few years in which to enjoy this benefit, I am quite sure that the House will be very satisfied.
  May I again thank the Parliamentary Secretary for introducing this scheme tonight, which I am quite sure the House will approve.
  10.13 p.m.
  Sir Edward Boyle: When the Bill was going through this House during the Committee stage several hon. Members, including the hon. Member for Ince (Mr. T. Brown) and myself, drew attention to the importance of having this scheme drafted in such a way that the ordinary person could understand it. Having this evening read through the draft scheme, I think the Ministry have made a very good job of it, and I was very pleased to hear that they have drawn up a short leaflet which will be issued. As this is a point which I raised, I should like to take this opportunity of adding this word of tribute.
  I should be out of order if I pursued too far questions about the application of this scheme to other diseases, but perhaps I should not infringe the Rules of Order if I just said that it seems to me that this scheme might form a good precedent for other schemes. I very much agree with what has been said by the right hon. Lady the Member for Fulham, West (Dr. Summerskill) about seeking the assistance of the officials of the National Assistance Board all over the country to help in this scheme.
  I am sure that many more people will benefit from this scheme, even in a constituency like mine which is a residential constituency though there is a pit not far away. I very much hope indeed, now that the scheme has seen the light of day, that it will help those in the greatest need.
  10.15 p.m.
  Mr. Tom Brown: I have no desire to disturb the placid atmosphere, but I have a grouse to make. I want to ask the Parliamentary Secretary why it
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  has taken so long since the passing of the Act to present these Regulations.
  Publicity is of paramount importance to the unfortunate victims of the dreaded disease pneumoconiosis. I speak from day-to-day experience in my constituency in saying that many of those affected have drifted away from the minefields to other parts of the country. I do not know what methods we can adopt to get into touch with them, but the suggestion made by my right hon. Friend the Member for Fulham, West (Dr. Summerskill), of using the National Assistance Board as a medium to draw their attention to the very important Regulations may be useful, and I hope that that will be done.
  It does not mean putting extra administrative duties on the Assistance Board, as they probably are in touch with many men who have been denied the right of compensation to which they have been entitled since the day of certification. They will have many men coming to them for assistance, driven there because this country—I am not blaming the Government—has failed to meet its obligations to men overtaken by this disease in days gone by.
  One of the pleasing features, as I said on my Second Reading speech on 16th November, 1951, is that I was appointed a member of the committee which started the battle for fair play and fair do's for victims of silicosis and pneumoconiosis. That was in 1922. It has taken us 30 years to secure justice for the totally disabled.
  There is still the other point, again of paramount importance, that a large number of men in the minefields are partially incapacitated as a result of the disease which they have contracted. I plead with the Parliamentary Secretary and his Ministry to hasten the day when the just demands and rights of the partially incapacitated will be met. I hope that every available means will be used to convey information to the victims of these diseases, including the Post Office, which might be a suitable medium for getting information to them.
  In conclusion, despite the fact that we are only now dealing with these unfortunate men, I am happy to have lived to see the day when the agitation which we started in 1922 has at last borne fruit in the year 1952.
  10.20 p.m.
  Mr. John Arbuthnot: I want to join in the congratulations to my hon. Friend the Parliamentary Secretary to the Ministry of National Insurance on the introduction of this draft scheme. Hon. Members on all sides of the House are delighted to see it and we have all played our part in assisting it through the House.
  I do not want to enter into rivalry, but it should be said that my hon. Friend the Member for Somerset, North (Mr. Leather) played a very prominent part by introducing a Private Bill with this object in view. In bringing his Bill to the attention of the House my hon. Friend made several speeches, not only then but since, emphasising the importance of the position of the partially disabled.
  On the Second Reading of the Pneumoconiosis and Byssinosis Benefit Bill we were told that if we were to press the claim of the partially disabled too much, there might be a danger of wrecking the entire Bill. Now there is no such danger. We now have the Bill and also this scheme, so that the time has come when we can try to see what can be done for the partially disabled without any danger of making more difficult the position of those who are totally disabled.
  There are two points in the scheme to which I wish to draw the attention of my hon. Friend the Parliamentary Secretary and to ask for a little clarification. During the Second Reading of the Bill my hon. Friend drew a definite distinction between the Workmen's Compensation Act and the Industrial Injuries Act. He said:
  "…it struck me from the speeches of one or two hon. Members that they were not fully aware of what we are trying to do by using these words 'total disability' from the Workmen's Compensation Acts.
  That is not the same thing as total disability under the Industrial Injuries Act. This condition under the Workmen's Compensation Act was defined by Lord Loreburn as: 'The man who has a physical defect which makes his labour unsaleable in any market reasonably accessible to him.'"—[OFFICIAL REPORT, 16th November, 1951; Vol. 493, c. 1384.]
  As I understand it, the point my hon. Friend was making was that he was proceeding under the Workmen's Compensation Act rather than under the Industrial Injuries Act. Therefore, I see with some concern in Article 6 of the scheme the statement referring to Section 13 of the Industrial Injuries Act—
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  "Where a person entitled to an allowance could, for the purposes of section 13 of the Industrial Injuries Act (which relates to unemployability supplement), be treated as being incapable of work and likely to remain permanently so incapable as the result of pneumoconiosis or byssinosis.…"
  I hope that does not mean that my hon. Friend is giving up the definition in the Workmen's Compensation Act in favour of that in the Industrial Injuries Act.
  Mr. Turton: If my hon. Friend will allow me to interrupt, if he reads Article 6 carefully he will see it says that the unemployability supplement granted under the Industrial Injuries Act shall apply in like nature to this scheme. It does not for one moment say that the definition of total disability is anything like the definition of total disability under the Industrial Injuries Act. Here we are accepting a wider definition, as I hoped I had made clear in my opening speech.
  Mr. Arbuthnot: I am grateful for my hon. Friend for clarifying that point.
  The second point about which I am slightly disturbed is that the Board seems to be the final arbiter in its own case. I am wondering whether there is not some way in which there could be another arbiter—application to a judicial court, for example—in cases of this kind.
  10.25 p.m.
  Mr. Bernard Taylor: I was unavoidably absent when the Bill was before the House, and I should like to take the opportunity now of congratulating the Parliamentary Secretary on his appointment as my successor. This is the first public opportunity I have had, and I do it with pleasure.
  With my right hon. Friend who was Minister of National Insurance in the late Administration, and with many others, I join in welcoming the Act and the scheme. I express not only by own personal pleasure at the passing of the Act and the bringing of this scheme before the House, but also the pleasure of the organised miners, who for so long have suffered from the time limits—
  Dr. Barnett Stross: And pottery workers.
  Mr. Taylor: And pottery workers. Being an ex-coalminer, I speak particularly for the miners, and I am sure that if

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  my hon. Friend is fortunate in catching your eye, Mr. Speaker, he will express the same pleasure on behalf of the pottery workers. Although in my own coalfield, happily and fortunately, we have not had a great incidence of either silicosis or pneumoconiosis, to miners, and particularly to those in the Welsh coalfield, the Act and the scheme will be a great boon and blessing.
  The point I want to make is very brief. The scheme is to be administered by a Board. Can the Parliamentary Secretary state tonight what will be the composition of the Board and give the names of the chairman and vice-chairman and the other members who will be responsible for the administration of the scheme?
  I was glad to hear the hon. Gentleman say that the Ministry are taking every possible step to give the widest publicity to what will be the rights of the men who will be affected by the scheme. I was particularly pleased when he said that in addition to using the B.B.C. and the national Press, the local Press is to be utilised for this purpose. That is a far more important medium than the national Press. I compliment the Parliamentary Secretary upon the initiative which the Ministry propose to take in this matter of publicity.
  There is another point, getting to know which men are suffering from this dreaded disease. When we were discussing the Act in relation to the pre-1924 cases, the Minister drew our attention to the fact that he knew of a man nearly 90 years of age who had had an accident long before 1906, let alone 1924, and he wanted to know how that individual would be acquainted with the scheme.
  The local officers of the Ministry of National Insurance are widely diverse throughout the land—there are nearly 1,000 of them—and if, in connection with publicity, there is close co-operation between them and the secretaries of the local branches, I am not sure that that would not be more important than contacting either the headquarters of the N.U.M. in London or the headquarters of the various areas.
  The best possible point of contact for getting the utmost out of the publicity which is the aim of the Department is that there should be keen, close co-opera-
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  tion between the Minister's staff on the spot in the colliery areas, and the local branch secretaries. I welcome this Measure and hope that the Parliamentary Secretary is in a position to give the constitution of the Board, with particular reference to whom the chairman and vice chairman will be.
  10.31 p.m.
  Mr. Ronald Williams: May I offer my heartiest congratulations to the Parliamentary Secretary, to his predecessor, and to their advisers upon having produced a scheme which will be of such benefit to the men suffering and to those who have died as a consequence of pneumoconiosis? I rise at this stage in the debate not to deal with the various relevant points which seem to be applicable to detailed consideration on so important a matter. I feel that the arguments put at some length—and rightly so—on the Second Reading of the Bill, were sound. But it is quite clear that this scheme closely coincides with the provisions of the Bill and carries the intentions of the Bill fully into effect.
  One point on which I should like a reply is this. I am sure that the Parliamentary Secretary would agree that it is the intention of everyone concerned with the scheme that those who die as a result of pneumoconiosis shall be covered and provided for. One should, therefore, look most carefully at the scheme and, as is so often the need, judge the words liberally and then look at them with a restricted mind to see if these cases are really fully covered.
  I would confine myself to one point which is, I think, by far the most important so far as the fatal cases are concerned. In Article 2, there are the words "as a result of pneumoconiosis" and, on the face of it, nothing could be more simple. But, in the fatal cases, it is not always so simple a matter. One cannot always resolve the question by asking, "Did the man die as a result of pneumoconiosis?"
  There may be other causes of death, but among them is pneumoconiosis. There might be argument as to whether the person, prior to his death, was suffering from that disease and other conditions as well, and it could be that there would be great difficulty in showing that death was the result of pneumoconiosis because of the other contributory factors.

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  It is quite obvious that a man who dies while suffering from pneumoconiosis may not die because of it. To take an extreme case, a man might be knocked down in the street and killed while suffering with pneumoconiosis. Because the man has pneumoconiosis, and yet dies from some other cause, is he covered by this scheme? I would press the Minister on the type of case where, in the chain of causation, pneumoconiosis is present. In that case, if we apply a liberal interpretation to these words, the man would be within the scheme, whereas, if we apply a restrictive interpretation we will find that the men's dependants will not be provided for.
  I am not satisfied—but I hope I will be after I have heard the Parliamentary Secretary—but I have a strong impression that he and his advisers are most anxious that the most liberal interpretation shall be given to the construction of these words by the Board. I put it to the hon. Gentleman that it would be most helpful to the success of the scheme, and to the dependants of those persons concerned, if a clear pronouncement were made by the Parliamentary Secretary tonight to the effect—if I may say so without appearing presumptious—that it is the intention of all concerned that there shall be this liberal interpretation of these words.
  10.36 p.m.
  Miss Margaret Herbison: There is one point that I should be pleased if the Parliamentary Secretary would clear up. In putting forward these Regulations the hon. Gentleman said that payment would start on the first Thursday after the expiry of the 14 days after they had been accepted by this House and another place. I have on my files at the present time about six cases of old miners who are awaiting these Regulations becoming law. In every one of these cases the men have been told by the pneumoconiosis medical board when they made application that as there was no legislation they could not be examined. I know that when these Regulations do become law these men, and many others will be making application for examination, and I would like the Minister to say whether payment will be made retrospective to the time when they first made application if it is found that they are 100 per cent. disabled. If it is
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  not these men will have been waiting weeks or perhaps months for payment.
  The Minister suggested that the medical board would give its decision to the administrative board in certain cases, and that the decision of the administrative board would be final. That is not unlike what happens now. The pneumoconiosis medical board decide on the percentage of disability from which a man is suffering, and a suggestion has been made that it is a bad thing that there should be no appeal from the decision of the administrative board. I have felt ever since I became interested in this subject that there is a great deal of dissatisfaction among miners on this point. I, and other members who represent mining constituencies, continually have miners attending interviews and telling us that their own board has diagnosed pneumoconiosis.
  In many cases they are sent to Edinburgh Royal Infirmary, where a specialist, after an X-ray examination, decided that a man has pneumoconiosis, and he is thereafter sent to the medical board, which, in a number of cases, decides that a particular man is not suffering from the disease. It might be that the general practitioner could make a mistake, but where a specialist in an infirmary like that of Edinburgh has given a decision and the medical board gives a different one it is impossible to make a miner believe that he has had a square deal.
  We want to let these men know that everything possible is being done to decide what is fair in their interest. I do not know if a law court would be the right place—it is one medical opinion against another. I have given much thought to this: in my early days in this House I interviewed the Minister, but I cannot say who should be the final deciding factor in this matter. It is very difficult, but I do think the Ministry should give some serious thought to it to make many of these people who have been turned down by the pneumoconiosis board feel that everything possible has been done to make it as clear a Bill as is possible.
  My final point is this. I suggested in Committee that many people would be rushing to be examined by pneumoconiosis boards. Is there going to be one administrative board for the whole

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  of Britain. If there is I have no objection at all. I take it that the medical boards—we have one in Edinburgh, we used to have to wait on doctors from Manchester—now we have one in Edinburgh will deal with the medical examinations and it will be one administrative board for the whole of the United Kingdom.
  These are the only three points I want to raise and add my plea with those of my friends that the Ministry as quickly as possible will bring in a scheme covering the partially disabled.
  10.43 p.m.
  Mr. A. Edward Davies: All people who have a knowledge of mining areas, pottery areas or other industries affected by this scheme, will welcome this mitigation of the hardships which many casualties have sustained in the industrial processes of this country. One has seen over the years an improvement in the arrangements to deal with what I have described as industrial casualties and my own view, for what it is worth, is that men who are incapacitated in industry ought to be cared for by the state or the industry itself.
  This scheme does not go the whole way—it provides for total incapacity. I share the right hon. Lady's view on the Front Bench and hope that without the lapse of a great deal of time some process will have been arrived at by which it will be possible to carry this a stage further and deal with the thousands of people who have a sense of grievance. They are not provided for in this scheme because they are not, in fact, totally disabled under the description of this Bill but I think a scheme such as I have adduced should be considered.
  There is a great deal of dissatisfaction because the men feel that while they have courtesy and an excellent service from the medical boards there is very often a conflict amongst medical men themselves in the diagnosis. In North Staffordshire men sent to tuberculosis hospitals and the medical men have formed the view they were suffering from an industrial disease—pneumoconiosis—and when a man has been referred to the medical tribunal they have said he was suffering from something congenital or something which
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  might have been given to him in any case whatever his industry was.
  It is very easy to pose these difficulties, but is very difficult to suggest a remedy. We and the men must be assured that whoever has the responsibility of making the final decision in these matters are men of the highest medical reputation and men whose word is beyond question as far as that can be made possible. But modern science is revealing increasingly new conditions and in my own area we find men, who have been out of the industry a great many years and who, when they were in the industry or about to retire from it, had a medical examination which showed they were not suffering from the disease, now many years afterwards, under examination of highly-qualified men, are told they have pneumoconiosis or silicosis.
  But they could get no redress under the present set-up, and no compensation. For that purpose, I hope our whole research and the appointment of the men responsible for this humanitarian work are of the highest quality and that with increasing patience and efficiency we shall see the best is done for the men.
  I was glad to hear the Parliamentary Secretary say that such trouble had been taken to make this scheme widely-known over the country. I am sure the unions will co-operate as they are agencies for this good work and they will not refuse to give advice because a man has left the industry. However, in an industry like the pottery industry, we have married women, who have been out of it many years, but who are now suffering from what they suspect to be pneumoconiosis. They are people sometimes with a family and who are no longer members of a union so that they have not access to the professional and legal advice which is normally forthcoming.
  These simple, good people want to know, and have already expressed some anxiety about it, what is the procedure by which they can get the benefit under this scheme. I support the view, which is almost universally expressed, that we should use the Ministry of National Insurance offices for this matter and not refer people to an administrative board, which may be a remote body of men unknown to the ordinary citizen. If possible, details should be given of the regions applicable to a citizen and there

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  should be definite information from which an ordinary person can see what he has to do to qualify for benefit.
  The Ministry of National Insurance is one of the best Ministries we have introduced in this country, and its offices are very helpful. But, so far, they have no information on this matter and are unable to answer queries. There has been some delay, of which my hon. Friend the Member for Ince (Mr. T. Brown), has complained, but in building up a scheme like this and in the compilation of a fine document, inevitably some time is required.
  This is taking the rough corners off the hard circumstances of many men, who have usefully contributed to the industry but who have felt discouraged and disheartened very often because they have had no consideration after being not totally incapacitated, but often so incapacitated as to have to leave the industry and not able to earn money. Whereas they had been able to earn from £10–£12 a week before being incapacitated, they are now to get only 40s., plus an inability allowance, if it is available. But I welcome this step, even if it does come from a Conservative Government.
  10.50 p.m.
  Dr. Barnett Stross: I am very happy to follow my colleague who represents the mother of the Five Towns and who can speak with real knowledge on this subject as one who, like me, has lived and worked in the atmosphere of the area. We know something of pneumoconiosis which we used to call "potter's rot." I would like to reveal my hesitations and fears on one or two aspects of this problem which have been touched upon, in part by the hon. Gentleman the Member for Wigan (Mr. R. W. Williams) who has great experience in advising the Miners' Federation.
  The Parliamentary Secretary said that total disablement and death claims would be referred to a medical board whose decision would be final. He realises, of course, that at present if a man or woman believes he or she is suffering from pneumoconiosis the machinery is available so that the sufferer can be examined by the pneumoconiosis panel, and, if the case is rejected, a further appeal can be made a few months later. We know of cases in which, because the disease is progressive,
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  refusal in one year meets with acceptance the next. May we take it this technique will be continued for these people?
  Mr. Turton indicated assent.
  Dr. Stross: I am happy to know that.
  When a man or woman dies of pneumoconiosis the death normally is reported to the coroner by the general practitioner in charge of the case, and if there be any question of compensation there is always a post mortem. The post mortem examination, as a rule, is attended by a representative of the pneumoconiosis panel, and the evidence is given to the coroner who records on the certificate that death was due to pneumoconiosis. It must be understood that the medical officers of the pneumoconiosis panel never perform the post mortem examination but are present and examine the appropriate organs. When the certificate is given, pneumoconiosis could be present as a primary or secondary cause, or, as has been mentioned by the hon. Member for Wigan, as an unconnected cause—for instance, a man being run over and killed who was suffering from the disease.
  I want to augment the hon. Gentleman's plea to the Parliamentary Secretary on how these death claims will be construed, and ask that they will be treated in as liberal a manner as possible. I remember most vividly the case of a man suffering from an advanced stage of silicosis whose life was a misery and burden to him. He could not lay down on a bed, but spent his last days, day and night, in a chair. No longer wishing to live he committed suicide, dying of gas poisoning. The death certificate showed that the primary cause of death was carbon monoxide poisoning.
  In that case the medical referee certified that death was due to silicosis. It would then in those years not have been possible for the widow to have had any redress. Everyone who knew the case realised that the man killed himself because of the burden of the disease, and it was, therefore, technically wrong, though morally correct, to say that he died of the primary disease.
  Today, we might be in great difficulty. I have mentioned this case because it is such a rare possibility, but there are others. Recently, I was approached by a widow; her husband had received compensation for some time before he died,

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  and she asked me why she could not receive any benefit. What had happened was that his death was due not only to pneumoconiosis but to cancer of the thyroid, and it was considered that death was primarily due to the cancer and that pneumoconiosis had not hastened it. Whether that be true or not, the widow felt aggrieved.
  When one signs a death certificate there is a primary cause, a secondary cause, and unconnected or apparently unconnected causes. If a man dies of pneumonia and also had pneumoconiosis there will be no difficulty with any medical board; but supposing a man had heart disease, coronary insufficiency or coronary thrombosis, there are some medical men who might say that there was no connection between pneumoconiosis and coronary disease. They would be quite wrong. A man whose vital capacity for breathing is permanently embarrassed cannot possibly escape aggravation of the organ which lies between the two lungs.
  I am urging, almost praying, that the Parliamentary Secretary and his right hon. Friend should be most careful that a really liberal interpretation of this should be understood by the medical boards, whose decision is final. The same must be applied to the question of total disablement. In the old days, however difficult they were for workmen, many county court judges had no difficulty in interpreting liberally what was the meaning of an "odd lot," a man who though it could be argued he was not totally incapacitated for work could not find it. I hope that now, in 1952, we are going to get as much benefit as in the days of 30 years ago in the interpretation of what is and what is not total disablement. That is the type of question I am putting. I do not necessarily expect the Parliamentary Secretary to give me an answer tonight. All I say is that this is what all of us, on all sides, are thinking about, and how we expect him to interpret the Regulations.
  10.59 p.m.
  Mr. W. R. Williams: In the previous debate I drew attention to the effect of this on the quarrymen in my native county of Caernarvonshire, and the Minister was good enough, in subsequent correspondence, to reassure me on one or two points. I am glad to
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  know the measure of publicity that is proposed, and that the Government are going to such trouble to ensure that nobody is going to be left out of consideration. I want to ask him whether his Department intends to issue an explanatory statement in Welsh, because it is important that it should do so. It would be no precedent because excellent documents have already been translated into Welsh by the Ministry of National Insurance.
  Mr. Turton: Will the hon. Gentleman repeat that, because I missed his remark?
  Mr. Williams: Yes. Is it intended to issue an explanatory statement in the Welsh language because, as I said in the previous debate, possibly no part of the country has suffered more from the effects of these diseases than has Wales. I want to make quite sure that any Welshman has the same opportunity of knowing what are his rights under the scheme as anyone else.
  In view of the time, I leave that one request with the Minister and hope that he will grant it.
  11.1 p.m.
  Mr. Turton: I am most grateful to the House for the reception given to this scheme and I will try, as a token of my gratitude, to answer the points that have been made.
  I am in a little difficulty on some of the points made by the right hon. Lady the Member for Fulham, West (Dr. Summerskill), and by some of her friends, because this scheme is made under the Act which excludes the partially disabled. I am too junior and unaccustomed to this Box to wish to be called out of order by you, Mr. Deputy-Speaker, but perhaps I could say that we explained at an earlier stage the difficulties that made us exclude the partially disabled from the Bill. We have not minimised those difficulties. We are considering how to get over them, but it will take time. We are seeking the cooperation of the unions in this matter but the outcome will not be reached soon.
  The right hon. Lady the Member for Fulham, West, also asked me about skin cancer. This draft scheme is entitled "The Pneumoconiosis and Byssinosis Benefit Scheme"—
  Dr. Summerskill: The hon. Gentleman ought to know—although I know he is new to this kind of thing—that Speakers and Deputy-Speakers often allow a great deal of latitude in the House when we are discussing a subject of this kind which has a humane aspect. So I do ask the hon. Gentleman not to be quite so rigid in his interpretation of what is done.
  Mr. Turton: The right hon. Lady has considerable experience—I have been in this House a mere 23 years—
  Dr. Summerskill: Not on that side.
  Mr. Turton: I know, but the Opposition are much more at the mercy of the Speaker than the Government side. I have not found Speakers so lax, Mr. Deputy-Speaker, and I would not like to suggest that you would be lax.
  This is a pneumoconiosis and byssinosis Act and scheme. If we were to deal with skin cancer a new Bill would have to be introduced and then a new scheme. So I shall leave that problem and come to a very good point which the right hon. Lady then made.
  Dr. Summerskill: The hon. Gentleman should speak from the heart and not from the head. That is a good piece of advice from a woman.
  Mr. Turton: On the question of publicity she asked that we should give details of this scheme in the National Assistance offices. It is certainly our intention that every Ministry of National Insurance office shall have plenty of these leaflets, on the reverse side of which will be an application form. Therefore, anybody who has a leaflet will have the application form ready for completion and submission. We shall certainly take into consideration the suggestion of the right hon. Lady with regard to the National Assistance offices as well as the post offices, which were suggested by the hon. Member for Ince (Mr. T. Brown). We shall endeavour to see that everybody knows about this scheme, and that is why I sought the co-operation of hon. Members on all sides of the House in this matter.
  The hon. Member for Ince took me up on the question of delay. May I try to plead my case on this? The Bill received the Royal Assent on 7th December, the day Parliament went into Recess. We laid this Scheme on 24th January, which
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  was before Parliament reassembled. We took every opportunity to get this earlier and, if it had not been for the sad event over which we all grieve, this scheme would have been in operation before now. That is the explanation and I do not think my Department can be charged with any delay in this matter.
  I was asked by my predecessor, to whom I was grateful for his kind words to me, what will be the composition of the Board. We shall be using the same administrative board as is used under the Workmen's Compensation Act, 1951, which was set up by the right hon. Lady the Member for Fulham, West. That is a Board composed of: Chairman, Mr. Paul Sandlands, Q.C.; Deputy-Chairman, Mr. J. A. Crawford, Q.C.; representing the T.U.C., from the N.U.M. is a friend of all sides of the House, Sir Will Lawther; and there is Mr. A. McAndrews; representing the National Coal Board is Mr. Pilkington, and Mr. Stansfield is representing the Employers' Confederation. That Board are well acquainted with these problems, and they will be employed for this purpose.
  In reply to the points made by a number of hon. Members about the interpretation of the problem of total disability and the question of whether deaths arise from pneumoconiosis, it will be the medical boards who at present determine these questions who will determine them in the future. These medical boards, as the right hon. Lady well knows, are composed of the greatest experts on whether the cause was silicosis or pneumoconiosis.
  Mr. B. Taylor: It will be the pneumoconiosis medical boards, and not the ordinary medical boards under the Industrial Injuries Act?
  Mr. Turton: I think I am correct in saying it will be the silicosis medical boards under the Workmen's Compensation Act; those for pneumoconiosis came later. They are the experts in this matter.
  I must not say anything that will limit them in their determination, but I can say this: I do not recognise the subdivision of the hon. Member for Stoke-on-Trent, Central (Dr. Stross) of causes into three categories. When I used to practice at the Bar we had not so sublimated causes to that extent. It is a causa causans, and not a causa sine qua

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  non, that we are seeking. In other words, where a material factor of death is pneumoconiosis, the medical board can say that it is the cause of death. It would be unwise for me to go further than that at present.
  The hon. Lady the Member for Lanarkshire, North (Miss Herbison) asked me—I nodded at the time—whether there will be one administrative board for the whole country. But for Scotland we shall be using the Scottish medical board. That is the answer to the hon. Lady's question.
  The hon. Member for Droylsden (Mr. W. R. Williams) made an appeal that the leaflet should be written in the Welsh language. I have not considered that before, but now that he has made such an impassionate plea I can see that there is considerable advantage in doing that, and we will consider whether it is practicable.
  I regard the scheme as a bold operation. We have had great help from Members on all sides of the House, and I hope that it will be the success that we all, on all sides, wish it to be.
  Miss Herbison: Can the Parliamentary Secretary answer the other point, which affects a great many people: Will those who have still to be examined by the pneumoconiosis medical board have their payment made retrospective if the case is finally decided in their favour?
  Mr. Turton: I am grateful to the hon. Lady, and am sorry I omitted that. She will see from paragraph 3 of the Order that the weekly payment
  "shall be payable as from the date this Scheme comes into operation.…
  That means that those who are at present receiving benefit under the 1943 scheme or the National Coal Board scheme for pneumoconiosis, or the 1941 scheme for byssinosis, will receive it at once, because they are already earmarked and examined.
  Those who are not in the scheme will require a medical examination, but if the application is made in due time the payment will be retrospective to the time when the scheme comes into operation, which, as I have said, is the 14th day after the signature of the scheme; and the first payments will be made on the first Thursday thereafter.
  Mr. B. Taylor: I should say that there is a precedent for disseminating the
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  leaflets in the Welsh language as well as in the English. The family guides and many of the leaflets explaining the National Insurance Act, 1943, were printed in Welsh.
  Question put, and agreed to.
  Resolved,
  That the Draft Pneumoconiosis and Byssinosis Benefit Scheme, 1952, a copy of which was laid before this House on 29th January, be approved.

INDUSTRIAL INJURIES (COLLIERY WORKERS)
11.10 p.m.
The Parliamentary Secretary to the Ministry of National Insurance (Mr. R. H. Turton): I beg to move,
That the Draft National Insurance (Industrial Injuries) (Colliery Workers Supplementary Scheme) Amendment Order, 1952, a copy of which was laid before this House on 29th January, be approved.
The supplementary scheme was laid before Parliament on 28th January, 1952. In 1950 there were amendments to the 1948 scheme, and the amendments now before the House were recommended by the National Committee which represents both the employers and the employees. Therefore, I suggest to the House that these amendments are non-controversial and I hope that after I have briefly explained them the House will consider them reasonable.
There are, in fact, four amendments. First of all we will extend this scheme to certain marginal cases. These include checkweighers, pick-sharpeners, workmen's inspectors and those who work in the central workshop for the repair of colliery machinery, who hitherto have been deemed to be excluded from this scheme. We do not think it right that that should be so. The number I am told is just under 4,000, and they will be brought into this scheme. Payment made in respect of them for any week in which they are not employed by the National Coal Board or a small colliery worker will be 1s. 3d. per week.
The second amendment concerns the supplement to the pension under this scheme which is one-third the amount of the pension. If a man has been in insurable employment for three months the supplement under the original scheme

387
is limited so as not to exceed the difference between the pre-accident earnings and his present earnings, plus any benefit he received under the National Insurance Acts. It has struck the National Committee that that is unfair, and it means that where a man is drawing 10s. a week contributory old age pension or, indeed, a guardian's allowance, he is being prejudiced. Therefore, we are seeking to amend that provision so that it will apply only to any payments made under the Industrial Injuries Act in respect of colliery accident or disease. This will prevent the men from being penalised if they are drawing 10s. contributory old age pension or a guardian's allowance.
The third amendment is in reference to the same article of the original scheme. Under that article, instead of taking the actual earnings, there was a minimum weekly wage under the old occupation. That was done under the 1948 scheme by a table of minimum wages that has now become out of date. In fact, it became out of date in 1950 and the right hon. Lady the Member for Fulham, West (Dr. Summerskill) had to bring in an amendment scheme so that a different table could be arranged. That is now out of date, and the National Committee suggested instead of having these tables, which unfortunately change because of the changing value of money, it would be better to refer all claims in general terms to the determination of the National Conciliation Board.
The fourth amendment which we seek to make is in the matter of recovery. In the very rare cases where a man receives supplementary benefit and then recovers damages from his employer at common law he has, under the original scheme, to pay back the supplementary benefit up to the amount of half the damages; and, if he refuses to pay, after not receiving supplementary benefit for four years, then there is no means of recovery of that amount. That, we think, if unfair on the other contributors to this scheme and, therefore, the National Committee re-
388
commends that we should amend that provision so that the power is given to the Committee to deduct any amount so due from any supplementary benefits; and also to give power to recover it by other means and, if necessary, by process of law. That is a recommendation which we ask the House to accept.
I should explain that there will be no cost on the Industrial Injuries Fund, nor on the Exchequer. This is entirely a matter for the supplementary scheme, and the actuary to this scheme is quite satisfied that the very small increase being caused by this amending Order can be carried by the scheme. The cost will be substantially covered by the extra 1s. 3d. contribution which comes under my first amendment.
11.13 p.m.
Dr. Edith Summerskill: I have no intention of keeping the House at this late hour. We are fully in agreement with this scheme for workers not previously included.
Mr. Bernard Taylor: The supplementary scheme agreed up between the National Coal Board and the National Union of Mineworkers in 1948 has always had this particular defect in so far as it has not been universal in its application to colliery workers. As an ex-checkweigher, I am glad to see that the checkweighmen are to be brought in, as are the workmen's inspectors and the pick-sharpeners. From an insurance point of view, I think some of those would be very good "lives" because the incidence of accidents among them is not great. The weighers and sharpeners and inspectors will welcome at long last that this admirable supplementary scheme has been brought in to embrace all colliery workers.
Question put, and agreed to.
Resolved,
That the Draft National Insurance (Industrial Injuries) (Colliery Workers Supplementary Scheme) Amendment Order, 1952, a copy of which was laid before this House on 29th January, be approved.

SHODDY CLOTHING AND MATERIALS
Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Butcher.]
11.20 p.m.
Mr. Norman Dodds: I wish to raise tonight a matter of the greatest importance to all of us in an endeavour to ginger up the forces in a war which will have the support of the vast majority of people, the war against waste, and I will restrict myself to the narrow field in which shoddy clothing and materials is to be found in ever-increasing quantities.
I want to make it clear before I make my specific complaints that I think there is ample evidence to indicate that this country still produces the finest textiles in the world, but if we are not careful there is a danger that some of the smart alecks who have crept into the industry will filch away the good name which this trade has built up. I am anxious on this occasion to avoid any disposition to party politics or setting one set of merchants against another. The subject is far too important for that.
Basically, the allocation of raw materials has caused the increase in the production of shoddy materials, because it has enabled some manufacturers and makers up, who have not the high respect for the traditions of this industry to get into it. Even in the utility scheme, which has been of great benefit to a vast number of people with limited purses, there are some weak links, and that largely arises from increased costs of production as well as labour costs, and the fact that because of the wide gap between minimum and maximum in the specification the general tendency has been to make the minimum the general specification.
There is legislation on the Statute Book to enable action to be taken, and most people feel that immediate action should be taken. Whatever the causes, I think the effects have been far reaching in the clothing, household linen and furnishing fabric trades, and there seems to be an attitude all to prevalent among producers that they have no responsibility whatever for problems of the home wash, cleaners and laundries. To illustrate what I
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mean, I would refer to the public outcry against shrinkage, particularly in rainwear. In the weaving of textile fabrics threads are strained, and unless there is a degree of pre-shrinkage there is a danger of some shrinkage occurring on contact with water or in the dry cleaning process. The two best known systems of pre-shrinkage are Rigmel and Sanforized, and one of the difficulties is that the get-rich quick merchants do not like these processes which considerably reduces the yardage of material available for sale.
I do not think there is much doubt that there is a great need for Government action to deal with those who do not observe what is ordinary fair play in dealing with the public. I quote a few lines from the "Sunday Chronicle" of 10th February. It says:
"The sales director of a well known firm producing 200,000 dresses a year declares fortunes are being made by people who omit to pre-shrink their products. To pre-shrink an article takes anything up to 7 or 8 per cent. more material and that means less profit."
The serious repercussions of this problem were put to the Board of Trade by the Retail Sales Trading Association several months ago. I quote from the "News Chronicle" of 30th August, 1951. It is headed:
"Move to end swindle of shoddy raincoats,"
and states:
"The Board of Trade have started a drive to stamp out production by some manufacturers of shoddy utility raincoats."
It goes on:
"A Board of Trade spokesman said that during the months when prices have been rising there has been naturally a tendency for people to try and cash in on the situation. We are now considering what safeguards can be applied against the unscrupulous manufacturers."
I ask the Minister from the Board of Trade to say if anything has happened from that date in August. I have it from a most authoritative source—one of the biggest textile testing houses in this country—that some ranges of cotton gabardine rainwear have a shrinkage of 10 per cent. Seldom is it less than 6 per cent. This is a serious problem because it can mean two-way shrinkage of three to four inches. I have seen examples of raincoats which, were a perfect fit when taken from the shop but which in a relatively short space of time made the owners look like skinned rabbits.

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I have a letter from one of the biggest wholesale firms in Britain which states:
"My Board have caused inquiries to be made and much of the criticism levelled at the standard of production of gaberdine raincoats in certain utility schedules can be substantiated—No. 223A, for instance."
One of the largest wholesale houses in Scotland says:
"Deliveries of materials, especially 223A, coming in Spring, 1951, were much poorer in quality than hitherto. The market is flooded with this material and even at low prices it cannot be sold."
This firm sent to the testing house—the City of Bradford Conditioning House—some of this material and after being laid flat in water for two hours and then dried on a flat surface in a temperature between 60 and 70 degrees Fahrenheit shrinkage was 5 per cent.
I think there will be general agreement on both sides of this House that with the economic situation such as it is today it is essential that in the spending of foreign currency on the raw materials we bring into this country there is a great need that they should have fair serviceability, and I think it is up to all who are interested in this problem to give support to anything which will help to see that the public get a fair deal when they buy this material.
I have a long list provided by a textile house of the alarming shrinkage found in dress wear and children's wear of cotton fabrics recently treated for shrinkage. Here are a few examples: Printed plains—shrinkage 10 per cent.; ginghams, 13 per cent. or 4½ inches every yard; printed haircord, 7 per cent., and linen 8 per cent.
Unfortunately, shrinkage is not confined to clothing. It is rampant in mixtures of rayon and cotton for furnishing fabrics. I have a sample here of what I mean. Here are two bits of material. One has not had the process of pre-shrinkage and the other has. One of the troubles with this is that the housewife, who is unaware of this particular problem, will take, in many cases, that which has not been through the pre-shrinkage process because the process of pre-shrinkage, as can be clearly seen, has taken off some of the sheen and has left a cockling effect, which does not seem so attractive as that which has not been pre-shrunk.
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But the excuse, as the testing house makes it in this case, is that about 8 per cent. is lost in the process of pre-shrinkage. This material, which is absolute tripe, looks attractive, but the looseness of the weave and the fact that it has not gone through any process of pre-shrinkage means that any person buying it will find very little serviceability of any kind. I have here a most wonderful bit of material, which is a rayon called a "viscose rayon." It is a dress material, in which the attractive design is produced by steam pressure on the rayon material.
If it is an acetate rayon, it can be depended upon to have a fairly long life, but as this is a viscose rayon, then a drop of rain will take the pat tern out. To send it to the cleaners means the complete disappearance of the attractive pattern, which means the ragbag at an early date.
Mr. W. Nally: It is a good job they are not fig leaves.
Mr. Dodds: I must turn to some dress effects introduced by makers-up. There is great use these days of a rubber adhesive instead of a sewing thread. When the articles are new, they look quite well. For instance, here is a green dress with which, when it was new, was a waist of imitation Italian quilting. On the arms it had the same effect. This effect was produced by two layers of material and in between a heavy thick thread. It was stuck on with a rubber adhesive, giving the imitation effect.
Once the material is sent to the cleaners, the rubber adhesive disappears and down come the bits of thread, so that once again it is only fit for the rag-bag. I have here, too, an imitation Italian Seersucker dress, in which the quilting effect is obtained by a rubber adhesive which is stuck on a thin material giving the puckered design of a seersucker dress. Once it goes to the cleaners, part of the dress comes back as a plain floral dress, as in this particular case. In other parts of the dress, one can see the puckered pattern.
Sir William Darling: Is the hon. Gentleman aware there are various forms of dry cleaning? There are some forms which use petrol, some spirit, and some which use neither

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of these. If the third process is adopted, the hon. Gentleman's wife will not lose the floral pattern which she so much admires.
Mr. Dodds: I am glad the hon. Gentleman put that point, but it does not alter my case.
This rubber adhesive is used in the production of buckles and belts instead of sewing thread. Once they go to the cleaners, the rubber solution dissolves and there is a ragged edge, which is the end of the business.
Here is a ladies' jacket in which the pockets have been stuck with a rubber adhesive. It went to the cleaners and was returned revealing a backing of cardboard and the pockets hanging from the garment. There is a widespread use of polyvinyl chloride plastic sheeting as an interlining for coats. Until going to the cleaners the material is pliable, but some of the properties of the sheeting are removed in the cleaning process and the garments go out of shape. In this child's overcoat there is a crinkling noise after cleaning which is enough to send a child to a mental home.
The industry has some of the finest testing houses available for consultation. There is no reason why this state of affairs should continue, and I hope that the Parliamentary Secretary will give us some hope of active steps being taken to deal with it. Finally in my chamber of horrors, here are plastic buttons which are found to be dyed with fugitive dyes or to soften in cleaning. The dyes are transferred to the garment's surface at the cleaners. I wish I had the time to delve into the question of nylon stockings. There have been protests from all over the country about the way the quality of these stockings has deteriorated over the past 18 or 20 months. I have been asked by many of the ladies who have written to me on this matter to say that highly desirable as these articles are unless there is some attempt to improve the standard there may be a revolt, and the goose that lays the golden egg will be killed.
There is great support for some action in the trade. In an editorial in the "Drapers Record" on 2nd February it states:
"Unfortunately voluntary agreement by organized employers could not be relied upon to achieve the object mentioned. Experience
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has demonstrated that time and time again. There are always some backsliders and not every firm belongs to a trade association. Consequently, the maintenance of minimum standard could be effected only by legislation with appropriate penalties for defaulters."
In regard to quality I should mention one point from the male aspect. I am wearing a suit made in 1935. Despite the fact that I have swollen visibly, and there is a terrific strain on the seams, it is as good as when I bought it in 1935.
Sir W. Darling: The days of Tory misrule!
Mr. Dodds: I wish I could get another suit which could stand me in as good stead. I suggest to the Board of Trade that there is a great need in this direction to help the housewives, the people in the shops, the laundries and the cleaners. I am hoping there will be some informative labelling which will distinguish some of these garments—for example between viscose and acetate rayon. I understand that a Committee of the Clothing Industry Development Council has been considering this matter for some time, and I would like to ask what has happened in connection with that. I hope, too, that eventually there will be introduced some Government standard marks that will guarantee such things as colour fastness, pre-shrinkage, and a reasonable degree of shower proofing.
Finally, I hope there will be set up a small professional body, under the wing of the Minister, which will deal with the many problems that will arise, particularly of informing the public, and also of research work. I hope this will be treated as a matter of some seriousness at a time when every effort is being made to deal with the question of waste. I hope that the Minister will say something about the Merchandise Sales Act, which is complicated and difficult to understand, and which will have to be simplified if it is to be of any value.
Mr. John Rodgers: It is important to realise that these delinquents producing shoddy goods are only a small proportion of the trade. On the whole the textile industry is an extremely good one, and its standards are comparable with those of any other country. I should like to ask if it is possible for the Board of Trade to bring in some form of regulation whereby

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goods bear the names of the manufacturer or retailer, so that shoddy merchandise can be traced back.
11.41 p.m.
The Parliamentary Secretary to the Board of Trade (Mr. Henry Strauss): The hon. Member for Dartford (Mr. Dodds) has raised a number of questions, and has given me very little time to reply, but at the outset I must repudiate the statement that there has been an ever-increasing quantity of shoddy goods in recent years. We know of no evidence of that. On the contrary, we believe that the general standard of clothing has improved in the last 10 years, in spite of all the difficulties of the industry.
I am not going to deny that bad textiles and bad clothing exist. There is no industry in any country where there are not some bad examples, but the British reputation for textiles at home and abroad is very high, and it does a disservice to the industry and the other export industries to make an untrue allegation that there is an ever-increasing proportion of shoddy goods.
I regret even more that there has been so much publicity given to the statements of the hon. Member before there has been any opportunity to reply. This debate was originally to have taken place on 7th February. There was no debate in the House on that day. Notwithstanding that, in at least three papers I have seen reports of the speech delivered by the hon. Member in that non-existent debate. Well knowing, as the House does, his loathing of every form of publicity, we know what pain that must have caused him.
The Board of Trade is directly responsible for the quality of utility goods only, and on that subject the Douglas Report will be published tomorrow afternoon and hon. Members will be able to study it. The hon. Member referred to the relaxation of certain specifications. It is true that the previous Government did add the so-called flexible specifications to the rigid specifications to which utility goods were previously subject. Obviously our predecessors were moved to that course by powerful reasons.
Those reasons, briefly, were the barrier that the rigid specifications imposed against the introduction of new cloths and the consequent injury to our export
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trade. Even so, the old rigid specifications did not give any close guarantee of performance in such matters as shrinkage; in fact, the only utility specifications where pre-shrinkage was compulsory were drill cloths for overalls.
In the brief time available I can take only a few of the points made by the hon. Member, but let me take some about shrinkage. To hear the hon. Member speak tonight one would have thought that nothing except the malevolence of traders prevented all cloths being adequately pre-shrunk. Of course nothing could be further from the truth. This is a highly technical problem to which research is constantly being applied. The textile industry is fortunate in having some admirable research institutions in the Shirley Institute, the Wool Textile Research Council and the British Rayon Research Association.
Let me give some of the reasons why all cloth is not pre-shrunk. First the machinery capacity for applying the process, though it has been increasing substantially for several years, would not be sufficient to shrink all cloth, even if that were desirable. In fact, of course, it is not desirable. Take heavy curtain cloths as an example. In heavy curtain cloths pre-shrinking might even be harmful. A heavy curtain tends to extend its length in hanging and if it were pre-shrunk it would tend to pull away at the top. For that reason such curtains are generally sent to the cleaner and not washed.
Take again the effect on cost if all cloth were pre-shrunk. The price would be sent up both by the amount of the reduction in length caused in the process of pre-shrinking and by the expense of that process itself. Many housewives would certainly prefer to save themselves that expense and to buy cloth that could shrink—buying a little more of it to allow for the shrinking.
Much depends, of course, on the purpose for which the cloth is required in considering whether the process of pre-shrinking should be applied. I have mentioned drill cloths for overalls where it certainly is applied. Then there is the question, familiar I suppose to all hon. Members or at any rate to their wives, that whether or not shrinking takes place in washing may depend on whether one washes well or badly. All those considerations apparently escaped the notice of the hon. Member.

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The hon. Member spoke of cotton gabardine rainwear. Well, after a complaint about shrinkage in the autumn of last year, the Board of Trade asked the Cotton Board to make a special inquiry. The Cotton Board called a meeting of all the sections concerned. I will not give the entire list because of the short time available. Intensive research is being carried out. No solution has yet been found, but the Cotton Board is convinced that we are as far advanced towards a solution as any country in the world. I may say that the Board of Trade has received no complaint of a shrinkage of as much as the 10 per cent. to which the hon. Member referred.
Fugitive dyes were another matter that the hon. Member mentioned. Again the quality of the dye should be appropriate
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for the use to which the cloth or garment will be put. It would be completely wasteful to use a faster and a more expensive dye than is necessary in such goods, for example, as linings. What is wanted—and here I agree with the hon. Member—is informed buying; that is to say, the purchaser should know as far as possible what are the qualities of what he or she is buying.
As to the remedies—
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 Ten Minutes to Twelve o'Clock.

ROYAL NAVY
  Sea Warfare (History)
  Sea Warfare (History)
  Recruiting Advertisement
  Recruiting Advertisement
TELEPHONE SERVICE
  Agreement Notices (Posting)
  Agreement Notices (Posting)
  Public Board Officials
  Public Board Officials
  Botwnnog, Caernarvonshire
  Botwnnog, Caernarvonshire
  POST OFFICE (GOVERNMENT SPONSORED SLOGANS)
  POST OFFICE (GOVERNMENT SPONSORED SLOGANS)
  BRITISH COUNCIL (OVERSEAS OPERATIONS)
  BRITISH COUNCIL (OVERSEAS OPERATIONS)
  FALKLAND ISLANDS DEPENDENCIES (HOPE BAY INCIDENT)
  FALKLAND ISLANDS DEPENDENCIES (HOPE BAY INCIDENT)
  YUGOSLAVIA (U.K. ASSISTANCE)
  YUGOSLAVIA (U.K. ASSISTANCE)
MINISTRY OF FOOD
  Fish Meal
  Fish Meal
  Home Canning (Tinplate)
  Home Canning (Tinplate)
  Meat (Overseas Purchases)
  Meat (Overseas Purchases)
  Price-Controlled Goods
  Price-Controlled Goods
  Fruit and Vegetable Sales, London (Telegram)
  Fruit and Vegetable Sales, London (Telegram)
  Horticultural Workers (Special Ration)
  Horticultural Workers (Special Ration)
  Bakers, N.W. Area (Gas Charge)
  Bakers, N.W. Area (Gas Charge)
  HURRICANE, FIJI (DAMAGE)
  HURRICANE, FIJI (DAMAGE)
SOUTH-EAST ASIA
  High Commissioner, Malaya (Directive)
  High Commissioner, Malaya (Directive)
  Commissioner-General
  Commissioner-General
  EAST AND CENTRAL AFRICA (WAGES BOARDS)
  EAST AND CENTRAL AFRICA (WAGES BOARDS)
TANGANYIKA
  Manpower Committee
  Manpower Committee
  Trade Union Adviser
  Trade Union Adviser
KENYA
  Government Staffs (Council)
  Government Staffs (Council)
  Legislative Council
  Legislative Council
  Constitution
  Constitution
  MAURITIUS (TEACHERS' PENSIONS)
  MAURITIUS (TEACHERS' PENSIONS)
EDUCATION
  Size of Classes
  Size of Classes
  Technical Schools
  Technical Schools
HOUSING
  Liverpool
  Liverpool
  Subsidy Rates
  Subsidy Rates
NATIONAL HEALTH SERVICE
  Ambulance Drivers, Kent, Surrey and E. Sussex
  Ambulance Drivers, Kent, Surrey and E. Sussex
  Hospital Staffs (Representation)
  Hospital Staffs (Representation)
AGRICULTURE
  Food Production
  Food Production
  Sheep Worrying
  Sheep Worrying
SCOTLAND
  Rural Water and Sewerage Schemes
  Rural Water and Sewerage Schemes
  Highlands Panel (Composition)
  Highlands Panel (Composition)
  INTER-ALLIED REPARATION AGENCY
  INTER-ALLIED REPARATION AGENCY
NATIONAL FINANCE
  Indian Sterling Balances (White Paper)
  Indian Sterling Balances (White Paper)
  Purchase Tax and Utility Schemes (Report)
  Purchase Tax and Utility Schemes (Report)
TRADE AND COMMERCE
  Carpets and Rugs (Production)
  Carpets and Rugs (Production)
  Film Finance Corporation (Borrowing)
  Film Finance Corporation (Borrowing)

Preamble
The House met at half past two of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers

LORD TURNOUR
The Right Honourable Edward Earl Winterton, in the Peerage of Ireland, haying been created Baron Turnour, of Shillinglee in the County of Sussex—Was (in the usual manner) introduced.

LORD KIRKWOOD
The Right Honourable David Kirkwood, having been created Baron Kirkwood, of Bearsden in the County of Dumbarton—Was (in the usual manner) introduced.
Several Lords—Took the Oath.

BLACKPOOL CORPORATION BILL [H.L.]
3.0 p.m.
Read 2a, and committed: the Committee to be proposed by the Committee of Selection.

CLIFTON SUSPENSION BRIDGE BILL [H.L.]
Read 2a, and committed.
GOVERNESSES BENEVOLENT INSTITUTION BILL [H.L.]
Read 2a, and referred to the Examiners.
TYNE IMPROVEMENT BILL [H.L.]
Read 2a, and committed.

UNDERPAID LETTERS FOR ABROAD
LORD MANCROFT: My Lords, I beg to ask Her Majesty's Government the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government, whether they are aware of the inconvenience occasioned abroad by the failure of correspondents to stamp their letters correctly, and whether they have any plans for dealing with this matter.]
THE POSTMASTER GENERAL (EARL DE LA WARR): My Lords, I fully agree with the noble Lord as to the importance of this question. A great deal of attention has been given to it over a long period. Great publicity has been used, including an approach to individual posters, where they can be identified, and I am glad to say that there has been a considerable fall in the number of underpaid letters for abroad posted in this country. There is actually a reduction to well under a half as between February of last year and January of this year, but the position is far from being satisfactory. I shall continue to do all I can to bring the correct rates of postage to the notice of the public.
LORD MANCROFT: My Lords, while thanking the Postmaster General for that reply, may I ask him whether he has considered the policy of intercepting letters and returning them to the original sender, as I understand is the custom in America?
EARL DE LA WARR: Yes, I certainly have given consideration to that point because, until I had examined it in detail, I must confess it rather attracted me, but I found that there are certain very considerable objections. It would require legislation for the Post Office to be allowed to return letters to senders, if they are correctly addressed. Moreover, as only 20 per cent. of those who post letters abroad put their name and address on the outside of the envelope, it would necessitate opening the letters. That, again, would mean legislation—and, I think your Lordships would agree, legislation of an undesirable character.

OPERATION OF CATERING WAGES ACT
3.3 p.m.
LORD DERWENT: My Lords, I beg to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether the Minister of Labour and National Service has yet heard further from the Catering Wages Commission on certain questions arising out of their Report on the operation of the Catering Wages Act, 1943, in the hotel industry, as mentioned in an answer to a Question on November 28, 1951.]
THE LORD PRIVY SEAL (THE MARQUESS OF SALISBURY): My Lords, my right honourable friend the Minister of Labour and National Service, has heard from the Catering Wages Commission in connection with some of these matters. Certain legal difficulties, however, have emerged, and the Minister is considering the situation disclosed. At the same time he is in discussion with both sides of the hotel industry and is hopeful that some constructive proposals may result.
LORD DERWENT: My Lords, while thanking my noble friend the Leader of the House for his satisfactory reply, may I remind Her Majesty's Government that the matter is even more urgent than it was last November, owing to the large number of visitors who will be coming here for Her Majesty's Coronation?
THE MARQUESS OF SALISBURY: I can assure my noble friend that the Minister has that matter very much in mind, but I will in any case report to him what my noble friend has said.

HUMANE RABBIT TRAPS
3.5 p.m.
LORD AMULREE: My Lords, I beg to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether it is to be understood, from the statements made on their behalf in the House of Lords debate on November 28, 1951. that they have accepted responsibility for promoting the designing of a rabbit trap which would be as effective and as easily transported as the gin trap now in use, but less cruel; whether the co-operation of the Department of Scientific and Industrial Research has been invited; and, if not, whether that will be done, and provision made from the funds of the Department for such expenditure as may be necessary.]
THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF AGRICULTURE AND FISHERIES (LORD CARRINGTON): My Lords, the Government have not taken responsibility for promoting the designing of a rabbit trap to replace the gin trap, and the Department of Scientific and Industrial Research has not, therefore, been asked to
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assist. The Government has, however, organised trials and assisted in the development of the most promising trap so far designed for this purpose. Various models were submitted by inventors to the Agricultural Departments and to the Committee on Cruelty to Wild Animals for their examination. The Committee, as stated in their Report, were impressed with the principles of a particular new model and considered this design of trap to be in advance of any others submitted to them. They asked that the Ministry of Agriculture should try this trap, and arrangements were made for a number to be produced so that field trials could be undertaken. The trap, for which the rights are held by the inventor, has undergone several modifications which have been settled in consultation with him in the light of field experience. Machine-made traps are expected to be available shortly for wider scale field trials, as the preliminary field tests have supported the first impressions about the soundness of the principles on which the trap is based.
LORD AMULREE: My Lords, I thank the noble Lord for his full explanation in reply to my Question.

BRITAIN AND FORMOSA
3.7 p.m.
VISCOUNT ELIBANK: My Lords, I beg to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether in recent weeks they have intimated to the Government of the United States that in certain circumstances they would intervene in the Chinese civil war by giving military, naval or air assistance to the Chinese nationalists on the island of Formosa.]
THE PARLIAMENTARY UNDERSECRETARY OF STATE FOR FOREIGN AFFAIRS (THE MARQUESS OF READING): My Lords, the answer to the noble Viscount is, No. The noble Viscount will have seen the statement made by the Prime Minister on January 30 in another place on the results of his visit to Washington. His statement was in the following terms:
"No issue has arisen as to the question of employing General Chiang Kai-shek on the

105
Continent. What I have said and repeat is that he and those who fought with him against the Communists and have taken refuge upon the island of Formosa should not be invaded and massacred there while the United Nations forces possess such overwhelming naval superiority."
My Lords, Her Majesty's Government have no intention whatever of intervening in the Chinese civil war, and have assumed no commitment of any sort in that direction.
VISCOUNT ELIBANK: My Lords, I beg to thank Her Majesty's Government for the reply which they have given to my Question, the last sentence of which I have heard with much gratification. However, the remainder of the answer to the Question requires further study, and I therefore propose to defer any further remarks on the subject until the debate on Foreign Affairs on March 12 arising on the Motion of the noble and learned Earl the Leader of the Opposition.

THE ECONOMIC SITUATION
3.8 p.m.
Debate resumed (according to Order) on the Motion moved yesterday by Lord Pakenham: That there be laid before the House Papers relating to the Economic Situation.
LORD PETHICK-LAWRENCE: My Lords, the debate yesterday on the Economic Situation ranged over a great number of interesting topics. They included questions relating to money, which were dealt with more particularly by the noble Lord, Lord. Brand, and the noble Lord, Lord Balfour of Burleigh, who is not at the moment in his place, but no doubt will be here before long. If I single out these topics for special treatment, it is because I share with Lord Balfour the opinion that they are of supreme importance, and I take the view that if we are pursuing, as I think we are, a wrong policy, it may be fraught with dire consequences for this country and its economy in the future. I made some reference to this question in the debate that we had on the Address last autumn, and I return to it to-day because, quite clearly there are likely to be difficulties, and already the position is one which merits very careful reconsideration. What has actually happened is that the Chancellor of the Exchequer
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has reversed the policy of cheap money to which successive Chancellors of the Exchequer have adhered for nearly a generation. I might have been pardoned if I had assumed that dear money by this time was not only dead but damned, but because evidently that is not the case I hope that I shall be forgiven if I make a few remarks by way of introduction.
Your Lordships are of course aware that money is said to be dear when the rate of interest one has to pay for borrowing it on best security is high, and cheap when that rate is low. The rates vary according to the length of time the loan is to run, with day-to-day loans at one end and irredeemable stocks at the other. The bank rate governs the former and the price of Consols is the indication of the latter; and, strange as it may seem to many people, there is no direct relationship between the rate of interest paid for short-term loans and that paid for long-term loans at any one particular time, though no doubt over a period these two exercise a pull on one another. In the half century preceding the First World War the Governments of the day allowed the Bank of England a free rein in settling the bank rate, but when the public came up against the grave consequences of the bad finance of that war, and later of the deflation which followed it, leading up to a restoration of the gold standard, Mr. Neville Chamberlain, who was then Chancellor of the Exchequer, took over the helm on behalf of the Government by the creation of the Exchange Equalisation Account, using that power to establish cheap money. It was that decision, made all that long time ago, which remained unaltered until last November.
Now I would ask your Lordships to look beyond the immediate present to one or two years ahead, to the years 1953 and perhaps 1954, in order that one may see where we are likely to be at that time. Without any gift of prophecy whatever, it seems to me that there are just three possibilities. The first is that we then may be facing—which God forbid!—the grim reality of World War No. 3. If that is so, I would ask your Lordships to consider deeply whether any addition to the horrors which are the inevitable consequence of modern war, horrors human, economic, and social, you

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are really prepared to face a war based on dear money. In order to bring your Lordships face to face with that issue I should like you to contrast what happened in the First World War, the war of 1914–18 which was fought on dear money—much of it at 5 per cent., some of it a little below, and some even above that figure—with what happened in the 1939–45 war which was waged on cheap money at 3 per cent. or quite a considerable amount below that figure. Let me point out to your Lordships what was the result at the end of those two wars.
At the end of the First World War the National Debt had increased by some £7,000,000,000 and the annual service of that debt had gone up by some £300,000,000. At the end of the Second World War the further increase of the National Debt was more than double as much—I should say a round figure of something in the neighbourhood of £15,000,000,000, more than twice the increase in the First World War, and the annual increase in the service of the debt, instead of being £600,000,000 as one might have expected, was only £200,000,000—actually less increased service charge for more than double the total increase in the National Debt. If we are to envisage our emergence successfully from a Third World War, with heads bloody and bowed down by a National Debt of £20,000,000,000 additional, it is just possible that we may be able to stagger along with a service charge for the debt of some £400,000,000 over and above what we pay at the present time. But if the annual additional charge for servicing the debt is £1,000,000,000 we shall be utterly broken. Therefore I say to your Lordships, if I have proved my point, that to enter a Third World War with dear money is to court financial wreckage and disaster.
Let me take the second possibility. It may be—we all hope that it will be—that negotiating from strength in 1953 we may reach some sort of concordat with the Soviet Union, with its satellites and with China—if not exactly a peace, at least some modus vivendi. Should that be so, the year 1954 will see a great reduction in our armament expenditure; and then all over the world, and not least in the United States of America, which exercises so great an influence in the
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trade of the world, there will be a cessation of buying and we shall be swept off our feet in an orgy of deflation. Heaven help us if we then are caught on the wrong foot of dear money! It might well be in such a case that in the midst of our satisfaction at our deliverance from a shooting war we should find ourselves in a slump compared with which the miseries of the 1920's would seem, in retrospect, like prosperity.
But, my Lords, let me come to the third possibility, which is probably the most likely of the three. No war, no negotiated peace, not even a declared modus vivendi, but a dragging on of a cold war, and a continuation of rearmament—though, as President Truman said the other day, at a steadily declining rate—and running through all our economy the deadening results of dear money, even if, in the light of events at that date, the price of money is then reduced. Let me illustrate this by a few examples showing how events will work out. First, I consider a house for the people. In the past we have talked a good deal about housing, with a certain amount of Party incrimination. I leave all that out of account for this purpose. Let me assume, for the sake of argument, round figures and say that a house such as we contemplate is going to cost £1,300. Let me assume as broadly true that the effect of dear money, both short-term and long-term, is to put up the rate of interest by 1 per cent. Now 1 per cent. on £1,300 is £13 a year. That is five shillings a week. So that the effect of our dear money policy is to increase the economic rent of one of these houses by no less than five shillings a week. That, I think, is a very serious thing to contemplate.
Let me turn next to education. I am not going to discuss it in terms of the recent education circular, but from an entirely different aspect. Assume that a school is to be built at a cost of £100,000. Continuing our assumption that the effect of these changes is to put up the rate of interest by 1 per cent., we find that the interest on £100,000 is £1,000 a year. If we assume that this school was designed to provide places for between 100 and 200 children, that means that for every child who is found a place by building this new school there will be an extra cost of from £5 to £10 in consequence of the dear money policy.

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Let us look at it from the point of view of the Electricity Board. On every £1,000,000 of capital for generating purposes, or other things which the Electricity Board are going to embark upon, £10,000 additional every year will have to be paid for loans. All that has to be paid by the consumers of electricity. And, mark you, that does not continue only while the dear money policy continues. On all loans, whether for housing, schools or electricity, contracted in the period of dear money, for all time in the future, until the Sinking Fund pays them off, this additional charge will have to be made. Noble Lords opposite particularly favour private enterprise. We on these Benches have never said at any time that there will not be a great deal of private enterprise right through our economy, at any rate for years to come. On every occasion when a company or a private individual borrows money to enlarge a business, the result of dear money will be that the individual or the company will have to pay 1 per cent. more interest for the loan. That, again, is going to clog up the wheels of private enterprise, and it is going to mean additional cost to those who buy the produce of that free enterprise.
These are the stark realities of the consequences of dear money. What are the grounds put forward for introducing it which are said to be so overwhelming that these consequences must be faced and borne? A great many arguments have been put forward by different speakers. I suppose that the most eloquent were those which fell from the lips of the noble Lord, Lord Balfour of Burleigh, whose exceedingly able and interesting speech we all listened to with such close attention last night. I am deeply grieved that he is not here to-day. I had thought that as he made that important speech he would have been present to hear what is said in reply, but no doubt he is otherwise engaged. I assume, as a matter of course, that if he were not he would be here. The first point in Lord Balfour's argument was that there had to be a reduction in general spending and, in particular, of new capital outlay. I agree absolutely with that. I think it is clear that that reduction had to take place if we were to prevent inflation and balance our account. He went further and said that as a result there must be a contraction of credit, at the fountain source of credit. Again I fully agree.
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Then the noble Lord said that, as there was to be this reduction of credit, if it was really to have effect there must be a psychological drive, as well as a purely material effort. Again I agree. Then, he argued that the sole psychological stimulus that would be effective was an increase in the rate charged for money. There, I fundamentally disagree. I really cannot believe that with all the skill, all the eloquence, all the experience, all the judgment of the banking fraternity, backed up by a solid phalanx of members of the Government, men whose whole reputation is based on their eloquent power of appealing to human psychology, it would not have been possible to make such art appeal and to make it effectively. I think it very likely that members on this side of the House who thoroughly agree that this crisis has to be met, and that it must involve some retrenchment and reduction of the fundamental basis of credit, would have helped, and I cannot think that their efforts would have been of no avail. I find myself unable to accept the suggestion that we must go through these incomparable evils which I have shown wait upon dear money just because it seems to certain bankers that it is necessary, in order to produce the right psychological effect, to impose dear money once again on the people.
The noble Lord, Lord Balfour of Burleigh, likened the case to the false scientific theories of people who believed in perpetual motion. I venture to think that that was a very bad analogy because, in point of fact, the theories of those people, as the mathematicians and scientists of the time knew well, were quite untenable. The mathematicians and scientists knew that you could not have perpetual motion, and the experiments which were made in that direction naturally failed. In this case it is the other way round. If a comparison from me is called for I will give it to the noble Lord. I say that it is not necessary to burn down your house in order to get roast pig. There is another point I should like to make in that connection. Suppose that the effect of the psychology created by dear money is—as it may very well be—to bring about a certain measure of unemployment, and not only a certain measure of unemployment but, in consequence, a certain underproduction. Would any of your Lordships seriously tell me that we should have the whole of this under-production for the

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one sole object of creating a certain psychology which I think the bankers and the Government can perfectly well create without it?
Your Lordships will acquit me, so far, at any rate, of introducing Party into this question at all. I hope you will continue to acquit me of any Party bias when I proceed to the inevitable question of who is responsible for introducing this dear money. Hitherto, I have not distinguished between dear money which is the result of the putting up of the bank rate and that measured by the long-term price of securities on the Stock Exchange; but it is now necessary to make that distinction. It was during the Labour Government that we began to see a considerable fall in Stock Exchange values, and in so far as that could have been prevented, the Labour Government cannot escape responsibility.
I do not think I am disclosing improperly any Cabinet secrets if I tell your Lordships that when I was in the Cabinet we at frequent intervals considered the whole balance sheet of the nation—Government expenditure, municipal expenditure, company expenditure and private expenditure—and we tried to make a balance between the work that had to be done and the labour force, the manpower and capital equipment available to do it. To the best of our ability we tried to keep a balance and not start doing things for which there was neither enough money nor enough labour. We may well have been—and I think the logic of what has happened shows that we were—a little too optimistic in our views, and that we should not have attempted so much. I am not discussing the question of the Welfare State, but of the whole enterprise of the country. That may have been a fault of ours, but I do not think it is a fault regarding which noble Lords sitting opposite can properly sling a stone at us, when I remember that they were constantly taunting us with trying to plan and constantly urging us to throw the reins on the backs of the horses of free enterprise in order that they might get ahead with their business and not be constricted and confined by our planning activities.
It is true, therefore, that when the Conservative Government came into being there had been a considerable fall in the value of Stock Exchange securities, which, of course, is the inverse of the rise in
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the rate of interest for long-term loans. There was a considerable hope amongst certain sections of the public that if a Conservative Government came in all that would disappear and what many people call the credit of the country, though that is not a very suitable phrase, would be revived and, as my noble friend Lord Strabolgi said yesterday, the Stock Exchange values of securities would rise. We all know that the exact reverse of that took place. So soon as the Government were established and the first cuts were made by the Chancellor of the Exchequer, there began a headlong fall in the value of securities, which was very much increased by the announced determination of the Chancellor to put up the bank rate and a number of other rates, including the rate of interest on loans made to local authorities for various purposes. I do not think it is an exaggeration to say that some people must have murmured to themselves, "The Labour Government chastised us with whips, but the Conservative Government is chastising us with scorpions."
I think I have fairly distributed the blame, if blame it is, for dear money, between the Labour and the Conservative Governments. I think I have stated the unbiased facts. But it is no part of my case to argue that this new policy in putting up the bank rate and in bringing about the helter-skelter fall in the price of securities has benefited any particular body of people. Some people say it has benefited the banks. Against that, it is obviously true that the banks, who have large quantities of gilt-edged securities, have suffered a loss on that account. Whether or not they can make that good in the future, and keep the advantage, I do not know. I have gone into this matter with a good deal of care and I have not found any section or body of people one can confidently say is making a good thing out of this. It is one of the curious facts in finance that surprises some people, that because somebody loses, it does not follow that somebody else gains; and if somebody gains, it does not follow that somebody else loses. And I have yet to be told that it is any merit in a particular financial policy that there is no one in particular who gains anything out of it and that everybody suffers a loss.
What am I asking should be done? Last November I said that we had taken

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this step, which had had certain consequences. I did not know how bad they were going to be, but they were bad enough. I hoped that in no circumstances would there be a further turn of the screw, and the noble Viscount, Lord Swinton, gave me, not a full assurance along those lines, but an indication that if there were a further turn it would not be turned very tightly. I think that is as near as I can express what he said. I am asking for more than that to-day, although it may not be given by the noble Lord who is to reply, because, obviously, it is a question in the last resort for the Chancellor of the Exchequer. I hope that if I have not convinced your Lordships very far, I have convinced you so far as this—that there ought to be no further turn of the screw. We have re-established dear money, with grave peril to the future, but, for heaven's sake do not let us go any further and make money still dearer than we have made it at the present time. I ask the Chancellor in the first place to make up his own mind that he will not turn the screw any further. But I want more than that. I think the deleterious effect of dear money is so great that the prosperity of the country demands that the Chancellor of the Exchequer should positively state his opinion on that point and go so far as to say that he does not propose to turn the screw any further. I think that would give some confidence to the people of this country.
I pointed out to your Lordships just now that the evil fruits of the dear money we have at present will continue to pile up until the policy is reversed. I hope, therefore, that this reign of dear money will be short and that sooner rather than later it will be done away with I am not charging the Chancellor of the Exchequer with any bad faith; I am charging him with nothing but good intentions to protect this country from danger, but trying to do so in a wrong way. Good intentions, in the last resort, are no excuse. We all know the saying:
"The road to hell is paved with good intentions."
The Chancellor of the Exchequer is a most honourable man for whom I have the greatest respect, but his good intentions in restoring dear money will not save the country from treading the way to hell. If he waits to reverse his policy
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until we are either immersed in a third world war or caught in the spiral of deflation, his repentance will come too late to save the country from disaster.
3.42 p.m.
VISCOUNT WAVERLEY: My Lords, in rising to address your Lordships for the first time I could wish that I had had a better opportunity of making myself familiar with the forms and usages of your Lordships' House. But the present debate is; so much concerned with matters for which not long ago I had some responsibility that I felt that I should be neglecting a duty if I did not seek to offer my modest contribution. I have no doubt that your Lordships will extend to me the indulgence that is usual on such an occasion.
I hope that the noble Lord who has just sat down will acquit me of any discourtesy if I do not follow him at great length in the matter to which he devoted the whole of, if I may say so, a most interesting speech. I am on record as having, as Chancellor of the Exchequer, expressed myself in favour of a cheap money policy. Such a policy was introduced, and established, as I thought on a fairly firm basis, by the Coalition Government of which I was a member. I thought that a mistake was made by the Labour Government in seeking to press that policy too far and too fast. I thought, in particular, that a rather disastrous blunder was made when, in deciding to redeem the local loans stock, resort was had to an undated security. I feel that that was a very serious mistake. I fully agree with what the noble Lord said in regard to the important part which psychology plays in this matter. The psychological consequences of the undated issue which followed the redemption of the local loans stock were, in my view, very unfortunate indeed. I still hope that the policy of dear money will not be carried too far. I firmly believe that if we once succeed in getting our economy on to an even keel it should not be too difficult to revert to a policy of cheap money, reasonably applied. That is all I find it possible to say on that topic at the moment, because I wish to devote the rest of my speech to other matters.
I fear that I shall have to say a good many things that are depressing, but your Lordships will find, I hope, that before

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I sit down I shall not fail to call attention to the factors—and there are quite a number—which offer encouragement. The gravity of our present economic situation can hardly be over-emphasised. If loss of gold and dollars went on at the recent rate, we should have no reserves by the end of the year, and long before then we should have lost so much that the confidence of the outside world would be shattered: the sterling area would break up; the pound would, in all probability, fall to such levels that our internal price and wage structure would lose such stability as it still has; and we should be in real danger of runaway inflation. That is not a pretty picture, but it is not, I believe, overpainted. Of course, to say such things is not to predict that they will happen—far from it. To state them thus in cold blood seems to me, in fact, to be the best way of ensuring that they shall not happen, the character of our people being what it is. There may, indeed, be some little danger of a different reaction in certain quarters if people were to say: "Such a thing is unthinkable. It could never happen to us. Before it did happen we should do something to stop it." I would rejoin: "Very well; but now is the moment to take such action. To delay further is to risk being betrayed by just that kind of complacency."
In this matter it is necessary to be starkly realistic and to speak plainly. That is why I have been sorry to see in the debate in another place, and elsewhere, some tendency to accuse the Government of working up panic to play down the emergency, and to find comfort in such reflections as are sometimes heard: "It is now admitted," it is said, "that our situation has been deteriorating for the last fifty years." Or again: "The Labour Government, when they took over after the war, faced a graver crisis than this." Again—and this was something like a note of triumph: "We, the critics, have wrung from the Government an admission that our present difficulties are due to external causes quite outside the control of the late Government." It may be worth while to examine these pleas or excuses—I do not quite know what to call them—for a moment to see how flimsy and, indeed, false they really are. There is one
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respect, and one only, in which our situation has deteriorated steadily during the last fifty years, and that is in respect of our overseas investments. In all other respects, as noble Lords must well realise, there has been a steady and spectacular improvement in the condition of the people, particularly those who are called the under-privileged, in amenity, comfort and every form of material well-being.
Again—and this is a much more important point, because of its practical implications—the suggestion that the situation was worse in 1945, presumably on the termination of Lend-Lease, will not bear examination. It may be that then the prospective gap in our overseas account was no less menacing, but every other circumstance was more favourable: the task of building up our exports was infinitely easier; the field was clear, and we had only to pull resources out of military production to be able at once to sell their products in overseas markets. In such circumstances a foreign loan to give us breathing space and to ease the transition was an obvious expedient. There was a clear prospect, moreover, that such a loan would be forthcoming. The only question was as to the terms. Now the amount of foreign aid that we can expect is obviously limited to such contribution as may commend itself to an ally on military grounds. We obviously cannot expect outsiders to maintain our standards of life any longer. On top of this, the prospects of production for export are much less hopeful. In 1945 it was a question of diminishing arms production to free resources for export. Now we have to increase exports and arms production simultaneously. Furthermore, our export markets are more difficult. Production elsewhere has revived. We are faced with formidable competition from Germany and Japan. Therefore there is really no comparison between the situation at the end of the war and our position to-day, and I hope we shall hear no more of that point.
On the plea that our troubles arise from external causes and therefore that no one is to be blamed, I will say only this. The world, having been left in the state it was after six years of global war, the disturbing factors that have emerged should not have been entirely unforeseen. We were all inclined to take too rosy a view when final and complete victory

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was achieved. After six gruelling years, the sense of relief was universal. Add to this the buoyancy induced in a Party succeeding for the first time to power after an unexpected, or unexpectedly sweeping, electoral success, and it was perhaps only natural that they should have launched forth, giving hostages to fortune, in many directions. I need not specify those now. What I do regret, however, is the failure to build up reserves against an emergency and, in particular, our failure to preserve or create a margin of taxable capacity as an essential element of strength in our economic situation. I must emphasise this point.
In this connection—and I rather apologise for saying this—I cannot help reflecting rather sadly that when, having announced, as it fell to me to do on behalf of the Coalition Government, our acceptance of the Beveridge Report, I thought it necessary to add a cautionary word to the effect that our first duty after the war would obviously be to look to our budgetary position, I was at once severely taken to task. The noble Lord, Lord Pakenham, may remember this. That was perhaps more significant than I realised at the time of a general trend of opinion which may be responsible for much that has happened since. However, I do not want to be censorious this afternoon, and I fully realise that "I told you so" would not be a very suitable gambit for a maiden speech. In our present situation examination of the past is likely to be profitable only in so far as it shows what are the mistakes to avoid.
Now the problem by which we are confronted has two or perhaps three aspects. There is our own adverse balance. Closely connected with this is the sterling dollar gap, and also connected, but more remotely, is the task of bringing our domestic expenditure, on investment and consumption, within bounds. I shall say something further about this connection in a moment. In my view, the first essential to any proper understanding of the way to get out of this crisis is to realise that we have to depend primarily on ourselves, trusting, of course, that other parts of the sterling area will keep in step. I agree with the noble Lord, Lord Layton, as to the importance of international co-operation, but there can be no question of our seeking further
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aid from outside the sterling area at this juncture, though, as I have said, I am clear that we were right to seek it in 1945. We may hope, perhaps, that members of the sterling area who have recently left money with us will not withdraw it too precipitately, for that would impose a strain which, in present circumstances, might wreck the whole structure. But we ought not to ask more. In this crisis, I repeat, we must save ourselves by our own efforts.
Once this is realised, the nature of a realistic programme becomes clear. Here it is in all essentials: Immediate measures to diminish the loss of gold and dollars; then, direct cuts in domestic investment and consumption to release resources for arms and export, and, finally, financial measures to arrest inflation. The immediate measures to arrest the loss of gold and dollars have been announced in the shape of the import cuts. These are drastic but they are not more drastic certainly than is warranted by the recent rate of loss. The objection—and it is valid—to measures of this sort is that they are bound to be very crude and clumsy in the limits they impose on individual expenditure. It is to be hoped that, as the domestic inflation is halted, it may be possible to dispense with the rigidity of this kind of control; but for the time being it is essential. This cutting down of imports by direct control is necessary, but at best it is only a palliative. The ultimate aim should be so to adjust our arrangements as to be able to sustain our position without special limitations on particular forms of expenditure. It would be pleasant to think that there were accessible immediate means of increasing production so as to make this possible without any encroachment on consumption or development, but in present circumstances this is out of the question. We must all work as hard as we can and seek to abolish artificial limitations on production. But, for the time being, unless we are prepared to abandon the effort to make ourselves secure, we must be prepared to curtail our consumption and development plans in order to release resources for arms and export.
The first and most obvious method of doing this is by reduction of Government expenditure for purposes other

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than rearmament, and by direct control of such investment outside the export and armament industries as lies within public control. Mr. Attlee has confessed his inability to understand the reason for this. He cannot, he has said, see the connection between the reduction of expenditure on education and arresting the withdrawal of gold via the sterling balances. This is perhaps rather a surprising disability in one who has held the supreme responsibility for so long. In fact, I submit that the connection is fairly obvious. All expenditure involves, directly or indirectly, the use of productive resources. If we save in one direction we release resources which become available for use in other directions—notably here to facilitate exports. It is, I believe, as simple as that.
But beyond action of this kind on particular kinds of expenditure and investment directly within the control of government, further measures of policy are necessary to restrain consumption and investment in general. The fact is that we are trying to spend more than we can afford in present circumstances. It is this which is causing the internal rise of prices, and it is this, fundamentally, which is responsible for our persistent trouble with the balance of payments. Until it is curbed we shall continue to be in danger. This is part of the programme which, as yet, has not been elaborated. Recent changes in monetary policy have brought into play a mechanism which has been unduly neglected in the last few years. But let no one think that the inflation is yet under control. Either by a further tightening of credit, or by budgetary measures—which, in present circumstances, must consist chiefly in further cuts of public expenditure—excess spending must be curtailed.
In this connection I must join with my noble friend Lord Balfour of Burleigh in pointing out what is not yet commonly or sufficiently fully realised: that, far from diminishing the inflationary pressure, the measures which have so far been announced actually tend to increase it. Thus, for instance, the cutting off of imports means that there will be fewer goods offered against existing money incomes, for imports represent goods against which no income has been created in this country. Similarly, any increase in exports will have the same effect: for the
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production of exports involves the paying out of incomes with no corresponding release of goods in this market. Hence, our attempts to close the gap in the balance of payments, in so far as they are successful, will actually release forces which will tend to open it again, unless countervailing financial measures are taken. Hold to this the probable increase in armament expenditure this year and you have a situation in which very drastic financial and fiscal policies will be necessary if only to prevent the situation from deteriorating still further.
Now I wish to digress for a few moments to deal with an entirely different topic, one which has not received much attention in this debate or in the corresponding debate in another place. I speak of food subsidies, and I must make it plain that here, as in my other remarks, I speak entirely for myself alone. I realise that what I have to say may not be altogether welcome to some of my former colleagues. I feel bound however to do this, because of the part which I myself played in the matter. Responsibility for the original scheme of food subsidies was shared by three Ministers. I was one. The others were Sir Kingsley Wood and Mr. Ernest Bevin who, unhappily, are no longer with us. This scheme of food subsidies was not conceived as a social service. It was in essence an economic device to keep the level of wages and prices stable. For this purpose it proved wonderfully successful for a time, and for that the credit is due mainly to the leaders of organised labour. Before I ceased to be Chancellor of the Exchequer I had to tell another place that the time was fast approaching when the strain of maintaining the existing price level was proving too great and some upward movement would have to be allowed.
I made this statement with the approval of my colleagues, including my Labour colleagues, but there was a considerable outcry and complaint that I was deliberately putting up the cost of living. The annual cost of these subsidies was then in the region of £130,000,000. The subsequent history is very illuminating. My successor declared that he had decided to maintain the price level throughout the year then current, whatever might happen. This was a notable departure from the original plan. The cost naturally rose

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rapidly. Mr. Dalton then had second thoughts, and later Sir Stafford Cripps declared that the whole situation was becoming unrealistic and that there must be no further increase. But nothing was done to make the declaration effective, and quite recently we found the late Chancellor of the Exchequer, if he was correctly reported, expressing regret that he could not spend more on these subsidies, the cost of which had meantime risen beyond the staggering figure of £400,000,000. They had entirely lost their original character and had come to be viewed as a social service. I venture to say that, viewed in the light of a social service, anything more clumsy and inefficient could hardly be imagined.
Think what they mean, my Lords. Out of the proceeds of general taxation, which must for this purpose be assumed to be fairly distributed over the community money is to be taken with which to pay for a proportion of the essential foodstuffs consumed by every man, woman and child throughout the country, irrespective of need, merit or appetite. It is not merely the cost that I object to, though that is a heavy burden. I should think it worth while to get rid of them even if the whole cost had to be redistributed for the benefit of the poorer sections of the community who were in danger of suffering hardship on account of their abolition. What I object to is that they obscure the true facts of our economic position, and anything that does that militates against the efforts that will have to be made before we can eventually get things right to bring the truth home to every section of the community. The illusion of unlimited resources must be destroyed, and it must be brought home to everybody that, however liberal the social services may be, a man still has a primary duty to maintain himself and his family—in addition to making his due contribution to the common good—by his own exertions. Widespread misunderstanding of these basic truths is one of the gravest aspects of our present situation. Having said all this, however, I must add that I am clear that, unfortunately, so long as one of our main concerns must be to keep the cost of living down, there is nothing very heroic to be done in this matter at the moment. We shall, I fear, have to be content with a modest beginning. I predict, however, with some confidence that before we finally get out of the wood
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full effect will have to be given to the views I have just expressed.
There are two further matters to which I should like to refer quite briefly before I come to my final wads. Mr. Gaitskell, while admitting that our present situation both physical controls and what he called monetary controls have to be resorted to expressed a strong preface for the former. He characterised the latter as
"clumsy, unfair and net well calculated to achieve the precise result that we want."
I myself should have put it the other way round. I have spent all my life in public administration, and I think I know as well as anyone the limitations that encompass effective administrative action. All my experience teaches me that to go against natural laws—and economic laws are natural laws—is to court disaster. In my view, the proper function of physical controls is to cheek the operation of natural laws where its effect is likely to be, as it often is, harsh or even cruel, and to supplement natural laws where their operation is beneficent. I believe that failure to observe this principle is responsible for many of the more obvious deficiencies of the system of economic planning to which the late Government pinned their faith. The manner in which the other method should work can be seen clearly from the White Paper on Employment Policy issued by the Coalition Government during the war.
Now a brief word about the social services and the modifications proposed by Her Majesty's Government. I have noticed a tendency on the part of Labour leaders—perhaps I may have the ear of the noble Lord, Lord Pakenham, here—to speak as if these services were exclusively of their creation.
VISCOUNT STANSGATE: No.
VISCOUNT WAVERLEY: Well, that impression is given.
VISCOUNT STANSGATE: Where?
VISCOUNT WAVERLEY: I do not want to be controversial., but the noble Lord, Lord Pakenham himself yesterday used words which I think I can quote, to the effect that the development of the Welfare State under the Labour Government was a shining and brilliant example (or something like that) of which everyone could be proud.
LORD PAKENHAM: I have in mind the strong tradition against interrupting a maiden speech in this House. Therefore, I will not interrupt.
VISCOUNT WAVERLEY: At this point I should welcome an interruption. That is exactly what I should like. I do not want and I ought not to be controversial, but it is very important that people should see these things in their true light and their true perspective. It is very important indeed. I do not want to say anything which injures any feelings, and I certainly do not want to say anything which is not absolutely in accordance with the facts. It is the fact that the foundations of the social services were laid, and the main structure was built, before the Labour Government came into office in 1945. What they contributed in the main, if it is not too unkind for me to say so, was an element of undue haste. As a result of the manner in which the details of what we now call the Welfare State were carried into execution, the late Government did not profit, as they might have done, by the experience of their predecessors. I believe that the present Minister of Health was perfectly right in claiming that the changes now to be introduced will help to eliminate abuses and promote efficiency as well as economy. To suggest that the foundations of the Welfare State are being undermined is a palpable absurdity. The people of this country will still have social services second to none in the entire world.
At the risk of provoking the noble Lord, Lord Pakenham, to an intervention, I venture to express the regret with which I heard certain observations which fell from him yesterday—I have the record here. He said some things which I cannot help feeling he cannot have meant seriously. He spoke of a diversion of funds, presumably, he said, in favour of the rich. Any diversion is from the proceeds of taxation, which must be assumed to be drawn equitably from the whole community, not in favour of the rich, but in favour of the taxpayer at large, and he submitted that the measures that have been announced defeat the whole purpose of the National Health Service. I think those extravagant observations really have no justification at all, and they are being repeated all over the country. They are being repeated for the purpose of arousing Party passions. I deplore that very
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much indeed, and I cannot think it can be the intention of the noble Lord to contribute to such a result.
I hope that in what I am about to say now I shall be entirely uncontroversial. May I, in conclusion, deal with the question, a question quite vital in this connection, of production? I have noticed that the right honourable gentleman Mr. Gaitskell reproached the Chancellor with having "said nothing—or virtually nothing" on this subject. I suppose that my right honourable friend Mr. Butler regarded it as belonging to the third or budgetary phase of his policy, but that is perhaps no reason against my dealing briefly now with so important a topic. It may fairly be claimed that in this respect the country has done well so far, though there has been a falling off in recent months. But much more is required. Further efforts and some sacrifices will be required from all sections of the community to achieve the desired result. There can be no escape from this, but it is not a question, I believe, of any superhuman effort. Far less will be required than the effort and sacrifice made willingly in time of war, for there are, as I said at the beginning, a number of favourable factors.
Better use can be made of the results of scientific research. There are great possibilities in the sphere of what is known as operational research, by which I mean the systematic study of the effect on industrial operations of changes of method. Experience in the chemical industry, with which I have some connection, has shown that by co-operation between management—with whom the initiative should rest—and workers in work study, which covers method study and work measurement, and in the training of foremen and supervisory grades, notable results in improved productivity can be achieved. New wage structures incorporating suitable incentives can be framed as the result of such studies. May I say that, in regard to incentives, I most profoundly agree with what fell from the noble Lord, Lord Pakenham, yesterday.
Then there is the better use of mechanical aids by which, side by side with a notable lightening of physical effort, greater output at greatly reduced cost might be achieved. May I illustrate this point by referring briefly to experience in the Port of London? I may have an

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opportunity, on a later occasion, of addressing your Lordships at greater length on this topic. For the moment, it will suffice if I say that there are many appliances—of which fork lift trucks and pallets are a good example—the extended use of which would add enormously to the efficiency and expedition of port operations; and these operations, of course, have a profound influence on the whole national economy. But there are difficulties to be overcome and prejudices to be broken down. With patience and understanding, I have no doubt that the situation will come right in the course of time, but we have no time to lose.
I make no criticism here of the dockers or their constitutional leaders; I want to make that absolutely clear. But there are agitators, who keep bobbing up from time to time, who are concerned only to sow dissension and to disrupt our economy if they can. They make a meretricious appeal to the traditional loyalties of the dockers, who too often lend a ready ear. It would help enormously if the gravity of our national situation could be brought home to these people. I am sure that as patriotic citizens they would respond. At present they have no conception of the true state of affairs, and I have no doubt that that is true of many other industries. No one could undertake this task so effectively as the trusted and respected leaders of the Labour Party. I venture to say that a heavy responsibility rests on them. But the impression of disunity created by recent discussions is not a good starting point. That is why I deplore the tone of so many public declarations after the restraint a-id studied moderation of the Chancellor's speech. It may not be very easy to do what I suggest. Many illusions will have to be abandoned, ant some words will have to be eaten. Is it, however, too much to hope that they will yet prove equal to the undoubted demands of the situation?
Finally, I would say this. I believe that the effort necessary to restore our situation is not likely to be such as seriously to upset our way of life, The cuts in consumption, admittedly necessary, are certainly not more than two or three years' normal increase in production in a healthy atmosphere should be sufficient to make good; and this, surely, is not a large price to pay for greater
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military security and a more solid basis for our economic position in the world. On the other hand, not to make the effort involves the risk of real disaster all along the line. My Lords, now is the time to decide.
4.22 p.m.
VISCOUNT BRUCE OF MELBOURNE: My Lords, I am sure it will be the desire of all your Lordships that I should express to the noble Viscount who has just resumed his seat our deep appreciation of the speech which he has just made. We should also like to congratulate him upon his manner of presenting the case he submitted, and the statesmanlike grasp he showed of the situation that faces this nation at the present time. We in this House pride ourselves that on any great issue of national importance some of our members, through years of experience, are roasters of the subject and can bring to bear upon its consideration the wisdom they have acquired. We have had only to listen to the noble Viscount to-day to grasp the fact that the number of those who can rate among the wise men and who, by their help in debates in this Chamber, can give leadership to the country, has received a notable addition to-day.
I do not want to dwell at great length on the internal situation of this country, or on the steps that should be taken to improve it, but I do want to emphasise what has just been said—namely, that at the present moment there is a deep lack of appreciation of the seriousness of the situation in which we find ourselves. I regret that that lack of appreciation seems to extend to some political leaders. I say that at the risk of being a little wearisome, because I have a feeling that we are always apt to talk a little too generally and not to pin down facts to the everyday life of the nation. The first fact that we have to remember is that the finances of a nation is exactly the same as the finances of an individual. The individual can enjoy only those things that his current income and his savings are sufficient to pay for The same applies exactly to the nation.
Looking at our position a year ago, one finds that our expenditure upon food and raw materials then exceeded by some £500,000,000 the value of what we were able to export in order to pay for our imports. During the game period there

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was a tremendous reduction in what I might call our savings. By strenuous efforts, and because of the great generosity of the United States, between September, 1949, and the middle of 1951 we increased our savings (by which I mean our gold and dollar reserves) from 1,340,000,000 dollars to 3,867,000,000 dollars—a very notable increase. During the last six months of last year, however, we reduced our savings by 1,532,000,000 dollars and were left at the end of the year with only 2,335,000,000 dollars. We are told that if we do nothing about it, those reserves or savings will, over the next six or nine months, disappear, with the dire results which the noble Viscount has indicated. I suggest that if such were the conditions that faced any family, whoever was responsible for the family would not hesitate to take any step, however drastic, to meet them. I believe the Government realise what are the facts and that they are going to face up to them.
In this regard I wish to say only one thing concerning the social services. All political Parties in this country are taking the attitude that for political reasons they must not say one word which would indicate an intention to do anything drastic about those services. On this I can speak with some experience. I had to face the issue in 1929, in Australia, which, after all, was the laboratory for the social services. The noble Viscount has said that, whatever is done, the social services of this country will still lead the world. I am not going to challenge him on that statement, but I am going to take a pretty careful look to see where Australia, as compared with this country, gallops on the social services field. Certainly in 1929, when I had to face this issue, Australia was well ahead of the whole world in social services. In our desire to launch social services we had outrun our national income, and in July, 1929, I told the people so and precipitated an Election. When the cloud of the 1929–32 economic crisis was seen on the horizon, I said we had to take action because we simply could not afford all we were spending on social services. I was heavily defeated in that Election, but within eighteen months the Labour Government which succeeded me had to do far more drastic things with regard to the social services than I had ever suggested. So your Lordships will
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realise that I have some reason for refusing to keep off this subject.
I am absolutely convinced that the situation in this country at the present time is such that we cannot afford the level of the social services we now have; that if we insist, for political reasons, on maintaining them, the value to the people of those services will be diminished because of the continuing diminution in the purchasing power of the pound; and that any Government which continues those services as they now are will, so far from helping the people, be doing them a tragic disservice. On the other hand, if only we will face realities at this moment, if only we will take any action that is necessary and as drastic as is necessary, with regard to the social services, irrespective of what the political results may be, I believe we shall be serving the people. When we have set our house in order we can then go forward to the realisation of what is the ambition of everybody, irrespective of his political views—namely, the progressive advancement of the social well-being of the people of this country. That is all I want to say on what I have described as the domestic side.
In consequence of the seriousness of the situation at the beginning of this year, the Finance Ministers of the Commonwealth were called together with the object of framing measures by which the drifting away of our gold and dollar reserves could be stopped and our finances could be put into equilibrium by the second half of the present year. I understand that that Conference was very successful. It recognised that this was only the first step—what I have described as a short-term remedy. The further objective is the achievement of a permanent gold and dollar surplus by the rebuilding of those reserves, working eventually to the convertibility of the pound sterling into dollars or any other currency.
I suggest that while the first step, namely, the reduction of imports and the attempt to expand exports to bring about this short-term equilibrium in the present year is obviously right, it can be no more than an expedient to meet an immediate situation; it cannot be the eventual solution of the problem. Let me take first the question of imports. There is a limit to the extent to which we can reduce imports into this country—for food, there is

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a very definite limit. We must import a great quantity of food. For raw materials there is also a definite limit because, if we go beyond a certain point we shall defeat our own objective of expanding production and exports. Therefore we cannot go all the way on that route. The problem, to my mind, goes even deeper than that, if we are seeking the long-term remedy. Britain, by her great efforts, to which tribute has been paid, in 1951 exported to the world in volume—not in value—85 per cent. more than she did in 1938. A great industrial expansion has also taken place in a number of other countries, and we are now on the verge of the coming back of Germany and Japan into competition in the world's markets. Unless something really radical is done to expand the volume of world trade, there are distinct limits to the expansion of Britain's exports beyond the 85 per cent. extra that she has already achieved over those for 1938. Therefore, we have to consider how that difficulty can be overcome.
At the end of the year 1945 and the beginning of 1946, I had the honour to be Independent Chairman presiding over what was known as the Food and Agriculture Preparatory Commission on World Food Proposals. This Commission, which consisted of eighteen nations—the United States, the United Kingdom, France and a number of others—when it faced that problem came to the conclusion that it could not confine its investigation to food, because food is agriculture, and agriculture is so mixed up in the national economy of every country that it could not be dealt with in isolation. So, greatly daring, we set out on a whole economic survey of the world position. That Commission's Report was published in January, 1946, and the eighteen nations were unanimous. The Report was subsequently endorsed in August of that year joy the sixty-odd nations in the Food and Agriculture Organisation. I still believe that it is almost the clearest and most concise statement of the problems the world is up against that has yet been evolved, notwithstanding the numerous Reports there have been. The conclusion to which that Report came, put briefly, was that, if disaster was to be avoided, there would have to be a great expansion of world trade but that the only method by which it was
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possible to get an expansion on the necessary scale was by the development of the resources of the backward countries. That Report also arrived at another conclusion—that it was essential that steps should be taken to create a greater stability in the prices of the main food products and the basic raw materials.
Notwithstanding the fact that that Report was endorsed by sixty-odd nations, nothing happened about it for some time. At the end of 1948, the United Nations in their Assembly in Paris suddenly woke up to this vital point of the development of the backward nations, and passed a unanimous resolution that action had to be taken to get on with that development. Within a month, President Truman had nude his Inaugural Address and in his Point IV proposals had brought out the importance of technical assistance for the backward countries. From that date, thing; have gone at an astounding pace. The technical assistance suggested by President Truman has resulted in about the biggest co-operative effort on an international scale that I have ever seen between the United Nations and all the specialised agencies of the United Nations. The work of technical assistance to the backward countries of the world is progressing at a great speed, and the foundations have now been laid. This step has now to be followed up by actual developments which can be brought about.
On the question of what can be done about the development of these backward countries, there have been four of the most extraordinary important documents and Reports with which the world has ever been faced. The first, published in 1950, is known as the Gray Report, which was A Report to the President on Foreign Economic Policies. The second was the Rockefeller Report called Partners in Progress—a Report to the President by the International Development Advisory Board, and it was published in March., 1951. There was also a Report on Measures for the Economic Development of Under-developed Countries, which was published in May, 1951, by a group of experts appointed by the Secretary-General of the United Nations. Finally, there was a Report, published in November last, called Measures for International Economic Stability, a Report by a group

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of experts appointed by the Secretary-General of the United Nations. The note which runs through all these Reports is best expressed by an extract which I will take from the Rockefeller Report. That says:
"The prevailing economic pattern of the under-developed regions could be revolutionised by a constant flow from the Western industrialised world of several billion dollars a year."
I am not going into those Reports but if any of your Lordships takes the trouble to read them he will see that that is the note struck throughout, that the money can be found by the Western nations and that it is essential, not merely in the interests of the under-developed countries but also in the interests of the more advanced countries and of all the industrial countries. They go so far as to say that, unless this course is pursued, there is no answer to the economic problems facing Britain and America and the whole world to-day. Personally, I entirely agree with what they have said, because it is what we said in 1945 and 1946, and I have been preaching it ever since. It is startling to find such unanimity in every one of these Reports coming from different sources, all of them stressing that this is the only answer to the world's economic problem at the present time. The last of these Reports—the one published in November, 1951—also deals with the question of stabilisation of commodity prices. After setting out its considered arguments on the action that should be taken, the Report finishes up in this way:
"for all these reasons we feel that the time is now ripe for a new concerted attempt to achieve greater stability in the field of primary products, and that there are firmer grounds than existed in the past for hoping for success."
For the United Kingdom, in particular, and for all the industrial nations, I suggest that this question of more reasonable stability in prices is one of absolutely vital concern. In the second quarter of 1951, the volume of the world's industrial production was about 90 per cent. above the 1938 level. But the world's production of food crops in 1950–51 was only 9 per cent. above the level of 1934–38. It is difficult to obtain accurate statistics with regard to raw material production, but when one considers the prices at
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which raw materials are selling to-day, even allowing for the demands of rearmament, the suggestion certainly is that there is a shortage in the production of raw materials. And it is vital to the industrial countries that that shortage should be overcome. Look at the effect on this country. It is well known that Britain's balance of payments difficulties are largely due to a deterioration in her terms of trade. In 1951, the average price of Britain's imports was four and a half times the 1938 level, but the average price of Britain's exports in 1951 was barely three and a half times the 1938 level. If the price of our imports had risen no more than the price of our exports, our balance of payments for the rest of the world in 1951 would have shown a surplus of about £300,000,000. instead of an actual deficit of around £500,000,000. It must surely be clear that it is essential to all industrial countries that the production of raw materials should be stimulated and that there should be abundant supplies so that reasonable prices will prevail. Unless action is taken on the right lines these shortages will tend to increase, despite these prices, by reason of the fact that without any certainty as to future prices it is almost impossible to get people to go into the production of the things that are wanted.
The argument I am trying to put forward is that unless a concentrated effort is made to increase the production of food and raw materials by the development of the backward countries, all the industrial countries will find themselves increasingly in trouble, and this country more so than any other. What I want to ask is: What is the attitude of the Government, and what are they going to do about it? The Government have been represented at conferences where these things have been discussed. The United Kingdom has been a party to discussions at the United Nations, notably those of the Economic, Social and Cultural Organisation which called for a Report. What is the Government's attitude now towards the Reports which have been published, and what is their attitude towards the demand for more action and for putting greater drive into this whole effort?
The only other matter with which I wish to deal is this. I know that as a result of the recent meeting of the Finance

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Ministers in London, as the second stage of efforts to deal with the dollar-gold problem, it is visualised that a great expansion of production in all Commonwealth countries is to be brought about. With that I am entirely in agreement, and I shall look forward with great interest to see how it is planned to achieve this. But I see most frightful difficulties in the way of doing so unless we "go slightly tough" on certain matters. I will indicate where I think we have to be "tough." At the present time, certain ideas to which we all give lip-service are current. We accept non-discrimination, most-favoured-nation clauses, and the principle of no increases in preferences. I suggest that these things will have to go by the board. This, no doubt, will cause considerable outcry in the United States, but to my mind it will be more noise than real fury. These things are to a great extent a survival of the days when Mr. Hull was guiding the fiscal polices of the United States. They have remained in the State Department as an ideal, but America has gone a long way since then and has changed very substantially in her views.
I learned recently of the position of the organised manufacturers in the United States, the apostles of the high tariff, the people who are supposed to be more closely together and to have more power in Congress than anyone else. They invited Mr. Harry Hawkins to make a report on the economic position of the United States. He did so, and his report, which was issued before Marshall Aid terminated, said that Marshall Aid must be continued up to the last possible date, and that after Marshall Aid had ceased America had got to make grants and give assistance to the world to the maximum that public opinion would tolerate. He said that they had got to spend the next five years lending to the whole world—almost lending indiscriminately—and that at the end of the five years they had to be prepared to put up with an adverse trade balance, which was the only possible position for a great creditor country. And the manufacturers "swallowed" what he said—indeed, it was endorsed by the manufacturers of the United States. I venture to say that the United States are moving very far they now realise that, while they are essential to the world, the world is also essential to them. Americans have the intelligence to recognise that anything which is going
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to strengthen economically and financially the British nation, even the whole sterling area, would best suit them also.
What I am pleading for does not mean interference with the domestic situation—I have said my little bit about that. But on the wider aspect I reaffirm my view that there is no conceivable answer to the problems of this country or the world in the economic field unless we push forward with the development of the backward areas, together with the creation of new food supplies and supplies of raw materials. When these raw materials and foodstuffs are produced they will bring about an enormous expansion of the world's trade, which is the only sure foundation upon which the future can be built.
4.50 p.m.
LORD MACDONALD OF GWAENYSGOR: My Lords, when I left the House last night I was under the impression that I should be following the noble Viscount, Lord Waverley, but overnight, without any consultation with me, the programme was rearranged. Therefore, I do not have the delightful responsibility of offering to the noble Viscount our congratulations on his maiden speech. But, having listened to his speech, I must say that, had I been following him, I should have had to revise what I intended to say. The noble Viscount promised that he was not going to be censorious. He will never be nearer being censorious than he was today. We have many privileges in this House, and new recruits do not always appreciate them and sometimes they appear to take advantage of them. I thought the noble Viscount's references to my noble friend Lord Pakenham went very near the line indeed. I know they were not intended to be a breach of privilege. It seems that one can hardly be guilty of such a thing in your Lordships' House, but on one or two occasions I thought the noble Viscount went very near to it.
I would say a word of warning to the noble Marquess, the Lord Privy Seal. I listened to the noble Viscount's maiden speech in another place, when he made a great impression. I did not hear another speech by hilt from the Back Benches, because he was immediately elevated to the Front Bench and elevated, I think, to the office of Lord Privy Seal.

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I would warn the noble Marquess that there are occasions when history repeats itself; and this may be one. I thought to-day that the noble Viscount's speech gave indications of policy which ought not to come from the Cross Benches. There was an indication of possible policy in the forthcoming Budget which may, of course, be intelligent anticipation. However, though some parts of his speech did not please us on these Benches, I assure the noble Viscount that whenever he chooses to intervene in debate he will always get a warm welcome.
Along with the noble Lord, Lord Balfour of Burleigh, the noble Viscount thought it necessary to emphasise the need for Labour leaders to take on themselves the task of making the masses appreciate the gravity of the crisis, although the noble Viscount did not go quite so far as the noble Lord, Lord Balfour of Burleigh, and gave us an indication of the way in which we should do it. That was, to applaud everything done by the Conservative Government. That is asking a lot from us. There are some things that we would applaud. In so far as they continue in the footsteps of their predecessors, I should approve, and it is remarkable how they are doing that in many directions. But I should not like the responsibility of applauding everything done by the present Government. I am sorry that the noble Lord, Lord Balfour of Burleigh, is not in his place because I do not like making personal references to noble Lords in their absence. He seemed a little concerned about the attitude of the Labour Party towards the cuts in the social services.
Let me make the position plain. We are anxious to know, and I hope that the noble Lord, Lord Woolton, will tell us, what is the precise purpose of the cuts in the social services. The purpose could be to produce revenue. I should hardly think that was the purpose, because the amount that can be secured is so small that I need not dwell upon it. The purpose could be to diminish or remove abuses. That would be a worthwhile purpose. The noble Lord, Lord Blackford, in his usual courteous manner, reminded us that the Labour Government had some responsibility for the initial steps taken. I agree; but in their
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wisdom they decided not to pursue that policy. They decided that the cost of administration involved was so high it was not worth while. I have heard in this House more frequently than I like references made to "a deluge of medicine" poisoning the country.
VISCOUNT SWINTON: That came from a noble Lord behind the noble Lord who is now speaking.
LORD MACDONALD OF GWAENYSGOR: I know the originator of that phrase. Between 1945 and 1951 the Labour Government brought a new set of people into the number of those who received free medicine for the first time. Any new scheme of this kind of necessity has its abuses in earlier stages. When the first health scheme was introduced before the First World War there were many abuses, and it took time to level them out. The people who were then brought in are now accustomed to receiving free medicine, and it is not that section who have caused the deluge of medicine. It is the new section who enjoy free medicine for the first time. Ask any medical practitioner who are the people who have taken full advantage of free medicine during the last three years and he will say that it was not the old but the new members of the Service who made the rush. If the purpose is to reduce or remove abuses, then we approve of the cuts, though we think it might have been possible to achieve this by a better method. This method imposes a burden on those with slender shoulders to carry it.
The cuts could have a third purpose, which was referred to by both the noble Viscount, Lord Waverley, and the noble Lord, Lord Balfour of Burleigh: they could have the purpose of bringing home to the workers of the country the gravity of the crisis. Sometimes I feel that in this House we have these economic debates in such a rarified atmosphere that it is difficult to breathe, although it is an atmosphere which economists and financial experts seem to find congenial. It seems to me at times to be deliberately created. The late Earl Lloyd George once referred to financiers and bankers as "penguins" and I often wondered why. The possible reason is that penguins have an inordinate capacity for gobbling up everything within their reach. I find that financiers and bankers

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are gifted with the capacity to give the impression that they are carrying very heavy burdens. I ask your Lordships to believe that the masses whose support we must secure, and whom we are anxious to get on our side, if any programme is to be successful, are carrying heavier burdens than any financiers or bankers I know. We have to realise their attitude to this problem.
The economic crisis and subjects of that type are discussed from time to time at branch meetings, but the approach to the matter at those meetings is entirely different from the approach to it in your Lordships' House. They see the crisis entirely differently. They agree that increased production and reduced consumption may be the means of solving the crisis; but they realise that there is a third factor, which is sometimes overlooked in your Lordships' House—namely, that equitable distribution will help both. The disastrous history of industrial life in this country shows us what it means to have inequitable distribution. I could give instances where the distribution in the coal industry was wholly inequitable. Twenty-two years underground produced for me less than £2,000. But the coal owner of he colliery in which I worked—and I question whether he knew where the colliers was—received over £100,000 in the same period. We can rest assured that we shall not get the production that we are told by noble Lords opposite—anti I agree—is essential to carry us through this crisis, unless we maintain the good will and secure the co-operation of the workers.
It is all very well for the noble Viscount, Lord Waverley, in his maiden speech, to remark how different things are to-day from what they were in 1945, and to say that the ex-Prime Minister had no right to suggest that things were worse then than they are now, because they were not. I would say this to the noble Viscount. Had it riot been for the Welfare State which we have built up since 1945, we should not have received the good will and the co-operation of industry that has led to increased production. It is utterly impossible to separate equitable distribution from production. I suggest that each of these proposals should be examined from that angle. Does it stimulate good will in the industry? Does it give to the worker a sense of fairness which helps him to
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give of his best? It is tests of that sort which should decide the fate of any proposal; and I am not sure that all the proposals put forward by the Government could stand that test.
The noble Viscount, Lord Swinton, said yesterday that now is not the time to have a Royal Commission m the question of incentives. I agree. But let it be remembered that the Welfare State was, and is, an incentive to the worker. I know there is always danger—and I am afraid noble Lords opposite are sometimes too conscious of the dangers—if you say to a man: "No matter what eventuality arises, whether you fall sick, are injured in industry or become unemployed, you will be well and fully covered to meet all eventualities." There is the possibility that that may demand a higher standard of morality than we enjoy to-day. Of course, there is a danger there. I have never questioned that personal financial gain has been a very effective incentive to human effort; it is not by any means the highest, but it has been a most effective incentive. But we shall certainly need something higher to get through our present troubles. The appeals we make are to a higher incentive than personal financial gain. All your Lordships appeal for something higher than personal financial gain now; and we all know that we shall not get through this crisis without a response to some higher incentive than personal financial gain, which is not a very noble incentive. The noble Lord, Lord Woolton, from time to time has told us, and I agree, that there is nothing wrong in making profits; that there is nothing wrong in getting a return on a financial investment. But what I say is this: the social services, the education of a man's children, the health of his wife and the knowledge that his future offspring are all, to some extent, safe, are incentives to him.
There is a danger that in our anxiety to get rid of this crisis we may weaken that incentive. I agree entirely that it would be disastrous to weaken the incentive of personal financial gain until we can replace it by a higher and nobler incentive which will be equally effective. I sometimes think that the Labour Party did presuppose a higher standard of morality when they introduced some of their schemes. Full employment is a test of morality. When a man knows that he

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cannot be discharged he may take advantage of that position, and he must have a high moral standard not to do so. Many employers had not that standard with regard to unemployment, but used unemployment as a weapon to beat down those in work. Many of my colleagues in industry, and many coal face workers, realise that. But not all the employers realise it. There are some glorious exceptions, but employers in many cases used unemployment as a means to menace those in employment. What do the workers say? "Very well. If that is what they do in unemployment we are now in full employment; we have now the whip hand, and we will use it." That is very dangerous. Full employment demands a high standard of morality on the part of the worker, and unemployment demands a high standard of morality on the part of the employer.
On the question of rearmament, the financial pundits appear to hold differing views. Some say that what has happened since Korea has intensified the crisis greatly, some say it has intensified it only a little, and others say it has intensified it scarcely at all. But there is general agreement that had it not been for Korea and the warlike atmosphere in the world, this crisis would not be so big a problem. My noble friend Lord Silkin yesterday tried to show that, whatever labour and materials are used up in rearmament, there is so much less labour and materials to be used elsewhere. After all, no one on this side of the House suggests that rearmament as a policy of preventing war is not a sound policy. That was, and still is, our policy. But I do want to emphasise that we are getting it over to the people as a means to prevent war. We are telling them that this is the best method to preserve peace, and I agree that it is.
Reference has been made in this debate to the fact that the Chancellor of the Exchequer said that this country has been deteriorating in the international sphere for the last fifty years. I have the highest regard for the Chancellor of the Exchequer. Many noble Lords saw him assist Lord Templewood (as he now is; he was Sir Samuel Hoare in those days) pilot the tremendous India Bill through the other place, and will remember his stone-walling and his grasp of
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the subject. When he referred to the last fifty years he was not altogether confining that reference to export and import problems. He saw a world that had changed during the last fifty years, and it is a world which will change much more during the next fifty years. He could see countries which were customers then and were now competitors.
Frankly, I am not very worried—although I believe diagnosis is a vital condition before you begin to apply remedies—as to how we got into this crisis. I am worried about how we can get out of it. I am not concerned about whether it has taken fifty years to get into the crisis, but about how long it will take to get out of it. In bringing the truth home to our people we must not let them believe that this is a short-term crisis. This crisis will not be removed in this Parliament—and that would be just as true if we sat where noble Lords opposite are now sitting. This is a crisis of more than one Parliament. Suppose we achieved our noble purpose of preventing war and we get the Russians to talk. The crisis would still be with us for quite a long while after that. What is happening is that the masses of the world are on the move (it is useless to try to ignore this) and they are demanding a higher standard of life, just as the countries in the Middle and the Far East are saying: "The United Kingdom can have her prosperity, but not at our expense." That is what you and I would say if we were in their position. They appreciate more than ever that much of our prosperity in the past has been enjoyed at their expense, but they sometimes ignore the benefits which have accrued to them from our connection with them. In my opinion, we have given more to the world than we have received. Britain can be proud of her Commonwealth.
Equitable distribution is not easy of achievement. My noble friend Lord Pakenham said how pleased he was that he had not the responsibility for the Bank of England. If he is pleased about that, I can assure your Lordships that I am ten times more pleased that I have not that responsibility. I think he might do something with it, but it is a tremendous responsibility. If we safeguard peace by the effort we are making in rearmament, we shall still have the crisis with us.

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But we may not safeguard the peace. There is quite a possibility that, despite all the efforts we are making, war may ensue. If that happens, I am sure that the Western Powers will be victorious. But will the crisis be over then? I see no hope of a successful war ending the crisis. It may be that at the end of the Third World War we can deal with the men in the Kremlin as we dealt with Hitler and his cohorts at the end of the Second World War. But we shall not kill Communism by war. We may kill Communists and non-Communists by the million, but not Communism. I ask the noble Lord, Lord Woolton, between now and the end of the debate to apply his mind to the question whether it is wise to do what I am sure the Russian leaders want—namely, to create uneasiness and suspicion in the minds of the workers. I am not one of those who would deny that the Conservative Party have done a great amount of social reform work. But there is a feeling among the workers that they have always done it as a means to keep the worker quiet and satisfied.
THE LORD PRESIDENT OF THE COUNCIL (LORD WOOLTON): It is very unworthy of them if they think that.
LORD MACDONALD OF GWAENYSGOR: I agree that it may be very unworthy, but the fact that they think that the Conservative Party is not as enthusiastic in support of social services as the Labour Party influences their conduct. It may be wrong, and it may be unworthy, but I know it to be in their minds. There are few noble Lords in this House in closer contact with the rank and file of the workers than I am. I know it to be in their minds, and I am very anxious. If this Government can pull us through this crisis successfully without endangering the morale of this country, I, for one, shall be extremely pleased. I am not concerned with which Party gets the credit so long as the job is done. I know that it is in the minds of the workers that the Tory Party is not as sympathetic or as enthusiastic for social reform as the Labour Party. Let it be remembered that we are very evenly balanced in this country-—rather too evenly balanced. On March 4—I am asking for no disclosures—the Chancellor of the Exchequer will be introducing his
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third set of proposals. In his maiden speech the noble Viscount, Lord Waverley, made references to food subsidies. He gave an indication that he did not expect much to be done, but he expected a start to be made. I beg the Chancellor of the Exchequer not to overlook the other statement of the noble Viscount: that there will be millions in this country who will "feel the pinch" if there is any lowering of those subsidies. I ask the Chancellor to provide machinery to see that their standard of life is not lowered by any manipulation of the food subsidies.
I am very anxious that this country should do something about the menace of Communism. There is a real menace here. Some fourteen months ago I left New York, having spent three months at the Fifth Assembly. On the right of the United Kingdom delegate sits the delegate of the U.S.A. and on his left the delegate of the U.S.S.R. The alphabet is a little unkind sometimes. I watched my next door neighbours. There were times when I had consultation with them to try and find out what they were thinking. Mrs. Roosevelt sat on my left, and I could get some idea of what she was thinking. I would then turn to my Russian comrade. He would talk, but I was seldom the wiser at the end of the talk than I was at the beginning. Now he is not the only Russian with that gift of saying a lot and giving nothing away. I am satisfied that the Russians will have us, exactly where they want us if we are not more careful. They are getting the whole world involved in heavy rearmament so that the various countries are obliged to inflict cuts on social services on those who are not in a position to withstand those cuts. The Russians are very far-sighted. Communism can be fought in this or any other country by removing those things which create Communists. During last weekend we had instances—very disturbing to me—of workers in different industries deciding upon industrial action to frustrate political policy. No man who loves this country could defend an attitude of that type. We must all do all we can to defeat it. And the leaders of every trade union, to their credit, have done all they can to stamp it out in its early stages. But we cannot afford to ignore those indications. There is evidence that people are at work in different parts of the

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country, creating these disturbances. In dealing with this very grave crisis I do not want the policy of this Government to play into their hands.
I hope that on March 4 confidence will be given to the lower paid, so that they will do all they can in their particular industries to pull us through. They, and they alone, can get us through this crisis. We in this House can never do so. What the workers do matters a lot. I am anxious that the policy pursued by this Government—I am not concerned with any electoral advantage—shall be a policy that will strengthen and give hope to those who have not had too good a time. I shall leave the matter there, in the hope that the noble Lord, Lord Woolton, will be able to give us some encouragement, without, of course, disclosing the intentions of the Budget to be introduced on March 4.
5.21 p.m.
LORD BLACKFORD: My Lords, may I be allowed, as an old acquaintance, to utter one word of warm welcome to the noble Viscount, Lord Waverley? He has made a most valuable contribution to our debate to-day, and I am certain that on many future occasions he will make valuable contributions, not only on this subject but on the wide range of subjects which his distinguished and varied career has fitted him to expound.
We have listened during the last two days to nearly twenty speeches, most of them able and learned, and some of them highly specialised. Indeed, my noble friend Lord Pethick-Lawrence devoted the whole of his speech to the fact that the bank rate has been raised by one half of 1 per cent., and he described this as a step on the road to Hell. I thought that Mr. Dalton's policy, which was the direct opposite to that, was very definitely an inflationary one in its results, and that Mr. Dalton had not been looked upon as one of our most successful Chancellors of the Exchequer. I was therefore rather surprised that Lord Pethick-Lawrence took a view that seemed to me in accordance with that policy. There have been many other specialised speeches dealing with sterling balances, the convertibility of the pound, and other complex subjects of that sort. But are not all these things ancillary and subsidiary to two main facts—quite simple facts? One of these is that
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we are spending more than we are earning; and the other that we are buying more than we are selling. If those two processes were each reversed all would be well, and in due course the other; problems would automatically solve themselves. But if those two processes are not reversed, then they will lead us to national bankruptcy, and national bankruptcy leads to dictatorship, to the end of a free democracy and, of course, to the end of the Welfare State.
I propose to devote my few remarks entirely to the consideration of the Welfare State, because that is the only economic fact that is of the slightest interest to the electorate. The first point I would make about the Welfare State is that it is very easy and popular to create. It is created entirely by politicians, who in fact compete in its creation, and have been doing so for many years—until during the last six years the Socialist Party have, as the noble Lord, Lord Brand, described it yesterday, put a roof on a building whose walls were not yet strong enough to carry it. But although it is easy and popular for the politicians to create a Welfare State it is quite a different matter to maintain it; and the maintenance of the Welfare State is not a matter in which the politicians can be of much assistance. The maintenance of the Welfare State depends entirely on the exertions of the people themselves. If the exertions of the people result in the creation of enough wealth to maintain the Welfare State, then it is possible to maintain it. If not, then the Welfare State cannot be maintained.
In listening to and reading speeches of noble Lords opposite, and of members of the same Party in another place, I sometimes feel that very few of them appear to realise the fact that the maintenance of the Welfare State depends not on the benevolence of the Labour Party but on the exertions of the workers. I submit that at present the exertions of the workers in this country are not sufficient to maintain the Welfare State, in view of the increasing competition from so many other parts of the world where the standard of living is much lower and the exertions of the workers are harder. We are already seeing that happen in the fact that unemployment is beginning to rear its head in Lancashire and Yorkshire, owing to competition from Japan. I was reading in my newspaper only this

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morning that our trade with Pakistan, in both yarn and textile machinery, is dropping to a negligible figure compared to that of a few years ago. We have lost that trade to Japan. The fact is that the exertions of the people in present circumstances are not great enough to maintain both the Welfare State at its present height and our rearmament programme on its present scale.
In the peroration to his very powerful speech last evening my noble friend Lord Balfour of Burleigh said that the Welfare State is "hanging by a thread," which is true. He went on to say that the bulk of the people are quite unaware of that fact—and that is equally true. He made an appeal for the co-operation of noble Lords opposite and their Party in bringing home the real truth of the economic situation to the people. He said, finally, that whether or not events turn out happily for us depends to a large extent on the attitude adopted by the Party of noble Lords opposite. In the light of that peroration—to which I entirely subscribe—I should like to consider the speeches made yesterday by the noble Lord, Lord Pakenham, and the noble Lord, Lord Silkin.
Lord Silkin, following the lead of Mr. Bevan, said that we are attempting an impossible task, and that we cannot maintain our rearmament on its present scale and the Welfare State at its present level. I agree with that. I agreed with it when Mr. Bevan first said it—indeed. I have thought it myself for a long time. But Lord Silkin went on to say—again following Mr. Bevan's lead—that the Welfare State must take first place and that rearmament must take second place; and that, having decided on what we thought a suitable Welfare State, we ought to spend what money was left over on our rearmament.
LORD SILKIN: That is not quite what I said. In that context I did not mention the Welfare State; I referred to an agreed standard of living—leaving out of the matter the question of a Welfare State.
LORD BLACKFORD: But the Welfare State creates the standard of living. I take the two terms as being synonymous.
LORD SILKIN: I did not intend to suggest that they were synonymous. I
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recognise that it may be necessary to reduce the standard of living.
LORD BLACKFORD: That is true. The noble Lord did say that. I noted down what he said and I have his words here. He said that the right approach would have been to see what our total resources were and what was required
"… in order to maintain an agreed standard of living for our people (it might have been fixed at a lower level than the present one, but it should be an agreed standard of living), and then devote what was left to rearmament. I feel that that would have been much better than fixing what I regard as an arbitrary figure for rearmament and then leaving the remainder for the people of this country to maintain themselves."
Surely my interpretation of what the noble Lord said is perfectly accurate? I say that he puts the Welfare State before rearmament: that is quite obvious. It is a most unfortunate thing that Marshal Stalin does not take that view. He takes the opposite view. He puts rearmament before the Welfare State. It is for the people of this country to decide what their view is about it: whether they think it better to maintain their Welfare State. and run a grave risk of being attacked by Russia at a disadvantage which may lead to total defeat and disaster, or whether it is better for the time being to forgo some of the advantages of the Welfare State in order to defend themselves and be prepared to prevent a third World War. I cannot help feeling that the line of opposition likely to be taken by the Socialist Party with regard to our economic affairs is that they will argue more and more that less and less expenditure should be appropriated to rearmament, and that the Welfare State should be maintained at all costs. It will be for the Conservative Party, the Government, to decide to what extent they are prepared to combat that line and take the increasingly unpopular view that for the time being rearmament must come first, that there will not be enough money for both, and that there may temporarily have to be some diminution in the Welfare State until that time of rearmament is passed.
The noble Viscount, Lord Waverley. made some reference to the speech of the noble Lord, Lord Pakenham. in which he talked about the small charge on prescriptions which, after all, was introduced by his own Party. It is true, as the noble

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Lord, Lord Macdonald, said, that they did not submit it to Parliament, but that may have been due to the fact that they were not returned to power and, therefore, did not have an opportunity of doing so. Anyhow, it is a very small matter, as I submit, but the noble Lord, Lord Pakenham, made it the occasion of talking some rubbish about the rich and the poor and so forth, which is just the usual class hatred "claptrap" wrapped up in suitable language for your Lordships' House. It shows the line of opposition which will undoubtedly be taken throughout the country. If a statesman of Lord Pakenham's stature begins at this early date to talk in that fashion, you may be quite sure that his colleagues in another place, and throughout the country, and the canvassing propagandists all over the place, will be putting that across all the time. The noble Lord, Lord Pakenham, went on to say, in one of the concluding sentences of his speech, that
"any onslaught on the Welfare State will be resisted fiercely."
The idea of that sentence is to persuade his hearers that, if it were not for the wicked Tories, with their horrible ideas, the Welfare State would be all right; that it is wholly those wicked Tories who are trying to take away the Welfare State. That, as I tried to point out earlier in these few remarks, is a complete deception.
Both lines of argument are completely deceptive. First of all, to think that it is possible to preserve the Welfare State merely by further taxation of the rich is a delusion—incidentally, I have often wondered what is the precise definition of "rich". At what point does a man cease to be an honourable, praiseworthy and thrifty citizen, hard-working and beloved by Lord Mackintosh and his Savings Movement, and become a hard-faced capitalist, grinding the faces of the poor and therefore fit to be cartooned and caricatured, misrepresented and robbed, and all that, ad lib.? I assume that perhaps the dividing point is when he becomes a surtax payer. If that is so, he has very few votes as a surtax payer, which is a great advantage.
Secondly, it is a great error to suppose that it is possible to get very much more out of him. Many of Lord Pakenham's colleagues are much addicted to the idea of a capital levy. Mr. Gaitskell himself
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has been advocating it. Mr. Douglas Jay, who is now the economic adviser of the Daily Herald, has long been a keen advocate. Mr. R. H. Crossman, who has now become assistant editor of the New Statesman, is another. They all come from Winchester—I do not know what it is there that breeds this attitude! Sir Stafford Cripps imposed a 5 per cent. levy on capital way back in 1948. That levy up to date, four years later, has produced exactly £106,000,000. I do not know what is Mr. Gaitskell's idea of a real, good, swingeing capital levy, as advocated by Mr. Kingsley Martin in the New Statesman. Let us assume that it is 10 per cent. Does anybody suppose nowadays that you would collect £212,000,000 in four years; and if it were possible to do any such thing, what does it amount to, compared with an annual Budget of approaching £5,000,000,000 a year? It is child's play. I submit that it is a complete deception of the working classes and the electorate as a whole to pretend that it is possible to maintain a Welfare State simply by further taxation of the rich.
The fact is that the Welfare State is paid for by the masses of the people themselves. The noble Lord. Lord Brand, hit the nail clean on the head yesterday when he said that it was an absolute miracle that people call the Health Service free when, as a matter of fact, it costs nearly £400,000,000 a year, every penny of which is paid for by the taxpayer. All these observations of mine lead me to believe that the noble Lord, Lord Balfour, is certainly far too optimistic in his hope that he will receive any co-operation from the Party of noble Lords opposite in the unpleasant actions which will be necessary on the part of this Government. Unpopular and unpleasant duties will have to be shouldered by the Government themselves, the Conservative Government, supported by the Conservative Party. They will be unpopular and they will be misrepresented. All those of us who have been Members of the Lower House are well aware how uncomfortable and distressing it is to have to go into the Lobby and register votes for measures which you know will be unpopular in your constituency, to have to meet the grumbles of your constituents. Perhaps your majority is only a slender one, you feel it slipping away from you, and it is almost certain that you will lose

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your seat at the next Election, a fate which all Members of Parliament wish to avoid.
None the less, I hope and believe that the Conservative Party and the Government will do their duty in this matter, however unpleasant it may be, however unpopular, and however it may be misrepresented. It may well be that the effects of the necessary measures which they have to take will not be fully realised during the lifetime of this Parliament. It may well be that they will be defeated at the next Election, just as was Lord Bruce in Australia, as he told us in his interesting speech earlier to-day. That does not matter. The Socialist Government will return to power, and it will be only a short time before the Conservatives are back again. But if they do not do their duty during this Parliament, then in fact they will be out for good, because lifelong Conservative supporters will feel that this is their last chance to do what they believe is right for the country. If we fail to do it this time, then we are not worth voting for another time. Indeed, a business friend of mine said to me only the other day, that if the Conservatives do not do their duty in this Parliament he would himself vote for Aneurin Bevan.
5.42 p.m.
VISCOUNT ST. DAVIDS: My Lords, in these days, when so many great changes have recently taken place, and now that we are in what some people hope, and I myself hope, will be a new Elizabethan Age, with King's Counsel being known as Queen's Counsel, I sometimes think that perhaps I ought to open my address to your Lordships with the words, "Noble, grave and reverend seniors." Certainly it is most impressive to stand here and see oneself surrounded in an economics debate with the bankers and heads of major industries in this country. I am particularly glad to see so many bankers around the Chamber, because I wish to put in a plea, which I hope will be welcome to the Conservative Party, for the small business man, the private enterprise man who really is private and really is enterprising. A great many things have been said from this side of the House, and will be said again, about the disabilities of private enterprise in various matters. But where private enterprise falls down worst, in my opinion, is where
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it has ceased either to be enterprise or to be private.
Here, perhaps, I may be able to answer Lord Blackford on a point that he made. He asked when does a capitalist cease to be a worthy saver of money and become an oppressor. I have always gone with Bernard Shaw in this matter. Bernard Shaw said that the real basic capitalist is the man who buys a spade to dig his garden, who takes the spade in his hand, works with it, and does something useful to the garden with it—with the aid of his capital which is his spade. That is a useful capitalist. In my opinion, the time when a capitalist ceases to be useful is when he forgets what his money is doing, when his money works behind his back, out of his control. In that case his money may well be used for purposes of which, if he studied them fully, he would not approve. One or two of the worst cases of misuse of capital that I have heard have been due not to the wickedness of the capitalist but simply to the fact that he did not know what was being done with his money.
But the people I want to plead for to-day are the little businessmen, the little capitalists, of whom there are enormous numbers in this country—when I say "business" I mean not only those in industry but also those in agriculture. On occasion I have spoken about the troubles of the farmer, but I do not want to go into that, matter to-day. I understand that Lord Noel-Buxton will be dealing with it, and I do not want to trespass on his ground. Many of my own speeches have been firmly trodden on by previous speakers, and I do not wish to follow suit. The small industrial capitalist is somebody of whom the Government should take more care. He is suffering from a number of things, some of long standing, others comparatively recent. The thing from which he suffers chiefly to-day, of course, is the fact that his capital has to cover goods which have gone up enormously in price. and therefore it is stretched to a limit, The Government's remedy for his trouble seems to be to restrict his bank credit, thus making him less able to carry on. Organisations have been set up to help these little fellows but I have always found them to be blatently insufficient.
My experience in this matter is that of one who carries on as a side-line the business of an industrial consultant. A

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number of these people come to me in an effort to raise capital. My first question to them is always: "Where have you been?" The first people to whom they say they have been are the Industrial and Commercial Finance Corporation. They say that they have put their case before the I.C.F.C. and that they have been turned down. I.C.F.C. money is comparatively cheap money, even in these days, for a little man. The next person they have gone to see, if they have been to see anybody else, is the Development Areas Treasury Advisory Committee, known as D.A.T.A.C., and this body they have almost always found to be equally inefficient. To begin with, the people applying must, to benefit, be in a development area.
Secondly, the Act under which the Committee was set up unfortunately became maimed during a Committee stage, with the result that, although on the face of the Act this Committee are empowered to advise the Treasury to make grants as well as loans, in the course of setting out the clauses it became impossible for the Committee ever to make a grant; and in fact I do not believe that they have ever done so. In regard to loans, the general trouble with getting loans out of D.A.T.A.C. is that they require all the information which they think anyone may possibly ever ask them for. D.A.T.A.C. is a committee of businessmen, with a Treasury secretary, and, trying to get all the information that he thinks a businessman might possibly ask him for, a civil servant will ask questions of the unfortunate applicant for cash until he dies from sheer want of it. If we really are to use the full enterprise of the little man in this country we must do better than that. What generally happens in the end is that the little man looks round and finally finds somebody who provides the capital at a very much more expensive rate; but he does provide it, and that, with luck, will keep the little man alive.
But there is in all this one enormous disincentive to enterprise for the little businessman. Over and over again one finds a small businessman who has developed some intensely valuable product, who has worked up some electrical invention or some device which will do a great deal for industry. He has had a small amount of capital, possibly family money, at the back of him, and he has
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sat down and developed his invention and spent £30,000 or £40,000 in working up the device; and when he has finished and has brought it to a fully marketable state, he has the plans of his machine or whatever it is, and nothing else, and he has to go to somebody to get it financed. On paper he has not got his money but he has got the marketable value of the machine. But if he tries to sell the marketable value of the machine to anybody on earth, he will discover that it is not as great as the value of the money that he paid to develop the machine. The result is that some bright lad with a "spot" of capital will come into the venture and buy up the whole thing cheaply, and that second man will make a fortune out of it while the inventor will not. A very fine film was made for the Festival of Britain, called The Magic Box—I do not know if any of your Lordships saw it. It was the story of Mr. Friese-Greene who invented the celluloid cinema film and thus made possible what is now a gigantic industry. Mr. Friese-Greene worked all through his life pouring his small capital into this invention, developing it to the point when it was saleable, and then he had to sell it for a song because he went bankrupt in the course of its development. When the industry was booming and making millions, providing fortunes for all those who had then come into it, Mr. Friese-Greene died in poverty; and the best that we could then do for him was to make a cinema film about him.
It would be of enormous advantage to this country if the present Government, who have always said that they support enterprise, could discover some method of making sure that the successors to Mr. Friese-Greene do not die in poverty, having sold their inventions cheaply. The reason I have risen to say this to-day is that, in my personal experience as a consultant, I have seen this happen several times. In each case the proposition has been one which was very well worth developing, and which was developed to a very fine state by somebody who had spent his whole fortune on it; and then the man who had done all this fine work has been pushed out and somebody with cash has stepped in and carried on. I believe it would do more to push on the industry of this country than many of the present actions of Her Majesty's

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Government if some way of financing these people could be thought out. It must be done on a basis of some sort, even if an expensive basis, which actually provides the money, because the present arrangements for financing small businesses are hopelessly inadequate. It has for long been a joke in the City of London that it is much easier to borrow a hundred thousand pounds than to borrow ten thousand pounds. It has also for a long time been a joke that the only way to get money out of a banker is to prove that you do not need to borrow it.
I find that these small people just cannot get ahead with the arrangements that now exist. Sometimes I begin to believe that somebody in an exalted position is trying to stop them. If you are a large firm there is something to be said for a method for discouraging small competitors. Large firms can stand crises in a way that small ones cannot, and an occasional squeeze which gets rid of small competition does preserve the big fellow who can stand it. Therefore amongst the small businessmen there is in some quarters a growing feeling that somebody is pulling the levers. Undoubtedly there is a type of businessman in this country—I think he is luckily rare, but he does exist—who owns a business of a largish size which has become fairly static owing to the fact that it is fully developed; and he finds it is much easier to change the circumstances which surround his business than to change his business to fit the circumstances. This can be done if, in fact, he has sufficient power in the industry itself. If a man of that sort is allowed to obtain any further grip on industry—and the Monopolies Commission has certainly shown that there are such cases—then this Government will not receive the support of those by whom it has been supported so far, and it will fall to the ground in very well deserved contempt.
5.58 p.m.
LORD RITCHIE OP DUNDEE: My Lords, I hope that he will not be overwhelmed before the day is out, but I should like to add my word of congratulation to the many which have been given to the noble Viscount, Lord Waverley. He and my father swapped jobs, if I may put it colloquially, some years ago, and I am very happy to have the opportunity of addressing your Lordships' House on the
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occasion when Lord Waverley has first spoken here.
I propose to make what is not more than a very brief intervention on a particular point in this important debate, and in doing so I am reminded of the fact that the last time I addressed your Lordships' House I was somewhat severely taken to tusk for using words and expressing views which were perhaps not suitable to your Lordships' House. It was suggested hat I was calling into question the sincerity of purpose and good faith of noble Lords opposite. Nothing was further from my thoughts. But, after all, if a man were to break into one of your Lordships' homes in the middle of the night, I do not think anyone would doubt his sincerity of purpose, although at the same time he would still be doing something wrong. I mention that subject only to give myself the opportunity of promising that I will keep my words as honeyed as possible in the circumstances to-day.
I was, unfortunately, out of the House for a few minutes during part of the speech of the noble Lord, Lord Strabolgi, yesterday. I do not want to add to the trouble into which he walked, but I feel that some reply must be given to one or two of his statements about opinion in the City. The Stock Exchange has been accused on a number of occasions of levity and of making jokes. We are, perhaps, a little notorious in that respect. But having regard to the fact that some 3,000 to 4,000 people gather together daily on the floor of the Stock Exchange building, it is perhaps permissible that occasionally a spirit of jocularity should rear its head. One can only hope that the noble Lord's friend, the "prominent stockbroker," as he described him, was making a joke when he said that the general feeling in the City was: "How long before we get this crowd out?"—and I take it by "this crowd" the gentleman meant Her Majesty's Government.
The noble Lord, Lord Strabolgi, concluded this part of Ms speech by saying that he was making no attack upon the Stock Exchange. I beg to differ, and to say that in my view he was making a very damaging attack in suggesting that the general opinion in the City, and in particular on the Stock Exchange, was in favour of the return of a Government

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by whom the members of what I beg leave to call an honourable profession were day after day subjected to ceaseless and somewhat cheap gibes, and under whose auspices the country was brought to the position which it is in to-day. It is never very amusing to lose money. None of us likes it. But I can assure your Lordships that we in the Stock Exchange—and, in fact, I think, everyone in the City—are perfectly prepared to face whatever is to come to us under Her Majesty's Government so long as efforts are being made to get us out of the grave position in which we now find ourselves. To suggest that members of the Stock Exchange would welcome a return to the follies of the past six years is, if I may say so, both unworthy and untrue.
6.5 p.m.
LORD NOEL-BUXTON: My Lords, I should like humbly to add my congratulations to those which have been tendered to the noble Viscount, Lord Waverley, on his maiden speech, and to say that I consider it a privilege to be speaking in the House on the same day. It is easier for measures to be drastic than fundamental, but measures to meet the present crisis must be both drastic and fundamental. I think we tend to be mesmerised by the present unbalance of payments. Far be it from me to under estimate this crisis and the need for drastic measures. Nevertheless, in respect of the unbalance of payments, I think we have to develop a really fundamental policy, a radical policy, and I should like, briefly, to suggest what I feel are the right lines for this policy. Reference has already been made to a sentence from Mr. Butler's speech in another place. That sentence was to the effect that our economic position in the world has been deteriorating for about half a century. I think we should consider whether this deterioration is accidental or whether it is part of an inevitable evolution. Mr. Butler gave us considerable confidence when he said that:
"Restrictions and cuts are only palliatives,"
and that, as the result of the meeting of Commonwealth Finance Ministers
"we have formed groups to put into practice some of the ideas which we discussed and to study their implications."
That seemed to be a very fruitful remark, and in view of the formation of
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these groups we shall look forward to Mr. Butler's further thinking with enthusiasm. But I think there is a tremendous danger that any slight easements of the position may encourage us to postpone the reckoning and to forget the new course that is needed. As I said, I think a radical, new course is needed, but, to look back for a moment, we still tend to bark up the wrong tree—and we do so for three fairly distinct reasons.
In the first place, we are tending to go back to the opinion, and to perpetuate the notion, that we are the main workshop of the world, just as we were at a certain stage of the nineteenth century, with a secure lead and everyone waiting for our products. Secondly, we tend to imagine that cheap food can continue to come our way without limit, and that its production is the sole mission (it has often been considered by them to be the sole mission) of the food producers. Thirdly, we tend to think that the terms of trade are, in some secret way, generally speaking, going our way. But what really is the position, and is it reasonable to foresee any easement? If not, we are deceiving ourselves, and the people, if we assume that the Ship of State can continue on its old course and that we can continue with the same type of regime in terms of numbers and types of production. I am not suggesting that it cannot; I am suggesting that the matter is sufficiently uncertain for it to be necessary for our leadership to consider the possibility of an alternative course from the point of view of the terms of trade.
Briefly speaking, can it be denied that the terms of trade are turning against countries which are predominantly manufacturing countries? Whether in Britain or the United States, or anywhere else in the world, the rate of productivity is increasing enormously through technical improvement. This clearly means more competition and a reduction in the prices of the products concerned. But this is not happening in the case of food. Can there be any denying that the population of the world increases steadily, but that food production does not keep pace with it? I assert—and I want to be challenged if this is not the case—that, as a result of the simple law of supply

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and demand, the position must be gradually favouring the food-producing countries, because they have the goods which are so much wanted in other countries and the terms of exchange are in their favour.
My second point—and I think it is one to which we show great blindness—relates to the tendency to export capital goods, rather than consumer goods. They are the goods, on the whole, that the world wants, and if I may I would quote for a moment what was said during the economic debate in another place. Mr. Harold Wilson said:
"What the world warts to-day, and what the world insists on having, if it is going to buy our products, is engineering goods.… It is no good the President of the Board of Trade telling them that they must take textiles, clothing, aspirin tablets and all the rest of it …."
He spoke of the "clamour" of other sterling areas countries for capital equipment from this country and said that if they do not get it from us, undoubtedly they will turn to the United States or elsewhere. I think this wish to encourage the sale of capital equipment, of engineering goods in particular, is a dangerous thing in the long run, on the assumption that we intend to revive and maintain the traditional set-up of the Commonwealth with Britain as the main workshop. Does anybody think that if New Zealand imports a particular type of machine-tool she will go on wanting repeat orders of that? Only if she were to set it up in boggy ground in which it would disappear. The whole fact is that this is a gateway to independence, which I think we ought to encourage. In the meantime, we are drastically cutting our own investment in industry and agriculture in order to increase our sale of machinery and tools to our competitors. Is that not cutting our own throats, if we are doing this on the assumption of the continuance of the existing type of economy? It is really immoral on our part to assume that this is the way the ship will continue to go, although I am not suggesting that it cannot go that way. When I was in a small settlement on the Labrador Coast just before the war there was a big forest fire, and it was decided on which boats we should go down river—the Broad Hamilton Inlet—if it should be necessary. It did not become necessary, but it was obvious that local states
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manship should and did rise to this task of preparation.
In view of all this, I should like to say what I think are our real assets and the way in which they ought to be developed. I regard them as the land, the great skill of our people, and the Commonwealth. From the point of view of the land, we may have to build a much smaller industrial house, or move into a wing of the old one, but there will still be the same amount of land. The fertility of our island is our sheet anchor. It would be the greatest tragedy if we had a poor soil, but nobody can argue that that is the case. It was the land and not industry which first made modern Britain and in my opinion it will re-create it in terms of a community of more balance between agriculture and industry. Why do we go on nibbling at this rural problem, as we are nibbling at it in terms of marginal land and hill land? Grass is as important as coal. I think of the remark of G. K. Chesterton:
"That enormous vision of the ploughed hills."
Why cannot we go "the whole hog" in relation to arable and grass land at both low and high elevation? On the point of skill, there can be no doubt that we have in this island the biggest reservoir of skilled labour and technical knowledge in the world. Therefore is it not reasonable that we should concentrate on the production of goods requiring the smallest amount of raw materials and the largest amount of skill? I suppose that proposition is generally accepted, but it should be more specifically developed.
On the question of the Commonwealth, it should be obvious, from what I have already said, that I do not believe in a Commonwealth with the Mother Country as an industrial community and the Dominions sticking to the rôle of primary producers. I think that is a hangover from the Colonial Age. Obviously the Commonwealth will have to be decentralised; the Commonwealth as a whole matters more than the Mother Country, or any other of the family partners singly. This question bristles with problems. That is why it is a paradox, but true, to say that I hope this crisis may be kind by being severe, so that we shall take this new route, and not be deflected by easements. One final point, which is also a paradox, relates to dependence or potential dependence on America. We are more likely

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to become chronically dependent on America by maintaining a very high population on an unstable, unjustifiable and impossible footing than with a smaller population that can pay its way and become satisfactorily integrated. My conclusion is that with the present set-up we always shall be vulnerable to crisis, and the Empire never will have a proper chance to develop.
6.16 p.m.
LORD GIFFORD: My Lords, when I read in the New Year Honours List that Sir John Anderson had been elevated to your Lordships' House, I looked forward to the day when we should hear him make his maiden speech, and we have not been disappointed. I am sure we have all listened to it with great interest. I propose to detain your Lordships for only a few minutes, to raise two specific points. Before I do so, I should like to say one word to the noble Viscount, Lord St. Davids. I was astonished to hear him tell us that he was an industrial consultant and then proceed to bemoan the fact that his clients who wished to develop some invention or project were not able to get capital or help. If he were earning his fee, that is what his clients paid him for—to find capital to develop their projects. I feel it is up to him to look after his clients and not expect the Government to do so. However, that is only by the way.
The specific points I wish to put to your Lordships are in connection with foreign travel allowances. I should declare that I have an interest in the matter as I am the managing director of a travel agency. I am not proposing to argue against the decrease in the main basic allowance, though I would point out one unfortunate effect which it may have. It may prevent those who normally wish to stay in first-class hotels from travelling abroad. Noble Lords opposite may say that that does not matter and that it is probably a good thing. It may have this effect, however: that they will occupy rooms in luxury and first-class hotels in this country which would otherwise be let to Americans and other visitors from overseas who would bring dollars into this country.
The first point I wish to ask Her Majesty's Government to look into is the children's allowance. At the moment this
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is £15 for a child under sixteen years of age. In view of our financial state at the present moment, I do not suggest that that should be increased, but I feel that the age at which the allowance is applicable should be reduced. I suggest that instead of being under sixteen, it should be under eight years of age. I can assure your Lordships that an hotel charges just as much for a boy or girl of eight years of age or over as for a grown-up person. I feel that this small allowance for older children unfairly penalises the family man. Certainly the family man going abroad saves money on the fares, but they are payable in sterling; and he does not save any money on hotel accommodation. That is a small point that might be altered and it would mean only a minute increase in the amount spent overseas.
The second point, on which I feel sure I shall have the sympathetic agreement of the Government, is this. The present allowances go on until next November. I would ask that ample notice be given—I suggest at least two months before then—as to what the allowance will be after November, so that travel agents and transport companies may have the opportunity to make their plans. They have to make up their programmes and catalogues and calculate the prices of their tours, and that takes some time. It is only fair that they should have reasonable notice of what the allowance is likely to be next year. I will not detain your Lordships longer, but I should be most grateful if those two points could be given consideration.
6.22 p.m.
LORD SEMPILL: My Lords, all noble Lords who have joined in this debate have rightly stressed, and more than once, the need for higher productive efficiency in every activity, whether of brain or hand. I should like to suggest one or two ways in which this urge to a higher efficiency, without which we shall collapse, can be made more rapidly effective. Your Lordships have listened to-day and yesterday to speeches of those with a unique knowledge of banking, finance and international trade, and beside this wealth of talented advice I venture to lay the experience of a production engineer. We live in an age of power production, and yet all too often we fail to apply that science in practice. Take, for example,

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the case of the loading and the unloading of ships. In this country, and, in fact, over the British world, labour-saving devices are welcomed so long as they do not save labour, with the result that passenger ships, say, between Britain and the Antipodes, all too frequently have to sail with half their cargo space empty. Yet the equipment to speed loading is not infrequently stored, but not used, at the dockside. That is a very bad state of affairs, since it entails locking up valuable equipment that might be exported elsewhere. This situation must be met, and can be met, as I hope to convince your Lordships.
I should like to say a few words about the coal mines. The present £500,000,000 fifteen-year programme of modernisation and mechanisation in the mines will eventually yield 30,000,000 tons more coal a year with 68,000 fewer miners. That means an increase of less than 2 per cent. a year per person employed. Now consider this other aspect, of a medium-sized power station consuming, as such a station would, some 1,600 tons of coal per day—the output, in fact, of a medium-sized pit. In the last fifteen years the efficiency in handling the coal in a power station has increased as much as 1,800 per cent. In the next fifteen years, in the mines, as I have already mentioned, it will be less than 2 per cent. Why is this? At one northern pit the number of men has recently been reduced from 1,400 to 800. This took some twelve months to accomplish, and the output during that period remained the same. Now, by effective mechanisation, it has been considerably increased. Those rendered redundant were absorbed into adjacent pits. That shows what can be done with existing equipment, efficiently used. The oft repeated high-level statements that a man will not work himself out of a job in the non-expanding industries are not true. If the production engineering techniques are effective and are efficiently applied, he is bound to do so in time. The high efficiency in coal handling in power stations, units in an expanding industry, shows what mechanisation can do where redundancy of labour does not arise.
I suggest that the problem of the resistance to the adoption of new techniques in the non-expanding industries, such as those of coal, railways and docks, can and will be swept aside as soon as it is
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accepted: first, that modern techniques are such that, if fully used, as they must be, man-power will become redundant; and secondly, that a practical solution has been evolved and can be applied without delay, so that redundant hands can be attracted—and not only attracted, but welcomed—into other industries which are expanding. This, of course, involves investigation into the amount of labour to be absorbed, the amount of capital per person employed and the amount of purchasing power to absorb the production of such labour. I suggest that until this is done—and it can be and must be done without delay—the efficiency in the non-expanding industries will remain as now, in the red. I should like to make one final remark. On November 18, 1941, similar matters were before your Lordships' House, and I had the honour of initiating the Motion that was then being debated. I should like to suggest to the noble Lord, Lord Woolton, that the points then made might be given further consideration at the present time.
6.28 p.m.
VISCOUNT HALL: My Lords, this debate has extended over two days and has been of a most interesting character. There has been no doubt at all that there is a crisis, and one which must be dealt with efficiently, and we have had varied opinions as to how best to deal with it. In the course of the discussion we have listened to some interesting speeches, and points of view have been put clearly and, indeed, forcibly. It is noteworthy that the speeches, with one exception, have given rise to very little controversy. I am not going to stress that exception, because it was a maiden speech. It was a speech to which there is a complete answer and such an answer would, I feel sure, do quite a lot of good in the country. I would say without hesitation that, whatever influence any of the best trade union leaders—or, indeed, some of the most respected leaders of the Labour Party—may have, it will be very difficult for them to dissociate the speech to which we listened this afternoon from the attitude of the Government; it will be regarded as a pointer to what might be a policy involving a considerable amount of damage to the industrial workers of this country.
It is not for me to refer to the experience of the first of the post-war years

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after the First World War. It was not an ugly situation left as a legacy after the first post-War Government; it was a legacy of misery, poverty, unemployment, discontent, industrial strife—indeed, it was the blackest twenty-year period in the economic history of this country. It is true that the present situation may be regarded as an ugly one, but after the handling by the economists, the bankers and the experts, with their rapid deflation and rapid inflation, of the situation after the First World War, then I am sure that the majority of the people of this country will appreciate what has been done for them during the last six years by the late Labour Government. I hope that that will be the last note of controversy I shall strike during the course of my remarks.
I have pointed out that there has been no dispute at all as to the crisis and, indeed, very little dispute as to how the crisis should be handled. But I should like some information from the noble Lord who is to wind up the debate for the Government as to the prospect, say, for the export trade during the course of the present year. We have had many speeches—particularly the speech of the noble Viscount, Lord Bruce—pointing out the difficulties which are likely to arise in the export markets. Indeed, it might be said that the trade returns for the month of January were not too promising. It is true that there was a substantial increase in the value of exports, but there was a very large increase in imports. notwithstanding the fact that nearly three months have elapsed since the Chancellor of the Exchequer made his announcement about the import cuts.
Now the Government must have some idea as to what is expected in relation to the import and export trade, not only to enable this trade gap to be wiped out, but also to ensure that we shall be able to build up the reserve of dollars and sterling which is so necessary. I know that great emphasis is placed upon the value of engineering products in the export market. That is true. But it must be remembered that last year two-fifths of the total value of our exports lay in engineering products. I think they earned something like £1,070,000,000. It is hoped, I understand, that there will be a 20 per cent. increase in that type of
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export. Unfortunately, that type of export has not brought in the highest price. I believe that the average increase in price for the engineering products exported last year was something like 11 per cent., whereas the average increase in price for other exports—particularly towards the end of the year—was something like 27 or 28 per cent. That was far above the 19 per cent. which was the increase in the early portion of the year. The increase in the import prices, however, was somewhere between 30 and 34 per cent. I hope that the noble Lord, Lord Woolton, will give us some information in relation to that matter.
The only thing with which I am going to deal in relation to the proposals of the Government is the question of the raiding of the stockpile. I must say that, to me, the statement made by the Chancellor of the Exchequer was somewhat alarming. He said that the reduction of the stockpile will be kept within reasonable proportions, but he also said, in the course of his statement, that he was not able to give any information as to how the stockpile is to be reduced. The Minister of Health, in winding up that debate, said that nothing which is essential will be sacrificed. But everything in the strategic stockpile is essential, otherwise it would not be there. These stockpiles consist of the essential necessities imported in time of war. They have been accumulated after much consideration, and at heavy cost, and they are very valuable as military equipment. In the event of war, they would represent a very great saving in shipping space, in the number of naval vessels required to protect that shipping and, possibly, hundreds of valuable lives. They are vital to our defence programme, and it is these stores which the Government are talking of raiding. If it is a question of loaning any material to the United States of America or any of the North Atlantic Treaty Powers with a view to its being returned, not the slightest objection can be taken. But we should have some information as to how far they are to be raided.
The only items of the additional £150,000,000 cuts to which the Chancellor of the Exchequer referred were, first, tourism, where something like £12,500,000 would be saved; the reducing of the import of coal by £2,500,000; a saving of £500,000 on the foreign information

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services, plus, of course, the raiding of the tobacco stocks by something like £22,000,000—making a total of about £40,000,000. Does that mean that the difference between that £40,000,000 and the £150,000,000 is coming mainly from the stockpile? That is the assumption to which one is forced. Without the information for which I am asking, it is difficult to draw any other conclusion. What must be understood is that the benefit of such capital cuts as the raiding of stocks is non-recurring. This cut cannot make a lasting contribution to long-term saving: it can only aggravate the position.
I want now to come to what will be regarded as one of the most important matters. It is one which has not been dealt with, except for a brief mention by the noble Lord, Lord Sempill, and that is the question of production. Whatever the economic, financial and business theories may be, unless we get the production form the men in the fields, in the mines, and in the factories, from the industrial workers and the management of this country, then all our other efforts are bound to fail. I am convinced that insufficient attention is being given by the Government to this very important matter of industrial production. Whatever may be said about happenings since the War, it is true that there has been an increase in our industrial production of something like 43 per cent., In view of the difficulties, I think that is a notable achievement in six years. As compared with the six years after the First World War the number of working days lost through industrial disputes has been infinitesimal. And let it be said that during this six years there have been scarcely half a dozen industrial disputes in this country which could be regarded as official or backed by trade unions. That is the contribution which has been made.
I should like to knew what the prospects are. Our most vital export industries depend upon steel and coal. Steel has begun the new year with production at a level below that of last year. The production of ingots and castings in January was at an annual rate of 15,234,000 tons, compared with a rate of 15,907,000 tons in January of last year. This means that there is a reduction at an annual rate of about 700,000 tons. Unless this
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can be dealt with, and dealt with effectively, we shall lose the effect of the million tons of steel for which the Prime Minister negotiated when he was in Washington. I appreciate the difficulties. Scrap is very difficult to obtain. From reports I have received recently I gather that it may not be possible to get more than a very little scrap from the Continent, particularly from Germany, after the next three or four months. And it is evident that the Government have many difficulties in maintaining the output of steel which we achieved in this country during last year. I should like to ask whether the noble Lord can give us any information about the steel which is expected from Japan. There have been rumours in the Press that we are not likely to get it. I am sure every Member of your Lordships' House would like to see as much steel as possible. There is the question of substituting other material for steel. During the week-end I saw a report in a journal that the soft timber situation in this country is very much easier, that we have fairly good stocks, and that there is no world shortage of this kind of timber. It was suggested that there was a possibility of saving some hundreds of thousands of tons of steel in our building operations by the use of this soft timber. I am sure that both the noble Lord and the Chancellor of the Duchy are fully seized of the importance of this matter.
The industry about which I am very much concerned, the industry which can make a very great contribution to our great problems, is my own old industry—the coal industry. It seems strange to me that during the course of my lifetime I have seen what might be regarded as the rise and fall of the coal industry. I spent half my life in the coal industry and the other half in politics—and I am not sure in which of the two I have been more happy. I certainly had a very happy time in my industrial life. I agree with the remarks of the Chancellor of the Exchequer that there is little prospect at the moment of seeing any increase in the export of coal. He said that plans are on foot, and I should like to know what these plans are. I am sure that the noble Lord, Lord Leathers, is fully alive to this situation—and he is not so much tied to Conservative propaganda as is the noble Lord, Lord Woolton. I am not going to chaff Lord Woolton on promises

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which he made at the time of the General Election. But I did hear of one Tory who went for a holiday in Italy—only members of the Tory Party can afford to go there.
SEVERAL NOBLE LORDS: Oh!
VISCOUNT SWINTON: The others go to Yugoslavia.
VISCOUNT HALL: This Tory went on to Naples, and a boatman there asked him whether he was going to have a look at the Blue Lagoon that day. He replied, "No, I can't afford it." The boatman said "That is very strange. Six months ago you told me that if you could get the Socialist Government in Britain out you would have all the money you want by now. The Socialist Government are now out and the Tory Government are in, and you have not got any money at all. What fools you are!"
LORD WOOLTON: I do not see what the moral is.
VISCOUNT HALL: You have not far to look.
The Chancellor of the Exchequer rightly said that the spirit of the miners is excellent and their production first-class. He went on to say that to export coal is of more value to the Government at the present time than money. That is true. The President of the Board of Trade went so far as to say that the battle of the sterling area will be fought out in the coal faces of the country. He could have gone a little further and said that it will be fought out by the production achieved by the industrial workers and the managers of this country.
A NOBLE LORD: And the farmers.
VISCOUNT HALL: They are industrial workers. What is the position? I should like to make this point: that the decrease in our export of coal is not caused by lack of production. Strange to say, the production of coal in this country last year—and in this, of course, I include open-cast coal—was higher than the production in this country in 1931, 1932, 1933 and 1934. In 1931, we exported from this country 57,000,000 tons of coal, with a production less than it was this year. In 1932, we exported about 50,000,000 tons of coal. In 1933, 1934 and 1935, we exported annually
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between 40,000,000 and 50,000,000 tons of coal, also with an output lower than the output of this country at the present time. Where has that coal gone to? It has not been fully realised that there has been a rapid development of inland consumption of coal. The whole consumption has increased from 1937, when it was 157,000,000 tons, to 210,000,000 tons at the present time. Indeed, had it not been for open-cast coal last year we should not have exported a single ton of coal from this country. That is a very serious matter. Indeed, to me the importation of coal into this country for any purpose is most annoying.
How are we going to overcome this difficulty—because overcome it must be. It is pleasing to note that the man-power of the industry is gradually increasing. It has gone up by about 8,000 during the last month. The average at the present time is 705,000, compared with about 696,000 or 697,000 during the course of last year. But what is happening is this—and this is very largely as a result of the application of machinery—that youths are no longer going into the pits. In 1938, there were over 70,000 young people under eighteen years of age working in the pits, serving a trade, having an apprenticeship. Those of us who have been through it did not dislike it to that extent. It was a rough life, it was a very unattractive industry, but there was nothing else for us to do. These young men, who will not go in when they are younger and get the training which the application of the machine to production cannot give them, are not going into the pits. One cannot blame them. The result is that, whereas the average age of men employed in the pits of this country in 1938 was twenty-eight, it is now over forty. We are retaining in the industry men of sixty-five, seventy and some over seventy years of age. Some of them have been doing a job of work in the pits of this country for over sixty years. I should like to spend a considerable amount of time in dealing with this matter, but I cannot take up any more of your Lordships' time now, other than to say this: whatever Government are in power in this country, this question of the production of coal, both for the inland market and for the export trade, is of the greatest possible importance.

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Now a word about the use of coal. I would that some attention be given to the increase in the consumption of coal inland. I am not referring to consumption by the householder: if there is any person in this country who has had a very, hard deal as a result of the shortage of fuel, it is the householder. Indeed, at the present time I understand that the ration for the householder is 36 cwt. a year. During the war it was 47 cwt. It is impossible to cut down the supply of coal to the householder, but I am wondering what can be done in relation to some of the industrial concerns of this country. Some of the bigger concerns could install fuel efficiency plant. Others are very wasteful in the use of coal, and I am convinced that, if there were a close scrutiny, it might be possible to reduce the consumption of inland coal by something like 10,000,000 tons a year. I am hoping that we shall be able to export something like 25,000,000 to 30.000,000 tons of coal if something on those lines is done, and if a greater drive can be made in the recruitment of labour into the industry.
One other matter and I will conclude—I refer to the question of man-power, the transfer scheme. I agree that it is essential to transfer men to work, but have seen so much of that transferring during the last fifteen or twenty years that sometimes I think much can be done to transfer the work nearer to the homes of the men. From South Wales during the wars, we transferred 500,000 people into England. Indeed, at the present time, we have the highest percentage of unemployed in the country for any area and we feel that something can be done to effect an improvement, because we have some up-to-date factories in South Wales at the present time. Work can be transferred to some of those factories. The Labour Governmert early last year gave a directive that not less than 20 per cent. of the Defence orders should be given to works in the development areas. I hope that the present Government are carrying out that policy. Indeed, I go further and say that something ought to be done, particularly in relation to the electrical trades. In my own home town, where we have a very large Royal Ordnance factory, we have three substantial factories which have been built and which give satisfactory employment in the making of radio and television sets. It ought not to be difficult, by bringing in some of the
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specialists and technicians, for the people who have been trained in that electrical work to be kept on the job.
I think the Ministry of Supply and the Admiralty are looking into that matter at the present time. If noble Lords can give them just a hint as to what should be done in connection with this matter, it will be a good thing, for it is not easy to transfer men. I saw a report only yesterday about some men who were transferred from one place in the Midlands to another. It is true that the distance was only fourteen miles, but here were men skilled in their jobs. They were earning, with incentives, about £11 per week. They were sent to a job fourteen miles away and they were given £7 a week. It cost them between 12s. and 15s. for transport, they had to pay for their lunches, and they were away from home. My Lords, these skilled men do not take very kindly to a transfer of that kind, and if the Government want this scheme to work smoothly they must look to matters of that sort. I know the Minister is keeping in close touch with the trade unions, but there are a great many snags. If you take work to the homes of the people it is very much better. Indeed, a, huge proportion of the industry of this country was built up by taking work right into the homes of the people. It is easier to transfer a few specialists than to transfer a thousand others into districts hundreds of miles away from their homes.
My Lords, there is nothing more that I am going to say. I could say a good deal about the social services, but my noble friends, Lord Pakenham and Lord Macdonald, have said all that is necessary to be said. I would add just this. There is no question but that the eyes of the country are on the present Government. I think it was a mistake that one of the first things they did was to make a reduction in the social services. I know Lord Balfour of Burleigh's view. He is very strong in his views, but. I entirely disagree with them. There is a sincerity about his views for which we cannot help having some respect; but he is all wrong. After all, the social services are services which the workpeople, the employers and, indeed, the State, pay for. Were it not for the contributory principle, it may be that the Government would have to provide all

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that was necessary. But here is a voluntary contribution of hundreds of millions a year, from the workers, from the employers and from the State.
LORD BALFOUR OF BURLEIGH: Would the noble Viscount forgive me for interrupting? I do not understand why he refers to me in this way. I have never attacked the social services. My one aim is to save the social services.
VISCOUNT HALL: Well, the noble Lord wants to save them by attacking them.
LORD BALFOUR OF BURLEIGH: I have never attacked the social services.
VISCOUNT HALL: Not in principle.
LORD BALFOUR OF BURLEIGH: Never.
VISCOUNT HALL: But the noble Viscount, Lord Waverley, himself said that he thought that they were introduced too speedily, and there is no doubt at all that there is that general feeling about the social services. I have here the very words of the noble Lord. He said:
"Did the Labour Party go too far and too fast?"
LORD BALFOUR OF BURLEIGH: Hear, hear!
VISCOUNT HALL: The noble Lord continued:
"I answer that with an unhesitating affirmative."
LORD BALFOUR OF BURLEIGH: That is not an attack on the social services.
VISCOUNT HALL: Then I do not understand what is. Whatever may be the noble Lord's view, I hope that the Government are going to be very careful about this matter. After all, it must be remembered that they have no majority in the country; they must remember that, notwithstanding all the propaganda of the last Election, 14,000,000 people voted against them. I am not holding that out as a threat. At the same time, the working people of this country regard these services as something which they have won, something which will have to be maintained, and something that they will not give up without a great struggle.
7.5 p.m.
LORD WOOLTON: My Lords, I will do my best, during the strength of your endurance, to reply to some twenty speeches to which we have listened, including two maiden speeches which we have been very glad indeed to hear in this House. If it is not presumptuous of me to say so, the debate that we have had will surely reflect great credit on our House when, as I hope it will be, it is read in the country. We have been dealing with subjects of the greatest moment and of such complexity that it is very difficult for the layman to understand them. Indeed, sometimes it has been difficult for us to understand all the financial implications of the problems that have been raised. However difficult it may be for people to understand them, it is really true of all the subjects with which we have been dealing that the end product, as I believe they call it in the engineering world, is in the homes of the people of this country.
The debate has been a distinguished one. There has been very little Party politics in it, for which it has probably been all the better. I always notice that when a Government are in power they think it better that there should be no Party politics in the discussions. I learned that lesson from noble Lords opposite when they were in power. When the noble Lord, Lord Pakenham, stopped trying to be a Party politician and gave us the benefit of his advice on economics and of his great erudition, for which the House is always grateful, I think he rendered us a service in initiating this debate; and I must say that I heartily agreed with his excessive language when he talked about this "infernal" business of the balance of payments. My Lords, this is something about which the nation cares. If the noble Lord, Lord Macdonald, will not think that I am being presumptuous—because he is a very old Parliamentary hand—I should like not only to congratulate him but to thank him for the speech that he made. I am not quoting his precise words, but your Lordships may remember that he said something to the effect that he did not care what Government it was that brought us out of our present troubles. I am sure that that has been the general sense of those who sit opposite to us. I do not care to go into any question as to who has the responsibility for the

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present state of affairs. What the public cares about is how we are going to get out of it. That is a matter that is full of complexities, and I hope that this debate, instructive as it has been to all of us and to the public, will do something to help us to find some of the solutions, and the best solutions.
I am always grateful to my old friend, Lord Layton, when he comes to give us the benefit of his advice. When he and I first met, he was an economist and I was trying to be one. When he comes here, with his great academic knowledge and his long practical experience, he always gives us something to make us think a great deal. I can assure him that we are very conscious of the possible harm to the economies of our European neighbours that might result from the cuts we have had to make our imports. I am sure he must know how very reluctant we were to make those cuts. They deprived this country of quantities of food, of meat, which was very greatly needed and which was available for us if we could find the gold to pay for it. Nothing but the most rigorous compulsion of the exchange position would have made me agree to import cuts of that nature.
In the meantime we have to face the position as we find it, knowing full well that if we do not face it now worse things will befall us—a serious increase in the cost of our imports and much suffering and deprivation to the people of this country. Day by day until this drain on our reserves ceases, we come nearer to the danger of disaster. That is not exaggerated language: that, in fact, is the position which faces the country. It is so serious that, as this debate has shown to-day, it overrides all the other issues that divide us. If the position were less complicated, and indeed if the public understood it better, I have no doubt that every section of the people of this country would do as the noble Lords opposite have done during the course of this debate. Every section, except the Communist Party, I think would throw all their energy into some great national effort to get over these difficulties. I am sure that it call be done. Such a national effort would call for temporary inconveniences, perhaps for some loss of leisure, but not for loss of necessities. The sooner we get down to it the more quickly we shall get out of our trouble and the
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more quickly we shall restore our standard of living. I was interested to notice that Lord Waverley said in his speech that he thought we would be able to get over these troubles in a period of three years.
Now if I do not refer to all the speeches I am sure your Lordships will acquit me of discourtesy. The noble Lord, Lord Rochdale, asked me whether we were prepared in the allocation of supplies of steel and other raw materials and in the regulation of credit to give preferential treatment to those industries that would help us to adjust the balance of payments. We must do so. Indeed, we should not be facing the reality of the situation if we did not. The noble Lord addressed some very wise words to the Government (people at this season of the year do address wise words to the Chancellor of the Exchequer) on the subject of maintaining the standard of our industrial plant. It is quite obvious that, whilst we have restriction, we must, in the first place, do everything that is possible to secure the expansion of those industries that have particular power to satisfy the special needs of the country, and, in the second place, devote all our brains—and this is a question of brain and not brawn—to increasing our manufacturing efficiency.
I greatly regret—and I hope noble Lords will accept my apology—that I had. yesterday a long-standing engagement at Guildhall which took me out of your Lordship's House for an hour, and I therefore was not able to hear, although I have read, the speeches of the noble Lords, Lord Silkin, Lord Brand and Lord Strabolgi. I was much impressed by Lord Silkin's speech. He rightly warned us that the short view was not enough. I assure him that we recognise that fact. I do not know how many hours a day noble Lords opposite worked when they were His Majesty's Ministers, but we are finding that the hours are rather excessive and are thinking of forming some union to protect us. Therefore we are not at the present time able to tell you all the things that hope we shall be able to tell you in the near future, but I can assure Lord Silkin that we are working on and developing a comprehensive programme, though at the moment I am bound to admit that our attention is considerably

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concentrated on the immediate and urgent problems that are facing us.
I always remember that the noble Lord, Lord Pakenham, accused me one day of not making constructive suggestions as to how the Government ought to do its job, and I pointed out to him at the time that that perhaps was not the responsibility of the Opposition. I say this to the Opposition: that if they know of any means by which they can help us, if they are happy enough to know the solution to our problems, then we shall welcome the stimulus that they will give us. The only thing I would beg of them is not to let there be any doubt in the public mind that all sections of this House, wherever they sit, are united on the importance of overcoming these immediate problems. This is not really a Party matter. Whoever had been in power instead of us, they would in the major issues have been taking precisely the same steps that we are taking now, though in the minor issues there would have been a difference of point of view. Indeed, these short-term measures are things that I believe are forced upon us by circumstances.
The noble Lord, Lord Silkin, asked me quite a number of questions. He asked me whether I thought it was going to be necessary to work harder. I do. I am one of those who have always believed in hard work, but I have also believed that when people work hard they should have the rewards for working hard. We call them incentives now. Of course, all progressive employers have believed in this for a very long time. The noble Lord said that I sometimes talked about profits. I have always held the belief that high wages, high rewards in industries, were good, not only for the people who were called workmen, but also for the people who were the managers of industry. The noble Lord raised another question. He asked me what we were going to do about rearmament. He asked whether it was possible to maintain our standard of living and at the same time to rearm the nation. Of course it is the most potent question that has been put during the course of the whole debate. Noble Lords opposite know perfectly well that when they as a Government took responsibility for saying that they would spend £4,700,000,000—I think my figure is somewhere near right—in rearming this
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nation, in order, as the noble Lord so wisely said, to preserve peace, they were facing this most teasing question as to whether we could afford to do that and at the same time maintain the standard of living that we all desire. The noble Lord and others, during the course of the debate, raised questions which I am not going to answer because if I did reply to them there would be an implication that I knew something about what was going to be in the Budget. In that respect, I have the honour of being in close company with the noble Viscount, Lord Waverley, in knowing absolutely nothing about what the Chancellor of the Exchequer is going to say when he presents his Budget. Those of your Lordships who have been in a Government know that the Chancellor of the Exchequer does not broadcast his views beforehand.
The noble Lord, Lord Brand, who always enhances the value of these debates by the breadth of his knowledge, and, as it seems to me, the impartiality of his approach, said many things which I personally found it difficult sometimes to follow. I am all in favour of the convertibility of the pound, but I am always glad to know that there are experts to tell me just how that is going to be brought about and what will happen when we have it. One sentence used by the noble Lord impressed me very deeply. He said: "The real enemies of the people are those who reject all plans, and not those who in the face of great difficulty take measures to deal with that situation."
That is a statement which might well receive much wider publicity. I was most interested to note the noble Lord's views on the price of gold.
The noble Lord, Lord Balfour of Burleigh, made surely the best speech that he has ever made in this House, whether your Lordships opposite liked it or not—and he was not speaking particularly in your favour. To my mind, one sentence in Lord Balfour's speech stands out, and it is one that all of us can certainly understand. The noble Lord said:
"We are all of us in this together."
I must digress for a moment to the subject of the Welfare State, and I would say to noble Lords opposite: Do not claim too much; we have all been in this together. It goes back to the time

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of Shaftesbury. We have all been developing a Welfare State, but I think noble Lords opposite have the credit of the christening. It was they who called it the Welfare State.
LORD STRABOLGI: It goes back to the time of Queen Elizabeth I.
LORD WOOLTON: It is something that has grown up over many generations. Do not let us make it a Party matter. Let us be proud of the fact that it has grown up, because it is something that has arisen from the instinct and the conscience of the people of this country. Its friends are those who want to see it persist but want to see it built on a solid and enduring foundation. Its enemies are those who want to develop it so quickly that it may produce a false sense of personal reiponsibility—which was the issue which the noble Lord, Lord Macdonald of Gwaenysgor, raised this afternoon. Another sentence from the speech of Lord Balfour of Burleigh that stands out in my memory was this:
"The text six months will be the most critical that we have ever had to face."
That was a serious thing for a man with his knowledge of the financial position of this country to say. I only pray that we may have the wisdom, the knowledge and the courage to face the situation.
The noble Lord, Lord Strabolgi, asked me what we were doing about the Crown Film Unit. I have a brief on this subject but it is so long that I do not think I will read it to your Lordships: I will try to give you the essence of the matter. If the noble Lord would like me to go into further details with him privately, I will gladly do so. The total cost of the Crown Film Unit in the financial year 1950–51 was £218.000. The expenditure of the Central Office of Information on film distribution was £200,000 a year. We thought that this was a subject about which other people knew a great deal more than we did, and that, since we were forced to a position of economising, this was one of the things that we could leave other people to do. But, in saying that, I want to pay a tribute to the Crown Film Unit, because it has produced some extraordinarily good films, some documentary films that I think will prove to be quite historic. The Unit has done a good job and I hope that the work will be continued. But it will not be continued at the expense of Her Majesty's Government.
EARL JOWITT: May I ask a question, because I want to be clear about this matter. Is the Crown Film Unit to disappear, or is it merely that the system in existence to-day of marketing their films is to disappear? That is something I should like to know.
LORD WOOLTON: The position is that the Crown Film Unit as a unit will disappear. The noble Lord says it is a great pity that this should be the position. I think all these economies are things about which we shall say: "It is a great pity." But the sum of money involved in this was very large. I listened to the speech of the noble Lord, Lord Gifford, about the children. I will tell the Chancellor of the Exchequer what the noble Lord said, and I will also tell him what the noble Earl, Lord Wavell, said about the importance of encouraging people to go climbing in Switzerland.
With regard to the contribution of Lord Sempill I will say only that I will certainly look at the Report of his speech, for it is my duty to do so, arid I hope that at some other time I may have the opportunity of telling your Lordships something of what Las happened in the Department of Scientific and Industrial Research. I think that the civil scientific work of the Government is the only departmental responsibility that I have. I am going around these units and I am most impressed by the work that they are doing. The technological work of this country is in a state of considerable advancement. The real difficulty is to get the industries of the country to make the fullest use of the discoveries that are being made.
I come now to to-day's debate. I never hear the noble Lord. Lord Pethick-Lawrence, speak without being instructed and without realising what a great advantage it is to come to this House after having served a long apprenticeship in another place. His speech was so clear, he enunciated an economic doctrine so convincingly that I had constantly to pull myself up in case lie carried me away with him. I said to myself, "What is he talking about when he talks about dear money?" Because during the period in which I was carried with him, I was thinking of 5 per cent., 6 per cent. and 7 per cent. But we are talking about an increase from 2 to 2½per cent.—not a very serious position as it stands,

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though the purport of the noble Lord was not so much to complain about the present as to warn about the dangers that may come if money went dearer. We are fortified by the noble Lord's substantial agreement on the main principles. He agreed that there must be a reduction in capital expenditure and in credit.
The only time that I parted company from him was when he suggested that instead of using the operation of the bank rate we might have achieved the same object by psychological means. If we all had the persuasive tongue of the noble Lord, we might he able to do it by psychological means, but that is a difficult thing to carry out.
LORD PETHICK-LAWRENCE: My Lords, that was not my point. I thought there were other means of restriction. I brought in the question of psychology only because it was a point made by the noble Lord, Lord Balfour of Burleigh. who said that the only object of having dearer money was that it was necessary, in addition to restricting credit, to have a psychological influence. I did not particularly advocate psychology.
LORD WOOLTON: I am sorry, and as the noble Lord knows, I did not willingly misinterpret him. I part company with him here because I believe that we must have this new money rate, but that is the only issue on which we need part company. I was grateful to him for the little political comfort he gave me when he said that when the Conservative Government came in there had been a considerable drop in Stock Exchange prices, which makes it perfectly clear that we have not been looking after the people who are reputed to be our friends. I have spent some part of my life in this business of banking, and I recall that in the past, when the bank rate was put up, it used to go up by 1 per cent., and when it came down it used to come down at one-half of 1 per cent. The fact that the bank rate has gone up by only one-half of 1 per cent. may give the noble Lord some inkling of the fact that we are not anxious to run into dear money. No Government with a National Debt of the size we have can want to run into dear money. I give him this firm assurance, that we have no intention of letting money become the master of the situation. I make that statement quite categorically. I imagine
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that my banking friends—and they are my friends—will agree with me on that as a piece of social policy.
I come now to the maiden speech of my noble friend Lord Waverley. There was warning in it. There was the characteristic realism which those of us who served with him when he was Chancellor of the Exchequer learned to expect from him. I am in a little danger here, because whatever I say regarding his speech may so easily be misinterpreted, and may be considered to have some relation to the Budget that is to come. Therefore, he will not think I am being discourteous if I leave his speech by saying how glad we are that he has come to this House and that we hope that we shall be able to profit constantly by his advice. The noble Viscount, Lord Bruce of Melbourne, talked to us about volumes. I see that the noble Lord is not in his place and that saves him from providing the volumes for me, because I have not seen some of the Reports about which he spoke and I am anxious to get hold of them. I think that the outstanding point he made was that the extent of the social services is not so important as the purchasing power of the money given through them to the public.
The noble Lord, Lord Macdonald of Gwaenysgor, asked me some questions. Are these charges for the social services made in order to raise revenue? No. Are they to stop abuses?—the noble Lord recognised that there were abuses. There is, of course, a perfectly obvious reason for doing this: the expenditure on the social services has to be kept within bounds. It is rising all the time, and all we are doing is keeping it within bounds. Forgive me, my Lords, if we have a little straight talking here, because we are anxious to get unity in the country in the present circumstances. It has been suggested that the workers are doubtful whether the Tories are in earnest about the social services. Noble Lords opposite ought to know, for they are the people who have been giving them that doubt. It is their speeches that have encouraged that doubt.
Why should noble Lords opposite assume that there is any doubt about it? Our hearts are just as tender as theirs. Our desires for the welfare of other men are just as strong as theirs. We are human beings just as they are. Why

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should they assume that there is some division between us that makes us into hard-hearted people who do not care for our fellow men, while they have all the virtues on their side? I know they do not claim the virtues, but they do not credit us with having any real feeling in this matter. Noble Lords opposite should remember that we founded the social services. Go back over our history and they will find that Conservatives and Liberals brought in these social services before ever we had the Labour Party as the Government of this country. Tell that story to the people of the country, and then you will get rid of this suspicion that when we charge people one shilling for prescriptions we are aiming at cutting the social services. I hope that I have not spoken with undue heat on this subject, but I feel some straight taking is called for. It is right that we should defend ourselves on this matter, and I have every intention of continuing to do so.
I have kept your Lordships a long time. The noble Viscount, Lord Hall, entrances me whenever he talks about the coal trade and the miners, because he speaks of what he knows, and he speaks from his heart. I can assure him that our mutual friend Lord Leathers is giving most detailed consideration to this very worrying problem. One of the reasons why the problem is so worrying is that we are wasting so much coal. I inquired the other day of the Department of Scientific and Industrial Research: "What have you clone in these years? Have you not found some means whereby we can waste less coal?" The answer was: "Yes. It is the application of the knowledge that is wanted." I do not think it is any good telling the housewives of this country that if they will give up coal fires then we shall be able to save a lot of coal. That is not the way we shall do it. But I think we might use many fewer electric radiators, which are consuming coal—and perhaps that remark is not addressed to the poorer classes of the people. The waste in industrial coal and the waste in electricity are matters which we might tackle at an early stage.
The noble Viscount, Lord Hall, asked me to say something about strategic stocks. I think he knew when he asked that question that I should find it difficult
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to talk about strategic stocks in public. I will just say this to him. The figures which he quoted with some fear have no justification. I am sure that the noble Lord will be relieved to know that. We are very conscious of the work which the previous Government did in the building up of strategical stocks as part of their rearmament programme, and we will continue that work. I have one final thing to say, and that is on the subject of home production. I am sure we must lock much more to our own land than we have been doing for a few generations. We have to look to our own land for the increase, particularly, in feeding stuffs. The noble Lori, Lord Hungarton, made a speech from the Benches opposite the other day which was full of wisdom. I am sure he was pleased—in fact, he told me so—to find that the advice that he then gave had been accepted. We have to grow more feeding stuffs, and produce more pigs and more cattle in this country; we have to depend more and more upon ourselves, and upon our Empire. If your Lordships pay me the compliment of recalling the last words I used when I last spoke on this subject, you will remember that I appealed to the Dominions to help us. It was most encouraging to find an immediate response to that appeal from the people of New Zealand. I believe that we can develop our own land, the Dominions and the Colonies, and from there get many of the things that will help us to balance our payments and get away from this "infernal business." My Lords, I apologise for the length of time I have had to occupy in replying to the debate.
7.45 p.m.
LORD PAKENHAM: My Lords, I am sure that all of us on these Benches, and, I think, on other Benches, are grateful to the noble Lord who has replied in such a friendly and sympathetic fashion. It cannot have been easy, so near the Budget, to tell us much of what is in the mind of the Government. If I may say so, I think he has made an excellent job of it in the circumstances. I should also like to express my gratitude to the noble Viscount, Lord Swinton, for the trouble which he took over his reply yesterday. As one who initiated the debate, though, of course, on behalf of the Opposition, may I thank all those who have taken part in a debate which has interested me

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greatly, and has probably interested a good many people inside the House and out of it? I do not propose to make another speech, because the winding up speech on this side was made, in my opinion very effectively, by my noble friend Lord Hall. I should just like to express my pleasure at the appearance of two maiden speakers. Next time one of them will not be, as it were, protected from me; though I am sure he will be well able to look after himself and will probably be more controversial, if that is possible, than on this occasion. I will merely say on behalf of this side of the House that our criticism of the cuts in the Health Service remains unchanged. I do not want to try and extract any further statement on this point from noble Lords, because reading what was said yesterday again. I see that the noble Viscount did not take up a tremendous stand on behalf of the existing cuts: and, putting two and two together and reading that Conservative M.P.s are rather critical, I draw hope and consolation from the whole prospect. I leave it there, and I hope that I shall not force anybody to his feet. As regards the question of whether substantial cuts are planned in the social services, I must repeat with emphasis that we would regard it as a tragic error if that were done.
At the risk of a moment's controversy—but only for a moment—I must take note of the fact that the noble Lord, Lord Balfour of Burleigh. whose eloquence held the House, as somebody said, spellbound, represents, as I see it, a point of view fundamentally opposed on this issue to that which we hold on these Benches. I hinted at that yesterday, rather hoping that the noble Lord would not go far. But, in fact, he went very far and, as my noble friend Lord Hall pointed out, said in regard to the social services, in answer to the question: "Did the Labour Party go too far and too fast?"
"I answer that with an unhesitating affirmative."
And he went further and said:
"That is the cause of our trouble."
That is the noble Lord's opinion: that the late Government went too far and too fast with the social services and that
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that is why we are in our present difficulty. All I say is that I beg the Government not to accept that point of view.
LORD BALFOUR OF BURLEIGH: I hope the noble Lord will forgive me for interrupting, as he really has misunderstood my argument. My argument is that the Labour Government have endangered the social services by their very unwise financial policy. If the Labour Party persist in misrepresenting me as attacking the social services, as they have done so often in the past, they will be deliberately sinning against the light. I am just as much in favour of the social services as the Labour Party. I say that the Labour Government endangered the social services by their financial policy. I am not attacking the social services. The Labour Government put the whole fabric of the social services—those which other people brought in as well as their own—in danger by their financial policy.
LORD PAKENHAM: All I did was to read out a quotation from the noble Lord's speech. If that is misrepresentation, I do not see how we can conduct the debate. I attributed no motives to the noble Lord; I simply read out what he said. His view is that we carried the social services too far and too fast. In that I rather assume he regards noble Lords opposite as accomplices. I do not know, but that is what he said yesterday. All I am saying is that, while I am ready to agree that the heart of the noble Lord is as tender as that of anyone here, so far as I can judge, if he were the Government he would feel bound to cut the social services substantially. That is the only conclusion I can draw. I am in the judgment of the House, and so is the noble Lord. All I say on that point is that I hope and pray that the Government will not adopt the noble Lord's attitude.
I do not wish to end on a controversial note. We are all agreed about the gravity of the situation, and upon the necessity for drastic and urgent steps to put it right—to redouble our efforts, whether on Government or Opposition Benches or whether in some other capacity, to pull the country through this most difficult period. Once again may

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I say that I am most grateful to all who have taken part in this debate? I beg leave to withdraw my Motion.
Motion for Papers. by leave, withdrawn.

FESTIVAL PLEASURE GARDENS BILL
Brought from the Commons; read 1a; and referred to the Examiners.
MERCHANT SHIPPING BILL
Brought from the Commons; read 1a; and to be printed.
JUDICIAL OFFICES (SALARIES, &c.) BILL
Brought from the Commons; read 1a; and to be printed.

CUSTOMS AND EXCISE BILL
Message from the Commons, That they have resolved that it is expedient that the Bill be committed to a Joint Committee of Lords and Commons: Ordered to be taken into consideration to-morrow.
House adjourned at seven minutes before eight o'clock.