Sitting of 3 July 1952

Preamble
The House met at Half past Two o'Clock

PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
WINCHESTER CORPORATION BILL [Lords]
Read the Third time, and passed, with Amendments.

ORAL ANSWERS TO QUESTIONS

  BECHUANALAND, BASUTOLAND AND SWAZILAND (WELFARE)
  Mr. Hector Hughesasked the Under-Secretary of State for Commonwealth Relations if he will specify how the recent grant of £500,000 to Bechuanaland, Basutoland and Swaziland is being applied to promote the social and economic welfare, and to foster the growth of representative institutions, there; what kind of local organisations have been set up for this purpose; and whether they are staffed by coloured or white officials.
  The Under-Secretary of State for Commonwealth Relations (Mr. John Foster): These additional funds, which supplement the grants, totalling £3¾ million, made under the earlier Colonial Development and Welfare Acts, have already been applied in part to an important project for the improvement of native agriculture in Basutoland, measures for the permanent control of foot and mouth disease in the Bechuanaland Protectorate and the improvement of road communications in Swaziland. Other schemes, all designed to improve the territories' economy, are in preparation.
  The staffs employed on all these schemes include both Europeans and Africans. Special local organisations are unnecessary, except in certain schemes, e.g., rural development in
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  Swaziland, for which teams composed jointly of Europeans and Africans are set up to work in consultation with informal committees of the local inhabitants.
  Mr. Hughes: While thanking the Minister for that answer, may I ask if he agrees that, having regard to the great political and cultural advances which have been made in various parts of Africa during the last few years, no invidious distinctions should be made among the various parts of Africa, and that it is desirable that these territories should be enabled to keep pace with the other British territories in other parts of Africa?
  Mr. Foster: Yes, Sir, I am in general agreement, but the hon. and learned Gentleman's Question is concerned with the funds. As regards the political side, I would refer him to the answer given to the hon. Member for Rugby (Mr. J. Johnson) on 15th November last.

  TRADE AND COMMERCE

    Textile Standards
    Mr. Doddsasked the President of the Board of Trade (1) what progress has been made in issuing standards for clothing, textiles, colour fastness and shrink resistance;
    (2) what progress has been made by the British Standards Institution in the informative labelling of textile products.
    The President of the Board of Trade (Mr. Peter Thorneycroft): For details of the progress made in establishing textile and clothing standards, I would refer the hon. Member to the answer which I gave to the hon. Member for Hammersmith, South (Mr. W. T. Williams) on 26th June. Arrangements for labelling articles to indicate whether they comply with these standards are being made by industries concerned, in association with the British Standards Institution.
    Mr. Dodds: While the wholesale and retail associations give full support to informative labelling, is the right hon. Gentleman aware that there are several West Riding manufacturers who seem determined not to give the fibre content of their productions and want to continue using the word "wool" even for as low a wool content as 15 per cent.? Will the Minister look into this matter, in the public interest?
    Mr. Thorneycroft: There might not be complete unanimity on this complex problem, but I am satisfied that progress is now being made in this matter.
    Mr. Dodds: Will the Minister keep an eye on this aspect of the matter, in the public interest?
    Mr. J. Rodgers: Will my right hon. Friend impress on the public the fact that, in the textile industry, we have the best finishers in the world, and that adequate standards can be maintained provided the public demand them and that the retailers are willing to pay the extra penny or two?
    Mrs. Mann: Is the right hon. Gentleman aware that there is today a great amount of shoddy material in the shops, that the so-called reductions are not beneficial reductions at all but represent only reductions in the standards, and that women very much resent this cheap stuff? Will the Minister see that this situation is remedied?
    Mr. Thorneycroft: It is rather a pity to suggest that the shops are full of shoddy articles, when Lancashire is going through very considerable difficulties. I believe that in the shops today there is very good value for money.
    Mrs. Mann: Is the right hon. Gentleman aware that one of the reasons for sales resistance is in respect of the goods that are really shoddy, and the under 4s. per yard standard, which escapes the D tax?
    Mr. Thorneycroft: I do not accept that at all. I am quite satisfied that the textile areas of this country are producing goods of very good quality.
    Mr. Doddsasked the President of the Board of Trade what action he proposes to take following the report, a copy of which has been sent to him, by the trade mission of the Manchester Chamber of Commerce that recently toured South Africa, concerning consistent criticisms they met of the serious deterioration in British textiles in the last few years, with specific complaint about poor yarns, bad weaving, indifferent printing, uneven dying and bleaching.
    Mr. P. Thorneycroft: Action in this field is primarily for the textile industries: I am confident that all concerned in our textile industries will give the most
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    earnest consideration to the report of the mission and do their utmost to safeguard the traditional reputation of their products in South Africa, and indeed all other markets. And I am confident that today Lancashire can produce, and is exporting, textiles of the highest quality.
    Mr. Dodds: But does not the right hon. Gentleman appreciate the seriousness of these statements? The Government should look into them and, if they are not accurate, say so. Is he not aware that the leading journal of the trade, "The Draper," said, on 2nd February, that there were backsliders in the industry and that it was necessary for the Government to do something about it?
    Mr. Thorneycroft: I dare say that there are backsliders in any industry, but there is no doubt that at the time of the sellers' market goods of an inferior quality were supplied by all textile manufacturers all over the world. That was bound to happen. At present, I am quite satisfied that we are producing goods of really good quality.
    Mr. J. Hudson: Does not the President of the Board of Trade realise that when the Manchester Chamber of Commerce, through an important trade mission, makes charges about the condition of our goods, those charges will be read not merely in South Africa but in every part of the world; and, further, does he not consider it to be his duty to seek to improve the goods or modify the charges made in this Question?
    Mr. Thorneycroft: What the Manchester Chamber of Commerce say in a report which they made after a valuable mission to South Africa is a matter for them, and should be discussed between them and the industries of Lancashire.
    Mr. Shepherd: Is my right hon. Friend aware that these charges are not intended to apply to the generality of exports from this country, but were probably true of a limited number of those exports?
    Mr. Thorneycroft: Yes, I think that that is true.
    Mr. Dodds: Owing to the unsatisfactory nature of the answer, I beg to give notice that I shall raise this matter on the Adjournment.

    British Films (Overseas Earnings and Markets)
    Mr. Shepherdasked the President of the Board of Trade the net earnings of British films in overseas markets in each of the last three available years.
    Mr. P. Thorneycroft: For 1950, the first year for which figures are available, the net amount payable to British producers out of the earnings of British films in overseas markets was about £2¼ million. Figures for 1951 are not yet available.
    Mr. Shepherd: In view of the fact that this amount is almost the same as the earnings in this country, does not my right hon. Friend think it constitutes a refutation of those who say that the industry is not deserving of assistance, especially as this export is a net export demanding practically no imports in return?
    Mr. Thorneycroft: I think it is a valuable contribution towards solving our problems.
    Mr. Shepherdasked the President of the Board of Trade how many British films have received major circuit bookings in the United States of America during each of the last three years.
    Mr. P. Thorneycroft: I assume that by the term "major circuit bookings in the United States" my hon. Friend has in mind the circuits which have been associated with the major American producing companies. I am informed that, excluding British films made in this country by the United Kingdom subsidiaries of American film companies, 10 British films have had major circuit bookings in the last three years, two in 1949, two in 1950 and six in 1951.
    Mr. Shepherd: Does it not appear to my right hon. Friend that these figures are rather disappointing, in view of the assurances given in 1948? When he has a further discussion on this matter, later in the year, will he undertake to draw the attention of the Americans to this situation?
    Mr. Thorneycroft: I certainly do find the figure disappointing, and anything I can do to enable a larger number to be shown I shall do.

    Trade Balance
    Mr. Shepherdasked the President of the Board of Trade if he will give an
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    estimate of how the import and export trade balance for 1951 would have been affected had the terms of trade been those of 1938.
    Mr. P. Thorneycroft: If the average value of imports had risen by the same proportion as that of exports compared with 1938, the value of imports in 1951 would have been about £2,800 million c.i.f. instead of £3,914 million, and the adverse trade balance of £1,208 million would have been less than £100 million.
    Mr. Shepherd: Does that mean that, as a result of the change in the terms of the trade since 1938, our import bill has gone up to something like £1,100 million?
    Mr. Thorneycroft: I have not worked out the calculation; no doubt my hon. Friend has done so.

    Cotton Buying
    Mr. Anthony Greenwoodasked the President of the Board of Trade how many cotton-spinning firms have notified his Department by 30th June of their intention to continue buying their cotton supplies from the Raw Cotton Commission; how many had indicated their wish to employ private importers; and what approximate spindlage is represented by each group, respectively.
    Mr. Holtasked the President of the Board of Trade how many cotton-spinning firms have contracted out from the Raw Cotton Commission up to 30th June for the buying of part or all of their raw cotton requirements.
    Mr. P. Thorneycroft: One hundred and sixty-two cotton-spinning firms, representing 210 mills and about 23 million spindles, or 68 per cent., have notified their intention to continue to obtain the whole of their supplies from the Raw Cotton Commission; 47 firms representing 60 mills and about five million spindles, or 15 per cent., have notified their intention to import the whole of their requirements privately, and 15 firms representing 55 mills and about six million spindles, or 17 per cent., have notified their intention to obtain part of their supplies from the Raw Cotton Commission and part privately. Nine firms representing nine mills have not yet replied. Some firms are included in more than one of these categories.

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    From these figures it is estimated, on the basis of past consumption, that about 29 per cent. of cotton imports will be on private account.
    The procedure for private import of cotton, which will include arrangements for consignment cotton, is being worked out by the Cotton Import Advisory Panel and will be announced as soon as possible.
    Mr. Greenwood: Is not the fact that a large number of firms have refused to exercise their option to contract out a remarkable tribute to the work of the Raw Cotton Commission, and will the right hon. Gentleman add his compliment to that Commission in addition to those which have been paid by a number of big firms during the past few weeks? Why did he find it necessary to extend the period in which firms could make up their minds? Was it so that certain parties could get to work to persuade more firms to contract out of the scheme?
    Mr. Thorneycroft: The important thing here is not the number who contract in or who contract out. The important thing is that people should be free to do what they want. They can buy their cotton, if they like, through the Raw Cotton Commission; or, if they like, on private account, which is more than they have been able to do for quite a long time.
    Mr. Greenwood: The right hon. Gentleman has ignored both the questions I have put to him. Is not the fact that so many firms still prefer to continue to get their cotton through the Raw Cotton Commission a remarkable compliment to the work that the Commission has done?
    Mr. Thorneycroft: I do not think the Commission requires any tribute of that character. I think it does a fine job of work and I have never questioned that. Certainly, we are indebted to Sir Ralph Lacey for the work he has done, but the important thing here is that people should buy cotton in the way in which they prefer to buy it.
    Mr. Fort: Will my right hon. Friend convey to the Raw Cotton Commission and to the spinners generally that we do not wish, at least on this side of the House, to make party political capital out of what is a plain trading arrangement?
    Mrs. Braddock: Does the answer of the President mean that this is another of the much-vaunted Tory promises that the Government will not be able to carry out—the opening of the Liverpool Cotton Exchange?
    Mr. Thorneycroft: This matter has been handled in a manner satisfactory to all parties in all sections of Lancashire, including the trade union movement, and we ought to be very satisfied with it.

    Hire-Purchased Furniture (Protection)
    Mr. G. Thomasasked the President of the Board of Trade whether he is aware of the custom of many families living in rooms to purchase their furniture on the hire-payment system and to leave the furniture in the store until the last payment has been made because they have insufficient space in their rooms; that in certain cases persons who have paid substantial sums of money have lost claim to their furniture due to the liquidation of the firm concerned; and whether he will introduce legislation to deal with such cases.
    Mr. P. Thorneycroft: When the customer has not previously taken delivery of furniture which he is buying on hire-purchase or credit-sale terms, the liquidator will arrange for delivery if the furniture in question can be identified. If it cannot, the customer is a creditor and ranks for dividend with other unsecured creditors. I see no ground for introducing legislation.
    Mr. Thomas: Is the Minister aware that, when the Principality Furnishing Company at Cardiff recently went into voluntary liquidation, working families in that city lost over £16,000 without any furniture being made available—[An HON. MEMBER "Private enterprise."]—and in view of the severe hardship which this causes to honest working people, will he make it obligatory on such traders to put money received in this fashion into a separate account rather than into a general account?
    Mr. Thorneycroft: While expressing every sympathy with the real hardship that was caused in that case, I doubt whether legislation would be practicable on the lines suggested by the hon. Gentleman. Perhaps he will have a word with me later.
    Lieut.-Colonel Lipton: Will the right hon. Gentleman bear in mind that in many cases the argument he used, that this furniture is identifiable, does not really apply because it cannot be distinguished from the other furniture in the shop and, therefore, the unfortunate hire-purchaser is put in the same category as all the other unsecured creditors?

    Coronation Souvenirs
    Mr. P. Robertsasked the President of the Board of Trade whether he will give an assurance that sufficient material will be available to the cutlery and jewellery industries for the making of Coronation souvenirs to be sold in this country and abroad.
    Mr. P. Thorneycroft: With regard to non-ferrous metals, I would refer my hon. Friend to the reply given to the hon. Member for West Ham, North (Mr. Lewis) on 16th June. Other materials should be available in sufficient quantities.
    Mr. Roberts: Is my right hon. Friend aware that the trade are expecting a deal of export business from this to help the balance of payments, and that his statement will be welcomed in that respect because there was some doubt about ferrous metals?
    Mr. Bottomley: Is it the President's intention, in making these allocations, to fix an extra quota to help the export drive?
    Mr. Thorneycroft: I do not propose to fix a special quota in the case of nonferrous metals. I am hopeful that sufficient will be available for requirements for this purpose. For Coronation souvenirs generally, the market is, of course, reserved to home producers.
    Mr. Hastings: Will the right hon. Gentleman use his influence to see that these souvenirs are of some slight worth and are not merely made for sale?

    Horticultural Imports (Tariffs)
    Mr. Nabarroasked the President of the Board of Trade what progress he has made in his discussions with the National Farmers' Union and other interested bodies in regard to the increase of tariffs upon horticultural imports, notably fruit and vegetables; and what
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    action he proposes to take to secure revision of the General Agreement on Tariffs and Trade and the Import Duties Acts to facilitate such tariff increases.
    Mr. P. Thorneycroft: The examination of the application made by the National Farmers' Union for increased horticultural tariffs is making good progress, but I am not in a position to say when it will be completed. I cannot, of course, predict what decisions will be taken as a result of the examination, but I shall naturally consider, at the appropriate time, what action is necessary to implement any decisions which may be taken.
    Mr. Nabarro: Does my right hon. Friend appreciate that notwithstanding the very considerable import reductions of fruit and vegetables this year, the heavy home crops, coupled with the excess of such imports left over from last year, are causing acute embarrassment to growers in this country? Is it not, therefore, a matter of great urgency that a settled policy for horticultural imports should be reached at a very early date?
    Mr. Thorneycroft: I am hopeful that a valuable result will come from the discussions which are proceeding on the application by the National Farmers' Union.
    Mrs. Castle: Is the President aware that any increase in horticultural tariffs would have a further serious effect on the price of food in this country, and in view of that serious effect upon the consumer will the right hon. Gentleman give the House an undertaking that he will reach no decision on this matter until there has been a full debate in the House?
    Mr. Thorneycroft: Horticultural tariffs might in many respects be a weapon far less harsh than the quota restrictions which are used at present.

    Yugoslavian Carpets
    Mr. Nabarroasked the President of the Board of Trade the extent and value of the quota for imports of Yugoslavian carpets into the United Kingdom for the year 1952 as a result of recent trade discussions; and what reciprocal benefits have been obtained for United Kingdom carpet or other manufacturers.
    Mr. P. Thorneycroft: Under the five-year trade agreement with Yugoslavia.

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    we have established an import quota of £50,000 for Yugoslav carpets for the current year. There is no specific quota for United Kingdom carpets, but despite their financial difficulties the Yugoslavs have established quotas of about £¾ million for the import of United Kingdom textiles and other consumer goods for which no provision was made last year.
    Mr. Nabarro: While there may be justification for importing foreign carpets in certain circumstances in view of reciprocal benefits which are given for United Kingdom manufactures, would my right hon. Friend bear in mind that the home carpet industry is going through an exceedingly difficult period and that every import quota granted in Europe or elsewhere is merely aggravating the employment position in our carpet industry?
    Mr. Thorneycroft: While sympathising with the very proper desire of my hon. Friend to safeguard the industry of Kidderminster, I should point out that the imports of carpets from Yugoslavia for the first four months of this year amounted only to £141. In practice, therefore, they are hardly very serious.

    Fondant and Sugar Trade
    Mr. W. T. Williamsasked the President of the Board of Trade the total tonnage of sugar exported during the past 12 months and at what average cost per ton, from Britain and the Colonies to countries in Western Europe who, in the same period, imported fondant into Great Britain; what was the total tonnage of such fondant imported into this country; and at what average price, per ton.
    Mr. P. Thorneycroft: Imports of fondant have been separately recorded in the trade returns only since 1st January this year. In the five months January to May, 1952, imports into the United Kingdom of fondant from Sweden, Norway, Denmark, Netherlands, Belgium and France, totalled 18,405 tons at an average c.i.f. value of £83 a ton. United Kingdom exports of refined sugar to these countries in January to May, 1952, were 1,610 tons at an average f.o.b. value of £53 a ton. No sugar is exported from the Colonies to Western Europe.
    I should add that the sugar so exported is bought for dollars, refined in this country, and sold for hard currency at a profit.
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    To stop these exports, therefore, would mean either the loss of a valuable processing trade which is a net earner of hard currency or an addition to our dollar import bill.
    Mr. Williams: Will the right hon. Gentleman convey those facts to the Minister of Food, who told me a fortnight ago that this trade was being brought to an end? Is it not possible for the right hon. Gentleman's Department to bring about some relationship between the price for which sugar is sold and the price at which fondant is bought, because fondant is bought at twice the price at which sugar is sold? Thirdly, would not the right hon. Gentleman agree that in these circumstances something ought to be done to find some alternative trade in order to provide sugar for home industries, which are suffering seriously because of the lack of sugar, which is being sent to Western European countries?
    Mr. Thorneycroft: The last question is, of course, a matter which should properly be addressed to my right hon. and gallant Friend the Minister of Food. On the point raised in the question, the answer is that this arrangement is a net earner of hard currency, which at present we certainly need.

    Hire-Purchase Agreements
    Mr. Rankinasked the President of the Board of Trade if he is aware that while the existing hire purchase Order remains in force an article acquired by the method of rental agreement can never become the property of the purchaser; and if he will bear this in mind when considering future action regarding rental agreement.
    Mr. P. Thorneycroft: If the agreement is one of hire, the article does not become the property of the hirer. The Hire-Purchase and Credit Sale Agreements (Control) Order deals, however, with hire purchase agreements under which the property will or may pass to the hirer. In present circumstances, I do not intend to amend this Order so as to make it apply to hire agreements.
    Mr. Rankin: I do not think that the right hon. Gentleman understands the point of the Question. Is he aware that under this system of rental agreements, once the purchaser has discharged his

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    obligations the goods may remain in his possession but do not pass into his ownership, and that he must continue to pay rent for an undefined period? Does the Minister think that that nefarious practice is in the public interest, and will he not consider amending the hire purchase Order to put an end to it?
    Mr. Thorneycroft: When people get goods under any arrangement, they would be well advised to look at the agreement into which they are entering. If they enter into such an agreement as described by the hon. Member, that would be an agreement, I understand, in which the property did not pass. It would be a hiring agreement, and the Order which is referred to in the answer would not apply to it.
    Mr. Rankin: I agree that those concerned should examine their agreements, but is it not the function of the House to protect people in their own interests against follies, if we agree on that word, of this description? Surely we have a duty in the matter.

    Black Currants
    Mr. Peytonasked the President of the Board of Trade the total quantity and value of black currants, fresh, frozen and pulped, to be imported into the United Kingdom during 1952.
    Mr. P. Thorneycroft: Imports of black-currants from Western Europe and certain other foreign countries are subject to the restrictions which were imposed last November for balance of payments reasons. There are, however, no separate quotas for black currants, whether fresh, frozen or pulped; in each case they are included in quotas covering a variety of other fruits and I cannot estimate what imports of black currants alone will be made this year. The current quotas represent an appreciable reduction on previous imports of the goods covered by them. Imports of fresh, frozen and pulped currants from the sterling area may be made under open general licence.
    Mr. Peyton: To what extent are the present difficulties of the horticulture industry caused or increased by excessive imports, particularly in pulp form, during 1951 under the previous Government? Will my right hon. Friend give the House an assurance that he will seek closer consultation with the Ministers of Food and
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    Agriculture in order to alleviate the undoubted hardship which the horticulture industry is suffering?
    Mr. Thorneycroft: The Question refers to what is going on in 1952. The National Farmers' Union have agreed that the severity of the present import restrictions makes it unnecessary to have additional restrictions on imports this year during the home marketing period.
    Mr. Bottomley: Does not the right hon. Gentleman agree that imports last year were not excessive and that the trade was to the mutual advantage of the importers and the exporters?
    Mr. Nabarro: Nonsense. The party opposite ruined the whole lot.
    Mr. Thorneycroft: I have carefully restricted my answer to the Question on the Order Paper.

    Film Quota (Prosecutions)
    Mr. Swinglerasked the President of the Board of Trade how many members of the Films Council are connected with cinemas which failed to fulfil the quota in the year 1951; and to what extent he took such connections into account in considering the council's recommendations about prosecutions.
    Mr. Wyattasked the President of the Board of Trade whether he will remove from the Films Council all those persons concerned with the ownership or management of cinemas which have become liable, through persistent defaults, to prosecution under the Films Quota Act, 1948.
    Mr. P. Thorneycroft: With the hon. Members' permission, I will answer this Question and Question No. 26 together.
    Mr. Wyatt: I do not give my permission. My Question is quite different and I want a separate answer.
    Mr. Speaker: The hon. Member will only get the same answer twice.
    Mr. P. Thorneycroft: I am prepared to give the same answer twice. I apologise for its length. It is as follows:
    Six members of the Cinematograph Films Council are directors of exhibiting companies which, at some of the theatres owned by them, did not exhibit in the

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    1950–51 quota year the prescribed number of British films. I do not think that this fact either makes necessary any changes in the Films Council as set up by the Cinematograph Films Act of 1938 as amended by the previous Government in 1948, or casts any doubt on the fair and reasonable nature of the advice which the Council has given me in the cases so far examined.
    The Act provides that if any member of the Council is convicted of an offence under the Act, he shall forthwith cease to be a member of the Council. The House should, however, be aware of the wide defences available to any person charged under the Act. The fact that the exhibiting company does not fulfil the prescribed quota does not in itself constitute an offence if it can show that its failure was due to circumstances beyond the company's control. Section 13 of the Act provides that failure to fulfil the quota can be deemed to be due to circumstances beyond the control of the exhibitor if, "owing to the character of the films available or to the excessive cost of such films, it was not commercially practicable to fulfil that requirement." And if an offence has been committed by a company, a director can be prosecuted only if there is evidence to show that he personally aided or abetted the default or that it was attributable to his neglect.
    The procedure of the Council is under the Act a matter for the Council itself to regulate. But it is already part of that procedure that members of the Defaults Committee should withdraw from the meeting during consideration of cases in which they have any personal interest, and that they should take no part in the subsequent discussion of these cases when they come before a full meeting of the Films Council. I have in addition suggested to the Chairman that they might also withdraw on these occasions.
    Mr. Swingler: Is the President aware that practically everybody, apart from himself, now appreciates that the Films Council has become an open conspiracy to defy the law? Is it not quite clear from what we were told last week that this Council recommended that the most notorious defaulter of all, the Empire Cinema, Leicester Square, should not be prosecuted, and that the Minister has accepted that advice? Will he disregard the recommendations of the Council in a
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    situation like this—when vested interests are represented on it—or else ask the members connected with defaulting cinema circuits to resign from the Council forthwith?
    Mr. Thorneycroft: I do not accept the description applied by the hon. Gentleman to the Films Council, of which at least one hon. Member of this House is a member. It has 22 members, seven of whom are independent members of standing, including Lord Drogheda, the Chairman, and there are, in addition, some members—I think seven—who are exhibitor members. However, I realise that there is some substance in the point that if an exhibitor member is sitting on the Council when the case of a cinema for which he is responsible comes up for consideration it would be better if he were not there during the deliberations. I have accepted that. In fact, such members do not attend when the Defaults Sub-Committee meets. I have suggested to Lord Drogheda, as I said in my answer, that they would do well to withdraw when the cases relating to their cinemas are considered by the full Council.
    Mr. Wyatt: Is the right hon. Gentleman aware that according to a document which I have here, issued by the Board of Trade itself, his answer was inaccurate in that there are not six exhibitors on the Film Council but seven? On the Defaults Committee and the Quota Reliefs Committee there are seven exhibitors out of 14 members, and on certain occasions the place of Sir Arthur Jarratt as a renter is taken by Mr. Sam Eckman, who is the controller or owner of the notorious Empire Cinema, Leicester Square, and these occasions give the exhibitors a majority on the Defaults Committee. Is the right hon. Gentleman aware that all defaults are first considered by a Defaults Sub-Committee, which has four members of whom two are exhibitors? Is is not absolutely fantastic that this situation, with its ramifications of interests, should be allowed to continue? Even if exhibitors withdraw when their own cinema is under discussion, naturally their friends and business associates will not recommend their prosecution in their absence.
    Mr. Thorneycroft: Exhibitors are members of the Films Council because that

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    was laid down not by me but by the previous administration. I have no doubt that we could have a discussion as to whether that was right or wrong, but it is a fact and one that we have to accept. My job is to try to administer that arrangement in the fairest possible way. I suggest to the hon. Gentleman that the proposal which I have put forward is a reasonable one, that we should accept the Act passed by the previous Administration and that a member of the Council who is concerned with a cinema which comes before the Council should withdraw during the consideration of its case.
    Mr. Marlowe: Is my right hon. Friend aware that from a purely legal point of view this is a most unsatisfactory arrangement, probably due to the fact that it was introduced by the late Government? While I accept the statement of my right hon. Friend that those who are affected withdraw when a decision is made, the important thing is that justice should appear to be done, and there is a fear in the public mind that there might be some prejudice in arriving at these decisions. Will my right hon. Friend consider introducing amending legislation which will avoid that or submitting cases to the Director of Public Prosecutions who can give an independent opinion?
    Mr. Thorneycroft: I am very far from saying that all films legislation is of the most satisfactory character, but it may be some consolation to hon. Members to know that in any event I am the person who finally decides whether a prosecution should go forward or not, though, naturally, I listen to the advice which is tendered to me.
    Mr. Hector Hughes: On a point of order. Is not what has just occurred a breach of Question time procedure in this House, Sir? The President of the Board of Trade has given a very long statement, and he knew it would be a very long one. He has cut down Question time by doing this and surely this ought not to be allowed.
    Mr. Speaker: It is a very large question and one which we cannot proceed to discuss at Question time.
    Mr. Bevan: May I ask the Minister if it is not a peculiar doctrine that people are allowed to violate the law merely
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    because the law was passed in a Parliament with a Socialist majority? Is it not always the case that, if the criminals are consulted, they will recommend that they should not be prosecuted? Would not burglars be wise to have an advisory committee like this?
    Mr. Thorneycroft: The right hon. Gentleman should recognise that it is not for him or for me to decide whether it is a fact that they have violated the law. That is a matter for the courts and will be decided by the courts on the prosecutions which I propose shall be instituted under the Act.
    Several Hon. Members—
    Mr. Speaker: We have spent much too much time on this Question.
    Mr. Swinglerasked the President of the Board of Trade in how many cases he has decided to prosecute film quota defaulters where prosecution was not recommended by the Films Council.
    Mr. Wyattasked the President of the Board of Trade to what extent he considers the views of the Films Council before instituting prosecutions under the Films Quota Act, 1948.
    Mr. P. Thorneycroft: Under the Cinematograph Films Act, 1938, as amended, I am bound to consult the Films Council before taking action on certain particular provisions of the Act, including the application which an exhibitor may make that his default was due to circumstances beyond his control. I consider the Council's advice very carefully and I have found it extremely valuable, but it is entirely for me to decide whether or not a prosecution should be instituted.
    I do not think it advisable to dissent from the practice generally followed ever since the establishment of the Films Council and treat their advice as other than confidential. But I can say that in a substantial number of cases which are being examined at the moment, I have given instructions for prosecutions to be instituted as soon as possible.
    Mr. Swingler: Will the President of the Board of Trade, having come out from behind the screen of the Films Council and told the House that he himself takes the responsibility as to who should be prosecuted, now tell the House

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    why he has decided that the worst law breaker of all in this respect shall not be prosecuted?
    Mr. Thorneycroft: Simply because the advice I received, and I agree with it, was that a prosecution would not have succeeded.
    Mr. Wyatt: Is the President not aware that the Empire Cinema, Leicester Square, showed only one British film during the whole quota year ended September, 1951, and if the right hon. Gentleman could not sustain a prosecution on that there is no possibility of sustaining a prosecution in the case of any default? Is the President further aware that the big exhibitors stack the exhibiting representation on the Films Council, and recommend the prosecution of small exhibitors in remote parts of the country who very often have good reasons for defaulting—
    Mr. Speaker: We cannot have speeches.
    Mr. Wyatt: On a point of order. Am I not entitled to conclude my question, Sir?
    Mr. Speaker: The hon. Member has asked one very long supplementary question already. He was proceeding to ask another. I must in fairness to other Members ask him to remember that there are other things in the world besides cinemas.
    Mr. Swingler: In view of the totally unsatisfactory reply, I beg to give notice that I shall raise the matter on the Adjournment.
    Mr. Wyattasked the President of the Board of Trade whether he will undertake to consult the Law Officers of the Crown about prosecutions under the Films Quota Act, 1948.
    Mr. P. Thorneycroft: I have been consulting the Law Officers of the Crown about these prosecutions.
    Mr. Wyatt: Did the Law Officers of the Crown not agree that there were adequate powers to institute proceedings under the Act passed by the Socialist Government?
    Mr. Thorneycroft: I think I had better treat the advice which the Law Officers
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    tendered to me as confidential, as previous Governments have done.
    Mr. Bevan: The right hon. Gentleman said just now that he had himself decided that a certain prosecution would not succeed. Did he have the advice of the Law Officers of the Crown in that matter?
    Mr. Thorneycroft: I have had the advice of the Law Officers about all these prosecutions, and I have acted on their advice in these matters.

    Engineers' Tools (China)
    Mr. P. Robertsasked the President of the Board of Trade why facilities are being granted for the export of engineers' small tools to China, in view of the fact that these tools can be used for the production of armaments.
    Mr. P. Thorneycroft: No licences for the export to China of engineers' cutting and forming tools—a description which covers all small tools of strategic importance—have been granted since October, 1951.
    Mr. Roberts: Does that mean that there are still in existence licences which have not yet expired, for instance, one which is due to expire on 31st August, 1952, for £5,000 worth of hacksaw blades used for making armaments, which are still in existence from that previous period? If so, will the President take them away?
    Mr. Thorneycroft: The truth is that no licences have been issued since 1951. If my hon. Friend has a specific case of a substantial character in mind, perhaps he will draw it to my attention.

    Anglo-Turkish Trade
    Mr. Philips Priceasked the President of the Board of Trade the value of the excess of exports from this country to Turkey over imports from that country; and what steps are being taken to increase our imports from Turkey in such a way as to decrease our dollar purchases.
    Mr. P. Thorneycroft: During the first five months of 1952 imports into the United Kingdom from Turkey were £4,074,000 (c.i.f.) and exports, including re-exports, were £17,491,000 (f.o.b.). The principal limiting factors in the sale of

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    Turkish produce in the United Kingdom are the usual commercial considerations of quality and price, and I would ask the hon. Member to bear in mind that in our present state of deficit in the European Payments Union additional imports from Turkey would involve corresponding increases in our dollar payments to the Union.
    Mr. Price: Would not the increased purchase of dried fruit from Turkey save us from making dollar purchases of similar products?
    Mr. Thorneycroft: I understand that the Ministry of Food have already bought 9,000 tons of Turkish sultanas this year.

    Foreign Tomatoes
    Mr. Patrick Maitlandasked the President of the Board of Trade whether he will, forthwith, cut the quota of 7,200 tons of foreign tomatoes which may at present be imported into the United Kingdom during July, in view of the slump in prices on the Glasgow wholesale market which denies to Clyde Valley growers a reward for their investment and labour.
    Mr. P. Thorneycroft: I have nothing at present to add to the reply given to my hon. Friend's Question of 30th June.
    Mr. Maitland: Is my right hon. Friend not aware that we have had assurances for the last six or eight months about reviewing the quota system, and will he kindly turn to its revision instead of its review?
    Mr. Patrick Maitlandasked the President of the Board of Trade what is the tonnage of Dutch tomatoes which he estimates to be prevented from entering the United Kingdom by reason of the Dutch Government's undertaking to restrict the validity of its export licences to 24 hours.
    Mr. P. Thorneycroft: I cannot give any quantitative assessment of the effect of this particular measure, which is one of several recently taken in the Netherlands to control exports of tomatoes to the United Kingdom.
    Mr. Maitland: Is my right hon. Friend not aware that there is tension amounting almost to despair in the Clyde Valley at the failure to give them encouragement by reducing the import quota?
    Mr. Thorneycroft: The only effect of the arrangement referred to in the Question would be to ensure that there was a rather more even flow of exports rather than a sudden dumping of large quantities.
    Mr. Patrick Maitlandasked the President of the Board of Trade what quantity of Dutch tomatoes of all kinds were imported to the United Kingdom between 16th June and 30th June, 1952; and what amounts were of the lowest and of the next two qualities, respectively.
    Mr. P. Thorneycroft: According to information received by the Ministry of Food, the answer to the first part of the Question is about 2,900 tons. The information requested in the second part is not available.
    Mr. Maitland: Is my right hon. Friend aware that that is 700 tons more than in the same period last year, and that the growers are complaining very bitterly about it?
    Mr. Thorneycroft: It is substantially less than the quota authorised for the period.
    Mrs. Mann: Is the President aware that the quota has been reduced and that the price had gone up yesterday by 1½d. per lb.; and that in any case the price of tomatoes in the wholesale market in Glasgow is always 3d. per lb. more than the price in England? Does the right hon. Gentleman know that housewives will not stand for any further increase in the price of tomatoes in order to please the vested interests of the hon. Member for Lanark (Mr. Patrick Maitland).
    Mr. Thorneycroft: My right hon. Friend and I are informed, and will keep ourselves informed, of the situation. We will seek to hold a balance between the hon. Lady and my hon. Friend the Member for Lanark.
    Mr. Maitland: On a point of order. May I ask the hon. Lady to withdraw the allegation that I have a vested interest in this matter? I have not.
    Mrs. Mann: I have no wish to make any offensive remarks, but there are vested interests in South Lanark and the hon. Gentleman appears to be appeasing those interests. [HON. MEMBERS "Withdraw."] We have to bear in mind the two million people in the Clyde Valley,

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    where there is heavy unemployment, and cheap tomatoes—[HON. MEMBERS: "Withdraw."]
    Mr. Speaker: Order. The words "vested interests" are a mere cant phrase. Every interest is a vested interest. I think the hon. Lady only meant that the hon. Member was advocating the interests of an industry in his constituency. If that is always to be considered reprehensible, I do not know what we shall come to.
    Mr. Maitland: On a point of order. May I say that I am greatly obliged to the hon. Lady for her graciousness to myself, but point out that these are the interests of very small growers and very poor people?
    Mr. Speaker: I think the House understands that.

    Arab Refugees (Textile Orders)
    Captain Soamesasked the President of the Board of Trade what contracts for textiles have been placed in this country on behalf of the United Nations relief organisation for Arab refugees.
    Mr. P. Thorneycroft: My Department has recently been in touch with representatives of the Agency about their textile requirements. I am informed that the only textiles which they are buying in any quantity are tents and blankets. I understand that orders for some 3,300 tents have just been placed in this country on the Agency's behalf. The Agency recently invited tenders for 150,000 blankets and my Department, in collaboration with the Agency's purchasing agents in this country, notified firms and trade associations likely to be interested.
    Captain Soames: While welcoming the fact that these orders have been placed, may I ask my right hon. Friend to do what he can to ensure that this international organisation also places in this country future orders for textiles which it may require?

    Irish Horses (Import)
    Mr. E. Johnsonasked the President of the Board of Trade if he will arrange for the Trade Returns to distinguish between the number of horses imported from Ireland for food and for other purposes.
    Mr. P. Thorneycroft: No, Sir. The volume of imports of horses for food is insufficient to justify raising a separate statistical heading for that class.
    Mr. Johnson: Would not my right hon. Friend agree that one of the first steps to be taken to prevent the illicit slaughtering of horses under disgusting circumstances should be at least to know how many are imported from Ireland and for what specific purposes they are imported?
    Mr. Thorneycroft: The total value of unspecified animals imported for food amounted only to £23,172 from January to May this year for all types of animals, and so I am afraid that the total for horses, if it were separated, would be extremely small and not of very great value to my hon. Friend.

    War Damage Business Claims
    Brigadier Clarkeasked the President of the Board of Trade when he anticipates being able to commence the payment of compensation under the War Damage Act, 1943, Part II, Business Scheme.
    Mr. P. Thorneycroft: I cannot at present add to the statement which was made in reply to my hon. and gallant Friend's Question on 27th May.
    Brigadier Clarke: Is my right hon. Friend aware that a constituent of mine is unable to re-start his business because he cannot get paid under this scheme, and alternatively, that he has been told that if he starts his business he can get the money?
    Mr. Thorneycroft: As my hon. and gallant Friend is probably aware, a general settlement of these claims must await the fixing of a date by the Treasury under Section 85 (1) of the War Damage Act, 1943.

    Turkish Tobacco
    Mr. Stokesasked the President of the Board of Trade why tobacco imports from Turkey fell from 5,800,000 kilos in 1950 to 1,400,000 kilos in 1951.
    Mr. P. Thorneycroft: Probably because manufacturers and merchants considered that they already held large enough stocks. They can import as much Turkish tobacco as they like, since import licences are freely granted.
    Mr. Stokes: Why does the President say "probably"? Why does he not find out? Is he aware that during the same period imports of American tobacco went up 50 per cent.? Obviously, this is a serious matter. Surely the trend ought to be the other way about.
    Mr. Thorneycroft: I say "probably," because it is, after all, for manufacturers and merchants to make up their own minds, in those circumstances, whether they intend to import or otherwise.
    Mr. Noel-Baker: In view of the great dollar difficulties from which we are suffering, cannot the President give us some more Turkish grown tobacco instead of American?
    Mr. Thorneycroft: In fact, there has been a substantial rise in the total consumption of Turkish and Greek tobacco during that period.
    Mr. K. Thompson: Is not it a fact that it is neither the President nor the manufacturers who decide in this matter, but the consuming public?
    Mr. Stokes: Has the President satisfied himself that there is no link-up between the cigarette manufacturers in this country and the growers in America?
    Mr. Thorneycroft: This Question refers to imports of tobacco from Turkey, and I have given the best answer I can.

    Russian Timber and Grain
    Mr. F. Willeyasked the President of the Board of Trade what negotiations are being held with the Union of Soviet Socialist Republics for the supply of timber and grain; and whether he will make a statement.
    Mr. P. Thorneycroft: In the case of timber, other than plywood, imports have now reverted to private trade and I cannot say, therefore, what negotiations may be in progress with the Russians. In the case of plywood, the Ministry of Materials have contracted for supplies for the current year.
    As to coarse grain, the Ministry of Food are in constant touch with the Russians, as they are with other suppliers.
    Mr. Willey: Is the right hon. Gentleman able to assure the House that we shall get our full requirements of foodstuffs this year?

    India and Pakistan Jute (Export Duty)
    Mr. Nabarroasked the Secretary for Overseas Trade, as representing the Chancellor of the Duchy of Lancaster, whether he will make a statement upon revision of export duties on jute and jute products by the Governments of India and Pakistan; and what effect this will have on supply and prices of jute and jute products, by his Department to industries in the United Kingdom, notably the carpet industry.
    The Secretary for Overseas Trade (Mr. H. R. Mackeson): The Indian export duty on hessian (including carpet yarn) which was increased in the autumn of 1950 from £26 5s. 0d. to £112 10s. 0d. per ton was reduced to £56 5s. 0d. per ton on 18th February of this year and to £20 12s. 6d. per ton from 7th May. There were also reductions in Pakistan prices for raw jute. In accordance with the policy of selling its purchases at replacement costs the Jute Control's selling prices of the main grades of jute were accordingly reduced by £50 per ton from 2nd April and by a further £40 from 4th June. Corresponding reductions were made in the Control's selling price of imported cloth and bags, and in the prices of home produced cloth and yarn, including carpet yarn.
    On 1st July the Pakistan export duty on raw jute which was increased from £12 to £21 per ton last November was reduced to £9 per ton. The minimum price in Pakistan was also reduced. A reduction in the Jute Control's selling prices will be made as soon as possible after the effect of the Pakistan reductions can be seen.
    Mr. Nabarro: In view of the very damaging effects on commercial and other relations between this country and India and Pakistan caused by the imposition of export duties on essential raw materials, will my hon. Friend institute negotiations with a view to ceasing this practice of imposing these export duties both in the case of India and Pakistan?
    Mr. Mackeson: Perhaps my hon. Friend would put that question on the Order Paper.

    International Cotton Agreement (Proposals)
    Mr. W. T. Williamsasked the Secretary for Overseas Trade as representing the Chancellor of the Duchy of Lancaster, what has been the result of the recent meeting in Rome of the International Cotton Advisory Committee in respect of achieving an international cotton agreement.
    Mr. Mackeson: A general discussion of an international cotton agreement took place at the meeting referred to, but preparatory work had not proceeded far enough for member Governments to form even a provisional view on whether a cotton agreement would be advantageous or not. The subject is very complicated technically and closely affects the interests of a great number of countries. It was, therefore, unanimously agreed in Rome that the Standing Committee of the International Cotton Advisory Committee should study the matter further in the light of numerous points raised by member Governments and with a view to submitting, if possible, concrete proposals at a later stage. Her Majesty's Government fully concurred in this decision.
    Mr. Williams: Is the Minister aware that the position was described in the "Daily Telegraph" of 16th June, as "suicidal"—the adjustment of cotton production in the world due to the smaller world export trade; and that a new conference has been called at Buxton on 17th September? May I ask whether, before that conference, a genuine attempt will be made by Her Majesty's Government to make some contribution to solving this suicidal situation?
    Mr. Mackeson: Yes, Sir, but this is a matter which concerns not only Her Majesty's Government. Twenty-eight countries are involved, and several of those who attended this conference were unbriefed technically on the complicated matters placed before them.
    Mr. Anthony Greenwood: Does not the Minister appreciate that the one thing the textile industry needs almost more than anything else is a stable price for raw materials? And instead of just lying down like this, will not he press the other countries to try to work out an agreement of this kind, which is vital?
    Mr. Mackeson: Yes, Sir, but at this particular meeting several countries were unbriefed. Pakistan and Switzerland spoke on lines adverse to an agreement and only France and Italy positively supported the idea. It is a matter on which we must go carefully, although the Government are anxious to do everything possible to achieve that objective.

  NATIONAL FINANCE

    Gold (Dental Allocation)
    Sir T. Mooreasked the Chancellor of the Exchequer what was the total value of the gold allocated to the dental profession including hospitals, during the year 1951, for the manufacture of dentures and for filling teeth.
    The Minister of State for Economic Affairs (Sir Arthur Salter): The value of gold supplied from official sources for essential dental requirements in 1951 was about £200,000 at the official price.
    Sir T. Moore: According to my information the sum was in the region of £1 million. Is not my right hon. Friend aware that chrome cobalt alloys have been used for 20 years precisely for these purposes and that five million dentures alone were made of this substance in the United States? Must not the leak of gold be stopped and does not this substance offer the opportunity?
    Sir A. Salter: The information I have was the most accurate I could get. My information is that the figure was £200,000. The situation is being continually reviewed with the object of seeing whether, by the use of substitutes, that expenditure of gold can be reduced.
    Sir T. Moore: As my right hon. Friend and the Treasury are obviously misinformed on this point, I beg to give notice that I shall endeavour to raise the matter on the Adjournment.

    Arts Council Grant (Administration)
    Mr. Bennasked the Chancellor of the Exchequer what action is taken by his Department to make sure that the grants from the public funds administered by the Arts Council are, in fact, used for the purpose for which they were given.
    The Financial Secretary to the Treasury (Mr. John Boyd-Carpenter): The Arts Council of Great Britain is an independent body established under a Royal Charter. I have no reason to think that any grants are not used for the purposes for which they are given. The accounts of the Council are audited by the Comptroller and Auditor General and are published in the Annual Report.
    Mr. Benn: Will the right hon. Gentleman tell the House whether his Department takes a fatherly interest in the projects which the Arts Councils sponsor, and whether he would consider trying to save the Old Vic Theatre School, which is due for extinction owing to the unwise appropriation of its funds?
    Mr. Boyd-Carpenter: There is another Question on the Order Paper relating to that matter.

    U.K. Sterling Balances, Australia
    Mr. Stokesasked Mr. Chancellor of the Exchequer why, as it was an advantage to allow Australia to build up sterling balances in this country during the war, the United Kingdom is not permitted to build up sterling balances in Australia at the present time.
    Sir A. Salter: If, as I understand it, the right hon. Member is suggesting that a form of credit should be granted I would refer him to the reply my right hon. Friend gave to him on 10th June.
    Mr. Stokes: But the Minister ought to know that that reply was entirely unsatisfactory. Is he aware that, if the Government allow the present trend to go on, Australia will become increasingly a secondary industry country, that she will produce less and less food and that there will be less and less food coming in this direction? What do the Government propose to do about it?
    Sir A. Salter: As I understand the right hon. Gentleman he is suggesting that, in one from or another—and the form he suggests is rather ambiguous—we should give a considerable credit to Australia in order that we might send further unrequited exports to that country. We do not think that that is practicable or desirable.
    Mr. Stokes: What do the Government want? Do the Government wish the
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    supply of food from Australia to increase or diminish? Does the right hon. Gentleman understand that, if the Government want the supply of food to increase, they must make special arrangements to allow an increasing supply of capital goods from this country to Australia—and that at once?
    Sir A. Salter: Of course we desire that the supply of food should increase, but there is a limit to the extent to which development in Australia can be financed by capital exports from this country, as the right hon. Gentleman should know.

    CRIMES OF VIOLENCE
    The following Question stood upon the Order Paper:
    SIR T. MOORE: To ask the Secretary of State for the Home Department the number of crimes, accompanied by violence, for which sentences were imposed during the year 1947 and the year 1951, respectively.
    Sir T. Moore: In view of the remarks made yesterday by the Lord Chief Justice on the question of corporal punishment, my Question seems to have gained special significance. Can an answer be given to it now, Sir?
    Mr. Speaker: No. We have not reached that Question.

BUSINESS OF THE HOUSE
Mr. Attlee: Might I ask the Leader of the House if he will state the business for next week?
The Lord Privy Seal (Mr. Harry Crookshank): Yes, Sir. The business for next week will be as follows:

MONDAY, 7TH JULY—Supply (18th allotted Day)—Committee.

Debate on Fuel and Power.

Consideration of Motions to approve:

Greenwich Hospital Accounts.

Draft House of Commons (Redistribution of Seats) Orders.

TUESDAY, 8TH JULY—Report and Third Reading:

Housing Bill.

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WEDNESDAY, 9TH JULY—Committee stage

Resolutions relating to Civil List.

Report and Third Reading:

Motor Vehicles (International Circulation) Bill [Lords].

Committee stages:

Marine and Aviation Insurance (War Risks) Money.

Ways and Means Resolutions.

THURSDAY, 10TH JULY—Supply (19th Allotted Day)—Committee.

Debate on Industry in Scotland.

Report stage:

Civil List Resolutions, after which the necessary Bill will be brought in.

FRIDAY, 11TH JULY—Private Members' Bills.

Mr. H. Morrison: Can the right hon. Gentleman now make any statement about the arrangements for the interruption of our Sittings, or the Prorogation, the Recess, or whatever it may be?
Mr. Crookshank: I undertook last week to inform the House as early as possible. But I am afraid that that is not today.
Mr. Morrison: We are now into the month of July. We are all anxious to do our work. Hon. Members opposite are just as much interested as I am. Everybody would like to know as soon as possible what the holiday arrangements are, because of their arrangements of a personal and family character. That is perfectly reasonable. This matter really ought not to be treated with indifference.
Mr. Crookshank: It is eminently reasonable, and I hope to make an announcement as soon as possible. I should like to remind the right hon. Gentleman that last year the announcement was made on 26th July, the year before it was made on the 20th, and the year before that it was made on 21st July.
Sir I. Fraser: Might I ask whether, through the usual channels, the utmost possible consideration can be given to arranging as many pairs as possible for all of us throughout August and September?
Mr. H. Morrison: Does not the right hon. Gentleman recall that in the last Parliament there were understandings and preliminary indications as to when we should probably adjourn? In any case, the Parliamentary programme and the Parliamentary business was so well run under the Labour Government that everybody had a reasonably intelligent idea of what would happen. But with this Government things are in such a chaotic state that we cannot know where we are unless the Leader of the House informs us.
Mr. Crookshank: The very short answer to that is that when we were in Opposition we were a united Opposition. In these days it is different.
Mr. Pannell: As we are to consider the remaining stages of the Housing Bill next week, will the Leader of the House represent to the Minister of Housing and Local Government the need to make available to Members of the House before that day the general instructions that he intends to make by circular in connection with the sale of council houses, which are now the subject of consideration before the local authority organisations? Will he bear in mind that we want to avoid the unfortunate happenings of yesterday whereby people outside this House had information which was denied to Members of the House of Commons?
Mr. Crookshank: That is outside my knowledge, but my right hon. Friend will remember what has been said.
Mr. Anthony Greenwood: Can the right hon. Gentleman hold out any hope of finding the necessary time if I was so fortunate as to obtain the leave of the House to introduce the British Museum Bill under the Ten Minutes Rule?
Mr. Emrys Hughes: Is there any real urgency about discussing the Report of the Civil List Committee before the Recess?
Mr. Crookshank: Yes, that is in accordance with precedent and previous practice.
Mr. Callaghan: Are we likely to have the Transport Bill published next week, and, if so, can the right hon. Gentleman say whether he intends to have a debate on that before the Recess?
Mr. Crookshank: I hope that the Bill will be introduced next week.
Mr. Callaghan: And the debate?
Mr. Crookshank: We had better see the Bill first.

BUSINESS OF THE HOUSE
  BUSINESS OF THE HOUSE
  Proceedings on Government Business exempted, at this day's Sitting, from the provisions of Standing Order No. 1 (Sittings of the House) for One hour after Ten o'Clock.—[The Prime Minister.]
ORDERS OF THE DAY

  MEMORIAL TO FIELD MARSHAL SMUTS
  Resolution reported:
  That an humble Address be presented to Her Majesty, praying that Her Majesty will give directions that a monument be erected at the public charge to the memory of the late Field Marshal Smuts, as an expression of the admiration of this House for his illustrious career and its gratitude for his devoted service to the Commonwealth, and to assure Her Majesty that this House will make good the expenses attending the same.
  Resolution agreed to.
  Address to be presented by Privy Councillors or Members of Her Majesty's Household.

HOUSING (SCOTLAND) BILL
Order for Second Reading read.
3.38 p.m.
The Secretary of State for Scotland (Mr. James Stuart): I beg to move, "That the Bill be now read a Second time."
As the House will be aware, the necessity for this Bill arose out of the decision to increase the rate of interest charged on the longer dated loans of the Public Works Loans Board. The Chancellor of the Exchequer announced the first increase on 8th November, 1951, when the rate was raised from 3 per cent. to 3¾ per cent., and then on 9th February of this year it was raised from 3¾ per cent. to 4¼ per cent. The Chancellor at that time, realising that this would be very disturbing to local authorities' finances and their housing accounts, agreed that a review of the subsidy arrangements for housing would be undertaken by the Government. That has been done.
Before dealing with the Clauses of the Bill, this might be a suitable opportunity for me to say a few words about the housing situation in Scotland at the present time. I know that our proceedings are to be interrupted this evening for a period, and I do not want to take up too much time, because I know that many hon. Members wish to speak, but I should like to refer to the position as it is today.

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The completions of houses in Scotland in 1949 and 1950 approximated 26,000. In 1951, there was a fall in the number of completions to just under 23,000, but it was only a matter of 72 below the 23,000 figure. The right hon. Gentleman the Member for Greenock (Mr. McNeil) warned the House that there might be some reductions in that year, giving his reasons for that view. I shall not go into that now, because our concern is with the present and the future in this important matter of housing in Scotland. We are doing, and shall continue to do, our utmost to increase the house-building programme and to step up the number of completions in so far as the limits placed upon us by the availability of labour and materials will permit.
For the first five months of 1952, the figures are encouraging. The completions for that period amounted to 10,704, as compared with 8,724 in the previous year. This represents an increase of 23 per cent. The number of houses built for letting increased almost similarly—from 8,209 to 9,804. The number of houses under construction at 31st May, 1951, was 33,239, and at 31st May, 1952, 38,447.
I am not going to suggest that these figures indicate that we have achieved all that we desire, but at any rate I do suggest that they are encouraging, and I only hope and trust that we shall be able 'to maintain this improvement. I am glad to say that local authorities at the present time have a substantial amount of work in hand—35,000 houses under construction by local authorities and the Scottish Special Housing Association. There are 10,000 houses for which tenders have been approved but which have not yet been begun, and a further 21,000 houses which have been authorised but not yet put out to tender. Therefore, in Scotland, we have a total of 66,000 houses at different stages either of construction or preparation.
Progress is not, of course, uniform throughout the country, and those authorities which are able to make the fastest progress with programmes already under way will be the ones to be authorised to build more, in order to maintain continuity and steady employment in the industry. It will be agreed on all sides of the House that, in order to maintain this continuity, it is essential to look ahead and see where difficulties
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and scarcities of one kind or another may arise. In this connection, the Department of Health for Scotland can do most valuable work in a survey of the field of housing as a whole.
On 13th June, I issued a circular to local authorities on this very subject, asking them to consider how they stood in three respects; namely, on the servicing of sites, the choice of non-traditional houses and the starting of new houses. I hope that all convenors of housing committees, and the housing committees themselves, of all local authorities throughout Scotland will satisfy themselves that they are planning and working ahead to see that the necessary sites, the servicing and roads are being got ready, in order that there should be no interruption of the steady maintenance of the house-building programme. If this is not done, housing will be held up, and it is absolutely vital that it should be done.
I have reason to suspect that in certain areas at the present time the builders in their work are beginning to creep up too close upon the heels of the road-makers. Since the war, of course, many of the sites which were then available, and on which building was held up during the war, have now been built up, and it is of vital importance that new sites should be planned ahead.
The main purpose of this Bill is to increase the subsidies for new houses in Scotland, and perhaps I should say a word about the basis upon which this calculation is arrived at. On the one side, we take the total annual charges which are made up of the annual loan charges—that is to say, the interest on the borrowed money—the allowance for management and repairs, and the allowance for owner's rates, and against that we have to put the figure for rent. The figure for rent, of course, is what is called today a notional figure, and is not necessarily the exact rent which anyone pays, but it is an endeavour to reach a fair figure looking at the country as a whole.
Mr. Hector McNeil: This is an important matter on which the Minister's right hon. Friend has already given us, if not some information, some directions on the subject. Will the Secretary of State tell the House the basis upon which he arrives at this notional

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rent? Is it an average calculation of the rent paid for a fair range of houses of comparable type in Scotland? Has it some statistical basis?
Mr. Stuart: Yes, Sir; it is based upon a picture of the general situation throughout the country. The rents do vary, of course, from area to area very considerably. I will come to the exact figure in a moment, as soon as I have dealt with the manner in which this calculation is arrived at and upon which the figure for the subsidy is based.
On the one side, we have the outgoings, such as loan charges, management and repairs, and owner's rates, and the figure for the rent has to be deducted from that, the difference being the average deficit which has to be met by the Exchequer and by the rates. I will give the exact figures in a moment, but, as this is a rather complicated matter, I must follow my notes rather closely at this stage.
In 1946, when the subsidies were last fixed, the Government of the day took the average cost of a four-apartment house to be £1,130, which at 3⅛ per cent. gave £42 as the annual loan charge. The figure taken for management and maintenance was £6 10s. per house, and that for owner's rates £7 10s. If we add these together, they produce total outgoings amounting to £56. It was estimated that the average rent would be £26, which left an annual deficit of £30 per house. This was borne by the Exchequer to the extent of £23 and by the rates to the extent of £7.
The proposed new rates of contribution for a four-apartment house under the Bill now before the House are based on an average cost of £1,635. The rate of interest taken is the present ruling rate of 4¼ per cent., which gives an annual loan charge of £75 15s. To this £11 is added for management and repairs, and £11 15s. for owner's rates, making the total outgoings £98 10s. Against this we have assumed an average rent of £42, leaving a deficit of £56 10s. per house. The proposal is that £42 5s. of this deficit should be borne by the Exchequer and £14 5s. by the rates in respect of houses completed after 28th February.
Hon. Members have before them in the Explanatory Memorandum a comparison between the rates of contribution as they
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exist at the present moment and as it is proposed to increase them for the various sizes of houses. I may say that in dealing with this matter I have taken—and I think it is the general custom to do so—the four-apartment house as being the simpler type with which to deal, instead of trying to deal with all the different sizes of houses. In the Explanatory Memorandum hon. Members will find details given for smaller and larger houses.
This means that the Exchequer grant increase on a four-apartment house over the next 60 years will rise from £23 per house to £42 5s. Meetings have taken place with the three local authority associations, but I regret to say that we have been unable to reach agreement. I think all hon. Members have received a circular from these associations explaining their differences and their views, and I think I should touch on certain important points which they have raised in this circular.
We have taken the average cost per house as £1,635, and the associations argued that the figure should be £1,900. I would mention, in passing, that the figure agreed for England is £1,525, which is £110 less than the figure for Scotland. It is not easy, I admit, to arrive at an average which is satisfactory or fair to all, and, as we know, circumstances and conditions vary from area to area. Therefore, there is bound to be some variation in the estimates, but I am afraid that in this case, although we made certain concessions with a view to trying to meet the representatives of the local authorities, the gap proved too wide to bridge. I am prepared to agree that in a few districts the cost of a house may be as high as £1,900.
Mr. A. C. Manuel: In certain Highland districts it could even be much more than the figure quoted by the right hon. Gentleman.
Mr. Stuart: There is a rather different arrangement in the Highland districts to which I shall be coming in a minute. There are additional grants in those areas.
I was about to say that I would not admit that this average figure of £1,900 would be fair for the country as a whole unless a large proportion of the houses built cost more than £2,000. From the

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statistics and figures available to us, I do not agree that that is the case. It is quite clear that an average as high as £1,900 would necessitate a cost of well over £2,000 in a considerable part of the country.
Mr. William Ross: Will the right hon. Gentleman say how his Department arrived at the average of £1,635?
Mr. Stuart: We endeavoured to work out what could be regarded as a fair figure for the country as a whole. I admit, of course, that in certain areas it is not so satisfactory as in others, but that must be true of any average or notional figure, whether it be the cost of the house or the rent charged for it, because costs vary from county to county and area to area. The rent, again, is a notional figure and in calculating it we took £42 per annum as being a fair general average or notional figure.
All I can say to the right hon. Gentleman who asked me how this figure was arrived at is that this, as he knows, is not the first occasion on which there has been a review of these matters. The last adjustment was made in 1946. This has been worked out in a similar manner to that adopted on other occasions, by looking at the country as a whole and trying to arrive at a reasonable figure. The associations suggest a figure of £33 as being a fair one. While our figure for Scotland is £42, it is perhaps worth noting that in England the figure of £46 17s. has been agreed to, which is £4 17s. higher than ours. At any rate, considerable increases have taken place in rents of local authority houses, and at the present time some are as high as £40 or more in certain counties, in two or three large burghs and even in some small burghs.
Of course, local authorities will continue to charge the rent which they think proper, but we believe that, taking into account previous increases, coupled with increased costs generally and improved wages, a notional rent of £42 for subsidy calculations is not an unreasonable figure. Further, the associations say that the increase of £19 5s. per annum by way of Exchequer grant barely meets the increase in the interest charges on a house costing £1,900. They also say that it gives no relief in regard to the increased building costs since 1946.
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I agree that this would be a perfectly fair criticism if the average figure for building costs were agreed at £1,900, But my reply is that on £1,635, which is our figure, the increase of £19 5s. is not only wiped out, but that there is, in addition, £3 over and above to be set against the rise in costs, because on a £1,635 house the increase in the interest rate is £16 5s., which leaves £3 to be set against the rise in costs.
Another important point which was raised by the associations, and to which I should like to refer, was that while Exchequer contributions under this Bill may be continued or reduced, they cannot be increased without the approval of Parliament. I need only say that I could not agree to its being otherwise, and I do not think any Government would or could or should do so, for the very simple reason that I do not think Parliament would approve. It would take away from Parliament control over increases in public expenditure, which would be a very dangerous constitutional innovation.
Those, briefly, are my replies to the main points of criticism made by the associations, and, to be quite frank, I cannot hold out hope of being able to increase the figures which the Government are proposing at the present time. We have to base our calculations on the various figures which we can obtain. We want to be fair, but it is impossible to secure an average figure which would be agreeable to all and which would cover all the costs. In addition, costs have risen steadily since 1946 and the recent Government, or at any rate their predecessors, resisted pressure by the local authorities for revision of these subsidies on account of the economic state of the country. That argument is no less forceful at present than it was in previous years.
I should like to deal with Clauses 2, 3 and 6 which affect, in particular, housing in agricultural areas. Here we have had to make certain modifications due to changes in conditions and circumstances, and also certain improvements. Firstly, when these subsidies for agricultural housing were started in 1938, the subsidies for houses built by the local authorities for the agricultural population varied from one place to another according to the cost of the house, the rent and the

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housing expenditure and financial resources of the local authority. Those were all taken into account.
But under the changed conditions, that is to say, with the present system of equalisation grants and with the improved position of the agricultural industry, we have decided to leave it in the hands of the Secretary of State for Scotland, under Clause 2, to decide whether the increased contribution should be paid in any particular case.
I propose to discuss with the local authorities how this discretion should be exercised to the best advantage. I may say, by way of explanation, that exceptional costs will be the main guide or criterion; that is to say we have in mind isolated neighbourhoods where labour and material have to be transported from considerable distances to the site, which naturally adds greatly to the cost of building.
An additional contribution to this type of housing will be a fixed additional sum of £12 to the basic rate of £42 5s., which will bring it up to £54 5s., in the scattered or remote areas. I believe that this change to a fixed additional sum will be agreeable to local authorities who are handling this important work, because it will simplify procedure and will help to avoid the unnecessary complications of forms, correspondence and so on.
There are two other important provisions affecting agricultural houses to which I wish specially to refer because it is important that, in the agricultural areas we should get that type of housing which is desired or is necessary under modern conditions to attract and maintain labour in the agricultural industry. We want to help the farmer who is ready and prepared to help himself to improve housing. Under Clause 3, instead of limiting the grant to new houses to replace unsatisfactory houses, we are making a grant available for new houses whether they are replacements of existing houses or not. That will be a definite improvement and assistance.
Clause 4 provides Exchequer assistance towards grants made by local authorities at present. I think this is the point to which the hon. Member for Central Ayrshire (Mr. Manuel) was referring just now. The Exchequer grants will be
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three-quarters of the local authority expenditure normally, but seven-eighths in the Highlands and Islands.
I attach very great importance to Clause 6, which contains the other main improvements. I have always been very keen to see the restoration of the grant for improving houses occupied in accordance with what is known as a contract of service. I have always held, and have often stated, that this should have been kept in being. A great deal of good work was being done under this provision in the late 1920s and even more so in the 1930s. It is through no fault of the occupier that he has been denied this assistance. His work is vital to the conduct of efficient farming, especially in Scotland, where our livestock is of much greater importance comparatively than in the southern part of the kingdom.
I am very pleased to take some part in restoring this grant, which I think can do a great deal towards improving existing housing, bringing it up to the standards required in modern conditions and encouraging people to remain in agriculture, which is of such vital importance if we are to maintain the maximum agricultural production in this country.
Mr. Thomas Steele: In view of the fact that the right hon. Gentleman has made a very clear and definite statement that he wants to help those people who are living in houses under a contract of service, will he indicate why he has limited this provision to agricultural workers and has not included workers in other industries?
Mr. Stuart: The Housing (Rural Workers) Act, 1926, provided for agriculture and we are aiming to restore that provision here.
Mr. Steele: My understanding of that Act was that it applied to houses in rural areas and that, not only agricultural workers, but many railwaymen, had their houses re-conditioned under that Act.
Mr. Stuart: The hon. Member is aware that it is not everybody who is in agreement about the restoration of this grant for the improvement of what are known as tied houses. I, personally, feel that assistance should be given to improve all the houses that we can improve, because, with the existing shortages of materials, I maintain that a great deal

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can be done to bring existing houses up to modern standards where the walls and masonry of the houses are in good order and indeed, as is often the case, in better condition than in many recently built houses. But for the purposes of this Bill I am dealing at the moment purely and simply with those defined as agricultural workers under Section 154 of the Housing (Scotland) Act, 1950. I am afraid that I cannot go beyond that at the present time, although I should be perfectly prepared to consider and discuss improvements or extensions in other directions.
Clause 9 (2) deals with a minor change to benefit agricultural housing. This remedies what was a mere oversight in the 1949 Act and enables grants for improvements to be paid in respect of houses occupied by certain crofters and landholders.
Clause 7 raises from £4 to £8 the payment to be made by local authorities to repair funds in respect of each house. This has also been objected to by the local authority associations. Some local authorities regard £8 as being too high a figure; but I must point out that, as a considerable part of their case rests upon the fact that costs have increased so much, it is reasonable to suggest that costs of repairs have similarly increased and, therefore, a higher amount should be paid into the repairs fund owing to the rise in costs generally.
Mr. A. Woodburn: Would the right hon. Gentleman agree with the local authorities that if the proportion of increase in the repairs fund is 100 per cent., that increase should also apply to the subsidy?
Mr. Stuart: I cannot agree to that. What I would say in reply to the right hon. Gentleman is that I have power under this Bill—indeed, I have power under the 1950 Act—to modify that sum of £8. Where the repairs fund is in good financial order and has reserves which are sufficient to enable the carrying out of the likely repairs ahead, that sum may be reduced; and I am perfectly prepared to consider suggestions to that effect which are put forward by any local authority.
Mr. James McInnes: Is the right hon. Gentleman aware that the local authorities have asserted quite categorically that an agreement was
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reached between them and him that this increase would apply only in respect of houses which earned the new subsidy—in other words, it would be applicable to the older types of houses—but that faith has not been kept in that agreement? Will the right hon. Gentleman indicate quite clearly whether or not this increase applies to all houses?
Mr. Stuart: It does apply to all houses. I do not think it is the case that that agreement was come to with the local authorities. I do not wish to argue, but I think they agree that we do not agree to what is suggested by the hon. Member. This increase does apply to all houses.
Mr. David J. Pryde: Am I correct in understanding the right hon. Gentleman to say that he would be prepared to discuss this question of the £4 increase?
Mr. Stuart: What I said was that under the 1950 Act it is not necessary to insist on £8 being paid into the repairs fund in every case. Where the repairs fund is in a sound financial position, I can modify that amount, and if any local authority wishes to bring forward a case on those grounds to have the amount paid into the repairs fund reduced to something below £8, I shall be prepared to consider it.
Mr. Pryde: Will the right hon. Gentleman accordingly insert an Amendment in the Bill?
Mr. Stuart: I do not think it is necessary to have such an Amendment. I have power under the previous Act to do this.
Clause 8 merely puts right an oversight in earlier legislation and secures that certain Orders made under the Housing Act shall be published as Statutory Instruments.
I do not think there are any other points of particular importance to which I should refer. This is not a big Bill or a very long one. As I said at the start, its genesis and the reason for it being necessary arise from the change announced by the Chancellor of the Exchequer in relation to the rates of money borrowed from the Public Works Loans Board. At the same time, we have taken the opportunity of including in the Bill certain points, particularly in connection with housing in agricultural areas,

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which we believe will be of great assistance and value in helping housing and agriculture. I commend the Bill to the House.
4.16 p.m.
Mr. Hector McNeil: This Bill, in the words of the right hon. Gentleman, may not be a big Bill, but the House is very aware of its importance, which derives from the survey which the right hon. Gentleman made in opening. The number of houses which are to be built and the proportion of those houses which are to be let at rents which can be met by the people who most need houses will turn upon whether this is an effective and a just Bill.
I am sure that the House is very honoured to have not only such a representation from the Scottish Office but also the presence of the Minister of Housing and Local Government. This is not an accident, because the Minister is plainly becoming the white hope—indeed, the only white hope—of the Government.
The Minister of Housing and Local Government (Mr. Harold Macmillan): Being a Member for an English constituency does not prevent my sitting in the House when we are dealing with Scottish affairs.
Mr. McNeil: On the contrary, I hope that the right hon. Gentleman will persuade some of his colleagues to attend. We are delighted to see the Minister here, sustaining, cherishing and supporting his right hon. Friend.
The figures which the right hon. Gentleman gave at the beginning of his speech are of great interest to the House, He showed us how impressive were the completions for the first five months of this year. They are very impressive indeed. They are an inheritance, and they were predicted. The right hon. Gentleman was fair enough to admit that a year ago I felt it necessary to warn the House that there would be a drop in completions last year and that I also said that, for the same reasons, there would be an increase in completions this year. Every one is very glad that that prediction has been fulfilled and we are very happy to think that these additional houses will be available, whoever claims the credit—whether we claim it for having made the provisions, or the
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right hon. Gentleman claims it, as he is quite entitled to do, for his administration. Local authorities, such as Glasgow Corporation, also deserve a great deal of credit for their long-term planning.
But it is very important that the Government, having impaired the Health Service, crippled the education service, badly bungled the economic condition of the country—[Interruption.]—yes, badly bungled it; no one looking at the drop in the productivity index for last month can be otherwise than alarmed at the economic conditions which Her Majesty's Government are forcing upon the country. And, added to this long list of failures, there is this new departure, that even the safety of our troops is to be threatened by the indiscretions of a Minister.
Mr. Steele: Is my right hon. Friend not aware that there is a split in the party opposite—that only the Ministers are above the Gangway, and all the other Members have gone below the Gangway?
Mr. Ross: I hope that my right hon. Friend will be fair to the Secretary of State for Scotland and will never accuse him of saying too much.
Mr. McNeil: At any rate, it is plain that the right hon. Gentleman not only had an obligation but, no doubt, had an instruction to make the best that he could of these figures from a political point of view.
Mr. Stuart: I am obliged to say that in presenting them I gave a purely factual statement.
Mr. McNeil: I took great care to point out that it was a factual statement. The motivation of the presentation of the facts is fairly plain to anyone who is politically alert.
Like anybody else on this side of the House, I wish the right hon. Gentleman well in his housing programme—do not let anyone doubt that. But what we must be concerned about—to be fair to the right hon. Gentleman, he shared the same caution himself—is not only the rate of completion, nor even the number of houses under construction, under approval, and for which preliminaries have been overtaken. The right hon. Gentleman quoted a figure of 66,000 houses either under construction or for

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which preliminary steps had been taken. That is a very impressive figure, provided it is physically matched by balanced preparation. The right hon. Gentleman admitted that, because he used a very good phrase about the house builder being too close on the heels of the road-makers.
Even though we wish the right hon. Gentleman well in this respect, we must all be careful to suspend our judgment. It is a little too early for the Minister of Housing and Local Government to start crowing or for his party to count the seats that they will win in terms of his programme. If they manage to build 300,000 houses, we all know that it will be the only promise from their Election programme that the Government have managed to keep, but it is not very plain yet that they will do that. Of course, the Bill has an acute relevance to whether or not that kind of promise can be kept.
I do not find it a very pleasant task to criticise the Bill, but it must be criticised. I propose mainly to deal with Clauses 1 and 7, although there is one over-riding point which I want to make. It is quite plain that the local authorities, like all of us, are concerned to try to understand how long this over-high rate of 41¼ per cent. can be maintained. I am not an authority upon this subject and I should be unfair if I expected the right hon. Gentleman to reply offhand, but it would be very much to the interest of the House and to the benefit of the local authorities if, before the end of the debate, the right hon. Gentleman or his hon. and gallant Friend the Joint Under-Secretary of State could obtain an authoritative reply on this aspect.
Everyone is worrying about the Bank rate. There are already rumours current that it may go up. There is already advice being offered to the Chancellor of the Exchequer that he should take another turn of the screw of this monetary instrument or weapon. That, in turn, would be bound to have an effect upon gilt-edged values, and therefore, in turn, as they went down, the gilt-edged return must rise. It seems to me—I repeat, however, that I am not an authority —that if the gilt-edged return again rose, the Public Works Loan Board interest rate could not be held out of relation to these charges. It is, therefore, relevant and fair that we should ask the Govern-
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ment to tell us whether they anticipate maintaining this figure at 4¼ per cent. and, if that is their intention, how they propose to do it.
The right hon. Gentleman, dealing with the anxieties of the local authorities to have annual revision of the rate of subsidy in relation to the rate of interest, ran away by saying that that would be unfair to the House and discourteous. It is quite understandable that, with no assurance that the interest rate will be stable, they should want an annual balance. May I suggest that it is a rather offhand judgment to decide that this could not be done by Regulation?
Mr. Stuart: I did not say "unfair" or "discourteous." I said that I did not think that Parliament would agree to such a thing. It would be taking away from Parliament the control of finance.
Mr. McNeil: The Patronage Secretary is the person who determines what this Parliament will agree to, whether or not it is fair to them, and we have had enough legislation, goodness knows, by Regulation already in this short Parliament.
Mr. Stuart: May I, then, repeat that what I said was, "a dangerous constitutional innovation."
Mr. McNeil: I am delighted to see this sudden breach in the Government and this emergence of sanity. Perhaps the right hon. Gentleman will convey that view to his right hon. Friend in relation to other legislation. If we cannot be assured that this rate is to remain stable, we might on the Committee stage very well consider whether we should not so amend the Bill as to permit a review by Regulation. It would be disastrous if local authorities were left behind in this unwise competition which the economic policy of the Government is forcing upon the country. That is a general point of great importance, and I turn next to Clause 1.
Sir William Darling: Is it the right hon. Gentleman's serious proposition that local authorities should borrow money irrespective of the money market generally?
Mr. McNeil: That is a very inviting question and one upon which the hon. Gentleman knows that he and I have rather controversial views. A promise has been made, with which I propose to

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deal, that subsidy would be related to rate of interest. If the Government cannot tell us that the rate of interest will remain stable, then surely it is an obligation on the House to consider how that promise can be implemented and how the local authorities can be safeguarded.
Sir W. Darling: The right hon. Gentleman attempts to stabilise the rate of interest, but that is only one of the many elements of the cost. Does the right hon. Member also favour stabilising wages, the prices of materials and land, and all the other elements in the price?
Mr. McNeil: I must in fairness say to the hon. Gentleman that the local authorities and, of course, the people whom we must constantly seek to rehouse—that is, all of us except the hon. Gentleman, because he does not believe in subsidies for houses; he once treated us to a rather ill-natured, bad-tempered, incautious and historically inaccurate discourse—I remember the mistakes of my opponent as well as his occasional correctnesses—
Mr. Stuart: I should like to remind the right hon. Gentleman that at the beginning of 1948 Sir Stafford Cripps increased the Public Works Loan Board rate from 2½ per cent. to 3 per cent. and that on 20th January, 1948, he explained that
"the rates of interest charged to local authorities were fixed from time to time to correspond broadly with Government borrowing rates for comparable periods."—[OFFICIAL REPORT, 20th January, 1948; Vol. 446; c. 33.]
Mr. McNeil: That is exactly what I am arguing. I know this is a dull and involved subject, but it is an important one, and if the right hon. Gentleman will do me the courtesy of listening to me he will appreciate that I am arguing that, at a time when every day we hear rumours about the Bank rate, with its consequential effect upon the gilt-edged rate and its further effect upon the interest rate of the Public Works Loan Board, if we are to make a job of this Bill we are entitled to know the Government's intentions and their expectations and how they are going to meet any variations in the situation to which the late Sir Stafford Cripps referred. I do not expect an offhand answer, but I hope that we shall have one before the end of the debate.
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If I might turn to Clause 1, I think there are two points of dissatisfaction in relation to this Clause with which hon. Members on both sides of the House must be familiar. I refer not only to the circulation of the memorandum to which the right hon. Gentleman referred, but the conversations with the local authority representatives. I understand that an undertaking was given that there would be effective consultation with the local authorities.
As I understand it, the local authorities do not think that that promise was implemented and they therefore feel aggrieved. We all know that disagreements between the Central Government and local authorities will frequently emerge, but I do not think that we on this side of the House have ever had a subject of this dimension involving disagreement between us and local authorities where we would not at any rate have made an effort which extended to the Secretary of State meeting these authorities.
Let the right hon. Gentleman understand that I make no criticism of him, and I should like publicly to pay tribute to his experience and ability in this housing subject; but when we have a difference in figures amounting to 12½ per cent. in a Bill of this importance, it is a little unusual for the consultations not to have been carried further. Certainly in the time of the Labour Government that did not happen; and, of course, we did not have the assistance of a fresh wind blowing through St. Andrew's House in the person of the Minister of State.
We were told in most extraordinary and vivid terms how the Minister of State would be able to meet these local people, would be able to satisfy them and would be at their beck and call; but on this first big question the Under-Secretary of State and the most excellent officials in the right hon. Gentleman's Department were the only people made available for consultation. I have talked with local authority representatives who feel decidedly aggrieved on this subject, and I must in honesty, however unpleasant it may be to me personally, tell the right hon. Gentleman that I appreciate their feeling of resentment upon this subject.
As the right hon. Gentleman told us, the local authorities are dissatisfied about the basis of the calculation. The Department of Health have submitted

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figures. They calculate the average cost of a four-apartment house to be £1,635 —the figure which the right hon. Gentleman gave. They go on to make their calculations upon that basis—loan charges at 41 per cent. for 60 years, £75 15s. roughly; management and maintenance, as the right hon. Gentleman quoted, proportionately at £11; owner's rates at 5s. 7d. in the £ giving £11 15s.; rent £42, giving a net annual deficit of £56 9s. and some odd coppers. They are, therefore, confronted with the proposition offered by the Government that, on the basis of the deficit shared in the normal proportion of three to one, they carry £14 5s. and the Government £42 5s.
The local authorities have argued throughout, and have submitted figures which are available to all of us, that the average cost was not £1,635 but £1,911. They have argued that the average levy for owner's rates is 6s. 4d. in the £ and not 5s. 7d. in the £, and further that the average rent charged for a four-apartment house is £33 and not £42. The right hon. Gentleman finds himself unable to accept these figures.
On 19th February the Minister of Housing and Local Government gave a flat undertaking that the increase in the housing subsidy was guaranteed to cover the whole increased cost to local housing authorities at the new rate of interest. I must admit that the phrase can have varying interpretations, and it would have been better if I and my hon. Friends had been more precise in our questions at the time. But when the right hon. Gentleman gave me that undertaking, I cannot believe otherwise than that he anticipated that the rise in interest rates in direct consequence of the Government's policy was going to affect not only the Government and the local authority but also the builder, the timber merchant and the brickyard. They have all got to borrow in the same market, and they have all got to borrow at rates affected by the Government's decision.
Sir W. Darling: The right hon. Gentleman must not be so innocent. There are plenty of businesses which run on their own capital. They do not all borrow.
Mr. McNeil: I have had some considerable local authority experience, and I cannot remember ever meeting any
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building contractor or supplier of material in substantial quantities who operated otherwise than by borrowing.
Sir W. Darling: The suggestion that big industries in this country subsist entirely on borrowed money is an indication of the innocence and lack of experience of the right hon. Gentleman. It is not the case.
Mr. McNeil: I might perhaps plead guilty to innocence but not to inexperience. The point I am trying to make—and I do not think the hon. Gentleman can deny it—is that when any local authority enters into a contract of a substantial kind with the building industry, such undertakings are financed in large part by borrowing. That is the position, and, of course, that 3¼ per cent. is bound to be reflected in increased building costs, and, in turn, they are bound to have a reflection on the figure upon which the right hon. Gentleman and the local authorities have got to agree.
The difference is a very substantial one. We are not talking about £1 or 30s. We are talking of a difference of £276 in the average figure for a four-apartment house whose standards are pretty uniform throughout the country—£276; more than 12½ per cent. It is really trying the patience of the House a little much for the right hon. Gentleman to come here and not offer any detailed information as to where this difference really arises.
Moreover, as I have already said, most of these figures are ascertainable. It is not a guess. We know exactly, for example, what the average rents payable in Scotland are for each and every type of house for any reasonable period, as the hon. and gallant Gentleman knows. We know, for example, that the average figure since the war is not £42 but £33—and yet that is cheerfully set aside without any further discussion.
I should not think it inconsistent with my duty as I see it to proceed further with this argument, but I have a simple proposition to make. The honour of the Government and the credit of the right hon. Gentleman are here at stake. They have to meet an undertaking which the right hon. Gentleman and the Government gave to these local authorities. It is quite true that there will be differences as to the figures upon which such an

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undertaking should be based. It is equally true that these figures for the most part can be ascertained; the tenders are there; the final figures are there.
The Joint Under-Secretary of State for Scotland (Commander T. D. Galbraith): I wonder if the right hon. Gentleman would help me? To what undertaking is he referring? I want to follow him.
Mr. McNeil: The undertaking is the undertaking given on 19th February that the complete interest rates would be met by increased subsidy. The hon. and gallant Gentleman, I know, is not going to be clever at my expense. That relates to the cost of a house, and the cost of that house has got to be ascertained by available figures. The local authorities believed that the increased interest charges were going to be met on a house the cost of which was determined by the Government without reference to them, and, much more important, without reference to the actual money which they have to pay. It must, therefore, be, related to a figure which is ascertainable.
I repeat, that since there is no doubt about the figure and since quite clearly the credit and reputation of the right hon. Gentleman and his Government are at stake, there should be a simple way of tackling this, and that is to appoint someone to whom the figures are made available, perhaps a judge—I do not know—perhaps an accountant; perhaps even a schoolboy from a secondary school, because he would have no difficulty in discovering that the average rent paid in these post-war years was £33.
The other figures, I agree, are a little more difficult to ascertain, to assess and to weigh; it is a little more difficult to determine an average figure; but they, can be reached, and since there now seems no likelihood of the Government and the local authorities coming together on this subject, surely the honest way and the quickest way would be to invite the decision of some outside authority upon the area of agreed figures. It is not an academic matter. I should not press it if it were only an academic and political matter. It is a matter of great importance to the whole population of Scotland who are waiting for houses.
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Perhaps because of my excessive good nature, I have given way too frequently to curious and belligerent hon. Gentlemen opposite, and I am aware that I am rather going beyond my time, but I want to make one other reference, which I can dismiss in almost a sentence or two, to Clause 7. My hon. Friend has already raised the subject of the repairs, and made a good point about this conclusion of the right hon. Gentleman that it is necessary to raise the annual contribution for repairs from £4 to £8 on all houses.
It is reasonable to think that the local authorities are more likely to be right in their calculation as to the cost of the house than he is in his calculation of £1,635. Moreover, it surely is a very wide argument that this increase should be available to all houses. We can plainly see that one would have to raise the figure on the houses coming under this Bill. One would have to raise it—I do not know whether necessarily to £8; but one would have to raise it.
I have had some information from my local authority, with the details of which I shall not bore the House, but I find from an examination of its calculations that the figure, which I have no reason to believe to be otherwise—and the repairs are effective, and are maintained at a reasonable level—is much lower than this and is slightly under £6 a house per annum. I have the details available if the hon. and gallant Gentleman would like to see them. If the Secretary of State is not able to move in this, I had better say frankly that hon. Members will feel bound to seek to amend it to a lower figure than £8 on Committee stage.
I suggest to the right hon. Gentleman that it is not enough for him to say that he retains power to vary this figure in relation to local conditions. What we are here discussing is a desperate situation for local authorities in relation to their rating position, and their housing revenue accounts. We are not making party capital. Hon. Gentlemen opposite who have been in touch with local authorities know that it is literally the position under this Bill.
There will be local authorities whose rating level in consequence of this Bill, if they are to carry out an adequate programme, will go above 20s. in the £

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in one year, and hon. Gentlemen opposite know that. I say that even this little crumb of a reduction of 20s. or 30s. in the annual repairs contribution would make quite a difference to their budgeting position. I hope that we shall have an assurance that the Government will look at an Amendment relating to that.
But it is not the decisive point. The decisive point must be the size of the subsidy; the decisive point is the carrying out of the Government's undertaking to these local authorities that interest increases brought about by the deliberate action of the Government shall not be passed on to the local authorities and shall not be passed on to the houseless people in Scotland.
My hon. and right hon. Friends will not divide against the Bill for the obvious reason that, so desperate is the housing situation that even with these inadequate subsidies we should not feel it responsible behaviour to impede in any way the possibility of building houses. We know that this will reduce the rate at which house building can take place in Scotland, and in Committee we shall have Amendments to offer to many of the Clauses.
4.51 p.m.
Major W. J. Anstruther-Gray: The right hon. Member for Greenock (Mr. McNeil) stressed the anxiety he felt about the financial situation very much from the point of view of local authorities versus the Government. While I agree about the seriousness of the financial aspect, I should like to approach the question from the point of view of the individual and the effect it has upon him or her. Who has to pay this additional cost entailed in house building nowadays? It can be paid in three ways: by the tenant by way of rent; by the ratepayers in a general rise in the rates affecting both occupiers and owners; and, thirdly, it can be paid by the taxpayers through an Exchequer grant from the Treasury which the taxpayers feel in the Budget by increased taxation.
Many cogent arguments can be brought against increasing the charge on any one of those three sources. I have no doubt in my mind that our taxation, both direct and indirect, is already such a burden that it is hampering our economic recovery, and I should much regret to see
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it increased unduly, even in the worthy cause of helping housing.
As to the ratepayers, I need go no further than quoting, if the House will allow me, some remarks made on 6th March this year by the Agent for the Convention of Royal Boroughs, who said:
"Housing finances of local authorities are in a serious state. Scottish local authorities have sustained deficits in the last five years of over E5 million, in addition to the statutory contributions."
To turn to another person whom I regard as an expert in local affairs, Sir John Ure Primrose, the Lord Provost of Perth, who speaking on 4th December last year said:
"There will be a housing crisis in Perth and other cities unless something is done quickly to bring down housing costs. I am afraid that the time is coming when the town council will decide to stop building."
My last quotation in this respect is from the Clydesdale Bank Survey of Economic Conditions in Scotland in 1951, which says:
"As a result of rising costs some small boroughs have been unable to take up their housing allocations in full, and other authorities have postponed or abandoned part of their housing plans."
That is a measure of the serious situation from the local authority point of view.
We must consider not only the local authority point of view but also that of the individual ratepayer. After all, these increased rates will not be paid only by the fortunate people who obtain new and up-to-date council houses. They are also paid by people living either in old council houses or in privately-owned houses. What do they think of having their rates raised in order to subsidise much better houses, many of which go to people who-are richer than themselves? It must be wrong for poor ratepayers to be called upon to subsidise people richer than themselves. It is not only occupiers' rates which are the worry. Owners' rates come into it too.
Mr. Woodburn: It does not necessarily follow that a person lives in a house of earlier vintage is poorer than a person who goes into a new house, but the person in the old house at a very low rental is paying a much smaller contribution for the services he receives from the local authority than the person going into a new house. The services in the house

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are different from the services outside the house, yet the person in the old house receives the same outside services, and because of his low rental pays, according to our rating system, a much lower contribution. Therefore, his lot is not quite as bad as the hon. and gallant Gentleman makes out.
Major Anstruther-Gray: I appreciate the force of the right hon. Gentleman's argument, but the fact remains that people living in rather indifferent houses, not very well maintained—and this brings me to the point of the Rent Restriction Acts which make it extremely difficult, if not impossible, for poorer property owners to maintain their houses properly—the people living in houses which are in bad repair are entitled to feel aggrieved when their rates are raised in order to provide better houses for people who are sometimes in very well-to-do positions.
I do not often quote from the "Daily Express," but they had this to say on 22nd February of this year.
"A Government official earning £3,000 a year with £500 expenses is living in a Glasgow council house. So, too, are six Socialist Members of Parliament and 25 Socialist Councillors —almost half the Socialist membership of the Corporation."
Mr. Ross: So is the Duke of Edinburgh.
Major Anstruther-Gray: The quotation goes on:
"These cases were cited at the City Council by Treasurer J. B. Kelly, and he went on to say that there are many with personal family incomes running into four figures who live in Corporation houses at the expense of the poorer folk of the City."
In general, it is legitimate for people in indifferent houses which are highly rated to feel indignant when their rates subsidise people much better off than themselves. Under the Rent Restrictions Acts, which this Bill does nothing to remedy, it is impossible for many property owners to charge sufficiently high rents to pay for even their necessary upkeep. The result is that the tenants suffer and property owners who are dependent on that source of income become destitute.
The last consideration on the question "Who pays the piper?" is the rent paid by the tenants of these houses. Here we not only come up against the unpopularity of raising rents, which no party,
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Government or local authority wants to face, but we come up against real consumer resistance. It would be a thousand pities if the most deserving families were prevented from getting houses because the rents were above a level they could reasonably afford to pay. This is not a new question. Back in 1950 the Scottish Housing Advisory Committee was reporting:
"We received evidence that a considerable number of families in some areas are prevented by their financial position from accepting the offer of a local authority house."
That came from Edinburgh in 1950.
As hon. Members know, it is perfectly possible to argue the other way round. I do not know if anyone here read "The Times" of the 3rd March of this year, which put a different point of view. How entirely artificial the situation is can be seen from the financial estimates of consumers' outlay, and here came the astonishing fact that the British people spend more in a year on cigarettes alone than they do on rent, rates and water charges put together.
Before the war they spent more on tobacco and drink combined, but now they spend more on cigarettes alone than on rent, rates and water charges. That is a United Kingdom figure and not a Scots figure. We must not go too far in pressing our arguments on consumers' resistance, and there is the further fact that whereas before the war the average industrial wage earner paid rather over 10 per cent. of his earnings on rent, at present the average industrial wage earner is paying rather less than 10 per cent. of his earnings on rent.
I, personally, am convinced that there are a lot of people in Scotland who cannot afford to pay an increased rent without having seriously to curtail expenditure which they are entitled to look forward to making in other directions. I say "look forward to making," but it is often expenditure which they pretty well have to make in other directions if they are not to see their standard of living seriously fall. I should like to hope that they may look forward to some relief from costs. I believe that I am entitled to say today that it is no longer necessary to take for granted that all costs are rising. While I say that, I think that I would be just as well to touch wood before I can claim that they may not start rising again in the future.

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Let us look at the position and take what is good. The fact is that timber is down in price, lead is down in price, cement is down in price 3s. a ton, and there is a prospect of a fall in the price of paint. These are all things that affect directly the cost of building houses. I was reading the report of the Royal Show the other day and saw that the price of hen houses and fencing wire is down, too. That is an indication in the right direction. I do not suggest that people live in hen houses, but I do suggest that the price of timber for making hen houses is by no means irrelevant in considering the price of house building. There are other things that affect house building costs, perhaps not quite so directly, such as road transport. Tyres are down 7½ per cent. in price, and in yesterday's newspapers an announcement was made that Ford vehicles were down from 5 per cent. to 10 per cent. in price, and also diesel engines.
Against these encouraging figures, I admit that there are others which must give great concern. It is a fact that the increase in building wage rates of l½d. per hour, granted on 4th February this year, is reckoned to have increased the price of the average house by £20, and so we see how easily the benefits of the reduced prices of material can be swallowed up if we give reign to a desire to allow wages to rise without taking careful note of the ultimate benefit to the public. Other factors can increase the price of house building.
In answer to a Question which I asked today as to how much agricultural land had been taken for house building, the answer was that since January, 1945, 21,666 acres had been taken for local housing, 2,885 acres for industry and 4,000 acres had been earmarked for urban development in the new towns of East Kilbride and Glenrothes. To the latter part of my Question, in which I asked how much of this was good land for farming and how much was land of relatively small importance, the answer war:
"The greater part of the land taken for urban development is of good or fairly good quality."
The point is that some 28,000 acres of good food-producing land is being taken away. We cannot afford to do that with impunity. That is since 1945. I would say that an increase in the
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cost of building, if it enabled rough sites to be used rather than the best agricultural land, might be public money very well spent.
That brings me again to look round for ways in which we can make economies. I hope that we will not look for it in quality, although there is an old saying, "Cut your coat according to your cloth." I am not sure that that is not a sound principle in public affairs as well as in private affairs, but housing not the particular coat that we want to, cut. Can we save money in house construction, or can we save it in standardisation? I wonder whether there is not still scope for freeing the regulations and seeing that the standard measurements are not too cut and dried.
As a last quotation, I should like to quote from the British Architects' Conference, held in Edinburgh last week. I read this in the "Scotsman," and I took great note of it. The heading was:
"Housebuilding within the country's means."
The architects were discussing low costs and methods. I am sure that other hon. Members will have read the article, and I was specially struck by what the Borough Architect of Northampton said. He stated:
"An architect designing a building for a private person would not usually desire to bring about his client's bankruptcy. Where funds were limited, he would design a building of simple character with sound but not expensive material. Faced with rising costs, the client, on his side, would usually agree to forego some of his originally idealistic requirements in the interest of economy."
This architect went on:
"Many architects felt that they were being prevented from the full use of their ingenuity in design by insistence on specified room sizes. In small house design the fundamental factor was room shape. It was all too easy to produce a bedroom well in excess of the required minimum size which could not be satisfactorily furnished, just as it was undoubtedly possible to plan a well-shaped bedroom below the minimum size which would serve its purpose admirably."
I felt myself in sympathy with that architect, although I do not feel qualified to go all the way with him.
He went on to say,
"Provided room shapes are planned to take normal bedroom furniture in normal positions. the minima for first and third bedrooms could well be reduced to 120 square feet and 60 square feet respectively in place of the present 135 square feet and 70 square feet."

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I hear hon. Members laughing, and it was with that feeling in my mind that I said that I did not think I knew enough to go all the way with this architect in his proposal; but let us have regard to the other side of the matter before deprecating this man's opinion too readily. After all, if we do not economise in this way, either the rents will have to go up or the rates will have to go up, or taxation will have to go up. I do not want to have to go to my constituents as one who has helped to raise taxation, rent or rates. I think that it is worth while to consider any further possibilities that may be to hand.
The architect goes on—
"Thus with the saving seen against the present social and economic background and realising the possibility of making some at least of the first floor bedroom space available for daytime and evening use, it is difficult to believe that a house of 800 square feet gross is inadequate for a family of five. The saving of 100 square feet of floor space in this way would effect a saving of £100."
Mr. Woodburn: The argument the architect has introduced is very interesting, but does not the hon. and gallant Member think that he has disqualified his argument from having any real consideration when he starts by assuming that architects are such fools that if they get a big area they design a house so that it cannot take furniture and if they get a small area they design the room so that it can take furniture? Is there any reason why they should not use common sense with the greater area as with the smaller area?
Major Anstruther-Gray: I do not think that the right hon. Gentleman is quite right in that argument; I think there is always scope for ingenuity and invention. If we look back to the invention of the motor car, we see how ridiculously out-of-date old motor cars appear. I am sure that, as time goes on, in architecture modern designers will improve on what was done by their forbears. I think there must be great importance in shape. In the "Scotsman," an admirable paper which picks and chooses what it reports, there is no record of derisory cheers, so I take it that what the architect said was greeted with the respect which in my opinion it deserves.
I leave that subject, which might easily become controversial, in order to turn to
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another point. I wonder if the House feels contented that we have gone as far as we could in the standardisation of house construction. This same architect said:
"Staircases could be manufactured on a large scale if architects would agree on desirable floor heights and the need to use simple straight flights on all possible occasions."
He also said:
"More important, two or three standard combinations of spacing between bath, lavatory basin and water closet would allow waste connection to be standardised and mass produced, leaving only assembly to be carried on on the site."
These may seem small contributions to a debate of this sort, but I feel that it is well worth while urging that my right hon. and hon. Friends at the Scottish Office should be in no way hidebound in their efforts to find some means, other than the highly undesirable means of increasing taxation, of increasing rents and of increasing rates. If a little more freedom and encouragement of ingenuity among architects, authorities, or private individuals will give us cheaper houses, quicker and good enough to live in, surely it is well worth our support.
5.14 p.m.
Mr. William Hannan: Since entering this House in 1945 it has been my privilege on occasions, when sitting on the benches opposite, to make several short speeches. They were indeed no more than interjections, and sometimes a dialogue was carried on between the occupant of the Chair and myself, as one of the then Government Whips, in conducting the business. The longest speech was one of 12 words, when I moved, "That the Bill be committed to a Committee of the whole House." On other occasions, it gave great pleasure when my speech was to adjourn the House. This is the first occasion on which I venture to address the House at length, and although this is not technically a maiden speech, I hope that the House will extend its understanding and sympathy to me in making some remarks concerning the Bill now before the House.
This Bill, as the Minister agreed, and as my right hon. Friend the Member for Greenock (Mr. McNeil) insisted, is a reflection of the financial policy of the Government. Although I am sure the hon. and gallant Member for Berwick

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and East Lothian (Major Anstruther-Gray) will, under present circumstances, understand if I do not follow his remarks, it is my opinion that the economies of which he spoke will follow as a direct consequence of this Bill. The Minister of Housing and Local Govern-ment, in introducing the English Bill, said that the need for this review at this time arose primarily from two increases in the rate of interest on loans to local authorities, and there is no difference on that point.
I wish to ask the Joint Under-Secretary of State for Scotland if he would not agree that, apart from the increase on interest rates, there is a case for an increase in subsidies. On the information supplied to me, and from the memorandum of the local authorities, there would appear to be a very strong case that, apart from the increase in interest rates, a further increase could have been justified because of the increased capital costs.
There is this difference between the local authorities and the Department of Health for Scotland on what I consider to be the fundamental approach on which all the considerations should be based. It is the premise from which we start. I am sorry that the Minister of Housing and Local Government is not present. He said in his speech on 22nd April:
"To fix what should be the amount of the subsidy, agreement has to be reached on certain premises. These are broadly three in number. First, there is the average capital cost of the notional house, second, the average cost of maintenance, and, third, what has to be taken as a notional rent."—[OFFICIAL REPORT, April 22, 1952; Vol. 499, c. 230.]
Figures have already been given of what the local authorities insist upon as the present day cost of building houses. They are at the end of the construction of building houses, and experience in these things goes a long way. They insist that £1,900 is much nearer the figure for a four apartment house than £1,635. In England the Minister of Housing and Local Government indicated that he had got agreement with the local authorities after an investigation committee had been appointed or an inquiry had been held. Has such a committee or cost-finding inquiry been held in Scotland in order to make an adjudication? All of us can see that, even on the difference of £250, the accumulated cost over 60 years will come to a startling figure.
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I have obtained some figures on the interest charges on the £1,600 which the Department of Health suggests. Assuming that that figure is right for a four apartment house, over 60 years the annuity required to repay capital and interest would be £57 16s. 3d. The total over the 60 years for a house originally costing £1,600 comes to £3,460. At 4¼ per cent., the new rate, the total over the same period, is actually £1,000 more —that is, £4,446. We are getting into a fantastic situation when we allow that to continue. My plea to the Government is to have another meeting and see if they cannot agree to split the difference between the figures. Some gesture like that would encourage the local authorities to do the great job which confronts them.
I intended to speak on the question of rents. My right hon. Friend the Member for Greenock has mentioned the fact that £33 is nearer the figure. The sum of £42 is the figure that the Government have suggested should be charged for a four-apartment house, but that is in danger of being increased because of the new Bank Rate, which in turn means increasing the cost of living in as much as rent is a big factor in the calculations of the ordinary people. In 1950 the present Prime Minister, when Leader of the Opposition, criticised the Labour Government for charging 25s. to 27s. a week for rent which he said was a hollow mockery of the housing plans, for it did not provide people with houses which they so sadly required at rents which they could pay. The Government are in danger of upsetting the present housing plans by reason of these much increased rents.
The general economic policy of the Government is going to restrict and reduce the demand for houses. Indeed, it could be said that it will act in the way which some members of the Government want. Such works as water schemes, sewerage schemes and so on will feel the effect of these increased charges. Recently the Minister of Housing and Local Government issued a circular to local authorities in England asking them to try to effect economies in the construction of water works and sewerage undertakings. These things are, of course, fundamental to any housing scheme, for they must be built before houses can be put up at all. Has the Scottish Office issued a similar instruction, because if it has it will increase the concern of those of us

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who are apprehensive about die overall economic and financial policy of the Government? What, in fact, is going to happen is that finance will determine the needs of the people instead of physical controls deciding social priorities.
A point in the Government's policy which I want to criticise for a few moments is their suggestion that local authorities should be empowered to sell houses. I would ask them to alter their attitude towards that scheme. They propose an increase in the number of houses for sale from one in ten under the previous Administration to one in five under this. Surely it is appreciated now that the evidence is overwhelming that there is no great demand to buy houses, but rather that the supreme need is for houses to let.
The Joint Under-Secretary of State comes from Glasgow and knows perfectly well what happened in Merrylee. I do not want to be controversial or appear to be overbearing on this subject, but he knows that the local elections gave a clear indication of the signs of anger at the proposals which were then made. Despite the help of the Secretary of State to restrict these houses to certain classes of people, like existing tenants, those who were ill, and those who would ordinarily be allocated houses within the next year from the large waiting list of 100,000, what was the result? Of a total of 131 applicants, only 24 came from existing tenants, only seven from the 100,000 on the waiting list for accommodation, and 100 from those who applied on health grounds.
What were they asked to pay? For a three-apartment house the deposit was £228 and £2 11s. 1d. weekly as repayment of capital and interest. For a four-apartment house they were asked to pay £323 deposit and £3 9s. weekly. On a five-apartment house the deposit was £354 and the weekly repayment £3 12s. 9d. I know the hon. and gallant Member is sincere in these matters, but does he not honestly think that these figures are an affront to the people in his constituency? They certainly are to the people in the constituency of Maryhill in Glasgow which I have the honour to represent. They are asked to pay weekly amounts like that out of wages of £7, 8 and £9 a week.
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It is interesting to look at the total incomes of the Scottish people. I refer hon. Members to the Annul Report of the Inland Revenue Commission for these figures. The total incomes of Scotland number 1,771,000, and of that total 1,164,000 earned £350 a year or under. Those earning £500 a year and under total 1,500,000. It is a well-known fact that the people in the north do not earn the high salaries and wages which can be earned in the south, particularly in the London area. In view of all these telling facts, I ask the Government to review at once the policy of houses for sale. They should stop it, and our primary aim should be to construct houses to let.
I want to conclude with this point. A large number of decent people for whom I am speaking now, but who are supporters of the party opposite, though they want to assume the responsibility of buying houses and entering upon a mortgage for them, find that the position will go hard with them. The hon. Gentleman the Member for Altrincham and Sale (Mr. Erroll), speaking recently on a new Clause in the Finance Bill giving relief from tax in respect of payments to local authorities and building societies, said this:
"The person who wishes to own his own house has to carry personally the full extra burden of the increased money rates now in force. In fact, it is clearly becoming very difficult indeed for younger married couples to be able to afford to own a home of their own because the charges involved are so considerable. They alone will receive no relief at all from the Treasury or the Exchequer.
I feel that this new Clause, which is designed to give them a measure of relief, should he welcomed by my hon. Friends on this side of the House since we are such fanatical believers in a property-owning democracy. We should live up to our aims and help where possible those who are trying and are anxious to own homes of their own." —[OFFICIAL REPORT, 17th June, 1952; Vol. 502, c. 1072.]
The cost of living has gone up, but these people are being asked to pay these excessive sums for owning their own homes. That is an added reason why their tastes should be catered for by proper attention to the admirable Report, issued by the Scottish Office. I want to congratulate the officials on the production of the Report—dealing with the Housing of Special Groups.
A policy of greater assistance to the local authorities in the acquisition of the

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properties which are being abandoned in Glasgow would make a useful contribution. I am not suggesting that it will be a solution to the housing problem. There are properties in Glasgow which the local authority cannot acquire because the ground burdens are excessive. The properties would be offered by the owners free of cost, but the local authority are hesitant, because they are not provided with assistance. We should encourage social ownership in housing. It is in that direction that a solution of the housing problem lies.
Private investment of capital will never again be able to provide for the needs of our people in houses to let. It will need to fall to public authorities and to public enterprise to do the job. Just as the great industries of coal and railways had to be salvaged from wreck and ruin because the nation needed them, so housing will require to be saved. I am hopeful that at no distant date the community will think fit to acquire all rented houses as a form of social ownership, pooling the rents and equalising them, and charging individuals in the higher income groups with the full economic rent. We can do that, and in doing so we shall in the end create still better citizens and make Britain a brighter and freer country than she has ever been before.
5.34 p.m.
Mr. H. R. Spence: It is a great pleasure to follow the hon. Member for Maryhill (Mr. Hannan), who has just made his maiden speech in the House, and I offer him unreservedly my congratulations upon the way in which he did it. I add the usual words, that we shall look forward to hearing his future contributions to our debates, but I make one reservation. It is that those contributions shall be long and not, for any reason, be the short contributions that we have had before.
I hope that the hon. Gentleman will forgive me if I do not follow him on the particular point of the Bill which he has been discussing. From my point of view, the important thing in the Bill is the introduction of Clauses 3 and 6, which, I think, will do very much for housing in rural areas. They affect my constituency vitally. Clause 3 introduces grants for the building of new houses and of houses to replace those that are scrapped. Clause 6 brings in reconditioning grants.
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Not very much has been said about the part that reconditioning can play. It may be interesting to run back over the history of reconditioning in the rural areas in the past 25 years. From 1926 until 1945, various editions of the Housing (Rural Workers) Act have operated, and some 36,000 houses have been reconditioned to make good homes for a very modest price. In 1945, the Housing (Rural Workers) Act was discontinued, one of the first acts of the Labour Government on taking office. Within a week that Government announced their intention of discontinuing the Act. The announcement was received with dismay.
Questions were asked to find out why it was being done. We were told by the then Lord Privy Seal that Scotland had not to continue to expect special advantages, and by the then Secretary of State, the late Mr. Westwood, that the Act would be replaced by something more fruitful. When re-enacting the legislation, reconditioning was hamstrung from 1945 until the Housing Act that we considered in 1949 and which became law in 1950. Reconditioning grants were then to be made on condition that where a grant was accepted the cottage would be no longer tied to the farm.
In the year after the Act was passed until June. 1951, only 410 applications were made for a reconditioning grant, whereas in 1938. the annual rate of application had risen to 3,800. The bringing in again of the reconditioning Clause will have a great effect on housing in the rural areas and, in turn, upon agricultural production, by keeping up manpower in agriculture, which is most important.
I have one or two questions to put which I hope the Minister will answer when he winds up the debate. We must read Clause 6 in the context of the principal Act, and when they are read together the impression is created that the reconditioning grant of £300 will be available where a house is reconditioned at a total cost of £600, but that if the reconditioning costs in excess of £600 no grant will be payable. I believe that this impression is not correct. In the parent Act are powers permitting the Secretary of State for Scotland to alter the sum. If that is so, I would ask my right hon. Friend to have the same broad outlook on the problem of the rural areas as he has shown

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in the rate of subsidy, which takes account of the higher cost in rural areas.
If £600 is the rate for an area easily served with materials it cannot be right for very remote areas. It would be a pity if a genuine case of reconditioning a cottage should fail to rank for grant simply because the cost over-ran some statutory figure, notionally put into the Act in advance. I hope the Secretary of State for Scotland will see that all genuine cases of reconditioning for the purpose prescribed in the Bill will receive the grant.
I should also be grateful if the Minister will tell us whether this grant will apply to cottages for forestry workers. We might well incorporate the wording used in the Housing (Rural Workers) Act, 1926, which, dealing with housing for the agricultural population, reads as follows:
"… housing accommodation for agricultural workers and for persons whose economic condition is substantially the same…"
If that could be incorporated in this Bill, it would be for the good of all.
I pass next to Clause 3, which deals with the grants for new houses. Will this grant be payable in respect of nontraditional as well as of traditional houses? I am thinking of timber and other prefabricated houses. The grant should be available for any kind of approved house and it would be helpful to have confirmation of this point.
Subsection (6) of Clause 3 gives me some foreboding. It reads:
"A local authority may in any case refuse to give assistance under this section on any grounds which seem to them sufficient."
It may well be that a Socialist county authority may not believe in tied houses, as many hon. Gentlemen opposite do not. It seems to me that a complete power is granted to a local authority to veto a grant where any cottage being built is to be tied to a farm. I may have misinterpreted this subsection and I shall be glad if the Minister will deal with this point also.
There is no doubt in my mind that this Bill will bring to the farming community and to those who work on farms a sense that their housing problem will be handled with nearly half as much speed again in the coming years. The building of new houses will go on, but reconditioning has been hamstrung. The
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figure at the end of 1938 was running at 3,800 a year for reconditioning and I believe we shall come near that figure again within a year of this Bill becoming as Act.
I welcome the Bill and I hope that the House will give it a speedy Second Reading. I hope, however, that the Minister will tell us tonight about the position of those who may be going on with their plans for reconditioning or building during the passage of the Bill. Will those rank for grant when the Bill finally goes on to the Statute Book?
5.45 p.m.
Mr. J. Grimond: I am glad to follow the hon. Member for Aberdeenshire, West (Mr. Spence), because I want to speak about the same points he raised. However, that does not imply that I do not realise that the most important part of this Bill, taking Scotland as a whole, is that containing the financial provisions. As many have spoken and no doubt will speak about that matter, I shall confine myself largely to Clauses 3 and 4 and to those parts of the Bill which affect primarily the rural areas.
As the Secretary of State knows, a great deal has been done for housing in my own constituency by the people themselves, by building, reconditioning and repairing houses, with the aid sometimes of Government grants and sometimes entirely on the initiative of the householder. I welcome any Bill which will encourage people to improve their own housing conditions. Certainly it is a great economy both to the State and to local authorities, and, generally speaking, the type of house put up is satisfactory.
There is provision in Clause 3 for grants towards the building or rebuilding of houses. In the conditions of today those grants should be greatly increased. I hope the Secretary of State will confirm that even though the work costs more than £600, a grant up to £300 will still be payable. But today £300 goes only a very short way. It is implied in this Clause that we may give a grant up to half the cost of a house. It would be in the interests of economy if we allowed grants up to half the cost of the cheapest house that can be built. Today that will cost between £1,200 and £1,500. There is a strong case, therefore, for increasing the grant up to £600 or £700.

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The hon. Gentleman also asked whether this grant would be available for the non-traditional type of house. Those which have been erected in my constituency are costing £2,000 and more now and, as he will appreciate, if the grant is limited to £300 that will only be of small assistance, although no doubt it will be welcome. I want also to stress the importance of making the best use of local materials, particularly of local stone where it is suitable.
I should like to know the total amount which will be available. I see from the Explanatory Memorandum that the annual additional charge to the Exchequer is estimated at £19,900. I am not clear what is in the mind of the Secretary of State about this. Under subsection (6) the local authorities have absolute power to refuse a grant without giving a reason. Is that primarily intended to safeguard them from the financial point of view because they have to bear a proportion of the total cost, though in the north their proportion is small? If this is the case, I want to plead that they are given the utmost encouragement and the largest total amount of money to enable them to give grants in every suitable case. I hope that building will not be restricted by this subsection taken in conjunction with Clause 4.
I want to know the types of people who will be eligible. As far as I can see, a crofter fisherman primarily engaged in fishing with a cottage or croft will be eligible for a grant under this Measure, but that might be confirmed, as also the case of the forestry worker. I want to make a plea for the plight of the true crofter today.
Under the old Crofters and Landholders Acts, it was intended that they should be given special protection and assistance owing to the difficulty of their life and the peculiar conditions in which they have to run their crofts and earn their living. Recently, however, as the help and protection given to other forms of agricultural holding have been increased, the crofter has fallen behind. I am very glad to hear that there is a small provision made in the Measure which will permit it to be applied to crofters. I know that at present they are entitled to grants under the Agriculture Act, 1948, but the grants are small, and I think it would be generally agreed that there is no area in the country in which
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rural housing is at a lower level than these areas.
If we want to retain the population in the country, then there is a great deal to be done to repair and improve existing crofter houses and to build new houses. This is a very difficult matter. All expenses are high, the crofters have little money of their own and the local authorities, in general, are also poor. The best and easiest thing the Government can do to solve the problem is to increase the rate of grant.
Without entering into the subject in detail, I suggest that there is also a case to be made for applying different standards in different parts of Scotland. I realise the dangers of lowering standards, and I realise, too, that there is already a certain amount of discretion, but if hon. Members were to go round Shetland in the winter they would find that the cry was not for more space to heat and more windows to stop up, but for means of keeping the wind and, indeed, the rain out and for getting up as big a peat fire as possible to try to keep the blood circulating. I do not want to go into the question in detail, it is difficult, and the last thin. I would wish to do would be to reduce building standards throughout Scotland. Nevertheless, there is a case for research, at least, into the best type of building for different parts of the country.
In conclusion, may I touch briefly on the wider subject? A very serious problem indeed is developing in Scotland because, in spite of these enormous subsidies, many people in my constituency find it extremely difficult to pay the rent, even where the State provide most of the cost. I do not know whether the answer is to spend less money on cigarettes, as has been suggested, or what it is, but that is the situation. We also have the difficult situation of one family in poor circumstances paying three or four times as much rent as another family, and for a very inferior old house. There is, too, the difficulty of keeping old property in repair.
The hon. and gallant Member for Berwick and East Lothian (Major Anstruther-Gray) spoke of the unfairness of richer people living in Government houses, and I sympathise with that point of view, because the State-provided houses are intended primarily for the poor.
Mr. Manuel: For need.
Mr. Grimond: I quite agree; for need. On the other hand, in places like my constituency we have a lot of people who come on temporary Government work which will last possibly three or four years. For example, we have officials of the Post Office, and local authority officials. They must have somewhere to live. We shall never get them to go to those areas unless we provide somewhere for them to live.
I cannot say what is the solution, but the Minister of Housing was kind enough, at Question time not long ago, to suggest that I should wait and see what he was going to do about certain matters, and I hope that if I wait and watch carefully, this whole question of grants, subsidies, of rents and of rent restriction, both in the towns and the rural areas, will eventually receive attention and that we shall then have not only a rise in the standard of housing throughout Scotland—because there is nowhere which needs it more, both in the rural and urban areas—but that we shall also get justice between the different classes of people who occupy these houses.
5.56 p.m.
Mr. James McInnes: I hope the hon. Member for Orkney and Shetland (Mr. Grimond) will forgive me if I do not follow him too closely, because he has dealt largely with the financial contribution towards the provision of new houses for the agricultural population. Nevertheless, I wholeheartedly agree with him in the views which he expressed on these financial arrangements.
One would naturally assume that this Housing Bill, dealing with subsidies, would make provision, as indeed all other similar subsidy Bills have done, not only for the increase in interest charges but also for the overall increase in building costs generally. Instead, we have a Bill designed merely to meet interest charges. Although the Secretary of State, in presenting the Bill, indicated that provision had been made for the increase in building costs, I submit that the Bill is designed merely to provide for the increased interest charges and that to that extent it is a fundamental departure from the original principle upon which all subsidies have been paid in the past. It makes absolutely no provision for the increase
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which has taken place in building costs, and there has been no recognition of present day building prices.
Mr. Niall Macpherson: Is not the hon. Gentleman aware, from a simple piece of mathematics, that the increase in interest rates amounts to 41 per cent. whereas the proposed increase in the grants, in the subsidy, amounts to about 83 to 84 per cent.?
Mr. McInnes: I am not aware of that, and, indeed, I hope to prove as I develop my argument that the increase in the interest charges is precisely, and by no mere coincidence, the same amount of money as that provided in the Bill. Failure to make any provision for the increase in building costs has inevitably meant that local authorities today are faced with the burden of having to meet the whole of these increased charges. The fact that the subsidies proposed in the Bill cover only increased interest rates was clearly indicated by the hon. Member for Maryhill (Mr. Hannan) when he quoted the statement made by the Minister of Housing and Local Government in introducing the English Bill, when the Minister indicated quite specifically that his promise was to make provision only in respect of the increased interest charges. There was no ambiguity about his statement.
Let us take the example of a four-apartment house, which is the generally accepted house when one is trying to arrive at an overall figure. Under the old subsidies, local authorities made a contribution of £7 and the Exchequer made a contribution of £23. Under the new proposal, the contribution of the Exchequer is £42 5s., which is an increase of £19 5s. Even if I were to accept the figure which the right hon. Gentleman gave as the capital cost of a house—namely £1,635—the then increased interest charges on that figure amount to something like £16 13s. But if I accept the figures submitted by local authorites —and this covers the point made by the hon. Member for Dumfries (Mr. N. Macpherson)—which shows the capital cost of a house today as £1,900, then the increased interest charges on that sum amount to £19 6s. 9d., and the provision in the Bill for the subsidy amounts to £19 5s.
One is prompted, in these enlightened days, to ask why there should be such a

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substantial difference between the Department's estimates of the capital cost of a house and the estimate of the local authorities. My right hon. Friend indicated that the difference is about £276. I should like to know precisely what formula or structure was adopted by the Department in arriving at its figures. I submit—I think I do so justifiably—that the Department based its figures not on present-day building costs but on the costs which existed several years ago, and then proceeded to find out the amount involved per house in interest charges, and on that basis determined the capital cost and the extent of the subsidies.
The right hon. Gentleman had, of course, to consult local authorities. Presumably he was under an obligation to do so, but he might have saved himself the trouble of fruitless negotiations had he simply indicated to the local authorities that the subsidies merely made provision for the increase in interest charges and nothing else. Perhaps that was rather too honest a course to adopt. He wanted to impress on the local authorities that his subsidies were based on present-day building costs. When he extended the invitation to the local authorities to meet him he did so in the knowledge that his mind was made up, his figures were all phoney and that his calculations were unrealistic. In other words, he was guilty of gross deception.
The methods employed by the right hon. Gentleman were far too clumsy and crude to deceive the local authorities. I will analyse some of the figures which the Department submitted to the local authorities. The right hon. Gentleman said that his figures were based on tenders received between June and December, 1951. The Department indicated to the local authorities that on that basis it had arrived at a capital cost of not £1,635 but £1,507. The local authorities challenged the right hon. Gentleman's figures, and they were then provided with lists to confirm that his figures were correct. However, when the local authorities analysed the figures they discovered that the cost of the nontraditional house was based on tenders submitted not between June and December, 1951, but in March, 1950. That revealed a difference of £150 in the cost of a house.
It can be said for the right hon. Gentleman that he conceded the point when the
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error was shown to him, and the estimate was increased from £1,507 to £1,635. But the right hon. Gentleman immediately took steps to regain what he had conceded. The local authorities assert that £150 should have been included in the estimates of capital cost in respect of under-building. I believe I am correct in saying to the right hon. Gentleman that the figure of £150 per house was deleted completely. I had submitted to me this morning a statement by the Convention of Royal Burghs citing 1,590 houses completed in the last 12 months by Glasgow Corporation where the extent of under-building worked out at £154 per house. I submit that there is absolutely no justification for the right hon. Gentleman's deleting or having no regard to the figure for under-building.
Let us also take the question of low cost design which also entered into these calculations. I am reliably informed by the local authorities representatives that at the original meeting with the Department the figure of saving in respect of low cost design was £130 per house, but when the local authorities pointed out to the right hon. Gentleman that it was utterly impossible to achieve a saving of that kind it was mutually agreed that the figure should be reduced to £100. But what has happened? The final statement reverts to the original £130. I consider that to be a piece of manceuvring unworthy of the right hon. Gentleman. It serves to demonstrate that, having conceded £150 in respect of the non-traditional house, he was determined at all costs to regain what he had lost.
Will the right hon. Gentleman indicate whether or not it is true that no provision has been made at all for architects' and surveyors' fees? I am satisfied that the right hon. Gentleman is aware that in all housing contracts and tenders provision is made for architects' and surveyors' fees, for that is a legitimate charge, always has been and presumably always will be. But the right hon. Gentleman makes absolutely no provision for that.
Let us take another item included in the calculations. Provision is made for the increases that are likely to arise either in the cost of materials or in wages during 1952–53, and the sum of £40 is allowed. The right hon. Gentleman allowed that sum because, as the hon. and gallant Member

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for Berwick and East Lothian (Major Anstruther-Gray) indicated, an increase had already taken place of 1½d. per hour for building trade workers, which cost £20 per house. Another £20 was allowed in respect of unremunerative capital expenditure, but nothing else.
I wish to ask these questions of the right hon. Gentleman. Am I right in asserting that since these arrangements were made between the local authorities and the right hon. Gentleman further increases have taken place in wages? Am I right in asserting that the cost of bricks has increased by 7s. 6d. per 1,000, which means an additional £7 10s. on every house? Am I correct in asserting that the price of cement has increased by 4s. 6d. per ton?
Lieut.-Colonel Sir Thomas Moore: No.
Mr. McInnes: I am.
Sir T. Moore: The hon. Member was asking a question.
Mr. McInnes: That increase in the price of cement adds £2 5s. to the cost of a house.
There are also other increases. Only last month those engaged in the cement industry were awarded a wages increase, and that will reflect itself in the cost of cement. Those engaged in the brick-making industry were awarded a 2½d. per hour increase on 18th May this year. That again will be reflected in the cost of building materials. I am certain that the right hon. Gentleman is aware that only a fortnight ago the building trade workers, at their annual conference, decided to go forward with a claim for substantial increases in wages.
Despite that trend of events, no provision to take account of it has been made by the right hon. Gentleman in his calculation of the capital cost of a house. I say quite categorically that the figure submitted by the local authorities showing that the capital cost of a house is nearer £1,900 than £1,635 is far more realistic than the right hon. Gentleman's figures.
I now wish to deal with the calculation of subsidy, and I wish to take only two items in that calculation-those of rates and rents. The right hon. Gentleman has calculated that the average rate throughout the whole of Scotland is 5s. 7d. in
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the £. I understand that that was the figure for 1950–51. I wish to ask him why he did not take the 1951–52 figures because these were readily available. Indeed they were available as far back as last September, and the right hon. Gentlemans' negotiations with the local authorities took place in January and February this year.
I venture to suggest that the right hon. Gentleman did not take the figures for 1951–52 because he knows perfectly well that almost every local authority in Scotland had increased its rates. If one takes the counties and compares their 1950–51 rates with those which they are imposing in 1951–52 one finds an increase of 5s. 3d. in the £ in Aberdeen, 3s. in Angus, 3s. 3d. in Moray and Nairn, 3s. 4d. in Banff, 5s. 3d. in Ross and Cromarty, 2s. in Stirling, 2s. 4d. in Glasgow, 2s. in Aberdeen and 2s. in Dundee.
Surely in the light of those figures the right hon. Gentleman would have been justified in conceding the claim made by the local authorities' association that the average rates throughout the whole of Scotland were not 5s. 7d. but 6s. 4d. in the £. So far as I have been able to ascertain, only four local authorities out of 84 in Scotland did not increase their rates in their 1951–52 estimates.
My right hon. Friend the Member for Greenock (Mr. McNeil) indicated that he could not understand how the Department's figures in respect of rents were arrived at. The figure quoted by the Department is £42. My right hon. Friend challenged the right hon. Gentleman to give concrete evidence as to how that figure was arrived at. I too would like to know because I have here a document produced by the Department, and issued in November, 1950, dealing with the rents of municipal houses in Scotland. It says:
"In the past 12 years the average rent of council houses in Scotland has increased by £3 11s.—from £18 7s. 7d. in 1938 to £22 8s. 7d. in … November, 1949. Permanent houses built"—
in the post-war period—
"are larger than their pre-war counterparts and have an average rent of £28 6s. 3d."
In the light of these figures, which cover every local authority in Scotland, I wish to challenge the figure of £42 upon which the capital cost calculations of the right hon. Gentleman are based. I wish frankly to state that I think that even the

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local authorities' estimate of £33 is far too generous.
But what underlies all this? I submit that the capital cost figures in the structure which was prepared, and the subsidy figures which the right hon. Gentleman also prepared, were deliberately and designedly prepared to coerce local authorities into increasing rents and rates of municipal houses in Scotland.
Let us look at the financial implications of this Bill. It means that a local authority will have to make a local rate contribution, not of £14 5s. as is implied in the Bill, but of £34 15s., a difference of £20 10s. If we calculate that on a housing programme of 25,000 houses we are adding an additional burden of £512,000 every year to local authorities; an addition to the already deplorable burden which these local authorities have to bear.
I have analysed the position and I find that in the past five years Scottish local authorities have contributed by way of their statutory local rate contributions the sum of £1½ million. But since the statutory local rate contribution was totally inadequate, they have had to make a further contribution of £5½ million. In these past five years the housing revenue accounts reveal a deficit of £5½ million, so that what Scottish local authorities have contributed to housing in the past five years is, in the aggregate, a sum of over £7 million. What has the State contributed? Less than £5 million. And we are told that subsidies are calculated on the basis of three portions by the State and one portion by the local authorities. Indeed, it is almost working out in inverse ratio.
I analysed the position in respect of the English local authorities, and I have a statement here which reveals to me that cities like Birmingham, Liverpool, Leeds, Manchester, Bristol, Newcastle and Sheffield, cities whose population are precisely equal in the aggregate to that of Scotland, did not contribute, apart from the statutory local rate contributions, one single penny to their housing problem; not one single penny. I say to the right hon. Gentleman that this appears to be an injustice to poor old Scotland, and I hope he will look at the matter again.
I want to refer to Clause 7. Like my right hon. Friend, I cannot for the life of
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me appreciate the necessity for increasing the statutory minimum contribution from £4 to £8. Again I have analysed the accounts of Scottish local authorities and I find that only nine out of 84 exceeded the sum of £8 so far as building repairs are concerned. It was rather illuminating to me to find that Scottish local authorities finished the year with a surplus of £1,411,000 in their repair fund account. Here we have the astonishing position of local authorities having a surplus of almost £1½ million in their repair fund and yet the right hon. Gentleman takes the opportunity, for some unknown reason, of increasing the contribution to the repair fund from £4 to £8. That is a rather peculiar situation.
There are four cities with a surplus of £860,000; 20 large burghs with a surplus of £210,000; 29 small burghs with a surplus of £158,000, and the counties have a surplus of £170,000. Surely, in the light of these figures, there is absolutely no justification for increasing the statutory minimum contribution. There can be no charge of neglect or of failure on the part of local authorities to carry out repairs. I only wish that private factors and landlords would carry out repairs with the same expedition as do the local authorities.
I wish to ask the right hon. Gentleman why he cannot leave this matter entirely to the discretion of the local authorities? After all, surely they are the best judges of what is required. I see no justification for interference by the Department in this matter. As the right hon. Gentleman indicated today, the Secretary of State has power not to impose the £8 if local authorities can prove it is unwarranted. But surely it will not be argued that he will concede this to 72 authorities and enforce it in respect of the other nine or 10? Surely if it was left to the discretion of the local authorities there is nothing to prevent them putting the statutory minimum up to £5 or £6 as they found it necessary. But to impose £8 by compulsion simply means that they would have to increase their rates in order to achieve this, because there is no other way of getting this £8.
In view of the criticisms made by my right hon. Friend, and by other hon. Members on this side of the House, I appeal to the right hon. Gentleman that there is every justification and every reason for withdrawing this Bill in order

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that further negotiations may take place between him and the local authorities. I make that appeal in the interests of his own housing programme and in the interests of obtaining the co-operation and confidence of the Scottish local authorities. If the right hon. Gentleman is not disposed to withdraw the Bill, then I ask him to consider, in view of the chaotic condition of the financial resources and position of Scottish housing, the question of setting up some form of commission or independent inquiry to make a complete investigation into the whole situation.
In my submission no effort to relieve local authorities has been made in this Bill. Indeed, it aggravates a problem which sooner or later must be tackled if we are to improve the situation so far as local authorities in Scotland are concerned.
6.30 p.m.
Mr. Niall Macpherson: The hon. Member for Glasgow, Central (Mr. McInnes) has treated us to an absolute galaxy of figures. I must congratulate him on his command of them. However, I thought that he was a little unfair to my right hon. Friend when he suggested that the Secretary of State for Scotland was inferior in powers of persuasion to my right hon. Friend the Minister of Housing and Local Government, because the Minister of Housing was able to convince the local authorities in England that what is being done in a similar but may be perhaps not so generous Bill is satisfactory for England, whereas the Secretary of State has been unable to persuade the local authorities in Scotland.
I do not think that that is the fault of my right hon. Friend the Secretary of State. The speech to which we have just listened has shown why. The hon. Gentleman started by saying that the Minister of Housing and Local Government had pointed out that the need for the present review arose from the change in the Bank rate. The Opposition are in a difficulty. In 1946 they brought into effect the present subsidies. Since then costs have risen continuously and also we have had a rise in the Bank rate. But the subsidies were not changed.
What did the Opposition intend to do in this matter? Why was it that they let the position run on for five years?
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Having done so, what right have they to say now that we should relate the subsidy to the present cost of houses? Why did not they do that a long time ago? What right have they to say now that we should do that?
Mr. McInnes: The 1946 provisions were considered to be adequate. Indeed, the Minister, in answer to a Question in this House recently, indicated that subsidies which were £3,500,000 in 1945 had increased to £10,600,000 by 1950–51.
Mr. Macpherson: The reason for that is clear. Houses were being built all the time.
Mr. Woodburn: That is the first time that the hon. Gentleman has admitted it.
Lieut.-Colonel Walter Elliot: Not as many as we would have built.
Mr. Macpherson: We know that they rose to a figure of about 25,000 a year in Scotland, and they fell back last year.
Mr. McNeil: No doubt the hon. Gentleman will offer the explanation why they fell back.
Mr. Macpherson: I was dealing with the point made by the hon. Member for Glasgow, Central. The reason for the increase in subsidies was that more houses were being built. The more houses we build during the next 60 years, the higher the annual bill for the country will become. We all accept that. But that is different from suggesting that, in spite of the policy of the last six years and of the fact that agreement has been obtained in England on the subsidy policy, we should now ask for a subsidy related entirely to the current cost of house building in Scotland.
Figures have been presented showing that with the proposed increase of £7 5s. in the contribution to be made by local authorities, and the proposed increase in the Exchequer subsidy, the accounts will balance on the basis of a rent of £42 a year. The estimate of the notional cost taken by my right hon. Friend, before the reduction of £130 for the economies to be made in construction, amounted to £1,765. That has been reduced to £1,635. That is disputed by the local authorities, who say the cost is £1,900.

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As the Minister of Housing said in a previous debate, a notional cost is not related to any particular house which is built. It is the notional cost related to the general policy of the Government. After that, having taken that cost, one sticks to it, just as the Labour Government stuck to the limit of £410 million on food subsidies.
My hon. and gallant Friend the Member for Berwick and East Lothian (Major Anstruther-Gray) has pointed out the various ways in which an extra cost could be met. We could either pass it to the Exchequer, put it on the rates, or on the tenant, or we could make economies in the house building. He concentrated mainly on the latter. The hon. Member for Glasgow, Central pointed out that some big cities in England had shown no deficiency in their housing accounts. What happened in Scotland? There was a natural tendency for local authorities, especially in the years immediately after the war, to say that the State would pay in the long run.
But that was not the policy of the Labour Government at that time. Costs were rising all the time. No increase in Exchequer subsidy was provided for in the 1946 Act. Therefore, the increase had to be met either by the tenant or from the rates. Different local authorities met the cost in different ways. Some increased rents, some ran a housing deficit. In 1951 the total housing deficit in Scotland was estimated at £1,500,000. That is a staggering figure.
We have to consider whether that policy is right. The local authorities say that the average rent is £33. My right hon. Friend takes as his notional rent £42. He says that £42 is the figure necessary to balance the account. What are we to do? If we accept the additional Exchequer subsidy for which the local authorities ask, that would cost the nation some £350,000 a year for 60 years for Scotland alone. That is not a small sum of money.
We have to ask whether that is really the right policy. Let us consider it in this light. Let us take the case of a house on which at present rates the annual interest amounts, roughly, to £100. Under the present Bill, for a four-apartment house, that means £42 5s. is to be borne by the Exchequer and £14 5s. by the local authority. That is a total of £56 10s. in
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the way of subsidy to the tenant of the house. What do the other citizens, who are not occupying council houses, pay towards that?
The hon. Member for Maryhill (Mr. Hannan) has a complete and logical solution. He said, "Let the State take over all the rented houses and share the burden equally." Incidentally, some local authorities have already shared out the burden between pre-war and postwar houses. The hon. Member thinks that that is going to add to the freedom of Britain. Is it really? When people have no option at all, but, when they want to rent houses, have to be at the mercy of a body, however high-minded it may be, that does not sound like freedom to me.
Mr. McNeil: What freedom have people got to rent a house?
Mr. Macpherson: There is a tremendous shortage of houses, but it is still possible to rent houses. [HON. MEMBERS: "Where?"] Houses do fall vacant from time to time; some are sold, but not all. [HON. MEMBERS: "Where are they?"] Hon. Gentlemen opposite ought to be more careful what they say. Surely, it is absolutely clear that, so long as there are houses to be let, other than council houses, there is at least a choice for people whether they wish to become council tenants or not. [Laughter.] The right hon. Gentleman laughs, but let him apply for a house now to a town council. What will he be told? "Find one for yourself; to start with, do all that you can, and meantime you go to the bottom of the list for a council house." But, all the time, people are finding houses for themselves, and they do not have to stay for ever on the housing waiting lists.
Mr. McNeil: Will the hon. Gentleman tell the House what houses under the Rent Restrictions Acts are becoming available for renting at present in an area like Glasgow Has he any figures? If he has figures and evidence, then, of course, I will apologise. I think the truth is that, not only is there a tremendous figure—I am sorry I cannot quote it—of the queue for council houses, but there are no official figures of working-class houses being offered for renting in Glasgow, and that is why we have this Bill.
Mr. Macpherson: The right hon. Gentleman is perfectly entitled to talk about Glasgow. What I am talking about is my own contacts with my constituents, which may be just as close, and perhaps even closer, than the right hon. Gentleman's contacts with his constituents. How could I collect statistics? I do not suppose that such statistics exist, for the very reason that these are privately-rented houses. That is the real difficulty which the Opposition are in today. It is really extraordinary that they should attack this Bill for not doing what they themselves failed to do for five years.
I should like to turn from that to the consideration of Clause 6. I welcome this Clause very much indeed, but I have some misgivings about it on the score of the maximum cost of improvements for the re-conditioning of houses occupied by agricultural workers. I hope the Joint Under-Secretary of State will tell us whether, if the cost of the improvements exceeds £600, it will still be possible for the owner to recover £300 of the cost. That, of course, would be only fair, and any other suggestion would be quite preposterous.
It is a fact that nowadays, if one wants to re-condition a rural house completely, it will cost a good deal more than £600. Many of the rural houses have been reconditioned in part under the earlier Act but need to be re-conditioned still further and modernised. Where a rural house is re-conditioned and modernised, the cost would be more than £600.
With regard to Clause 3, I welcome the provision for the building of new houses for the agricultural population, whether or not they are in replacement of old houses. That provision is very much overdue, but there is one question which I should like to ask with regard to it. A number of houses have already been started in the present year, and those houses are building just now. Will the owners be entitled to the grant if the houses are completed after this Bill becomes law? It would seem to be logical that that should be so, because, after all, the grants for local authority houses are back-dated, and if they are back-dated there seems to be no reason why in the same way local authorities should not only be entitled, but encouraged, to pay that grant if the houses are not completed by the time the Bill becomes law.
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In conclusion, I should like to say that this is a Bill which we on this side of the House welcome very much. I should be extremely surprised if the Opposition were to vote against the increases in the grants, but, from the heat of the speech which we heard from the right hon. Gentleman the Member for Greenock (Mr. McNeil), one would have thought that that was going to happen. I do not believe they want it to happen. I do believe, however, that they have sought in this debate to raise the maximum prejudice against an increasing rise in rents that is bound to take place, and has been taking place for a considerable period, for local authority houses. I consider it deplorable that this Bill should not have had the united support of the whole House.
6.49 p.m.
Mr. David J. Pryde: This Bill has certain recommendations. This was made very plain when the Secretary of State for Scotland tried to impart to us the Government's attempt to tackle the housing problem. The principal recommendation which the Bill possesses is that it effects a reversal of Tory policy. The Tories have preached to us for the abolition of subsidies; they have preached to us about a property-owning democracy, and it may be that this Bill only gives a new interpretation to that nice, smooth but well-worn phrase "a property-owning democracy."
Probably the Government intend to make the local authorities the property owners, and, as the members of local authorities are elected by secret ballot, in just the same way as Members of Parliament are, one might say that it will be a democracy. But that is charging the local authorities with the responsibility for housing. The Bill is a confession of the fact that private enterprise in this country cannot be expected to provide housing accommodation for the people and that the responsibility must be transferred to the local authorities.
Today we hear that the local authorities are jibbing and we ought to make some analysis of the cause of that. I want to focus the attention of the House on the Bill, not from the point of view of the large local authorities but from the point of view of the small burghs, because they are in a doubly disadvantageous position.

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The large burghs are simply the direct connecting links with the Department of Health for Scotland. The small burghs are the sub-tenants of the counties. As a result we are in a very dangerous position from the point of view of housing finance. If we read the Report of this debate in the cool light of reflection tomorrow. I think it will be generally agreed that the contribution of my hon. Friend the Member for Glasgow, Central (Mr. McInnes) emphasised the real problem.
I want to draw attention to the real reason why the local authorities in Scotland are not in accord with the Secretary of State. That is a dangerous state of affairs which we on this side of the House do not at all encourage. We want the local authorities to be in complete accord with the Secretary of State for Scotland; but only this morning I heard from my own local authority the real reason why members of the local authority cannot agree with the Secretary of State for Scotland. They believe that they are not getting a square deal as between the financial contribution of the Central Government and the financial contribution of the local authority.
I want to give an illustration. The hon. and gallant Gentleman the Member for Berwick and East Lothian (Major Anstruther-Gray) dwelt on the subject of rates. I should like to remind the House that since 1945 I have continuously mentioned the dangerous position towards which Scottish local authorities were heading. In a local authority area not eight miles from the Scottish Whitehall, 30 traditional houses were built. In that burgh in the East of Scotland, which has had a very fine record since 1945 in the building of houses, those 30 houses were costing approximately £55,652, to which has to be added £3,242 for the cost of architects fees and measurement fees. That is one of the items which, as my hon. Friend the Member for Glasgow, Central impressed upon the Secretary of State, the Government fail to take into consideration.
That total of £58,894 shows that the average cost per house is £1,963. The contract price was £40,576, or an average unit cost of £1,352. But the Department, in its generosity—and I have no doubt that the Department was quite sincere in its feeling of generosity—gave
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a subsidy based on £1,560, which means that £400 is being ignored. The Department may be able to ignore the £400, but the burgh chamberlain in a small burgh cannot afford to ignore £400, because if he does the Secretary of State will send round the auditors and those gentlemen will impose a surcharge. So we cannot afford to ignore that £400.
I want to draw attention to the £8 which the Secretary of State told us will be the cost of repairs. It is generally agreed that there must be some increase in the cost of repairing houses, but where are we to get the increased amount? At present the £4 is taken from the housing revenue account. The local authorities are faced with the problem of getting another £4. That is not going to be such an easy matter. It is a very complicated affair from the point of view of the burgh chamberlain of a small burgh.
If we add £4 to the tenant's rent in this burgh, it brings in £2 13s. 4d., because there has to be deducted owner's rates of 6s. 8d. in the £. The tenant then has to pay rates at 8s. 6d. in the £, and that adds £1 14s. to the £4. That means the tenant will be required to pay an additional £5 14s. a year, but that will not get the £4 necessary. We then find that in order to get the necessary £4 into the housing revenue account the tenant in this burgh will have to pay an additional £6 or £6 10s. in annual rent and rates, making a total sum of something like £8 11s.
That is not the whole story. The county assessor comes into the matter. In Midlothian the county council employs a very able and competent gentleman to ensure that everyone contributes his share to the county rating. Mr. Smith comes along, rubs his hands and says to the small burgh, "Yes, this is a gift from the gods. You have raised the value of that burgh," and the county requisition goes up. When the county requisition goes up the Exchequer equalisation grant goes down. The small burgh is being hit twice. Therefore, I ask the Secretary of State to consider very seriously the advice of my hon. Friend the Member for Glasgow, Central and endeavour to put before the House a more workable proposition.
There may be difficulty in providing houses for the people, but there is one part of this Bill that we on this side of

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the House will fight tooth and nail. Even if not one other Member on this side challenges a Division, I certainly will not sit here quietly and allow this House to turn back the wheel of evolution so far as the tied cottage is concerned.
I am shocked when people who are in well-endowed positions come to this House and argue for the minimum standard of accommodation for the real wealth producers of this country, the people who till the soil and produce our wealth. Surely the people who produce the wealth of the country are entitled to as high a standard of living as we can afford. Surely we should see to it that these people on the land are given some status in society which will encourage them to look forward to the future. In the past they have had a most chequered career—
It being Seven o'Clock, and there being Private Business set down by direction of The CHAIRMAN OF WAYS AND MEANS, under Standing Order No. 7 (Time for taking Private Business), further Proceeding stood postponed.

ROCHESTER CORPORATION BILL (By Order)
As amended, considered.
ROCHESTER CORPORATION BILL (By Order)

  Clause 117.—(HAIRDRESSERS AND BARBERS.)
  7.0 p.m.
  Mr. F. J. Erroll: I beg to move, in page 60, line 38, to leave out Clause 117.
  Perhaps it would be for the convenience of the House if the debate on Clause 117 of the Rochester Corporation Bill were taken simultaneously with the corresponding item of the Leamington Corporation Bill [Lords] in respect of Clause 140 of that Bill, which deals with the same subject.
  Mr. Speaker: I have considered these two Bills and the point raised here is exactly the same in both. If it is agreeable to the House, I propose that there should be a general debate covering the same point with regard to both Bills. I do not propose to select the Amendment standing in the name of the hon. Member for Altrincham and Sale (Mr. Erroll) to leave out Clause 145 of the second Bill.
  Mr. Erroll: Thank you, Mr. Speaker. I should add that if it is intended to press this matter to a Division, as I have been paired for the whole of today I shall not be taking part in that Division.
  Mr. A. G. Bottomley: If the Amendment on the second Bill has not been selected, how can there be a Division only on the Amendment to the first Bill if we are to debate the general principle in both Bills together?
  Mr. Speaker: There are two Amendments to the Leamington Corporation Bill and the first deals with the same point as the Amendment to the Rochester Bill. The second Amendment to the Learning-ton Bill raises quite another point and that is the one which I have not selected.
  Mr. Erroll: There are two objects in this Clause, which for brief reference can be called the "Hairdressers' Clause." It enables byelaws to be made to keep hairdressing establishments clean and it also gives powers to local authorities concerned to compel the registration of all persons practising as hairdressers in order to facilitate inspection for the purpose of seeing that the byelaws are being observed.
  My contention and that of my hon. Friends is that even if the purpose of the Clause is desirable, this is not the way to carry it out. I propose to develop the different facets of this argument in my remarks. It is quite clear, of course, that we all want clean barbers' shops. No one who supports my Amendment is in favour of dirty barbers' shops. The question is what is the best way of securing clean shops and what is the standard of cleanliness with which we are really concerned.
  There are two standards or sorts of cleanliness in this matter. There is the cleanliness in the housewifely sense, namely, no dust, no hair clippings lying around and the ordinary sort of standard of cleanliness one would expect to find in one's bathroom at home. Then there is the other standard of cleanliness—that of the surgical cleanliness of an operating theatre. However desirable it may be to have that higher standard of surgical cleanliness, it is obviously quite impracticable for the many hairdressing establishments of this country, including those of Rochester itself.

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  As, therefore, we are concerned with domestic cleanliness, I submit that this is essentially a matter which can be safely left in the hands of the public. If a barber's shop is dirty, it is quite easy for the customers to see that and to make their complaint to the proprietor, and, if nothing is done about it, to go to another shop. We are not dealing here with war-time scarcity and the shortage of barbers. Indeed, I am informed that there is a good deal of competition in the trade and that that is the reason why prices are relatively low.
  The remedy lies in the hands of the public who can change shops if they find a dirty one. That is the more British way of doing it than to report the matter to the town hall, from where an inspector will be sent round, or indeed not to do anything about it because it is somebody's else's job, namely, the town hall official's, to go round and inspect—which would be the case if this Clause were passed.
  Surgical cleanliness would involve sterilisation of all instruments and equipment, as well as scrupulous standards of cleanliness in the premises and adjacent buildings. I mention particularly surgical cleanliness because of the rather horrifying bogy in the statement sent to certain hon. Members by the promoters of the Bill. In the bottom paragraph of the first page of that statement they refer to skin diseases which they claim are likely to result from lack of hygienic arrangements in hairdressing establishments.
  They include a number of fearsome looking diseases with horrible names, and it is suggested that these diseases may be visited upon an unwary customer who patronises a barber's shop which has not benefited from the standards proposed. These diseases, while they are rare enough, do exist in this country and their incidence could be curtailed only by complete sterilisation of all barbers' equipment, if indeed they are transmitted to any significant degree by barbers' equipment in this country.
  Indeed if an inspector went round barbers' shops maintaining merely a domestic standard of cleanliness, it would provide the public with a false sense of security—if any additional sense of security is necessary—because the public would think that if the establishments
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  were domestically clean they therefore would be surgically sterilised as well and there would be no risk of contracting these contagious diseases. But in actual fact, of course, the risk is so slight as to be entirely negligible.
  In the short time in which I have had available a copy of the statement by the promoters—and that was only a few minutes before this debate was due to begin—I have consulted the British Encyclopaedia of Medical Practice which gives a complete account of the four principal diseases mentioned in the fourth paragraph of the promoters' statement.
  It is quite clear, for example, that ringworm can be contracted from other human beings, but the principal source of contact in this country is dirty animals, and particularly dogs and cats. The risk from barbers' dirty equipment is extremely small. In the case of pityriasis, the British Encyclopaedia of Medical Practice says that it is not only a very rare disease but that its causes are unknown. The House should realise that this sinister disease bogy is somewhat of an exaggeration, to rate it no higher.
  As for boils, one of the other items mentioned in the promoters' statement, according to the same medical authority that disease is communicated by a staphylococcus which comes to people by various means, one particular example being from the scrubbing of the skin with a clean scrubbing brush, thereby opening up the pores. I mention this because it shows that the ordinary general standard of cleanliness is no protection against staphylococci and against boils where they are the result of staphylococcal infection.
  If this inspection is to produce properly sterile establishments with absolutely no risk whatsoever of the possibility of dangerous disease, the inspection must be carried out in a proper medical manner. There would have to be sections cut from brushes, tools and other equipment so that specimens could be taken away to a proper laboratory for treatment and analysis and subsequent microscopic inspection. If that is what Rochester Corporation really want, they should have these powers; but I cannot conceive that this is what they really want to happen, and anything short of that will not prevent the risks which they claim exist at present.

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  I suggest that those risks are completely negligible or non-existent. This House does not need to be taken in by this bogy of disease. It is noticeable that in page 1 of the statement of Rochester Corporation it is admitted that there have been no cases of these diseases in Rochester since the war. They admit that during the war there was one case of barbers' itch. That is understandable, because at that time both towels and soap were rationed and conditions may have been difficult; but now that neither of these commodities is rationed and when there is plenty of competition amongst barbers, I submit that there is no need for this particular protection.
  There is yet further evidence to support my view. A number of towns already have these powers, but it is significant that, where they have an inspection system in force, there is no evidence of a reduced incidence of skin disease. Skin disease will occur, but it is obviously not because of the barbers' shops, whether they are clean or domestically dirty. If, indeed, there were any evidence that inspection and policing of barbers' shops did reduce the incidence of skin disease, I should be the first to welcome inspection Clauses of this sort; but in the absence of any such evidence, I feel that we should regard with extreme caution the claims made in the statement of Rochester Corporation.
  I suggest that the real objects of the Clause are very different. First, there is the motive—probably unconscious—of providing an extra function in the town hall. Rochester and Leamington Corporations may feel that, as other towns inspect their barbers' shops they also should have the powers to do so. I know that it is unlikely that it will be a whole-time job, but it represents an added duty and responsibility for some official and therefore a claim for increased status and possibly increased salary at some time in the future, I do not think we should stand idly by and see this sort of "pyramiding" going on, small though it may be when compared with bigger examples on a national scale.
  There is another object of the Clause which I mention with diffidence, because I do not wish to arouse controversy in the matter; but it does seem that this Clause is particularly appropriate if anyone wants
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  to frighten away newcomers into the hairdressing business. It is well known that the Hairdressers' Federation are in favour of a closed shop in their industry and they do not want outsiders to come in, and compulsory registration is quite a good way of frightening off newcomers, even though I should be the first to admit that anyone may register and that the town hall concerned cannot refuse any application for registration. Nevertheless, the fact that existing hairdressers are registered and logged up in the town hall is likely to act as a deterrent to new entrants to this trade.
  I would remind the House that when Private Members' time was first restored to us, one hon. Member introduced a Hairdressers' Bill designed to make hairdressing a closed shop throughout the country but, though I feel his motives were sincere, the Bill was thrown out lock, stock and barrel when there was a Labour majority in the House. The fact that the Hairdressers' Federation gave evidence in favour of this Clause before the Committee which examined this Bill is scarcely relevant, because one would hardly expect them to do otherwise, as they are the main force behind this type of Clause.
  7.15 p.m.
  I want to turn now to the evils of registration itself, particularly as applied to hairdressers. I believe—as many of my hon. Friends do—that registration should be avoided wherever possible. I know that we have to register motor cars and that registration is necessary in many other walks of life, but as far as possible ordinary trade should be free from registration. If a man wants to be a hairdresser, let him be a hairdresser without his having to register the fact.
  The next evil of registration, particularly as applied to hairdressing, is that registration does not catch those who fail to register and who are probably the very ones the promoters want to inspect. So that even if we give Rochester and Leamington Corporations this Clause, they will not be catching the dirty hairdressers whom they are so anxious to catch. In fact, when I mentioned this point to the agents of one such Bill, I was told that this could be a function of the police and that they could go round looking for any shops or private houses where a bit of hairdressing was being done on

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  the quiet and report the fact to the town hall. I suggest that, at a time like this, there are very many more valuable jobs for the police to do than trying to catch someone who is doing a bit of hairdressing without being registered for that purpose.
  Registration particularly affects the part-time hairdresser, and it is the part-time hairdresser to whom the Hairdressers' Federation particularly object. She is often a former assistant in a hairdresser's shop who marries and, in order to earn some pin money, takes on a few clients and does permanent waving and setting in her own home. This activity represents a very serious threat to the hairdressing shops, I admit, but I think it is most unfair to use the technique of registration to discourage those people who provide a useful and much cheaper service and who ought, therefore, to be encouraged.
  I should like to stress the fact that these part-timers who do a little bit of hairdressing in their own homes are in all probability doing it in clean homes, because they are in their own homes, and these establishments are the very ones which least require inspection, as they must maintain a good standard if they are to continue to hold their very limited clientele.
  I next want to turn to the very justifiable and understandable fear of registration. It may be irrational to fear registration, because no one can stop a person registering if he or she wishes; but there is a very real fear, particularly on the part of the home hairdresser, who does not want to have inspectors tramping round her home having a look at the basins and linen cupboards and all the rest of it. The home hairdresser probably does not want to be pestered by salesmen selling hairdressing equipment and who have listed the names on the register at the town hall and are now engaged in a vigorous campaign to sell more hairdressing equipment.
  There may well be other reasons why the home hairdresser does not wish to make public her desire to earn a little pin money by some semi-amateur training. There are those who may be rather shy and who may not want too much to be known about it until they have succeeded fairly well. That applies particularly to the person who learns to do
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  simple hair work by means of a correspondence course or by going to night classes, where she can learn the essentials of the art and can commence by doing only simple work until she feels ready to launch out on a bigger scale. Before she can do so in Rochester, however—if this Clause is agreed to—she must register upon pain of prosecution if she fails, although it remains to be seen whether the fact that she has not registered can ever be discovered.
  There is a further disadvantage in registration. The fact that the trade or profession is registered gives the impression that only those who are in the trade already may practise, and although new registrations must be accepted, the fact is that the impression will get around that hairdressing is a closed shop and that no newcomers are welcome.
  A particular disadvantage in registration is that it is being done only town by town. One may live in Maidstone, where there is no registration and, on moving to Rochester, find that hairdressers must be registered. That is all very well at the time the powers are granted when, with the publicity given, everybody already practising is made aware of the need to register; but I want to ask the promoters of the Bill what they will do in three years' time, when the byelaws have long since become rusty. How are newcomers to the town to know that in Rochester there is registration of hairdressers, especially if there is no such registration in the town from which they come?
  How are they to keep on publicising the fact over and over again, except at considerable public expense—and to what purpose, in any case? If we are to have the registration of hairdressers because of the negligible risks which are run, we might as well proceed to the registration of garages in case they do faulty work which might lead to an accident, or to the registration of electrical contractors on the ground that faulty wiring might lead to a casualty in the home. We must not allow this process of registration to go too far.
  There is another point which the House might like to take into account. This might lead to an increase in charges for hairdressing in Rochester and Leamington because the byelaws might give an opportunity for them to charge an

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  extra 6d. or 1s. per hair-cut or half a crown for a "perm." I want to plead for a cheap hair-cut still, even if it is not absolutely surgically clean; let us have something which is cheap and adequate for those who cannot afford to pay more.
  Finally, I would say to those who are inclined to favour registration, that if it is the good thing which the promoters have tried to make it appear, it should be made universally applicable by a public Bill. But can one really imagine a Government, whether it be Conservative or Labour, introducing a public Bill for this purpose? It is hardly likely, and yet it is happening piecemeal; as each batch of Private Bills comes up each session, a number of them contain this Clause, and so we are getting a patchwork of areas all over the country where registration is compulsory, surrounded by larger areas, fortunately still larger, where no such ridiculous nonsense is necessary. I admit freely that a number of towns have these powers already and that the Clause is one of the model Clauses, but I submit that no worth in these powers has yet been demonstrated and that it is, therefore, high time we stopped granting them.
  Sir Herbert Williams: I beg to second the Amendment.
  My primary objection to the Clause is against monopoly. It is quite true that on superficial reading the monopoly aspect does not appear, but I am always suspicious when I find a body of employers or trade unionists getting together to seek collectively to do in the industry something which makes it into a quasi-monopoly. It is not only the hairdressing trade; the window cleaners have tried it, on the pretext that the casual window cleaner might burgle a flat, although there is no evidence of such casual window cleaners having burgled flats. Equally, there is no particular evidence of these terrible things in the constituency represented by the right hon. Member for Rochester and Chatham (Mr. Bottomley).
  There is no case for the Clause at all. Its existence is only an accident. What people do not realise is the method by which these Private Bills are built up. I remember one in Croydon. They
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  wanted extra powers for the water works, and out of dusty pigeon holes in Croydon town hall they collected a whole lot of completely nonsensical Clauses, collected a lot more from the Parliamentary Agents, and a Bill which need not have contained more than 20 Clauses became a Bill of about 120 Clauses.
  I inquired into the history of some of these Clauses, which, with my assistance, disappeared from the Bill—because it is no part of the duty of a Member of Parliament to regard himself as the slave of his Corporation; certainly I am not, and I got more votes than all my councillors put together. Whenever there is a municipal Bill, the local Member gets up to defend it, without the faintest knowledge of whether the populace want it. Indeed, I do not believe 10 people in the whole of Rochester know that this Clause is in the Bill, and I doubt whether half the members of the council know it, either. Some of the Croydon councillors did not know the Clauses were in their Bill which I caused to be knocked out.
  This is a thoroughly bad habit. Clauses are inserted by someone or another to deal with some minor grievance and they are incorporated into a Private Bill. There is nobody in the House particularly concerned to watch them, the Bill gets an unopposed Second Reading, goes upstairs, where four of our colleagues sit in a semi-judicial capacity, and unless somebody takes the trouble to expose the undesirability of some Clause, in the ordinary way it is accepted. The next year the same Clause is in 20 more Bills.
  I hope the House will carry the Amendment, which will be a very good moral corrective for the promoters of Private Bills. Is there any need for the Clause? In 1875 the most important Act of our time was passed—the Public Health Act of that year. It has since been modernised, in 1936. In Sections 91 and 92, if my memory serves me correctly, powers are given for the local authority to inspect the district and abate nuisances. I was not in the least impressed when I read in these documents, sent to me by the Corporation of Rochester, that no general powers are known which enable the Corporation to claim protection for barber's clients from dirty equipment. I think if the medical officer of health for Rochester would try to find them—and I assume he has not

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  done so up to now—he would be successful.
  He has been very active in this matter. He sent a long memorandum, which he has prepared, in which he says this is likely to happen and that is likely to happen—and it is the most nonsensical memorandum any medical officer of health ever drafted. He was a kind of Old Moore; he knew what was going to happen, although there is no evidence of what did happen. Of course he has the powers. He has the power to enter any premises he likes in order to see whether there is any kind of nuisance being committed.
  A great many local authorities are not fully acquainted with their powers under the Public Health Act. I wish more of them were more familiar with the Acts. They leave it to the town clerk to read them. Councillors never read an Act in their lives—but that is in passing. I do not blame them entirely.
  Who is covered by this Clause? There is no definition of the business of a hairdresser or of a barber carrying on a business. I presume that if the matter came before the High Court for an interpretation, they would probably say it was anybody who did hairdressing for gain. But there are still a few people in this world who have the assistance of nurses, maids and valets to look after their children, and certainly in many public institutions there are such people looking after children's hair. If I had a young family and employed a nannie who, amongst other jobs, looked after my children's hair, would she be carrying on the business of a hairdresser?
  I think, quite clearly, we should have to register every house in which there was somebody who looked after somebody else's hair for gain. I do not suppose the people who drafted the Bill thought of that. People who draft Private Bills often do not think of anything, in my judgment. The standard of the drafting of Private Bills is very much lower than that done by Parliamentary Counsel.
  We are really saying that every house in Rochester where anybody who is employed in any kind of domestic capacity helps, in addition, to dress the children's hair should be registered. They say. "Oh, we would not do a silly thing like
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  that. "I know it is silly, but they would have the duty to do it, and if the town clerk did not do it some agent provocateur, some strange animal, would compel him to do it.
  I could go down to Rochester and find some friend of mine, a lady who is a sister of a prominent constituent of mine, who would be only too willing to act as an agent provocateur. I hear hon. and right hon. Members on both sides attacking monopolies, but when they see a little bit of monopoly in a Bill they are in favour of it, especially if it is a nationalised monopoly. Indeed, the only true monopoly which can exist is one with an Act of Parliament behind it. One cannot have a private enterprise monopoly; it is a contradiction in terms. But if we create one by an Act of Parliament it becomes a real monopoly. I am quite satisfied that this Clause is a step towards monopoly and as I have always been a convinced opponent of all monopolies, I hope very much that the House will carry the Amendment to leave out Clause 117.
  7.30 p.m.
  Mr. J. Kinley: I suppose I had better begin by declaring an interest. though I no longer have it. For many years I was a more or less humble follower of the late and much lamented Sweeney Todd, and so from the inside, as it were, I want to draw the attention of the House to the desirability of leaving this Clause in the Bill. I and those who went before me have spent long and weary years trying to improve the efficiency, the skill, the standard of hygiene and the standard of education of those who were our fellow craftsmen. We tried, and have always tried, but we have so far never succeeded.
  We desire that the public should in all their contacts with this profession be assured of a reasonable minimum standard of hygiene and skill. The public have no way of securing that except as a result of personal experience and disappointment.
  Mr. J. Enoch Powell: The hon. Gentleman said that the public should be assured of a reasonable minimum standard of hygiene and skill. Do I understand from the hon. Gentleman that the byelaws to be made under this Clause will include qualifi-

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  cations in hairdressing, or does he think that the Clause is unsatisfactory in that respect and should go further?
  Mr. Kinley: I have been too long engaged in this kind of game to fall for that one. I am speaking of my own experience.
  Mr. Speaker: There is nothing about skill in the Clause, it is true, but the hon. Member who is addressing the House is entitled to say that he desires skill and cleanliness.
  Mr. Kinley: I am supporting all that we as a trade have tried for years to secure and are still trying to secure. We cannot ask that Rochester or any other town shall include any qualification of skill, but we can agree that one of the things we have tried to secure and failed to secure should be secured, so far as the citizens of Rochester are concerned, by the passing of this Bill.
  Whether in its effect the Clause will prove to be fully efficient is for the citizens of Rochester to discover from experience. They can make their own lives in their own way and their own decisions in the light of their experience. But, speaking for myself, as one with much experience of this trade and of local government, I have regretted over and over again when taking part in local government that we had no power to protect the general public by means of such a Clause as this. Therefore, on the grounds of my own trade experience and my experience as a local governor and also as a general citizen of the country, I hope the House will agree that Rochester shall have this Clause in the Bill.
  Mr. A. G. Bottomley: The hon. Member for Croydon, East (Sir H. Williams) suggested that I would speak because I happen to represent Rochester, and that I had no independence of mind. Let me say at once that I sit for both Rochester and Chatham. I do not know what the hon. Gentleman would have done in such circumstances, but, initially, I learned of this Bill from the Chatham Corporation when the town clerk asked me to oppose it. Chatham happens to be the other half of my constituency, and the City of Rochester subsequently came along and asked me to support the Bill; so I am, at least,
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  exercising independence in the sense that I stand to please one section and the other not quite so much.
  Perhaps I ought to explain that I addressed the Rotary Club in my constituency, when I told its members that I thought this Bill was a mistake. But once it was promoted, it was only right that there should be some agreement. I managed to see the town clerks of Rochester and Chatham who got together and made it easy for me to take the line I am taking tonight.
  I am disappointed in the hon. Member for Croydon, East, who is a very old and well-known Member of this House, for looking after particular interests which seem to upset Parliamentary procedure. If he were to give a good deal more of his time to arguing against the system whereby Private Bills are sent upstairs and thousands of pounds are paid in fees, I think he would do more good. I hope that in due course he will join me in an agitation against such a system.
  This Clause to which objection has been taken was dealt with effectively by my hon. Friend the Member for Bootle (Mr. Kinley). But may I say that the Rochester Corporation is really only concerned with public health. It has no other interest in this Clause than that, and it is backed by no less a body than the Department of State and the Ministry of Housing and Local Government, which say that in the interests of public health such Clauses as this might be considered.
  The hon. Gentleman opposite placed the matter of cleanliness in two parts. For instance, if one finds that the floor is dirty then one can be pretty sure that the instruments are also dirty. We want to have registration so as to ensure that standards of hygiene shall exist.
  The medical officer for Rochester is held in very high esteem by all the doctors of Kent and, I think I can say, of the country. The whole of the doctors in Kent have given him a most responsible position. It is his considered view that, as a result of dirtiness in barbers' shops, diseases arise—not only from unclean surroundings but from the use of dirty razors, clippers, brushes, towels, and things of that kind. I would assure the hon. Gentleman the Member for Altrincham and Sale (Mr. Erroll) that, whatever

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  arguments he may have about registration, this Clause is concerned with health.
  Incidentally, I am surprised that he does not carry his principles farther and say that no profession should be registered and that no professional organisation should exist, and say that no business organisation should exist. I think that, if a principle is accepted, it should be taken to its logical conclusion. So I do hope that the House will allow this Clause and will not accept the Amendment—will allow what the local newspaper said about the Bill, "So much for so little." I agree with the contents of the leading article. We may, I hope, as a House give to the Rochester Corporation this Bill without further discussion.
  The Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. Ernest Marples): There is only one word I want to say. The model Clause has not necessarily to be accepted merely because it is the model Clause. It is up to the promoters of a Bill to prove that it is wanted in any particular district. In that respect I think that the right hon. Gentleman the Member for Rochester and Chatham (Mr. Bottomley) slightly over-stated the case when he said that it has the support of the Ministry of Housing and Local Government. The Ministry did not give opposition or support. There is a model byelaw included in this particular instance, but as far as the Ministry and the Government are concerned, it is up to the promoters of the Bill to prove their case in their own way.
  Mr. Ede: Can the hon. Gentleman say what observations, if any, the Ministry made to the Committee upstairs that was considering the Bill? Did they comment on this Clause at all?
  Mr. Marples: The proceedings, as the right hon. Gentleman knows, are available. There was nothing said by a Government Department. If the right hon. Gentleman has a copy before him, be will see that the case was mostly put forward by the promoters of the Bill,
  and the four Members of this House took evidence and asked questions, and they did, undoubtedly, pass it. The Department itself gave no evidence before the Committee.
  Mr. Ede: It is usual, as the hon. Gentleman knows, when these Bills are upstairs, for the various Government Departments concerned to make reports and comments to the Committee, quite outside the giving of evidence. Was any report made by the Department to the Committee that considered the Bill on this particular point?
  7.45 p.m.
  Mr. Marples: As I think the right hon. Gentleman knows, the Ministry makes reports when it has specific objections. When it has no comments to make, it does not specifically make a report.
  Mr. Ede: So at that stage the Department had no opposition to this particular part of the Bill, no matter what the attitude may have been on others?
  Mr. Marples: That is exactly what I said—there was no opposition. It was up to the promoters of the Bill and to the right hon. Member for Rochester and Chatham to prove their case. The right hon. Member for Rochester and Chatham made his speech just before the right hon. Gentleman the Member for South Shields (Mr. Ede) came in, perhaps.
  Mr. Ede: I heard him.
  Mr. Marples: The right hon. Gentleman said that this had the support of the Rochester and Chatham local authorities and went on to say that it had the support of the Ministry. In that, I think, he went a little farther than is the case. I say there was no opposition, but no support necessarily. It was a question of neutrality.
  Mr. Ede: At any rate, it was benevolent.
  Question put, "That the words proposed to be left out stand part of the Bill."
  The House divided: Ayes, 79; Noes, 57.

  Division No. 190.]

  AYES

  17.47 p.m.

  Acland, Sir Richard

  Bonn, Wedgwood

  Braddock, Mrs. Elizabeth

  Anderson, Alexander (Motherwell)

  Benson, G.

  Brook, Dryden (Halifax)

  Attlee, Rt. Hon. C. R.

  Bing, G. H. C.

  Callaghan, L. J.

  Ayles, W. H.

  Blackburn, F.

  Carmichael, J.

  Baton, Miss Alice

  Bowles, F. G.

  Chetwynd, G. R

  Clunie, J.

  Hubbard, T. F.

  Price, Joseph T. (Westhoughton)

  Collick, P. H.

  Hudson, James (Ealing, N.)

  Proctor, W. T

  Daines, P.

  Hughes, Emrys, (S. Ayrshire)

  Pryde, D. J.

  Dalton, Rt. Hon. H.

  Janner, B

  Rankin, John

  Davies, A. Edward (Stoke, N.)

  Jeger, Dr. Santo (St. Pancras, S)

  Reeves, J.

  Davies, Ernest (Enfield, E.)

  Johnson, James (Rugby)

  Ross, William

  Delargy, H.J.

  Johnston, Douglas (Paisley)

  Royle, C.

  Ede, Rt. Hon. J. C.

  Jones, David (Hartlepool)

  Shackleton, E. A. A.

  Forman, J. C.

  Keenan, W.

  Shinwell, Rt. Hon. E.

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

  King, Dr. H. M

  Simmons, C. J. (Brierley Hill)

  Gibson, C. W.

  Lever, Harold (Cheetham)

  Sparks, J. A.

  Grenfell, Rt. Hon D. R.

  MacColl, J. E.

  Steele, T.

  Griffiths, Rt. Hon. James (Llanelly)

  Mclnnes, J

  Taylor, John (West Lothian)

  Hall, Rt. Hon. Glenvil (Colne Valley)

  MacPherson, Malcolm (Stirling)

  Thomas, Ivor Owen (Wrekin)

  Hannan, W.

  Manuel, A. C.

  Thorneyeroft, Harry (Clayton)

  Hargreaves, A.

  Marquand, Rt. Hon. H. A.

  Wells, William (Walsall)

  Hastings, S.

  Mitchison, G. R.

  Whiteley, Rt. Hon. W.

  Hayman, F. H.

  Moyle, A.

  Wilcock, Group Capt. C. A. B.

  Harbison, Miss M.

  Noel-Baker, Rt. Hon. P. J

  Willey, Frederick (Sunderland, N.)

  Hobson, C. R.

  Oldfield, W. H

  Woodburn, Rt. Hon. A.

  Holmes, Horace (Hemsworth)

  Oswald, T.

  Hoy, J. H.

  Pearl, T. F.

  TELLERS FOR THE AYES:

  Mr. Bottomley and Mr. Kinley.

  NOES

  Amory, Heathcoat (Tiverton)

  Gomme-Duncan, Col. A.

  Raikes, H V.

  Astor, Hon. W. W. (Bucks, Wycombe)

  Gower, H. R.

  Renton, D. L. M.

  Baldwin, A. E.

  Gridley, Sir Arnold

  Savory, Prof. Sir Douglas

  Brooman-White, R. C.

  Grimond, J.

  Scott-Miller, Cmdr. R.

  Browne, Jack (Govan)

  Harris, Frederic (Croydon, N.)

  Snadden, W. McN.

  Butcher, H. W.

  Henderson, John (Cathcart)

  Spearman, A. C. M.

  Cary, Sir Robert

  Hill, Mrs. E. (Wythenshawe)

  Spence, H. R. (Aberdeenshire, W.)

  Clarke, Col. Ralph (East Grinstead)

  Holland-Martin, C J.

  Sutcliffe, H.

  Clarke, Brig. Terence (Portsmouth, W.)

  Holt, A. F.

  Thompson, Lt-Cdr. R. (Croydon, W.)

  Conant, Maj. R. J. E.

  Johnson, Eric (Blackley)

  Thornton-Kemsley, Col. C. N.

  'Crouch, R. F.

  Law, Rt. Hon. R. K.

  Wakefield, Edward (Derbyshire, W.)

  Darling, Sir William (Edinburgh, S.)

  McAdden, S. J.

  Ward, Miss I. (Tynemouth)

  Deedes, W. F.

  MoKibbin, A. J.

  Wellwood, W.

  Donaldson, Cmdr. C. E. McA.

  Maclay, Hon. John

  White, Baker (Canterbury)

  Duncan, Capt. J. A. L

  Macpherson, Maj. Niall (Dumfries)

  Williams, R. Dudley (Exeter)

  Duthie, W. S.

  Maitland, Comdr. J. F. W. (Horncastle)

  Wills, G.

  Elliot, Rt. Hon. W. E.

  Maitland, Patrick (Lanark)

  Fell, A.

  Maydon, Lt.-Commdr. S. L. C.

  TELLERS FOR THE NOES:

  Fisher, Nigel

  Orr-Ewing, Ian L. (Weston-super-Mare)

  Sir Herbert Williams and

  Galbraith, Cmdr. T. D. (Pollok)

  Partridge, E.

  Mr. Powell.

  Question put, and agreed to.

  Standing Order 205 (Notice of Third Reading) suspended; Bill to be read the Third time forthwith.—[The Chairman of Ways and Means.]
  Bill accordingly read the Third time, and passed.

  LEAMINGTON CORPORATION BILL [Lords] (By Order)
  As amended, considered; to be read the Third time.

HOUSING (SCOTLAND) BILL
Postponed Proceeding resumed on Question, "That the Bill be now read a Second time."
7.51 p.m.
Mr. Pryde: Year by year the problem of providing food for our people becomes more intense, and we must make the employment conditions in the agricultural industry as attractive as possible. I contend that we shall not in Scotland attract people to the land if we force them into tied cottages. Only quite recently, by Question and answer, I elicited from the Joint Under-Secretary of State that in my own constituency local authorities were building sufficient cottages for agricultural workers to remove all fear and apprehension. It has been demonstrated in this House in past years that every farm worker does not need to live near the farm. I am proud to say that in both Midlothian and Peebles we have seen to it that adequate accommodation is being provided for our agricultural workers.
The oldest farmer in my constituency, in Peeblesshire, did not wait for Government assistance. He himself built two fine cottages for his workers. His complaint against the Government is that he cannot get people to come and occupy those houses and work for him because he is in such an isolated part. The Government have withdrawn the train service there upon which agricultural workers depended, and the transport authority has not allowed sufficient licences for road transport.
Mr. Woodburn: On a point of order. Would it be in order for me to ask the Government Front Bench whether the attention of the Scottish Ministers has been drawn to the fact that the debate has recommenced?
Mr. Deputy-Speaker (Mr. Hopkin Morris): That is not a point of order. It is a comment which can be made.
Mr. Marples: Perhaps I might intervene only to say to the right hon. Gentleman that the previous business collapsed earlier than was anticipated.
Mr. Manuel: It did not collapse.
Mr. Marples: It stopped earlier than was anticipated. We have sent for the Scottish Ministers. I am Parliamentary Secretary to the Ministry of Housing and Local Government in England and Wales, and I shall make notes of the hon. Gentleman's speech.
Mr. Pryde: I get every issue of the organ of the agricultural workers in England, and instead of looking at the front page first I always turn to the back page where I find each month the number of agricultural workers who have been evicted from agricultural cottages. We shall never by this means attract sufficient people to the land. In Scotland we have given a lead in providing agricultural cottages for our people. Surely it would be far better to spend money in this way rather than trying to patch up old worn out slums which have long outlived their usefulness, and which have no real drainage. It would take far more than money to recondition those houses than to build new ones. I ask the Secretary of State to listen to the advice of my hon. Friend the Member for Glasgow, Central (Mr. McInnes) and withdraw this Bill.
The problem does not seem so serious to the large cities. We in Scotland doff our caps to the great City of Glasgow, especially under Labour rule, which has tackled the question of housing in their area so adequately. We must always remember that at least two-fifths of Scotland's population is centred in the city of Glasgow. I regret that I cannot say the same about Edinburgh. Only recently when travelling south from Edinburgh I heard one of my constituents say to another "By Jove! Hasn't Edinburgh Corporation got a move on since Mr. Wheatley "—my right hon. and learned Friend the Member for Edinburgh, East —" put them on the spot."
We in the counties always try to make every effort to work in accord with the Scottish Office. Our transfer scheme of providing houses in Midlothian for redundant miners from Lanarkshire is, I think, an illustration of the co-operation of the local authority with the Department of Health in Scotland. I appeal to the Scottish Office to try to take the local authorities with them in this respect, for by this means they will alleviate the problem of our local authorities under our rating system.
7.59. p.m.
Mr. Patrick Maitland: This evening we have heard much that has been wise and some that has been witty both on the subject of the Exchequer grant and many of the provisions which the Bill does and does not contain. Turning at once to the provisions in Clause 6 for the rehabilitation of damaged, decaying and rotten property, I cannot help commenting that there seems to be a lack of provision in the Bill for the re-conditioning of abandoned property. That problem seems to have been left un-tackled. Further than that, one would wish to see in a Bill of this kind some provision for the particular difficulties that arise in connection with the new towns.
There are in Scotland two new town corporations, one of which has proceeded a little way with the provision of new dwellings for needy inhabitants. The other, that is East Kilbride, has been in existence for something like five years, and many of the suggestions that have been made and many of the taunts that have been flung at my right hon. Friend the Secretary of State for Scotland would apply as well to the East Kilbride Corporation as to anything which my right hon. Friend has proposed or has already promised.
I noticed, for example, that the hon. Gentleman the Member for Glasgow, Central (Mr. McInnes) described the figures used by my right hon. Friend as being a gross deception—[An HON. MEMBER: "Fraudulent."]—a fraudulent deception. We have been told of phoney figures and of figures even too phoney even to deceive. I propose to say that indeed these very phrases could be used appositely with regard to the East Kilbride Development Corporation, which exists in my constituency.
Mr. James H. Hoy: On a point of order. The hon. Gentleman said that he proposed to give figures with regard to the East Kilbride Development Corporation. Is it in order to bring the East Kilbride Development Corporation into this Bill?
Mr Deputy-Speaker: I do not know what the connection is.
Mr. Maitland: I am not suggesting that I would bring in figures in direct relation
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between the Bill and the Corporation, but I suggest that the Corporation has special problems which any Scottish Housing Bill is bound to encounter. I am in the hands of the House, and if this is ruled out of order, I will resume my seat, I am reminded that the new towns, of course, receive the subsidies and share in them.
May I suggest that this question of new towns is a wide and extensive problem, and, in the case of East Kilbride, is one that deserves the very closest scrutiny. This ill-fated, prematurely begotten, prematurely born, weakling child is a story of tragedy and disappointment. It was plainly designed to produce a new town of some 45,000 people, but at the end of five years, at the end of the expenditure of £1½ million of public money and after the Corporation has been paying out a wages bill of—
Mr. Deputy-Speaker: I do not quite follow what connection the new towns can have with this Bill.
Mr. Marples: On a point of order. Is not it a fact that the Bill which the House is now discussing provides for the subsidy to be paid for both local authority houses as well as houses built in new towns?
Mr. Deputy-Speaker: I understood that the hon. Member was not discussing that. He was discussing the new towns corporation.
Lieut.-Colonel Elliot: Further to that point of order, Mr. Deputy-Speaker. I take it that my hon. Friend will be allowed to discuss houses that would be built, and that he is entitled to make references to the corporation so far as that is incidental to the main subject, which is the building of houses.
Mr. Deputy-Speaker: The right hon. and gallant Gentleman has stated the position accurately.
Mr. Steele: Is it in order, Mr. Deputy-Speaker, to misrepresent the history of this matter?
Mr. Maitland: As I understand the position, I am in order to refer to the actual construction of houses for which the East Kilbride Corporation is the responsible agent. May I have your Ruling, Mr. Deputy-Speaker, that I am right?
Mr. Deputy-Speaker: The hon. Member is in order if he is dealing with houses which come within the provisions of this Bill, but if he is dealing with the new towns corporations that is a separate issue.
Mr. Maitland: Thank you for that Ruling, Mr. Deputy-Speaker, and I hope that my interpretation of it will meet with your approval and with that of the House. The houses are built by a local authority. There has been abundant reference this evening to local authorities. This particular local authority is the East Kilbride Development Corporation which is responsible. Since, however, the matter is one of contention, I shall be happy to leave to another occasion the unfolding of this tragic story of hopes deferred.
Let me mention one simple fact about the building of houses in East Kilbride. It was the intention of those who allowed the scheme for house building there that there should be accommodation for some 45,000 people. At the end of five years, there are in fact 389 tenancies. I have it in writing from the Chairman of the Corporation responsible that, although 389 tenancies have been let in this new town, only 33 of those have gone to rehousing of persons living in insanitary property, and another 43 are awaiting houses out of this 389. The story with which we are confronted is one of—
Mr. Woodburn: While it is very interesting to hear to whom the houses are let in East Kilbride, I take it that the Bill refers not to the letting of houses, which is a very wide subject, but to the financing of houses. I can understand the pertinence of the East Kilbride housing finances, but what I cannot understand is the question of the policy as to whether houses are let to people coming from insanitary property or people coming in to staff the industries in East Kilbride. That seems to be something outside the scope of this Bill.
Lieut.-Colonel Elliot: Further to that point of order. Surely the Bill does deal definitely with the letting of houses to certain people. Strong adumbrations were made by hon. Members opposite against the letting of houses to certain people under certain conditions, the agricultural grants in particular. Hon. Members opposite indicated that they
702
would oppose that. I suggest that to separate the building of houses to let from letting houses—
Mr. Pryde: The right hon. and gallant Member is wrong in his statement. Hon. Members on this side did not object to certain people getting houses. It was hon. Members on his own side of the House who objected to certain people getting houses.
Lieut.-Colonel Elliot: I do not wish to quarrel. It was not a question of letting houses; it was the conditions under which people were to get the houses.
Mr. Deputy-Speaker: The Bill has to do with the provision of houses, and letting may be part of the provisions. In so far as that has to do with the provisions of the Bill, it is relevant to the Bill, but not otherwise.
Mr. Maitland: I do not want to waste the time of the House in erring substantially from the essential subject of this debate. There has been discussion already about the letting that should take place. We have had that from the hon. Member for Midlothian and Peebles (Mr. Pryde) in referring to agriculture.
Mr. Pryde: On a point of order. May I point out to the hon. Member—
Mr. Deputy-Speaker: That is not a point of order at all.
Mr. Pryde: May I point out to the House—
Mr. Deputy-Speaker: That is not a point of order. Mr. Maitland.
Mr. Pryde: The question of housing in East Kilbride comes within the scope of another Act altogether, the New Towns Act.
Mr. Deputy-Speaker: That is still not a point of order. Mr. Maitland.
Mr. Maitland: I thank the hon. Member opposite for his kindly, witty and agreeable intervention. We are, however, back on the point of providing houses, and I have a question I wish to put to my right hon. Friend the Secretary of State for Scotland with regard to the building and provision of houses. I wish to ask him whether or not he is satisfied that this Bill is so drawn as to encourage the provision of more houses in the new town of East Kilbride where there has

703
been a lamentable failure to reach even declared targets.
I submit that there are many different causes for this lapse in the East Kilbride Development Corporation's activities. I should like to know, whilst naturally being willing to go forward loyally with the Secretary of State in the same Lobby, whether indeed the Bill will assist the promotion of house building in this case where completions are running at the rate of about 10 or 12 a month, very little more than last year, and where the housing curve is practically a straight line—
Mr. Hoy: How can that occur?
Mr. Maitland: It hardly appears at all. Apparently hon. Members opposite understand the allusion I was making. I should like to inquire whether the pledge which has been made in public by the Development Corporation to get 500 houses completed this year is in fact in sight of achievement, and whether the present pace of completion shows any sign of such an achievement being attained.
I should like to inquire whether the determined plan described to me by the general manager of that Corporation to build 800 houses this year is within sight of completion and whether this Bill will assist to that end. I should like to know whether the pledge described to me by the chairman of the Corporation that they would build 1,000 houses this year is within sight of completion and whether the Bill will assist to that end.
Without wishing to trespass unduly upon the patience of the House, or the humour of hon. Members opposite, or above all on your patience, Mr. Deputy-Speaker, I should like to ask whether the Secretary of State has the whole fabric and organisation of house building at East Kilbride under his constant care and consideration. I have been patient in listening to a series of irrelevant interruptions, and I simply conclude—no doubt to the pleasure of the Opposition —with the observation that a Bill which makes no particular provision for the difficulties of a new town corporation may indeed prove to deserve some amendment on Committee stage; but nonetheless I shall, of course, support the Bill.
8.15 p.m.
Mr. A. C. Manuel: During the course of my speech I wish to refer to some of the remarks of the Secretary of State. I hope that the hon. Member for Lanark (Mr. Patrick Maitland) will forgive me if I do not follow him into the devious paths of the East Kilbride housing problems, as I am not well aware of the problems of that area.
I wish to deal with a question posed by the hon. and gallant Member for Berwick and East Lothian (Major Anstruther-Gray). I was present during his speech, and it appeared to me that his main case, so far as saving in cost was concerned, revolved round the question of smaller rooms being provided in municipal houses. He gave the information that he was not sure whether he knew enough about the subject to say whether that was of any real value or not. In my opinion, as one who has had a fairly lengthy local authority experience, our problem in Scotland has been because we have had too many small rooms for far too long. Scotland has had far too many small houses and that has been one of the reasons for the extent of our problem. I hope that we are not to have accommodations arrived at in order to try to solve some aspects of our housing problem by further depreciation of our housing standards.
Major Anstruther-Gray: The point of my speech was to encourage experiment and research, not only in economy of space, but in economy of material, economy of method and standardisation. If we do not want to pay more in rent, rates or taxes, we must find economy in production.
Mr. Manuel: I am concerned at present only with the plea for smaller rooms, and I believe that in the ultimate that would cause greater expenses to Scotland in its health bill and its provision of health services. I am convinced that our bad record in tuberculosis and children's diseases can be attributable to the herding together in tenements and small rooms far too many of the people of Scotland.
Major Anstruther-Gray: That is attributable to overcrowding, too large a population in a room. What I want to

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get is many more houses, so that although the rooms may be small, they will not be overcrowded.
Mr. Manuel: There is a limit to the number of people who can live in a small room or sleep in a small room. Of course, if the hon. and gallant Member is wanting many more small rooms and much larger houses—six or seven-apartment houses—I do not know the standards he is using. But since the Labour Government was elected there has been a material change in the health of the people. Our children need larger rooms because they are taller and heavier. We are rapidly getting to the position when the children of the working class will be somewhat similar in stature to the hon. and gallant Member. This change is borne out by statistics over the past seven years.
If there is research into design with a view to a more economical design, I am sure that we shall get such benefits as there are from scientific resources, rather than from reducing the size of the rooms in houses below the minimum standard laid down by responsible people in the Health Department. It is only in recent years that we have come anywhere near equality with England in the size of rooms. There have been many years of agitation for this equality and I should be most loath to see Scotland slipping back to the position that existed before the agitation commenced.
Lieut.-Colonel Elliot Lieut.-Colonel Elliot rose—
Mr. Manuel: If the right hon. and gallant Gentleman will allow me to finish this point, I will give way. He has held responsible positions in the past, including that of Minister of Health, and I am quite sure that he would not lend his support to any scheme for smaller rooms as indicated by his hon. and gallant Friend the Member for Berwick and East Lothian.
Lieut.-Colonel Elliot: I do not wish to interrupt the hon. Gentleman, but I think he will find that generally England has smaller rooms but a greater number of them and Scotland has larger rooms but fewer of them. He should keep that in mind.
Mr. Manuel: The right hon. and gallant Gentleman cannot ride away with that. He knows that 60 per cent. of the
706
houses in Scotland are only two-apartment houses, and those apartments do not compare in size with the rooms we find provided for the people in England.
Lieut.-Colonel Elliot: I do not wish to go on interrupting the hon. Gentleman, but I would say that his argument rather supports the one that I was making. No doubt he has heard of the big single end, into which everyone piled in a muddle. That was more conducive to overcrowding and particularly to the transmission of disease than was the case when there were smaller rooms and more of them, where segregation could take place.
Mr. Manuel: In reply to the right hon. and gallant Gentleman, I would say that my experience of single rooms was that they were usually in the attic space of the house where there was a low ceiling, with the result that in a large area of the room a person could not stand upright. That is my experience of the single end about which he talks, and I do not think we should encourage that type of room at all.
I ask the hon. and gallant Member for Berwick and East Lothian to consult with his own local authority members, and I am quite certain that they will not support his contention that we should have smaller rooms below the minimum standards laid down by the Department of Health in the Scottish Office. I am quite certain, too, that the Department would not allow local authorities to build such rooms and so deplete the standards reached after many years of struggle.
I am pleased to see the hon. Member for Dumfries (Mr. N. Macpherson) back in his place, because he also introduced a rather contentious note. He tried to indicate, though not very succesfully, that during the period of the Labour Government no encouragment had been given to the local authorities because costs were rising and no additional subsidies were provided. His researches into this matter have not been very deep, because he has completely overlooked the impact of the equalisation grants on local authority finances. If houses were costing more and making a greater impact on the rates, then there was compensation for the local authorities through the increased grants which eased the burden of housing expenditure.

707
I was disturbed at one suggestion he made. He indicated—I do not want to deal too much with figures because they were extensively dealt with in his splendid speech by my hon. Friend the Member for Glasgow, Central (Mr. McInnes)—that the tenant of a council house—I take it he was dealing with a four-apartment house—was being aided to the extent of £56, and he spoke as if the tenant were the owner and were getting this £56 each year. That is completely wrong. It is the local authority which gets the help, and it is the people in the particular local authority area which owns the houses who collectively bear the burden and who collectively get the rents from them.
I am utterly opposed to the repeated attempts by certain hon. Members opposite to drive a wedge between the people in municipal houses and the people in privately-owned houses nearly all of whom want to get into municipal houses. We should remember that, if it were not for the added valuation created in local authority areas by the building of municipal houses, there would be an additional burden on the rates which have to be paid by the occupiers of privately-owned dwellings.
When one thinks of a city like Glasgow, or even of the smaller burghs of the country, like Ardrossan, one realises just what this extra valuation means to the rateable income of the local authorities. If such housing had not been undertaken, the bulk of the people in these places would be very much worse off. We should drop this idea of trying to put people in privately-owned houses against people in municipal houses.
I have gone into this question with meticulous care and I have discovered, when comparing the wage-earning classes in municipal houses with those in privately-owned houses, that the former are paying more in rates than people in the older type of houses simply because the people in that sort of a dwelling are not paying such a high rent. We are being driven into the position where local authorities are having to put more on to the rents of municipal houses so that the tenants are paying more than the occupants of privately-owned houses, who in many cases have far greater and much better amenities.
708
I wish to warn Tory-controlled authorities that if they continue this tendency much longer the county councils, acting on behalf of the small burghs so far as valuation is concerned, will be forced to reassess those areas and increase the valuation of these privately-owned houses. So if the authorities to which I have referred want to look after their friends in that respect, I would ask them to go easy with regard to the raising of rents.
Mr. N. Macpherson: Surely the hon. Gentleman realises that the purpose of building houses was to provide homes for the people, and in 1946 a basis, which was related to costs in those days, was found for a subsidy to be given to the local authority. The hon. Member himself has admitted that it is the local authority, the local community as a whole, that is creating and benefiting by these values. Surely that is not an argument for asking the State to subsidise without limit the creation of those values.
Mr. Manuel: I appreciate the point of that intervention but I am not satisfied, as I shall try to indicate, that the subsidy position is satisfactory so far as the local authorities are concerned.
I am convinced that if a local authority is confronted with the position of having to fix rents and arrive at a figure which they think is equitable according to the wages being earned in the district, they should not further aggravate that position by increasing rents, thereby keeping food and clothing from the children and the people who are going into the houses in order that they may be able to pay the rent. I am convinced that what extra sum is required should be obtained by means of the rates and be met in the aggregate by the whole burgh. That will be more equitable than putting that liability on those who live in municipal houses and raising their rents to such an extent that all those anomalies to which I have been referring will be caused in regard to the owners of private cottages. I wished to make that point in reference to what was said by the hon. Member for Dumfries.
I wish to deal with several points that were made by the Secretary of State for Scotland. I was rather intrigued by the fact that, in almost his first sentence, he said that during the first five months of

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this year 10,000 houses have been completed in Scotland. That was the figure he gave, and I do not blame him for trying to take some of the credit for it, although there is no real credit in it for the present Government.
The right hon. Gentleman is following the example of the Prime Minister, the Home Secretary and the Foreign Secretary, who at meetings and at Conservative Party rallies and on the wireless have used the same example and have asserted that the present Government, in the first five months or the first quarter of this year were doing much better than the Labour Government did in the same quarter of the previous year. We all know that this is a phoney argument.
We have heard this week of things that were said to be fraudulent, but really this is a most fraudulent statement because these 10,000 houses were all begun under the Labour Government and have only been completed since the present Government have been in office. Surely the Government are claiming no credit for that?
The houses were authorised and were allocated to the local authorities by the Labour Government, and the building of every one of these houses was commenced in the lifetime of the Labour Government. We know that it takes from 11 to 13 months to complete a house in Scotland, and we have as yet had no houses completed which have been authorisd by the present Government, and we shall be very fortunate if we get any this year. I hope that we shall hear no more of that claim—the claiming of credit for things with which the Government have had nothing to do.
Mr. J. Stuart: The right hon. Member for Greenock (Mr. McNeil) also mentioned this point in his speech. I did give a purely factual statement. I also gave the figures for 1949 and 1950, which were nearly 26,000. Obviously the figures for 1951 follow on, as do the completions in the first five months of 1952. I have stated nothing beyond the facts.
Mr. Manuel: I appreciate that point, but I am also quite well aware of the intention, because the right hon. Gentleman did say at the end of these remarks that that figure was 20 per cent. better
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than the same quarter of the preceding year. Why did he say that if he was not drawing the distinction between the quarter in this year when his Government were in office and the quarter in 1951 when we were in power?
During previous discussions on the subsidy position we had great doubts whether there would be the fillip that the Secretary of State thought that there would be to people to buy their own houses. We had great discussions and heated words because of the increase in houses which could be built for sale. He informed us that of these 10,000 houses 9,804 were built for letting. This shows the very large number that were built for letting, and the very small proportion of the 10,000 built for sale. In total during the five months only 196 houses have been built for sale.
That is a complete repudiation of all that was said from the Government Front Bench in previous debates, because local authorities have shown quite clearly that they want none of this policy. They do not want to add to the houses for sale, and whether the Government are against it or not they mean to continue building houses to let.
Mr. Stuart: If the hon. Gentleman says that I was taking credit for the number of houses completed in the first five months of this year, he cannot pretend that the houses built for sale would have been completed by now, if we only altered the ratio so recently.
Mr. Manuel: No, the right hon. Gentleman is completely wrong, of course, because did not Glasgow immediately agree to the sale of the Merrylee scheme comprising 622 houses? So every local authority had the opportunity to sell every house which became completed during the five months.
Mr. Stuart: They had the power to sell before. But I was talking about building more than selling. They had the power to sell the houses at Merrylee. They had the power to sell them, if they wished, under previous legislation.
Mr. Deputy-Speaker (Mr. Hopkin Morris): I would remind hon. and right hon. Gentlemen that this is not the Committee stage.
Mr. Manuel: I will try to respect your Ruling, Sir; I am sorry if I strayed. So far as houses for sale are concerned, I will merely say that Glasgow did repudiate that policy completely from November of last year to May of this year. During that period there were only eight houses actually sold and occupied. Therefore, even with the decision of the local authority and with the subsidy available, there was no attempt by the people of Glasgow to take up these houses. The policy has now finally departed and the houses will go to the people who really need them.
Mr. Stuart: And all is well.
Mr. Manuel: I am delighted. I have converted the Secretary of State for Scotland. He reiterates, "Now all is well," and we have arrived at complete agreement so far as Glasgow and its housing is concerned. I think, however, that the subsidies outlined in this Bill are completely inadequate to deal with the present position. I am certain that the tempo of municipal housebuilding in Scotland will slow up as time goes on. That is inevitable. The local authorities, especially the less progressive authorities, are getting into a position where they are afraid of the debit side of their housing revenue accounts.
Most of us are being consulted by the treasurers and town clerks of our burghs, who are asking us for help in trying to meet the position. My hon. Friend the Member for Glasgow, Central adequately dealt with the subsidy position. He showed clearly that the subsidy outlined in this Bill will only meet the increased interest charge. I ask the Secretary of State to have another look at this position and also to consider the increased on-cost charges of labour and material. There is no indication that we shall have any substantial drop there.
If these tendencies continue, with the wage claims which are lodged and the increases in the price of materials, obviously the right hon. Gentleman will have to grapple again with this problem of subsidy. He will have to meet it in a more realistic fashion. I am convinced from what I have heard from local authority officials and members that they are most annoyed with the right hon. Gentleman. Scottish local authorities feel that the area
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of disagreement between the Scottish Office, the right hon. Gentleman and themselves is too large. There must be some other method of trying to solve this question of subsidy.
The Scottish local authorities feel that the subsidies will fail to help them with their huge housing commitments. Most of them still have headaches over the problem of the large number of sub-tenancies and overcrowded and unfit houses which they have to replace. They consider that they are not getting sufficient help in this connection. There are many places in my constituency where these subsidies will give no real help. I am thinking of Dreghorn, Springside, Dalry, Irvine, Beith, Kilburnie and many other places where there are hundreds of old houses in old miners' rows which are rapidly falling into a state of complete dilapidation and becoming unfit for human habitation. The local authorities are at their wits' end.
Are people to continue living in these intolerable conditions? How long will the people stand for that way of life while the local authorities squabble with the right hon. Gentleman as to the amount of the subsidy to enable them to meet their commitments? This subsidy is too small. In some areas there seems to be a complete disregard of the domestic problems of house provision which the local authorities must meet.
There is the question of under-building. In some areas of Scotland that does not assume large proportions. I should imagine from what I have seen that the problem in Glasgow ought not to be of large dimensions compared with that in Greenock or other areas in Ayrshire, Lanarkshire and Renfrewshire. There is the problem of subsidence in the mining areas, and the position is that some local authorities have to face this intense problem of added on-cost because of under-building, and they are not being helped in any way to meet that extra commitment.
If all local authorities had that commitment, there would be no unfairness in it, but when others have no under-building and no mining subsidence, such as the local authorities have in the areas which I have indicated, surely it is time that we took some cognisance of the added cost involve in those areas?

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Glasgow has provided figures for a recent scheme which show that it costs them £154 per house for under-building. If it has cost Glasgow £154 per house, what is it costing the burgh of Greenock, which is building houses on the hillsides around and where there is no flat land on which to build? What about the local authorities in Renfrewshire, Ayrshire, and particularly in the mining areas of South Ayrshire, so ably represented by my hon. Friend, who could very adequately deal with this problem, because of the large amount of subsidence due to the huge quantity of coal which has been extracted in the area which he represents?
We have got to the stage that, taking all things into consideration, and remembering the added costs and dearer money, it is now time that we were setting up some independent committee of inquiry. I want to ask the right hon. Gentleman a definite question. Is he prepared to set up an independent committee to inquire into housing costs in Scotland—a committee that will arrive as a fair subsidy, taking into consideration the question of under-building, the added costs of materials and the dearer money policy of the Government?
The area of disagreement between the local authority associations and the Scottish Office has been so extended that we must now turn to some really independent committee of interested and competent people who are prepared to take a broad and fair view of the position and consider how best they can arrive at the successful re-housing of our people in Scotland, without delaying them any longer with the interminable squabbles between the local authorities and the Scottish Office on the amount of the subsidy.
I hope the Secretary of State will give favourable consideration to that suggestion, and, if possible, that he will recommend to the quarters where the decision lies that such a committee should be set up. I am quite sure that it would receive great favour in Scotland, and that the local authorities would be delighted to present their cases to such an impartial tribunal, which could then decide, on the facts, what is the best subsidy to be given for the further development of Scottish housing.
8.49 p.m.
Lieut.-Colonel Walter Elliot: I apologise to the House, for I had not intended to intervene in the debate, but, in a discussion like this, it is very difficult for those of us who are vitally interested in this matter to refrain. The hon. Member for Central Ayrshire (Mr. Manuel) has broached a very interesting topic—not merely that of the adequacy of the subsidy, but of the conditions under which it is to be given. It might well be that this matter should be further inquired into, but I beg the hon. Member to remember that, when he appeals to Caesar, to Caesar he must go, and I do not think that either the local authorities or this House would willingly see these great matters taken entirely out of their hands. [HON. MEMBERS: "No."] Well, then, what is the use of a committee merely to inquire into this matter if, at the end of the day, we have to have it all over again here on the Floor of the House?
Mr. Manuel: It is quite usual.
Lieut.-Colonel Elliot: The hon. Gentleman talks of delay due to the squabbles and arguments which go on. I really think he will find that the very point he was making with some vigour against my hon. and gallant Friend the Member for Berwick and East Lothian (Major Anstruther-Gray) is exactly one of the points into which such a committee would go.
Mr. Manuel: No.
Lieut.-Colonel Elliot: Then, I suppose, he would draw the terms of reference with that excluded, as a consequence of which we would have an argument lasting the whole night regarding them. The question of lower costs must come in, and with it the question how best to utilise the materials that are available.
Let me comment, too, on the very paragraph dealing with this in the Report we are discussing. The hon. Gentleman sought to give my right hon. Friend what we in Scotland call a "flea in his lug" about the question as to whether he had really assumed credit for what he was not entitled to assume credit, namely, the improvement in building in the current year.
I am inclined to remember the great epigram of Field-Marshal Joffre when he

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was asked who won the Battle of the Marne. He said, "I cannot tell you, Madam,"—for it was a lady who asked him—"but if it had been lost I can tell you who would have lost it." Although my right hon. Friend might not be entitled to the credit for the houses which have gone up, I am quite sure that if the figures had gone down he would have been blamed for it.
Mr. Manuel: I assure the right hon. and gallant Gentleman that I am certain his right hon. Friend would not have been blamed for it unless it could have been proved that his was the responsibility.
Lieut.-Colonel Elliot: I would not place any limit to the ingenuity of the hon. Member for Central Ayrshire on, so to speak, connecting those two things together. I am sure that if he had not done so, his right hon. Friends would have found their ingenuity equal to the task. But let me point out what the paragraph says. Giving an account of the reasons for the slow up in the previous year, it says quite clearly:
"At the end of 1951, however, there were reasonable prospects of an improvement in housing output. Some 40,000 houses were under construction, the labour force on new housing had increased, and plans were being developed for making materials go further by the building of a larger proportion of smaller houses and by the use of more economical designs. The Government had also announced their intention of expanding the country's housing programme as rapidly as circumstances allowed, although in the prevailing economic circumstances it was not possible to estimate precisely the rate or the scale of the expansion."
I think this indicated that a favourable climate for house building had arisen under the present Government, and I will say that if an unfavourable one had arisen, none would have been more willing to draw attention to it than hon. Members opposite. The building of a larger proportion of smaller houses and the use of more economical designs must certainly come in. I find a certain sense of unreality in a discussion such as this when I, like the hon. Member for Central Ayrshire, always keep remembering the people who are living, as he mentioned, in dwellings such as the worn out miners rows which I knew well when I had the honour to represent the division of Lanark and which is now so ably represented by my hon. Friend.
Mr. Manuel: You have been around.
Lieut.-Colonel Elliot: Yes, I have been around, and I have had my ups and downs. I do not complain about life. Once I was returned by a majority of 18,000 and once by a majority of two. I have also known defeat. All these things go to make up a Parliamentary career. For all my life I have, at any rate, been closely connected with the industrial Clydeside, and for 20 years or more with the worst housed parts of Clydeside. Everybody knows the conditions under which these people live.
I feel that some of the schemes which have been developed for people in much better circumstances really seem to ignore the existence still of these festering slums in which health and even decency is almost unattainable. A certain review of the housing position with a view to concentrating first upon cleaning out these areas would be a very valuable thing indeed. But much more will come from discussion in this House and the cut and thrust of debate than would come from the rather academic inquiries of any committee however distinguished. I would sooner see greater numbers of new houses even with smaller rooms and lower ceilings and many of the things which have been so animadverted against so bitterly. I remember the time when ceilings were lowered from 8 ft. 6 in. to 7 ft. 6 in. Very few of my constituents are over 7 ft. 6 in. in height—
Mr. Manuel: Is the right hon. and gallant Gentleman saying that the roof should only just clear one's head? I want him to recognise that when I spoke of a committee of inquiry it was only because I prefaced that remark by indicating that there was an area of disagreement between the local authority association and the Scottish Office which had now become wide, and the rift was so deep that we needed to try and bridge it somehow.
Lieut.-Colonel Elliot: I do not deny that at all. This is a process, if not of bridging a rift, at least of measuring and plumbing it, which is the first thing one does before erecting a bridge. A height of 7 ft. 6 in. gives a reasonable clearance even if we go to bed with our hats on, which is generally regarded in Scotland as a sign of a very lively evening.
The difficulty before us is that we have two problems in Scotland—to tackle the housing of the people in general and to

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clean out the slums, and they are almost two separate problems. The worse problem now is the slums. There are still in our country conditions of which we must all be heartily ashamed. All of us who go down at weekends to take our "surgeries" must be heart-broken by the problems presented to us by people often willing to pay higher rents—because nowadays, very often a good deal of money comes to these homes—but who are totally unable to secure decent houses.
I rejoice in the greater number of houses which the present figures show. I would glory in a greater number; and if one could secure a greater number even by providing smaller rooms, but a greater number of them, I certainly would be prepared to trade that against the continuance of the horrible conditions with which we are so familiar in the areas with which we are best acquainted.
A close examination of the technical problems, such as that of under-building, subsidence, and more particularly of modern higher building is desirable and necessary. My friends in the high altitudes of the ultra-housing circles say they do not want high buildings. They say that flats are a very expensive form of housing and that tall buildings are really a mistake. But many people on Clydeside want to live near their jobs.
Mr. McInnes: And within their means.
Lieut.-Colonel Elliot: There is great need of lifts in these taller buildings. A great many old people say that they want a room on the ground floor, but there are not enough ground floors to go round. When winter comes these old people living two or three stories up in the old tenements are almost imprisoned in these places where there are no lifts. There are people with rheumatism and bad hearts who have difficulty in walking who have to climb up and down stairs in Glasgow, and to them any modern building with a lift that could take them up and down would be a release from prison. That would also apply to many of the mothers with young children, to whom dragging their families up to the top of these old tall buildings is a perfect nightmare.
I do wish that in our examination of this subsidy it were possible to connect the problems a little more closely with individual requirements. The danger is
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that that would mean delay, and the first necessity is for speed. To make too meticulous an examination of the circumstances of each particular local authority or of the areas within each local authority could very easily defeat the object which we have most in mind, namely, the speeding up of house building. Undoubtedly the granting to local authorities of a sum with which they have to work as best they can is the quickest way of handling the problem.
The hon. Member for Central Ayrshire seemed to me to adopt a dangerous line of argument. He seemed to suggest that these new houses were so profitable to local authorities that the more they could get built the better it would be. I thought that he very nearly gave away the case which he was trying to make. The whole story he was trying to make was that more subsidy was needed, but his whole argument was that new houses were such a good thing that his burgh of Ardrossan would have been very badly off if it had not had these 1.000 new houses.
Mr. Manuel: The point I was trying to make was that it would have been worse off than it is at present under this Government. There are commitments which apply to a small burgh which are different from those of a large burgh. I say that their increased borrowing power, because of the added valuation given by municipal housing, is good compensation. But it has nothing to do with the subsidy position as such.
Lieut.-Colonel Elliot: I have the honour to be a Freeman of the Burgh of Lanark, which is a small burgh if ever there was one. I do not wish to be led away into that argument.
Mr. Rankin: On a point of order. Quite frankly I must appeal to you, Mr. Deputy-Speaker, because I think that some of us are beginning to feel in the road here. Is the debate a private one or is it open to other hon. Members?
Mr. Deputy-Speaker: I would remind the House that we are on Second Reading, and that here has been a good deal of interruption.
Lieut.-Colonel Elliot: I have never known the hon. Member for Tradeston (Mr. Rankin) to be backward in coming forward when he wanted to express his views and opinions to the House. I only say that I think the argument which the

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hon. Member for Central Ayrshire brought up was certainly not a private one. It was the very core and essence of our problem. I do not wish to interrupt the conversation which the hon. Member for Tradeston is carrying on at the moment; but he complained rather bitterly that a private debate was going on. I would point out that our debate was under the auspices of Mr. Deputy-Speaker, but the debate of the hon. Member for Tradeston with his friends is going on entirely without any rules of order.
We are trying to examine the question (a) whether the subsidy is adequate and (b) whether all possible conditions to diminish the burden upon the tenant—who is the final person about whom we are worried—are being adequately explored. One of the points which have been repeatedly brought up is that a lower cost of the houses would be very desirable if one could bring it about. If we are to have a lower cost of housing we must examine boldly whether there are any economies in the use of materials which can bring that about.
I do not think that is a private debate. I think it is the very essence of the great discussion which is taking place. I wished to follow up the very interesting argument which was opened up by the hon. Member for Central Ayrshire. I do not think that the tenant, at the moment, can demand a higher subsidy from the taxpayer than is allowed for by the figures which have just been given. But I do say—and I think we all recognise it—that the burden falling upon local authorities and tenants at the present time is very severe. We must take every possible step to examine how it can be reduced.
I think the Bill should certainly obtain a Second Reading, as I am sure it will, and without a Division; but I do not see that it solves or goes near to solving the problem of housing in Scotland. It may well be that the line along which we are going will lead to very great difficulties. It behoves us all, therefore, to bend our minds continually towards solving the real problem—and that is the burdens upon the taxpayer and the ratepayer and the tenant. Those burdens have increased, are increasing and ought to be diminished, to use an old Parliamentary
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phrase. Until we can find some way to do that, we have not solved the problem which the people of Scotland sent us here to solve.
9.6 p.m.
Mr. John Rankin: I intervene in the debate for a very brief period and I hope that in doing so I shall not break with precedent. I feel that the attention of the House ought to be directed to one important essential in the provision of housing, which I take to be the purpose of the Measure before us, and that is the shortage of cement.
The intention of the Bill is to make the way of the local authorities easier from the financial point of view, and I do not in any way intend to depreciate the need` for dealing with the financial burden which rests upon the shoulders of our local authorities. But I know that the whole House will agree that the housing problem will not be solved merely by the provision of money. Houses cannot be built with £ notes. We want cement, we want timber, we want bricks and all the other essentials needed for the erection of the houses.
It is because cement is now in short supply that I want to ask the Secretary of State to face the problem which that shortage has created. On 10th June I raised this question with the Minister of Works and asked him if he could assure us that sufficient supplies of cement were available for all works in progress. He replied to me that he was satisfied that the general arrangements for the production and distribution of cement were adequate, but he went on to say that
"when cement has to brought a long way local shortages are liable to occur."
He pointed out that
"exceptionally heavy demands recently in Scotland for defence and other purposes"
had helped to create this shortage, although supplies were much greater than they were last year. Yet they have not been sufficient. He then assured me that
"urgent steps are being taken to increase the supply still further."—[OFFICIAL REPORT, 10th June, 1952; Vol. 502, c. 7.]
In today's "Glasgow Herald" I was able to read some of the results of the urgent steps which the Minister of Works assured me on 10th June were being taken, because yesterday the convenor of the housing committee in Glasgow Corporation complained of the continued

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shortage of cement for housing in Scotland. I am not seeking to make any party capital out of this, because his predecessor, the convenor in the Tory local authority which preceded the present Labour majority in the city, supported Councillor J. R. Duncan in this protest which he made about the way in which Glasgow Corporation was being held up in its house building by the lack of cement. But Councillor Macpherson Raitt took a further step. He said that successive Governments appeared to be satisfied if the Home Counties were supplied, and Glasgow had been compelled to bring cement from London by road at a much inflated cost, and the position, said the former convenor—that is, Councillor Macpherson Raitt—is that
"there is a glut of cement in London and shortage in Scotland."
The reason evidently which is supplied to the Corporation for this shortage is that there is a lack of shipping but surely it seems totally insufficient that we should say cement cannot be brought from London and the Home Counties, where there is a glut, to Scotland, where there is a shortage, simply because there is a lack of shipping. If that be true, what is wrong with using our railways for that purpose? Perhaps, that is a matter into which the Secretary of State for Scotland may be able to look, along with the Minister of Works.
But I think the House has got to probe this matter a little further, and ask, apart from the question of transport, why there should be a glut of cement in London and a shortage in Scotland. That prompts me to look at the agency for the distribution of cement, and to look also at the terms under which this agency operates. So far as I understand the position, the agency for the distribution of cement in this country is the Cement Marketing Board. It is representative almost wholly of the large contractors in cement, and this strange position exists in the distribution of cement that the large monopoly contractors are given a rebate of 1s. 100.½d if they are contractors for more than 1,000 tons of cement per year, but the small dealer is given no incentive whatsoever.
As an illustration of how that works out, let me quote what happens with the North of Scotland Hydro-Electric Board. I am using this merely as an illustration. The largest consumer of cement in
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Scotland is the Hydro-Electric Board. It consumes 100,000 tons of cement in a year, but it cannot be its own contractor. It has got to give out supply to private contractors who get 1s. 10½d. rebate for every ton delivered to the Hydro-Electric Board, and that costs the Board £10,000 per year.
There is obviously money in that, and I do think that the method, the agency, and the terms under which it operates for the distribution of cement are things that ought to be inquired into, because obviously if it carries on on those remunerative terms, then it is going to be easier, more profitable, for it to work in London, where we have an immense population in the City and its environs of nearly 10 million people, twice the population of the whole of Scotland. Methods of distribution are easier; there is quicker profit; there is more advantage to the monopoly who are engaged in the distribution of this cement that we require in Scotland for the provision of those houses which, we are all agreed, we should have today. I submit that that is something the Secretary of State ought to examine, and I hope that he will take up this matter.
I assume, I think correctly, that he is anxious to speed up the production of houses in Scotland. I am sure there is no difference between us about that. But if he wants to do that he must see, not merely that the financial path of the local authorities is made easy, but that the materials essential for turning that money into houses are made more accessible than they are at present.
We are told by those engaged in the work that the cement is there but that it is located in only one part of the country. I suggest that the method by which that cement is distributed is a bar to its fair allocation throughout the country, and I hope the Secretary of State will take up this matter with his right hon. Friend the Minister of Works and see that Scotland gets her fair share of the cement so that she can undertake the housing programme she needs.
9.17 p.m.
Mr. C. N. Thornton-Kemsley: I apologise that I was unable to sit through the whole of this debate. I was here to listen to the speech of my right hon. Friend the Secretary of State, and that of the right hon.

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Member for Greenock (Mr. McNeil). I then had to attend a Select Committee upstairs so that I missed a great many speeches which I should like to have heard. I shall not be long, and if I am repetitive, for the reasons I have given, I hope I may be regarded as someone who merely wants to underline one or two points which have already been made.
The hon. Member for Tradeston (Mr. Rankin) gave the impression—I am sure erroneously—that the Cement Marketing Board was a monopoly. It is not a monopoly. The Cement Marketing Board is merely the distributing agent for Associated Portland Cement. As he well knows, the cement we see in Scotland is not produced in Scotland. It is produced in the South of England, where there is a great quantity of chalk. It is merely a natural feature of the geography of our land that the chalk happens to be chiefly in Kent and other places like that, where many companies are competing in the production of cement, which is then sent by sea up the East Coast to Grangemouth and Leith, and further north to Aberdeen, where it is distributed to meet our needs for housing and defence works.
The hon. Gentleman is perfectly right in saying that there was a serious shortage of cement earlier this year, and I do not think we can altogether exempt Scottish contractors from some share of the blame in not stocking up, although I understand that they were urged to do so by the Minister of Works. My information is that they were overtaken by a sudden and unexpected demand for defence purposes and found themselves short of cement early in the season. The position had to be put right by the Minister of Works, who actually imported a quantity of cement from Belgium to Scotland to rectify the position.
Mr. Rankin: Is the hon. Gentleman suggesting that the position is now rectified in the face of the words uttered yesterday, not merely by the convenor of the Glasgow Housing Corporation, but by his predecessor in that office, who said that the shortage of cement for housing purposes not merely in Glasgow but in Scotland as a whole still exists?
Mr. Thornton-Kemsley: I do not deny that. But I understand that imports from Belgium and other countries overseas have now stopped, that the position is rapidly improving, and that by the end of this month the supply should have caught up with the demand.
I rose to make two points, and I shall make them, as I promised, as briefly as I can. The first one is to express my thanks, as I have no doubt many other of my hon. Friends have expressed theirs, for the fact that Her Majesty's Government have been able to include in this Bill the reconstitution of the old housing rural workers' grants. It is a great thing for the country districts of Scotland that once again we are able to get grants for the improvement of cottages occupied by agricultural workers—these grants which to the great regret of many of us, and no less to my right hon. Friend the Secretary of State for Scotland, who told us so in his opening speech, were so foolishly and so irresponsibly withdrawn by the Labour Party when the Housing (Rural Workers) Acts were allowed to lapse in the early days of the Parliament of 1945.
The whole country, I think, is now agreed broadly upon the need to give every possible assistance to our home agriculture, and to do all that we can to make it possible for our farmers to produce as much as they can from our own soil. I cannot believe that there is any real division of opinion in the country as to the desirability of ensuring that everyone in the country has a decent house, no matter what his terms of employment or his conditions of service.
I remember very well that the Hobhouse Committee in 1947—I think, in their Fourth Report—said that they considered that as long as tied cottages existed they should have the same standards and amenities as other cottages. That is a view to which, I think, all of us on this side of the House will most warmly and heartily subscribe. I have in my hand a copy of the old scheme of assistance under the Housing (Rural Workers) Act, 1926.
I believe from conversations I have had with my hon. Friend the Member for Aberdeenshire, West (Mr. Spence) that he has already brought this point to the attention of the House—that under the old Act the condition for giving the grant

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was that the houses which were to be improved must be for the occupation of agricultural workers,
"or by persons whose economic condition is substantially the same as that of such workers."
I am sorry that it has not been possible to put words of that import into this Bill. Important as it is that we should help farm workers, I am sure that it is desirable that we should do what we can to provide decent housing conditions for people in similar economic conditions—forestry workers, estate workers and so on.
That is the first point I want to make, the desirability, if possible, of slightly enlarging the eligibility for receiving an improvement grant by approved people of substantially the same economic circumstances as farm workers. The second point I wish to emphasise is that there should be some increase in the £600 limit for improvement grants. That £600 limit was laid down in Section 111, subsection (4), of the 1950 Act, the principal Act. There it was stated that the maximum expenditure which will be considered for improvement purposes is £600. The grant was not to exceed 50 per cent. of that amount.
That amount of £600 was not fixed for the first time in the 1950 Act. It was fixed in the 1949 Act and since 1949—as can hardly be disputed—there has been a very considerable increase in building costs. If £600 was the right amount in 1949, it surely cannot be adequate in 1952. It is true that the Department has power under subsection (4) of Section 111 of the 1950 Act to increase that amount of £600 if the consent of the Secretary of State is first obtained. The grounds on which the Secretary of State gives consent to an increase over £600 are where the costs have been unusually high for one of two reasons, or perhaps for a combination of both.
The first reason is where there has been an attempt, or is to be an attempt, to preserve certain architectural features in the building to be improved and for that reason the cost of the work is greater than it would be if it were just a utilitarian attempt to improve an unattractive cottage. The second reason is where there are specially high local building costs because of the distance from quarries, brickworks, or anything of that
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nature and where the property is in an isolated position.
Apart from these two special circumstances, the Secretary of State does not give consent to any expenditure in excess of £600. One can understand his reasons. One can understand that he is naturally anxious at the present time of shortages of labour and shortages of materials not to make more demands on that limited supply of building labour and materials than is absolutely necessary. But recently the Department, in my view quite rightly, increased the amount in respect of which local authorities may issue licences for repairs and maintenance. Having done that, one would think it quite reasonable to grant some extension of the amount by which that £600 can be exceeded.
The real mischief is the ludicrous, absurd and fatuous situation that if the work exceeds £600, even by £2 or £3, it is ruled out altogether from grant. Unless there are special circumstances which I have outlined, such as unusually high building costs or a desire to preserve special architectural features, if the work of improvement is estimated to cost £605 or £610 no grant can be given. One would think that the proper thing would be to allow the first £600 to be eligible for grant and if the work is going to cost £700 to allow a 50 per cent. grant on the first £600.
I apologise that I was unable to be here throughout the entire debate, and I am sure that much of what I have said has been said before. However, I believe it to be right, and I would be glad if my right hon. Friend will hear us on these points in Committee, and that when he hears us he will be sympathetic and meet the points we have tried to make.
9.31 p.m.
Mr. Thomas Hubbard: Unlike the hon. Member for Angus, North and Mearns (Mr. Thornton-Kemsley), I have sat here throughout the whole of this debate, but like the right hon. and gallant Gentleman the Member for Kelvingrove (Lieut.-Colonel Elliot), I had made up my mind not to take part in the debate, athough it is very difficult to remain in one's seat during a housing debate, particularly on Second Reading. We are all very keenly anxious about houses. I have listened to many housing debates during the short period I have been a Member of this House.

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As one would expect, there are points of difference between Members on the other side and on this side, though not on the main question of the provision of houses. It is a very bad thing indeed that the housing of the people of this country should be thrown into the political arena. That is something nobody wants. We all have different ideas on the subject, but at no time have I ever accused any hon. Member opposite of wanting to restrict the building of houses, nor am I going to do so now.
There is one thing I should like to say now, however, and that is that during the eight and a half years I have been in this House, this is the first time that I have seen a Measure on housing coming before the House where there has been such a lack of agreement with the local authorities. We must all regret it, because while we may debate this subject of housing and score debating points one against the other, at the end of the day, although we have got to provide the Measures that make house building possible, we have got to depend upon local authorities to erect the houses and we require the utmost co-operation from them.
As I say, it must be a matter of real regret even to the Secretary of State that we cannot get the agreement on this Measure that is essential for full co-operation with the local authorities so that the people requiring houses may get them. What are the grounds of disagreement? First of all, there is the question of the amount of the subsidy. Obviously, rates throughout Scotland and south of the border vary and an average must be struck. Local authorities contend that £33 is a fair rate, whereas the Secretary of State fixes a figure which is much higher in arriving at what he considers is a reasonable subsidy. In so doing I think he injures himself, the Government of which he is a member and the people who need houses. Obviously the more it is to cost a local authority to build houses the higher the rent will be.
The Government are today asking people—and I do not quarrel with this—to refrain from or to restrict demands for increases in wages and incomes. At the same time the cost of living is, for many reasons, going up, and the portion of income that the ordinary wage earner—and there are many low wage earners
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in Scotland—has to pay in rent makes his position extremely difficult when at the same time rent is increasing. Clause 7 of the Bill makes provision for doubling the amount of money to be paid by the local authority into the repairs fund. That also has a tendency to increase rents. Those two things are happening together.
Houses have to be built for people who need them at a rent they can afford to pay. There seems to be no sense in fixing a subsidy and making arrangements for the building of houses if people whose need is greatest are to be precluded from taking those houses because of the fear that they will be unable to afford the rent.
I am one of those who think that the rent for a good house is a charge which any sensible person would be willing to meet. A good house is essential for the welfare of the people themselves and their children and for the health of all the family. There comes a point, however, when a person who may have been waiting for years for a house, and who has in mind the increase from year to year in the rents of houses, is in a dilemma when he reaches the position when his turn for a house comes.
The subsidies provided in this Bill will make it possible for the building of houses to continue, but such a person as I have mentioned may be confronted with the problem, "I can have a house but how can I, with a wage of about £5 a week, afford the rent of £42 which has been suggested? That will take far too large a slice of my income." That will defeat the whole purpose for which the Bill is before the House. Therefore, I hope that we shall be able to overcome the difficulties that exist at the moment between the local authorities and the Secretary of State.
I wish to be brief, because I know that the hour is getting late and that there is other business to come before the House; and as I said at the beginning of my remarks, I had not intended to intervene in the debate. There is, however, a further point I wish to make relating to Clause 7, in which provision is made for the doubling of the amount of money that is to be set aside by local authorities for the repairs fund—an increase from £4 to £8.

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The higher subsidy to be paid to the local authorities for the building of houses is to be effective for all houses completed after February this year, which is not unreasonable. But the £8 instead of the £4, which is in that part of the subsidy that might be called the local authority subsidy, applies to all the houses that have been built by the local authority under all the Housing Acts. That means bearing on the rates a local subsidy extending back over a very long period, while at the same time the higher subsidy to be paid by the Government only applies as from February this year.
This provision may be necessary, because it is essential that when a house has been built it should be kept in good repair. It would be madness if a local authority allowed the repairs fund to get too low. Some provision is necessary to ensure that local authorities have a repairs fund sufficiently large to keep their houses in good repair. Many local authorities are not in that position, however.
It may be necessary to provide the Bill for a figure of £8, but we want a definite assurance in respect of local authorities who have no worries about their repairs fund. I am thinking of my own constituency, which at the moment has a surplus of about £40,000 in the repairs fund, and who at no time—although it may be different in the future if the rate for repairs per house is exceeded—ought to be called upon by Clause 7 of this Bill to pay £8 instead of £4. That, in fact, means that a town like Kirkcaldy, which has a surplus in the housing repairs fund, has to pay nearly £19,000 a year; which is an additional charge on people already faced with higher costs for food and so on.
I do not think that is the intention of the Minister. I know he has powers under previous Acts not to insist on this charge of £8 being imposed, but I want it made clear that there will be no compulsion upon local authorities, who do not require to increase their repair fund or to double it from £4 to £8, by the passing of this Bill. I do not think there will be, but I want a definite assurance that such a guarantee will be given to local authorities.
I hope that as a result of this Measure we shall continue building houses, and
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that we shall have an even closer relationship with the local authorities charged with the responsibility of putting into effect the legislation which we pass in this House; and that the Secretary of State for Scotland will keep in mind the need for strict control over the provision of these houses so that they will not be let at a figure which will make them prohibitive to even the lowest paid wage earner. Then, whatever may be our views on other matters, so far as the housing of the people of Scotland is concerned we shall move along as we have done in the past, and make the best of the various Statutes placed on the Statute Book.
9.42 p.m.
Mr. A. Woodburn: We have heard an interesting debate and one which has been slightly less controversial than is usual with Scottish debates.
Before I make any comment, I think I should extend our congratulations to my hon. Friend the Member for Maryhill (Mr. Hannan) on what was, in effect, his maiden speech. We look upon Whips in this House as strong silent men. While outside the Chamber we all know that they are capable of speaking; inside the House there has never been much evidence of it. But today we have had an example that when a Whip does decide to make a contribution to our debates he can make an effective one. I think most hon. Members will agree that my hon. Friend did it in a charming way. He proved that he had thought out his subject carefully, and he presented it to the House in an agreeable way. I am quite sure we can genuinely look forward to hearing him again.
As a matter of fact, this debate was opened by an ex-Whip, the present Sec retary of State for Scotland. On one occasion he created a great surprise in the House when he spoke and broke his silence for the first time. Since then he has done a considerable amount of speaking. He takes an unfair advantage of the Opposition in that, by being so disarming in presenting his Bills and in making his remarks, he makes it difficult for my right hon. and hon. Friends to be controversial with him. He assured one of my hon. Friends that he sticks so closely to the facts that there should be no need for any contention about them because they are the facts. However, this Bill is not

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quite so innocuous as that. As my right hon. Friend said, naturally we are not opposing the granting of this subsidy, nor are we opposing the Resolution which will make possible the financial provision.
This is not the Bill we expected from the Government. Since 1945 every successive Secretary of State has been canvassed by hon. Gentlemen opposite to put right the great defects in the whole finance of Scottish housing. I have listened to many speeches about the iniquities of Scottish rating and the difficulties of the local authorities and the landlords under that system. These matters were pressed upon us with great urgency. In view of that, it surprised me that this Bill came along and that the Conservatives did not introduce a measure to clear up all these defects about which they had complained for so many years. I can only conclude that that is because they do not believe in planning even their own policy before they come into office. No doubt in due course some proposals on that line may appear.
My right hon. Friend made clear one of the defects of these proposals. He said that they provide cover only for the increase in the interest rates as they affect directly the loans to the local authority. He said that they did not cover the indirect effect of the increased interest rates on the costs incurred in the building of the houses themselves. It would appear, even on the Government pledge to recompense the local authorities for the costs resulting from the increase in the Bank rate, that not only should the direct cost of loans to local authorities be covered, but also the effect of the increase in the Bank rate on the cost of building houses.
Most of my hon. Friends who have spoken are expert in local authority building matters. My hon. Friend the Member for Glasgow, Central (Mr. McInnes) presented very largely the case for the local authorities. That case has been put to Members on both sides by the local authorities. On this occasion there has been an absence of the enthusiasm which used to be shown for presenting the local authority case by hon. Members opposite.
I was astonished that hon. Members opposite, especially the hon. Member for Dumfries (Mr. N. Macpherson), deliberately opposed that case and suggested
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that it was exaggerated. The hon. Gentleman actually discouraged the Government from giving any further assistance to the authorities in addition to that which they have had in the past. How the hon. Member for Dumfries will justify his efforts to the local authorities in his constituency I do not know. His constituency needs a good deal of assistance if it is to do its duty to the citizens. In some parts of that constituency it has taken over three years to build some of the houses. If the hon. Member knew his constituency well enough, he would recognise that the local authorities require encouragement and not discouragement from the persons who represent them in this House.
Many pertinent points have been made. No doubt they have been noted by the Government. I do not desire to repeat them now, but there is one point which I wish to emphasise. It is a great mistake to think that we are discussing some new benefit to the local authorities. The local authorities will be no better off when this Bill is passed than they were before this Government came into office. This Bill makes no difference to the subsidies to the local authority.
What is happening is that the Government are providing the local authorities with a subsidy which they are forcing the local authorities to give to the banks through the Public Works Loan Board. The Board has to pay extra to the banks or to the Consolidated Fund for borrowing money. It passes that extra cost to the local authorities. Now the Government are reimbursing the local authorities with a subsidy which they are forcing them to pay to the Public Works Loan Board.
The Bill, when originally introduced for the English side of the Border, was explained by the Minister of Health as being a by-product of the Government's financial policy, and he said that it was as such that it had to be discussed. The Minister of Health said that this was the context in which we must discuss the two objects of the Bill, the first being to deal with the balance of payments position and the second to stop inflation, but a more ramstam method of securing those objects could hardly be imagined.
First, the Chancellor of the Exchequer switches a whole lot of payments internationally to settle the balance of

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payments abroad, and then attempts at home to switch income and taxation in order to change the balance of payments at home. He takes £160 million from the food subsidies in order to give to people who already have too much another £1 a week in relation to Income Tax, and he unsettles every wage settlement in the land.
He then comes along and, in addition, raises the Bank rate to put a check on industrial production, and presumably a check on full employment, and he goes out of his way to make, as a consequence, an increase in the Public Works Loan Board's rate of interest to the local authorities. That has the effect of unsettling all the financial arrangements of the local authorities.
There was no need to increase the Public Works Loan Board rate. At the time it was clearly intended to check local authority enterprise in many directions. It was an indirect method of bringing this stop to local authority enterprise, but that could have been checked by direct methods. This indirect method had the immediate effect of bringing the local authorities up against the proposition that they either had to stop house building or go on the rocks as far as finance was concerned. Of course, when it was announced, the storm broke out. The local authorities, by their pressure, immediately compelled the Government to give a pledge that they would restore the position by this method of reimbursing the local authorities for the extra interest which they have to pay on these loans.
The proof that this was unnecessary is this. When the Bank rate was raised for the second time, the Government did not proceed again to raise the rate charged by the Public Works Loan Board, and therefore they need not have done it the first time. That would have been a much more sensible thing to have done, without having to introduce this Bill to restore and patch up the rent which they had made in local authority finance.
The justification offered us was that the loan rate had to be raised, otherwise it would be a hidden subsidy. It is quite true that if we met the interest on the loans of local authorities, that would be a hidden subsidy. I think it would be a pretty open one, but it would be an
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indirect subsidy, and the question is when this interest rate becomes a subsidy and when the subsidy becomes, as it were, a demand on the local authorities.
I should define it as the cost of providing the money, but the Government have offered no evidence to the House that there has been any real increase in the cost of providing the money. It was done by the deliberate action of the Government themselves in putting up the price of money, and was not due to any increase in the cost of money, because there is a distinction between the two. It was quite clear that, if the previous policy of checking the local authorities had gone on, there would have been no hope at all of ever getting the 300,000 houses. In fact, there would have been a steady decrease in the number of houses built.
This does not by any means restore the position, and therefore it is not surprising that the local authorities have said, "Thank you for nothing." The only result has been a waste of effort in the local authorities, a confusion of their financial relationships, and the raising of local authority resentment to boiling point, while this Bill has done nothing to assuage the injured feelings of the local authorities.
We have to admit that the local authorities were already having difficulties before the interest rates were raised. They must have been already pressing the Government with their troubles arising out of rising costs, and it appears to them as adding insult to injury that the Government, who by their deliberate action have raised the interest rates, should now come along and recompense them only for part of the cost which they have imposed on the local authorities.
As regards the local authorities, the position is that their conditions are such that they are likely to be discouraged from proceeding with house building, and those conditions arise entirely from the Government's action. First of all, there has been a general unsettlement of the feeling of security that has existed among the population for the last seven years. People were beginning to feel that their incomes were assured, that they could undertake steady payments, and that they would be able to go on paying rents and other costs for years to come because of their steady employment.

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The shattering of the feeling that there is going to be full employment has unsettled the minds of great numbers of the population. These people will now be afraid to undertake the rental of houses when rents are high. The very suggestion that rents should be £42 is apt to stampede people away from any intention of renting houses. It ought to be borne in mind that—as has been the experience of my right hon. Friend in Greenock—where towns have had to build at some distance outside, it is not only the rents which the workers have to pay, but also the high travelling costs. Such travelling costs represent a large part of the cost of living of the average worker who gets a new house at some distance from his work.
Therefore, the local authorities are faced with the problem that there is a group of people who desperately need houses, not only for personal reasons but from the point of view of the health of the community, but who are more and more being placed in the position of being unable to pay the rents asked. It is true that the Secretary of State has not said that rents should be raised to £42, but that sum having been taken as a notional rent it is a pretty broad hint to the local authorities that that is the rent for which they should ask.
Therefore, if local authorities are faced with the position of having to offer people houses at a rent of £42, people who even now are turning down houses at £33, then they are going to be driven to the position of either not being able to let the houses, or of stopping the building of houses until they see the possibility of getting tenants for them.
So here we have a problem from the tenant's point of view. In part, the building costs have been rising, and it may be that this will cause a rise in rents. I sympathise with the Secretary of State in discouraging local authorities from aiming at a price of £1,900. He certainly has provided them with an inducement to get the price down to below that figure.
I was surprised today that in all the discussion about solving this difficulty it never struck anyone that there might be the possibility of cutting down the price of houses without lowering the standards simply by lowering the price. I am satisfied—and I was satisfied when I was
736
Secretary of State for Scotland—that the building trade could cut a good deal off the price without any detriment to the houses by simply increasing the efficiency of their trade.
I suggested to the building trade employers and to the workers that as an experiment they should knock £100 off the price of the houses, and that they would be surprised how quickly they would find means of economising to that extent. That suggestion had a little success for a few weeks, but one of the problems of that trade is that no one seems to know what a house costs to build; I recommend to the Secretary of State that he should probe whether all the people who contribute to the building of a house, the "rings" who supply certain of the fittings, and the people who supply the cement and a good deal of the other materials, could not be induced to do what Ford's have done, take a chance and cut something off their prices. That would make one contribution which would not affect anybody very seriously and it might start the right process of trying to bring prices down instead of our having to find means continually to pay increasing prices.
I want to emphasise one point on behalf of my hon. Friends. One Clause in this Bill proposes to give help for the building of houses for farm workers. There is no hope of keeping people on the land unless they are given decent houses in which to live. The proof of that is that the farmers who in the past gave their workers decent homes—and I can mention a few even in the constituency of the hon. and gallant Member for Berwick and East Lothian (Major Astruther-Gray)—never had the slightest difficulty in keeping their workers.
We took urgent steps to try to provide houses for agricultural workers and we gave extra financial assistance for the purpose. But my hon. Friends feel that a condition which must be attached to the giving of public money is that power must not be placed in the hands of private people to turn a family out into the fields without notice in order to sack a man from his job, and to penalise men through the loss of their homes.
I know that farmers in Scotland say that it does not happen, but at a meeting at which I addressed farmers one of them rose to emphasise the need for these

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grants and gave as his reason that he wanted power to turn a man out because he was not doing his job. [An HON. MEMBER: "It is his house"] If it is his house he may have the right to do that and we cannot prevent it by law, but my party will not agree to public money being subscribed for the purpose of building houses so as to give an individual an arbitrary power to turn people out on the street without proper investigation.
Major Anstruther-Gray: Would not the right hon. Gentleman agree that it is essential in the interests of agriculture that shepherds' houses should be retained to house the men who at the time have to look after the sheep?
Mr. Woodburn: That is perfectly true, and in the assistance which we offered to the farmer there was no difficulty about that. The position was that it was not left to the farmer or to the farmer's wife to quarrel with the employee or his wife and to decide that he must go. The farmer had to go to the sheriff and obtain an impartial judgment that the man had to leave his house. The man had to have some opportunity and there had to be some investigation, and as long as there was that provision there was no difficulty about farmers obtaining possession in Scotland.
We take the view that the local authority should provide the houses and at the same time provide some assurance against the kind of injustice which my hon. Friends have quoted. At any rate, there is bitter opposition among farm workers in Scotland to the provision of public money for tied houses. On one occasion I met the farmers and the farm workers on another matter and took the opportunity of telling them, "I will leave you together to discuss this question and to come to some arrangement which will be satisfactory to both sides so that the community can help to provide houses for farm workers." I am sorry to say that the farmers could not come to any agreement with the farm workers.
We certainly cannot agree to the provision of public money by a one-sided arrangement which would give dictatorial powers to farmers who, however good, cannot be trusted with such powers over the lives of their fellow men and women. We disagree with this idea
738
of providing public money without proper protection for those who occupy the houses. It is quite true that the great majority of farmers are quite decent and get on quite well with their workers, but that does not deprive us of the duty of providing for the people who are not decent—and those people occur in every walk of life.
I am glad that the Secretary of State has at least adopted the provision made in the 1950 Act for guranteeing that if the money is provided the benefit goes to the farm worker. So far as it is possible by law, every provision is made to see that nobody can profit out of State money given for this purpose, and that the benefit goes purely and solely to the person who lives in the house. From that point of view, I welcome the introduction of the Clause, which I was instrumental in putting into a previous Bill. I am satisfied that it ensures that people will not be able to sell public money at a profit and that they must repay it if they are going to depart from the conditions which have been imposed in that regard.
The question is: What are the possibilities before the country in trying to deal with this problem? Hon. Members said, quite truly, that there is a tripartite arrangement and that the houses must be paid for. That is very sound psychology. The argument is, who is to pay? The tenant does not want to pay, or is unable to do so; the local authority does not want to pay, or is unable to do so, and the State does not want to pay, or is unable to do so. Therefore, the problem is, if the houses are to be built, who is going to pay?
If the cost is to be divided, how is it to be divided amongst those three parties? Even Solomon would not have been able to satisfy all three of them. As I have said, there is the other party which has been left out—all the builders and the suppliers, who, so far, have not been asked to make their contribution. The Secretary of State might keep that point in mind. But so far as the other three parties are concerned, there are certain possibilities which are open to local authorities. It is a most amazing thing to go into the problem of the rents which are charged in Scotland. They have been built upon a multitude of Acts, including the Slum Clearance Act. Some rents are £15,

739
but in one part of my constituency miners are being asked to pay £42 with another £20 in rates. These discrepancies are enormous.
Some local authorities have got over the problem by spreading and equalising rents over all the local authority houses; but even here they come up against difficulties, because in a place like Clydebank, where the houses were practically all destroyed and where there is a town consisting almost entirely of new houses, they have not got the old houses over which they can spread their rents and therefore they have all to go on to the new tenants.
If the hon. Member for Lanark (Mr. Patrick Maitland)—who is always so anxious to criticise and damage the reputation of East Kilbride—would look into some of the difficulties which arise from the fact that it has to build new houses and has no other houses over which it can spread the cost, so that the new houses must be charged at the full economic rent, he would see that the problem of East Kilbride is one that is not common to the county or to any of the other towns in Lanarkshire.
Mr. Patrick Maitland: The right hon. Gentleman will remember that he was among those who intervened on points of order when I was developing this very theme. So far as seeking to damage the reputation of the Corporation is concerned, I was seeking to expose frauds where they existed and to shed light on darkness.
Mr. Woodburn: The hon. Gentleman was starting to complain that the houses were not let to the people in East Kilbride but were being let to people who were coming into East Kilbride. East Kilbride was a new town developed outside Glasgow and the houses there were not intended only for the people of East Kilbride.
Mr. Maitland: I was not allowed to proceed with that part of my argument. What I said was that there were families from insanitary homes who remained unhoused while they saw other people getting the new houses that were being built.
Mr. Woodburn: That applies in every town in the country and the only cure is more houses, but they cannot get more than their share.
Mr. Maitland Mr. Maitland rose—
Mr. Speaker: Order. That is a Committee point.
Mr. Woodburn: There are other possibilities for local authorities, and some are trying to achieve a balance of rents within the community. I despair of how this can be done over Scotland as a whole, and I shall congratulate the Secretary of State if he is able to solve this problem. I looked at it several times. If, with greater enthusiasm and greater efficiency, he can bring about the rationalisation of rents and the rationalisation of the whole system of housing in Scotland, I am sure that we on this side of the House will be only too ready to congratulate him.
A point has been raised about the different economic status of people occupying these houses. One of the problems which we had to face was that if housing in the future was to be largely the responsibility of local authorities, it could no longer be justified that people who were not of the working class, which was the definition in the old Act, should be deprived of any opportunity of ever getting a new house. In the Housing Act we removed restrictions on the local authorities which had limited them to the provision of houses for members of the working class. If local authorities were to build new areas and create new communities, it became necessary for them to provide houses for different sections of the population.
Mr. Dudley Williams: A stupid policy.
Mr. Woodburn: The hon. Gentleman may think it was a stupid policy, but he can have no experience or he would know that some of the great housing schemes which were carried out before the war, where they were all of one class, have led to great psychological distress, because a population of one class can never supply the elements which are required to make up a happy community. In a community there must be houses for old people, small houses for single people, houses for doctors and teachers, a house for the parson, houses for nurses—all types of houses for all types of people to make up that community. We cannot build houses without churches. All these things have to be taken into account when planning a community. I

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am afraid the hon. Member for Exeter (Mr. Dudley Williams) does not appreciate the problem or he would know that a local authority must be able to provide all the types of house which make up a balanced community.
Mr. Williams: This is the conflict between the two parties. We believe that the strong should help the weak. The right hon. Gentleman believes that somebody who is strong should be helped by the weak.
Mr. Woodburn: I am afraid the hon. Member for Exeter does not even know about the enlightened policy of his own party, because his own party believe in no such nonsense as that which he has announced. The strong do help. Perhaps the hon. Gentleman does not know, but the people with the biggest incomes pay the biggest taxes.
Mr. Frederic Harris: It is about time the right hon. Gentleman found that out.
Mr. Woodburn: We take the view that the person who pays his taxes according to his ability to pay, is entitled to the benefits of the community in the same way as anyone else. We do not segregate a community into classes. Each may have a different status in a community, but they are all treated as citizens, one equal with another, in receiving the benefits from the community.
Mr. Williams Mr. Williams rose—
Mr. Woodburn: The problem facing the Government is this. They have not been able to satisfy local authorities that they have done the local authorities justice, and I do not see that there is any possibility, once the Money Resolution has been passed, of increasing the subsidies. Indeed, that may not be the right way to solve the problem.
I want to suggest to the Government that even at this late day they have a simple means of helping the local authorities without interfering with their Bill and without altering the subsidy. It is this. There is no reason why they should not reduce the Public Work Loan Board's rate to the local authorities. There is no need to increase it, and it is quite possible to decrease it. I would recommend to the Secretary of State that
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he bring before the Chancellor the possibility, in this problem of satisfying the local authorities reasonably—I do not suggest he should do more than that—reducing the Public Work Loan Board's rate to the local authorities.
While we take exception to certain parts of the Bill I think I ought to congratulate the right hon. Gentleman and the Minister of Health on their success in over-turning the original policy of the Government to raise the rates to the local authorities without giving them any recompense in the form of this Bill. There is no doubt that it was something of a triumph both for him and the Minister of Health to be able, after the Government had intended to check all this growth in the local authorities, to get from the Government some reimbursement of these interest rates. I do not want to press the right hon. Gentleman into saying exactly how.
Mr. Stuart: I think the right hon. Gentleman meant the Minister of Housing and Local Government.
Mr. Woodburn: Well, I was congratulating both the right hon. Gentleman and the other Minister—the right hon. Gentleman mentions the Minister of Housing and Local Government—because I gather that both right hon. Gentlemen took part in getting this reversal by the Government of their original policy of checking the expenditure of local authorities. I think myself that the Government are mistaken in their policy of raising the Bank rate. It obviously has had an effect in accelerating unemployment. I am perfectly certain that the effect of this is going to be to discourage local authorities from pushing ahead as far as they can.
If the right hon. Gentleman is sincere, as I believe him to be, about getting as many houses built as possible, I think he must have a conference with the local authorities to find out what is real in the difficulties they place before him, and try to do something to make it possible for the local authorities to do what they can in the way of building houses. I think that he would be entitled to exact from them that they should do all that is in their power in their own areas to solve their own problems.
It may be that it is going to be a difficult matter to get complete agreement,

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but I think that there is, at least, the duty on the Government to meet the local authorities and to give them the feeling, at least, that the right hon. Gentleman is going to examine their problems sympathetically to find out where differences are. If they are wrong with their figures, that can be put right; where there is a dispute about figures, the facts can be ascertained. Once agreement is got on the facts, the question is: What is just in face of the facts?
I hope that, as a result of what has been said by my hon. Friends, with their great experience, and of the sympathy expressed by hon. Members with the local authorities in their difficulties, the right hon. Gentleman will do what he can to bring about a reconciliation, and a speeding up of house building even beyond the present limits.
10.19 p.m.
The Joint Under-Secretary of State for Scotland (Commander T. D. Galbraith): I should like first of all to join with the right hon. Gentleman the Member for East Stirling (Mr. Woodburn) in congratulating the hon. Gentleman the Member for Maryhill (Mr. Hannan) on what was, as the right hon. Gentleman said, practically a maiden speech, and I am sure the whole House will agree with what has been said as to the manner in which the hon. Gentleman presented his case, and that the House will desire that he should break his self-denying ordinance more frequently in the future.
Now I turn from that rather pleasant duty to one, that I feel, is not so pleasant. I feel the House ought to resent the implacations which were made in the course of this debate—and ill-concealed implications—as to dishonesty on the part of officials of the Scottish Office. That was perfectly clear from a number of speeches, and I think it is very much to be regretted.
Mr. McNeil: Whose speech?
Commander Galbraith: It was perfectly clear in the speech of the hon. Member for Glasgow, Central (Mr. McInnes), and, so far as I could understand it, it was not much concealed in the speech of the right hon. Gentleman himself.
Mr. McNeil: If there was any imputation or construction by which my remarks could be interpreted as an attack upon the officials of the Department, I immediately and unreservedly withdraw them. My remarks were directed to the fact that it seemed to me that the Ministers responsible had not offered the evidence for the assumptions upon which their arguments proceed.
Commander Galbraith: I am very glad to have that statement from the right hon. Gentleman, but I must say the impression gained from those two speeches, to which I listened with the very deepest interest, was the one I have stated. I am very glad to hear what he now says. As for the levelling of such a charge against my right hon. Friend, if such a charge was levelled, my right hon. Friend is perfectly willing to face up to that, and I am quite sure that before I conclude I shall be able to convince the House that that charge was altogether unjustified.
There was then a further charge made against my right hon. Friend by the right hon. Member for Greenock (Mr. McNeil), the charge of discourtesy, which he knows perfectly well is altogether unjustified and a charge which could never be levelled against my right hon. Friend. That charge was absolutely untrue. My right hon. Friend met the local authorities and listened to everything they had to say on 21st March of this year, and having listened with the utmost sympathy to everything they had to say, informed them that it was with regret that he had to maintain the position which had already been announced. So the charge of discourtesy had no foundation whatsoever, and the right hon. Gentleman has been misinformed.
There were a lot of charges flying from the right hon. Gentleman. In fact, he had little to say except to level charges. He also said there had been no proper consultation. Exactly the same measures of consultation were taken as during the times when he and his right hon. Friend the Member for East Stirling were Secretary of State. What does the right hon. Gentleman think of five consultations with officials of the Department, one consultation with the Under-Secretary and one with the Secretary of State? If that is not consultation, I do not know what

745
is. That is a charge which should also be withdrawn.
He also said that no concessions were made. Concessions were indeed made. Wherever we found that we had neglected to take something into account the matter was rectified to the extent that we considered justified. On this occasion, as on all previous occasions, the basis taken was the tender prices. On this occasion we went beyond that at the request of the local authorities. They asked that some allowance should be made for any subsequent rise in the cost of labour or materials, and an allowance was made in that connection. That is something which has never been done before.
The hon. Member for Ayrshire, Central (Mr. Manuel) indicated that my right hon. Friend was taking all the credit for the increased number of completions since he had assumed his present office. I hope the hon. Gentleman will read in HANSARD tomorrow what my right hon. Friend had to say, when I think he will find that my right hon. Friend took no such credit for himself. It is obvious to one of even the meanest intelligence that we could not have completed any houses if there had not been houses left for us to complete. What I think my right hon. Friend can take credit for is the greater tempo which is now to be seen in the building industry, the greater flow of materials going to the sites, the greater elasticity in local authorities' programmes, and also the greater number of houses under construction at the present time. Let me say, as has been remarked by some hon. Members who have taken part in this debate, that credit is also due to the building industry and to the local authorities who act as the agent of the Secretary of State in these matters.
Before dealing with the main argument which has been put up in the course of this debate, I should like to endeavour to answer certain specific questions put to me. The right hon. Member for Greenock asked how long the Public Works Loan Board rate of interest would be retained at 4¼ per cent. I can only refer him to the statement of my right hon. Friend the Chancellor of the Exchequer in winding up the debate on the Budget on 17th March. I will read what he said to the House:
"It is not the intention of the Government to make any change at present in the rates
746
currently charged by the Board. It is far too early to say the effect of the increased Bank rate on the market, and particularly on longterm rates, and, therefore, I propose to make no prophesy about the matter or to give any answer today about the satisfactorily arranged inter-relationship which has taken place between the housing subsidies and the rates charged."—[OFFICIAL REPORT, 17th March, 1952; Vol. 497, c. 2053–4.]
Mr. McNeil: Are we to take it that the hon. and gallant Gentleman is not in a position to give any undertaking about the operation of these rates?
Commander Galbraith: I do not think that is a question which I should be expected to answer. No doubt the right hon. Gentleman will put that question to the Chancellor of the Exchequer in due course.
Mr. McNeil: I did, with great courtesy, indicate that I knew that could not be answered offhand when I put the question some two hours ago, but it is fundamental to the consideration of this Bill and to the adequacy of the Bill, and I think that the hon. and gallant Gentleman is scarcely being courteous, after being given all that notice and after all these consultations about this Bill, if he is unable to give us an answer at this stage upon that fundamental aspect of the Bill.
Commander Galbraith: The answer which my right hon. Friend the Chancellor of the Exchequer gave still stands. That is quite sufficient for the right hon. Gentleman at the present time.
May I turn to a question which I was asked by the hon. Gentleman the Member for Maryhill? He asked me for my opinion as to the sale of houses. I am afraid that I would be out of order if I were to give my opinion on that matter, but I may, perhaps, be allowed to say that those who are capable of buying and do buy their own houses are much to be commended because they are, in fact, relieving their fellow citizens of a considerable burden of taxation.
Then, if I understood the hon. Gentleman the Member for Maryhill correctly, he spoke of charging economic rents. Where tenants can afford to pay the economic rent, I am sure that is something which is very much to be desired in the interests of the whole community. According to notices I have seen, some tenants, now being aware of the position, are offering to do so. They are in fact

747
not willing to be subsidised by those who are possibly less well-off than themselves.
My hon. Friend the Member for Aberdeenshire, West (Mr. Spence) asked me what happened when the cost of improvements exceed £600, and a similar question was also addressed to me by my hon. Friend the Member for Dumfries (Mr. N. Macpherson). The position, in fact, is, as was stated by my hon. Friend the Member for Angus, North and Mearns (Mr. Thornton-Kemsley), that the local authority may ask the Secretary of State's consent to accept an application above £600, and if he is satisfied as to all the circumstances a grant may be paid not merely on the £600 but on the higher figure.
I want to reiterate the warning which was implied in what the hon. Member for Angus, North and Mearns said, that the conditions are exceptional and it must not be taken that everyone can possibly qualify. I have taken note of the other point which my hon. Friend made and which I will see is looked into.
My hon. Friend the Member for Lanark (Mr. Patrick Maitland) asked if this Bill would apply to East Kilbride. Yes, it will, and we hope it will help. The hon. Gentleman the Member for Tradeston (Mr. Rankin) raised the question of the supply of cement. I would remind the House that Scotland produces less than one-third of her cement requirements, and the rest has to be shipped from the Thames. It is very difficult in peak periods to arrange that it arrives regularly, but every step is being taken to endeavour to see that the shortage does not occur again. I am very sorry that such a shortage of cement should have occurred as it did in Glasgow, but we have succeeded in speeding up deliveries to Scotland this summer. So far it has amounted to no less than 21,700 tons a week, an increase of about 20 per cent. over what was happening last year.
I have been struck during the course of this debate by the fact that only two references were made to the extension of the improvement grants to tied cottages. Until the right hon. Gentleman the Member for East Stirling spoke, I thought we had succeeded converting the Opposition to the view that it was necessary for Scottish agriculture to have tied houses and that agricultural workers were as
748
much entitled as any other section of the community to decent living conditions. [HON. MEMBERS: "Hear, hear."] I am glad to hear that, because there is no doubt they have not had those conditions as the result of the action of the late Government in not carrying forward the provision of the Housing (Rural Workers) (Scotland) Acts.
Mr. Manuel: That does not mean to say that we deliberately prevented agricultural workers getting good houses. No doubt the hon. and gallant Gentleman will be aware that in the rural areas throughout Scotland in the last six years more new houses have been built by the local authorities entirely for agricultural workers than has ever been built at any other period.
Mr. McNeil: And not tied.
Commander Galbraith: And many of them are now occupied by people who are not agricultural workers.
Like my hon. Friend the Member for Dumfries, I thought some of the strictures made against the Government by the Opposition as to the amount of subsidy were somewhat rich. The Government lately in office fixed the subsidy in 1946 at £23, and since then the cost of a house has increased from £1,130 to £1,551 but there was no increase in the amount of the subsidy. What happened was that the amount of the deficit falling on the rates in 1948 had gone up to £6 14s., in 1949 to £14 12s. and, though there was a drop the following year, to £9 9s., that was effected by the Government increasing the assumed rent and reducing the cost of the house. It rose again to £10 2s. in 1951. Right hon. Gentlemen opposite who were partly responsible for that situation have little cause to comment or complain about what the present Government are doing.
Mr. Woodburn Mr. Woodburn rose—
Commander Galbraith: If the right hon. Gentleman will permit me to finish this part of my remarks I will give way. The hon. Gentleman for Glasgow, Central summed up the position very well when he said that local authorities in the last five years had exceeded the statutory rate contribution by £51 million. That is absolutely accurate, and we know who it was that was responsible for that. But no doubt if there was a Division tonight

749
the hon. Gentleman would be in the same Lobby as his hon. and right hon. Friends.
Mr. Woodburn: I do not think that the hon. and gallant Gentleman wants to be unfair. He has forgotten one very important consideration. Assistance was given according to need by means of the equalisation grant which, for instance, gives the constituency of the hon. Member for Dumfries (Mr. Macpherson) as much as 8s. 11d. as a contribution to its rates.
Sir W. Darling: What about Edinburgh?
Commander Galbraith: I thank my hon. Friend for his assistance. What about the City of Glasgow and the complaints about the working of the grant at present? Is the right hon. Gentleman satisfied with that? He should not bring that matter up too often as far as it affects Scotland. I do not think that it will curry much favour with the local authorities.
I should like to deal with the main points of the debate. First, there was the argument about the figure chosen by the Government in relation to the capital cost of a house. There has been no mystery about this. It has never been concealed from the local authorities for one moment. They were told at the time exactly how we arrived at it.
Mr. Manuel: Nobody suggested that—
Commander Galbraith: May I make my own speech in my own way? I did not interrupt the hon. Gentleman. If he will look after his own speeches and let me look after mine I shall be grateful to him.
Mr. Hubbard: We have heard a great deal about the negotiations with the local authorities. I hope that they were conducted on a much better tempered plane than this debate.
Commander Galbraith: The hon. Gentleman does not need to worry about my temper. I can look after it perfectly well without any assistance from him.
A question was raised about how we arrived at the figure of £1,765. It was quite simple. We simply took all the tenders approved for the last six months of last year and the first month of the
750
present year, and that was the average figure which resulted. The local authorities have known that from the beginning. The local authorities suggested that £1,900 was the correct figure. Our inquiries were far wider than theirs. We were unable to agree to their figure. The figures which we gave for the tender prices were completely accurate. There is no question of deception.
Mr. McInnes: The hon. and gallant Gentleman indicated that the inquiries of the Department covered a far wider field than those of the local authorities. Am I correctly stating the position when I say that all the tenders which the Department had under review were given to the finance officers of the associations and that from them they detected all the weaknesses which were in the calculations of the Department?
Commander Galbraith: Not according to my information.
Mr. McInnes: I have the details here.
Commander Galbraith: I will not argue the point. I have answered the hon. Gentleman. I consider that the information available to the Department was much greater than that which could possibly have been available to the local authority associations. I want to say, because it is of importance, that agreement was obtained with the English local authorities on the figure of £1,525. That should be kept in mind. It is generally recognised that the proper difference between the cost of a house in England and one in Scotland—allowing for our different weather conditions and the stouter construction required—should be about £120.
From the figure of £1,765 a deduction of £130 was made in respect of low-cost designs. It is clear that there may be great differences of opinion as to whether or not that is the proper figure. But it was the figure that the advisers of my right hon. Friend in these matters considered was correct. I may say that we did reduce that figure to £115. We thereafter added to it £15, because while the negotiations were going on we were permitted to put wooden floors into 50 per cent. of the houses in Scotland and that meant a saving of £15 per house on the average.

751
I know that local authorities can argue that it is not the figure to have taken, but on the other hand it is what our advisers believed to be correct. May I say to the hon. Member for Glasgow, Central that never, so far as I can ascertain, was any agreement made to reduce that figure to £100?
Mr. McInnes: Here are the Department's own figures.
Commander Galbraith: I am not dealing with that. I have given the hon. Member his answer.
Let me take up the question of the criticism of the notional rent figure which was adopted of £42—
Mr. McNeil: The hon. and gallant Gentleman is departing altogether from the question of cost?
Commander Galbraith: No.
Mr. McNeil: Are we to take it that he is quite unwilling, despite his certainty, to submit this to the independent test of any kind of fact-finding organisation? Is that the answer?
Commander Galbraith: I am quite unwilling to do that—
Mr. McNeil: To test the facts?
Commander Galbraith: The right hon. Gentleman was telling us a few minutes ago that he was not levelling a charge of dishonesty against the Scottish Office—
Mr. McNeil: Against the Minister—of course against the Minister—
Mr. Speaker: Order. A charge of dishonesty should never be made.
Mr. McNeil: I think I was improper in suggesting that the Minister was dishonest, and I unreservedly withdraw. But the hon. and gallant Gentleman will nevertheless understand that I am anxious that these facts should be tested as facts, although I was improper to suggest that it was dishonesty which actuated the Minister.
Commander Galbraith: I consider it is an insult even to be asked to submit them to a test. The figures are the figures proved over a period of seven months, and that is the figure on which we stand. [Interruption.] This is a Government which intend to govern and not be ruled
752
by a body outside the House of Commons.
The local authorities contended that the correct figure to be taken was £33. I understand they contend that is the average rent now being paid. I do not know on what basis they find that. One hon. Member has suggested it was too high. At any rate, I am not in a position to say whether it is correct or not. But I would point out that certain local authorities are already charging rents of £40 and more, both in the counties and in large burghs as well as in some 40 small burghs. I say again, how can we in Scotland possibly justify a notional rent of £33 when the notional rent for England is £46 17s.?
Mr. Hubbard: We are to be ruled by England?
Commander Galbraith: No, by common sense. The hon. Member for Kirkcaldy Burghs (Mr. Hubbard) spoke about the proportion of earnings to be applied to the rent. I could give him some information about that, but time is so short that I cannot go into the matter at present.
May I take the question of repairs and maintenance, the notional figure being taken at £11—[HON. MEMBERS: "No, £8."]—no, repairs and maintenance is £11. The figure for repairs is £8. That is the figure which the local authorities gave us as the cost of repairs at the present day, so it does not seem to me that there is much dispute about that point. I would say this, in view of what has been said about the large repair funds in the hands of local authorities.
These funds have been reduced since the beginning of the war from £10 15s. per house to £4 4s. per house, and I would ask hon. Gentlemen opposite to be good enough to study the Rating Review of 1951 of the Municipal Institute of Surveyors and Accountants which says that many of the local authorities have only £2 per house left in their repair funds, and that a number of them are in debit.
I think that amply covers the point made. I am very sorry that my time has been so restricted, but I will join with the right hon. Gentleman opposite who wound up for the Opposition in the hope, which is the hope I am sure of every Member of this House, that the

753
provisions of this Bill may speed up the building of houses for the people of Scotland.
But let me say that the thing that should worry us most in regard to housing is the high cost of building at the present time. My right hon. Friend is doing everything in his power to find ways and means of keeping down the cost. The architects of the Department of Health have produced low cost designs of houses which, while maintaining the standards of building and rooms of adequate size, have cut out all unnecessary circulating space.
The architectural profession have done what seems to be everything that is possible at the present time. I join with the right hon. Gentleman opposite when I say that it is now up to the industry to show what they can do. They can rely on the Government helping them in every way they can. I commend this Bill to the House.
Bill accordingly read a Second time.
Committed to a Committee of the whole House.—[Mr. Redmayne.]
Committee Tomorrow.

HOUSING (SCOTLAND) [MONEY]
Considered in Committee under Standing Order No. 84 (Money Committees).—(Queen's Recommendation signified.)
[Sir CHARLES MACANDREW in the Chair]
Resolved,
That, for the purposes of any Act of the present Session to make fresh provision for the making of contributions out of the Exchequer and by local authorities in respect of housing accommodation provided in Scotland, to amend the provisions of the Housing (Scotland) Act, 1950, in certain respects, and for purposes connected with the matters aforesaid, it is expedient—
A. To authorise the payment out of moneys provided by Parliament of any increase in the moneys so payable under the Housing (Scotland) Act, 1950 (hereinafter referred to as "the Act of 1950") attributable to any provision of the said Act of the present Session—

(1) Substituting for the annual contribution to be made by the Secretary of State to a local authority under subsection (2) or subsection (7) of section eighty-four of the
754
Act of 1950 an annual contribution for sixty years in respect of each new house provided by them and completed after the twenty-eighth day of February, nineteen hundred and fifty-two, of the following amount, that is to say, thirty-nine pounds fifteen shillings for a house of three apartments or less, forty-two pounds five shillings for a house of four apartments, and forty-six pounds fifteen shillings for a house of five or more apartments, and for each part of a hostel deemed to be a new house, twenty pounds, or, if the Secretary of State so determines in the case of any house so completed which a local authority have provided for the agricultural population as defined in the Act of 1950, of the following amount, that is to say, fifty-one pounds fifteen shillings for a house of three apartments or less, fifty-four pounds five shillings for a house of four apartments, and fifty-eight pounds fifteen shillings for a house of five or more apartments;

(2) Amending the law relating to improvement grants under section one hundred and eleven of the Act of 1950;

(3) Enabling a tenant of an agricultural holding, a landholder or a statutory small tenant to receive an improvement grant under the Act of 1950 in respect of the execution of improvement works on any dwelling on his holding in respect of which he would at his outgo be entitled to compensation as for an improvement:

B. To authorise the payment out of moneys provided by Parliament of—

(1) Any expenses incurred by the Secretary of State in making to a local authority, towards the expense incurred by them in giving assistance, in accordance with a scheme approved by him, for the provision of housing accommodation in new houses for the agricultural population as defined in the Act of 1950 (such assistance being given by way of payment of a lump sum not exceeding either one-half of the cost of the house or two hundred and forty pounds for a house of three apartments or three hundred pounds for a house of more than three apartments), an annual contribution for forty years of an amount equal, where the assistance is given in respect of a house in the Highlands and Islands as defined in the Act of 1950, to seven-eighths, and in any other case to three-quarters, of the annual loan charges referable to the amount paid by way of assistance;

(2) Any increase in the sums payable under Part II of the Local Government Act, 1948, out of moneys so provided which is attributable to the provisions of the said Act of the present Session;

C. To authorise the payment into the Exchequer of all sums received by the Secretary of State by virtue of the provisions of the said Act of the present Session.—[Mr. Boyd-Carpenter.]
Resolution to be reported upon Monday next.

HOUSING (SCOTLAND) [MONEY]
  RATING AND VALUATION (SCOTLAND) BILL
  Not amended (in the Standing Committee), considered; read the Third time, and passed.

  NAVY, ARMY AND AIR EXPENDITURE, 1950–51
  Resolutions reported:
  I. Whereas it appears by the Navy Appropriation Account for the year ended the 31st day of March, 1951, that the aggregate Expenditure on Navy Services has not exceeded the aggregate sums appropriated for those Services and that, as shown in the Schedule hereto appended, the net surplus of the Exchequer Grants for Navy Services over the net Expenditure is £8,455,905 16s. 5d., namely:

  £

  s.

  d.

  Total Surpluses

  9,031,170

  5

  0

  Total Deficits

  575,364

  8

  7

  Net Surplus

  £8,455,805

  16

  5

  And whereas the Lords Commissioners of Her Majesty's Treasury have temporarily authorised the application of so much of the said total surpluses on certain Grants for Navy Services as is necessary to make good the said total deficits on other Grants for Navy Services.
  1. That the application of such sums be sanctioned.
  II. Whereas it appears by the Army Appropriation Account for the year ended 31st day of March, 1951, that the aggregate Expenditure on Army Service has not exceeded the aggregate sums appropriated for those Services and that, as shown in the Schedule hereto appended, the net surplus of the Exchequer Grants for Army Services over the net Expenditure is £6,497,749 1s. 4d., namely:

  £

  s.

  d.

  Total Surpluses

  9,593,189

  5

  10

  Total Deficits

  3,095,440

  4

  6

  Net Surplus

  £6,497,749

  1

  4

  And whereas the Lords Commissioners of Her Majesty's Treasury have temporarily authorised the application of so much of the said total surpluses on certain Grants for Army Services as is necessary to make good the said total deficits on other Grants for Army Services.
  2. That the application of such sums be sanctioned.
  III. Whereas it appears by the Air Appropriation Account for the year ended the 31st day of March 1951, that the aggregate Expenditure on Air Services has not exceeded the aggregate sums appropriated for those Services and that, as shown in the Schedule hereto appended, the net surplus of the Exchequer Grants for Air Services over the net Expenditure is £8,166,612 3s. 2d. namely:
  756

  £

  s.

  d.

  Total Surpluses

  9,022,801

  0

  9

  Total Deficits

  856,188

  17

  7

  Net Surplus

  £8,166,612

  3

  2

  And whereas the Lords Commissioners of Her Majesty's Treasury have temporarily authorised the application of so much of the said total surpluses on certain Grants for Air Services as is necessary to make good the said total deficits on other Grants for Air Services.
  3. That the application of such sums be sanctioned.
  [For details see OFFICIAL REPORT, 26th June, 1952; Vol. 502, c. 2561–92.]

HIRE-PURCHASE RESTRICTIONS
Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Redmayne.]
10.50 p.m.
Mr. Stephen McAdden: I am grateful for the opportunity of being able to raise, even at this late hour, a question of which I have given notice to my right hon. Friend and to which, I hope, a reply will be forthcoming from a representative of the Board of Trade. I want to draw the attention of the House to the question of the hire purchase restrictions. It will be within the recollection of the House that a week or so ago this matter was brought to its attention in a somewhat different form.
Tonight, I wish particularly to raise the question because it is my belief that the Order concerning hire purchase, which was introduced by the President some time ago, and which was prayed against in the House, but finally approved, is one which was designed for the purpose of cutting back upon the production of certain items of industrial equipment. Radio and television sets and vacuum cleaners and things of that description were brought within the purview of the Order so that production could be cut back in the interests both of the export trade and of re-armament.
While I generally can agree—even if I did not, it would not materially matter, because the House has already approved of it—in principle with, and support, the decision of the House to give approval to this Order in its general sense, I must say that, on examination, it would appear to

757
me that its effects have been far more far-reaching than was intended when the Order received the approval of the House. It is because I so believe that I want to invite my hon. and learned Friend's attention to some of the happenings that have occurred since the Order was approved, and to ask him whether, in fact, in introducing the Order, the President had in mind any clear picture of what effect it would have.
I can, as I say, well understand the desirability, in the view of the Government and of the House, of seeing that there should be a reduction in the domestic consumption of certain items, but I cannot bring myself to believe that that decision to restrict consumption was taken without some very careful examination as to the effect it would have on the industries concerned, and it seems to me to be fairly reasonable to assume that, when they made this decision, the Government had a certain percentage in mind of the amount of reduction to be effected. Indeed, I believe I am correct in saying that the Chancellor, earlier this year, intimated that in his view there should be a reduction of something like a third in the amount of the goods covered by the Order to be consumed in the home market.
It seems to me, although contrary views were expressed, as my hon. and learned Friend will remember, in the debate last week as to how much production has, in fact, been affected, that examination of the figures shows something rather catastrophic has occurred. Manufacturers' supplies of radio and television sets, about which I propose to speak particularly, necessarily reflect market conditions with a time lag. It takes a little time for a decline of manufacturers' supplies to be reflected in the retail trade.
In the period from March to May, compared with the previous three months, it appears that there was a decline in radio sets of 29 per cent. and in the number of television sets supplied of 17 per cent. If we compare the first five months of this year with the first five months of last year the figures are even more alarming. We find that the decline in radios is 58 per cent., in radiograms, 62 per cent.; whereas in television there was a slight increase of 1 per cent. But the position becomes even more
758
serious if we compare the second quarter of 1952 with the second quarter of 1951, for in that particular quarter we find that the decline in the manufacturers' supplies in radios was minus 65 per cent., in radiograms, minus 79 per cent., and in television, minus 18 per cent.
I should explain that the figures which I am quoting included the June figure, which is an estimated figure based upon the nearest assumption which it is possible to establish from those manufacturers who are members of the British Radio and Electricity Manufacturers' Association, who represent 90 per cent. of the trade, and whose figures I think can be regarded as reliable.
I think it only fair to explain that it is possible to argue that, while it cannot be denied that there has been a catastrophic decline in demand for radio and television sets since this Order was instituted, there has not been so marked a decline in the turnover in the radio and television business. Comparing the first five months of 1952 with the first five months of 1951 one finds the decline in turnover is from £26 million to £21 million, and it might be argued that that decline in turnover, being some 20 per cent., is nothing to get excited about. On the other hand, it seems to me to be important to remember that there has been maintained to a limited extent the sale of television sets, which are more expensive than radios and radiogrammes, with the result that that does not give quite a true picture.
Even in the case of television sets one finds a decline in turnover from the beginning of this year, the growth of which is becoming so marked that I think my hon. and learned Friend ought to consider whether this does not indicate a catastrophic decline. The turnover has gone from minus 17 per cent. in January to minus 11 per cent. in February, minus 19 per cent. in March, minus 30 per cent. in April, and, in May, minus 40 per cent. So we see that there is a growing, and rapidly growing, decline in the sale of radio and television sets.
While there may be every justification for arguing, as was argued when the Order was first introduced, that it is necessary to restrict domestic consumption in the interests of the export trade and of the re-armament programme, if the home trade is allowed to decline to

759
an extent greater than was originally envisaged it must inevitably result in great hardship to an industry which has led the world in this particular scientific development, and which is of tremendous value not only to our re-armament drive but to our export trade as well. I do not think the Parliamentary Secretary will deny the great contribution which this industry has made to the export trade. It has done remarkably well. Indeed, one finds that the export figures have been worthy of every possible praise.
I notice that according to the "Financial Times"—I do not say that is necessarily an authoritative interpretation of the Government's view—
Sir William Darling: Why not?
Mr. McAdden: I do not say that it is not or that it is. I merely quote it as a reputable newspaper whose views are entitled to be regarded with respect. The "Financial Times" says this in its issue of 14th June:
"The original production plans for radio and television sets this year envisaged a continuation of the rising output of 1951, but at the beginning of the year the Chancellor demanded a one-third cut in the production of sets for the home market, and in February the curbs on hire-purchase were imposed. The restriction on hire-purchase may mean the cut will be achieved without any further action at the production end as regards radio sets."
That is a very modest under-statement of the real position.
The fact is that, not only has that cut been effected, but it has been effected in such a disastrous manner that I suggest consideration should now be given to whether the effect the Parliamentary Secretary desired has not been more than accomplished, and whether some easement of the position might not reasonably be effected. I do think it is important for the Parliamentary Secretary when considering this question to bear in mind the interdependence of home and export sales.
Mr. Edward Heath: Could the hon. Gentleman tell me whether the figures he is quoting are the reductions caused in hire-purchase or reductions on overall sales?
Mr. McAdden: That is a very interesting point. The figures I have quoted are
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applicable to all sales. What is significant is that you find the rapid acceleration in the decline of radio and television sales only since the operation of this Order. While it is true that other measures have contributed to the decline it has been made far, far worse as a result of the introduction of these hire-purchase Orders.
Mr. Kenneth Thompson: Has the hon. Member considered whether this has any relation whatever to the quality of the B.B.C. broadcasts?
Mr. McAdden: I do not want to get drawn away on that. You, Mr. Speaker, would correct me if I even appeared to be drawn away on a discussion of the quality or otherwise of the B.B.C. broadcasts.
The Government, obviously, does not intend that there shall be no radio or television sales. They have approved the opening of two new television stations, one in Scotland and one in the north of England, and it appears that since they have approved the opening of these stations it is not their intention to send out programmes which no one will see.
If I am right in the assumption that people will be able to see something of the programmes to be transmitted from the stations they have opened and others they propose to open in the future, it seems equally desirable that they should see whether these hire-purchase restrictions are working in such a way as to make it difficult, if not impossible, for many of these people who are being brought within range of these new stations to be able to derive the pleasure the Government presumably hopes they will derive. It seems to me that the effect of these regulations has been to make it exceedingly difficult for them to be able to purchase sets. This fact has been proved by the figures I have put before the House, and I hope that the Parliamentary Secretary will give consideration to them.
One should pay due regard to the interdependence of the home and export trade. It is impossible to develop the export trade in this particular field if one is not to have some kind of a home market of a reasonable order. The idea that it is possible for us to produce in quantity and at reasonable

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prices unless one is assured of a reasonable home market is not a sensible attitude to adopt. Important as the defence programme is, anxious as we all are to see it develop and anxious as the industry is to play its part, the domestic radio is the end product of the component and valve producers who are essential to the defence programme. Valve producers cannot be fully and productively employed producing only for the defence programme. There must be some other outlet for their production.
I have, in my remarks, done what I could to concentrate in the main on radio and television, because they are industries of which I have some little knowledge. It will not be beyond the memory of the House that the constituency I represent happens to have within its borders a large section of the radio and television industry. Consequently, I am not uninterested in seeing that due consideration is given to the effect of this Order on employment in my constituency. I do not suggest at all that there is any marked unemployment in this industry, but one should take note of the positive trends existing at present and try to correct the possibility of unemployment before it eventuates; and, if the Government are giving serious consideration to the effects of the Order, it ought to be possible for us to be told what is the decline in the production of radio and television sets. It ought to be possible for us to be told what was the anticipated decline, what decline has actually taken place and, thirdly, what action Her Majesty's Government proposes to put things right.
I have spoken of radio and television, but if one turns to other commodities covered by this Order, one finds that they include electric immersion heaters, electric washing machines, and vacuum cleaners; and, dealing with the last-named, supplies to the home market in the first quarter of this year totalled 115,000, whereas, in the comparable quarater of 1951, the figure was 204,900. That is practically a 50 per cent. drop in the home market supplies of vacuum cleaners. Can the Parliamentary Secretary say whether that was the figure envisaged, or whether it was a lesser figure? If a lesser figure, does he propose any action, either by way of withdrawing the Order, or by substituting some other?
When it comes to the question of washing machines, there is also a very con-
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siderable reduction on the figures for previous years, and I hope that the Parliamentary Secretary, who, I see, is indicating that the time is fast running out, will now have the opportunity to give the fullest possible answer. I hope that he will bear in mind the importance of this industry affected by this Order, for that industry appreciates that it is expected to make some contribution to the difficult national situation. But, one would like to feel that it is not being inflicted with a greater burden than the Government originally intended it should bear. I hope that the Government appreciates that the decline is of a very serious order, and that we shall now be told that something will be done, and done quickly, to help the industry.
11.9 p.m.
The Parliamentary Secretary to the Board of Trade (Mr. Henry Strauss): I can assure my hon. Friend the Member for Southend, East (Mr. McAdden) who raised this subject tonight, that Her Majesty's Government are well aware of the importance of this industry. Indeed, I cannot think that, at the present time, whether we consider exports or re-armament, any Government would be likely to overlook the importance of electronics. I thank him, too, for having given me some indication of the points he wished to raise.
The Hire Purchase and Credit-Sale Agreements (Control) Order, 1952, came into operation on 1st February of this year, and this is the third occasion that I have found myself at this Box dealing with that Order. The first occasion was when I answered a Prayer for its annulment, and when the House, on a Division, approved the policy of the Order. The second occasion was little more than a week ago, when I answered another Adjournment debate. What was then asserted in that debate was that the Order had had no effect whatever on production, and what is argued today is that it has had much too much effect. Those familiar with the rules of logic will know that, while both these propositions cannot be correct, both may be wrong.
My hon. Friend asked, among other questions, what was the intended effect of the Order on particular trades. The questions he put were, I think, based on a misconception. This Order does not impose a physical control. It is one of

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a number of monetary measures to restrict credit, and to prevent too much borrowed money using up materials and labour which would be better employed in producing goods for export and defence.
The other measures taken in this field were the raising of the Bank rate, the Funding operation, the request to the banks, and the directions to the Capital Issues Committee by the Chancellor of the Exchequer, particulars of which were given in answer to a Parliamentary Question on 7th December last year. On 29th January this year the Chancellor said this in the House:
"Credit restriction will also limit hire purchase, which is essentially a form of living beyond one's means."—[OFFICIAL REPORT, 29th January, 1952; Vol. 495, c. 59.]
And in the reply I gave to the Prayer on 13th March I described the object of the Order thus:
"It is to check demands upon the productive capacity required for defence and for exports."—[OFFICIAL REPORT, 13th March, 1952; Vol. 497, c. 1712.]
This is not, therefore, a physical control but a monetary control; but it is none the worse for that. It may well be that some physical controls are still necessary in the case of scarce raw materials; but monetary controls can not only supplement physical controls; they can sometimes supersede them and prove equally effective for their purpose, with far less interference with liberty and with consumers' choice. If the Government in this field relied wholly on physical controls, they would have to make an arbitrary decision on the output of all these different commodities, whereas it is possible in the way that has been adopted to leave far greater choice to consumers.
The real question is whether the time has come when credit need no longer be restricted, because our balance of payments problem has been solved. The House knows that, obviously, that time has not come. If they have followed the recent statements of the Chancellor of the Exchequer, the latest being given in the House yesterday, they know that, while there has been a great improvement, our goal of safety has not yet been reached, and that in a very difficult situation companies must be prepared to turn to production for defence and export, or
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to release labour and materials for that purpose. If there has been a fall in sales on the home market, the surplus capacity can, in most cases, be used in more important work or the labour can he absorbed elsewhere.
I do not wish to weary the House with many figures, but I should like to give these figures relating to exports of radio sets. In the first five months of 1950, 1951, and 1952, 93,000 sets, 176,000 sets and 206,000 sets, respectively, were exported. The figures for the first five months of this year are 15 per cent. higher than the comparable figures for 1951 and more than double those for 1950.
There has certainly been a reduction in sales by the shops, but that reduction has taken place not only in hire-purchase sales but in all sales, and in the very short time at my disposal, as my hon. Friend has referred to an article in the "Financial Times," let me also refer to something stated in a recent article in that newspaper. It is very dangerous to ascribe the diminution of sales to Purchase Tax or to restriction of hire-purchase, merely because one dislikes these things. The danger becomes all the more obvious when it is seen what has happened in the case of the sale of electric cookers, which happen to be subject neither to Purchase Tax nor to hire purchase or credit sale restrictions. Yet the figure of production in October, 1951, was 23,000 and in May, 1952, it was 16,000. The figures for deliveries to the home market were 16,000 in October, 1951, and 11,000 in May, 1952.
My hon. Friend very fairly admitted that the unemployment figure in the industry was very low indeed. The latest available figures show that on 12th May of this year for gramophones and wireless apparatus there were 1,562 wholly unemployed and 29 temporarily stopped out of a total of nearly 100,000, or, roughly, 1½ per cent. The corresponding figure for wireless valves and electric lamps was less than 1¼ per cent. As many as 1,161 vacancies for radio workers were notified to the employment exchanges in London and the South-East recently. At the same time the defence programme is continually making increasing demands on the industry.
For all these reasons we believe that the Order—with the other financial

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measures adopted by Her Majesty's Government—has promoted the purpose for which it was designed with a fair measure of success. At the same time, I would make it clear that it is no part of our purpose to close down any industry through the operation of this Order. Some fears have recently been expressed that the contraction of the radio and television trade has been too severe. The British Radio Equipment Manufacturers' Association have made representations to the Ministry of Supply and my hon. Friend the Parliamentary Secretary to the Ministry of Supply—who, I hope it will be noted, has been listening to tonight's debate—will meet the Association's representatives in a few days' time to discuss the matter.
In conclusion, I can assure the House that the Board of Trade have kept, and will continue to keep, in close touch with the Ministry of Supply about the effects of our Order on all the industries concerned.
11.18 p.m.
Mr. Harmar Nicholls: The House will detect a ray of hope in the closing words of my hon. and learned Friend the Parliamentary Secretary.
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While we recognise the significance of the arguments he advanced in reply to the main points raised by my hon. Friend the Member for Southend, East (Mr. McAdden) it reflects great credit on the Parliamentary Secretary and on his hon. Friend the Parliamentary Secretary to the Ministry of Supply that they are prepared to meet with sympathy the deputation which he mentioned. That is the right approach and one which shows that the Government have a broad mind on this problem.
If a slight retraction will avoid any difficulty which might apply in my hon. Friend's constituency, it shows that the Government are meeting the big issues which are fundamental and that they are not fostering dissatisfaction which, if allowed to grow, would not be in the best interest of the nation. We hope to see arise from the closing words of the Parliamentary Secretary some tangible results which will give satisfaction to my hon. Friend the Member for Southend, East.
Adjourned accordingly at Nineteen Minutes past Eleven o'Clock.

TRADE AND COMMERCE
  German Bonds (Claims)
  German Bonds (Claims)
  Coronation Celebrations (Overseas Visitors)
  Coronation Celebrations (Overseas Visitors)
NATIONAL FINANCE
  Purchase Tax (Pianos)
  Purchase Tax (Pianos)
  Sugar Purchases (Dollar Areas)
  Sugar Purchases (Dollar Areas)
  Financial Year (Date)
  Financial Year (Date)
  Durham University (Building Costs)
  Durham University (Building Costs)
  SCIENCE TEACHERS AND TECHNOLOGISTS
  SCIENCE TEACHERS AND TECHNOLOGISTS
  CUSTOMS DUTIES OFFICIALS
  CUSTOMS DUTIES OFFICIALS
AGRICULTURE
  Horses
  Horses
  Farm Survey
  Farm Survey
  Foot-and-Mouth Disease
  Foot-and-Mouth Disease
  R.A.F. Exercise, Huntingdonshire
  R.A.F. Exercise, Huntingdonshire
FORESTRY
  Land Acquisition
  Land Acquisition
  Fires
  Fires
  CHANNEL ISLANDS (PRISON SENTENCES)
  CHANNEL ISLANDS (PRISON SENTENCES)
  CRIMES OF VIOLENCE (CONVICTIONS)
  CRIMES OF VIOLENCE (CONVICTIONS)
  CAR PARKING (OBSTRUCTION)
  CAR PARKING (OBSTRUCTION)
  UNEMPLOYED DOCKWORKERS
  UNEMPLOYED DOCKWORKERS
  CORONATION SOUVENIRS
  CORONATION SOUVENIRS
  PRESCRIPTION CHARGES
  PRESCRIPTION CHARGES
EDUCATION
  School Requisites (Tax)
  School Requisites (Tax)
  School Meals (Holiday Periods)
  School Meals (Holiday Periods)
  Local Authorities (Circular 242)
  Local Authorities (Circular 242)
  Personal Case, Newcastle-under-Lyme
  Personal Case, Newcastle-under-Lyme
  Teachers (Training College Vacancies)
  Teachers (Training College Vacancies)
  Political Propaganda (Leaflets)
  Political Propaganda (Leaflets)
  AGRICULTURAL LAND, SCOTLAND
  AGRICULTURAL LAND, SCOTLAND
  BRITISH ARMY (COMPASSIONATE RELEASES)
  BRITISH ARMY (COMPASSIONATE RELEASES)
  LOCAL AUTHORITY EXPENDITURE (SALARIES)
  LOCAL AUTHORITY EXPENDITURE (SALARIES)

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

WEST HARTLEPOOL EXTENSION BILL
Read 2a
GLAMORGAN COUNTY COUNCIL BILL
Read 2a.

CITY OF LONDON (GUILD CHURCHES) BILL
2.37 p.m.
Order of the Day for the Second Reading read.
THE LORD BISHOP OF LONDON: My Lords, I beg to move that this Bill be read a second time. It is, in point of fact, so far at any rate, an agreed measure. I am empowered by my own ecclesiastical leader, the most reverend Primate the Lord Archbishop of Canter-bury, to say that he gives full support to the Bill. Indeed, I think that the Archdeacon of London, who is the architect of the Bill, has been in consultation with His Grace the Archbishop at every stage of its compilation. Not only so: there has been, so far, a unanimous measure of agreement among the many interests which had to be consulted before the Bill could be compiled at all. There were as many as 250 vested interests which had to reach agreement before the Bill could be compiled. The Bill has, moreover, passed through all the necessary stages in another place, and so far there has been no opposition at all to it.
I suppose that I myself should feel highly gratified and flattered at this unanimity of agreement about a Bill which proposes to enable the Bishop of London to do certain things. But I hasten to point out that the Bill does not, in fact, add to the Bishop of London's powers. While, throughout the arrangements, we tried to see that all the various
674
interests concerned "broke even," it is a fact that the Bishop of London loses a certain amount of power and does not gain any. It is not a very great matter, but I thought it necessary to make that word of explanation because the wording of the Bill might lead people to believe that the Bill intended to give the Bishop of London powers which, in fact, it does not give him. It does, however, enable him to do certain things and it is those which really form the basis of the Bill.
I am sure that your Lordships will not expect me to go through all the clauses of the Bill, but you will expect me to explain its main purposes. Perhaps I can best do that by recalling to your Lordships' recollection a Commission over which the noble Lord, Lord Merriman, presided, and which reported in 1946. That Report was issued in two Parts. The First Part dealt with the financial aspect of the ecclesiastical organisation for the City. Your Lordships passed a Bill that was compiled as a result of that Report, and the effect of that Bill has been to bring order out of the previous chaos in our financial arrangements in the City. Both Church and City are extremely grateful to the House for what it did on that occasion.
The Second Part of the Report dealt not with finances but with the actual buildings, the churches in the City, and it is with that matter that the present Bill in fact deals. There are forty-seven churches in the City of London, and there is a population of not much more than 5,000: only about 5,000 people actually sleep in the City of London. On the other hand, nearly 500,000 people work there by day. The existence of this congested population during the day and the small population at night time involves a very special problem. The question is, how to use the forty-seven churches to the best advantage. Lord Merriman's Report was extremely conservative, and we are all very happy about that, because on a previous occasion it had been suggested that no fewer than nineteen of the City churches should be demolished or removed. On this occasion the suggestion is only that three churches should not be rebuilt. There are three churches in the City which have been almost obliterated, and there is no point in rebuilding them. There are two churches which it is pro-

675
posed shall be given over to other uses, one to become the choir school of the Cathedral Choir, and the other to become a central hall for the diocese. With regard to two other churches, we have not yet made up our minds what would be the best thing to do with them. That disposes of the odd seven, and we are left with forty churches for which we must devise some satisfactory use. Out of those forty churches, it is now proposed to use twenty-four as parish churches and to reorganise the parish boundaries in the City so that the parishes will be completely catered for by these twenty-four churches.
The remaining sixteen it is proposed to put to a hitherto unprecedented use, and that is the main point of the Bill. What has been suggested is that these churches should be used as what we call guild churches—that is to say, that they shall be taken out of the parochial organisation of the City altogether and shall be used mainly to minister to the day-time population of the City. This involves, of course, running quite contrary to the customary procedure in the Church of England. If the churches are taken out of the parishes, it will also necessitate depriving the incumbents or vicars of those churches of the customary freehold. They will be given a five years' tenure of office, with the possibility of being reappointed for a short period of years if they prove successful at the particular work which they are doing. That will at once both preserve the traditional stability of our work in the City and introduce an entirely new element of flexibility. We shall have sixteen churches which have no permanent incumbent and which therefore can be used for any special purpose. The vicar of such a church will be relieved of the legal necessity of taking Divine Service on a Sunday, because the bulk of the people who work in the City are not there on a Sunday. Therefore he will have much more freedom to practise special techniques or to introduce new ways of doing church work, which it is impossible to practise under the old and still traditional parochial system. I must point out that this is an important change in our methods of work in the City, and I hope that we have your interest and your support.
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There is one other thing that the Bill will enable the Bishop of London to do—namely, to designate certain churches, whether they are parochial churches or guild churches, to become ward churches; that is to say, to appoint them to individual wards in the City, so that the aldermen of the ward can sit on their parochial church council, their board of management so to speak, and other representatives from the ward can come and take an interest in the organisation and management of the church thus designated a ward church. In one particular example, that liaison between the City and the Church would be most effectively cemented. The Church of St. Lawrence, Jewry, would be the Corporation of London and City of London church, and the Corporation would have not only the right of patronage but also the actual freehold.
My Lords, I hope that I have said enough to explain the main purposes of the Bill. Your Lordships will realise that, from our point of view, the advantages of such an arrangement are tremendous because it will set free for the spiritual administration in the City sixteen of these churches, and will give an opportunity for trying out many experiments in church work which hitherto have been almost impossible. One of our great difficulties in the past has been the almost impossibility of experimentation. Owing to our historical position, the close legal ties that bind us and fix our whole method of work, it is almost impossible to start upon a new venture. But if these churches are thus released we shall be able to embark upon more experimentation than has been possible up to now. Further, we shall have the very great advantage that the City will be much more closely linked with the churches, and the Church will be much more closely bound to certain wards in the City. Above all, I am sure your Lordships will be interested to know that there will be preserved the priceless heritage of Wren buildings, which are one of the most glorious architectural features to be found in the whole of Europe. I beg to move that the Bill be now read a second time.
Moved, That the Bill be now read 2a.—(The Lord Bishop of London.)
On Question, Bill read 2a, and committed.

POST OFFICE (AMENDMENT) BILL
Brought from the Commons; read 1a, and to be printed.
IRISH SAILORS AND SOLDIERS LAND TRUST BILL [H.L.]
Read 3a (according to Order), and passed, and sent to the Commons.

BALANCE OF PAYMENTS
2.48 p.m.
LORD PETHICK-LAWRENCE LORD PETHICK-LAWRENCE rose to call attention to the position of the balance of payments; and to move for Papers. The noble Lord said: My Lords. I think we are fortunate in that yesterday, only a day preceding this debate, we had an illuminating statement by the Chancellor of the Exchequer in another place relating to this particular subject. It was not only an illuminating disclosure but a very encouraging one, and I congratulate the noble Viscount who is to follow me in this debate on the fact that, in consequence of that statement, he will on this occasion bat on a favourable wicket. But it must not be assumed from that observation that I or my noble friends sitting on these Benches are in any way discouraged by this statement—quite the reverse. We may have our Party differences, which extend even into the financial field. But in the war in which we are now engaged (which, even if it does not call for blood, calls for the sweat of the people of this country in endeavouring to get our heads up from the troubles, financial and economic, which have beset us ever since the war ended), there are not two sides in this country; there is only one. Though we may differ about the means and methods, and though there may sometimes be criticisms about the devices adopted, we are at one in being heartened and encouraged by any news which goes to show that temporarily, or better still permanently, we are making progress in this desperate struggle.
The Chancellor of the Exchequer was very careful in two respects. In the first place, though he gave an encouraging account, he was most anxious and careful to explain that that did not mean that we could "let up" in any way in our efforts for recovery. Your Lordships will remember that no less a member of the
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Government than the Prime Minister himself stated—rather unfortunately I thought just before the Chancellor of the Exchequer's speech on June 12—that he was going to sound not merely an alert but an alarm, because of the difficulties that still confronted the people of this country.
Of course, your Lordships will realise that when any of us speaks, particularly in this House or in another place, on these important matters, he has two audiences outside the Chamber. The first, of course, is our own people in this country; and it would be very unfortunate if, when things looked a little brighter we gave the impression that all was therefore well, that nothing further need be done and that no further sacrifices were required. So we always have to temper our optimism with a great deal of caution and reserve. At the same time, we are addressing an international audience, and it is of the greatest importance that we should do nothing to minimise such recovery as we have already made. Nothing would be worse than that we should cry "Stinking fish" of our own country. Therefore, it is incumbent upon all of us who take part in these debates to bear these much larger audiences in mind. I am quite sure that the Chancellor of the Exchequer and the noble Viscount who will follow me and answer me in this debate will, equally with myself, keep those two audiences in their minds.
I should like to add this further remark. I always deprecate any undue stress being laid on something which happened yesterday or the day before, or in the last few weeks—or it may even be in the last quarter; because, particularly in regard to this question of dollars and our reserve of gold and dollars and other foreign currency, there are often temporary events which make a considerable mark on one particular period but which may be easily reversed after a short time. Therefore, I hold it to be most injudicious to place too great a stress upon anything which has taken place within a short period. I have spoken of that matter on one or two occasions before, and I will just make one reference to it again today. I pointed out, some little time back, that when the exchange moved considerably in our favour and I think reached nearly the highest point, 2 dollars 82 cents, that was temporary. It was good as far as it went, but I said that I did

679
not attach any undue significance to it. Since that time, we have had a reverse process setting in; we have had the United States exchange with us falling against us and the low point being nearly reached. I think it was only about one-sixteenth away from 2 dollars 78 cents. Now it has gone up a little—to, I think, just over 2 dollars 78½ cents. I am anxious that no one should attach undue significance to that. It is good so far as it goes, but it would be a great mistake to make too much of it, because that sort of thing is often due to temporary causes which are not long enduring.
Further I would say this. There are, of course, two problems which are involved in the term "balance of payments," and though they are closely related they are by no means identical. There is the balance of payments with which the Chancellor of the Exchequer was particularly dealing in another place yesterday. This is the actual reserve of dollars and gold which we have in our Treasury, and the effect of the quarter's dealings with regard to that which is temporary and can be influenced—as I shall show presently—by isolated causes which may or may not be recurrent. There is also a balance of payments in the other sense, which is the United Kingdom's position with regard to its exports and imports, visible and invisible. This balance is bound up with the long-term situation and is, in the long run. far more important than those matters which affect merely the day-to-day situation. It was with regard to the first of these—the position of the sterling area and our relation to it as banker—that the Chancellor of the Exchequer was mainly talking yesterday. But it is to the position of the United Kingdom as a producer, exporter and importer, that I specially desire to devote my remarks to-day, because, as I have said, in the long run that is the more important consideration of the two.
Before I come to that, I would add one further note. The over-all picture that the Chancellor of the Exchequer drew was one of very great advance—practically the wiping out of the quarterly deficit of the balances in gold and dollars (and other foreign currency, if there is any) held in this country. And the Chancellor of the Exchequer was most careful to point out that there were several items of specially adventitious
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advantage accruing to us in the period. There was, for the first time in its new form, a special American contribution. There was. again almost for the first time, the effect of the import cuts, and there were a large number of other items which were by no means necessarily recurrent. The first question we have to ask is to what extent, from the United Kingdom point of view, these items are going to be part and parcel of the regular quarterly position in this country.
I should like first of all to come to the question of the United States. So far as the United States are concerned, President Truman asked for a contribution to European defence, of which the United Kingdom's share was expected to be 600,000,000 dollars. So far as I can make out, however. Congress has cut it down to about 400,000,000 dollars for the ensuing year—that is, roughly, £150,000,000. Further there is a proposal—it is hardly more than a suggestion—that the United States should buy aeroplanes from Europe, I think mainly from ourselves, which might run to as much as 700,000,000 dollars in the course of the first period. That would amount to £250,000,000 if these orders were fulfilled. Of course, those are large items. I do not know whether the noble Viscount has any information on that point, but if he has, the House would be interested to hear from him with regard to it.
Leaving these single items out of account, I come to what I might call the bread and butter question, the question of our visible imports and exports. So far as imports are concerned, we see to-day, and are likely to continue to see, the benefit of the cuts in imports made by the Chancellor of the Exchequer. May I say in passing that I am sure noble Lords on all sides will realise that whatever Party had been in office, whether the Chancellor of the Exchequer had been Mr. Gaitskell or Mr. Butler, something of the same sort would have been done, and, in a sense, this is not a Party question. We are now getting the benefit of these cuts on the right side of our balance sheet of income and expenditure. But we all know that this is not a permanent remedy, for several reasons. In the first place, cuts on imports are a game at which two sides can play. It is clear that if we cut off valuable imports from some other country, they will tend to cut valuable

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imports which they receive as part of our exports. Therefore, in the long run, we shall not get the same advantage from the cuts on imports as we receive when we first impose them. Our advantage tends to be neutralised by the action of the other country whom we are adversely affecting by cutting imports. We must be prepared, therefore, for some recession in the advantage which we get, on paper, from the cuts on imports.
Of course, we all know that that is taking place. It is taking place over Europe, and one of the serious factors we have to consider is our deficit with the European Payments Union, which has been running at something like £17,000,000 a month up to quite recently. The principal creditor is Belgium, and the Chancellor of the Exchequer reported yesterday, what was already well known in business circles, that an arrangement had been made by which part of that debt in future would be covered not in gold but by defence munitions, which would be supplied by this country and France. I think the total from the two countries is to be 50,000,000 dollars. The share of this country is in the neighbourhood of £8,000,000 to £9,000,000. But that is a single payment and, valuable as it is, it is not a large contribution towards a monthly deficit of £17,000,000. Any information that the noble Viscount has to give on that subject will be useful, but I shall be surprised if he has much to add to what the Chancellor of the Exchequer stated yesterday in another place. That is pretty well all I need to say on the question of imports.
The really vital and important matter is the question of exports, both visible and invisible. Exports have to cover a great number of things. In the first place, we have to find exports to make good the loss of exports to Commonwealth countries, which is very considerable, because when we make cuts in our imports, in order to save dollars, the other Commonwealth countries also made considerable cuts, including cuts in imports from the United Kingdom amounting to considerable sums. In order to get dollars, we have to make exports to the United States and Canada. In so far as there has been any fall in price, it has varied from article to article, particularly in some of the raw materials coming from our Colonies, and we have to increase our exports to the United States to cover
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losses we are subject to there. Therefore, it is important that we should have a substantial increase in exports of all kinds. That is much easier said than done; for three reasons. In the first place, we are being subject for the first time to a considerable amount of fresh competition, notably from Japan and Germany. We shall need all our wits and skill if we are to be able to hold our own in a world which is ceasing to be a sellers' market and becoming a buyers' market, in order not to be undercut by these new competitors as well as by older competitors who are in the field.
In the second place, so far as the United States are concerned, and possibly other countries as well, we are going to be confronted with fresh efforts to keep out our exports. Noble Lords will no doubt be aware of the efforts that are being made by manufacturers in the United States at the present time to obtain higher and higher tariffs, in order definitely to shut us out. That is being resisted by a certain section of thought in America, but it might be in part successful and that, in itself, would be a very important thing. Of course, the total imports into the United States from all countries of the world form a very small part of the expenditure of the people of the United States. I think it is somewhere about 3 per cent. of the national income. If only the Americans could be induced to increase that 3 per cent. to 4 per cent, it might make all the difference in enabling dollars no longer to be a scarce currency. However, that is for them and not for us. But this fresh attempt to keep out world imports and, in particular, those of the United Kingdom—I do not mean that they specialise against us, but we, amongst others, suffer—is a new obstacle to face.
Neither of these two obstacles is the main one. The main obstacle confronting us is to find the particular kind of exports which are going to be of saleable value in other parts of the world, and in the United States in particular. It is there that I believe we need to think very carefully. What sort of exports are we going to produce? It is easy to say that if we reduce purchasing power, or cut off by the process of making money dear, we reduce the amount of goods manufactured for home consumption and thereby provide material and labour to

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produce more exports. But that is only partially true. Unfortunately, there are only a few classes of goods which are widely marketable in the world at the present time. They nearly all boil down to something in the engineering line, such as motor car manufacture, prefabricated houses, to which a member of the Government recently called attention, and other similar things.
We have the difficult position at the present time that the engineering industry is being called upon for exertions for three main purposes: first of all, for rearmament; secondly, for building up the capital of this country; and thirdly, for export. The engineering industry has been working very well in recent years and doing yeoman service for the financial position of this country—I believe that last year its output exceeded that of the previous year by something of the order of 3½per cent. But what we must consider is whether they can be expected greatly to increase that progress. If you cut off raw materials for the textile industry; if you put the work girl in Lancashire out of work, or put her on short time, so that she does not go to the cotton mill, that does not necessarily mean an increase in the raw materials or human labour available for turning out motor cars or other engineering products. I see a great danger that we may at one and the same time have serious unemployment in certain industries in the country and yet not have the labour or materials available to produce the exports that are saleable in some part of the world. In other words, you cannot marry a recession in the textile industry with "overpress" in engineering. If the noble Viscount, Lord Swinton, who is to follow me, has any light to throw on that aspect of the matter, I am sure the House will be most interested to hear what he has to say.
I turn now from visible imports and exports to what are more or less invisible items. One of the great losses which we have suffered recently has been that of the Persian oil, which was a factor of considerable importance to us—I believe that would be called an invisible export. It rendered us great service. Whatever may be our views on whether, by different conduct, we could have retained that oil, the fact remains that we have lost it, and I feel it is unlikely that we
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shall get it back. In those circumstances, it is something which has already come about to our disadvantage, and I am afraid it is likely to remain so. Then there is the drain to E.P.U., the European Payments Union, of which I have already spoken: how far we shall have to pay out considerable sums of money in the course of next year, and further years ahead, to E.P.U., and in particular to Belgium, which must take either the form of gold or some world currency. There is another item, which I do not think will come into the picture in the immediate future but which looms ahead, and, in my view, ominously so—namely, the question of Germany. Hitherto, we have been getting an annual payment from Western Germany for Occupation costs. I understand that, under the new arrangement, that payment will cease, and in place of it a burden will be thrown upon us to help the Germans to rearm, which may begin in the year 1953. I gather that nothing definite has been fixed at present, but there is likely in the future to be a considerable item under that head. I feel that it would be optimistic to place that item below so large a figure as £100,000,000 a year. That may be too high an estimate—I shall be only too pleased to hear if it is so—but the information which reaches me leads me to think that it may be even more than £100,000,000. If that is so, it will be a serious figure on the wrong side of our account.
I have already mentioned the American invisibles, and I need not repeat what I said about those. But while I am looking a long distance ahead, I should like to make this general observation. When you are dealing with many countries, if you get an agreement with the Government, you feel reasonably sure that you will get your end of the bargain satisfied. With all respect to our valuable friends on the other side of the Atlantic, we can never be quite sure about that when it comes to dealing with the United States. Their Government come to an agreement, but they always have the reservation that it must pass through Congress. We have seen the President's proposal of 600,000,000 dollars for us this year being cut to about 400,000,000 dollars. We never quite know what the position will be with regard to the future. You cannot look a gift horse in the mouth: the generosity of the United States has

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been on a very fine scale, and we can only be grateful for what we have had. But there is this uncertainty which always affects anything which the United States do, in view of the different system of relationship between their Government and their Legislature from that which we have here; and until the thing is passed through all its stages one is never quite sure how one will stand in the future.
There is a further item, which I suppose is not strictly an invisible export, but something between the two—namely, the Colonial position. On paper, we have been doing reasonably well with regard to the support our Colonies have given us on the matter of their exports exceeding their imports. So far as 1951 was concerned, the Colonial surplus was something like 455,000,000 dollars, as against 410,000,000 dollars in 1950—quite a comfortable increase. But the fact is that most of that surplus, arid certainly all the increase, was produced in the first half of 1951; and if you take the second half of 1951, the position was not nearly so rosy. It may well be that, due to the fall in prices of many of the things which our Colonies have to sell, that figure has been considerably reduced to-day, and may be even further reduced in the months that lie ahead.
There is, among other factors, the recession in Hong Kong, which is quite important from our point of view, which seems quite irrevocable and which neither the present Government nor the last were able to prevent. Therefore, encouraging as was the statement which the Chancellor of the Exchequer made yesterday, so far as the last quarter and the actual dollar and gold reserves are concerned, I think the wider picture is full of great anxiety, and I do not think we can view the future with any complacency. There are some factors which are good and promising, but I am afraid that there are other factors which are not nearly so rosy and which, indeed, may be exceedingly dangerous. Lying behind it all there is this question of productivity in this country. Can we not only hold up our production at the high level which it has reached but increase it, or are we in danger of seeing something in the nature of a recession, possibly a slump, unemployment, and a reduction of total productivity?
It is a little difficult to get exact figures, because the actual war production of finished munitions is, I think, excluded from the figure of production. I may be wrong about that, but that is what I understand. I believe that: the latest figures show an actual reduction of something like 1½per cent. as compared with a year ago. That, I believe, is excluding war production. I should like to read a passage written by an expert on these matters, Mr. Oscar Hobson, who I think is an authority and a writer in the Sunday Times. He wrote in the Spectator of June 10 an article which was headed "Is it Slump?". He said:
"We are in a recession of trade. There cannot be any argument about that. What is really at issue is whether the recession is or will develop into a slump of the classical cyclical type, which will go on getting progressively worse for three or four years before the 'trough' is reached and a gradual recovery begins to develop. Well, While I agree that I did not expect a year ago that the commodity price fall would go quite as far as it has done, I still refuse to believe that what we are in for is a real cyclical depression of this kind. And the reason why I refuse to believe it is just—rearmament."
I do not regard that as a particularly encouraging forecast. It may be—we all hope it will—that rearmament will slow down as the need for it ceases to exist. But if we are to pin our whole hopes on rearmament to prevent a slump, I cannot say that I feel very happy about the situation. I would add this further remark. We may not have a slump unless there is a slump in the United States of America. Whether there is rearmament or not, we also depend to some extent upon the good offices of our cousins across the seas in the United States.
I will close with a little story which I hope noble Lords will not consider irreverent, and I apply it to the United States. A little girl was offering up her petitions at the bedside, and she prayed first for dear papa and then for dear mama; for her little brother Jim, and for her baby sister, Mary. Then she said: "And pray God, do take care of yourself, for if you get ill we are all sunk." I beg to move for Papers.
3.26 p.m.
THE CHANCELLOR OF THE DUCHY OF LANCASTER (VISCOUNT SWINTON): My Lords, I gather that it will be for the convenience of the House if I speak immediately and then, if necessary, with

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the leave of the House, I will add a word of two at the end. We are all grateful to the noble Lord for putting down this Motion. I do not know whether he has a prophetic vision as well as a prayerful attitude, but he certainly could not have fixed it for a more fortunate date. Perhaps he realised that the Chancellor of the Exchequer or I would be in a position by now to give the figures for the past quarter. Therefore, I agree with him that we could not be considering the matter at a more opportune time. Nor, if I may say so, could the subject have been introduced in a more thoughtful or responsible speech. If I may respectfully say so, I have for many years, in both Houses, listened to the noble Lord on these economic subjects. If I have not always agreed with him, I have certainly always learned something from him.
And, of course, the noble Lord is right. After all, the question of the balance of payments does transcend in importance all issues to-day, and will for years to come. It affects every element in our national life. Therefore, it is very important that we should try to see the picture as a whole, as, indeed, the noble Lord said, and in true perspective. Particularly is that so because, again as the noble Lord reminded us, what we say here is considered with care, not only by a wide public in this country but by a still wider public overseas, both on the Continent and across the Atlantic Ocean.
May I first, very briefly, put the position as it was last November? Then, so far as the United Kingdom was concerned, we were running into debt at the rate of over £800,000,000 a year. That meant that in that half-year our deficit was so large that it was about the equivalent of a quarter of our imports. You cannot get imports "on tick." The whole sterling area is dependent on the reserves. The noble Lord was right to stress the importance of E.P.U. It has great advantages, and I sincerely hope that it will be able to continue. But unless we can get into balance, E.P.U. has, of course, disadvantages for us as well. In October alone, we lost £89,000,000 to the European Payments Union. Taking the sterling area as a whole in the second half of 1951 the sterling area deficit with the rest of the
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world was in the region of £750,000,000. The consequence of that slide was that during that half year our reserves fell by £547,000,000 to £834,000,000—or, as we now quote them in dollars, to a figure of 2,335,000,000 dollars. At that rate, of course, the reserves would have been totally exhausted in nine or ten months. In fact, we should have been "over the precipice" very much sooner, unless we had taken effective action. All confidence would have gone, and there would have been a complete flight from the pound. And, of course, we should have been facing national bankruptcy in a very few months.
The immediate and urgent task was to retrieve that situation and I think the noble Lord. Lord Pethick-Lawrence. will agree, though he may criticise this or that detail, that nothing but a very comprehensive plan and a plan which involved both restriction and expansion—it is not easy to have both—was necessary. The way we tried to do it was by the import cuts which we introduced last November and again early this year; by economy in Government expenditure; by the provisions of the Budget; by the bank rate, and by restrictions of credit. I am not going to argue the matter—the noble Lord has spared me the necessity to do so, and we have often had these matters out and discussed the relative merits of cheap money and dear money—but he did issue a possible warning; and I should like, equally frankly, to say that so far as we can see there is no evidence and no sign today that dearer money is causing production to fall. That is the factual evidence for which I asked and which has been supplied to me. Finally, we have had to divert materials wherever we could to the most vital needs—and I put export first.
Now, my Lords, that was the position. Let me give you the results which have been achieved. Of course, these things do take time, and it takes a longer time, sometimes, than one expects. In the first quarter of this year the rate of loss of our gold and dollar reserves slowed down. We lost in all 635,000,000 dollars in that quarter; but in March our losses were reduced to 71,000,000 dollars. At the end of the first quarter, our reserves stood at 1,700,000,000 dollars. In the second quarter, the one just finished, the

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collective effect of these measures was much more evident and the position had greatly improved—and that in spite of the fact that we have had to pay E.P.U. over the last six months no less than £130,000,000 in gold.
The noble Lord asked me in that connection, whether I could say any more about Belgium. Well, as the noble Lord knows, there has been no direct loss of gold to Belgium. The money is put into the pool. We have been in continuous bilateral deficit with Belgium and Luxembourg; we have been on the wrong side over the whole of last year. I think it is a valuable transaction, valuable from the exchange and defence point of view. that we should have reached this arrangement with Belgium for what in the United States would be called "off-shore" purchases, by which we supply some of their defence requirements and that goes directly to reduce our debt which, on the present balance, would be payable in gold or dollars. I cannot really add to what the Chancellor of the Exchequer said yesterday except to say that I think there was a very genuine realisation the last time the Finance Ministers met a week or two ago in Paris of the the value of the European community and inter-trading. The countries in Europe should rely less on dollar exports bought by the gold which comes into E.P.U. and try to rely more and more upon each other. Now in spite of that drain in E.P.U., as the Chancellor of the Exchequer announced yesterday, during the second quarter we lost only 15,000,000 dollars, leaving the reserve at the end of the second quarter at 1,685,000,000 dollars. I am not going to overrate the improvement. It is fair to say that defence aid, which totalled some 202,000,000 dollars, came into that.
The noble Lord asked me about the future. I cannot tell him. I am not even sure yet exactly what is the form in which Congress has passed this Bill. It is quite certain that the, total amount which the President proposed to Congress has been cut, but, that from such information as I have now, I do not think that in making a global cut Congress recommended what specific cuts out of the global sum should go to any country. But some aid certainly will come our way, and, I hope, purchases of armaments also. I cannot give the exact figure (the noble Lord was being a little prophetic, for the figure he gave
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is not known even to me in the course of the rather intimate defence negotiations), but I certainly hope that it will be considerable.
But, making all allowances for that, I think it is a remarkable achievement that we should have, so to speak, broken level over the last quarter. And it is right that the world should know that we have done so. I think it gives us ground for sober confidence but no possible excuse for complacency. We have done no more than this: we have come back to the starting-point of a very long, uphill road. The reserves of the sterling area are dangerously low and it is not enough to keep them there; we must build up. Forecasts in these matters are difficult. We are dealing with the trade of the whole sterling area, which comes to about £10,000,000,000 overall in a year. One hesitates to make calculations, because an error of even 1 or 2 per cent. means £100,000,000 on either side. I do not pretend to be a mathematical planner, but whether you make a mathematical calculation or not makes little difference: if there is a good monsoon in India there is food; if there is not, then there is starvation for the million. The food has to come from dollar sources and to be paid for in dollars: then you get a wholly unexpected drain upon our reserves.
LORD PETHICK-LAWRENCE: You may get a monsoon in Chicago!
VISCOUNT SWINTON: You may get a monsoon in Chicago, it is perfectly true; but still, while we may speculate in private on what is likely to happen there, we must not anticipate in public. We shall all be agreed that our reserves are at a precariously low level, and that it is not enough to stand still. We have to build up these reserves. Another point is that we have not the old resources of credit to rely upon. Before the war we were a creditor nation, to the tune of something like £3,500,000,000. To-day, we are a debtor country to the tune of I suppose something like £2,500,000,000. To put it in another way, before the war, for every man, woman and child the world owed us £80 per head. To-day for every man, woman and child we owe £55 per head.
Our part in world security and the alliance of free nations involves heavy overseas expenditure, in addition to the

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rearmament programme at home. The noble Lord, Lord Pethick-Lawrence, asked me about the cost of our forces in Germany in 1953. In so far as the first half of 1953 is concerned, I am not very anxious. Until the European Defence Community Treaty and the Convention with Germany have been ratified, it is impossible to say whether any sterling charge in respect of such expenditure will arise before June 30 of next year, but I think it unlikely that we shall have to bear any of this cost in the first half of 1953. As regards the second half of 1953, the amount available from Germany for the support of the United Kingdom forces will depend upon negotiations which have yet to be undertaken, and therefore it is not possible to make any estimate of the charges which are likely to fall upon us. Another consideration—this is an obvious truism—is that we must export to pay for our food and raw material, and we face the keenest competition in a buyers' market. To-day, everything turns on price and delivery dates. It will be very easy to price ourselves out of the market. Do not let us forget that increased prices. increased charges, in the basic industries like coal, transport and power affect all other industries.
For example, the noble Lord spoke about engineering. We rely tremendously upon the export of capital goods for which there is still a large unsatisfied demand. But even here, in machinery and electrical goods, where exports each year from this country and other countries run into hundreds of millions of pounds, we are facing increasing competition, particularly from the United States and Germany. Japan is already beginning to move forward. Our industries did well last year. Our exports of machinery and electrical goods rose by 14 per cent.; the United States exports rose by 29 per cent., and German exports rose by 98 per cent. I am always a little suspicious of mere percentage figures: I remember the famous case of the anti-aircraft guns that increased by 100 per cent. because they had gone up from one to two. But that is not the case here, because German exports of machinery and electrical goods rose from £126,000,000 in 1950 to £249,000,000 in 1951. That is a pretty substantial increase. I will quote only
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one other set of figures. The noble Lord asked about our exports. I think the most important element is exports to the non-sterling area. There the situation is not too bad. For instance, in the third quarter of 1951 the monthly average was £114,000,000; in the fourth quarter, it was £111,000,000; and in the first quarter of 1952 it was £126,000,000, while in May—I do not give April which is a short month—the figure was £133,000,000. Those figures are of exports to non-sterling areas. If we can keep up that rate, that is fairly good.
I agree entirely with the noble Lord that the triple demand made by export, defence, and domestic requirements imposes a heavy strain upon the engineering industries. We have recognised that to the full. How are we to meet it? I would say that we can help to relieve that strain in three ways. First of all, we must obtain all the raw materials that our metallurgical and engineering industries need. Steel from the United States will, of course, be a tremendous help. Secondly, we must reduce the less essential home demands for supplies of durable consumer goods from the metal-using industries so that exports and defence can go ahead. Thirdly, we must reduce less essential home investment. But we have to be careful that we do not reduce this last too much—we have to try to restrain home investment; but there is a limit to which it is wise to go, if one takes the long view.
It is difficult when you have, as I have, the job of trying to apportion where it is most necessary something of which there is not enough to go round. It is very tempting to take the short view all the time. The short view is very important, but I wish people would not talk about "a crisis." This is not in the nature of a crisis. It is not like a fever where your temperature goes up and you either get the right prescription and take the right medicine or you do not, and then either you are cured or you die. It is not the least bit like that. This is a continuing struggle which will go on year after year. So "crisis" is the wrong word to use. Taking the longer view, it is extremely important that we should not prevent productive industry from getting those improvements in plant, new buildings and whatever is necessary to make it a really effective competitor. Therefore, I put very much as third the restraint on invest-

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ment, particularly investment in the manufacturing industries.
The noble Lord is a very attractive but a most difficult person to answer because he puts such penetrating questions. He asked also about the prospects of a recession or slump here or in the United States. It is not very easy to answer with certainty. While I agree that we must try to be as realistic as possible when we are looking at the future as well as at the present, I think the noble Lord will agree with me that unjustified fear or pessimism, if widespread, can help to create a slump. If anybody starts feeling his pulse, taking his temperature and wondering whether he is going to be rather worse to-morrow, then there is a great fear that he will be a little worse to-morrow. An old expression which I have heard used on both sides of the Atlantic is "talking yourself into a slump." It is no good being too much of a ruddy optimist—if I may put it that way. I hasten to add that I use the word in the sense of "rosy." I appear to have woken up the noble and learned Earl the Leader of the Opposition. "Rosy optimism" is what I mean. I do not think pessimism is justified.
There has, of course, been a recession, and there still is, in the textile industries. I think that accounts for the 1½ per cent. to which the noble Lord referred. There have been very steep falls in prices, and these have already led to renewed buying. On the whole, that position appears to be improving, though, if I may venture a personal opinion, I should say that I am doubtful whether Lancashire can ever look forward to employing all the people that the optimists have thought it could employ. I think Lancashire will get its biggest share in the export trade if the work is concentrated in the most efficient mills. We may have to bring in special orders and get sub-contracts into Lancashire, but I am sure that the secret of continued and permanent employment—security, if I may call it such—is getting a greater diversity of industry into that county. I am not just preaching something I myself have never tried to practise. In the years before the war, when I was responsible for starting them, I tried to get shadow factories into Lancashire, among other places. There was a large shadow factory at Speke and there were others at Oldham and Bolton. Those were admirable factories. Light industries, such as electronics and so on,
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will be the things of the future. Quite frankly, I should like to see Lancashire getting a fair share of those industries. But there must be a willingness all round. This is not just something the Government can do. It must be an outlook on the part of everybody. Between us, we all ought to try and get a greater diversity of industry there.
I am not unhappy about the general prospects in this country. Of course, it is true that even slight changes in activity in America can have a marked effect upon our balance of payments. That happened in 1949, and the result was quite out of proportion to the size of the temporary recession. But, from all the evidence I have, the large and increasing munitions programme in the United States, and also their very large domestic production, certainly does not lead me to suppose that at any time in the near future there is a risk of a large trade recession there.
My Lords, I apologise for going on for so long, but at this stage I want to give as complete and fair a picture as I can. As the noble Lord, Lord Pethick-Lawrence, said, there is another factor to be taken into consideration—namely, the trend of commodity prices. This is very important to the sterling area. Whilst it is very helpful to us in the United Kingdom as a manufacturing country, and, certainly to our people as consumers, that commodity prices should go down—and some of them have gone down a great deal—it is not favourable to the sterling area as a whole, since the sterling area is such a large producer and exporter of raw materials. Rubber is a very good example. From the sterling area point of view, a high or relatively high price for rubber—you do not want prices too high—is desirable. I am glad to say that there has been some improvement recently. That is the trend. World prices of food, as distinct from the materials we use in manufacturing, are high, and I do not see that there is any prospect in the immediate future, broad and large, of food prices coming down very much. I am sure that the whole era of cheap food is past. Today the food producers of the world are the people who, on the whole, have got a sellers' market.
Therefore, we have a very heavy task in front of us. This all shows that there

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is no discrepancy at all between the speeches made by the Prime Minister and those made by the Chancellor of the Exchequer. It is absolutely right and necessary that we should tell this country and the world what we have achieved. It is equally necessary to tell our people how grave the situation is, and that we have only just struggled back from the edge of disaster. We cannot afford to lose any of the ground we have regained; indeed, we must gain more ground. The position is precarious. The "trap-door" was, I think, not only a vivid phrase but an accurate one. It is very important that the reality of this position should be appreciated. It is difficult to bring it home to some people. If you have an engineering works or a shipyard, with orders on the books sufficient to provide work for two or three years, it looks as if everything is secure for an indefinite time ahead. But all that depends on our being able to get the raw materials. It is really like the position of a house which may be becoming undermined without anyone knowing about it.
Let me say this—I think it was Mr. Morrison who said it first, but others repeated it over and over again—that if it had not been for Marshall Aid we should have had about 1,500,000 or 1,250,000 more unemployed in this country. What those who said that meant was that if we had not been the recipient of those thousands of millions of dollars from America we should not have had the money to buy food and raw materials. We should have had to buy the food, but without that aid we could not have bought the raw materials which our factories needed. We should not have had the materials to keep 1,250,000 people in work. That is a perfectly fair statement. Bui of course we cannot rely, and we ought not to rely, on such aid to-day; we must stand on our own feet. But we must get that material.
The question was put to me, very fairly, what must we do to be saved and to be safe. I will try to put forward seven things which I think we must do—and by that I mean not only the Government but all of us. These may prove to be Seven Pillars of Wisdom. First, I would say that we must continue on the road we have followed, the policy which has
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saved us from disaster. Secondly, we may well have to tighen up still further on imports from the non-sterling area. In some things I think we shall certainly have to do so. But we must have the materials our industry needs for export and for defence, and we must concentrate on those. I would make it absolutely plain that where there are restrictions to-day, whether in timber, steel, copper, aluminium, or whatever it may be, on what our American friends call "end use," it is quite idle for people to think of more lush and easy times in which rare materials bought with our exports can be used for any purpose people may like. We should be fooling ourselves if we pretended that that was likely to happen. We shall have to maintain the restrictions on "end use."
Thirdly, we must grow all the food we can. The counterpart of guaranteed prices must be efficient farming. The county committees and the National Farmers' Union have promised their cooperation in this matter. There are some very good farmers, and there are some thoroughly bad ones. We cannot afford to tolerate bad farmers to-day, when there are all sorts of efficient young men who have been through our agricultural colleges and have got some capital behind them, but cannot get the farms. Sentiment must go by the board. But we have a number of people in the middle, who are pretty good farmers, who could get some more out of their land, maybe with more capital, but probably with more knowledge and with more use of the scientific services which are available for their assistance—for example, in regard to soil research, the kind of grass it is advisable to grow when re-seeding and so on.
I do not know whether I ought to trespass on the provinces of all my different colleagues, but I am pretty sure that a large and rapid increase in food production in this country will not be obtained by spending millions of pounds on ploughing up rather doubtful marginal land. I am not saying for a moment that we should not get what we can out of marginal land, but where we shall get more food, and get it rapidly, is from the land which is already pretty well farmed today. Therefore, my right honourable friend, the Minister of Agriculture, is absolutely right. I think, in giving instruc-

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tions to the Advisory Services—and very useful bodies those Scientific Agricultural Advisory Services are—to concentrate on what I may call the middle-class farmers, and to do what they can to help them to get the best out of their farms. I would add that a good landlord who plays his part in the maintenance and improvement of his farms ought not to be expected to tolerate a thoroughly bad farmer as a tenant.
Fourthly, I would say that we must develop Empire resources—Empire resources of raw materials and Empire resources of food. I know that this is perhaps a longer-term matter. I would instance the development of copper in Rhodesia. Then there is the Volta scheme for aluminium in the Gold Coast. And there are other projects which are being explored, as noble Lords who take an interest in these matters well know. These are longer-term enterprises. Do not let us regard any of these things as short-term propositions or as merely crisis measures. The long-term problems are going to be with us, and with whatever Government comes into office in the next five years, when we go out.
There is one matter to which I should like to refer, with which the name of my noble friend Lord Morrison (whom I am glad to see in his place) is closely connected. I know that he will support me when I say we must collect and use all the waste material we can use economically, wherever we can, in order to reinforce imports. That again is not a short-term business it is a long-term business. I should like to thank Lord Morrison for the job which he has been good enough to undertake. I knew that I could not have gone to anyone better, and the work which he and his panel have been doing ever since our debate some months ago in this House on salvaging has been admirable.
I take three examples—though its work is not limited to these. There is, first, paper. Last year, the board mills of this country used 1,000,000 tons of waste paper. I think they are now using practically all they can, and that about 95 per cent. of the material which they are using in their products to-day is this waste paper. But there came this recession in demand and the collections were still going on. The mills could not use all the paper that was coming in. Lord Morrisson then did a very practical
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thing—I am not sure that some of the local authorities would have taken it from anyone else. Some of them, who had been farseeing, had made contracts with the mills for as much as they could deliver. If those contracts had been fulfilled 100 per cent., nothing would have been taken from other people. Lord Morrison asked them all, whether they had contracts or not, to take an even cut. I understand from him that in practically every case they agreed to do so. The result is that this waste paper business has gone steadily on; and although it has had temporarily to be reduced it is ready to be reinforced whenever need arises. Then there is the collection of metal scrap, and particularly steel scrap. That is vital to-day. And this business, too, is being reinforced. Those responsible are collecting all they can. There again, local authorities and farmers' unions are all coming in in order to help in this matter.
But I come back to the question of food. There is another enormously important element in respect of which we can do much more than we are doing today. That is in the matter of food waste and the production of our "Tottenham pudding." Four hundred thousand tons of food waste was collected last year, and every bit of it was used to feed pigs and poultry. That was the equivalent of £3,500,000 worth of coarse grains which otherwise would have had to be imported. We know exactly how to make and use this product, and there will be a market for it so long as any of us is likely to keep pigs and poultry. Therefore, I make an appeal to the local authorities. Those who are engaged in this work just now I ask to intensify their efforts, and others I urge to take it up with all possible energy. I do not ask them to make a patriotic effort but to make what is a very good investment. I hope that they will respond enthusiastically.
My sixth point is that we must produce all the coal we can, and we must export all the coal that can be made available. For, quite literally, export coal to-day is gold. Above all, my seventh and final point, or Pillar of Wisdom, is this: that we must keep our costs and prices down. Our whole future turns on our ability to export. Wherever there is an opportunity to sell our goods we must exploit it to the full, particularly where we have a novelty or a clear lead. I cite one example in connection with which I think

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there is indeed a great opportunity—jet civil aircraft. In these aircraft we have a lead over the whole world. There are markets anxious to take these aircraft, and if we get into them now we shall probably keep them for a decade or, it may be, for a generation.
Broad and large, however, the sellers' market has gone for good. To-day the seller is courtier and the buyer is king—and there are a lot of courtiers at every court ! If we cannot export at competitive prices, we cannot export at all. We are all in this together. Nothing is more true than that we are all members one of another. All these industries react on each other. Take coal, for example. It enters into the cost of every article that is produced. And it enters into it not only once; it enters into it twice over. It enters into the cost of fuel or power which an industry uses, and it enters into the cost of transport of the raw materials or the finished article. The most dangerous thing we could do would be to price ourselves out of the competitive market. We should lose all the ground we have won—and we cannot lose it twice. A repetition of last year would be ruin.
In fairness I must add this. It could be said, and I think said fairly, that I should not be dealing with the case adequately unless I dealt with the cost of living. So I want for a moment, in conclusion, to deal with it. I am not content to say, though it is profoundly true, that if we were to price ourselves out of the export market that would strike a fatal blow, not only at the cost of living but at the employment and livelihood of millions. But it is said that by reducing food subsidies we ourselves have raised the cost of living. I think that is a very incomplete and one-sided statement. It has always been—and rightly—a cardinal article of faith with Chancellors of the Exchequer—with Socialist Chancellors as well as with the present one—that there must be a ceiling on food subsidies, and that quite irrespective of food prices. In 1949, though food prices had risen eight points in two years, Sir Stafford Cripps fixed the ceiling at £465,000,000. The following year food prices had risen fourteen points, but Sir Stafford Cripps reduced the ceiling to £410,000,000. The following year food prices had risen another nine points, but Mr. Gaitskell
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refused to raise the ceiling. I am not making a Party point out of this. It was absolutely right and necessary to do that. As Sir Stafford Cripps himself said (and I think I paraphrase accurately): if we do not do that—we shall have prices with no relation to reality.
Though I must admit that to-day I do not see a prospect of world prices of food coming down in the near future, the prices of many other articles are coming down, and coming down substantially. That is a new and welcome factor, and a very important one. In assessing the effect of the recent cut in food subsidies which the Chancellor made, we must in fairness take into account the countervailing benefits—the increase in family allowances, pensions and rates of benefit, and the reliefs in taxation. Sixteen million wage and salary earners benefit from these tax reductions. A broad statement of that kind is pretty general and it may be asked whether they benefit enough to make any difference. Let me take two or three examples from different industries which I think are representative. Take an engineer, a married man with no children, earning £10 a week: he is paying 12s. 9d. a week less in tax. A lorry driver, a single man earning £8 a week, is paying 4s. 5d. a week less in tax. A married miner with two children, as underground day-worker, getting £10 2s. 6d., pays 6s. 2d. a week less and a worker at the face, again a married man with two children, earning £14 15s. a week, pays 9s. 10d. a week less and, of course, these married men with children get the benefit of family allowance.
I have tried within reasonable compass, I hope at not too great length, to give a true picture of the situation as it was and as it is to-day, and of the task now confronting us. If it is a sombre picture—and it cannot be any other—I do not paint it in any mood of pessimism but rather in a spirit of realism and resolution. Surely those qualities of realism and resolution are among the strongest and most enduring characteristics of the British people, and they are the surest guarantee that we shall most certainly win through.
4.14 p.m.
LORD RENNELL: My Lords,. the noble Lord. Lord Pethick-Lawrence, who opened the debate, has said nearly all I should have liked to say. That will save myself and your Lordships a great deal

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of repetition. If I have anything to say, it is only as comment: upon one or two points made by the noble Lord. Before I deal with them, however, I should like to say how glad I am that the Motion was brought forward to-day and that the summer discussion in. your Lordships' House on the economic situation has been divided into two parts: first, the noble Lord's Motion on the balance of payments, and, secondly, the Second Reading of the Finance Bill which is to take place on Tuesday. I think this makes the debate much more manageable, and I, for one, welcome it.
The whole problem confronting us can be gauged only in terms of the effect that the various measures have, will have, or will not have, on the balance of payments. That is the one vital thing that matters in the world. Whether the impact of taxation is a matter of political opinion, whether a Budget measure is right or wrong according to people's opinion, whether the policy adopted by the Government on credit restrictions, about which the noble Lord and I have had many discussions in your Lordships' House, is right or wrong, the only thing out of all these that matters is the effect which they will have on our balance of payments. In the long run, it is by that that we shall survive. If the measures are inappropriate, we are heading for disaster, as the noble Viscount, Lord Swinton, has said.
The two previous speakers have reviewed the present situation, and the conclusion to which anybody who considers these matters must come is common ground to us all. Obviously, it is better to have lost only 15,000,000 dollars in a quarter than to have lost 500,000,000 dollars in a quarter. It does not matter very much whether something might have been done or not. What matters is whether we shall lose very much more of our reserves in the sterling area. So far, the figures that have been published are wholly satisfactory. What I think is important for us to analyse is whether this quasi-balance which we have achieved has been achieved as satisfactorily over the whole sterling area. That is a point on which I feel much more doubt than has appeared from the discussions up to date. We are the banker of the sterling area and we may be in balance with our current creditors' and
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debtors' account; but is the bank itself solvent on its incomings and outgoings? The difficulty of our own situation is that we are in a paradoxical position, a vicious circle. In order to export, we want to see prices reduced, to become more competitive. In the buyers' market we must be able to compete, especially with the new factors of Germany and Japan. Any reduction in the price of the raw materials we use in our manufactures, and in our own manufacturing costs, must be favourable to us. On the other hand, so far as the sterling area is concerned, as the noble Viscount has pointed out, a fall in the price of raw materials does not necessarily redound to the financial credit of the sterling area as a whole. It is in that paradoxical situation that I find the figures available disquieting for the future in this element of the sterling area.
I do not think that enough people are aware of the substantial fall which has taken place in raw materials in the last ten months. The Statistical Summary recently published shows, under the heading "Non-Food Materials Used in Manufacturing Industry"—which is pretty well everything except food—a fall in prices of raw materials from an index figure of 220 in March last year to 165, or, roughly, 25 per cent. The cost of living has not fallen and the cost of manufactured articles in this country has risen. In other words, so far as the export trade is concerned we are not getting the benefit of the lower prices of raw materials, but are suffering from the disadvantage that the sterling area has to sell those raw materials for a lesser price. In other words, what would be of benefit to this country is a disadvantage to the sterling area. That is a vicious circle in which I feel it is difficult for us to see what the immediate future will bring, except by one way to which I will come in a moment—namely, a general fall in manufacturing costs.
The same vicious circle applies to the measures which Her Majesty's Government have taken in the last six or nine months. The two main measures which they have taken have been, first, the restriction of imports and, second, the restriction of credit, by raising interest rates and various other methods. Those methods would, in my submission, have

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been much more effective, so far as we are concerned, if they had been taken earlier than they were. If they had been taken last year, or if, when they were taken by the present Government last autumn, they had been taken more drastically, in my view they would have avoided the rise in interest rates and the second cut on imports at the beginning of this year. That is not merely jobbing backwards and finding fault at what has been done. I have a particular reason for saying that.
The restriction of imports, or a rise in interest rates, in one country, will be effective for that country in comparison with what is done in other countries, provided that other countries do not do the same thing at the same time. If we had raised interest rates last year and had restricted imports before the general restriction of imports took place practically everywhere in the world, except in the United States, our measures would have been much more effective than they are today. The delay in doing that, and doing it in stages, as it has been done, led to our example being followed, perhaps inevitably, by most European countries, and by many other countries outside Europe as well. In other words, we there have the position illustrated in the old saying: "When father says 'Turn.' we all turn." If father had turned without everybody else turning he might have got a little rest in bed. As it is, as everybody else turned at the same time, he got just as many kicks as he did before he turned. We have now reached a position of competitive restriction, from which the world must extricate itself if development is to take place again. How do we get out of that without injuring the balance—the perhaps doubtful balance—into which we have succeeded in placing ourselves, as can be seen by the figures for the last quarter to which the noble Viscount, Lord Swinton, referred?
There is one point I should like to mention here which is perhaps a slightly delicate one. The object of restricting credit in this country was undoubtedly to produce a fall in prices, to produce economies. It is no doubt doing so, but probably at a very heavy price. I venture to doubt whether, in the first place, an aggravation of that policy would have any more effect than it has already had; and, in fact, I am inclined to think that
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an aggravation of that policy might produce unsatisfactory results. There comes a point when, if you restrict too much, you do not cause economies but cause bankruptcies. The current opinions which are expressed tending towards an aggravation of credit restriction here at this moment fill me with a good deal of apprehension lest productivity falls as a result of difficulties into which armament manufacturing concerns, and others not engaged in the armament industry—even those engaged in the export trade—might get.
There is some doubt as to how far we ought to go in this policy. The figures of production in this country are difficult to disentangle, for the reasons referred to by the noble Lord, Lord Pethick-Lawrence. The published figures of production—my noble friend the Deputy Leader of the House will correct me if I am wrong—are of ordinary production, and not armaments production.
VISCOUNT SWINTON: I think not. I will verify this for certain, but I believe the productivity figures are in respect of the whole of the production of industry, whether producing armaments or anything else.
LORD RENNELL: I am obliged to the noble Viscount. If that is the case, then the position is rather worse. Your Lordships will have seen the Central Bureau of Statistics' figures of productivity in The Times this morning. You have to take the months of March and April together, owing to the incidence of Easter last year and this year. If, as a rough average, you take March and April of last year and March and April this year together, there is a downward tendency in production manifest in each of the five groups to which these production figures refer, except in building. The noble Viscount, Lord Swinton, has been good enough to intimate that these figures include everything. Therefore, it means that, in spite of an increased production of armaments which has taken place in the last twelve months, there is a decrease in productivity overall. If, therefore, the armaments industry has increased its production, other manufacturers must have fallen more than the Index figures show. According to the Index, there is a reduction from March and April last year for all industry of

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146 to 144; in mining from 122 to 120; and in manufacturing from 152 to 148. There is an increase in the building industry from 124 to 136, but a decrease again in gas and electricity. Is the policy of restriction which is being followed having the effect of reducing production? I ask that question because I believe that it needs consideration, although I do not expect that the noble Viscount will be able to answer it to-day. I am becoming doubtful, however, whether a policy of restriction, if continued, will produce more goods than it has done, and I fear that, if aggravated, it may send those production figures into a greater decline.
The other factor—to which reference has not been made this afternoon, although I believe it to be, paradoxical though it may seem, a favourable figure in our balance of payments—is that there seems to be little doubt, from such information as I have been able to glean, that after a brief initial period of confidence abroad in sterling and in the economic stability of this country, a deterioration has taken place in recent months. In spite of the controls and restrictions which are in force, the effect of that has been to create what may be called a short or "bear" position in sterling, not by people selling currency for future delivery but by foreign elements seeking to borrow, instead of to remit, and trying, by all those devices which still remain open, to take their balances away from this country. I believe that that position has built up again in the last few months. The effect of that position building up will, of course, have been towards a reduction in our reserves. Inasmuch as they have not been reduced in the last quarter by more than 15,000,000 dollars—to which the noble Viscount referred—we have been able to withstand that drain, and since that tendency never continues indefinitely, as experience has shown, there is a cushion or spring which will operate to our benefit in the quarters which are yet to come.
There is another element which I think has been equally neglected and which has some bearing on this point; that is, the accumulation of sterling balances in London. Here I want to refer to something which has not been mentioned this afternoon, but which I should like to elaborate a little. In the past it has been commonly said that we have been living
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on money borrowed from our Colonies and our Dominions, and inasmuch as they have built up sterling balances in this country which we owe to them, that, of course, is true. But, in point of fact, in the last few months the sterling balances of the major Dominions in this country have fallen astronomically. For instance, the published figures of Australian balances—and I am talking in terms of Australian pounds at this moment and not of London pounds—have fallen within the last twelve months from about £A800,000,000 to just over £A300,000,000. That was the last available figure on June 18. In other words, we have repaid to Australia money which she had lent us, and her balances here are now at a very low level. If they go much lower they will probably get to a level which is the minimum working balance—a point to which I will refer in a moment. The balances of all other major holders of sterling have also fallen steadily, and though they are still large as compared with before the war, that fall has improved our domestic position within the sterling area in the last twelve months by many hundreds of millions of pounds. That is a wholly favourable element in our United Kingdom position within the sterling area to which I think insufficient regard has been paid.
The size of these sterling balances which occupied your Lordships' attention in past years for many hours is, I believe, much less of a bugbear, if I may say so, than many of my noble friends on this side of the House have perhaps thought in the past. In the first place, the decline in the value of money everywhere in the world inevitably means that balances in the banking centre of the sterling area must be bigger than they would have been before the war, and bigger by a very considerable amount. In the second place, in a community which to-day is inevitably hedged round with restrictions and controls, a much larger balance has to be kept in any place or in any bank than would have been necessary in an entirely free economy, where either securities can be melted and turned into cash, or where anybody requiring sterling can sell currency and buy currency overnight, as they used to be able to do, in very large amounts. It follows that people trading with London, who normally might have been trading in any of the Continental currencies, and who

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require sterling, quite frequently have been required to keep sterling in amounts very much greater than if they could have gone into the market and bought sterling for this or for that. The process of controls has slowed up the banking turnover from the international point of view, from the point of view of the sterling area in London, and consequently has required the accumulation of a much larger liability of London towards the rest of the world than had been the case before. In so far as we have been able to diminish that liability by repaying to those to whom we owed sterling the amounts which we have repaid in the last year, our own domestic position has again been improved.
I believe that those are elements in the general picture of the balance of payments which require to be analysed in trying to assess how far our future position is likely to better or worse. The difficulties about commodity prices and costs of production in this country are well known and need no elaboration. Our only way out of that, as it seems to me, is one that has been mentioned so many times, almost ad nauseam, that I hesitate to say it again. But it is that we must have a greater productivity for a given standard of life. It is doubtful whether, at the present moment, the standard upon which we wish to live—our standard to-day—can be supported by the productivity of the country as a whole. That is the main element of doubt in our future balance of payments. The other element, or elements, are tied up with so many political difficulties which makes an economic assessment impossible that I can say no more than that we must be extremely grateful that in the last quarter the position has turned so much more in our favour as to make some light appear on the horizon.
4.37 p.m.
LORD HAWKE: My Lords, in this debate hardly a word has been uttered with which I would not agree. Undoubtedly our position is an extremely gloomy one at the moment, but I propose to start by referring to the brighter end of the picture. What is the situation in the world at large, with which we have to trade? The population of the world is going up at a regular and quite rapid rate; the machinery of the world is going
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up at perhaps an even faster rate, and the money supply of the world is going up at least as fast as that. The raw materials are increasing after a period of stagnation after the war. The world is still woefully short of many of the great British traditional exports; the world is grossly short of railway material; the world's passenger' planes are obsolescent; the road passenger industry in overseas countries is only awaiting better roads for it to become immensely more important. The other day the Minister of Works pointed out an entirely new industry—the export of prefabricated buildings, for which there is a considerable future. We are just breaking into the earth-moving business and into the business in large agricultural tractors, and the enormous world market for a really cheap small motor car has not yet been touched. Of course, every day our chemists are producing more and more wonderful things, mostly from our own very meagre raw materials.
In face of this comparatively bright situation, why is it that we seem unable to pay our way in the world? I can assure noble Lords opposite that in my analysis of this problem I am not trying to make Party points: I am trying to be entirely analytic and factual. The fact of the matter is that the whole position has been upset by the redistribution of income which was undertaken during their period of office. As Lord Keynes pointed out, the lower income group are the people who spend the largest proportion of their income on imported goods. Moreover, it is obvious and well known that the lower income group spend a lower proportion of their income on savings than do others. So money has been taken away from the people who spent less of it on imports and from people who saved more, and put into the hands of the people who do the reverse. Of course, that is a double factor. From the aspect of Christian ethics I am not arguing the matter; there is probably a very strong case for it. But I submit that nobody foresaw the end of the path on which the Party opposite entered at the time. At the same time the higher income groups had their purchasing power so reduced that many more took to disregarding income, living on accumulated capital, living on capital gains which were fed by the unrestricted credit,

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living on expenses allowances and tax losses, and all the thoroughly unethical things that result from too high taxation and inflation.
All those factors make for increased imports and decreased exports, and for a greater consumption of our own production in this country than would otherwise have taken place. That is most unfortunate. I do not believe noble Lords foresaw that this would happen. They certainly have not put into operation the particular antidotes that one might require to offset these factors—and it may be too late now. Her Majesty's Government, then, have been confronted with the double task, for the moment at all events, of reducing the percentage of our purchasing power which is spent on imports and, at the same time, increasing the proportion of our production which goes overseas. On the whole, I think they have made a most promising beginning. Restriction of credit was a key move in the whole situation—I mention restriction of credit, because the bank rate really follows. If credit is restricted and money finds its own price in the market, the interest rates must follow in due course—and of course the Budget was subsidiary to this. But undoubtedly these two measures have resulted in reduced consumption of goods; and that, working back all the way along the pipe-line, has very largely engendered these falls in raw material prices. While at the same time leaving prices at a very high and healthy level, the measures reduced them from the exorbitant level which they assumed as a result of the Korean boom.
There are still further measures which I think all people in this country would like to see Her Majesty's Government take. We are by no means convinced that economy in Government administration has yet reached 100 per cent. perfection—if, indeed, such a thing could ever happen. Nor am I sure that the example of economy there has penetrated yet into all branches of industry—because it is just as important that there should be economy with the shareholders' money as that there should be economy with the public purse. Indeed, to-day most of the shareholders' money is the public purse.
Their other task, the diversion, as apart from the restriction, is extraordinarily difficult, and one would like to know more about how it is happening. One is
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rather in the dark there. It is not difficult to achieve the diversion of raw materials by allocation to the people whom you want to have them; but when it comes to the human factor, to people, it is extraordinarily difficult to get people to change jobs. There is a lack of skilled men, and so on. Then, are the questions of transport to work being properly explored? If it is possible for businessmen to travel every day between Brighton and London it is perfectly possible for British Railways to provide express trains across country from Blackburn to some area where other work is available. Perhaps that has been done—I do not know. I know that in the heavy engineering trade it is only too often delivery and not price which is the thing that determines contracts. Nobody wants to place an order four years ahead. Very often people would be prepared to pay more money to be able to secure more speedy deliveries. What is the delivery period of British locomotives to-day? I am out of touch. Is it still four years? There is an immense demand in the world for our new airliners, the Comets. Is it true that India has rejected buying them because the delivery time is four years? I do not know. But these questions exemplify the difficulty of the diversion of resources—and it is diversion which is one of the hopes of the future.
That is for the present. I agree with my noble Leader when he says that this is a permanent state. But what of the future? We are receiving little guidance from leaders of the banking industry, or from statesmen, on what is the great plan for the many years ahead. We must all agree, of course, that the stability of the pound is largely a political question; but what is going to be the economic and strategic object? At international conferences we attend we all assume that the pre-war system was the normal one. But I submit that the pre-war system was already breaking down before the present difficulties began. Germany, one of the great manufacturing units, had completely broken away from the system, with its multilateral exchanges and so on. It was the same with South America; and we were none too happy.
The pre-war system I can define as trade only inhibited by tariffs—and comparatively low tariffs. I submit that that system has completely broken down and

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that it has been replaced by the war-time licensing system which, of course, is immensely attractive to industry, and that means labour in all countries of the world which have any industry. With more and more countries industrialising, there are more and more countries that have a strong political interest in retaining this new system of the regulation of trade by discriminatory licensing. We have exercised it since the war and it applies everywhere, except, I think, in the sterling area and now in the European Payments Union. It was not long before in the European Payments Union we ran into trouble. We promptly had to reimpose the licensing which we were supposed to eschew. No—I submit that the old pattern is what we might call a "Liberals' dream world" and the problem is: what is to replace it?
At the moment, we are travelling along the road of import licensing and that is, frankly, at times discriminatory. Whenever we are in financial difficulties (which is almost every day) our licensing system is discriminatory. Whether this is the best way of discriminating, I do not know. There are strong arguments for discriminatory tariffs instead, a high tariff system with a lower tier for one's friends and so on. But what I am convinced is that, in the modern world, where it is quite certain that large portions of our manufactures will be deliberately excluded if they are cheap—they are, in fact, excluded because they are cheap—we shall have to find methods, either of a drastic diversion of resources away from goods of that sort to others, or, by mutual bargaining, of finding people who will take the full range of all our exports. It looks uncommonly like Imperial Preference, but in any arrangements of this sort I should not exclude the inclusion of other people. The criterion should not be the sentiment of Empire. The criterion should be: "Are you or are you not prepared to exchange goods freely with Britain? "Of course, to adopt a tariff method is impossible now, because discrimination by tariffs is forbidden by G.A.T.T. and the most-favoured nation clause. Nevertheless, we are doing it by licensing, which we pretend is temporary but which I can see no hope of our ever abandoning; so perhaps we may achieve our aims in that way.
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I should have thought it would be more straightforward and honest to try to achieve liberty to do it the honest way, by tariffs. Whether this age of restriction by licensing and so on will ever, in turn, give way once more to a freer trade outlook is problematical. It may well do so, I think, but whether it will be in my lifetime I do not know. Clearly, when we reach the stage of the United States population requiring a large unfavourable balance of trade, then will be the time when the world may possibly return once more to the freer trade ideas of fifty years ago. Meanwhile, to carry us over the next twenty-five years, we have to mobilise all the resources we can of common interest and sentiment; and we have to try to bind with it a trading system suitable for this second half of this century.
4.55 p.m.
LORD LUCAS OF CHILWORTH: My Lords, at the outset of the remarks which I shall venture to make to your Lordships, may I at once offer my sincere congratulations to the noble Lord who opened this debate, and also to the noble Viscount who spoke on behalf of Her Majesty's Government, for the simple manner in which they tried to state the present problem? I was rather surprised that there was not a large list of speakers to-day, and I could only surmise that the supposed complexities of this problem frightened many of your Lordships away, as they frighten to death the ordinary citizen. I am particularly grateful to the noble Viscount for reducing the problem to language which the common person can understand. That, in itself, is a public service. I was heartened to read in the leading article of The Times this morning something which I thought really reduced the whole of our problem to a few lines. It says:
"The task of securing external solvency can be expressed in simple terms. The nation must produce more at home and sell more abroad. If it does not or cannot do so, any expectations must he abandoned that its standard of life can be improved or even maintained."
That is the crux of the whole matter. I think the noble Viscount, on behalf of Her Majesty's Government, if he will allow me respectfully to say so, made one of the best statements upon this problem I have heard emanating from the present Government.

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I have only one quarrel with the noble Viscount and I may as well have that now, though I do not think it will turn out to be a quarrel, because I think he will agree with me as I agree with the noble Lord, Lord Rennell. We have either to export more or import less, but, always assuming—this is the assumption I make—that we have already eliminated unnecessary imports, I am very much against import restriction. It is a vicious policy. It sets up a vicious circle. Everyone else does the same. It encourages high-cost secondary industries to spring up. The next phase is tariffs—and where are we? We are in a whirl of restriction, with every country trying to impose more restriction than the other, and we are back in the state the world was in between the two wars. I would far sooner say that what we have to do is to increase our exports, and John Bull Limited has to make a profit. That is what it really boils down to. Call it a surplus, if you like, but we have got to sell more than we buy.
How can we do it? I agree wholeheartedly with the noble Viscount, Lord Swinton, that this is not a crisis. This is going to be our way of life in the future. We must have new thinking upon this problem. It is all very well to say, as I have heard it said by some of our greatest industrialists: "We can never go hack to the old ways of the past. We are living in a new life." People sit around in meetings and say that kind of thing, and then go back to their various parts of the country and lay their plans to make sure that no silly things like changes are going to happen in their lives. What we need, as the noble Viscount said, is a greater concentration upon those industries which can contribute most to our export market. In the second of his "Seven Pillars of Wisdom" the noble Viscount said, I think, that "sentiment must go by the board." That is true in this regard, and Her Majesty's Government must be proof against the industrial pressure groups that want to keep alive, or to be kept alive, by the allocation of materials that can ill be spared, just because those groups have been in existence for so many years in the past.
I agree with the noble Viscount about Lancashire. It is a hard thing to have to say, but it is true that the Lancashire
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textile industry will never play the part in this country's exports that it has done in the past. I do not know what the optimum figure will be; it may be 60 or 70 per cent. of past production. But again, as the noble Viscount quite rightly said, what we have to bring to Lancashire is diversity of industry and to do this we shall have to use the development area technique. We have to bring in industry. We must bring in and develop in Lancashire the engineering industries, because it is in those industries that I see hope for the future. It is significant that those industries have contributed 50 per cent. of our total exports since 1945. In 1938 the total exports of the engineering industries in this country were £100,000,000; to-day they are £1,000,000,000. That is the growth. We must see how far we can expand our engineering industries. That is the one great block of industries in which we can lead the word. How right the noble Viscount was about jet development! Here is something which can be exported. Look at the conversion value of a Comet airliner. That is one of the great factors we have to take into consideration in planning material allocation.
My Lords, I agree also that future markets are going to be held only by concentration on cost and price. I have no fear that we cannot battle with the buyers, on grounds of equality with our competitors. Cost and price are the things we have to watch. We must have delivery of our heavy engineering, and also quality in our exports. I am afraid that in an attempt to cheapen the price of their goods, some of our manufacturers have cheapened their quality. Apart from America, we have to look to Western Germany as perhaps our greatest competitor in the world of engineering. May I as an example take one industry that has contributed much to our exports, an industry with which I am not unacquainted—the motor industry? Its exports last year were £317,000,000–12½ per cent. of the nation's total exports. Our motor industry exported about 77 per cent. of its total production. I think we should pay tribute to one of the principal firms in this country, the Ford Motor Company, for making a very bold move and reducing its prices. That company has not waited to be driven into reducing

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its prices, and I think our congratulations are due to that far-sighted man, Sir Rowland Smith, and to his colleague, Sir Patrick Hennessy, for doing that. I hope that their lead will be followed by all the other manufacturers.
But now we come to a rather serious point. The motor industry is an example of the utilisation of capacity and of its effect upon cost. The motor industry in this country has a capacity of, approximately, 1,000,000 units a year. It is running to-day at only just a fraction over 60 per cent. of its capacity, and the reason is shortage of materials. I intend to come to that particular problem in a moment, but I want to put this to the noble Viscount, especially in his capacity as Minister responsible for materials: Are we not, in some cases, trying to spread our meagre amount of butter too thinly over too many slices of bread? That is one of the things of which I am afraid. I am afraid that we are so conservative that we want to retain for the sake of tradition industries which are using materials but which are going to play no part in the solution of the problem, or help us in the struggle we are having.
I am very glad the Government have taken in hand this matter of conversion value, because it is a great factor. I hope they will not be pushed around. I hope the noble Viscount will not be pushed around in his capacity as Minister of Materials, as I sometimes think the Chancellor of the Exchequer was pushed around in regard to his Budget. We must be very firm on this question of conversion value, because it is one of the matters we have to look to. Let me give another illustration of conversion, which the noble Viscount might like to think about. I understand that we have exported somewhere in the region of 230,000 to 250,000 tons of tinplate. Our food producers are screaming for containers. The conversion value, the total value of a tin of biscuits to the value of the amount of tinplate in that tin is twenty-one times. That is very high. Let me turn to ancillary uses. Every year for seven years after British motor vehicles have been exported, £30,000,000 or £40,000,000 worth of spare parts will need to be exported. My Lords, those are very valuable considerations.
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When we talk with trust, confidence and hope about expansion in our engineering industries, then, of course, we look to steel. I am delighted with, and welcome, the plans of the steel industry to expand their output to 20,000,000 tons. I have never subscribed to the theory that we in this country might have a surplus of steel. On the day we have a surplus of steel in this country we shall be bankrupt. We must use our engineering industries to the greatest possible degree and therefore we must produce as much steel as we can. But, as I see it, the problem is, from where are we going to get the ore?
A little while ago, in the early months of this year, I took a holiday in Australia. During my journeys, when I was in South Australia, I went to the Iron Knob, that huge mountain of ore 1,014 feet high, comprising millions and millions of tons of ore having an iron content of about 65 per cent. The ores we in this country are using average in iron content only 40 per cent. I was taken right to the top of this 1,014-feet high knob, and from there I could see to the horizon thirty miles away. I saw nothing except scrub and two other iron knobs which had not been touched. There were millions of tons of iron ore in them. Throughout the time I was in Australia, whenever I met anyone in authority, politicians or industrialists, I said to them: "Here are we in Britain, trying to carry out an immense rearmament programme and at the same time to keep up our exports. We are scraping the barrels of Africa and Scandinavia for any ore that we can get. We are going to the extreme cost of obtaining the help of our American friends to divert shipping to bring ore from Africa to our country and return to America in ballast. Why cannot we have some of this ore which is here in Australia?" I was given many reasons, but not one which carried any conviction to my mind. I have an unhappy fear that a very large proportion of the Australian people are so obsessed with the idea of developing their secondary industries that they are losing sight of the fact that this ore would be a grand export and an immense help to this country. Perhaps, at some time or other, the noble Viscount will look into that point. If he does I am sure that your Lordships would very much like to know the results of his investigation.

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Where are the markets? I must confess that I have never held a Very optimistic view of our successes in the dollar market. I think that in this connection we have to face some very hard facts. The Chancellor of the Exchequer said that the slogan of the future should be: "Trade as against aid." I would say that it has got to be "Trade or aid," because I have always been of the opinion that if America had taken a wider view of her responsibilities as the greatest creditor country in the world, and had lowered her tariff walls and her customs barriers to the imports of European and sterling area goods, we should never have required anything like the amount of Marshall Aid which we have had in the past. One does not have to tell this to the American Administration. President Truman has said this many times. It is Mr. Acheson's daily song. The Report of the Presidential Commission, published only the other day says some pertinent things, to the effect that this American economic isolationism has got to stop. Every informed member of the Administration says this. I am afraid that what we have to try to do by some method—I should not like to say how—is to convert Wall Street and American big business. Unless they do as the Presidential Commission's Report says, abandon their economic isolationism, accept imports on a much larger scale and work for a greater measure of economic cooperation, then Americans are going to sadly rue the day.
But where is the alternative?—and come now to the sterling Commonwealth. I am unhappy, very unhappy. I am unhappy because not long ago we had in this country a Sterling Commonwealth Finance Ministers' Conference, and immediately that was over—and we have had no official communiqué on the results of that Conference—we had these appalling cuts of United Kingdom imports into Australia. I know that perhaps I am now treading on somewhat dangerous ground, but I think these things have to be said, because restriction of imports is no good to Australia and it is no good to the sterling Commonwealth. The right answer is expansion of Australian exports. But when I was in Australia I was appalled to see the growth of high-cost secondary industries, with the high-cost selling that followed them. I was
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appalled to see the herding of the population. Over 60 per cent. of the population of Australia is herded in the big cities. Moreover, some of the costs of these secondary industries are equally appalling.
Let us be frank about this. I listened to every word spoken in public by the Australian Prime Minister when he was in this country, and he made some very fine speeches. But speeches are not deeds, and I am afraid that I can see every sign now that the result of the cuts in imports of British goods into Australia has been to give a fillip to these secondary industries. And what will happen next? They will want tariffs; and the whole vicious circle will start over again. Let us not blind ourselves to the fact that in the Australian Commonwealth Government there is a very strong protectionist group. What part can the Commonwealth countries play? In the course of a speech which he made at the Central Hall when he was in London Mr. Menzies asked, were we to set out on a lonely journey, or were we to try and travel together? He went on to say that the real question was how we reconciled our various individual ambitions and policies so that the strength of each contributed to the strength of all. The noble Lord, Lord Rennell, said that we are the bankers of the sterling area, and in the sterling area lies the largest trading community in the world, and in the Commonwealth sterling area lies the one hope of getting this world economic disequilibrium put right. Until we get the Commonwealth sterling area right, I do not think we shall make much imprint upon the American economy.
One other point, and this is my final one. Just take this matter into consideration. Before the war, Australia exported about 5,000,000 sheep and fat lambs a year, and about 1,000,000 quarters of beef. Last year, the export of sheep and fat lambs was reduced to under 1,000,000, and that of quarters of beef to under 300,000. And all the experts in Australia to whom I spoke told me that if this neglect of the primary industries of Australia went on; if the population continued to rise as it is rising to-day, at the rate of 3 per cent. per annum; and if they consumed as much meat per head as they are consuming there to-day, in six years' time Australia would be

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importing meat to feed her own people. Is that not a stark tragedy of the neglect of primary industries and of the insane goal of self-sufficiency which has taken hold of all these countries? They cannot be self-sufficient. Even America cannot be self-sufficient. I hope that as soon as they possibly can the Government will have a conference of Commonwealth Prime Ministers to tackle this problem. If the noble Viscount, Lord Swinton, has anything to do with this Conference, I hope he will talk to them as plainly and as bluntly as he has talked to us this afternoon.
5.21 p.m.
VISCOUNT SWINTON: My Lords, this debate has shown so much agreement that it is hardly necessary for me to speak, by leave of the House, for more than a moment in answer. Certainly it has been full of practical and constructive suggestions. All that my noble friend Lord Rennell has said on the financial side I shall certainly take to heart, because I agree with him that restrictive measures like raising the bank rate are always more effective if we take them first, and are the only people doing it. I am not being polemical when I say that I think it would have been better if we had taken that as one of the measures a good deal earlier than we did. I think that possibly we have come so near together that even my noble friend Lord Pethick-Lawrence, who introduced this Motion, may agree that it is sometimes necessary, if we are to restrict credit, to use the only machine by which credit can effectively be restricted, while at the same time I would agree with him, as my noble friend Lord Rennell has to-day, that we have to watch the restriction of credit to make sure that it does not obstruct productivity that we really need. That is the balance which we have always to try to preserve.
My noble friend Lord Hawke said that the diversion of credit was necessary and that the diversion of things and men was more difficult. I have always thought it possible for us to rely too much on purely mechanical planning about what we can do with manpower. After all, manpower is not machine power. We are dealing with the human element: people are attached to their homes and are not likely to move if there are not new houses into which to move. That is why housing is
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bound up with the production problem. It came as a revelation to me to learn from the Ministry of Labour that there has been a remarkable success in the new technique of operating the order under which all engagements have now to take place; that there has been a remarkable success in the upgrading of people and in persuading firms to make do with fewer skilled people than they think they need. We did it in the war and industry is learning to do it again.
It is often said that people can do only one job, but I think most people are like Cabinet Ministers: they can do quite a number of jobs. People said that it was no good taking industry into Lancashire because the Lancashire people would work only in cotton. But that was nonsense. I took industries into Lancashire before the war, and I remember that when there was a short boom in the cotton trade at the end of the war, and it was a question of turning out textile goods for the immediate stifled demand of the world, people were anxious about whether we should get girls who had gone off to munitions to come back to cotton. But they did. I believe that it is nonsense to think that girls as efficient as these Lancashire girls are could not equally turn to other industries, if there were the opportunity, and given a small highly skilled staff. The project of introducing light industries into Lancashire is in its early stages. Those of us who have been through these diversion problems in two wars know that in the highly technical industry of to-day, while a skilled man is worth his weight in gold, the number of highly skilled positions is much less than it used to be.
In the distribution of materials we are now learning a great deal more about which industries are the most deserving and most necessary. When we take the example of steel allocation, probably a great many mistakes were made at first in sub-allocation. No doubt I made mistakes in the broad allocation, and when it came down to making sub-allocations among 30,000 firms, inevitably mistakes were made, and there was not enough to go round. The whole object we have in mind is that materials shall go where the need is greatest; that is where they can fulfil the most useful purpose. We are learning a good deal about what individual firms are able to do in export.

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One hopeless thing about controls is that they must be imposed on some basis, and there is always a tendency to fix controls on the basis of what an industry did in 1938. We might as well control on the basis of what they did in 1838 ! We are trying to get away from that as well as we can.
We are learning a good deal about conversion value. The noble Lord asked why we were giving so much tinplate as tinplate, because it has a low conversion value. I could not agree with him more. I suppose that I should not say this, but the noble Lord knows that I do most of these allocations. I started with a prejudice against the allocation of tinplate as tinplate, but I soon discovered that we do not live in a nice world, where everything is free and goes through the ordinary process of trade. I discovered that half the trade we do is on a barter basis, and I had to allocate tinplate because, as part of a bilateral agreement with some country, tinplate had to be sent so that we could get a commodity we needed. In some cases tinplate had to go to countries in order to pack the food which we were to receive under our contracts with those countries, in addition to getting the food at a particular price. I also discovered that there was this valuable dollar trade in food such as biscuits and confectionery. I can give the noble Lord an assurance, without revealing detailed allocations of tinplate, that I have given every ounce of tinplate that can be spared for the export trade.
With regard to iron ore in Australia, I think probably the answer is freight. I do not know how near the coast this iron ore is. In dealing with iron ore, freight is most important, and it is a long way to bring iron ore from Australia to this country if it can be got from Newfoundland and Sierra Leone; and I know, going a little further up from that special port, that there is a large new field of iron ore which can be developed. All these things are worth considering. It is common knowledge that we are all extremely anxious to have this wider economic and general Conference, and I sincerely hope that it will not be too long before it conies about. It is practical matters of this sort which must then be considered. Taking the fairly long view, with the currency problems that we are going to face, it may well
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be worth while developing something within the Empire, although, on a purely currency basis, if all currencies were equal, it would not be.
LORD LUCAS OF CHILWORTH: I do not want to detain the noble Viscount, but he will agree with me that we have had to do some rather uneconomic things, such as importing coal from America.
VISCOUNT SWINTON: I quite agree; and we do not want to have to do that again.
The noble Lord referred finally to a very wise Report made to the President of the United States, and said: "I think you have got to convert Wall Street." Wall Street might not be so hard to convert. I think the wise men who wrote that Report for the President must convert Main Street, rather than Wall Street. I am glad to say that most of them are not isolationists in foreign policy to-day, but it is natural, when it comes to domestic politics, that they are apt to be a little isolationist if their own industry is out for a moment.
There is no real, ultimate solution to this problem unless a creditor country becomes an importing country; and here is the only creditor country in the world, recognising it with extraordinary generosity in gifts and loans, and now in security aid. Yet the much more obvious way of doing it is by carrying out mutual trade. The closer we are together, the more we can talk in this friendly way. But it is much easier to grow up gradually as a creditor country over a hundred years, than suddenly to drop all your old habits and become a creditor country overnight. That is all I have to say, except this. I feel that this has been a remarkable debate. I do not remember a debate on this subject in which there was such unanimity and so many attempts at constructive suggestions. I certainly have learned much from the debate, and I think it has shown a unity of counsel and purpose which augurs well for us in these difficult times. I thank the noble Lord for having introduced the Motion.
5.37 p.m.
LORD PETHICK-LAWRENCE: My Lords, it only remains for me to say that, in my view, we have had a most enjoyable debate, and I hope that it may have fruitful and practical results. If the

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numbers taking part and listening to the speeches have been few, I am sure that they have made up by their quality for the lack of quantity. I beg leave to withdraw my Motion.
Motion for Papers, by leave, withdrawn.

PIER AND HARBOUR PROVISIONAL ORDER (FALMOUTH) BILL
Returned from the Commons with the Amendments agreed to.
WINCHESTER CORPORATION BILL [H.L.]
Returned from the Commons, agreed to with Amendments: the said Amendments considered and agreed to.

HOUSE OF LORDS OFFICES
Third Report from the Select Committee: made and to be printed.
House adjourned at twenty-two minutes before six o'clock.