Sitting of 26 July 1955

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS

  BRITISH TRANSPORT COMMISSION BILL
  (Queen's Consent, on behalf of the Crown and the Duchy of Cornwall, signified.)
  Bill read the Third time and passed.

  CORN EXCHANGE BILL [Lords]
  As amended, considered.
  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, with Amendments.

  LONDON COUNTY COUNCIL (LOANS) BILL
  As amended, considered; to be read the Third time.

  MILFORD DOCKS BILL [Lords]
  As amended, considered.
  Standing Order 205 (Notice of Third Reading) suspended.—[The Chairman of Ways and Means.]
  (Queen's Consent, on behalf of the Crown, signified) Bill read the Third time and passed, with Amendments.

  NORTH WALES HYDRO-ELECTRIC POWER BILL [Lords]
  As amended, considered.
  Standing Orders 204 (Notice of Amendments on Consideration of Bill, or on Third Reading) and 205 (Notice of Third Reading) suspended.—[The Chairman of Ways and Means.]
  A verbal Amendment made to the Bill: (Queen's Consent, on behalf of the Crown, signified) Bill read the Third time and passed, with Amendments.

ORAL ANSWERS TO QUESTIONS
  HOUSING

    Local Authority Allocations
    Mr. Lewisasked the Minister of Housing and Local Government why he refused the request of the municipal associations that local authority housing should be freed from quota allocation, similarly to houses built by private enterprise.
    Lieut.-Colonel Liptonasked the Minister of Housing and Local Government what restrictions he still imposes on the building of houses by local authorities.
    Mr. Gibsonasked the Minister of Housing and Local Government whether he will give as much freedom to local housing authorities as has been given to private builders to build as many houses for letting as they think they are able, subject only to the condition that they are built to the standard of construction and fittings suggested by the Central Housing Advisory Committee.
    The Minister of Housing and Local Government (Mr. Duncan Sandys): The issue of allocations is an informal arrangement, introduced in 1947, to facilitate forward planning by local authorities. Local authorities are required by law to obtain sanction for loans and approval of houses for subsidy. I am not satisfied that it would be desirable to dispense with these procedures.
    Mr. Lewis: Yes, but in view of the fact that private builders are not subject to the inhibitions experienced by local authorities, and in view of the fact that the municipal associations have made this request to the right hon. Gentleman, can he now state a satisfactory reason why he should not grant the request?
    Mr. Sandys: I cannot automatically agree to approve any request that is made to me by an association.
    Lieut.-Colonel Lipton: But has the right hon. Gentleman at least realised the folly and injustice of allowing private building to proceed, without any restriction whatever, to the detriment of local

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    authority building? Will he at least tell us what is his view about that and secure some equality of treatment between private builders and local authorities?
    Mr. Sandys: There is nothing like equality of treatment. In fact, the ratio is about two-to-one in favour of the local authorities.
    Mr. Gibson: Does not the Minister realise the growing difficulties of large local housing authorities in finding accommodation for those on their urgent lists? In view of that fact, will he not have a look at the possibility of releasing the local authorities from some of the restrictions which are imposed upon them at present, so long as the houses conform in their design with the plans suggested by the Central Housing Advisory Committee? Surely that would be sufficient?
    Mr. Sandys: As I have explained in my answer, the only restrictions that are imposed by law are the requirements that local authorities have to obtain sanction for loans and approval of houses for subsidy. All this business of allocations is only an advance warning so that they may know some time ahead how many houses they may expect to have approved for loan sanction and for subsidy in the future. It is for convenience.
    Mr. Mitchison: Is not the effect of the right hon. Gentleman's handling of these authorisations that the number of council houses is going down and the number of private houses is going up? In view of that, will not the right hon. Gentleman give these authorisations much more freely, or without any restriction at all, where they are reasonably required?
    Mr. Sandys: The fact is that during the first five months of this year local and public authorities have built 88,000 houses, which is more than were built in any comparable period under the Labour Government.
    Mr. Sparksasked the Minister of Housing and Local Government why the number of local authority and housing association houses under construction and in tenders approved is steadily falling.
    Mr. Sandys: This is due to a variety of factors.
    Mr. Sparks: Would the right hon. Gentleman give the House an assurance
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    that the number of new houses to be developed and completed by local authorities in the coming year will not fall below 300,000?
    Mr. Sandys: It never got to more than 200,000 under the Labour Government.
    Mr. Mitchison: Is the Chancellor one of the factors and, if so, what are the others?
    Mr. Sandys: Among them are the rate of approval of tenders, the rate of construction, number of allocations, the speed of completions and the weather.
    Mr. MacCollasked the Minister of Housing and Local Government if he will give an assurance that he will sanction all applications for increases in house-building made by local authorities affected by the Requisitioned Houses and Housing Amendment Act, 1955.
    Mr. Sandys: This is, of course, one of the factors which will be taken into account when considering applications.
    Mr. MacColl: When the Minister is considering these applications, will he make certain that no local authority is compelled to use for rehousing licensees new building which ought to be used for slum clearance and other purposes, and will he make sure that local authorities clearly understand his undertaking when the Bill was being considered that this would not happen?
    Mr. Sandys: The hon. Gentleman, who took an active part in the debates on the Requisitioned Houses and Housing Amendment Bill, must know as well as I do that the Act provides a number of methods. It does not rely primarily upon new construction for winding up requisitioning. It provides various other methods, including the leasing or purchase of requisitioned houses, which are likely to play a much bigger part than the provision of new construction for this purpose.

    Slum Clearance
    Sir I. Fraserasked the Minister of Housing and Local Government whether he will make a statement on the progress of slum clearance.
    Mr. Sandys: I will make a statement to the House after the Recess, by which

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    time I hope to have received the slum clearance programmes of local authorities.
    Sir I. Fraser: Will my right hon. Friend have in mind, in the public interest and in the interest of persons who want houses, that the total amount of building, including slum clearance, local authority building and private building, should not be increased, because, if it is, it will clearly raise prices and create a demand which cannot be met?
    Mr. Sandys: No Government has ever accepted the view that the number of houses which it was desirable to build is altogether unlimited. The Labour Government fixed a firm ceiling of 200,000. We find that under private enterprise conditions it is possible to manage about 50 per cent. more than under Socialism.
    Mr. Mitchison: Is it not a fact that the number of council houses is still falling steadily, and in view of the urgent need that these council houses represent, is the Minister not going to take any action about it?
    Mr. E. Fletcher: Would the Minister say whether it is intended to hold up progress on slum clearance as a result of the Chancellor's appeal yesterday to local authorities to cut back their capital expenditure as much as they can?
    Mr. Sandys: Not at all.
    Mr. Blenkinsopasked the Minister of Housing and Local Government what proposals he has received during the last 12 months from the Newcastle-upon-Tyne City Council for slum clearance under Parts II and III of the Housing Act, 1936.
    Mr. Sandys: I have not yet received from the city council its complete proposals for slum clearance. It has, however, submitted a compulsory purchase order covering 226 dwellings in five clearance areas, and this is now being considered.
    Mr. Blenkinsop: What is the right hon. Gentleman's date-line for submission of the major slum clearance proposals, and has it been affected by the statement of the Chancellor of the Exchequer yesterday?
    Mr. Sandys: The answer to the first part of that supplementary question is, "31st August," and to the second part, "No."
    Mr. P. Robertsasked the Minister of Housing and Local Government whether he will instruct those councils which do not submit their slum clearance proposals under the Housing Repairs and Rents Act, 1954, by 31st August, 1955, being the appointed date, that they must complete these returns by, at the latest, 31st September, 1955, in order to ensure that there is no delay in dealing with this problem.
    Mr. Sandys: No, Sir. I hope this will not be necessary.
    Mr. Roberts: May I ask my right hon. Friend two questions? First, will he bear in mind that some councils—I am referring particularly to the Sheffield Council —may not have their schemes ready by August, and as they have taken over a year to consider these, will he see that there is no delay in this matter? Secondly, is the Minister aware that the statement he has made today will give a great deal of satisfaction in the country, namely, that the slum clearance programme of Her Majesty's Government will not in any way be affected by the statement made by the Chancellor yesterday?
    Mr. Sandys: I am as anxious as my hon. Friend to give this information about the slum clearance proposals of all local authorities, but I do not think it would hurry them up to fix a later date, thus making them feel that they need not submit their schemes by the end of August. I am proposing to send out a reminder to all local authorities who have not yet submitted their proposals.
    Mr. Mitchisonasked the Minister of Housing and Local Government whether he will publish as an appendix to the housing returns or otherwise as soon as possible after the 30th August, 1955, the estimated number of unfit houses stated by each housing authority in their proposals under Section 1 of the Housing Repairs and Rents Act, 1954.
    Mr. Sandys: Yes, Sir.
    Mr. Mitchisonasked the Minister of Housing and Local Government how he intends to publicise, nationally and

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    locally, the proposals of housing authorities under Section 1 of the Housing Repairs and Rents Act, 1954.
    Mr. Sandys: A copy of the approved proposals will be deposited for inspection at the council's offices.
    Mr. Mitchison: Will they be deposited soon after they have been received?
    Mr. Sandys: As soon as they have been approved.

    Repairs and Rents Act
    Mr. E. Fletcherasked the Minister of Housing and Local Government to what extent the Housing Repairs and Rents Act has resulted in repairs being done to houses that would otherwise have fallen into disrepair.
    The Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. W. F. Deedes): It is impossible to measure this statistically; but there is growing evidence that more work of repair and improvement is being carried out as a result of the 1954 Act.
    Mr. Fletcher: Is the Minister aware that this Act has very largely failed in its purpose of being a real attempt to deal with these derelict houses, and is it not time that the Government gave more power to local authorities to deal with them?
    Mr. Deedes: I do not accept that for a moment. It might well be said that progress could be quicker, but the results are not at all unsatisfactory.

    Rothwell
    Mr. Mitchisonasked the Minister of Housing and Local Government whether he is aware that, for the reasons which have been given to him by letter, there is an urgent need for the authorisation of further council house building in Roth-well, Northamptonshire; and whether he will now authorise additional houses there.
    Mr. Sandys: I am satisfied that some increase in this council's housing allocation is justified, and I have asked my regional officer to discuss the matter with them.

    Newcastle-under-Lyme
    Mr. Swinglerasked the Minister of Housing and Local Government if he will now reconsider the housing allocations
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    to the borough and rural district of Newcastle-under-Lyme, with a view to increasing them.
    Mr. Sandys: I will be pleased to look again at the programmes of these two authorities, but I cannot in advance undertake to increase them.

    Whiston
    Mr. H. Wilsonasked the Minister of Housing and Local Government how many additional houses he proposes to authorise the Whiston Rural District Council to build in the years 1956 to 1960 to enable them to meet his requirement of rehousing the residents of the M.A.P. estate at Knowsley.
    Mr. Sandys: I cannot at present say how many houses the Whiston Rural District Council will require over the next five years. But the need to rehouse families now living in temporary hutments will, of course, be taken into account.
    Mr. Wilson: Is the right hon. Gentleman not aware that already houses on this estate are being left vacant, as part of this crazy plan for rehousing this particular estate, on the assumption that the right hon. Gentleman is going to allow enough houses to be built for rehousing purposes in addition to the normal needs of the Whiston Rural District Council? Is he further aware that in Whiston all normal council house building has already come to a full stop, and yet it has its own programme and its rehousing programme to do as well?
    Mr. Sandys: The right hon. Gentleman asked quite a number of questions. It is, I think, desirable that these hutted camps should be brought to an end, and that does involve a certain additional strain. But one of the factors which will affect the progress of this scheme is the rate at which the council is able to advance in making provision for a substantial new sewerage system which will be required.
    Mr. Wilson: But is the right hon. Gentleman aware that this is not a hutted camp, that the dwellings are brick-built, and, in the second place, that the local authority has stopped its building? Since he does not know the answers to my question, will he either go or send an emissary

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    to this area to discover the facts at first hand and then see that something is done about it?
    Mr. Sandys: I will look into it.

    Applicants
    Lieut.-Colonel Liptonasked the Minister of Housing and Local Government whether he will publish in the quarterly housing summaries the number of applicants on the housing lists of local authorities.
    Mr. Sandys: No, Sir.
    Lieut.-Colonel Lipton: Is the Minister too ashamed or too afraid to publish these figures, which have been increasing steadily since 1951, and is he not aware that, as a result of his wretched policy during the last year or two, we shall have more and more people waiting for less and less houses?
    Mr. Sandys: The information derived from these lists gives an erroneous picture of the effective total demand, and also of its distribution between the various local authorities.
    Mr. Mitchison: What steps is the right hon. Gentleman taking to get, and to present to the House, a correct picture?
    Mr. Sandys: The reply I gave to the hon. and gallant Member was an exact quotation from one given by the right hon. Gentleman the Member for Ebbw Vale (Mr. Bevan), and I have not been able to improve on it.
    Lieut.-Colonel Lipton: Owing to the unsatisfactory nature of that reply, I beg to give notice that I shall raise the matter on the Adjournment.
    Mr. Sorensenasked the Minister of Housing and Local Government to what extent he has a statistical and other assessment of the present extent of the approximate number of persons and families living in overcrowded and also in slum conditions, who are living in rest-houses and who are on local authority housing lists but who cannot expect to be rehoused within their local authority area because building sites are not now available; and if he will request local authorities to assist in the compiling and provision of such information.
    Mr. Sandys: It is desirable that local authorities should maintain a full record
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    of housing applications made to them. But it would be difficult to compile statistics nationally on a comparable basis.
    Mr. Sorensen: Can the right hon. Gentleman say why it is impossible to collect from local authorities statistics which they have, or should have, so that we might have some conception of the national burden still remaining, particularly in regard to the unfortunate people who are in rest-houses and similar places and never know when they are going to be rehoused?
    Mr. Sandys: The Question covered all people who are on housing lists in general. As I explained earlier, the basis on which local authorities compile housing lists and the conditions which they lay down vary so enormously from district to district that to mass all the figures together into a single national global total would be most misleading.
    Mr. Sorensen: Most unsatisfactory.

    Cardiff
    Mr. G. Thomasasked the Minister of Housing and Local Government why there has been a substantial reduction in the number of council houses completed in Cardiff during the past two months.
    Mr. Sandys: The recent decline in the number of completions is, I understand, no more than a temporary fluctuation.
    Mr. Thomas: Is the Minister aware that statements have been issued that we are now getting houses at exactly 50 per cent. of the rate at which we were getting them, and that it looks as though there has been a serious fall in the number of houses made available at Cardiff? What is he going to do about it?
    Lieut.-Colonel Lipton: Nothing at all.
    Mr. Sandys: If the hon. Gentleman is suggesting that this is due to the restriction of allocations, he is quite incorrect. Only a small proportion of the houses allocated to the council this year has as yet been put out to tender.

    Leeds
    Miss Baconasked the Minister of Housing and Local Government how many houses the Leeds City Council applied to build in their 1955 programme; how many he is allowing them

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    to build; and if, in view of the large number of persons on the Leeds City housing list and the great number of houses that require demolition, he will enlarge his allocation.
    Mr. Sandys: It is not customary to publish figures of housing allocations. In this case, the council has only recently received a substantial additional allocation.
    Miss Bacon: Is the right hon. Gentleman aware that the council originally asked for 3,000 houses in this year's scheme, that his Ministry cut that figure to 2,000, and that only after months of protracted negotiation has the figure been raised to 2,500? Is he further aware that on the waiting list for council houses in Leeds there are no fewer than 26,500 families, and that in addition to these there are 22,500 houses earmarked for demolition? In view of this, why was not Leeds allowed to build its original allocation?
    Mr. Sandys: I have no doubt that those figures will be read with interest in the Leeds newspapers. What is more relevant is that the allocations already given to Leeds should be sufficient to provide the council with as large a programme as it is able to cope with at present. I would add that the council has an abnormally large number of houses approved but not started.

    New Town Tenants (Middlesex Families)
    Mrs. Butlerasked the Minister of Housing and Local Government how many of the 4,000 families from Middlesex who have been housed in new towns around London since 6th May, 1953, were selected under the industrial selection scheme as contained in his Department's circular No. 29/53 and his further circular letter dated 10th September, 1953.
    Mr. Sandys: About 400.
    Mrs. Butler: Is the Minister aware that a very high proportion of the families going to new towns outside this industrial selection scheme do not appear to be on the housing waiting list of any local authority, and as this scheme was introduced to enable families on the waiting lists of local authorities to work and live in the new towns, and the
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    numbers just given are very small compared with the total number, is the Minister satisfied that this scheme is working so as to benefit the families in the greatest housing need?
    Mr. Sandys: I am satisfied that it is making a worth-while contribution. In this connection it should be remembered that every family which moves out of London to a new town or elsewhere releases a house or removes a family from a housing list.

    Ex-Service Men, Wales
    Mr. Gowerasked the Minister of Housing and Local Government the nature of the response from Welsh local authorities to his circular on the special needs of serving members of Her Majesty' Forces for inclusion in housing lists; and if he will make a statement.
    Mr. Sandys: The circular was sent to 168 authorities in Wales. One hundred and seventeen have so far replied. Of these, 73 assured me that they were already applying the principles of the circular. Twenty-six stated that, whilst they had not done so hitherto, they would in future bring their practice into conformity with my recommendations. Two authorities are reconsidering their practice, and 11 gave replies which are partially satisfactory. The number of negative replies was five.
    Mr. Gower: Does my right hon. Friend think it might be beneficial if he indicated to authorities who are reluctant to do anything for fear of penalising the people on their housing lists that any help which they gave to Service men would be reflected in sympathetic treatment of their applications?
    Mr. Sandys: I do not see why special treatment should be given to the sinner that repenteth.

    Subsidies and Loans
    Mr. Blackburnasked the Minister of Housing and Local Government if he will state for each year, from 1950 onwards, the amounts paid to local authorities in housing subsidies and the amounts paid to the Government by local authorities in interest on housing loans.
    Mr. Deedes: On the first part of the Question I would refer the hon. Member to the Annual Appropriation Accounts,

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    Class V.2. With regard to the second part of the Question, he will find the information in the Annual Reports of the Public Works Loan Board.
    Mr. Blackburn: Would it have been a great difficulty for the Minister to tabulate the figures so that it would be possible to compare them? Does not the amount being paid by local authorities in interest far exceed the amount they are receiving in housing subsidies, and will not the amount be increased owing to the new rate of interest for loans from the Public Works Loan Board? If it is necessary to restrict local government expenditure, does he not agree that it could be done in other ways than by increasing the rate of interest, which imposes a further burden on the rates?
    Mr. Deedes: To supply the hon. Gentleman with the answers which he wanted would have entailed a rather voluminous reply. There are two sources, and perhaps he will consult them to ascertain whether he is satisfied with what they provide.

    Removal Expenses
    Mr. Sorensenasked the Minister of Housing and Local Government what powers he has conferred on local authorities financially to assist tenants of council houses or prefabricated bungalows when tenants are required by a local authority to move to other dwellings.
    Mr. Sandys: Under the Housing Act, 1936, local authorities have power to assist such tenants by paying for removal expenses or by allowing rent rebates.
    Mr. Sorensen: Is the Minister aware that in many cases this is not done? Has he taken any steps to recommend that, where obvious hardship is imposed on tenants who have no desire, or are compelled, to leave their present houses for other accommodation, local authorities should make a reasonable contribution towards their expenses?
    Mr. Sandys: I should have thought that the powers were very well known to local authorities, because they have existed since 1936, but I will examine the matter again and see whether any reminder is needed.

    Sites, Manchester
    Mr. W. Griffithsasked the Minister of Housing and Local Government whether he is aware of the growing concern in Manchester about the scarcity of suitable sites for the corporation's house-building programme; and whether he will reconsider those sites previously rejected by his Department.
    Mr. Sandys: I have arranged to visit Manchester in September to discuss this and other problems with the city corporation.
    Mr. Griffiths: Is the Minister aware that his reply will give great satisfaction in Manchester? Can he give an assurance that he is not without an open mind so far as reconsidering, for example, the site of Lymm?
    Mr. Sandys: I go there with a receptive mind on all questions.

  LOCAL GOVERNMENT

    Stevenage By-pass
    Mr. Maddanasked the Minister of Housing and Local Government what action he is taking as a result of representations from the Stevenage Development Corporation to co-ordinate the building of the new town houses and factories with the construction of the Stevenage by-pass which is an integral part of the new town plan.
    Mr. Sandys: My right hon. Friend the Minister of Transport and Civil Aviation is being kept fully informed of the programme of development at Stevenage and of the importance attached by residents and local authorities to the construction of the by-pass as soon as practicable.
    Mr. Maddan: Does the Minister agree that he has a very special responsibility in this matter since, by building a new town without the by-pass which was on the original plan, he has, in fact, created a danger black spot on the Great North Road?
    Mr. Sandys: I have a very special responsibility for quite a lot of things. I have fully accepted the necessity for this by-pass, but, like most of the road construction problems, it is largely a matter of priorities. As far as the black spot is concerned, my hon. Friend knows that

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    various road safety measures have already been taken or are being taken. These include the construction of a subway for cyclists and pedestrians under the Great North Road, and also the installation of traffic lights and controls.

    Education Committee Meetings (Press Admission)
    Dr. D. Johnsonasked the Minister of Housing and Local Government whether, in view of the importance of the plans for educational developments at the present juncture, he will introduce legislation to the effect that meetings of all education committees of local councils should be statutorily open to the Press and public whether they are, in fact, education authorities within the meaning of the Act or not.
    Mr. Deedes: No, Sir. My right hon. Friend is not satisfied, on the information before him, that there is a sufficient case for altering the law in this field.
    Dr. Johnson: Is my right hon. Friend aware that the education committee of the Carlisle City Council has recently decided to exclude the Press, thus breaking a precedent that has existed since the inception of that committee and adding to the number which conduct their affairs in secret at this important time?
    Mr. Deedes: If my hon. Friend will send me the details, I will look into the matter but, broadly speaking, the local authorities are not behaving unreasonably over this. It is a very controversial question.

    Private Street Works (Loans)
    Mr. Swinglerasked the Minister of Housing and Local Government how many local authorities have applied for loan sanction in connection with private street works in the last 12 months; what was the total sum involved; and in how many cases sanction was refused.
    Mr. Deedes: A total of 299 loans for private street works was sanctioned in the 12 months ended 30th June, 1955, involving a total sum of £1,579,325. No application was refused in that period.

    Synthetic Detergents
    Mr. Doddsasked the Minister of Housing and Local Government, in view of the recommendation by the Committee on Synthetic Detergents of the need
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    for manufacturers to stress on containers the advisability of thoroughly rinsing the hands in fresh water after using water with the washing products in order to reduce the possibility of skin irritation and dermatitis to persons who are particularly sensitive, what steps he has taken to see that this precaution is carried out by manufacturers.
    Mr. Deedes: The Interim Report containing this opinion was put on sale and well publicised. I have no doubt that the manufacturers of washing products have noted the Committee's views.
    Mr. Dodds: Does the Minister not appreciate the particular danger to married men who, by compulsion or of their own free will, do the washing up, as an investigation has shown most are prone to the using of too liberal quantities of de-fatting detergents, with harmful effects? Cannot he therefore take some action to persuade manufacturers to put the warning on the packets?
    Mr. Deedes: The Interim Report which has been published by the Committee was not unreassuring on this point. It did not specify married men, but if the hon. Gentleman awaits the final report later this year, he may find out what he wants to know.

    Rating and Valuation
    Mr. Proctorasked the Minister of Housing and Local Government if he will recommend the appointment of a Royal Commission on Rating and Valuation, the terms of reference to include the submission of an early interim report on the derating of industry.
    Mr. Sandys: No, Sir.
    Mr. Proctor: Does the Minister realise that there is general support for the abolition of derating in the country and that hon. Members on his own side of the House have recently expressed themselves in favour of it? Also, has he taken into account the change of opinion on this matter, and will he do something about it?
    Mr. Sandys: The appointment of a Royal Commission is not always the best way of expediting the consideration of a proposal.
    Mr. Mitchison: Is the right hon. Gentleman for or against the continued derating of industry?
    Mr. Sandys: That is quite a different point.
    Mr. Proctorasked the Minister of Housing and Local Government what action he proposes to take and when to implement his undertaking of 6th December, 1954, regarding the revaluation of business premises and other properties.
    Mr. Sandys: I would refer the hon. Member to the recent statements I made in the debates on the Rating and Valuation (Miscellaneous Provisions) Bill, of which I am sending him copies.
    Mr. Proctor: Does the right hon. Gentleman realise that the statements which he made were far from explicit and that in them he has not answered or anticipated the question I am now putting to him? Does he realise that he promised to consider, and if necessary take, action as soon as the forthcoming valuation could be fully measured? Does he think he will be able fully to measure it before rates are collected on the basis of the new valuation?
    Mr. Sandys: Not before the new valuation comes into effect. I have made the position clear. I think the hon. Gentleman had better re-read the statements which I shall send him.
    Mr. Sparksasked the Minister of Housing and Local Government if the loss to local authorities from the derating of industrial hereditaments forms an element in the computation of the Exchequer equalisation grant.
    Mr. Deedes: Yes, in the sense that a county or county borough which, because of derating or for any other reason, has a rateable value per head below the national average has its financial resources brought up to the average.
    Mr. Sparks: Is not the answer really "No"? Is not the hon. Gentleman confusing the issue completely, because local authorities whose rate average is above the national average get no Exchequer equalisation grant and, therefore, cannot receive any compensation for losses on derating?
    Mr. Deedes: The hon. Gentleman knows quite well how the Exchequer equalisation grants work. If he studies the system, he will agree that the answer should be "Yes."

    Departmental Envelopes (Economy Labels)
    Mr. Knox Cunninghamasked the Minister of Housing and Local Government to what extent it is the practice of his Department when envelopes are in use for the first time to send them out with economy labels containing the recipient's name and address affixed thereto; and whether in the interests of economy he will take steps to stop such a practice.
    Mr. Deedes: Economy labels are not put on envelopes sent out for the first time except to utilise otherwise unusable stocks.

    Water Supplies, Dursley
    Mr. Kershawasked the Minister of Housing and Local Government whether he is aware of the unsatisfactory water supply in the Ashmead Green area of Dursley rural district; and whether he will make a statement.
    Mr. Deedes: A water scheme, including a new main to Ashmead Green, has been submitted by Dursley Rural District Council and will be investigated locally when my right hon. Friend has certain information which the council has promised to send him soon.

    Cribbs Causeway Development (Planning Appeal)
    Captain Corfieldasked the Minister of Housing and Local Government by what date he anticipates that it will be possible to come to a decision in regard to the planning appeal concerning the proposed Cribbs Causeway development.
    Mr. Sandys: A letter was sent to the parties yesterday conveying my decision on this appeal. I am sending a copy to my hon. and gallant Friend.

    Interest Rates
    Mr. A. Robertsasked the Minister of Housing and Local Government what reply he has sent to local authorities in answer to their protestations against his decision to increase the rates of interest to local authorities.
    Mr. Sandys: I would refer the hon. Member to the answer given by the Chancellor of the Exchequer on 19th July.
    Mr. Roberts: In view of the statement made by the Chancellor yesterday, does the Minister intend to increase or decrease the interest rates in the near future?
    Mr. Sandys: That does not rest with me.

    Town and Country Planning Act (Part VI Claims)
    Mr. R. Bellasked the Minister of Housing and Local Government what further progress has been made since 24th June, 1955, in the payment of claims under Part VI of the Town and Country Planning Act, 1947, arising in respect of private sales of land.
    Mr. Deedes: I am informed by the Central Land Board that, in the period from 24th June to 21st July, it had made a further 957 payments amounting to £1,003,834 in respect of private sales.
    Mr. Bell: How many are outstanding?
    Mr. Deedes: I cannot say without notice, but I will let my hon. Friend know in due course.

    Outfall Sewers, London (Rating)
    Mr. Hastingsasked the Minister of Housing and Local Government what steps he is taking to implement his undertaking regarding the rating of the northern and southern outfall sewers in the Greater London area.
    Mr. Sandys: It was unfortunately found that the inclusion in the Bill of the proposed amendments to implement the undertaking would turn it into a hybrid Bill, and this would involve a lengthy procedure for which time is not available. It is, however, still the Government's view that the overground parts of these sewers should continue to be rated, and I am considering how best that result might be served.
    Mr. Hastings: While I thank the Minister for what he has said, would it not be possible to implement the agreement without making the Bill a hybrid one, by not mentioning London at all but simply stating the size of the sewer?
    Mr. Sandys: The hon. Member will know that the difficulty was initiated by one of his party colleagues. We have taken the best possible advice, but we are not satisfied that, without stretching the constitution, it would be possible to deal with the matter other than by means of a hybrid Bill.
    Mr. Mitchison: Is the right hon. Gentleman aware that one of his colleagues in another place declined to move Amendments which had been tabled to give effect to the undertaking? As it was a perfectly clear and specific undertaking and now requires legislation to implement it, will he undertake to introduce the necessary regulation as soon after the Recess as possible?
    Mr. Sandys: It is no good criticising the Government for not moving an Amendment in another place. In fact, I do not think it is proper for us to discuss that subject here. However, as I have already indicated, the difficulty was initiated by a member of the hon. and learned Gentleman's party.
    Mr. Mitchison: On a point of order, Mr. Speaker. Am I not entitled to refer to Government statements in another place?
    Mr. Speaker: That is right, but the matter cannot be debated at great length.
    Mr. Mitchison: May I have an answer from the right hon. Gentleman to my last question?
    Mr. Sandys: I was on the point of answering the second part of the hon. and learned Gentleman's question when he interrupted me. I have stated clearly that we still adhere to the view that the undertaking we gave was a correct one, and that it is proper, right and fair that the overground parts of the sewers should be rated. A Parliamentary difficulty has arisen, and I am examining the matter to determine how best we can ensure that the undertaking is in one form or another honoured.

    Reorganisation
    Mr. Sorensenasked the Minister of Housing and Local Government what further action he intends to take to secure joint consideration by adjacent local authorities in the Greater London area

    981
    and elsewhere in respect of any proposals for the revision of local government.
    Mr. Sandys: Full opportunity will be given for all concerned to consider such proposals before the introduction of any legislation.
    Mr. Sorensen: Can the Minister give any idea of when that is likely to happen? Increasing difficulties about the future are arising for local authorities, and if he could give some idea of when that is likely to happen, it would certainly help local authorities a great deal.
    Mr. Sandys: They will have plenty of warning.
    Mr. Sorensen: That is not very helpful.

  NATIONAL SERVICE

    Agricultural Workers
    Sir I. Fraserasked the Minister of Labour whether he will make a statement on future policy for the deferment from National Service of farm workers.
    Mr. Collinsasked the Minister of Labour whether, in view of the difficulties occasioned to agriculture by the continued drift of farm workers from the land, he will continue the deferment of call-up of farm workers beyond the period of the harvest.
    The Parliamentary Secretary to the Ministry of Labour and National Service (Mr. Harold Watkinson): I would refer to the replies my right hon. and learned Friend gave to Questions by the hon. and gallant Member for Brixton (Lieut.-Colonel Lipton) on 14th July.
    Sir I. Fraser: Will the Government keep under continuous consideration the question whether agricultural workers could not do their National Service, in the public interest, in their own interest and in the interest of farming, in some manner which would keep them near to their farm work, especially having regard to the great change which is taking place in military and strategic considerations?
    Mr. Watkinson: My hon. Friend was kind enough to write to the Minister about this, and I know that he is very carefully bearing that point in mind.
    Mr. Collins: Is the Minister aware that there will be no opportunity for us again to press him on this subject until after the harvest? Could he not therefore be somewhat more positive in his answers to this very important question?
    Mr. Watkinson: I am sure the hon. Gentleman knows about the harvest suspension which has already been announced in the House. This matter was the subject of representations by the National Farmers' Union and is now under consideration.
    Mr. Vane: Will my hon. Friend not overlook the suggestion that, even if he cannot relieve the existing 6,500 farm workers who are called up of their full-time National Service, he will see if it is not possible to relieve them of their fortnight's training in the following three years? This affects their agricultural duties considerably and is out of all proportion to the military benefit.
    Mr. Watkinson: That is a different point, but I will bear it in mind.
    Lieut.-Colonel Lipton: Can the Parliamentary Secretary say what is holding up these negotiations to which the Minister referred in his answer to my Question of 14th July? Why are these negotiations with the National Farmers' Union taking so long? Is the National Farmers' Union opposed to the exemption of farm workers?
    Mr. Watkinson: There are a great many different views to take into account —for example, the views of the National Union of Agricultural Workers.

    Personal Case
    Mr. Doddsasked the Minister of Labour if he will make a statement following his investigations into the case of Malcolm Harris; what happened at his medical board; and why he was instructed to report to the Royal Air Force on 11th July last.
    Mr. Watkinson: Further inquiries into this case have led me to the conclusion that Mr. Harris must have been wearing his steel corset when he attended the medical board. My right hon. and learned Friend's previous reply was based on the statement adhered to by the medical examiners that he was not wearing it

    983
    when he appeared before them; no mention of it was made by Mr. Harris in recording his medical history nor did the consultant who saw him record it. Mr. Harris was instructed to report to the Royal Air Force on 11th July because he satisfied the minimum medical requirements and had been accepted for that Service. As my right hon. and learned Friend has already informed the hon. Member, such notice was cancelled and arrangements are being made for Mr. Harris's re-examination by another board as soon as possible and he will advise the hon. Member of the outcome of that examination.
    Mr. Dodds: But is it not a deplorable state of affairs that doctors at a medical examination ask a man to take off his corset with steel supports and that is not put on record at the medical examination? In view of the fact that it is not contested that the man was attending for treatment at hospital three times a week, is it not deplorable that a man in such a condition should be detailed for one of Her Majesty's Armed Services?
    Mr. Watkinson: I do not at all agree with the hon. Member. I think that there is here quite a genuine misunderstanding. [HON. MEMBERS: "Oh."] If I may, I will explain why. It is a perfectly logical and reasonable point. So far as I can find out, Mr. Harris was wearing his corset when he was seen by one of the members of the staff of my Ministry who merely recorded the initial details. He wore a white coat and may quite well have been mistaken for a doctor.
    Lieut.-Colonel Lipton: I suppose he examined the doctors.

  EMPLOYMENT

    Manpower
    Mr. Fernyhoughasked the Minister of Labour the estimated shortage of manpower in the major exporting industries.
    Mr. Watkinson: In the manufacturing industries which produce the bulk of exports from the United Kingdom there were, in the first half of June, approximately 190,000 vacancies outstanding at the employment exchanges and 87,000 registered unemployed. The latter may not be in the same occupations or areas
    984
    as the notified demands, and it is therefore not possible to make a firm estimate of the actual shortage of manpower.
    Mr. Fernyhough: In view of the statement the Chancellor made yesterday and the necessity for us to expand our export trade very drastically and quickly, does not the hon. Gentleman think that the time has now come when the Government should consider reducing the period of National Service and thus enable some of these strong, vigorous young men, many of whom are wasting their time, to render service to the nation in the best interests of the nation? They would be better for it.
    Mr. Watkinson: That has nothing at all to do with this Question.
    Mr. Fernyhoughasked the Minister of Labour the estimated overall shortage of manpower in British industry at the present time.
    Mr. Watkinson: Precise estimates of this kind cannot be made. In the first half of June there were approximately 443,000 outstanding vacancies and 211,000 registered unemployed. Some additional labour is also becoming available through the continuous increase in the working population.
    Mr. Fernyhough: Is there not something wrong with this country when we are bearing a period of conscription longer than that borne by any other Western nation, and bearing it at a time when our economic position is very unsound? Does the Parliamentary Secretary not therefore agree that the time has come when the Government should seriously consider reducing the period of National Service and once more enable the men to render a service which would be in the best interests of the nation?
    Mr. Watkinson: On the subject of the Question, more than 250,000 people joined the working population last year and I am very glad to say that in addition they all produced more.

    Fishing Industry
    Mr. Edward Evansasked the Minister of Labour how many persons are engaged as fishermen in the United Kingdom; and to what extent this number shows a diminution during the last five years.
    Mr. Watkinson: As the reply includes a table of figures, I will, if I may, circulate it in the OFFICIAL REPORT.
    Mr. Evans: Can the Parliamentary Secretary say in what category of the fishing industry there is a falling off in numbers? Is it in the far-distant waters, or middle waters?
    Mr. Watkinson: The only figures I had intended to send to the hon. Member were the total of those regularly employed and those occasionally employed. They have decreased slightly in the last three years, but not to any material extent.
    Following is the reply:

    GREAT BRITAIN

    ESTIMATED NUMBERS OF FISHERMEN EMPLOYED IN SEA FISHING

    —

    Regularly employed

    Occasionally employed

    1952

    …

    …

    28,063

    5,437

    1953

    …

    …

    27,414

    5,357

    1954

    …

    …

    26,244

    3,594

    Figures in precisely comparable form are not available for earlier years, but such figures as are available suggest that there was little change in the numbers between 1950 and 1952.
    Mr. Edward Evansasked the Minister of Labour whether he is aware of the anxiety of the fishing industry on the manning of fishing vessels; and what plans he has to stimulate recruiting of manpower for the industry.
    Mr. Watkinson: I am aware that there has been some difficulty this year at Lowestoft, in particular. Any steps that the industry may take to improve its arrangements for the recruitment and training of young persons would assist my officers in placing young men in this work.
    Mr. Evans: Can the Parliamentary Secretary publicise the fact that the fishing industry provides a very fine career for young men and that the rate of promotion, certainly in certain aspects of the fishing industry, is very rapid and remunerative?
    Mr. Watkinson: I entirely agree with what the hon. Gentleman has said, and I hope that his Question will do something to publicise the industry.

    Agricultural Workers
    Lieut.-Commander Maydonasked the Minister of Labour how many requests for agricultural labour were registered at employment exchanges in the county of Somerset at 1st July, 1955; and how many such requests were satisfied by the employment exchanges in Somerset during the preceding six months.
    Mr. Watkinson: On 29th June, when the last count was taken, there were 66 vacancies for agricultural workers registered at employment exchanges in Somerset. One hundred and twenty-seven agricultural vacancies were filled during the preceding six months.
    Lieut.-Commander Maydon: Can my hon. Friend tell me whether these figures are characteristic of the picture throughout all rural areas in the country? Can he say whether these figures give some impetus to reconsidering the rules and methods for granting deferment to agricultural workers?
    Mr. Watkinson: I think that what my hon. and gallant Friend would like to know is that we have recently held a meeting in this connection on the harvest prospects in his own county of Somerset. I am advised that it was agreed at that meeting, in which all sides of the industry took part, that there was no general shortage of agricultural workers in the county and that no difficulty was likely to be experienced in the harvest period.

    Coal Miners (Recruitment)
    Mr. Swinglerasked the Minister of Labour, in view of the coal shortage, what special steps are being taken by his Department to recruit more men for the mines.
    Mr. Watkinson: Local offices of the Ministry of Labour throughout the country give special and continuing attention to finding suitable men for employment in the coal mines and this is re-enforced at the present time by a special publicity campaign run jointly with the National Coal Board; in addition, all men who register for National Service are reminded that call-up is deferred in all cases where men are satisfactorily employed underground in coal mines.
    Mr. Swingler: Is the hon. Gentleman aware that his Department gives the

    987
    impression of complacency in this matter? In view of the nation's urgent need for coal, and the wide open opportunities to get more coal, especially in the coalfields in North Staffordshire, where there are hundreds of vacancies, surely his Department should carry out some sort of investigation to discover the reason it has failed to get the men to get the coal?
    Mr. Watkinson: We think it more important to get on with the job of trying to recruit more miners; we are more concerned with that.
    Captain Waterhouse: If the hon. Gentleman is not able to get British recruits, will he not reopen negotiations with the miners' union in order to get permission to import some foreign recruits, possibly Italian?
    Mr. Lindgren: Before taking that action, will the Minister carry out a propaganda recruiting campaign in the public schools of this country?
    Mr. Watkinson: We are carrying out the largest recruiting campaign that we have even undertaken.

  JUNIOR MINISTERS (SALARIES)
  Mr. Hurdasked the Prime Minister if he will now make a statement on the emoluments of junior Ministers.
  The Prime Minister (Sir Anthony Eden): I regret that it will not be possible to make a statement on this matter before the Recess.
  Mr. Hurd: Will my right hon. Friend keep in mind that junior Ministers have no trade union to argue their case for them and must rely on the Cabinet to see that they have fair treatment and are not asked to make undue sacrifice in the public service? This is a matter of some urgency.
  The Prime Minister: I have not forgotten the matter and I agree that it is a matter of some urgency, but there have been other matters of some urgency lately, too. I am sorry that it has not been possible to reach a conclusion before.
  Mr. Shinwell: Has the Prime Minister noticed that the cost of living has gone
  988
  up three points in the last week or two and is that not a consideration which appeals to him in this respect?

  NATIONAL SERVICE
  Mr. Allaunasked the Prime Minister whether, as a result of the decisions reached at the Geneva Conference and in order to assist the relaxation of world tension, he will bring forward proposals for reducing the period of National Service.
  The Prime Minister: I have no statement to make on this subject at present.
  Mr. Allaun: Does the Prime Minister appreciate that meanwhile the lives of hundreds of thousands of youngsters are being upset and disturbed by the knowledge that at 18 they will have to leave their homes, their jobs and their sweethearts to serve for two years? Would not the ideal way of transforming the fair promise of Geneva into positive achievement be by means of a cut in the call-up?
  The Prime Minister: I should have thought that the chief concern of the younger generation would be to hope that they would not have to take part in another world conflict. That is certainly the chief concern of the House, and it comes before anything else. What the hon. Gentleman asked me is whether I had any statement to make at the moment, and the answer is that I have not.
  Mr. Shinwell: Although there is considerable controversy in many quarters about this matter of the period of service, about which I make no comment at the moment, may I ask the right hon. Gentleman whether during the Recess he will take the opportunity to consult the N.A.T.O. Powers in order to ascertain whether collectively it would be possible to reduce the period of National Service, both here and elsewhere?
  The Prime Minister: I think that the right hon. Gentleman, who has wide experience, will know that there are other questions besides what the N.A.T.O. Powers are doing. They have to be considered. Other burdens which we bear, and which all N.A.T.O. Powers do not bear in this connection, have to be taken into account, and, I can assure the right

  989
  hon. Gentleman, are taken into account in our consideration of this matter.
  Mr. G. Thomasasked the Prime Minister whether, in view of the easing of tension in foreign affairs, he will now announce a target date for the complete abolition of military conscription.
  The Prime Minister: No, Sir.
  Mr. Thomas: Would the Prime Minister explain why the optimism of Sunday has disappeared and there is not even a target date for the reduction in the period of conscription? Will the Prime Minister bear in mind that, as long as the Army is committed in Europe, it is likely that we shall have conscription?
  The Prime Minister: I think that if the Army had not been committed in Europe we should not have got on as well as we have in international affairs.
  Mr. Strachey: While appreciating that, may I ask whether the Prime Minister would agree that there may now be a case, strictly on defence grounds and in order to maximise our deterrent to war, for re-examining the period of National Service and ultimately, perhaps, its extinction?
  The Prime Minister: The Question asked for a target date for the complete abolition of military conscription, and I am sorry that I cannot provide it.
  Dame Irene Ward: Is my right hon. Friend aware that National Service men prefer his policy to that of right hon. and hon. Gentlemen opposite?

  NUCLEAR WEAPON TESTS
  Mr. G. Thomasasked the Prime Minister with which foreign Power he has now reached agreement for the British hydrogen bomb to be exploded on their territory; and whether he will make a statement.
  The Prime Minister: I have no statement to make.
  Mr. Thomas: In view of the fact, as everyone knows, that no one would be foolish enough to want to test this bomb on our soil, can the Prime Minister hold out a hope that he will get a foreign Power to agree that this hydrogen bomb shall be tested within their domain?
  The Prime Minister: The hon. Gentleman's ingenious hypothesis will not draw any response from me on this topic.

  COMMON LAND LAW (ROYAL COMMISSION)
  Mr. Neaveasked the Prime Minister whether he will arrange for a review of the law relating to common land in view of the widespread desire for a review of this kind.
  The Prime Minister: Her Majesty's Government are aware that the present law relating to common land in England and Wales needs to be reviewed. I have recommended to The Queen and Her Majesty has been graciously pleased to approve that a Royal Commission should be appointed to undertake a comprehensive review of the present law. I will announce at a later date the names of the chairman and members, together with the terms of reference.
  Mr. Emrys Hughes: Can the Prime Minister say why there is not a similar reference to Scotland?
  The Prime Minister: I understand that in Scotland—for reasons which it would not be for me to comment on—there is no common land.
  Mr. Nicholson: Can my right hon. Friend say whether the use of common land will come under the purview of this Commission? Is he aware that in Surrey there is great uncertainty about the requirements of the Defence Departments and that the whole situation regarding common land is in a state of chaos?
  The Prime Minister: Yes, Sir. There was a debate on this topic a little while ago and a Resolution asking for some investigation was passed unanimously by the House. After looking into it, we thought that this was a matter which deserved a Royal Commission to investigate it,
  Mr. T. Williams: Will the topic of a time-limit for the Commission be discussed, or will it sit for years and years?
  The Prime Minister: I should not have thought that was in the category of topics. I hope not.
  Sir L. Ropner: Would the Prime Minister give an assurance that he will

  991
  carefully consider the appointment to the Royal Commission of a member of the Forestry Commission?
  The Prime Minister: Yes, Sir, I know that the Forestry Commission is intimately concerned in the matter.
  Mr. H. Morrison: Can the Prime Minister say whether the object of the Royal Commission is to consider what steps may be taken to preserve and protect common land, or will its purpose be to consider how far the common land can be enclosed?
  The Prime Minister: Oh, no. There are a whole series of problems about this, as the right hon. Gentleman knows. There are a number of organisations, including the Commons, Open Spaces and Footpaths Preservation Society, the National Farmers' Union from their angle, and others, who have asked for an inquiry. The purpose would be that the inquiry should tabulate the position as it is—it varies greatly—and make recommendations on the subject. There will certainly be no kind of commitment by the Government or this House until we have the result of the work of the Royal Commission.
  Mr. Watkins: Is it the intention to appoint someone from Wales to the Royal Commission?
  The Prime Minister: I will bear that in mind.

BILLS PRESENTED
  VALIDATION OF ELECTIONS (No. 2)
  Bill to validate the election to the House of Commons of Christopher John Holland-Martin, Esquire, notwithstanding his holding the office of local Director of the Bank of New Zealand, and to indemnify him from any penal consequences which he may have incurred by sitting and voting as a member of that House, presented by The Prime Minister; supported by Mr. Crookshank, The Attorney-General, and Mr. Henry Brooke; read the First time; to be read a Second time Tomorrow and to be printed. [Bill 39.]
  CLEAN AIR
  Bill to make provision for abating the pollution of the air, presented by Mr. Sandys; supported by Mr. James Stuart, Mr. Geoffrey Lloyd, and Mr. Deedes; read the First time; to be read a Second time Tomorrow and to be printed. [Bill 40.]
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).—[The Prime Minister.]

ECONOMIC SITUATION
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Buchan-Hepburn.]
3.30 p.m.
Mr. Hugh Gaitskell: I am very glad that the Government agreed that we should have a full economic debate this afternoon, and I am grateful to the Scottish Members, and particularly to those on this side of the House, because this was the equivalent of a Supply Day—that is, Opposition time—in which they were to launch their criticisms of the Government's record on Scottish education. I particularly appreciate their agreement to withdraw for the time being.
However, I must say that I do not consider that this difficulty should have arisen. It would not have arisen if the Chancellor had made his statement earlier. I do not know why he delayed it so long. The Press were expecting that he would take some further action, and, certainly, he was repeatedly questioned from this side of the House as to what measures he was going to take to deal with an obviously worsening economic situation. Had the right hon. Gentleman been ready to say even a week earlier what he said yesterday, I am sure that the business could have been rearranged so as to satisfy our Scottish colleagues.
There are three questions about this matter which we have to ask ourselves. First, is the economic situation so serious that action is necessary, and, if so, secondly, why has it become so serious, and, thirdly, are the measures which the Government are proposing to adopt the right ones to deal with the situation?
Mr. Ellis Smith: And other questions.
Mr. Gaitskell: I am sure that my hon. Friend will have other questions to put as well.
Those seem to me to be the three central questions to which we should address ourselves. We on this side of the House certainly do not deny the seriousness of the economic situation. Indeed, we have made repeated efforts to convince the Government that the situation was not as good as they appeared to
994
think it was. It was not we who played down the seriousness of the deficit in our balance of payments. It was not we who minimised the fall in the gold reserves. It was not we who preferred to turn a blind eye to the steady rise in the cost of living. It was not we who brushed aside the rise in Stock Exchange prices. On all these counts we have repeatedly explained to the Government why we think there is in this country a too inflationary situation, and why we think that that situation has arisen.
It is, on the other hand, for the Chancellor to explain his remarkable double change of front. In February last, the right hon. Gentleman came to the House and made a statement almost, if not quite, as serious as the one he made yesterday. But within six weeks—at the time of the Budget—he was speaking about "the liberation of the human spirit." He was boasting that "the situation had been brought under control," and, of course, when, during the Election period, I ventured to draw attention to what seemed to me to be coming financial difficulties, the right hon. Gentleman described me as being very alarmist.
I think that the right hon. Gentleman owes it to the House to explain exactly what has happened since the Budget to cause him to change his mind. Why is it that the situation which was apparently so favourable then has now become so bad? I do not think that there is very much doubt about the nature of the problem. Our balance of trade figures are bad, and our foreign exchange situation is weak. The figures for the balance of trade for the first half of this year have now been given and show a deficit as between exports and imports in the first half of the year alone of £455 million, which contrasts with a deficit of £340 million in the second half of 1954 and a deficit of £275 million in the first half of 1954. Therefore, we have an increase in our trade deficit for these six months alone of somewhere round £200 million greater than it was in the corresponding period last year.
We do not, of course, yet know what are the figures of the whole of the balance of payments. We do not get these until September, but I think it a fair deduction from the trade figures to say that in the first half of this year we must have been in balance of payments deficit. That

995
is serious because, of course, the first half of the year is a very much easier one than the second half during which we have to meet the interest on the Canadian and American loans. There are other reasons, too, why the second half is usually less favourable.
The Chancellor has been making much play with the fact that these figures for the first half of 1955 were affected by the dock strike. Of course, no one would deny that the trade figures are bound to have been so affected, but I really must ask the right hon. Gentleman not to try to give the impression that the dock strike is the cause of our difficulties. He really should not seek an alibi in this way because, whatever he may say about the export figures, I am sure he will not deny that the rise in the total value of imports in the first six months of the year was no less than 14 per cent. compared with the previous year; and I do not think that even he would claim that even if there had been no dock strike our exports could possibly have risen to anything like the same extent.
The figures as affected by the dock strike show an increase in exports of only 3½ per cent, for the first six months of the year. One must also observe that the rise in imports, of which I have spoken, is clearly no fortuitous or temporary affair. Among the increases especially noticeable has been the increase in raw materials for industry, particularly steel and other metal goods, as well as, of course, in coal and oil. This does not suggest, I think, that it is just a matter of stocking up temporarily so that we can allow imports to decline a little later.
During the course of the Election, I also ventured to say that I thought we were heading for a deficit for the year of at least £100 million. At that time I was again accused of being alarmist, of being full of woe and catastrophe. But I: would ask the Chancellor—because I think that we are entitled to know his views on this—whether he really contests that estimate. Does he really think that as things are we can escape a deficit of that order?
With regard to the gold and dollar position—to the situation of the sterling area—we have not, as yet, had anything like the same degree of information. That information, I know, cannot be available
996
until a little later. Perhaps we shall have more opportunity for discussing that problem in greater detail in the autumn, but, as far as the gold figures go, they are not reassuring. They declined from June, 1954, to March of this year by £125 million. There was a very slight rise in April, almost wholly due to defence aid. There was no change in May, and there was a further small fall in June. The Chancellor has warned us of a much larger fall in July.
I do not know whether the right hon. Gentleman can say how big he expects the decline to be, but, according to the Press, it will be rather serious. I imagine that it will be something of the order of the decline which took place in February. Not only that; in these last few months we have heard a good deal about the import of capital from the United States. There have been reports of United States business men buying shares in British industry. I would like to ask the Chancellor how far he thinks we have been sustained during this period by the import of capital, either on that account or because of the high interest rates resulting from his policy of last February in attracting funds from elsewhere, or, at any rate, preventing funds from going abroad. That is the gloomy and depressing picture which faces us as we go away for the Summer Recess.
I now turn to the second question. What is the cause of this situation? I have always said that we should not pass judgment upon a Government simply in the light of events. We must bear in mind what the causes of those events were, and how far the Government can fairly be said to have been responsible for those causes. So I ask the Chancellor: are we faced with this crisis—if "crisis" is the right word—because there has been an American slump? I should certainly admit that that would be beyond the control of the Government. The answer is "No." American industry is booming. One cannot say that an inflationary position exists there, but one can say that they are certainly on a prosperity wave of no small dimensions.
Is it, then, that the terms of trade have moved sharply against us as, unhappily, they did in 1951—as I remember only too well? One cannot say that the terms of trade have moved to any significant

997
extent against us, though there was a small movement earlier in the year. Taking into account the rise in export prices in the last quarter, I think I am right in saying that, as compared with the average of 1954, whereas import prices have risen by about 3 per cent., export prices have risen by 2 per cent. One therefore cannot make out any case that the difficulties with which we are now confronted have much to do with changing terms of trade.
Is it, then, that the rest of the sterling area has been over-importing; that there is an inflationary situation there? Again, I do not think that one can make much of a case out of that. One could have argued, earlier in the year, that in 1954 Australia was over-importing, but I have seen no evidence recently to suggest that anything has happened such as happened in 1949, for instance, when the combination of a minor American recession, plus over-buying in the rest of the sterling area, were largely responsible for the devaluation of the £.
Finally, is it that there has been a sudden increase in the burden of defence which we have to carry?—which, of course, creates difficulties for any Government. The answer, again, is "No." On the contrary, the defence programme is levelling off, and this year, for the first time for two or three years, we do not have to contemplate taking any additional burden upon ourselves by reason of defence.
The plain fact of the matter is that the real causes of the present situation are three in number. First, it is the result of a doctrinaire application of what is called Conservative freedom in a situation of brim-full employment; secondly, It is the result of a policy of blatant electioneering by the present Government and, thirdly, it is due to bad and incompetent administration.
Let me elaborate those three charges. I do not think that it can be denied that one reason for the increase in the volume of imports, which has been quite substantial, was the relaxation of restrictions upon dollar imports made by the Government in 1954. As the Chancellor knows, there has been a substantial increase here, and I think that in removing those restrictions the Chancellor went a great deal too fast. Again, I do not think it can be denied that the situation with
998
which we are now confronted in the building industry is the result of applying a free-for-all policy, which resulted in council house building going to the bottom of the queue and local councils being unable to obtain enough labour to complete their own programmes—and, incidentally, being cut down by the Ministry of Housing and Local Government—which has subsequently resulted in the need to restrain building activity even further. I shall return to this subject a little later.
I do not think that anybody can deny that we now have what we have been calling for years a wage-price spiral, that is to say, a situation where wages are chasing prices, and prices chasing wages. I venture to say that that is the result of a complete failure, or the absence of any attempt on the part of the Government, to deal with the problem. Not only that; they have encouraged this wage-price spiral by their flagrant refusal to do anything about limiting dividends. Combined with the beneficient gifts which the Chancellor has handed back to the companies, that has resulted in an amazing Stock Exchange boom which has affected the whole economy; has led to a considerable increase in luxury expenditure, and will inevitably lead, directly and indirectly, to demands for higher wages and higher salaries—to claims for better chances for themselves by various sections of the community.
As my fourth illustration of how Conservative freedom works I would point to the extraordinary situation into which we have got upon the convertibility of the £ sterling. I shall refer to that in greater detail later, but it is unquestionably one of the causes of the situation with which we are now confronted.
As to the charge of blatant electioneering, I hardly think it is necessary to give very many of the facts here; we are all so familiar with them. In his Budget statement the Chancellor made a lot of estimates of what he thought the situation would be. When I say "estimates" I do not mean that he gave any figures—he is not in the habit of giving us figures in these matters—but he said that he thought investment would increase by at least as much as last year. He even said that consumption would not rise so rapidly, and he referred to the scope for increased production being as least as

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great as it was in the past. If his estimates were right I am bound to ask why it is necessary to change the policy so soon after the Budget. Does he really believe that if the statement which he made yesterday had been made in the course of the Election campaign it would not have very seriously affected the result of the Election?
The plain man will draw one conclusion from all this. In February the Chancellor was worried about the economic situation and adopted certain measures which we have discussed upon earlier occasions, but at the time of the Budget, shortly after the decision to have an Election was announced, the Chancellor had changed his mind and had decided that, after all, it was possible to give away about £150 million a year—most of it to companies and wealthy individuals, though some crumbs were given to other people. People will deduce that he did this solely to give an impression of abounding prosperity. This, of course, enabled him and his friends to boast about over-full employment, though they did not call it that. They were able to boast that everybody was having a wonderful time, and nothing was then said about what was to come afterwards: about the dangerous situation of our balance of payments, or about the rise in the price of coal, which was to be announced a little later on—the decision on which was deliberately held back. These are serious charges, and I must tell the Chancellor that we take an extremely poor view of an Administration which deliberately deceives the electorate in the way that he has done.
I turn to the third charge, of incompetence—and by this I mean that even the Government's own policies have been carried out thoroughly badly by the right hon. Gentleman and his friends. I give as an illustration, first, the extraordinary muddle into which we have got upon convertibility, and the rumours which had finally to be scotched yesterday. It is well known that these rumours have existed for some time, rumours that there was going to be a floating rate for the £, with the result that a lot of people apparently started to sell sterling, and created additional difficulties.
Why did the rumours start? Apparently they started because the Chancellor said
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something at a meeting of the O.E.E.C. in Paris. He appears to have said, according to his own account of the matter, that he was opposed to fixed rates of exchange in the event of convertibility.
The Chancellor of the Exchequer (Mr. R. A. Butler): I have no knowledge of such a statement, so I shall be obliged if the right hon. Gentleman will quote the exact words.
Mr. Gaitskell: The Chancellor made some reference to this, I must remind him, in reply to a supplementary question by my right hon. Friend the Member for Battersea, North (Mr. Jay), I think a week ago, and he did throw some further light upon it. He can easily satisfy us all if he tells us exactly what happened in Paris.
Mr. Butler: The right hon. Gentleman was in process of saying that I made a statement in Paris. I am not conscious of having made any such statement. As we are all desirous of obtaining the truth, and as I am President of the European nations, I think I have every right to ask the right hon. Gentleman to quote verbatim the statement I made, if he says I made it.
Mr. Gaitskell: The right hon. Gentleman has promoted himself a little fast. He is not yet President of the European nations. He is only Chairman of the O.E.E.C.
Mr. Butler: I am perfectly modest. I do not wish to be proud. I must apologise if I described myself wrongly. The right hon. Gentleman knows that we were talking in terms of the O.E.E.C.; but I have a responsibility to the other European nations as well as to Britain. Therefore, if I have made the statement it is very important that it should be brought out.
Mr. Gaitskell: The Chancellor must be aware that in the "Economist," the "Financial Times" and other papers it is said that at a meeting of the O.E.E.C. he did, in fact, indicate—[Interruption.] I am not criticising him for the substance of what he said. The substance of what he said, apparently, is that we did not want to have fixed rates of exchange. What I am saying is, in face of these rumours, of which he is perfectly well aware—[An HON. MEMBER: "There were no rumours."] If somebody says

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that there were no rumours I must ask him to turn to the Chancellor's own statement about this. [HON. MEMBERS: "Read it."] Very well, I will read the statement. The statement which the right hon. Gentleman made yesterday said:
"Our foreign exchange position is also being currently affected by many rumours, here and abroad, about our intentions. This has led to sales of sterling, which will adversely affect our reserves in July. My general policy has been to allow rumours to be answered by events as they unfold. But these rumours have reached such unreasonable proportions that I cannot allow them to remain unanswered."
Then he went on—quite rightly in my view—
"I want, therefore, to make it clear that Her Majesty's Government regard the period in front of us as being one of hard work and consolidation to strengthen the home front before we make any further forward move on the exchange front."—[OFFICIAL REPORT, 25th July, 1955; Vol. 544, c. 826.]
What I am complaining about is that the Chancellor, although pressed from this side only a week before, declined to refute these very rumours which, I repeat, according to the Press, were started as the result of something that he said in Paris. The Chancellor—
Mr. Butler: It is one matter to say that there are rumours, which I acknowledge there were and which we all regret, whichever side of the House we are on. We all wish to defend sterling. It is quite another thing to lay a charge at my door and say that those rumours are due to me because of a statement I made in Paris.
Hon. Members: Withdraw.
Mr. Gaitskell: If the Chancellor says that he made no statement, then, of course, it is very satisfactory. I only wish that he had said this earlier.
I want also to draw the attention of the House to something else. We cannot, after all, avoid reading these things. There was an article recently—[HON. MEMBERS: "Read it."] If hon. Members want it, we can quote it later in the debate. I have not bothered to bring it along. [HON. MEMBERS: "Oh."] No. I am not prepared to quote it now, because I did not want to waste too much time. I will ask my right hon. Friend who will wind up the debate to quote it. [Laughter.] I should have thought that the Chancellor would be
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interested in a leading article in the "Financial Times" which is, after all, a serious paper on these matters. He has probably read it himself.
The article speaks of the two voices on convertibility, of the Treasury on the one side and of "the authorities" on the other, by which I think is meant the Bank of England. The two voices are that the Treasury speaks of convertibility as something remote which we are not going to reach for a very long time and about which we must be very cautious, while, at the same time, the authorities speak of convertibility as something that is just round the corner and which we have very nearly approached already. I could easily, of course, have read out the leader, but I do not think it is worth while doing that.
I ask the Chancellor to make a reply on that point. If, in fact, the Bank of England is speaking in the City with a different voice from that of the Treasury, that is a very bad thing. If it is speaking about convertibility as something to be achieved immediately, it is responsible to some extent for the difficulties in which we are now.
I turn to the use which the Government have made of their monetary policy, which is the chief if not the sole weapon on which the Chancellor relies. One would have supposed that he would take rather more care about the way in which the monetary policy has been operated, but we find in the statement which he made yesterday that he said:
"The monetary measures taken in February have been by their nature slow in their effect on home demand."—[OFFICIAL REPORT, 25th July, 1955; Vol. 544, c. 826.]
It is five months since the increase in the Bank Rate. Does the Chancellor really think that anybody supposed when he was boasting about this wonderful flexible instrument which would come into operation so easily—this little automatic affair where you just turned a knob and you got the economy right again—did he lead anybody to think, in February, that it would take more than five months before any significant consequences were to be felt? The truth of the matter is either that he has been deceived or is deceiving himself about the effectiveness of this instrument, or that he has deliberately refrained from using it as sharply and as fiercely as the situation demands.

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I would have thought that almost everybody realised that the effectiveness of the Bank Rate turned very largely on how quickly and how definitely it affected the level of bank advances. Indeed, the Chancellor admitted yesterday that that was the point in the economy and in the financial system on which he wanted to operate.
What has happened to bank advances since February? From February to mid-April they increased by £68 million, from April to May by another £36 million, and from May to the end of June by a further £83 million. In fact, bank advances in these last five months when we have had this monetary policy operating, have risen by the astonishing figure of £184 million. They are, in fact, now very nearly £300 million above the level they were on 1st January, 1955. How anybody can say, in the face of those figures, that this monetary policy has been operating effectively I really do not know.
Now, at last the Chancellor comes along and asks for direct intervention. He appeals—and not only appeals—to the banks. He writes to the Governor of the Bank of England a pretty stiff letter and asks him to convey his desires to the banks. He now comes out at last with the request to the banks, put in very strong terms, that they should actually reduce the level of their advances.
Why has this been left for five months? Why has the Chancellor delayed all this time before taking direct action in order to see that his own policy worked? It really is incomprehensible to me that he has left this for so long. It may be that he assumed that the banks would do this on their own and without a request from him, but if that is so how is it that they did not do so? Have they been failing to carry out the Government's policy? I think that we are entitled to an answer to this question. Did he think that the banks would cut advances on their own? If so, why have they not done so? If he did not think they would cut down advances on their own, why did he not make a direct request a long time ago?
I turn to the third question, namely, the measures which we are now considering. I would ask, first of all, that the Chancellor should reinforce his purely negative statement on the question of convertibility
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—which, in my opinion, was as good as far as it went—by saying a good deal more. We now have, as I think he would agree, a position where pounds owned by non-residents of the sterling area can, in fact, be converted at the transferable sterling rate—that is to say, at a slight discount. The consequence is, therefore, that any country in the transferable account area—which covers almost the whole of the world except the dollar countries and the sterling area—can finance its own dollar imports by converting sterling into dollars in London.
There is an obviously grave danger in this situation if dollars generally become scarce once more. And as I think that there are some signs of this—the Chancellor should say whether he envisages a continuance of the present situation. Since he has now said that we are not to take any further steps forward does he think it possible to hold the present situation? He is faced, of course, with a serious dilemma owing to the relaxation of controls which he has operated. He was losing quite a lot of gold through the so-called shunting operations. He is now losing quite a lot of gold through his own policy of supporting the rate for transferable sterling.
The Chancellor indicates dissent. In that case, what were the reasons for the loss of gold last month, which he has already announced to us? If he shakes his head it only shows how necessary it is that we should have a clearer statement—which has also been asked for by the Press—on the whole situation as far as convertibility is concerned. I hope that he will indicate what he now understands by further steps towards convertibility. I have always supposed that this meant not merely the unifying of the two rates which exist at present—the transferable and the official rate—but also involved the removal of restrictions on dollar imports both here and in the rest of the sterling area. I think that the Chancellor has given that impression in previous statements that he has made.
If that is so, I must ask—is he really satisfied? Does he really think that we can afford to relax these dollar import controls without seriously affecting our own competitive position in the sterling area export markets? In those circumstances, it means that other members of the sterling area will be free to buy dollar

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goods which they are not at present free to buy, and there will be some switching of demand from British to dollar goods. I confess that my main reason for raising all these matters is that we do want further light thrown upon them.
I must mention here one other matter which, I think, is rather serious. I notice from the "Economist" that the Government have now decided to sell another 15 million dollars worth of our dollar securities. I referred to this in a Question in the House some time ago. These securities, of course, are those which were requisitioned during the war. They have been held by the Government, and on them the Government have made a very substantial capital appreciation. Personally, I welcome that. I welcome the fact that these securities now represent about 2,000 million dollars. If my figure is anything like correct that is extremely significant, because, in effect, it means that our reserves are a great deal larger than one suppose by merely looking at the figures of the gold and dollar reserves which are published.
I think that the Chancellor should now very seriously consider whether the time has not come to publish, and to admit openly the existence of these securities—to publish their amount—because, obviously, in so far as this does become known it is bound to improve confidence in our ability to weather any temporary difficulties in our balance of payments. But he can only do that, let me say to him, if he refrains from this policy of selling dollar securities to other people.
I notice here, again, that the "Economist" says:
"Clearly, the Government now takes the view that the right place for a mixed bag of American industrial equities, prior charge stocks and utilities is the private investment portfolios of British residents."
Is that, in fact, the Government's view? If the Chancellor does intend to sell to private individuals 2,000 million dollars worth of securities now held by the British Government that is a very serious matter. I hope that he will not do so, and that he will make the position quite plain because, obviously, if he sells the securities they are no longer available as a potential reserve in the hands of the Government.
My third point on this relates to overseas expenditure. The Chancellor
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referred to his decision, his intention of cutting down overseas Government expenditure. I think that we are entitled to ask what he has in mind there? What overseas expenditure does he think can be cut? As he knows perfectly well, we are at present faced with the prospect of having to increase our overseas Government expenditure by reason of the need to pay for our own troops in Germany so long as they are there. I have no wish, of course, to go into matters of foreign affairs, but I think that the previous Minister of Defence told us that the increased cost of that in a full year would be about £70 million. If that is so, it is a little odd that the Chancellor should come here and express the hope of actually cutting back overseas expenditure. I hope we shall hear more about that.
I turn now to the general home restrictions which the right hon. Gentleman has announced. His argument is that we are consuming to much—that we are exporting too little and consuming too much of what we produce. He therefore proposes, by his credit policy and by these other means, to cut down spending at home. But surely the crucial question would be this. Can he cut down spending at home by these general measures, in which his party believes, in such a way as simply to divert some of our products to exports, or in such a way as to reduce our imports directly? Or will these general measures of credit restriction and the cutting back of investment in effect not merely divert in other directions what is being produced but lead to a reduction in the level of production as well?
That, I think, is the most vital issue that we have to consider. It is still our view that if the Chancellor relies solely on that policy of general credit restriction it is inevitable that the effect of the measures he has announced will be a general damping down of activity. This is borne out by the fact that most of the financial commentators are now pointing out that if the monetary policy is to work properly it must fall upon the import of industrial materials, but I do not see how it can do that if industry is to continue to produce at the same rate as it has been producing in recent months.

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Again, I think that the right hon. Gentleman should make plain whether he really believes that the level of production and employment is now too high; whether it is to be cut back because it involves an increase in imports which we cannot sustain. If he takes that view I should not deny that these general measures of credit restriction may well be effective, but if he is hoping to hold the level of unemployment at 1 per cent. and to maintain brimful employment how is this to be done by general credit restriction?
I turn to the subject of investment, which played a large part in the statement. The Chancellor's attitude to investment is rather curious. When he made his first statement on 24th February I asked, in a supplementary question, what the effect of the rise in the Bank Rate would be upon the level of investment, and the Chancellor replied:
"Finally, in regard to investment, I am very glad to say that, as a result of the measures in the last Budget, there are distinct signs of marked improvement not only in factory building but also in machine tools and in industrial investment generally."—[OFFICIAL REPORT, 24th February, 1955; Vol. 537, c. 1455.]
A few days later he said:
"… I should be very sorry if any steps that we have taken affected the long-term investment, which is now showing signs of improvement."—[OFFICIAL REPORT, 1st March, 1955; Vol. 537, c. 1871.]
When he came to the Budget he said:
"There is no reason why the recent increase in interest rates should discourage sound long-term investment… We are looking, then, for a real increase in investment in manufacturing industry this year."—[OFFICIAL REPORT, 19th April, 1955; Vol. 540, c. 54.]
Even as late as 16th June he said:
"… although I do not regard the figure of bank advances as yet satisfactory, … we have at least maintained a very considerable degree of investment.… I believe we are managing not only to maintain full employment but also to keep up a high degree of investment."—[OFFICIAL REPORT, 16th June, 1955; Vol. 542, c. 789.]
The Chancellor should explain whether his views have altered on this. Does he still want to maintain such a high level of investment? If so, how can he reconcile this with the statement which he made yesterday? If one thing is clear about the statement it is that the brunt of the cuts which are imposed in it will fall not
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on consumption but on investment. Let me be clear about this: it means, in effect, that the future is to pay for the mistakes of the present. I therefore hope that we shall hear more about this from the Chancellor. The right hon. Gentleman may, of course, take the view that investment is too high. I do not know how he can sustain that argument when the level of investment in plant and machinery in 1954 was only just superior to that of 1951, three years before.
There is another consequence of the increase in interest rates and the restriction of credit to which attention must be drawn. If we try to control the economy through credit restriction it is inevitable that the people who suffer most in industry are the small men. The smaller businesses are bound to have to rely a great deal more on bank credit than do the larger, well-established businesses, with large reserves, can afford, if they so desire, to disregard the Chancellor's wishes and to disregard the banks, for they do not depend on the banks to the same extent and can proceed with their investment plans. The smaller men are in a very different position. I have already heard of a number of cases, both in my constituency and outside, where smaller business men are already complaining bitterly because they are being cut back sharply in the amount which they can borrow from the banks.
I want, next, to ask what sort of priorities the Chancellor has in mind. He spoke of maintaining, or continuing to allow an increase in, investment for export production, but he said nothing, for instance, about investment in agriculture. Does he propose that that should be cut back. He said nothing about investment in industries or firms which are producing products which compete with imports. Is that to be cut back? Is not the Chancellor able to give us a more precise indication, and, therefore, give it to the banks as well, of what should be cut and what should not be cut?
I will ask a number of specific questions. A few days ago the Minister of Fuel and Power announced a big programme of increased oil consumption. He told us that the oil companies were to provide an extra 6 million tons of fuel oil in the course of the next five years. To produce that fuel oil, presumably they

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will have to have increased refinery capacity. Is that refinery programme to be affected by the investment cut?
The Government were very pleased to announce a number of other programmes before the General Election and we should like some information about them. For instance, there is the £1,200 million development plan for the railways, of which £800 million was to be borrowed. Are we to assume that that is unchanged and that it will go ahead or are the railways to be cut back in their expenditure as well? We are particularly interested in this question, because, in announcing the programme, on 3rd February, the Chancellor said:
"I am proud that this Government have so strengthened the economy of the country that we can go ahead on the right road and the right rail for Britain."—[OFFICIAL REPORT, 3rd February, 1955; Vol. 536, c. 1305.]
It is not only a question of railways; there is also the question of the roads. The Minister of Transport came to the House the day before that, on 2nd February, and announced with great pride a tremendous programme of road construction—£27 million in 1955–56 and £120 million in the following three years, with £85 million for great motorways. Is that to be scrapped or curtailed?
This, we know, was a part of the build up for the General Election. We shall be interested to know whether, now the Election is over, the Chancellor of the Exchequer intends to continue it. It is the same story with electricity and gas. In 1954, the Minister of Fuel and Power announced investment in the years up to 1960 of no less than £1,440 million for electricity and £366 million for gas. He said that these programmes had been carefully examined by the Departments and discussed with the boards concerned, and that he was satisfied that they were on the right lines. Are they to be sacrificed?
Incidentally, I should like to ask the Chancellor whether the boards of the nationalised industries were consulted before he made the announcement yesterday. According to the Press they do not seem to have heard anything about it until he made his statement.
I turn to other forms of investment of a social character. The Minister of Education has been to the House and
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has announced from time to time bold plans for the expansion of school building. In Circular 283 he raised the limit on projects by local authorities. He said there was to be a vast programme of rural school building, playing fields and further education. Is Circular 283 affected by this or not? The Minister of Education announced only a few days ago that £9 million a year was to be spent on building for technical education. Is this to be maintained or not?
We have some feeling that the right hon. Gentleman's predecessor was perhaps rather unreasonably sacrificed to the cuts which were imposed upon her by the Treasury. Now we are becoming very anxious about the present Minister of Education. It looks to me as though he may well go the way of his predecessor. Perhaps the Chancellor can put him out of his misery and announce that these projects at least are, as I hope, to be spared.
Then the Minister of Health came to the House—all before the General Election, of course—and said that there was to be a programme of £17½ million on hospitals. Is there to be any change in that programme or is it to be maintained?
Finally, I come to housing. Council housing, of course, has already been cut back; today, there are 40,000 fewer council houses under construction than there were a year ago. I understand that the Minister of Housing and Local Government has stated that the slum clearance programme will not be affected, but can we be told whether the programme to deal with overcrowding is to be affected by these cuts? Are we to be given no idea of what the local authority housing programme is to be? We are entitled to an explanation. The House is going into recess for three months, and I know we are all very much concerned about the need to increase rather than to diminish local authority building.
Other building of certain kinds is, of course, affected. Already, the building societies are having to restrict loans. They are unable to lend as much as before because the rise in interest rates has prevented them from obtaining as much money from the public as before. The small man who goes to a building society and wants to buy a house is now finding increasing difficulties. I understand that

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in some cases a deposit of 33 per cent. is asked for and that in other cases loans have been refused altogether. We should like to know whether local authorities are to be free to continue lending under the Small Dwellings Acquisition Acts on exactly the same terms as before.
It seems we now have this situation: we have council houses cut back, council houses likely to be cut back still further, and we have small houses built as a result of loans from building societies now being cut back somewhat, while, at the same time, the really big man who does not have to go to a building society and who has the money in reserve can build as he likes without any control whatever.
We have, in fact, exactly the opposite priorities to those which existed when we were in power, when we put council houses first, small houses for private ownership next, and kept back and under control the large private building, which is now completely free.
The only point at which consumption is affected by these changes is hire purchase. I do not know whether the Chancellor thinks that the rule about the deposits for cars will have much effect. It was extraordinary that he did not earlier increase the size of the deposit here because everyone knows that the normal arrangement when one buys a car on hire purchase is that one has to put down 25 per cent. deposit. Now the Chancellor has raised it to 33½ per cent., but I very much doubt whether this will have much effect.
Is not it an absurd situation that we have imposed hire-purchase restrictions on the purchase of cars but are allowing all the time the initial allowance to continue, so that, on the one hand, a man can borrow from the Treasury through the initial allowance while, on the other hand, if he is a small man who cannot get initial allowances, he is being cut down in this way.
As for the rest, it is the same story as before. Young married couples will find it more difficult to buy the amenities that they want—refrigerators, vacuum cleaners, radios and television sets—while, at the same time, nothing whatever is being done to discourage luxury expenditure. There has been no whisper of dividend limitations. The Stock Exchange,
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since the Election, has gone on even faster with its boom, and in the period from the middle of March until last weekThursday—when rumours of this statement came about, the rise in share prices was no less than 27 per cent. That is a colossal increase in four months, and it has meant huge capital gains and a great increase in luxury spending. One is bound to ask whether what is now happening will make any difference. So far as one can see, there has not been even now any real impact on the Stock Exchange.
I have no desire to paint too gloomy a picture of the outlook in front of us. We have certain things in our favour. The tailing-off of armaments and the defence programme is one of them. If the terms of trade do not turn against us perhaps things are not so bad, but we are at the moment in fairly serious difficulties, and it is our contention that these difficulties, in contrast with the earlier difficulties which we faced after the war, are essentially of the Government's own making.
The Government have, in fact, allowed inflation here when there has not been inflation elsewhere. They have done so for electoral reasons. That is the main reason. The measures they have taken to deal with the situation are, unfortunately, bound far more to reduce productivity in the future because of the cuts in investment, and they are also, in our opinion, unfair as between different sections of the community.
There is no reason to expect that there will be any fall in prices. We have not only had the rise in coal prices just now, but we have had a further rise in steel prices, which seems to me wholly unjustified in view of the enormous profits being made in the steel industry.
Fundamentally, I believe that this country could be prosperous through higher production and because of the easing of the defence burden, but we shall not achieve this sustained prosperity unless we can enjoy full employment without inflation. We believe that the Government's policy of freedom on the one side to industry and the removal of all controls—the policy of free for all and the devil take the hindmost—is essentially the cause of the inflationary situation with which we are confronted. We believe, secondly, that the Government's indifference to fair distribution makes it

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impossible to tackle the problem of inflation as it should be tackled. We believe that this is the main cause of the present situation. We believe that the events of the last year have shown how right our judgments of these matters have been, and we believe that the future, unfortunately, will make this even clearer.
4.26 p.m.
The Chancellor of the Exchequer (Mr. R. A. Butler): I think that there was only one word used by the right hon. Gentleman the Member for Leeds, South (Mr. Gaitskell) in his speech which needs an immediate answer, and that was the word "crisis." I think that he, the House and the country would be wrong to regard the situation which we are facing as one of crisis at all.
The position is as described by me yesterday, that there is undoubtedly a degree of inflation, otherwise I should not have made the statement I did, that there is the necessity to adjust the expansion of home demand and home consumption, that there is a distinct necessity to put more into exports, and that everyone, as I said. must save rather than spend more.
I think that the evidence today, from the reception of the statement which I made yesterday, is that the Government have, in fact, found about the right balance in the measures we propose—[Interruption.] At any rate, I can say that the result on the market, which is, I think, important to all of us in the country, has been distinctly favourable as a result of the first impressions.
I shall not take great, violent, or bitter exception to any of the remarks made by the right hon. Gentleman. He said what he had to say at great length, with a little more of his undoubted ability as an economist peeping up over his rising ability as a politician. Therefore, we were more interested than we have been on other occasions, because this is a debate in which we are considering the economic situation, and many of the points made by the right hon. Gentleman deserve an answer, which I shall attempt to give this afternoon.
The right hon. Gentleman was a little more excitable yesterday in reference to the Election speeches. It is true that he touched on that subject today, with due moderation, and I think that it might be valuable to remind the House of what I
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said in answer to his supplementary question yesterday and what I said in the final sound broadcast of the Election about the outlook for the future, because he ventured to taunt me by saying that we tried to run the Election without warning the country of the dangers.
This is what I said in the final sound broadcast of the Election:
"We do not claim that all is settled and stable. Indeed, we realise that there are many difficulties ahead. What we do claim, and our record proves it, is that when things go wrong we can act promptly and effectively to put them right,"
unlike the record of the last Socialist Administration,
"and when things are going well we seize our opportunities to the full."
I went on to say:
"Our policy is a combination of strictness and encouragement. We have had to keep a firm grip on borrowing and hire purchase."
That is still precisely the policy which I am continuing now.
Mr. Harold Wilson: Since the right hon. Gentleman has given us some quotations, and as I am sure he does not want to mislead the House, would he read the sentence which precedes the part which he has just read, and also read the part from his broadcast about our reserves now being adequately maintained?
Mr. Butler: The right hon. Gentleman and the House can read the whole of my broadcast. I have a copy here which, if I did not consider economy, I should have circulated in the OFFICIAL REPORT.
I would remind the House that the major issue which is before the country today was set out fairly and squarely in the Conservative Party Election manifesto in the following terms—and I contrast this warning with the contents of the Labour Party Election Manifesto which had nothing whatever on this subject. Our warning contained these words, in page 15:
"Any country pursuing a policy of economic expansion and full employment faces a constant danger of inflation. The risk is that home demand may take away from the export trade and swell the import bill. Here sound monetary and fiscal policies are powerful weapons. We propose to continue with their flexible use."
That is precisely what we are doing now. Therefore, not only did we warn the country, but some of the language

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used in our Election manifesto corresponds almost exactly with the language which I used yesterday. In view of this additional phrase, "a general readiness to save as well as to spend," it is not altogether surprising that the language and temperament of that document should be the same as my speech yesterday because I had a considerable amount to do with writing the document.
Mr. H. Wilson Mr. H. Wilson rose—
Mr. Butler: I now wish to deal with the economic situation as outlined by the right hon. Member for Leeds, South. First, I want to consider the effect of the measures of 24th February and to examine how, immediately, they had a distinct effect and were then put back by causes very largely beyond our control, as is seen from the trade figures.
Let us take the trade figures for, for example, the first quarter, the second quarter and April-May of 1954, when the figures for excess of imports over total exports were respectively £40 million, £52 million and £47 million a month. The reason why we introduced the measures of 24th February was that we saw that the excess in the first quarter of 1955 was too great; it turned out to be £77 million a month. In the second quarter it was £74 million. However, the important figure is that we have managed, by a combination of monetary and other disciplines, to reduce the gap in April-May to £49 million, which was almost exactly the equivalent of the figure for the previous year.
That and the total of the reserves for the two months in question were two indications that our policy was having an effect. It was not until we got the June trade figures with the remarkable excess of imports over total exports of no less than £129 million, that we recognised that it was largely due to the dock strike that those exports had not been sent abroad. What happened—the House will remember that not all the dockers were on strike—was that a great many of the imports were taken off the ships but most of the exports were not sent out.
While I have no desire at all to treat these strikes as in any way an alibi for the fundamental difficulties in our economy, to which I have made reference, I must say that the immediate effect of
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the dock strike in particular was disastrous for our trade figures and undoubtedly had a serious effect on our general situation.
If the right hon. or hon. Gentlemen opposite try to claim that the industrial unrest and the strikes really have not set us back—I am convinced that they have been a cause—I would remind them of the non-official coal strike which itself cost us at least a million tons of coal, which, of course, had to be made up by imports, and has added to the very great difficulty that we are now suffering in our balance of payments in relation to the coal situation.
Mr. Gaitskell: If the Chancellor is saying that the figures for June are due to the dock strike and other strikes and that, otherwise, everything is all right, why is it necessary to take further action now? Obviously, if it was simply a temporary matter due to the strikes, we should have our exports booming right away, without any further restrictions.
Mr. Butler: I said I had no wish to make an alibi of these strikes, and I said there were fundamental causes and difficulties to which I have already made some allusion, namely, that we have been consuming too much at home. I may make allusion to other difficulties later.
However, I think it is right to bring out some of the obvious difficulties created by industrial unrest, if only to show that it will be advisable in the future, if we can, to avoid such industrial unrest, and if, on all sides, a sense of moderation is shown and the better spirit which has been created is generated throughout the country. I am not criticising any particular section of the community. I am only saying that the country must realise that we cannot afford these disputes and cannot afford to hold up our export trade in any way.
The right hon. Gentleman went on to ask whether the forecasts that I had made in the Budget, for example, about the economy, were true or not. Fortunately, the figures of production have been almost better than I forecast in the Budget. The figures for April and May, for example, show industrial production already about 4 or 5 per cent. above last year's level, and that indicates that what I forecast in the Budget, and, indeed, what I forecast last year, has, broadly, come true on the production front.

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One of our main difficulties, however, derives from the fact that this very increased production and our enlarged prosperity are causing us as an island country so far to increase our imports of raw materials and, to a certain extent, our imports of food that we are having difficulty with our balance of payments situation. Therefore, some of the very difficulties to which I was referring come from the prosperity and the full employment that we have been enjoying.
When hon. Members opposite refer to the desirability of retaining full employment, they have hon. Members on this side of the House entirely with them. We are all desirous of retaining full employment, but if we are to retain full employment with rising production and increased imports, it is absolutely essential to keep down our costs and make ourselves competitive with others. That is one reason why we cannot tolerate any signs of inflation, why I had to make my statement yesterday, and why I hope to control not only capital expenditure but also consumer expenditure.
The right hon. Gentleman addressed to me a direct question about demand. The retail trade figures show that sales of goods other than food by large retailers in the period February-May were about 9 per cent. higher than in the same four months of 1954. The figures also show —this confirms the general line that I took in my Budget—that that is a slightly smaller increase than in the fourth quarter of last year, when the increase was as high as 11 per cent. over the corresponding period of the previous year, but it still indicates that consumer demand is very buoyant, and that is another reason why I have had to take my present action. It does not do away with the prognostication that I made in my last Budget statement.
The right hon. Gentleman referred to bank advances and deposits and the position of credit policy. Bank deposits have fallen by more than £200 million, or more than 3 per cent. The position about bank advances is broadly as stated by the right hon. Gentleman, though the figure is just a little under what he said. Frankly, the position about bank advances is quite unsatisfactory, and if it had been allowed to go on we could not have said that we were satisfied that
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credit policy was doing the work we want it to do in curbing inflation.
The reason for bank advances being considerable was partly that banks, in the period in which I asked them originally to start the credit squeeze, were financing in particular the gas and electricity undertakings, and that has clouded and befogged the whole of their operation in the first instalment of the credit squeeze. Now that the authorities have arranged for the nationalised undertakings to go on to the market for the money they want and not to depend so much on bank advances, I am hoping that we shall get a direct result from the credit squeeze and that a distinct source of embarrassment to the banks in operating the squeeze will have been removed. That will be an improvement.
I now come to the second reason. I can only give my opinion, because I am very much obliged to the banks for carrying out the odious task which I asked them to undertake and would like them to feel that it is in response to Government requests that they are performing this task. The reason is that on this occasion, in 1955, the credit squeeze has been operating at a time of almost unrivalled buoyancy in the British economy, an expansive surge such as we have not seen for years, an expansion which is most desirable in most ways and which has brought a great deal of improvement to the lot of many people, and not only to the rich, as the right hon. Gentleman made out. It has resulted in improved living standards and improved houses and conditions for many of our fellow citizens.
But this surge has been so considerable, backed by confidence in Her Majesty's Administration, that it has been a different economic proposition to operate a credit squeeze against a tide flowing at that pace than it was in 1952. When some newspapers and some hon. and right hon. Members opposite shuffle off these economic difficulties by criticising my policy or saying, as the right hon. Gentleman said, that it is due to incompetent administration, I assure him that I can take it, because I am more modest than he is.
We are going through a period of distinct experimentation in the use of some of these weapons. I am convinced

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that having got out of the way the advances to the nationalised sector, and with the new directive, to which the right hon. Gentleman was kind tnough to refer as being stiff, which I have sent to the Bank of England, the credit squeeze will now operate to the general advantage of the economy. That is the broad outline of the economic position in which we find ourselves, and now I will refer, as shortly as I can, to some of the other questions put by the right hon. Gentleman. With extraordinary prescience, I had foreseen most of what he was going to say.
Mr. H. Wilson Mr. H. Wilson rose—
Mr. Butler: The right hon. Gentleman is to address the House later. We should be very sorry if he were to spoil his speech by fragmentation.
Mr. Wilson: The right hon. Gentleman said that he had some prescience about what my right hon. Friend would put to him. Will he recall, also, that in answering some questions which were put to him yesterday, he said that he would make a note of them and would answer them in the course of his speech? Will he ensure that this is done?
Mr. Butler: I have a folder which is marked with the name of the right hon. Gentleman. It is not quite so fat as the others, but it includes the answers to his questions.
The first important question which we have to answer, to which the right hon. Member for Leeds, South referred and which is a matter of great importance to the country, is whether we should deal with our economic troubles by cutting imports. It is a simple question, but a very difficult one to answer. The Government are quite determined that if we were at present to indulge in a policy of cutting our imports, the retaliation which would be involved against our export trade would be so severe that we should lose all the advantage of the advance that we have made in the last three and a half years. We have, therefore, got to rely on credit policy.
In passing, I will refer to one of the questions of the right hon. Member for Huyton (Mr. H. Wilson). He asked me about dollar imports and dollar import policy. Broadly, the position about
1020
dollar import policy is that we have now freed from licensing about half of the dollar imports which we bring into this country. I also think that the right hon. Gentleman had in mind purchases which are allowed not so much for our own consumption but for merchanting abroad. In answer to the right hon. Gentleman, I should like to say that we see two great advantages in the policy that we have assumed at the moment towards dollar discrimination. One is that we think it right that our merchants and traders in cotton, wheat and other things should be able to buy in the cheapest markets, in the interests not only of our country, but of world trade. That is especially so for the sake of our relations with Canada. We must not think of dollar trade in relation only to the United States of America.
The second important reason is that when we allow goods in for merchanting abroad, that results in a distinct improvement in our balance of payments, it improves the entrepot trade that we retain as a nation, and is in the general interests of the broad free trade and payments policy which this Government are pursuing. I therefore believe that our policy in relation to the dollar, carried as far as we have done it up to date, is sensible and sound.
I would further say that it is hardly likely that we should obtain a response from the U.S.A. in freer trade policies and greater opportunities for our goods if we were to go back on this policy at the present time. I should like here to welcome the advance that has been made under the initiative of President Eisenhower in the legislation recently passed through Congress on the Trade Act, which, I think, will be of some benefit to us in the future.
The right hon. Gentleman asked me a question about the increased cost of interest on, for example, the sterling balances. He will remember that a substantial proportion of these sterling balances is held in the form of Government stocks, the interest costs of which are not affected by changes in current rates. Accordingly, I have some difficulty in making an estimate, but the best estimate of the additional interest costs resulting from the changes in the rates between 31st December last and the present time is that they are now running

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at the rate of about £30 million per year. These are the answers to the points which the right hon. Gentleman asked me to answer in the course of my speech.
I now come to the right hon. Gentleman's remarks about credit policy. I have not received, as I expected might be the case, a very great deal of criticism of my letter to the banks. I think that this is the right way to handle one's relationship with the Bank of England and with the banks. I believe that the letter will be effective, provided that we associate with the letter some indication that it is not only the private sector which is to be held back at present in the interests of curbing inflation, but that we have some regard to the public sector. That is precisely what I am coming to in the latter part of my remarks in answer to the right hon. Gentleman's observations. First, however, I must deal with two points raised by the right hon. Gentleman—namely, investment and the question of the future of our exchange policy, both of which are very intricate questions indeed.
On the subject of investment, I want to make quite clear that we want the same spirit of moderation and balance as I tried to show in my opening remarks. It is quite true that we want investment to continue, and I do not withdraw a single one of my earlier remarks in any of my speeches on this subject.
In fact, expenditure by private manufacturing industry on new factory building rose by about £25 million between 1953 and 1954, an increase of about 25 per cent. or one quarter; and there is every indication that this rise is continuing. Approvals of new factory building in the first quarter of this year amounted to 23,835,000 square feet, or an increase of 65 per cent. on the first quarter of last year. This indicates that together with the growth of orders for new machine tools, the House as a whole, in backing the investment allowance two Budgets ago, has achieved what it wanted: that is, a marked advance.
All I ask now is that hon. and right hon. Gentlemen opposite should remember the problem which faced them in the time of Sir Stafford Cripps, which is exactly the same as the problem now: namely, the impact on one particular sector of our economy—that is, the metal-using sector. It is vital that in that
1022
sector it should be remembered that we depend upon it not only for the export trade, but also for our defence programme, for our industrial programme and also for so many of those delightful gadgets—television sets and everything else—which are of such importance to the housewife and in the home. It is because there is such a pressure upon this sector that I have had to take the measures that I have taken about hire purchase, so as to be quite sure that the export section of this sector is not prejudiced and that the defence section can continue; because both defence and exports are more important to our economy than the private user or any other element.
At the same time, all I want to do about investment is to control the rate. I do not wish to destroy investment itself. It may be a criticism of my policy that we were too keen to keep a degree of investment growing in the earlier times after 24th February and were not stricter, as we have had to be in the last few days. I say that on purpose in order to indicate that investment is still a vital feature of our policy.
Now, I come to the right hon. Gentleman's question about the future of exchange policy. I think I have disposed, in answer to his speech, of any idea that I made any particular statement at the O.E.E.C. meeting in Paris.
Mr. Gaitskell: Will the Chancellor allow me? Hon. Members opposite asked me for a quotation, but, unfortunately, I had not got the quotation ready at hand. I have it now and will read it. It is from a leading article in "The Economist" of 23rd July, and this is what the article says:
"Nevertheless, it seems that the floating rate part of the British proposals "—
that is, the British proposals in E.P.U.—
"was never taken as seriously on the Continent as the convertibility part until Mr. Butler surprised his colleagues at the June meeting of the Council of the Organisation for European Economic Co-operation by insisting on the door being left open for fluctuating exchange rates in Europe's future currency arrangements. The result was to convince some speculators and traders that a depreciation of sterling was in the immediate wind, and there was something of a small scale run on sterling until the official denials had succeeded, as they have not always done, in allaying the rumours."
Mr. Butler: I have no exception to take to that statement, which seems to me to

1023
be absolutely correct, but it does not mean that I made a particular statement in Paris, because I did no such thing.
Mr. Gaitskell: With great respect, surely that is exactly what it does say? It says:
"… Mr. Butler surprised his colleagues at the June meeting of the Council of the Organisation for European Economic Co-operation by insisting on the door being left open for fluctuating exchange rates in Europe's future currency arrangements."
That is exactly what I said the Chancellor had said.
Mr. Butler: I made no statement to that effect. All that was arranged, by agreement between the nations of Europe which are members of O.E.E.C., was that we should make provision—and perhaps this will explain to the right hon. Gentleman and to the House what happened—for some successor mechanism to the European Payments Union. The E.P.U. has been a particularly successful form of mechanism for making payments between European nations.
When I reached Paris immediately after the Election, I found some anxiety lest the E.P.U., which had done so much good, not only for payments and trade, with the liberalisation code attached, but also for European solidarity in the political field, should be disbanded if one or more European currencies went convertible. We had an extremely difficult task in trying to plan some future system of European payments, and indeed of consolidation, in the event of having some currencies which were floating and others which were fixed. That is a technical problem. It is impossible, as the right hon. Gentleman recognises, to have a payments system with monthly payments if some currencies are floating and others are fixed.
Therefore, with considerable ingenuity, and under the lead of the Dutch Government, to whom both I and the House will be very much indebted, a scheme of clearing—a new form of payments—has been invented, the settlement of which will, I hope, be made at the end of this month, thereby, I hope, bringing to an end all the rumours. At the same time, we have made great progress in Paris by making possible the setting up of a European Fund for giving credits in the event of one or more currencies going convertible.
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I should like to remind the House that it is important to get the emphasis clear, and not to place the responsibility for the rumours on a statement by me, which is not correct. It is important to place the responsibility where it lies, namely, upon the need to envisage the possibility of convertibility of European currencies other than our own. Ours is by no means the only currency which might one day go convertible. It is possible that the Deutsche mark, the guilder and the Belgian franc and other currencies may go.
Therefore, in Paris—I was surprised at the time that neither the House of Commons nor the British Press took very much interest in this matter—we were involved in a very difficult act of statesmanship in not disrupting Europe and in trying eventually to have a piece of mechanism ready in the event of one or more currencies going convertible.
Mr. Douglas Jay: Although that is true, does the Chancellor deny what he said in the House a week ago—that rumours did arise out of these discussions which he had, and that these rumours have been harmful to sterling? That is what we are saying.
Mr. Butler: Yes. That enables me to say something else. I do not deny that, and I very much regret it.
What we are paying for in these rumours is the fact that we in the British Government have always been determined to go ahead with what is called the collective approach towards a system of freer trade and payments. This collective approach to such a system involves not only the Commonwealth, with which we have had frequent conferences, but also European nations, and in framing such a system of clearing as an alternative to the new payments union, it was natural that reference should be made to margins and to rates.
Indeed, it is not surprising that the International Monetary Fund has already recognised that some movement on either side of a declared parity is desirable and permissible without calling into question that parity. I regret that rumours should have arisen which damaged sterling in the midst of an exercise the motives of which were quite above board and in the interests of Europe as a whole.
The right hon. Gentleman asked me for a statement about our position towards

1025
convertibility. I have taken a most consistent line on this, and it is that certain conditions must be fulfilled. They are, first, that we should have a strong internal position, and that we are attempting to remedy with the further measures I announced yesterday; second, that we should have a degree of credit available, and that I think would be quite easy to arrange in the event of convertibility, in view of our position in the International Monetary Fund; and, third, that there should be a wider trade policy, particularly between the dollar and non-dollar worlds. The reason for that is that there should be a basic pattern, so that our exchange policy can ride safely on a basic pattern of trade. I have always said that, and I have never departed from this line, and I see no reason to doubt that that is the general policy of the Government.
I should like to add that there is no doubt about the policy of the Government in relation to the exchange value of the £ sterling, and I can give this policy in one sentence. It has been, and will continue to be, the maintenance of an exchange parity of 2·80 dollars to the £, either in existing circumstances or when sterling is convertible. In the long run, this must depend upon our efforts. Nothing can replace these.
I have stated our attitude to convertibility and to the exchange value of the pound sterling, and have stated the classical view of the International Monetary Fund that some movement on either side of the declared parity is desirable and permissible without calling that parity into question. I think that statement will indicate our basic approach to the situation, and I think I have answered the questions put to me on that matter by the right hon. Gentleman.
The right hon. Gentleman next asked me some questions—and I think this will interest the House—about the programmes, both the social programmes and the nationalised industries' programmes. He wanted to know about oil, the railways and the roads. In general, I can say that my statement does not affect any programme already announced, unless a nationalised industry or a local authority can with reason and without doing any harm slow it up, so that we shall not be trying to do too much.
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Certainly, the coal mines must have their full investment because that is our major economic problem at the present time. Secondly, we must press ahead with nuclear power, for civil purposes especially, and, thirdly, with oil, if only to supplement our coal resources which are not sufficient to keep pace with our rising industrial production.
Mr. Aneurin Bevan: Before the Chancellor leaves the subject of the coal mines, since he has said that we must maintain our investment in coal, and I think everybody would agree about that, may I ask whether he is also instructing the Minister of Housing and Local Government that there must be no interference with new houses for miners in the coal-mining areas?
Mr. Butler: The right hon. Gentleman has asked me a question on the social side, but I am stating the nationalised side, and I shall come to housing and other matters he mentioned later.
The railway modernisation programme must also go on.
Mr. Gaitskell: I take it that the Chancellor means the whole programme of £1,200 million on the railways and £150 million on the roads?
Mr. Butler: Yes, I am coming to roads. The railway modernisation programme must go on. It would be bad not only for the future of the railways but for morale in the ranks of the railway men if there were to be any check on modernisation of the railways, which cannot do anything but good to our economy at the present time.
On the subject of the roads, all I can at present permit to go on is the programme which has been already announced, a fairly considerable programme—
Mr. James Callaghan: Oh, no.
Mr. Butler:—announced by the Minister of Transport and Civil Aviation himself. That will mean a review again in the autumn, or whenever I consider the economy can bear the strain of an extra road programme, of what I regard as being inevitable and very desirable additions to the programme; but I must for the time being ask my right hon. Friend, as he realises, to stick to the programme

1027
already announced. It will itself develop, but that is all we can manage in conjunction with housing and various other needs at the present time.
The nationalised industries themselves have undertaken to defer, for periods varying from three to twelve months, certain projects. This is a sign of the response we have had from the nationalised industries. In the case of the gas industry these include certain extensions to carbonisation plants, underground gas storage, and extensions to plant for handling coal and coke. Four of the boards expect to reduce working capital needs by £1 million in the next six months by reducing stocks of appliances and fittings. Three boards will apply internally some superannuation moneys which would normally be invested externally.
That shows the co-operation there is with the boards. In general I should like to say that the statements in the Press, that the nationalised industries were not consulted before my statement was made, are wrong, and I understand that the nationalised industries are today issuing statements to that effect. We have had full contact with the nationalised industries, and in the case of the Gas Council they indicated where certain econmies can be made.
The electricity industry, I understand, is prepared to defer certain projects mainly in relation to distribution, because generation can be held up only with danger to the regularity of the supply to industry. That, I think, we all know from our experience of the industry. The industry will also reduce working capital needs by economies in stocks, appliances, etc., and by applying to internal needs certain superannuation moneys which would otherwise be invested outside the industry. The Central Electricity Authority has already announced that, as a general contribution towards meeting our economic needs, it will make provision, in raising charges, for financing part of its capital expenditure without borrowing. So the House will see that a definite response is being made by the nationalised industries.
I come now to the position of the local authorities, and to answer in detail some of the points made by the right hon. Gentleman. First, he asked about existing programmes. I should like to make this
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statement. We have not withdrawn authorisations already given to local authorities or cut down specific programmes which have already been announced. Among these are the recently stated programmes for school building. I include also in this statement, in reply to the right hon. Gentleman's question, hospital building. My appeal to local authorities for restraint covers these and all other capital developments, but we do not intend to create uncertainty or to run the risk of delaying essential work, as we might do if we embarked on rearrangements of those programmes.
In the case of housing the right hon. Gentleman was correct in his statement about the extent of local authority building. The Minister of Housing and Local Government has answered Questions on the subject today and has explained why, for a variety of reasons, which are many, the expenditure of local authorities on house building has been reduced, as can be seen from figures published in the Monthly Digest of Statistics, which I have here for all to read.
The Government would like to make plain that we cannot do everything at once. We have encouraged the development of private building, and we are adhering to the target of 300,000 houses a year, which is 50 per cent. above the target which right hon. Gentlemen opposite aimed at. What has happened in housing is that the target was very considerably exceeded, so that under the brilliant administration of the present Foreign Secretary when he was Minister of Housing and Local Government the number of houses built rose to approximately 350,000 a year and more. What I think will happen—only we cannot exactly foresee it at the moment—is that housing will adjust itself, come nearer to the general target as announced by the Government prior to the General Election before last.
Mr. Gaitskell: I am sorry to interrupt the right hon. Gentleman again but we really must try to get this clear. Where exactly do the local authorities stand as far as their housing is concerned? Is the total figure still to be 300,000? If so, is there any change in the distribution of the total between houses built by local authorities and those built privately? That is the first question. The second question is this. Can we take it that all

1029
the plans of local authorities for other sorts of building, which have been authorised, will go on, and that there is no question of cutting those back at all? Are we to assume that local authority building which is part of a longer programme already announced will go ahead and that the only cuts to be imposed will be those on any further suggestions the local authorities may have to make?
Mr. Butler: Authorisations are to go on. There is a certain give and take, which I have agreed with my right hon. Friend, about other needs, and the whole housing question is being handled with the utmost humanity.
The attitude for the future is as I have described it, namely, we shall be aiming at the target of 300,000. I cannot enter into the domain of the Minister of Housing and Local Government by defining exactly what the expenditure is likely to be on private or local authority building, but the right hon. Gentleman will find it on page 69 of the Monthly Digest of Statistics for this month. [Interruption.] I am interested from the financial angle, and from the point of view of controlling the problem of inflation, in the question of the total number of houses built. I cannot interfere any further with the administration of my right hon. Friend—in the details of his administration.
Mr. Gaitskell: We are going into Recess in two days' time, and it is no use telling us that we can ask the Minister of Housing and Local Government about this matter. We cannot. We have no chance. If the Chancellor himself cannot answer these questions, will whoever is to reply to the debate answer them? Are the local authorities' housing programmes to be cut down further when they come up for authorisation next year? By how much will they be cut?
Mr. Butler: We have envisaged the general target which I have described as being reached, and we shall have to take consideration of private house building and the building by the local authorities. Therefore, I cannot at this stage say exactly what our policy will be. The intention is that housing should make a general contribution to the target which I have in mind, namely, of not trying to do too much at once. We are likely, because of the great success of our policies in the past, to build, I think, that number of 300,000 in the immediate
1030
future. Therefore, I do not think the right hon. Gentleman need have anxieties on that score. His anxiety should be more on economic matters.
As for the rest of local authority capital expenditure, my policy will be reinforced by a stricter attitude by the Departments concerned towards the approval of specific projects and towards the approval of applications for loan sanctions. That is essential in the present situation, and the local authorities are well aware of it, because I took the trouble to explain it at their conference at Folkestone earlier this year, and to say why it was essential that local authorities at the present time should help to meet our needs in the same way as the nationalised industries are doing.
It remains for me only to deal with the question of hire purchase.
Mr. E. Shinwell: I am surprised that the right hon. Gentleman, speaking of the subject of the restraint of capital investment, has made no reference at all to the possibility of some restraint being exercised over capital investment in defence. There is a great deal of expenditure at the present time, which no doubt could be remedied, on Service works and buildings of all kinds. Has the right hon. Gentleman thought of some restraint of that kind?
Mr. Butler: Yes, Sir. I am obliged to the right hon. Gentleman. I included in my original statement, which I have here, a statement that we shall deal with Government expenditure with particular regard to overseas expenditure. The right hon. Gentleman may take it for granted that the considerable success which we have had in keeping our defence programme within bounds will be maintained and intensified, and that any examples of waste will be ruthlessly dealt with by the Treasury.
Furthermore, the right hon. Gentleman can take it that in our overseas expenditure we have had already a considerable saving arising out of Korea, and I am hoping that, as a result of examinations which are proceeding, we may be able to examine closely and if possible limit some of the liability arising out of the new German costs which are likely to fall. Furthermore, I have the collaboration of all my colleagues who are engaged in important duties overseas to see that they

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limit to the greatest possible extent, consistent with foreign policy and with our national safety, our obligations overseas, because they have a double impact, both on our Budget and on our balance of payments.
Mr. Shinwell: May I press the Chancellor upon this very important point? This is a very important matter on which I think we ought to have further information. I do not intend to intervene in the debate, I only want certain points elucidated. Nobody wants to impinge on the safety of the country and its security, but will the Chancellor address himself not only to the overseas defence expenditure but to defence expenditure in the United Kingdom and the provision of material that may never be required? All I ask is that he should examine the matter much more closely than apparently has yet been done.
Mr. Butler: I can give the right hon. Gentleman that undertaking because, as I have said, we have already had considerable good results in pruning the defence programme. If the right hon. Gentleman can give me any special advice I shall be only too glad to have him as an ally in this connection.
Miss Alice Bacon: The right hon. Gentleman had reached the point in his speech at which he was about to leave the subject of local authority spending. I hope that before he leaves that subject he can be a little more specific about the school building programme, which as yet he has not mentioned.
Mr. Butler: I simply said that, for the reasons which I gave, we are leaving the programmes already announced to develop, and that means that the statements already made by the Minister of Education stand as announced by him. Knowing education perhaps even as well as the hon. Lady, I know how determined all educationists are—including myself in a previous incarnation—to seek more money, and I warn them that if they want more money they will have to wait. The programme remains as announced.
My hon. Friend the Economic Secretary to the Treasury will possibly answer more fully points of detail with regard to hire purchase. I simply conclude by summarising the position as I see it. As I
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said in my opening remarks, there is no question of a crisis. The British economy is fundamentally sound. We have made a great surge forward. Our exports have increased and what is wrong is that, owing to our prosperity, we have simply taken in so many imports that the rise in our exports is not sufficient to meet them.
We have a very difficult task in combining social needs with strict finance. In the old days, finance was very strict and we had high unemployment. At present, certain countries whose finances are very strict have high unemployment. It is not the aim of Her Majesty's Government so to conduct our financial policy that we cause a large section of our workpeople to become unemployed. We, therefore, have, on all sides of the House, the same aim, namely, a social democracy, fully employed.
This is a particularly difficult problem in our island economy. It is not difficult in other countries, because they have not the same proportion of raw materials or food to import that we have. We are perpetually coming up against this problem in the history of our island economy. It will need more co-operation and understanding than we have had hitherto in our country, more realisation of our increased wage costs, and more realisation that our costs do not compare favourably with those of Germany or America at present, if we are to survive our present difficulties.
The right hon. Member for Leeds, South said that inflation was not widespread, but I must warn him that several countries in Europe are facing a problem similar to ours. I have discussed it with their Finance Ministers. There is nothing here particularly that can be attributed to gross maladministration by the present Government or lack of foresight. We are dealing with one of the classical British difficulties of combining increasing prosperity and production and over-full employment—with unfilled vacancies double the number of unemployed and running to a figure of half a million—with a position of balance of payments difficulty.
My view is that the attack on inflation started in February and continued now—of which we gave warning during the Election and of which I spoke in all the major cities where I addressed meetings—will be carried on. At the same time, our

1033
exchange policy, despite the rumours and the difficulties of carrying with us the nations of Europe and the Commonwealth, will be carried on inflexibly and with the same determination and executive strength that we have shown hitherto. If we do this, we shall obtain a synthesis between full employment and a general advance in the economy. It is because we have an opportunity of debating this matter in the House that I am convinced that I shall have the support of the House in trying to get things better for the country as a whole.
5.16 p.m.
Mr. Roy Jenkins: The Chancellor's speech, although somewhat more sombre in tone and even vaguer in phraseology than many of his previous efforts, had one thing in common with almost every other major speech that he has made in the House since he became Chancellor. It was that he asked us to accept his assurance that the measures which he has taken have struck just about the right balance.
It would be easier for us to accept that assurance if he had not used almost precisely that phrase in, for instance, his Budget speech three months ago. It is really disingenuous and detracts from his speech to try to reconcile everything that he said at the time of his Budget speech with what he is saying at present, because it is quite impossible to reconcile these two approaches on the part of the Chancellor.
We should consider precisely what the Chancellor did almost exactly three months ago in his Budget. He gave away £135 million in extremely regressive taxation concessions. In other words, he increased the demand in the country three months ago deliberately, as an act of Government policy, at an annual rate of £135 million. In view of what is now happening, can the Chancellor think of any single argument, other than that of electioneering convenience, for the step which he took in his Budget? I shall be very willing to give way if he can.
Mr. R. A. Butler: I am not ashamed of anything in the Budget. I think it was a very good Budget. The weight of taxation in this country militates against our advance as an industrial nation. If there is a surplus and an opportunity of relieving taxation on industry as well as
1034
on persons, it is a very good thing for our economy. Moreover, in view of the difficulties which I foresaw, I deliberately held back half of the surplus, which was a wise move.
Mr. Jenkins: I agree that it would have been still worse if the Chancellor had gone twice as far, but that is not a good recommendation of the Budget. All that the right hon. Gentleman says is that as a general principle, when circumstances are right, we would like to reduce taxation. So would we all. What we are disputing is that in April the circumstances were right for a reduction of taxation which led to an increase in demand in the country. It is impossible, on the Chancellor's own presentation of the position, to accept that view.
What did the Chancellor tell us? He said that the trade figures were bad in the first quarter of the year. He took certain measures in February and then in March he found the worst trade figures of the lot. In April he introduced his give-away Budget, and in early May, before the effect of the Budget came home, there was an improvement. But as soon as the effect of the Budget began to make itself felt, the position became worse, and we are now in the situation in which we find ourselves.
It is not possible now for the Chancellor to expect us, if we are to take him seriously, to accept that he was right in what he did at that time. He was severely criticised by several hon. Members from this side of the House, and particularly by Mr. Crosland, the then Member for Gloucestershire, South, who is no longer with us. The Chancellor, replying to the Budget debate, used these words:
"This debate is indeed a contrast in the philosophies of the two sides of the Committee. The hon. Member for Gloucestershire, South referred, perfectly honourably"—
one of the Chancellor's happy, patronising little remarks—
"to his belief in a return to austerity. We believe "—
that is, the Chancellor and his hon. Friends opposite—
"that with the improvements which we have introduced, we must have an expanding economy, which depends upon the vigour and the discipline of a free people."
Where are we to have an expanding economy at the present time? Is it to

1035
be in the nationalised sector or, after what the Chancellor has said, is it to be in the field of local government finance? Is it to be in the private sector if the restrictive requests that the Chancellor has put out are to be effective? There is a sharp contrast between what the Chancellor was saying before the Election and what he is saying now. No doubt the right hon. Gentleman would say that it was governed by this phrase:
"…the vigour and discipline of a free people."—[OFFICIAL REPORT. 22nd April, 1955; Vol. 540, c. 578.]
We have got used to these peculiarities of speech by the Chancellor, but that is a very typical phrase of the right hon. Gentleman, vague, almost meaningless, and slightly sententious. It fits in perfectly with the Chancellor's style. We have considerable affection for it, but at the same time it has certain dangers.
I should like to turn for a short time to a very important point which has already been discussed, the question of the extent to which the run on sterling in the past month or so is the responsibility of the Chancellor. If I may say so with respect, I do not think he really disposed satisfactorily of that question at all. What are we told? We were told, first, by the Chancellor himself yesterday:
"Our foreign exchange position is also being currently affected by many rumours, here and abroad, about our intentions. This has led to sales of sterling which will adversely affect Our reserves in July."—[OFFICIAL REPORT, 25th July, 1955; Vol. 544, c. 826.]
That, obviously, is common ground: there is no question about it.
But there is the question about where the responsibility for the rumours lie. We had the "Financial Times" saying this morning, in its leading article:
"The adverse rumour that has weakened sterling is that Britain intends to effect a covert devaluation of the pound by widening the dealing margins. The rumour arose out of the negotiations for the removal of E.P.U. where such a policy was, in fact, discussed."
That is very similar to the "Economist" quotation, but a little more recent. I imagine, from the Chancellor's attitude to the "Economist" quotation, that he would not deny this statement of the position which appeared in the "Financial Times."
But he cannot go on from there and say that this was something which was
1036
quite inevitable, that this was bound to be discussed and that everybody was doing it. I am, for instance, quite unaware that there were other countries in Europe which were pressing for, or even discussing, floating rates for their currencies. Did the Germans press for a floating rate for the Deutschmark? Did the Dutch? Did the French? I do not believe for a moment this argument that everyone was discussing floating rates. The difficulty in the E.P.U. negotiations largely arose from the fact that even a month ago the Chancellor was hankering after early convertibility for sterling, not committing himself to it, but hankering after it, and discussing it on the basis of wider floating rates.
Mr. Beresford Craddock Mr. Beresford Craddock (Spelthorne) rose—
Mr. Jenkins: I am discussing very closely what the Chancellor did. I do not think it would be very interesting to hear the hon. Member's views on that.
That is the position, and that was how the discussion on the £ arose. The run, when it came, was not against the German mark or the Belgian franc, but against sterling because it was sterling that was discussed, and it was the Chancellor who raised the issue, which was an extremely damaging issue for this country. The Chancellor admits—and I do not doubt that his motives in all this were perfectly good, but it is results, not motives, which count—that we have lost a great deal of gold during July. He gave very disturbing hints about how much we had lost. Was it 50 million dollars? Was it 80 million dollars? I do not think that these figures are unreasonable in view of the amount of gold—
Mr. Cyril Osborne: But not as much as the Labour Government lost in 1951, before they went out of power.
Mr. Jenkins: I do not want to be diverted from my argument by considerations put forward by the hon. Gentleman, but the Chancellor knows quite well that both in 1951 and in 1949 the position was radically different from that of today in the sense that we were then facing difficulties originating outside this country. In 1949 the trouble started with the American recession and collapse of the sterling area dollar earnings. In 1951 it started with the inflated world prices which put our import costs up by 30 per cent.

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Why we are so critical of the Chancellor is that the present situation is due to internal matters. There is nothing outside this country to explain why we have this trouble at present. It has all been created in the United Kingdom, largely as a direct result of the Chancellor's own policy, particularly in the. Budget two months ago, and particularly also, as I think, in the unfortunate results of his trip to Paris a month ago.
Mr. R. A. Butler: As the hon. Gentleman is criticising my policy, perhaps he would listen to this. There has been no change in the general attitude of Her Majesty's Government on the subject of the collective approach to freer trade and payments since the last Government came in to office. We discussed this matter with the Commonwealth Finance Ministers and Prime Ministers. We then conveyed our views to Europe, and the same plan has been before the Commonwealth and Europe for introduction at some possible date when circumstances permit, but a long time ahead. There has been no particular change in the circumstances, and the fact that certain rumours arose should not be laid at my door. If there is responsibility it should be laid at the door of the Commonwealth as a whole and the European nations that discussed it with us.
Mr. Jenkins: I think the Chancellor will agree that there is a difference. This year, E.P.U. has been negotiated for another year on an entirely different basis. If nothing new were to happen, why not negotiate on the old basis, as has been the case for many years?
Mr. Beresford Craddock Mr. Beresford Craddock rose—
Mr. Jenkins: The Chancellor has put a point to me, and I think it better for me to apply myself to that point.
In the matter of the even division of responsibility between this country and other countries, surely the Chancellor will not deny that it was the position of sterling which was in question. It has been the future of sterling in regard to convertibility and with floating exchange rates which has given rise to the trouble and caused the run against our currency.
Mr. Beresford Craddock: May I interrupt the hon. Gentleman, because his facts are not correct? On Saturday, 11th
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June, it was reported in the Press that my right hon. Friend at Paris the previous day, Friday, 10th June, had said that convertibility of the £ was a long way off.
Mr. Jenkins: The right hon. Gentleman always says a great number of things, both in this House and when he is abroad. The fact remains that, whether or not that was reported in a particular organ of the Press on a particular day, the impression which got about in Paris was not one of a strong anti-convertibility position. However, I have made the point I wanted to make.
The Chancellor's motives may have been of the best, but his visit to Paris has been an extremely expensive one for the gold reserves of the United Kingdom. The right hon. Gentleman could travel the world in oriental splendour and it would still be more economical for us than that he should travel in the reasonable modesty in which no doubt he does and make these dangerous and unfortunate statements.
Mr. R. A. Butler: I must make it clear that I am not aware that there is extant any speech or text by myself. The hon. Gentleman is continually referring to statements. I do not know what he means.
Mr. Gaitskell: If my hon. Friend will allow me, there was no statement, of course, because the meeting was a private one. None the less, the whole of the Press, here and on the Continent of Europe, evidently came to the conclusion that this statement had been made. What is more, the Chancellor's own statement this afternoon, made very belatedly—he might have made it during my speech—shows that he knows of this impression that we were going in for convertibility at a floating rate.
Mr. Beresford Craddock: My right hon. Friend denied that on 10th June.
Mr. Jenkins: My right hon. Friend has made it clear that we are not talking about statements, but about plans and impressions which are given. If these things are talked about in large meetings like those of O.E.E.C. they inevitably get out. However, after great pressure the Chancellor virtually made a fairly satisfactory statement about convertibility this afternoon.

1039
I want to press the right hon. Gentleman on one further point mentioned by my right hon. Friend, and that is the attitude of the Bank of England on this matter. I am sure that the Chancellor cannot deny, though I do not expect he would be prepared to admit, that it is well known that in the past few months there has been a Treasury policy on the one hand and a Bank of England policy on the other hand. That is a very undesirable thing. The Bank of England have been making it clear—not by statements, because that is not the way the Bank operates—that early convertibility is not merely desirable but inevitable because the existing restrictions are impracticable to maintain.
Sir Robert Boothby: Is the hon. Gentleman now seriously maintaining that all the trouble that some of us had to get the Bank of England nationalised was of no avail?
Mr. Jenkins: The Chancellor should exercise some of the power he has, and which Sir Stafford Cripps exercised when he described the Bank as his creature. A little more disciplne from the Chancellor towards the Bank would be highly desirable.
There is one other major point and it is one of the gravest of our charges against the Chancellor this afternoon. It is that, despite what he said in his closing words, the right hon. Gentleman has made this country an island of inflation in a stable world. The "Economist" brought this out clearly in its article last week.
"It is not true,"
it said,
"that we live in an inflationary world. What we live in is an inflationary country."
The Chancellor is responsible for a situation in which, over a period of years, we have been consistently inflating faster than any other major country in the world.
That this is undeniable is brought out clearly by the relationship between our home prices and our import prices. Since 1951, our prices at home have gone up by 14 or 15 per cent. During that period import prices went down by about the same amount. If we compare the period of the Labour Government, either a fairly stable period, 1948 to 1950, or a period of fairly rapid price increase, 1950 to
1040
1951, the relationship will be found to be quite different. Between 1948 and 1950 retail prices went up by 5½ per cent. and import prices went up by 15 per cent. In 1951, retail prices at home went up by 8 per cent. and import prices by 33 per cent.
What the Chancellor has done—and this is the root cause of his difficulties and the root cause of the great danger which faces what the Chancellor always now calls our island economy—is to have produced an inflation in our home price level entirely out of line with what has been happening in the rest of the world. Confronted with this difficulty, continuing over a period, what has the Chancellor done? First, he produces a grossly inflationary Budget and he justifies the regressive tax concessions given in that Budget largely on the ground that they would act as a great stimulus to investment.
Then when, as is inevitable, three months later there has been a slight increase in investment, what does he do? And let us make no mistake about it, only for a short time has there been an adequate level of investment in this country. When his policy brings the country not to disaster but to considerable difficulties, even though we are sailing in a very calm international sea, what does he do?
So far as consumption is concerned, he only takes another swing in the dark at hire purchase. The Chancellor is obsessed with hire purchase. The President of the Board of Trade moves so admirably slowly that we still have no adequate statistical information and, therefore, the Chancellor takes a swing in the dark at hire purchase, at which he has already taken two other swings in the dark in the past year. Apart from that, in a rather vague way, he allows the whole weight of the burden to fall upon investment.
Therefore, if his measures are to be successful in getting us back to any sort of position of balance, we shall achieve it with the economy tilted more against investment and more in favour of consumption than was envisaged at the time of the Budget. So we shall be facing again difficulties with which we were faced three years ago and of which nobody can be more aware than the Chancellor because he has talked of them

1041
constantly—the difficulties of stimulating investment, of getting a level of industrial investment comparable with that which has been taking place in our main competitor countries. We begin a repetition of a dismal story.
In many ways I have considerable admiration for the right hon. Gentleman, but I am not sure that he has not been Chancellor for too long. Perhaps in the first six months or so of office the right hon. Gentleman showed real courage—more courage—than he has been prepared to show in recent years. It earned him unpopularity. After one dose of that, he has since become the great, successful Chancellor, the Chancellor of the continuing boom. Whatever he has done about the future of the country, he has invested so much political capital in his own success, that he is very loth—
Mr. Osborne: Cheap and nasty.
Mr. Jenkins:—to turn round and admit that a great part of his policies have been a failure, and that he has to start again at the beginning. I am not sure that in order to start on this difficult road again we do not need a new Chancellor of the Exchequer.
5.40 p.m.
Sir Henry d'Avigdor-Goldsmid: In asking for the indulgence of the House that is customarily given to a maiden speech, I am very conscious of the fact that there are a large number of hon. Members who are much better qualified than myself to speak on the important topic we are debating this afternoon, so I shall be brief.
I hope I shall not be considered controversial if I refer to a point made by the right hon. Member for Leeds, South (Mr. Gaitskell), because I am quite sure he would not wish to mislead the House. He referred to the sale of dollar investments by the Bank of England to British investors as representing a loss of foreign exchange earnings to this country. That is not, in fact, the case. British investors purchasing such securities must lodge them with what is known as an authorised depository. That authorised depository is a financial institution which is, to a certain extent, controlled by the Bank of England.
The authorised depository keeps control of those securities. The coupons or
1042
dividends are, of course, automatically credited to the exchange control again and there is no loss of dollars there. Alternatively, should there be an emergency, it would be very much within the power of the Bank of England to requisition those securities, exactly as was done in 1939. I mention that point because I feel that the right hon. Member would not wish to give a misleading impression to the House.
We find ourselves in a dynamic and expanding economy in which we have to keep our place and we can never manage that by methods of restriction and curtailment. Therefore, we must adapt ourselves to the world as we find it if we are to keep our place in it. Our shortage today is a shortage of capital. That is not very surprising. Before the war, we had a cushion of overseas investments to protect us from the difficulties in which we might find ourselves from time to time in our overseas payments situation. Those overseas investments are entirely lost. I do not think we would have it otherwise.
When, in the war, we prepared to sacrifice our lives and—what was perhaps even more difficult—to order others to sacrifice their lives, we would not have thought such action proper if, at the same time, action had been taken to safeguard our investments. I think we would have felt quite convinced that the human sacrifice could not be justified unless the sacrifice of financial advancement was made first.
We therefore found ourselves, after the war, at the centre of a trading empire without sufficient means to maintain our position. It is not surprising that, from time to time, we have these difficulties in the balance of payments; but it shows the strength of our recovery that they become increasingly lighter. Each so-called crisis has been less lethal and each has shown our powers of recuperation in a stronger light. In our dual rôle as traders and manufacturers and also as bankers to the sterling area, it is essential that we should recover from these crises as soon as possible and by the quickest means. Our position after the war was a little like that of the traveller in Jules Vernes' book, "Round the World in Eighty Days," who, in order to complete his passage across the Atlantic when the ship he had chartered ran out of fuel, chopped down the superstructure and

1043
burned it in the furnace so that the ship could proceed. That was our position in 1945. We came out of the war with only our battle honours and our resolution.
In those circumstances, we had to make great concessions to the future in order to obtain the loans and finance we needed to try to set ourselves on our legs. We are paying for those loans today, but our economy is fundamentally expansionist and enterprising. In my constituency, Walsall, which is known as the town of a hundred trades, I am daily astonished by the variety of human ingenuity put to manufacturing purposes in that great Midlands centre and the enormous adaptability of manufacturers there. These are great assets. We would be untrue to ourselves if we attempted to introduce an economy which did not give full rein to them. But we have a dual rôle. We have also to act as bankers to the sterling area and retain the confidence of our overseas clients.
Probably all of us expect a slight difference in behaviour between our bank manager and ourselves. We expect to see him perhaps a degree better dressed, a degree more staid in his manners, and perhaps a little less likely to go to the "local." In the same way we, acting as bankers to the sterling area, must keep the confidence of our depositors. How-can we best manage that? At present, we have three enormous assets. Our first asset, which is one which must appeal to all interested in investment, is that we have a stable system of Government. Secondly, we have a people intensely patriotic, enterprising and ready to accept the call of its leaders. Thirdly, we are lucky today to have a financial leader to give us just what we want, whose words are words which are listened to not only in this country but all over the world.
I speak as one having business with people in many other countries, but this is an opinion not simply learned from them—although they are people in dozens of other countries. It is also the view of my constituents in Walsall. We have as Chancellor a man whom we can trust entirely. That is the great asset which this country enjoys in the world at the moment and which is recognised by the fact that the Chancellor is Chairman of O.E.E.C.
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The combination of these advantages and a dynamic drive will enable us undoubtedly to survive this minor upset. The dynamic approach to our difficulties is the one which will get us out of them. I am quite certain that our balance of payments difficulties will very soon be turned by the influx of foreign investment. We are short of capital and we would welcome foreign investment in this country. Today, we offer better prospects for the investor than any other country in the Western world, a stable system, a prudent Chancellor and an industrious population.
I hope that I have not trespassed on the indulgence of the House.
5.48 p.m.
Mr. F. Blackburn: It is a great pleasure for me to offer congratulations to the hon. Baronet the Member for Walsall, South (Sir H. d'Avigdor-Goldsmid) on getting over perhaps the most important hurdle in the early days of membership of this House.
It is always rather a strain when one has to make a maiden speech, but I think everyone will agree that the hon. Member has distinguished himself at his first attempt at addressing the House. The hon. Baronet comes here having already made a considerable reputation outside, and with a distinguished war record. I understand that he has been the High Sheriff of Kent and leader of the Conservative Party on Kent County Council. So far as the last part goes, I can only commiserate with him, but there will be hon. Members on his own side of the House who will wish to congratulate him.
It takes some courage to select an economic debate to make a maiden speech, because it is most difficult, in such a debate, to be non-controversial. Nevertheless, I think that everyone will agree that the hon. Member chose a subject with which he was very conversant. It is quite evident that he is an expert in these matters. He managed to be practically non-controversial and I should like to convey to him the congratulations of the House and say that we hope that we shall be able to hear him on many occasions in our future economic debates.
Having said that, I hope to be allowed to be a little more controversial than the hon. Member was. Exactly two months ago today the people registered their votes

1045
in a General Election. It is clear from the statement which the Chancellor made yesterday, and his speech of this afternoon, that our assessment of the reasons for that Election were correct: that the Government feared a worsening of the economic situation and decided to cash In before things got worse.
The public was told at that Election, "If you elect the Labour Party, you will be electing a party which will impose controls." The Chancellor of the Exchequer came to the House yesterday and said that he was going to impose controls, but only in a half-hearted sort of way, not sufficiently definite to have the necessary effect. The Conservative Party has been bedevilled because, a few years ago, the right hon. Member for Woodford (Sir W. Churchill) coined the phrase, "Set the people free." Ever since then the Conservative Party has been bedevilled by that phrase.
We are told that Conservative freedom works. It is obvious from what the Chancellor said yesterday and today that Conservative freedom has worked very badly. The right hon. Gentleman said that in the Press today there was a fairly good reception of his statement of yesterday. He does not seem to be in great favour with the "Manchester Guardian," for instance, which says:
"It is a pity that the Chancellor had to put the brakes on the runaway boom in this crude and sudden fashion. But he left himself no choice but to return to the obsolete medicine of direct controls."
I will not argue with that point now.
"Having raised the bank rate too late (as it now turns out) and made it ineffective by a soft Budget and a soft heart for the prices of Government securities he is now faced with almost an emergency. Apart from the elections Mr. Butler has had none of his famous luck this year. And just now his record looks rather less brilliant than it did."
That is the financial editor of the "Manchester Guardian." The newspaper's first leader tells us:
"If anyone is to be blamed, then Mr. Butler is clearly the guilty party. In his Budget last April he took a calculated risk, and one about which many people felt misgivings."
Some of us felt more misgivings than did the "Manchester Guardian."
"The effect of his tax concessions was to throw the whole burden of restraining the boom on to monetary policy."
The trouble with the Chancellor is that when he came to the House in February
1046
he tried to rely entirely on monetary policy, and I am rather tired of hearing about the flexibility of policy under a Conservative Administration.
In February, the Chancellor of the Exchequer relied almost entirely on an increase in the Bank Rate and certain hire-purchase measures. He was told at that time that the increased Bank Rate would not achieve the effect he desired, that it was a non-discriminatory tax and, of course, he was putting on the banks the job of deciding where capital investment should go. Taking for granted that his decision in February was right, and that it was right to come to the House and explain the economic position, he could not be right when, in his Budget, as my hon. Friend the Member for Stechford (Mr. Roy Jenkins) has pointed out, he pursued an entirely different policy. It was a soft Budget.
If it was right in February to come to the House with the intention of restricting consumption, the right hon. Gentleman was entirely wrong in April to produce a Budget that would surely have the effect of increasing consumption. Yesterday, the Chancellor of the Exchequer referred to home consumption, pointing out that we are absorbing too much of our production at home, and said:
"For the time being our primary aim must be to reduce home demand in order to leave room for the extra exports we need."—[OFFICIAL REPORT, 25th July, 1955; Vol. 544, c. 827.]
We quite agree with the Chancellor of the Exchequer, but there is no difference between that and his statement on 24th February, when he said:
"What is needed—and what the Government now propose—are steps to moderate excessive internal demand.…"—[OFFICIAL REPORT, 24th February, 1955; Vol. 537, c. 1453.]
It is obvious that the steps which the Chancellor took in February have failed. It is obvious that he produced a Budget which was merely an attempt at electioneering, that he introduced politics into the financial affairs of this country. Now he is saying exactly what he said in February and we have no proof, of course, that he will be any more successful than he was then.
If we are to reduce home consumption, if the Government are to be consistent—and there has been no consistency about

1047
the Government's economic policy since they came to office in 1951—and it is really intended to reduce internal consumption, are we to expect the Government to bring proposals to delay the putting into effect of the Independent Television Authority? After all, the whole effect of the Authority will be to increase internal consumption. Advertisers will not spend their money merely because they want to produce an alternative programme for the people. They will do it because they will expect to get increased returns from increased sales.
There is no consistency in the Government's policy which, on the one hand, wants to reduce consumption and, on the other, brings in legislation and schemes that must increase consumption. Yesterday, the Chancellor was beginning to try to put some blame for the position on the strikes which have taken place. There has been a slight change in his attitude and remarks today. Naturally, any strike or industrial upset is bound to have some effect on the economic situation. But we also must agree that the strikes and upsets are, in the main, a direct result of the Chancellor's policy. If the right hon. Gentleman is attributing a great deal to the effect of the strikes, may we not expect, now that the strikes are over, that there will be a great upsurge in exports, and that the accumulated stocks will have a beneficial effect on the balance of payments? But the Chancellor seemed to have no idea that that would take place.
The Chancellor must be struck by this fact, but it is significant that in his speeches we seldom hear the right hon. Gentleman refer to the Stock Exchange, or to dividend restraint, or profits, or anything of that kind. It is true that if he is pressed, the right hon. Gentleman will say that he is against unrestrained dividends —just as the clergyman is against sin—but he seldom makes any definite reference to that. He never suggests any action which he might take to deal with the matter.
There has been a runaway boom on the Stock Exchange which has had a psychological effect on the workers. I have here a quotation from the "Sunday Express" of 12th June. As we know, equity share values have risen by 60 per cent. since the beginning of last year, and Mr. Frederick Ellis wrote in that newspaper:
1048
"The Stock Exchange, a vital link in the nation's money machine, is becoming a casino … the less you know about investment the more you will make. Just stick a pin in the back page of the 'Financial Times'—and buy."
Mr. Osborne: Just let the hon. Member try it.
Mr. Blackburn: Mr. Ellis goes on:
"Bad news is almost a signal for a fresh market surge. The trade gap widens—up go share prices. Gold drains away in months we should be storing it up. It makes no difference. Do not blame the Stock Exchange for this … the blame lies with the Government for allowing inflation to rear ahead unchecked.… In Mayfair you cannot go to a party without being asked by bejewelled women. 'Shall I buy So-and-So?' Everybody's doing it. Every day the boom is stoked up, as profits of the companies go up and up. So do the dividends. Not a day goes by without a big combine making more, paying out more … Do you wonder that workmen with £10 a week and less stick up their hands to strike for more wages?"
Of course, the first part may be a little exaggerated, but the principle is there. There is this runaway boom on the Stock Exchange and it is something which the Chancellor entirely ignores. He entirely ignores the increased dividends and share bonuses which are being paid. Both yesterday and today he made no reference whatever to that part of the economy.
Referring to foreign exchange, the Chancellor said yesterday:
"Our foreign exchange position is also being currently affected by many rumours, here and abroad, about our intentions."—[OFFICIAL REPORT, 25th July, 1955; Vol. 544, col. 826.]
One thing which the Conservative Government have not had to put up with, but which the Labour Government had to endure, is people denigrating this country abroad. Part of the trouble in which the Chancellor finds himself regarding foreign exchange is of his own making. At far too early a stage he began talking about the possibility of convertibility. He put his own terms on convertibility, but once having raised the idea, there has, of course, been speculation all over the world ever since as to when convertibility would take place.
I wish now to refer to the question of credit restriction and capital investment. About credit restriction, as "The Times" said this morning, the Chancellor is proceeding entirely by exhortation. He has said that firms should endeavour to slow down investment. He has not taken effective action, nor has he any policy on

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the subject. He has exhorted them to do certain things. In the matter of credit restrictions and capital investment the Government are in a dilemma. As the Chancellor stated, it is important that we should have the maximum amount of capital investment. I would say that there we should even go to the danger limit, because capital investment is vitally important to our future economy.
We are not quite clear what is the Government's policy. In the Economic Surveys for the past few years we find the Chancellor complaining that private industry is not investing sufficiently in industry and, therefore, in his Budget he gave incentives to encourage that course of action. Last February, the Chancellor was rather pleased with the result of his incentives. He said:
"Finally, in regard to investment, I am very glad to say that, as a result of the measures in the last Budget, there are distinct signs of marked improvement not only in factory building but also in machine tools and in industrial investment generally." —[OFFICIAL REPORT, 24th February, 1955; Vol. 537, c. 1455.]
In February, the Chancellor was delighted that there is an increase in capital investment, but in July it has to be cut down. First, we are told that there is not sufficient capital investment, and incentives are given, and then when the incentives begin to work, capital investment is cut down. I agree that the Chancellor is in a dilemma. Yesterday, he said that there were certain kinds of expenditure which should be dealt with:
"They are the expenditure of the Government itself, of local authorities and of the nationalised industries; credit restriction; and hire purchase."—[OFFICIAL REPORT, 25th July, 1955; Vol. 544, c. 827.]
I am not clear about this Government expenditure. When the Chancellor spoke yesterday I thought that Government expenditure was definitely to be cut down, but today I am not quite sure what the Government propose to do. I made a note of what the right hon. Gentleman said this afternoon. He said, "My statement does not affect any programme already announced." What is it to affect? I take it that the situation which we have to face is with us now. If it is only a future programme which is to be affected, the present situation will not be dealt with.
Yesterday, regarding capital expenditure by the Government, the Chancellor said:
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"… the Government, while restricting to the minimum all its expenditure, both current and capital, will pay special attention to its overseas expenditure."—[OFFICIAL REPORT, 25th July, 1955; Vol. 544, c. 827.]
We get far too many of these indefinite statements, such as, "will pay special attention." If there is a difficult economic position, we want something a little stronger than that.
I understand from what the Chancellor said this afternoon that the road programme which has already been announced will not be interfered with. That must bring some comfort to a great many people who have been pressing for a much more extensive programme than we have at the present time. I am not quite clear what is the intention of the Government with regard to local authority expenditure. They said that they would not withdraw authorisations or cut down programmes which have already been announced. I take it that the authorisations for 1955–56 have already been made by the Ministry of Housing and Local Government, and what the Chancellor has had to say about that can, therefore, have no effect whatever.
Can the Chancellor say whether there will be any control at all over the private sector of the housing industry? There is not a great deal of point, in any case, in cutting down local authority expenditure if, at the same time, we are to allow increased expenditure upon private building. I am also not clear about the position as it affects education. Certain programmes and expenditures have been announced, but I should like to know the exact position. We have had so many indefinite statements from the Government—and especially from the Chancellor —that we ought to have a more definite one from the Economic Secretary tonight.
What the Chancellor has said about restriction upon capital investment seems to amount to the fact that he hopes that both the nationalised industries and the private sector of industry will restrain their capital investment for a time. Does he really think that such a mild way of dealing with the matter will meet the present difficulties? It certainly did not meet the difficulties in February. The Chancellor himself admitted yesterday that the action which he took then has been very slow in its effect. The Government are wobbling, as they did in February and then in April. They are

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not taking effective action, but are trying to live up to the speech of the right hon. Member for Woodford, who said, "Set the people free" without knowing exactly how to set them free. The Government are against controls, and are afraid to use them with effect. In fact, the Government do not know what they are doing.
6.13 p.m.
Mr. J. Grimond: I take it that for the time being the question of convertibility can be left aside. I regret that, although I know that some people look forward to a continual state of seige. It is worth mentioning, however, that we are apt to attach too much importance to some of the movements of funds in and out of the country. They come, in the first place, with the intention of leaving us again, and they are not very significant in our financial discussions.
The Chancellor's speech once again contained a good many rather pulpit-like phrases, which seemed to be removed from reality. I think, if I heard him rightly, he said that he could not tolerate any signs of inflation—but signs of inflation here are like daisies in June. We know that retail prices have risen much faster than they have in Germany or America. The cost-of-living index is up, and foreign contracts are being lost because our prices are not competitive. Although it would be foolish to exaggerate the degree of inflation it is undoubtedly going on all the time, and it is undoubtedly the most serious thing that we have to face.
Then, when the Chancellor dealt with the question why his raising of the Bank Rate had not been effective in reducing this inflation he drew attention to the fact that the gas industry had been able to borrow about £70 million from the banks, in defiance of his policy. He seemed to regard that as the act of some rather ill-disposed god, quite outside his control. But the method of financing the nationalised industries has been designed by the Government. These industries can borrow at cheap rates of interest, with a Government guarantee. If the Government want to stop nationalised industries from getting money cheaply, or from getting it from the banks in this way, they must examine once again the way in which these industries are financed.
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But this cannot be the complete answer to the question why the raising of the Bank Rate has been so ineffective. The banks have been selling securities, and one would have thought that the natural effect would have been to force them to reduce their advances very much more quickly that they have done. Unless there is a hidden widow's cruse, which does not appear in the banks' accounts, it seems mysterious that they are able to go on making these advances, even when the Bank Rate is as high as it is.
The Chancellor said that it was very difficult for him to exercise restraint when the country was so prosperous and there was an upsurging and booming economy. I suggest that the truer explanation would be that when the Conservative Government first came to power people really thought that they might take tough measures against inflation and stop it, but they have now become more and more convinced that inflation will be a more or less permanent state. It is quite obvious that the buying upon the Stock Exchange is not against the yields on securities, but a hedge against inflation. The stock markets have made up their minds that the only hedge is to go on buying equities, and that no Government will stop inflation. That is one of the reasons why the yield on equities is almost down to the yield on gilt-edged securities.
Sir R. Boothby: Does the hon. Gentleman agree with the theory advanced by the hon. Member for Stalybridge and Hyde (Mr. Blackburn), that one has only to get a Stock Exchange list and stick a pin in it and one cannot fail to profit by it?
Mr. Grimond: I do not subscribe to that theory, but I say that it would have been far wiser to invest in Imperial Chemical Industries ordinary shares eight years ago than in Government stock.
Mr. Blackburn: Since I have been referred to, I should like to make it quite clear—and the hon. Member for Aberdeenshire, East (Sir R. Boothby) knows this—that it was not my view; I was quoting from an article from a newspaper.
Sir R. Boothby: With approval
Mr. Grimond: I find it difficult enough to make my own speech, without having a discussion going on all round me.

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I approach our present difficulties from the standpoint of the Chancellor, in that I want a freer economy—the kind of expanding economy of which the hon. Member for Walsall, South (Sir H. d'Avigdor-Goldsmid) spoke. I take it that the criticisms voiced from the Opposition Front Bench were made from the standpoint of Socialism, and that their remedy would be to return to controls, decrease international trade and go back again to a state of affairs which, depending as we do so much upon exports and our position as a great banking centre, we could not tolerate.
Even approaching the problem from the Chancellor's standpoint, however, the economic situation is at least alarming. There is no reason to suppose that we are going the way of France, but there is great danger in this continual inflation, which goes on under Government after Government, year in and year out. What is the Chancellor going to do about it? He will not cut housing; we shall have another 300,000 houses built this year. Since the war there has been a great demand for housing, but by this time I should have thought that it was coming near to being met. There is a strong case for continuing slum clearance, but if it is true that inflation is a danger there is a great deal to be said for re-examining the number of new houses to be built other than in replacement of slums.
Everything the Chancellor said yesterday led one to the conclusion that he would put up the interest rate, but he never came to that conclusion. Instead, he is to curtail hire purchase. We know that he is doing that because it is a fairly easy way of striking at consumption. The only trouble is, as has been said by the hon. Member for Stechford (Mr. Roy Jenkins), that there are no statistics to tell us how important hire purchase is, although it is probably fairly important. However we know that the most important aspect of hire purchase concerns the buying of cars, and upon that the new rules will make very little difference. I understood that the Government were against discrimination, and I can see no reason why a woman who wants to buy a vacuum cleaner should receive worse terms than a woman who want to buy a sofa. It is a type of discrimination from which I thought we were getting free. [An HON. MEMBER: "A vacuum cleaner is not a
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luxury."] I entirely agree with the hon. Member. It is not a luxury.
Coming back to my argument, I suggest that we might look at the situation in places like Germany, Holland and Luxembourg, all of which have achieved a more stable economy than ours and have not restricted hire purchase; although there is a Bill to deal with it coming into the German Parliament.
The Chancellor of the Exchequer stressed the strikes, but the difficulties in our economic situation were beginning before the strikes took place. We are not by any means the only nation in the world to have strikes. America has continual strikes and threats of strikes. Although we lost 1½ million working days last year through strikes, there have been at least four years since the war when we lost 2 million working days. The situation is worse this year, but the country is not ridden by strikes nor is the increase absolutely disastrous. On the other hand, it must be remembered that the effect of the strikes will continue. When people ask, "Why have the figures of trade not now improved now that the strikes are over?" the answer is that the strikes may have lost us some markets for all time. That is the most serious aspect of these strikes. Their evil effects may be felt in export markets for many years.
Like the hon. Member for Stalybridge and Hyde I am a little interested in what the cuts in investment will amount to. I take the view that the country is not over-investment in industry or agriculture, although it may be desirable to review how that money is distributed. On the other hand, the Chancellor attached great importance yesterday to certain cuts in investments, yet today the only cuts mentioned were in pursuance of a voluntary agreement with the gas industry and, I think, a voluntary agreement with the Central Electricity Authority. I am not certain whether that is the whole of his proposals. If not, it will be interesting to hear, in the winding-up speech, what else is proposed. I am interested to note that the roads programme is not to be cut. I do not think that anyone regards it as adequate as it stands. It is not to be cut, but it is serious that no expansion can be looked for.
We should review the method of financing nationalised industries. A great deal

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of capital must be provided for them but the method of providing it is unsatisfactory. No reasons have been given to the House why so much is to be spent on electricity, or gas and or railways. If it comes to running down these industries, as we are having to do with the railways, the fact that they have gigantic fixed charges on their shoulders makes the process very difficult.
If the Chancellor is to rely on the interest rates he will find that the method acts very slowly because so much expenditure is now made by public authorities. If he is to rely on that as his chief weapon he must make up his mind that the time has come when he should review the whole question of public finance. It is difficult to cut public expenditure, but a way must be found to do it. It is extremely difficult to control the whole field of local authority expenditure and central Government expenditure when there is continual pressure, not least from Members of the House, that more expenditure should be found for deserving purposes. But if we are to reach the sort of economy that I, and I am sure the Chancellor, hope for, an expanding and free economy, we must make it possible for interest rates to play their part in it. I do not believe it is easy to exercise control over them when public expenditure stands at. such a high level.
It is a valid criticism of the Chancellor that he acts too slowly, when much of the economy is insulated from what he does by previous commitments and public commitments. When the tempo and the atmosphere are, as the Chancellor recognizes, inflationary, when he has to step in, he should do so much earlier than he has done. I am sure that it is not a good thing to allow campaigns to run on in the Press, with all the uncertainties that they cause in trade and industry. They give the impression that the Chancellor has been forced reluctantly to come here and make a statement.
If the right hon. Gentleman has to deal with problems of this character he must take very sharp action, and must not be afraid to keep interest rates high. That is ultimately in the interests of everyone. In particular, it is the poorer people and people on pensions and fixed incomes who suffer most from inflation in the long run. The Chancellor should not be afraid to
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take monetary action early when the economy seems to be getting out of hand.
6.28 p.m.
Mr. Godfrey Nicholson: I wonder what sort of impact this debate will make on the country tomorrow? I believe that all the high-falutin' economic stuff we are talking today will pass right over the heads of the average elector. I am not sure that a good deal has not passed over the heads of some hon. Members. A lot of it has passed over my head.
The ordinary elector and his wife do not understand words like inflation, terms of trade, balance of payments, Bank Rate, credit policy, and so on. They are simply and solely interested in the cost of living and in prices. They are absolutely right, because everything turns on those matters. The hon. Member for Orkney and Shetland (Mr. Grimond) spoke about the plight of pensioners living in an economy where the cost of living is continually rising. Then there is the wage-price spiral which, if ignored, will price us out of world markets. I wonder whether my average constituent, when reading the account of this debate, will think we are paying the slightest attention to that spiral.
Periodically under the present Government and under the previous Government the Retail Prices Index has risen, but we appear to outside eyes to shrug our shoulders, and use the fact only as a stick to beat the other side in our political fights. Nevertheless, we are all agreed in our heart of hearts that the battle for economic stability is the only battle that matters today. It is the only thing that should concern us, yet we seem to treat it as though it were indecent or improper to mention it.
Are we not in danger of losing touch with the troops who have to fight the battle, namely, the people of this country? On the all-important economic front we have lost touch with the people. If the issues are explained to the people they will follow and support the Government, no matter to what political party they belong—I do not mean "follow" in the electoral sense but give them their support—in any heroic steps they have to take. I do not believe that this is the last of the heroic steps. We have got to explain to the people why the battle is all-important, what the issues are, and

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what it all depends upon, and why upon victory depends our survival as a nation.
I do not pretend to be altogether clear myself, nor do I know whether I speak for any other hon. Members, but how much relative importance should be paid to the main enemies? Is Government expenditure and taxation the main enemy? Is overfull employment the main enemy, or is it merely a symptom? Is too lax a credit policy the main, or only a minor, enemy? How many hon. Members can explain to their constituents why the money income of the country is going up more rapidly than is its real wealth? However deeply we may feel about these things, I believe that we are completely missing the target if we do not carry the people with us. The ordinary man and his wife are concerned with the prices that affect their weekly budget and standard of living. They do not understand what we have been talking about today.
I want to say to my right hon. Friend that unless and until politicians—hon. Members of this House—can explain to our people in simple terms what this is all about, and what the Government are trying to do—explain it, not in terms which the "Economist" or the "Financial Times" can understand and comment upon, but in terms which my constituents can understand and comment on—we shall drift further and further from those whom we represent, and we shall lose the battle.
My constituents sent me here—and this is probably true of every hon. Member—mainly so that I could help to conduct the battle against the rising cost of living. As far as they can see, we are just ignoring that and, as one hon. Member has said, taking it as an act of a rather malevolent god. We have to close the gap between ourselves and the people. Things must be analysed simply so that the people can understand the factors and on what the result of the battle depends. Until that is done I very much fear that we are beating the air.
6.33 p.m.
Mrs. Barbara Castle: I am very glad to note the post-Election repentance of the hon. Member for Farnham (Mr. Nicholson). I would point out, however, that ever since the Election. when we have asked any questions about
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the cost of living and the growing menace to our whole economic situation of prices getting completely out of control, we have had one persistent reply from the Chancellor. It has been vary simple. He has said in so many words "The country seems to find our policy eminently satisfactory, as demonstrated by the Election."
In his opening remarks this afternoon the Chancellor was generous enough to congratulate my right hon. Friend the Member for Leeds, South (Mr. Gaitskell) on his "rising ability" as a politician. I must say that that was a tribute from a master, which my right hon. Friend ought to appreciate, because the Chancellor has been graduating so boldly lately from the pure realms of economic orthodoxy to the muddy waters of political expediency that he is now getting to the point of openly vindicating his economic policy in this House by purely electoral arguments of the kind which I have mentioned. In our last discussion on economic questions —our last attack on the rising cost of living—he again said, "I think that everyone is very well satisfied, as the country illustrated during the Election."
Therefore, we have to begin by asking on what policy the Government fought the Election and what the country was, therefore, expecting them to do, because that would explain to a very large extent how the country is now behaving. I have in my hand an article called
"The Voters' Choice, in the Popular Record."
It was distributed by the Conservative Party regardless of expense throughout the length and breadth of the land during the Election campaign. There is a beautiful photograph of the Prime Minister on the front. It says:
"The Voters' Choice. With the Conservatives peace and plenty. With the Socialists controls and crisis."
It goes on:
"Peace—and prosperity. What more does any one want? They are not easy to achieve. Yet the Conservative Government has secured both. You can expect a new Conservative Government to do as well."
It then goes on to list the achievements to the credit of the previous Administration, and which it said are to be continued. They read:
"Record employment. Record high wages. Record spending and saving."

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The House should note that—"Record spending." Then:
"Record housing. Record factory and school building. New road and rail plans, a new hospitals plan and massive investments in an Atoms for Peace programme which will benefit us all."
We are told that if only we vote Conservative all this will continue.
My first comment is that the two headings ought now to be reversed—"With the Conservatives, controls and crisis," for the significant thing which, I think, has emerged from the Chancellor's statement today, the most outstanding fact, is that the purely monetary policy upon which he has relied has broken down and that he himself—a Chancellor elected on a programme to discredit controls and to continue Conservative fredom—has resorted to direct and physical controls in order to adjust a situation which his policy has brought about. The direct controls which he is operating, however, are only on the public sector and on working-class amenities. It is quite nonsense to say that we now have a policy of purely monetary controls. What the Chancellor is saying is: "Direct controls are not necessary for the private sector but, in addition to the operation of the Bank Rate, the credit restriction policy and the higher interest rates which will hold everyone in check, I shall apply direct restrictions and controls over the public sector, which is most vital to the needs of the mass of ordinary people."
I shall give him a very simple example from Hornsey, the borough in which I live. It is a middle-class borough. It is not one of the most desperate so far as conditions of life are concerned, but it has an acute housing shortage arising from a lack of sites and still has 1,800 people on its housing list. In the last few months, in Southwood Lane—quite near to where I live—there has been erected a block of fourteen private houses, each having four bedrooms, two bathrooms and a garage. They are selling for £7,995—practically £8,000.
Mr. Ellis Smith: Two bathrooms?
Mrs. Castle: Yes—two bathrooms. four bedrooms and a garage.
There they are, on a site which the Labour members of the local council
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fought for as being appropriate for municipal development, and on which thirty or forty council flats could have been built. That bit of private luxury development is part of that liberation policy of which the Chancellor has boasted as bringing such prosperity and better standards to the people.
What is the Chancellor doing to check that kind of private development whereby fourteen families who can afford £8,000, which they made in the spree of inflation which the Chancellor has encouraged, can obtain these luxury houses? There is to be no direct control over it, yet 1,800 people who desperately need council flats are told by the Chancellor, "It is not enough to have a credit restriction policy to check local authority housing and I shall step in and refuse loan sanction for council housing schemes."
In other words, this is the restoration of building licensing, but on the public sector only. Building licensing on the private sector has been abolished and is not to be restored. This means, in effect, that when the Conservative Party says that it believes in freedom from controls, it believes in freedom only for the luxury section of the economy. I am sorry that the Chancellor has left the Chamber in the middle of my speech. I wanted to ask him a specific question about housing with which he did not deal in his speech. I hope it will be dealt with in the Government's reply.
What about housing improvement schemes in areas such as Hornsey, where it is extremely difficult to get sites for development—particularly where they have a Tory council which always gives the best sites to private development of the luxury kind? It is vital that the councils should get ahead with the improvement of existing property. Hornsey council has a programme for improving 370 pre-war council houses. It is a pretty good indication of what some pre-war council houses were like under a Tory Administration that these improvements consist of installing a bathroom and a proper kitchen. Some of these pre-war council houses were actually built without a bathroom.
This is a question of giving 370 modest families one bath—not of installing two bathrooms in each of 14 £8,000 houses. The total programme of the 370 houses is to cost £140,000 spread over a number

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of years at a rate of about £30,000 a year. So far the consent to such schemes has been automatic. Is it to continue to be automatic? A good deal of improvement work of this kind is being done throughout the country. Much of it consists of installing bathrooms and kitchens, the basic amenities for a civilised standard of life. I want the Government to tell us whether this scheme is to be slashed under the controls which they propose.
The hon. Member for Farnham—and I am sorry that he is about to leave the chamber; my speech seems to be causing hon. Members to leave—was right when he said that people were worried about the cost of living and that we had lost touch. How right he is about people's feelings on this question. When we have asked the Government for their cost-of-living policy they have had a very simple answer; they have turned round and jeered at us and said, "Why should we worry? The electorate did not."
I will be honest with the House: it is true that the cost-of-living issue did not bite very deeply during the Genera] Election. It was not a great vote-catcher at that time. The simple reason is that the Government boasted in their Election material that wages had been allowed to follow prices in an upward spiral. Here is another extract from their propaganda:
"Record high earnings, record spending."
That was the boast of the Government in May, yet in February they had already foreseen the inflationary crisis and its effects on the country.
When the Chancellor said that the country was quite satisfied he was rebuked by the "Observer" for being "amazingly smug and complacent." On 19th June the "Observer," after the last economic discussion in the House, asked,
"How long must the pretence that all is well be kept up? There is the major problem of creeping inflation which is getting, if anything, worse rather than better."
It is all very well for the Government to say, "The country did not mind in the Election, why should we?" Of course the worker does not mind prices rising if his wages rise automatically. One of the boasts made by my Conservative opponent in the Election was that wages had risen even more than prices, and that workers should therefore vote for the Tory Party, because, even though prices
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went up, wages would go up at least as much.
In other words, that was an open invitation to the people of this country not to worry their heads about a cost-of-living policy because there would be as much a free-for-all in wages as there was in prices. That is an open invitation to inflation. It won votes. It was a promise that nothing would be done about inflation because, while prices would continue to rise, nobody need worry, for wages would rise, too. That was the most irresponsible piece of electioneering which any party has ever produced.
Of course it cannot last. We knew it could not last and said so at the Election —and were called Jeremiahs for saying that it could not last. Now the Treasury Bulletin for Industry, in its latest edition, has told us what we all knew weeks ago—that although world trade in manufactures is expanding, the British share of that expanding world trade is not keeping pace with the share of the United States, Germany and Japan. Why is that? The Treasury Bulletin gives the answer quite simply:
"In recent years, it appears that in manufacturing labour costs have risen faster here than in the United States and in Germany."
Of course, the spiral has to be broken somewhere; it cannot go on. Yet the Government refuse to state their cost-of-living policy either in the constituencies or in the House, because they dare not state their policy. Their policy is to break that spiral at the expense of wages under the threat of unemployment which will come when our export markets are jeopardised. That is the policy. It has always been quite clear.
The Chancellor has said that costs must come down, and the Treasury Bulletin has said that the level of our costs is crucial. The Chancellor has talked about "hard work and consolidation." Consolidation of what? Wages? Are we to consolidate wages without having a prices policy? Having delighted in the fact that so many workers were such good Conservatives that they voted for a free market economy and an unrestricted upward spiral in wages in pursuit of that free market policy, how can the Government now turn round to them and talk of consolidating wages? How can we turn to the workers and say, "You must exercise

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restraint," when all they are doing is to practise good Conservative economics—and, after all, that is how the Government won the last Election.
It is therefore not surprising that we face this inflationary situation; it has been deliberately encouraged by the Government, and it is the policy on which they won the Election. Perhaps the workers read the "Economist" and perhaps they read this week's issue and the very illuminating article "Profits without Prophecy" which pointed out that
"the rise in trading profits reported in the second quarter of this year … is the steepest proportionate rise that the figures had shown for over two years."
The article goes on to say that the investor
"can reasonably take courage from the fact that there were fewer obvious signs of timidity in recent dividend decisions."
When restraint is exercised in dividends it is timidity, but when restraint is exercised in wages it is responsibility. The article concludes, that from the investor's point of view
"It has been sunshine all the way and there are lots of investors, cocking their weather eye, who expect it to continue."
On the other hand, it is nonsense to suggest that the workers have been doing fabulously well, for in the middle of the Election the "News Chronicle," in its City columns, printed some interesting figures. Oscar Hobson produced some very useful material which some of us were able to use in the Election. He pointed out that,
"Whatever the politicians may say, the cost of living has in these two years been rising more steeply here than in most other countries … In several of the countries, notably in Germany, France and the United States, real wages have been rising faster than here, but the stability of the cost of living in those countries suggests that productivity has been increasing more rapidly. There is a rather ominous 'spiral' look about the step for step advance in our cost of living and wages rates."
Who started this wages-prices spiral? It is the old argument of which came first, the chicken or the egg. I was in the House in March, 1952, when the present Chancellor of the Exchequer laid the egg of higher prices which hatched into the chicken of higher wage demands. He cut the food subsidies by £160 million and offset that by a mere £80 million in concessions.
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What we know as an historical fact is that from their coming into office in 1951 the Government have been unfolding an economic policy of deliberately stimulating price increases. They were able to buy off the political consequences of that until recently by allowing wages to follow prices. But they knew that there was a ceiling beyond which they could not go and they planned to call in aid the external effects and the economic crises which must follow and to say to the worker, "Do not blame us; it is not our fault. Export markets are difficult. We have competitors in Germany, Japan and the United States. The wage increase you ask for cannot be given because costs have gone up. The choice is either a wage increase or unemployment." When we get to that point, an attempt will be made to break this spiral at the expense of the wage standards of the workers of this country.
Mr. Nicholson: May I drive a little sense into the hon. Lady's head? This is not a question of party politics; it affects us all. Does she not remember that under her own Government in 1945–51 prices went up? Does she boast of the fact that wage rates did not increase pari passu with prices? The world did not begin with the Butler egg in 1952.
Mrs. Castle: It is, I think, now all an established part of the exchanges between both sides of the House that in 1951 our domestic prices went up in obedience to an upsurge in world prices. Up till then we had been more successful in keeping prices steady than any other major industrial country. Then we got the backwash of the Korean war. When the Conservative Government came in, instead of world prices rising because of the stockpiling that was going on through fear of a world war, stockpiling was falling off, and that led to a slump in prices. What happened was that world prices were going down and ours were going up. They were going up because it was a deliberate act of Government policy to stimulate them. They always believed that prices were too low and not too high. I suggest that it is time that we had a cost-of-living policy. I agree with the hon. Member for Farnham that this cannot go on.
At whose expense is this spiral to be broken? I suggest that it is quite in-

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tolerable to break it at the expense of wage rates.
Mr. Osborne: Who is doing that?
Mrs. Castle: The Government are saying that costs must come down.
Mr. Osborne: Who said that?
Mrs. Castle: The Chancellor said it this afternoon.
Mr. Osborne: Not wages.
Mrs. Castle: I want to know then how he proposes to bring down costs, and I say that the only way, unless we have a price policy, is by breaking the wage levels through unemployment. I suggest to the Chancellor and to the Government quite seriously that we are getting to the stage in the House when every time there is a wage demand in any important basic industry in our country or a price increase by a nationalised industry it is subjected to the most careful scrutiny by this House, just as the recent price increase of coal was subjected to scrutiny only last week in this House.
When coal or any one of our nationalised industries is concerned, we are in a position to examine price increases with scrupulous care, to see whether they are justified, whether economies can be made, and whether a shilling can be knocked off the proposed price increase. For the whole of the private sector, however, the Government have a different policy, and the private sector is free to do what it likes. One of the consequences is that we have remained in this general inflationary atmosphere, that when price increases are made there need be no public accountability to anyone.
I was glad to find myself the other day in company with the "Daily Express" on this issue. Immediately following the announced increase in the price of coal, we had the iron and steel companies of this country announcing a 5 per cent. increase in the price of steel. Everyone shrugged his shoulders and said, "The price of coal has gone up, so the price of steel must go up; everything must go up." How do we know that that increase was justified?
Mr. Robson Brown: As the hon. Lady knows perfectly well, there is an Iron and Steel Board appointed by the
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House, with full responsibility and accountability to us and the nation for the price of steel. No single steel company or section of the steel industry can increase its prices without submitting its costs to the Board, which decides the selling price. So she should withdraw that remark.
Mrs. Castle: I am aware that the Iron and Steel Board is responsible for fixing the maximum prices of steel, but there has been no public scrutiny on the Floor of this House to justify the decision of the Iron and Steel Board. We have not had any examination here of the price of steel, yet steel enters into every single item of production which we have been talking about today, including the capital goods which we need to export.
I agree with the "Daily Express," which said only the other day:
"The steel companies are the latest to contribute to this continuing process of inflation. They are putting up their prices by £2 a ton.… the steel firms put the blame on coal. They say that they must pass on the extra costs of their supplies. Why should they do anything of the sort? Anyone would think that the steel firms were barely making ends meet. In fact their earnings, since they were returned to private hands, have been tremendous. So far this year 20 iron and steel companies have shown profits of nearly £83 million between them. How much more do they expect to make before they pay the extra coal bill themselves? Industry has a public duty to absorb price increases when it is prospering."
I say that it should be the duty of the House to have a price policy, instead of following this steady inflationary drive to the point at which there will be unemployment to enforce wage reductions. That is the inevitable consequence of the policy of the inflationary drive which the Government have intensified.
I suggest that it is time that we took this question of rising prices seriously and that every single price rise should be subjected to the same scrutiny and examination as was the recent increase in the price of coal. We ought to decide, as one of the measures to deal with this problem, that no company should be allowed from now on to increase its prices without the approval of the Board of Trade and proper examination and scrutiny.
The Government won the Election on a lie. They won it on a policy which means economic disaster for this country. The simple policy, "Do not bother about

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prices because wages will always follow suit" will mean economic disaster for every one of us, and the only way to break that spiral is to have a price policy.
7.0 p.m.
Mr. Hugh Fraser: It gives me considerable pleasure to follow the hon. Lady the Member for Blackburn (Mrs. Castle) because to accuse us of having won the Election on a lie is fantastic when we compare the records of this Government and the Labour Government. The Election was won on promise and performance—the promise we were able to fulfil and the performance which hon. Members opposite put up.
The hon. Lady put forward two suggestions in her speech. The first was that it is in the interests of this Government and of the so-called capitalist class to induce mass unemployment in this country. I should have thought that by now she would have read and learned enough to know that that is an out-dated myth.
Mrs. Castle: If I may correct the hon. Member, I said that that was the inevitable consequence of the Government's policy. How are we to break the spiral if we do not have a price policy? The only alternative is to enforce wage reductions and, with full employment, that cannot be done.
Mr. Fraser: The hon. Lady said that the question of a rise in the price of coal was fully reviewed by this House. That is precisely incorrect. One of the things which is coming out more and more clearly, and came out of the speech of the Chancellor this afternoon, is that this House is an extremely ungainly body with which to control the nationalised industries. It is clear that when we come to a critical period the House has to be, so to speak, the economic board—to use the German comparison—set above the executive board. If that is the function of this House in relation to nationalised industries, I can imagine no assembly more ill-fitted for the task of being a board of directors when the main object of about 300 of the members of the board is to get rid of the other 300.
One of the things we have to face, and the sooner it is faced the better, is control of the expenditure of the nationalised in-
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dustries. The suggestion of the hon. Lady that the same machine, which could not discuss the question of coal prices except in the most superficial and political fashion, should control the price structure of the country is one of the most fantastic suggestions ever put forward. In economic matters this House is often the fifth wheel of the coach. The sooner we recognise that, the better it will be.
The matter I should like to speak about this evening is the question of the amount of money to be devoted to the capital investment programme for what one might call the energy industries—coal, gas, hydro-electricity and atomic power, which are under nationalised control. Over the next five years the programme in the public sector for making energy will amount to no less than £2,000 million. Also, during those five years, we will use foreign exchange either for imported coal, imported oil or of coal not exported to the extent of at least £100 million a year. It is vital that, somehow, we should effect economies in this part of the capital programme.
I believe it absolutely essential that we should continue the development which my right hon. Friend has discussed this afternoon and that we should pursue the dynamic economy we are pursuing. That is proven by the fact that this year we have increased production by more than 5 per cent. over last year. At the same time, as my right hon. Friend pointed out, the very prosperity and advance of the economy makes an additional strain. That strain in energy supply will be eventually at atomic power. It could be met tomorrow if the coal mines could produce 240 million tons of coal, but as that does not seem possible we must consider this vast expenditure as one item of a group of nationalised industries and see whether economies can be made.
This afternoon the Chancellor pleased many hon. Members on this side of the House and I know that he pleased the hon. Member for Orkney and Shetland (Mr. Grimond) by saying that in future nationalised industries will have to go to the market to get their money in the normal way. I hope that when the Financial Secretary winds up the debate he will explain in slightly more detail what that will mean, because I think it vital that the same control as exists for the free part of the economy should

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be made to apply as far as possible to the nationalised sector.
That expenditure can affect our economy in two ways. First, it can drain away from the export market those vital goods which the Chancellor described as the metallurgical section into home industry. Secondly, unless we see that the best possible use is made of raw materials, it will increase dollar and other expenditure which we have to pay for imported fuel. This matter should be examined to see whether something can be done about it. I believe there could be saving in capital expenditure, some saving of pressure on exports, and some saving on foreign exchange by the better use of fuel.
One of the first things we should consider is the amount of money being spent today by hydro-electricity boards. I believe that at this stage, when we are pressed on our investment side, it is not intelligent to invest such large sums of money on the peak programme for producing electricity. We are investing on 11 per cent. load factor stations such as the new Welsh stations, which will cost about £20 million. I believe that there are cheaper ways of doing it. When we are under pressure from abroad for exports and under inflationary pressure at home, that programme should be looked at.
Also, in the fuel and power industries we should have a look at what could be done in the way of substitution or employment of unused capacity. Today, there is unused capacity in the oil refining industry of this country, and also in electrical generating.
No less than 4,500 kilowatts of electricity-producing machines are in private hands, that is to say, outside the Central Electricity Authority. We must remember that the Authority will be spending £1,000 million and more over the next five years and that this power, in private hands and in factories, when it is not fully used, should be put into the supply available from the Authority so as to reduce the need to build more peak stations.
More could be done by furthering investment in the gas industry as opposed to the electricity industry. Capital investment in gas produces the same output in thermal units for roughly a third of the amount in electricity investment. Through the catalytic oil process we have means of meeting demand on a larger scale than
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before. I believe there is investment possible in that direction, whilst we could cut down on other investments.
It is possible to look at the issue of the better use of coal and oil. I shall not repeat remarks about coal conservation made by my hon. Friend the Member for Kidderminster (Mr. Nabarro), but I must confess that I am far more in agreement with those remarks than with the remarks of other people. I think there could be heavy coal saving with a comparatively smaller capital investment than we are now called upon to make in creating new capacity.
Her Majesty's Government, by increasing the price of coal and letting coal find a proper market price, have done far more towards coal conservation than any activity of voluntary bodies such as N.I.F.E. As the Chancellor said this afternoon, the question of oil should be considered. Our oil policy should be such as to make the maximum use of oil resources available at the lowest cost to us.
As every hon. Member knows, there is plenty of coal in the ground and there is plenty of crude oil. The problem is that there are shortages of certain refined types of oil—mainly diesel oil and fuel oil—which, unfortunately, owing to the structure of the world's oil trade, tend to be dollar imports. Hon. Members will know that this year alone we have imported diesel oil from the United States to the extent of about 50 million gallons. This tendency will, of course, grow.
If one forecasts the present rate of growth of our oil imports and looks ahead to the year 1960, there will by then have been a considerable increase in this sector. At that moment, it appears likely that the diesel oil which we shall then have to import will be in the neighbourhood of 9 million tons as opposed to 5 million tons today, and of fuel oil 20 million tons as opposed to 4 million tons today. How can steps be taken to see that this country, by a heavier refinery throughput programme and by a better use of oil, reduces the cost of these fuels? I believe that it can be done and that this could make a considerable saving in both our dollar and our sterling imports during this period.
The truth of the matter is that all over the world the thing which is in surplus

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from the oil refineries is motor spirit. There has been a revolution in oil refining. The world's demand for oil is not in the form of motor spirit, as it was before the war. It is now in the form of fuel oil and diesel oil. What we must do is somehow reduce our costs of this imported oil by absorbing a sufficiency of motor spirit, or what are called the top elements from the crude oil when cracked, to make certain that the total throughput of crude oil through our refineries is increased, thus reducing costs.
There are various ways of doing that. One method, of course, is to reduce taxation on petrol. This would mean an increase in the throughput of crude oil, but that is probably fiscally impractical. There are other methods which can be undertaken, such as by seeing that the diesel engine, which is wasteful of raw materials, more expensive to build and wasteful of man hours, is slowly replaced by more light scale petrol engines.
The third method, which, I believe, is the most practical one, is for the trade unions, the Government and the oil companies to agree that the safety factor in the type of oil that is used in energy producing plants should be lowered to enable the top elements from crude oil—that is, the motor spirit equivalents—to be mixed in with the lower basic fuel oils to form a new fuel, which is perfectly possible, with which to fire boilers for steam raising and other purposes. This method has been used. I believe that some petroleum companies are actually heating their boilers by using motor spirit, which must seem amusing to us when we think of paying 4s. 6d. a gallon to our garages for it. We must think out these things, because during the next few years these imports will swell and will be a dollar drain of unbearable magnitude.
Further, we must see that the best use is made of oil, in precisely the same way as we must see that the best use is made of coal. Oil has many facets and uses. In some engines, like the diesel electric engine, it is nine times more efficient than coal. Used for steam raising, it is only one and a half times as efficient. Used for gas, it is nearly twice as efficient, and for certain steel processes it is four times as efficient. Surely, we must see that in those sectors where the Government are responsible and where the oil
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companies and industry can be encouraged, oil is used for the best purposes.
Another direction in which, I believe, economy can be effected is by the Government deciding whether sufficient coal will ever be available. At the moment, dual-firing systems are being installed beneath C.E.B. boilers. This installation puts up the cost per kilowatt installed by about £10. Surely, we have come now to the point at which we can decide whether coal will ever be available in sufficient quantity. And I regret to say that, as things are, it is too late to hope for very much in that direction. But the moment for decision has arrived.
I would say to the Government that with the progress we have made, with the expansion we are making, with the pressure on resources and especially on investment, the fuel and energy producing industries should be looked at to see whether economies cannot be made to save our capital investment and to improve our exports. At the same time, we should investigate even more closely whether at home we cannot make better use of coal and of oil itself. If these things were done, I believe that over the next five years we could make a considerable reduction in the capital investment programme and improve exports. I believe also that we could save abroad the pounds and dollars that we can ill afford to lose or pay.
7.16 p.m.
Mr. Austen Albu: The hon. Member for Stafford and Stone (Mr. H. Fraser) has made one of the first practical contributions to the debate that we have had for some time. By "practical" I mean detailed proposals of the kind of thing that the Government might do. But the hon. Member is in the wrong party, for the proposals that he made are proposals for planning and for discrimination in investment and in imports, which are methods that the Government refuse to adopt. The Chancellor of the Exchequer persists in his doctrinaire policy of using only fiscal methods to deal with what is agreed on both sides of the House to be a seriously inflationary situation.
I was very interested in some of the things that the hon. Member was saying, particularly about the use of oil. Although some of the more technical

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details that he was discussing are not particularly original, they certainly need full consideration. There is one thing that I have wondered about oil refining. The hon. Member was quite right in saying that there has been a change in many countries in the use of oil and petroleum, so that much more fuel oil and diesel oil but much less motor spirit is now used.
That is not, however, the case in the United States. I have never quite understood why it is not possible for us to exchange our surplus motor spirit, which is inevitably produced in the course of refining, for the United States' surplus of the lower fractions. However, that is a matter that the Government might look into with the oil companies. The whole situation of oil drilling and refining is so complicated that, unless one is mixed up in it, it is difficult to understand.
The method of not using discrimination regarding investment has led to the necessity for the Chancellor of the Exchequer to use almost a blanket control to try to deflate the economy. We have warned him of this right from the beginning of the year. When all his gaudy announcements were made and bribes were given to the electors—the proposals for more hospitals, roads, railways and nuclear energy, more investment in the mines and in electricity, and so on—some of us asked the Chancellor whether any estimate had been made of the yearly cost of this investment, together with that of other forms of investment, particularly in private industry, so that he could see whether it was possible for the economy to carry them or whether they were merely window dressing.
The Chancellor said at the time that it was impossible to give the figures, but I am very glad that the Treasury is now requesting private industry to provide figures of its proposed investment and the level of its stocks over the next year or so. This will make planning a very great deal easier for the Chancellor, but it is a little late now, after making all these gaudy promises to the electors about what was to take place.
There has been some discussion about the cuts in investment. It is rather like the Government's attitude to defence. There are to be no cuts, but the total programme is apparently to be stretched out.
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This, of course, is a reduction in investment, just as there was a reduction in the defence programme at the time. No playing around with words will alter the fact that it is a reduction in the programme. The total figures remain, but the amount to be spent each year falls and the rate of investment falls. I should have thought it was fairly obvious that there is to be a reduction in investment.
There was some discussion between the two sides of the House on whether the investment cuts should be made in the private or public industries, but I think that is quite beside the point. The point is where we should now encourage investment to take place or should discourage it, whether in public or private industry, because we want investment where it will do most good, particularly from the point of view of exports and the balance of payments in general. A panic action to damp down on all investment now could have nothing but disastrous results on the economy as a whole.
I want to look at two places where, I think, the Government might find methods either of saving foreign currency or helping the balance of payments by increasing exports. Let us look, first, at the motor industry. At the beginning of the year, the motor industry announced very substantial plans of expansion, and if we take these together with the component and raw materials industries which go with the motor industry, it would mean a very heavy investment indeed. I do not know what it is per annum, but I think it is probably in the region of £100 million per year at present. The home demand for cars has been rising and home sales have been rising faster than export sales.
The Chancellor is increasing the initial deposit on hire purchase, but I do not know what proportion of the total cars sold are sold on hire purchase, though I think that the proportion has been rising. We are aware that a large part of our home market car sales are for business purposes, and it seems ludicrous that a business man should continue to receive the 40 per cent. depreciation allowance if he buys a car every year. I suggest that it is time that we dropped the initial allowances for motor cars, and also put a limit on the capital value on which depreciation on ears for business purposes is allowed.

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The Government might also call the leaders of the motor industry together and discuss their plans with them, because the industry is not only absorbing capital equipment on a very large scale, including machine tools—the machine tool industry is able to supply what the motor industry wants, but has a very poor export record —but the motor industry is also largely responsible for the increase in steel imports, which is very serious indeed. In the first five months of this year, the monthly average of steel imports was 146,000 tons, compared with 82,000 tons in 1954, when the figure had been rising; and it is still rising. Of these total imports, sheet steel represented 34,000 tons monthly, compared with only 13,000 tons monthly in 1954, and, in addition. there is an extra 10,000 tons of tinplate monthly.
I reckon that the cost of importing steel is now getting on for £100 million a year. Of course, we all realise that there is a limit to the reduction that we can make in imports of raw materials for industry, although I believe that we might well consider whether the rate of expansion is not greater than the economy can bear.
There is still great scope for reduction of imports in agriculture, particularly in feeding stuffs. In the last year or two, we have been importing more and more feeding stuffs from abroad, and less and less have been grown at home. When the importers and compounders in this country were given freedom, it was hoped that they would be able to buy cheaply in world markets, but that has not turned out to be the case.
Anyone who has read the interesting article by Mr. Lloyd, in "The Times," will have realised that the farmers are fattening their cattle on a cost-plus basis. They are guaranteed average prices for their cattle which are based on costs, but the costs are the costs of feeding stuffs which they are free to buy from abroad to any extent they like. It does not pay them, or pays them very little, to go in for growing their own feeding stuffs, and this is very largely owing to the Government's policy, which policy has also had the effect that less and less grass has been grown for drying last year, because, in 1952, the Government wrecked the grass drying industry.
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The value of the imports of wheat and coarse grains has risen from a monthly average in 1954 of £10 million, for the first five months, to £17½ million in 1955, and imports of oilseed and cake have risen from £1,569,000 monthly to £3,148,000. Here is another increase of nearly £100 million a year in imports which is very adversely affecting the balance of payments. These feeding stuffs imports account for nearly one-third of the rise in imports of food, beverages and tobacco, which have gone up by nearly £30 million per month in the first quarter of this year.
The Chancellor might also look at the very rapid growth in large-scale office building which may not be quite so necessary now as it appeared to be to the present Minister of Education when, as Minister of Works. he announced his policy two years ago. Unless the Chancellor wants to slow down the whole tempo of the advance which we have been making in industrial expansion and production, and particularly in industrial change which is so important, he will have to use discrimination in the controls which he is now using and, in particular, decide which investment we want to encourage and which should be discouraged.
I suppose that, in addition to all the other things which some of my hon. and right hon. Friends have mentioned, the present controls and restrictions will mean a cut in the programme of scientific and technical education which we heard about only last week. This is a very important form of investment for Britain at present. If we have to have reductions in investment of this type, then the sort of situation in which we now find ourselves is likely to continue for the rest of our lives.
7.27 p.m.
Sir John Barlow: I do not intend to follow the hon. Member for Edmonton (Mr. Albu) in close detail, but in view of his remarks about the cost of imports of feeding stuffs for agriculture, and especially for feeding cattle, I will say that if he tries to feed steers or heifers with imported feed at present prices, I do not think he will make much out of it; on the other hand, he will probably suffer substantial losses.
In regard to his remarks about the motor car trade and the initial allow-

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ances, I would suggest that it might help matters and might release more high-class cars for sale abroad if cars run on a firm's account had the name of the firm printed on them in large letters, in the same way as lorries have. Then we should know exactly which cars were being run on firms' accounts and which were not, and it might be a very good thing indeed.
I should like to congratulate the Chancellor on the way in which he has tackled and faced this problem about which he has talked to us today. There was a similar problem, though it was not quite so acute, when he spoke to us on 24th February, and he dealt with it on lines similar to those on which he has spoken today. He restricted advances and hire purchase, and he increased the Bank Rate. He made it clear at that time that some action was necessary. He also made it clear that if that action which he took then was insufficient to meet changing needs he would have no hesitation in making further changes later. As soon as it became clear that more changes were necessary he came to the House and did what I and most of us consider is necessary.
In reading in the OFFICIAL REPORT his remarks in February, when he made his statement, I am interested to see that apparently there is a misprint in HANSARD, in Vol. 537, c. 1453, where it is stated that the Bank Rate was to be increased "by" 4½ per cent. I cannot think that that was right at that time, and it is rather surprising that that small error has crept in.
I think, however, that possibly the changes which the Chancellor has just announced may not be quite sufficient. We all know that credit and confidence in finance and international finance are very delicate indeed. If we overdo what is necessary we may destroy valuable confidence, which it is most difficult to restore. We know that in response to his suggestion in February the banks imposed a credit squeeze.
It was interesting to see that the Chairman of the Clearing Banks Association, about a month ago, wrote to "The Times" and appealed to would-be borrowers to reduce their requirements. He indicated that if they did not do so the banks would have to do it for them. I would ask the Chancellor whether he
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knew of that letter before it was written, and if the recognised method of conveying such information from the clearing banks to the public is the centre page of "The Times" and of "The Times" alone. One would have thought it might have been better to have conveyed that information through a much wider Press, or, indeed, in a totally different way. As far as I can remember, that was the first time there has been a letter of that kind, and I wonder whether it was sent with the Chancellor's knowledge.
It seems to me that in a matter of this kind it is advisable to be constructive so far as possible. For that reason I should like to make a very few suggestions, and I hope that some of them may be of use. Yesterday the Chancellor laid great emphasis on the fact that the banks should reduce their advances to the public. Having read the letter which was published in HANSARD today, it would seem to me that he wrote in
general terms to the banks. I cannot think he wishes to reduce all credits and all advances.
For example, if he reduces agricultural advances substantially it will mean that agricultural production will diminish. If a farmer wishes to buy a farm and to get a substantial advance for that, it may be a good thing to refuse it. If he wishes to increase or to maintain his present advance for production, then it would be inadvisable to reduce it. In the same way, manufacturers and other people who are exporting goods should be allowed to maintain or increase their advances, otherwise exports are bound to diminish, and that would be very serious for this country.
I suggest to the Chancellor that he should elaborate the letter which he wrote yesterday so that there may be no misunderstandings among the banks. We know only too well how misunderstandings can arise and have arisen among the very small circle of people concerned in financial matters. This is so important that I feel that the Chancellor should leave no ambiguity about his intentions.
My right hon. Friend has asked industry generally to postpone and curtail capital expenditure. I feel that industry generally will readily agree to do that, knowing the necessity at the present time, but in doing that the Government have, I feel, a very great responsibility to see

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that their side makes an equal contribution. It is useless to stop works which have already been started. That, indeed, would be a very serious waste. but all new projects should be most carefully vetted, especially local government expenditure, over which the Bank Rate has very little control indeed. The Bank Rate has much less influence on local government expenditure than on normal industry. I think the Government should curtail both their revenue and their capital expenditure. I feel sure that some reduction is possible in both ways.
The Chancellor has laid great emphasis on the reduction of credits and advances by the banks. There are many other sources of advances at the present time as well as the banks—the finance houses, large insurance companies, and others. Does the Chancellor propose to write in a general way a similar letter to them and ask them to adopt the same policy? Indeed, it would be in the national interest for him to do so, and I hope that those different institutions will adopt a similar policy to that which the Chancellor has asked the banks to pursue.
I think we all agree that in making these reductions in advances we must be most careful to see that they do not reduce the production of industry in any way. It is of the utmost importance that industry shall increase its production and increase its efficiency in production, and I hope that the Chancellor, both directly and indirectly, will do his best to see that there is in the national interest a complete removal of restrictive practices in industry and labour which are in any way prejudicial to the public interest. I would add there are some restrictive practices which exist to protect the national interest, and one has to be very careful in differentiating between those which help the national economy and those which are destructive of the national economy.
Yesterday, when the Chancellor made his statement, and finished without any serious reference to the Bank Rate, I was rather disappointed. It would seem that the Bank Rate is not as effective as it used to be in the old days. I think that that may be due to the heavy taxation which exists, so that many people say, "What does it matter if we pay another 1 per cent. for our overdraft if the Government absorb about half the loss in
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taxation?" That is very unfortunate, and if the weapon of the Bank Rate has been blunted I would suggest that it should be used even more ruthlessly to be effective. For that reason I should like to see the Bank Rate raised by 1 per cent. on Thursday.
I am delighted to see that the Chancellor has not tried to plan imports. That would have been a very retrograde step indeed. At the same time, we wish to see imports kept at a reasonable minimum. Coming from Lancashire and representing a cotton area, as I do, I should like to see a reduction in the imports of grey cotton cloth for retention in this country, cloth which could perfectly well be made in this country, knowing as I do that many of these imports are subsidised by the country of origin.
In conclusion, I urge the Chancellor to be even tougher than he has been. He has made one effort to remedy this difficulty. It was insufficient, and it will be infinitely better to be tough now than to run the risk of an autumn Budget, which would be very unfortunate for the country's industry. I urge the Chancellor to continue to be bold and courageous and to stop this inflation forthwith.
7.41 p.m.
Miss Alice Bacon: Like the hon. Member for Middleton and Prestwich (Sir J. Barlow), I should like to see the Chancellor get tougher. The trouble is that the Chancellor is tough with the wrong people. That has been the basis of our case today. In the very few minutes that I shall detain the House I do not intend to enter into the economic arguments that have been made from both sides. Rather do I want, very shortly, to pinpoint two or three of the ways in which the Chancellor's announcement of yesterday will strike at our homes and our families blows which were certainly not expected, at least certainly not by the ordinary people who voted for Members opposite in the General Election.
I was interested to hear the hon. Member for Farnham (Mr. Nicholson) say that we ought to get closer to our constituents and to put their point of view in simple terms. I agree with him. He thought that the cost of living was the most urgent problem for many people. That is true, but I represent one of our great cities, and the problem which I believe is even greater than the cost of

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living is that of housing. The hon. Member for Orkney and Shetland (Mr. Grimond), who represents the Liberal Party, hoped that the Chancellor would restrict still further the number of houses being built. He said that we had got over most of our housing problems. It is only those of us who represent the big cities who realise how immense is the problem of housing. Like my right hon. Friend the Member for Leeds, South (Mr. Gaitskell) and other hon. Members, I represent the City of Leeds. Since the redistribution of Parliamentary boundaries, I have represented the centre of the city and the whole of the ring around the centre. There we have a very great problem.
As I said at Question Time today, we have 26,500 families on our waiting list and 22,500 houses in urgent need of demolition. I would be failing my constituents if I did not enlarge a little on what has been said today about housing. The Chancellor of the Exchequer was rather vague about the number of points today. He was altogether vague about local authority spending, particularly vague about house building and even more vague about school building. On house building he said that it was the intention of the Government to leave the ceiling at 300,000 houses. When we attempted to question him about the proportion that would be built by private builders for sale and the proportion to let, he got out of that by saying that it was something which could only be left to his right hon. Friend the Minister of Housing and Local Government.
Surely the Chancellor of the Exchequer is not saying that the policy which that right hon. Gentleman has been following for the last few months and which, I understand, will be even more strongly followed in the next few months is merely the policy of the Minister of Housing and Local Government. Surely it is the policy of Her Majesty's Government. Surely there is some liaison between the Ministry of Housing and Local Government and the Treasury. I believe that that policy of curtailing the number of houses to let in favour of houses for sale has something to do with the amount of subsidy paid for council houses to let.
It is elementary that if we are to pursue the policy of having a total ceiling for the number of houses to be built,
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with no ceiling whatsoever on private building, as time goes on there will be fewer and fewer houses built to let. It is that which is very much worrying us after the announcement made yesterday, because we cannot help but feel that the policy of asking local authorities to go easy on their works will lead to the building of fewer and fewer houses.
Viscount Hinchingbrooke: So long as the houses are built, does it very much matter? When they are built for sale, the chances are that the person who buys them comes from a rented house and automatically releases more houses to let.
Miss Bacon: The noble Lord is mistaken. If he will come with me when I hold my interviews on Saturday afternoons, he will realise how mistaken he is. I know perfectly well that the 22,500 houses in Leeds that need demolition do not contain many people who would want one of these luxury houses for sale, although I would grant the noble Lord that some people sometimes take desperate remedies.
I had a case of a man—a case with which I am now dealing—who was so desperate for a house that he paid £400 and did not realise that it was on the demolition list. So bad is the house that, although he still owes £400, he has written to me to see whether he can get the house condemned, so that he can get into a council house, knowing that he will get no compensation for the demolished house and will still have to repay £400. That is one of the problems which confronts us, and I appeal to the Chancellor not to take any action whatever which will mean a further cutting down of the allocation to local authorities of houses to let.
Further, there is, of course, the cut in the capital building programmes of local authorities, apart from housing. I want to ask the Government whether there will be any restriction on other building by private bodies. At the moment there is no restriction whatever on either private building, or other forms of building. Is there to be some further restriction on private building, other than housing, in the same way as local authorities will be asked to curtail their capital building programmes?
I want to refer to the school building programme. During his speech today I

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asked the Chancellor to say something specific about this, but all I got was that schemes which are already being approved will continue. We did not get an assurance about future schemes. What will happen over the next few years? A great many right hon. and hon. Gentlemen opposite paid a great deal of lip-service at the General Election to education. The Prime Minister mentioned education in his television performance. He devoted five minutes to it—a considerable amount of time—in the speech in the debate on the Address.
My hon. Friend the Member for Stoke-on-Trent, North (Mrs. Slater) and I were at Scarborough at Easter, a few weeks before the General Election, when the Minister of Education told 3,000 teachers how he was to provide more and more places in the coming year. Not only did he make a speech—and, when all is said and done, 3,000 teachers comprise a very important body before a General Election—but he also took the precaution of having a leaflet printed and a copy put on every seat in the hall, so that the teachers could take away with them details of the number of schools to be built over the next five years. I want to know what is to happen to that programme. Three weeks ago, on 7th July, I asked the Minister of Education a Question about overlarge classes—classes with over 40 pupils in them. I was told that in January, 1951, the number of classes with over 40 children in them was 35,103. By 1954, the number had risen to 43,751, an increase of 8,648.
Under these circumstances, are local authorities to be told to make cuts in their programmes next year? We had cuts imposed in the school programme by this Government in 1951. The first thing that the Government did was to issue Circular 245. During the six months before the General Election we had plans for more school buildings, but, since the General Election, we have come back to the bogey of cuts in the education service; and I hope that the Government spokesman tonight will be much more specific about our school building programme than was the right hon. Gentleman today.
It is true that we have had Circular 283, and the Chancellor said that it must continue. But that Circular was designed to
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clear away some of the older schools in the rural areas. In addition to trying to revise the conditions of classes, we need more schools to replace old schools in the towns as well as in the rural areas. Those interested in education had hoped, also, that we should be able to go on with some of the other requirements envisaged in the 1944 Education Act.
I wish to say a word about hire purchase. One of the good things in the post-war years has been the fact that ordinary working women have been able to take advantage of electrical appliances which were once considered to be luxuries. Only those who live among working people know the difference which it makes on washing days when the woman of the house can use an electric washing machine instead of having to do a big weekly wash in the old-fashioned way. I was sorry to see that electric washing machines are among the items chosen by the Chancellor to bear an increase in the amount of deposit under hire purchase. Though he may retain all the other things, at least I ask the right hon. Gentleman to exempt washing machines and let women have a little more rest on their weekly wash day.
I think it clear from this debate, and the case which has been advanced by hon. Members on this side of the House, that in April we had a bogus Budget. The party opposite won the General Election on a bogus programme. Indeed, I would go so far as to say today this country is controlled by a bogus Government.
7.54 p.m.
Mr. Cyril Osborne: I hope that the hon. Member for Leeds, South-East (Miss Bacon) will forgive me if I do not follow the argument which she has been advancing about housing. I sympathise with what she has said about the importance of housing in our family life. Those of us who do not represent constituencies in big cities do not perhaps see the problem quite so vividly as those who represent great concentrations of the population. I entirely agree with the hon. Lady that that is probably the most important of the human problems which face us.
I should like, however, to return to what we are supposed to be discussing. We seem to have got away from the problem which we are supposed to be

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debating tonight. Yesterday, the Chancellor set the problem in simple terms, when he said:
"But one thing is clear. We are at present absorbing too much of our production at home. Our success in increasing production and our very prosperity require increased imports which, in turn, must be paid for by increased exports. Sufficient extra exports, however, are not yet forthcoming."—[OFFICIAL REPORT, 25th July, 1955; Vol. 455, c. 826.]
That is the problem which we all should be discussing—and not talking about who won the Election or whether the Government are bogus or this, that and the other. The hon. Lady will have to put up with us for the next four years. In four years' time she can start electioneering again, but in the meantime, let us face the problem confronting the country.
Miss Bacon Miss Bacon rose —
Mr. Osborne: No, I do not wish to give way—
Miss Bacon: But the hon. Gentleman has started electioneering now.
Mr. Osborne: The problem before us is, how are we to increase our exports? If we do not increase them, we shall, as a nation, be living beyond our income and that, of course, cannot last.
Before I deal briefly with the problem, I should like to say three things to the Chancellor. I was glad of what he said at the beginning and at the end of his speech. Speaking with all the authority which, as Chancellor, he possesses, he said that the nation is not facing an economic crisis. He said that at the beginning of his speech and at the end. He said that today there was no situation similar to the economic crises which we faced in 1947, 1949 and 1951.
The second statement that will help the nation and our economy was the emphatic denial by the right hon. Gentleman of the rumours spread from Paris about the possibility of convertibility. That should help to strengthen sterling. Thirdly, the Chancellor said—it is a thing upon which we should all agree—that we must have industrial peace. We must keep down strikes and secure industrial peace if we are to have lower production costs and greater output. I am sure that those are three most important statements which will be supported by hon. Members on both sides of the House.
Mr. R. Moss Mr. R. Moss (Meriden) rose —
Mr. Osborne: No, I do not wish to give way; I have been in the Chamber all day—
Mr. Moss: So have I.
Mr. Osborne:—and I wish to make my own statements in the short time allotted to me.
As I see it, the problem arises from a condition of full employment with inflation. A former Member of this House who represented Gloucestershire, South wrote an essay in the new series of Fabian essays in which he said—I am speaking from memory—that the Western democracies have had such a bitter experience of unemployment that they never intend to have unemployment again under any circumstances. Speaking for his party—and, I think, for the whole of Western politics—he said that we would rather have creeping inflation than a return to unemployment.
That is quite true, and I think it a fair judgment, but—and this is the point—if we are to have the full employment which we are determined to maintain, we have to find some way of curbing the inflation which seems to go with it. If we do not do that, ultimately we shall price ourselves out of the export markets and be unable to sell the very goods by which we are to pay for the foodstuffs which we must import and for the raw materials we need in order to keep our people fully employed. That is the problem which faces us, no matter which party is in Government.
Because of that, I wish to ask my right hon. Friend a number of questions which have nothing at all to do with party politics. First, if the national productivity remains at the same level as it is today, how much must home consumption be reduced in order that we may pay our way? What sacrifice in our standards of life must we endure if we are to get the necessary exports and if, on the other hand, we are not to expand our total productivity?
The Chancellor spoke about our having too much fat on the home front. I want to know by how much that home front fat will have to be reduced if total productivity is not increased. Secondly, I should like to know, if the present rate of home consumption remains the same—which we all want it to do, because none of us wants to see a cut in our standard

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of living—by how much national productivity must increase in order to meet the necessary exports which the Chancellor says that we require. What sort of hurdle has both sides of industry to overcome if we are to break even?
Lastly—and I think that this is the heart of the matter—is the Chancellor sure that the United Kingdom can sell its products abroad and that our comparable costs from industry to industry are sufficiently low to enable us to sell abroad that extra production which he says is required?
I will give the House three examples of the difficulties that I am sure we shall have to face. Hon. Members may know that in recent years this country has enjoyed almost a protected market for motor cars in Sweden. During the last six months the imports of cars into Sweden have considerably increased, but during the same period the imports of British cars into Sweden have dropped by more than half, whereas imports of German cars have more than doubled.
The explanation which I was given for this state of affairs is that German cars are cheaper and better. The priorities which we enjoyed in that market have gone for ever. Supposing that under the restricted credit facilities we stopped the selling of cars on the home market and made them available for export to Sweden and to other countries, is the Chancellor sure that our costs are so reasonable compared with world costs that we could sell those extra cars? It is no use depriving the Englishman of his motor car in order to export it if there is no importer to buy it. The whole crux of the matter is our comparative costs.
Then there is the case of shipbuilding and ship repairing. In recent months the Blue Star Line and the Shaw Savill Line have both ordered a number of large vessels from German yards. They have done it for two reasons. The first is, I agree, that the Germans can give quicker delivery and can quote a firmer price. Our quotations are much more uncertain and our delivery dates are much longer. Even if we denied ourselves the pleasure or re-equipping our own mercantile fleet, we could not sell to third parties in competition with the Germans. It is said that productivity in the German yards is much higher than in ours, and I should like
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to know what can and is being done to make our yards more competitive
My third example is that of the textile industry. I am sorry that the right hon. Member for Huyton (Mr. H. Wilson) has left the Chamber because on a number of occasions recently he has raised the question of Lancashire's troubles in connection with the importation into this country of Indian grey cloth, Japanese textiles, and, to a smaller degree, Hong Kong gloves. It is not a question of quality but of price. The difference between our price and theirs has been enormous. If, by restricting credit facilities, the purchase of home-made textiles is reduced, thereby making a greater amount available for export, is the Chancellor sure that we shall find a market for them?
It is no use denying production to the home market and making it available to foreign markets if we price ourselves out of those markets. The question of comparative costs is one of paramount importance. That is where the problem of inflation comes in. As a nation, we have said that we will not have unemployment and that, to that end, we are prepared to put up with a minimum amount of inflation. The problem now is how we are to control that inflation so that it does not make it impossible for us to sell our goods abroad. This has nothing whatever to do with party politics. It is a basic economic fact, and if the right hon. Member for Huyton sat on this side of the House instead of on the other he would still have to face the fact, and would find it just as difficult of solution as does my right hon. Friend at the moment.
I propose to make three suggestions as to how this inflationary position could be controlled without going into deflation which would bring about unemployment, something to which, I am sure, no hon. Member would agree. The problem is how we are to induce greater production in this country, and, as the late Sir Stafford Cripps so often said in this House, a more efficient and lower-cost production. How are we going to make the economic machine work more efficiently?
First, I think that high direct taxation such as we endure today, plus inflation, is the greatest disincentive both to workers and management in regard to

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greater production. I have heard men at all levels in industry say, "One might as well play for nothing as work for nothing." There is no doubt that the greatest deterrent to increased productivity is a high rate of direct taxation, and the sooner the Chancellor faces that fact and brings down taxation the sooner we shall get over our problems. The purchasing power of the £ today is about one-third of what it was twenty years ago. The Surtax rate today starts at £2,000 as it did twenty years ago, so that, taking into account the fall in the purchasing power of money, the Surtax rate now starts at about £700. As I say, something must be done about direct taxation.
Secondly, the Government must look at the question of the distribution of manpower. Quite recently we discussed in the House two important industries—agriculture and mining. The complaint was made that manpower was leaving those industries. The coal mining industry complains that it cannot get men to work in the pits. We who represent agricultural constituencies know that men are leaving agriculture.
Where are they going? It is extraordinary that with a total civil employment figure of 22,800,000, some 2,700,000 are employed in the distributive trades, over 4 million in finance and the professions and 1,300,000 as civil servants. I believe that we have far too many men employed in non-productive jobs in this country, and I am sure that if something could be done about that it would help the position.
Mr. Moss: The hon. Member has not mentioned the Armed Forces.
Mr. Osborne: The Armed Forces are not an enormous factor in this matter. They number about 850,000 as compared with the 8 million I have mentioned, and they are not so vital in this consideration.
My third suggestion is that we have allowed a wrong sense of values to develop in relation to home demand. There has been a great outcry—and we shall have another when the cold weather comes—about the cost of coal, which has risen by 12s. 8d. a ton. Industrialists have said that it is scandalous, but I am not so sure. The domestic consumer, who takes over 30 million tons a year, is bound to complain. The total additional cost of the domestic consumption
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of coal this year will be just under £20 million. As Members of the House of Commons, irrespective of which side of the House we sit on, we have a task in front of us—to teach our people to spend their money more wisely.
Mr. William Ross: Whitehall men know best.
Mr. Osborne: Hon. Members must judge for themselves.
There is no justification for the consumer of coal crying out that he cannot afford to pay this extra £20 million a year, which is a mere nothing when compared with last year's expenditure of £864 million on alcohol; £855 million on tobacco, and £187 million upon entertainment. Our values are completely wrong, and it is no use denying it. We fritter away our income upon things which do not matter and boggle at the cost of things which we should be prepared to pay for.
If my right hon. Friend is to control inflation, which is the one thing that is really necessary, he must somehow reduce direct taxation and encourage men to work—for men work only if they are paid to do so. Secondly, he must somehow see that more manpower goes into productive industries, and that the men in those industries are adequately rewarded for what they do. Lastly, I want him to set us all upon an educational campaign to teach our people to spend the money they receive a great deal more wisely than they do today.
8.13 p.m.
Mr. Wilfred Fienburgh: I hope that the hon. Member for Louth (Mr. Osborne) will forgive me if I do not follow his remarks in detail, because I find myself extremely intrigued by the delicate question of the Chancellor of the Exchequer's sense of balance. If the average equilibrist at a fairground had the Chancellor's sense of balance he would have broken his neck a very long time ago. The danger is that the Chancellor's lack of sense of balance will break the neck of our economy.
It is only five months ago that the right hon. Gentleman blandly assured us that he thought he had balanced things just right. Through five months he has slid, lurched, teetered and finally come to rest delicately poised upon one toe again, and he still assures us that he has got things

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balanced just right. Even though, in the intervening five months, the supports upon which he based his policy have crumbled underneath him and the premises upon which he calculated it have proved to be ill-founded, he has succeeded in finding a new sense of balance somewhere else. If the world were to come to an end tomorrow—if this globe were to fragment into a million pieces—somewhere outside the outer stars, hurling towards infinity would be the Chancellor, with his parasol of platitudes saying, "I have just about balanced things nicely."
I now want to discuss his sense of balance in relation to housing. I know that the hon. Member for Louth chided my hon. Friend the Member for Leeds, South-East (Miss Bacon) for discussing housing.
Mr. Osborne: No. The hon. Member must be fair. I begged the hon. Lady's pardon for not following her, and agreed that those who represented the big cities had the problem a great deal more in front of them than we in the rural areas.
Mr. Fienburgh: I forgive the hon. Member.
Mr. Osborne: The hon. Member should forgive himself.
Mr. Fienburgh: I want to discuss the question of the Chancellor's sense of balance in relation to housing. A significant thing happened a short time ago. To achieve this balance he announced that he was imposing certain restrictions upon hire purchase, which had the effect of denying people who were moving into new houses the opportunity of buying furniture to fill them. There was a disbalance between houses being built and the furniture going into them. It was necessary for a balance to be achieved between furniture and housing, and the Chancellor has achieved that balance, but he has done it in the wrong way. He has adopted the restrictive way. Instead of enabling people to buy furniture upon hire purchase and putting that furniture into the houses which have been built, he has reduced the number of houses being built to fit the smaller amount of furniture which people can purchase.
This is ridiculous. It is almost an echo of the situation in the 1930s. He has
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denied people the opportunity of buying furniture while, all over North London, there are unemployed furniture workers. This economic paradox was thought to be one of the miserable monstrosities of the 1930s, but to achieve his balance the Chancellor has managed to perpetrate one of the grosser injustices of that period, in a smaller sphere.
The Chancellor, with what I thought was nothing less than chicanery, this afternoon avoided a question put by my right hon. Friend the Member for Leeds, South (Mr. Gaitskell). My right hon. Friend asked him to give some indication of the balance between the public provision of houses to let and the private provision of houses to sell. The Chancellor said, "That has nothing to do with me; you must ask next door. You have come to the wrong shop." Has it escaped his attention that, as Chancellor of the Exchequer, he is responsible for finding the finance which pays for the subsidies which enable publicly provided houses to be let at reasonable rents?
He has a duty to answer that question. He avoided it, and I hope that whoever winds up the debate for the Government will answer it, because it matters deeply to people like my right hon. Friend the Member for Leeds, South and myself, who represent massive urban constituencies. There may be some parts of the country, in rural areas, where the wealthier sections of the population have a valid choice between buying a house by putting down a deposit and going to a building society, and trying to get a house through the local authority, but there is no such choice in the major industrial centres. There is no alternative in my constituency, Islington, between buying a house and having it provided by the local authority.
We have to build upwards; we cannot spread. The only way we can house our massive list is by building upwards into the sky of London, in flats. There is no opportunity for people to buy houses in north London. Even if they have the wherewithal to pay the deposit and take up a mortgage with a building society there is no valid choice in the matter. The Chancellor is striking a balance in connection with housing which will weigh most heavily against the good people of the towns and cities, who are absolutely

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unable, for physical or financial reasons, to buy houses in which to live.
I now want to discuss the Chancellor's delicate balance in connection with the question of consumption and investment. He implied that he wished to reduce both these things. Again, he felt that he just about hit the right balance between the two. In effect, he has done nothing to reduce consumption. All the weight of the measures he announced this afternoon will fall upon investment. There will be a reduction in consumption on the part of people who would have bought things on hire purchase and will now not be able to do so, but, while the Stock Exchange boom continues and dividends remain unlimited, whatever reduction in consumption is effected on the part of the lower income groups will be more than absorbed by the increased luxury spending of people enjoying the benefits of the Stock Exchange boom and the higher dividends which are being paid. Therefore, there will be no reduction on consumption. There will be an anti-social transfer of consumption from one section of the community to another. Anything which happens to meet these economic difficulties will almost inevitably fall upon the investment field.
There is a by-product to this transfer of consumption. It will remove from the Chancellor any remaining moral authority he had to demand savings, any degree of wage restraint, and any quiescence on the part of trade unions in putting forward wage demands. The transfer of consumption to the higher from the lower incomes or, to put it bluntly, from those who bought on H.P. to those who pay cash down, removes any moral authority the Chancellor had over the broad masses of the people to restrain their demands in the jungle economy and jungle social order which the Chancellor seems to be doing his best to create.
In this generation we have to reduce our consumption. That is not possible on a class basis. It is not possible to do that selectively, by saying that only one section of the community shall do it. We have to reduce our consumption in this generation if we are to hand on any viable industrial heritage to coming generations. We are living on the forced restriction of consumption which was endured by working people in the inter-
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war and pre-war years when so much of our industrial capital was created. We are enjoying the benefit of it now but, in the kind of social and economic world which the Chancellor of the Exchequer is trying and succeeding in creating, we are not replacing that stock of wealth and not creating that industrial heritage which —and this is important—will feed a growing population in an increasingly competitive world.
It is nonsense for the Chancellor to point to the investment figures of the last few months and to boast that they have increased. They had just about picked up from the catastrophic decline that they suffered in the first year or so of this Government's administration. We were just about getting back to the level of investment which this country enjoyed under the Labour Government. We were just beginning to pick up some of the backlog, but even all that is insufficient for the future of the country if we are to compete with nations like Germany, Japan and the United States. They have an enormous weight of industrial investment. We must jack-up our rate of investment considerably. As a consequence, we must accept reduction of consumption on an egalitarian basis. Otherwise, we betray our duty to our constituents of today and, what is much more important, we betray the trust we hold for the generations of tomorrow.
Even if I accepted that a general reduction of investment was necessary, the complaint I would make against the Chancellor would be that the method he has chosen is very unselective. He has chosen the instrument of the Bank Rate. The Bank Rate should, on his argument, go up again on Thursday. If it does not, we shall have the first slow beginnings of a change in the Chancellor's policy from general financial control to some form of more direct control. His original thesis was the use of the Bank Rate, which he described as a flexible weapon, but it was not selective. It is now five months since the last increase in the Bank Rate, and we are still waiting for its results. Unless the Chancellor follows through with a further increase in the Bank Rate he will be discarding the weapon which he thought was so effective. He will be leaving, on his own assessment of the position, the decision to reduce investment in the hands of

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bank managers and bank boards of directors who will, in different parts of the country, apply different criteria; and, what is more, leaving investment to the strength of the reserves of different companies and industries.
It may well be that reduction of investment will fall upon certain firms who are doing good work in the export field, but who have not very large reserves. The brewers have very large financial resources and do not need to go to the banks for their expansion. Under the Chancellor's method they will be able to continue their investment. That is a completely crazy situation. I am not making a speech in memory of my good friend Jimmy Hudson, who is no longer in this House, but am attacking a state of affairs in which it is possible for an exporting industry to be denied finance for expansion while, for example, the brewing industry, or the lollipop industry, or any other industry creating material for home consumption alone, is able, almost by the accident of the strength of its own financial reserves, to carry on with its investment programme unchecked. That is very stupid.
Perhaps the Chancellor will be interested in a word of advice. I do not suppose he is, for a minute. If he wishes to decrease investment—I do not accept the case for this, but I accept the case for decreasing some investments in order to increase others—the Chancellor should look again at the initial allowances and try to devise some means, as my right hon. Friend the Member for Leeds, South suggested a few Budgets ago, of selective, discriminatory initial allowances which would enable at least some form of guidance and direction to be given in the field of investment.
One interesting point arises out of the Chancellor's speech and out of speech after speech from the Government benches. Many hon. Gentlemen there have asked for a selective approach to the problem of investment. We heard a speech from an hon. Member who wanted something quite complicated to be done about investment in the oil industry, another from an hon. Gentleman who wanted investment in agriculture to be maintained while investment in other fields was allowed to run down. Government supporters are demanding a selective investment policy which, by
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definition, is impossible under the broad, slashing, bashing instrument which the Chancellor chooses to use. But the Chancellor has been able in one sector of the economy to be selective, and that is in the field of publicly-owned industries. That is a point which those who have advocated public ownership throughout the years have always made.
Disregarding all the arguments about working conditions, workers' control and discussing simply the pure technique of trying to manipulate the complex economy of modern days, I suggest that the Government's hand is strong in proportion to the amount of direct control they have over industry. That has been proved this afternoon by the Chancellor of the Exchequer. Indeed, it had been proved previously, because two years ago the great complaint of the Chancellor was that industry wanted investment. Then, he wanted more investment more rapidly. He could not get private industry to invest until he provided it with lashings of bribes in previous Budgets.
All the time the record of the public industries was immaculate in this respect, because they were able to respond more directly to the will of a Government presumably ruling in the interests of the community as a whole. Investment in the public sector of industry rose more quickly, more steadily, more firmly than in the private sector. The case was proved there. Now, when the Chancellor—I think wrongly—feels that investments should be reduced, the only field in which he can have a really direct and selective approach to the problem is, once again, in the sphere of public industries.
The trouble, of course, is that in preserving his political equipoise during the last year or so the Chancellor has altogether lost his economic balance. He is no longer in control at all. He may pretend that he is walking a tight rope which he himself has erected with miraculous skill across the economy. He is doing nothing of the sort, but is stepping blindfold into impredictable conditions, because he himself has put the blindfold upon us. He himself has been instrumental in dismantling so much of the effective control which he must now in his heart of hearts wish he had retained over the economy.
I am not worrying about the Chancellor —I hope that he succeeds as a politician.

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What does worry me is the fate of the generations who, ten, fifteen or twenty years from now, will have to try to feed 55 million people from what is left of an industrial heritage after five years of Government by the party opposite.
8.31 p.m.
Mr. A. C. M. Spearman: The hon. Member for Islington, North (Mr. Fienburgh) is exceedingly eloquent, but I thought that he was carried away by his own words when he attempted to see a similarity between the conditions of 1931 and those of today. In 1931, as we all know, there was mass unemployment and a glut of goods which we had not the money to buy. Now there is what the right hon. Gentleman the Member for Leeds, South (Mr. Gaitskell) described as over-brimful employment and an excessive demand.
Mr. Fienburgh: I am sure that the hon. Member would not wish to misinterpret me. I said that, in one tiny sector of industry, we have repeated the paradox of the 'thirties, of people wanting to put furniture into their homes while there are furniture workers unemployed. The hon. Member can ask his hon. Friend the Member for Wycombe (Mr. John Hall), who, I am sure, will repeat what I said.
Mr. Spearman: The difference, perhaps, is that there are now great opportunities, which were not present in 1931, for all those men to get other jobs, but there might not be the same ease in getting the materials.
I think that the Chancellor's policies in the last two years might be summed up as policies of maintaining a high rate of purchasing power and, therefore, of demand for goods; providing incentives for greater production and investment by tax concessions; and getting rid of controls—liberalising the economy. I do not think that there will be any dispute between the two sides of the House about that rough summary. Where we would disagree is as to whether those were good or bad policies. I think that, up to the present, we on this side of the House can claim that the evidence shows them to have been good policies.
After all, the last two years have been the most prosperous in our economic history. In 1953–54 the real national income increased by about 5 per cent., which is
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far greater than has, I think, occurred since our recovery after the fall of the Socialist Government in 1931. I believe that today, with certain admitted exceptions, there is in industry throughout the country a greater sense of enterprise than has been present for a very long time. It may well be that we have to face difficult conditions for the next few months, but I should say that the economy is in a far more robust condition to face those conditions than it was four years ago.
Most of us would agree that there is some degree of inflation in our economy, and I have been trying to assess just how big it is. Obviously, that is very difficult for those of us who have not access to official figures. I have made out a sort of balance sheet, and if my figures are entirely wrong my hon. Friend will no doubt tell me when he is winding up the debate. I have made this case. The increase in our resources this year, owing to increases in production and variations in the terms of trade, is of the order of £500 million. The increase in the money income, including undistributed profits, is about £1,000 million. I do not suppose that we can expect an increase in savings of more than £200 million. That leaves an increased money income of £800 million against resources of £500 million.
On those figures we appear to be overspending to the degree of £300-£400 million. Up to now we have had before us two choices. One is a policy of having easy profits and excess demand for labour, with many more vacancies than applicants for jobs. I think I can describe that as excess demand for labour. Consequently, there has been no unemployment. The crux of that is in the increase in the cost of living. The other choice is to restrict demand, thereby curtailing profits and eliminating the excess demand for labour. That means some measure of unemployment. Broadly speaking, we have had those two choices and have chosen the first.
The degree to which we can afford that choice depends upon the degree of inflation in other countries. Inflation here may be inconvenient but it is not disastrous, provided that other countries are inflating as much. We have to face the fact that both in America and in Germany prices lately have been much more stable than they have been in this country. We have to face the fact that

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we are living not in an inflationary world but in an inflationary sterling area.
Are the remedies which the Chancellor now prescribes sufficient to deal with this situation? He must remember, and surely does remember, that they are now pulling against the stream. In 1952 import prices were falling and demand was falling, as shown by the greater savings. Excessive stocks were held by manufacturers and have been released. At that time, therefore, the monetary measures were much easier of effect than they are today. If I may give this analogy, it is no indication of the effect of a brake being applied to a car going downhill if it is based on the experience of applying the brake to the car going uphill.
One thing is quite clear: whenever there is a big boom, inevitably there is a serious slump. I do not think that today we are in those conditions, but I think we are in some danger of getting into them. There is a French saying which, in view of my pronunciation, I would rather translate: it is sometimes wise to retreat in order to jump further. That should be our policy today.
What are to be the Chancellor's actions? I think he has roughly three choices: physical controls, fiscal policy, and monetary measures. The "Economist" of 16th July said that the thing
"we must not do is to revert to controls, for if the last few months have shown anything at all it is that controls could not make anything better at once and that they would certainly make them worse later on."
I support that view as strongly as I can. If imports are controlled—and I realise that in an extreme emergency that might have to happen—it can only be, like a violent drug, of use for a short time but makes conditions much worse afterwards. If imports are controlled, then supplies of raw materials will have to be allocated.
No Government, and certainly not the Socialist Government, have ever been able to devise a way of allocating controls according to real priorities. It had to be done on past records of use. That meant that vigorous, enterprising firms were penalised whereas sluggards snapped up all the raw materials they could get because they knew that there might be a shortage. I think it was for that reason that we required so much greater stocks
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under the Socialist Government than under my right hon. Friend's regime. Therefore, I hope that at all costs the Chancellor will avoid reversing the liberalising policy of the Government, and will not revert to controls.
Then we come to the fiscal method. It would be a serious and drastic matter to reimpose further taxes to cut demand. I hope that the Chancellor will not find that necessary. I would say to him that if there is real danger of such a crisis that he would have to use controls, I hope that he will not hesitate to use the fiscal method straight away.
Finally, there are the monetary methods which the Chancellor has been adopting. I do not share the view that because they have not done everything which we might want at once they have failed. On the contrary, I feel that conditions would be very different today but for the firm action taken by the Chancellor. I think that the monetary methods and all reasonable applications of them take a longish time to work.
I would say to the Chancellor that I believe that a sharp increase in the Bank Rate, really dear money for a short time, is far more effective for his purpose and less expensive and less dislocating for the country than moderately high rates for a long time.
Of course, there will be objections made to dearer money than we have now got. One is that it will hurt. Good medicine is often disagreeable, and very often it does not do good until it gives a little pain. If the banks reduce their advances then certainly demand will be cut. If demand is cut then profits will be curtailed. What hon. Members opposite do not always seem to realise is that, if profits are curtailed, there will be some degree of unemployment, because only when profits are very high is it worth while for industrialists to maintain employment at very high rates. As soon as their profits start falling, they would not want a good deal of labour which they now retain.
Mr. Arthur Moyle: I should like the hon. Gentleman to make clear one point. Is he suggesting that part of the good medicine which he advocates is a dose of unemployment?
Mr. Spearman: No. That is the point which I am coming to, because I realise very fully that talking about unemploy-

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ment is political dynamite, and one can very easily be misrepresented. Therefore, I want to spend a minute or two saying quite clearly what I have in mind.
I think that I realise as much as most of us here that mass unemployment in the inter-war years was perhaps the greatest cause of suffering and poverty that we have ever undergone. At that time, I think that we were right to be very frightened indeed of any increase in unemployment, because unemployment in those days was a sort of avalanche which we could not control, and once it started it could suddenly become very big.
I think that we must realise the fact that today that is not the case. Unemployment of that sort is not a bogey today, and I believe that we can control it. I do not believe that there will ever be mass unemployment again in this country, except for one reason alone, and that is a balance of payments crisis which would prevent us from getting raw materials. Provided that we can get raw materials we can always control the unemployment figures.
Naturally it is enormously beneficial to have absolutely full employment because of the improvement in the condition of the workers and because of the improvement it encourages in technique and labour-saving devices and so on, but I think an undue apprehension and fear of a small amount of unemployment might be just a way to bring about mass unemployment if we make a bogey of it. Then we may fall into really serious balance of payment difficulties. When unemployment is enormously below the 3 per cent. which Lord Beveridge said was the best we could hope to attain, I do not think we have any cause for alarm about unemployment. Therefore, in answer to the hon. Member, I say that I think that nothing could be worse for us than mass unemployment, but that that is a fear that is not well-founded.
Mr. Moyle: Except for 3 per cent.
Mr. Spearman: I am not saying that we want 3 per cent. unemployment but Lord Beveridge said that that was about the lowest we could hope to achieve. It may be better to have a little more unemployment than we have today if those workers unemployed are unemployed for only a short time rather than to run into a balance of payments crisis
1102
in which we might fail to get raw materials and have more unemployment.
Mr. Ellis Smith: Who wants to be unemployed for a short time?
Mr. Spearman: Of course no one wants to be unemployed at all and our job is to keep employment as high as we can, but not to be so frightened of unemployment which we can control.
Mr. Sydney Silverman (Nelson and Colne): I quite follow the point made by the hon. Member. I take it, therefore, that he would have no objection whatever to paying the unemployed full wages?
Mr. Spearman: I would certainly agree that very high unemployment assistance is infinitely better.
The other objection which may well be made, and which I believe has been made, to raising money rates now is that it would cause a scare abroad, that foreign opinion would panic and think things were worse than they are. I have consulted those in a much better position to judge that than I am and have confirmed my view that that is the very opposite of the truth. I believe that what foreign opinion is frightened of is that action too little and too late might be taken, and that we should both relieve foreign opinion and fortify confidence abroad by the Chancellor showing that he was going to take strong action and doing so at once.
8.49 p.m.
Mr. J. Idwal Jones: I was rather surprised to hear the hon. Member for Scarborough and Whitby (Mr. Spearman) say that 3 per cent. unemployment was tolerable—
Mr. Spearman Mr. Spearman indicated dissent.
Mr. Jones: Of course, there is nothing which can create unemployment more than the fact of some people being unemployed.
Mr. Spearman: May I correct the hon. Member?
Mr. Jones: Yesterday, the Chancellor of the Exchequer said
"The monetary measures taken in February have been by their nature slow in their effect on home demand."—[OFFICIAL REPORT, 25th July. 1955:Vol. 544. c. 826.]
The main monetary measure was that of raising the Bank Rate. It has been asked

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on the benches opposite, "Why is it that the Bank Rate has not been effective in the last few months?" The explanation is a very simple one. When the currency of this country was on the Gold Standard the Bank Rate was more or less effective, but now we have a fluid currency no one in the country is able to predict what the effect of the increase will be. I was surprised to hear the hon. Member saying that it might be a good thing or might be just the opposite. No one can prophesy what the effect would be.
As everyone would agree, a far more effective method than the Bank Rate for dealing with this is through budgetary policy, and by budgeting for a surplus. What amazes me about the last Budget is that there was a substantial Budget surplus, which could have been used for a deflationary purpose, but it was actually thrown away to big industry.
The Economic Secretary to the Treasury (Sir Edward Boyle): Only rather less than half of the Budget surplus was given away.
Mr. Jones: That is very substantial. While the last Budget had a deflationary effect on one sector of the economy, it had a very inflationary effect on another sector in which there was already inflation. I refer, of course, to the boom on the Stock Exchange and the gift of reliefs to industry, which eventually will find their way to the recipients of dividends and will increase inflationary pressure in that respect.
Yesterday, the Chancellor told us—and we have heard it from the benches opposite tonight:
"We are at present absorbing too much of our production at home."—[OFFICIAL REPORT. 25th July, 1955; Vol. 544, c. 826.]
The Government answer to that has been to check hire purchase. I am not speaking on the merits or demerits of hire purchase, but I want to say most emphatically that this is class legislation.
Sir Frederick Messer:That is a fact.
Mr. Jones: After all, people who have the cash to put down can get what they require from home production. People who have money to buy washing machines can buy them, and people who have money to buy cars will buy them.
1104
The time has arrived when people who produce these things can claim the right to have them when they require them. To change the metaphor, people who build have the right to inhabit; people who plant have a right to eat, and those who produce motor cars and washing machines have the right to a share of them. It is a question of controls. It has been suggested tonight that controls would be a bad thing, but this type of legislation is only control in another form—
Sir F. Messer: And for another set of people.
Mr. Jones: —and for another set of people. I leave the point at that.
Another feature is the checking of investment. The Chancellor said that in the private sector he would appeal to people to restrain from initiating new investments. One of my hon. Friends has just said that people will be able to make beer, lollipops and all the rest. Private enterprise will not restrain itself in investment if money and private gain are involved. That is the argument for controlled investment, and in that respect I suggest that the Government and hon. Members can a leaf out of what the Labour Government did after the war.
When we come to Government expenditure, I was very much alarmed by the fact that when the Bank Rate was raised one of its effects would be upon local government expenditure. Now, to make this more effective still. we are told by the Chancellor that the Departments are to stiffen up as well in regard to local government. One of the fields to be affected will be that of education, and I am well versed in this particular subject. I have been in the teaching profession for the last thirty-five years, and I want to say quite clearly that never have I felt the result of economy in education more seriously than I have felt it since 1951. It is not right that we should have this further cut in the realm of education.
There is one point I would make about the nationalised industries. There is a suggestion that long-term policy is to be restricted. Sooner or later, if we restrict long-term policy in the mining industry, we shall have a debate here similar to that which we had a few days

1105
ago. There will be a shortage of coal, and the blame will be placed on the shoulders of the miners, of the National Coal Board and on the lack of fuel economy, but not on the shoulders of those responsible, namely, those responsible for our financial policy at the present time.
The Government should take the nation into its confidence. I suggest that we on these benches took the nation into our confidence at the last Election. We told the electorate that the period ahead would be a period of sacrifice, and we were asked questions sponsored by Conservative headquarters on what would be the nature of these sacrifices, because it was thought that we should lost votes thereby. We said that we were fully conscious of the fact that the years ahead would be difficult. We did not promise prosperity in the immediate future, but planned for prosperity in the years to come.
We emerged from the last war a bankrupt State. Our investments had gone, our shipping had gone, our insurance had gone, and, in that hour of difficulty in 1945, we saw a new economy—a planned economy, with imagination—growing in a most difficult period. I am of the opinion that when the historian comes to record that period, it will be said that that was one of the most miraculous achievements of modern times. I would ask the Government to take a leaf out of the policy adopted by the Labour Government in that period, and to plan forcefully, thoughtfully and with imagination, and thereby lead this country back to prosperity.
8.58 p.m.
Mr. Harold Wilson: This debate has been enlivened by one maiden speech, that of the hon. Baronet the Member for Walsall, South (Sir H. d'Avigdor-Goldsmid) who, we understand, is a bullion broker by profession. I hope that, now that the hon. Gentleman has emerged from his maiden speech, he will on a future occasion initiate the House into the mysteries of bullion broking.
I think that the hon. Member's speech was, for the greater part, uncontroversial, but he did say one thing which some hon. Members opposite would find controversial, because he used the same argument as my hon. Friend the Member for Wrexham (Mr. Idwal Jones) used a
1106
moment ago, when he said that we came out of the war in 1945 bankrupt. I think the hon. Gentleman's own phrase was that we came back from the war in 1945 as a nation with only our war honours, and our resolution. I was, therefore, surprised when some hon. Gentlemen opposite queried the remarks of my hon. Friend when he reminded the House of the fact that we were bankrupt in 1945, a point which was first made by the right hon. Gentleman the Member for Woodford (Sir W. Churchill).
Despite a somewhat end-of-term atmosphere the debate has been extremely grave throughout. We have been enjoined by the Chancellor not to use the word crisis about the present economic situation. He told us that he is to pursue his policy inflexibly, and, on other occasions, he has emphasised the need for flexibility. Obviously, his policy from now on is to be a policy of inflexible flexibility. One of our big problems in trying to assess the economic situation, particularly, as my right hon. Friend the Member for Leeds, South (Mr. Gaitskell) said, we do not have all the figures necessary for the purpose, is that as a nation we suffer from a Chancellor of the Exchequer who is an economic schizophrenic. He comes to the House one day in one mood and on another day in another. One day he is the gloomy Chancellor, and on another day he says we are living under blue skies, and so on. Sometimes he is the Chancellor of Tory freedom, the Chancellor of the Election Budget, the Chancellor of the Election broadcast.
Today, the Chancellor was at pains to suggest he had not been over-optimistic during the General Election, and he read out a quotation from his Election broadcast which seems to have impressed him so much. I think he fell below his usual standards when he employed such selective quoting from his broadcast. Hon. Members will remember that I sought to interrupt him, to get him to read out the sentence which immediately preceded the passage he read in his quotation. He did not, and he spent about ten minutes explaining why he could not. I sought to interrupt him again, and he did not give way. The "previous sentence" I wanted him to read consisted of only five words. It would not have taken him long to read. This was the sentence in that famous broadcast:
"Well. we've restored national solvency."

1107
That was a very different tone from the tone of his statement yesterday, or even of the passage which followed almost immediately after the one he quoted in his selective quotation from his broadcast. He was referring to the action he had taken. and he said:
"We are beginning to see the first effects. Our trade figures are better; and we are once again holding the position of our reserves."
That is what he said in that broadcast. That was the sort of mood the right hon. Gentleman was in from the date the Election was announced up to and including 16th June.
There is no doubt what he said in his Budget speech:
"It became clear by February that we needed to take action to moderate the growth of imports and to encourage exports. And from the result, all I can say is, thank goodness that we took action in time… But the situation has been brought under control, as, for example, is shown by the movement of the reserves since then and the latest rates for sterling."—[OFFICIAL REPORT, 19th April. 1955; Vol. 540, c. 39–40.]
As recently as 16th June, when he was still in a sort of Election atmosphere, the right hon. Gentleman used very similar words:
"… the situation has been moving not unexpectedly and more or less as I forecast in the Budget statement… Credit policy has been taking effect, and the external position, in so far as we can judge it to date, has been beginning to show some response to the measures we had taken."—[OFFICIAL REPORT. 16th June, 1955; Vol. 542, c. 793.]
That was the position as recently as 16th June, but, on the other hand, we have the gloomy Chancellor, the Chancellor of 24th February, when the Tory freedom bubble burst. Yesterday, also, the right hon. Gentleman had to admit by implication, though not clearly in so many words, that the measures he took on 24th February had not done the trick. It is, perhaps, a little unfair to remind him that we warned him about that in February, that in February we said he might, from raising the Bank Rate and from the other measures he was taking, reap some benefit in the form of the inflow of capital, of hot money. I remember writing an article in February, long before the Election was announced, saying that the Chancellor might, as a result of his measures, get in lust enough hot money to conceal the true situation, perhaps for a few weeks, long enough to let him go in for a snap
1108
summer Election with his solvency record unimpaired.
That, of course, is what happened. In the best sense of the phrase—I am not accusing the right hon. Gentleman of the worst sense—the right hon. Gentleman, on 24th February, pulled a confidence trick, a stunt purposely to restore confidence amongst international dealers in sterling, and he did temporarily restore confidence, but only for a few weeks. Now that confidence is lost again. All of us at the time warned the right hon. Gentleman that the real test was not the short run financial movement, but the movement of our basic figures of exports and imports. I want to say to the Chancellor of the Exchequer again, as I tried to say in a supplementary question yesterday, that it is no good blaming all this on the strikes. We have only to look at the figures for the first four months of the year. Exports for the first four months of the year, before the strike, were up by 10 per cent. on the first four months of 1954, but imports were up by 20 per cent. compared with the first four months of 1954 and there was already an alarming gap between exports and imports before the strike started. Indeed, taking these four months compared with the same period in 1954, the gap had worsened by £33 million a month. So we cannot blame it on the strikes.
What is the position after six months, the first half of the year, including, of course, the period of the strikes? Between the first half of 1954 and the first half of 1955 exports rose by £48 million, but imports rose by £229 million, a widening of the gap, as my right hon. Friend the Member for Leeds, South said, of more than £180 million. In value terms, exports rose by 3½ per cent. and imports by 14 per cent.; in volume terms, exports rose by 5 per cent. and imports by 10 per cent.
If we look at the import figures and see what groups have been increasing in the first half of this year, we find that imports of manufactured goods have risen by about £90 million. That includes some of the steel imports being used in the motor car industry, about which there has been a lot of discussion this afternoon. Imports of food increased by £86 million, despite a fall of about £23 million in dairy products and sugar. A large part

1109
of that must be explained, as my hon. Friend the Member for Edmonton (Mr. Albu) pointed out, by this Tory freedom in the matter of importing dollar coarse grains which could be quite easily produced in this country, or bought in the sterling area. Basic materials have risen by £17 million and, as the Chancellor reminded us, coal imports were £2½ million in the first half of last year, compared with £331 million in the first half of this year.
So the figures for the first six months of this year do not fill us with any of the rosy optimism that at times—and I will be fair to the Chancellor, only at times—he has exuded. But what about the prospects for exports for the next two months? Is it really true, as the Chancellor tried to suggest to us this afternoon, that, broadly speaking, it was only imports which were maintained and only exports which were affected by the strikes? Is it true that over the next two months we shall catch up with exports, except in those cases he mentioned where we have lost the markets for good, and clear the backlog? If that be so, it must have affected the figures for the first four months of the year, because in January we were still reflecting the backlog, or the after-effects, of the strikes of last autumn. If that sort of mechanism does work and the Chancellor is right, the figures for the first four months of this year are even worse than they look.
Then, of course, there is the extraordinary argument of the Minister of Supply, although I do not want to waste time on it. He is convinced that financial figures always reflect the trade figures of two months later. The financial figures come first, he says, and the trade figures two months afterwards. He was very pleased when he said that and said that the better figures of April represented an improvement in the trade position. If the Minister of Supply is right, we must expect the bad financial figures of July, about which there does not seem to be any doubt at all, to be reflected in equally bad trading figures two months from now, and so we cannot, with great confidence, look forward to an improvement in exports in the next month or two, if the Minister of Supply is right.
About imports, surely the Chancellor agrees that imports have got out of hand, especially dollar imports. The question I
1110
put to the right hon. Gentleman—he has referred to it in general terms—related to the expenditure of dollars as a result of freeing the commodity markets. We have put this point time and again in this House, but I do not think that it has yet been accepted by the Chancellor. The result of freeing the cotton market has been a serious increase in the purchase of dollar cotton, and an equally serious decrease in the purchase of cotton from Colonial Territories, particularly with the ending of those long-term contracts. That is bound to have an effect on the dollar balance of payments, and it is no good the Chancellor denying it.
Then, if this is the serious position on visible payments, it is obvious that invisible payments will be no better. From the moment they came into office this Government dedicated themselves to increasing our invisible earnings. That is why we had all the Liverpool cotton business and the rest of it. Yet the net invisible earnings last year were about £30 million lower than in 1951, and they are still worsening. The Chancellor told us that there is this increased payment now in respect of interest charges. The figures in the Economic Survey for last year showed that in 1954, on interest balances held in this country, we were paying overseas £80 million more than in 1951, an increase of £80 million a year on interest account alone.
As a result of the increase in the Bank Rate which took place in February, the Chancellor said this afternoon that he estimates a further burden on our balance of payments of an additional £30 million. It is no wonder that we hear nothing now from hon. Gentlemen opposite about the groundnuts scheme, because the whole of the groundnuts operation cost £36 million, but the Chancellor, with a stroke of the pen, is adding £30 million to our overseas balance of payments in a single year, making a total of £110 million. We certainly get nothing in return for that.
The right hon. Gentleman was talking about reducing overseas expenditure. He has not told us of any direction in which he thinks we shall reduce overseas expenditure, whether in respect of Government expenditure or any other form. I would remind the right hon. Gentleman—I do not think that he will disagree with this—that the position of our balance of payments over the last few

1111
months would be worse were we not getting abnormal shipments of Soviet gold into the country. The Chancellor has given figures of how many millions we have had, which was a departure from the position last year when he would not give the figure because it was against the public interest. Last year we got £60 million, in the winter of 1953–54. I put it to the Chancellor, how much worse would the balance of payments be were this Government not being helped by Red gold?
As I have said, the most serious position is in our gold and dollar reserves. In April, as was stated by my right hon. Friend, there was a very small rise which was largely accounted for by defence aid. In May there was no change at all, and the Prime Minister thought that a very good thing. He said:
"The gold and dollar reserves have remained without any significant change since February, and, in all the circumstances, I think that is a pretty satisfactory situation."—[OFFICIAL REPORT, 9th June, 1955; Vol. 542, c. 62.]
But of course, as we have reminded the Chancellor more than once, this is the time of the year when, seasonally, the gold and dollar balances should be improving. In May of last year they increased by over $160 million. In May, 1953, they increased by $48 million and even in May, 1952, they increased by $12 million. Yet, in the summer of this year, we have seen a steady fall in the gold and dollar reserves. One can only say that if this is happening now, at what should be a period of seasonal improvement, what in the world shall we do when winter comes? And, as the Chancellor knows, winter, so far as the balance of payments is concerned, is the late autumn.
Now we have the Chancellor's proposals as contained in his statement yesterday. First, a proposed cut in investment. The right hon. Gentleman feels now, as he said this afternoon, that we have gone a bit too fast in encouraging investment. Now he wants to have a cut. He has done an extraordinary thing. He has appealed to private industrialists to cut their less essential investments. That is the first time we have heard from the Government that some industrial investment is less essential than other industrial investment. [Laughter.] Yes, I will give proof of that in a moment, and then I hope that hon. Gentlemen opposite will not laugh too loudly.
1112
We thought, from some of the speeches of hon. Gentlemen opposite—I will quote one in a moment—that the Tory philosophy was that all economic activities are equally worthy so long as they all earn a profit. Our approach to this subject of investment has been more selective. During our period of office we used building licensing to concentrate resources on those factories which would make a direct contribution either to dollar earning or dollar saving, and had we not done so there would not have been any solvency at all for the Chancellor at the present time.
On 16th June, when I asked the Government whether they did not think that there was too much investment going on in petrol stations, the President of the Board of Trade worked himself up into hysterics about it. He seemed to think that it was wrong for anyone to cut down on such investment. If petrol stations are making a profit then, presumably, we should build more. But now, presumably, the Chancellor wants the building of petrol stations to be cut down as being less essential. What he is doing is to appeal to business men to select the less essential investments and to cut them down or slow them down.
Mr. Osborne: That is a good thing.
Mr. Wilson: Yes, but I do not think that it is likely to happen.
Mr. Osborne: The appeal is quite right.
Mr. Wilson: The Chancellor can make the appeal until he is blue in the face, but it is not likely to be answered.
On 2nd November, 1950, Mr. Oliver Lyttelton, now Lord Chandos, expressed the Tory philosophy on this question. He thought that the selective control of investment was nonsense and that the thing to do was to put up the Bank Rate. He said:
"The only way to find out what industrial production is likely to be profitable is to find out if people are willing to pay the price for putting up the plants which make the products. If the industrialist thinks that a 5 per cent. interest rate for borrowing his money will still leave him with a profit, the plant will be built, but the marginal capital investments will be discarded."—[OFFICIAL REPORT, 2nd November, 1950; Vol. 480, c. 332.]
There, I think, is a clear statement of the Tory philosophy, and that, I believe, expresses the reason why the Chancellor's

1113
appeal will be made in vain. He is appealing to the industries themselves to select the marginal investments to be discarded when Mr. Lyttelton, as he then was, told us that the only selection would be on the basis of profitability.
It is clear from the Chancellor's statement that the cuts will not be made in the private sector, but in the public sector. The only effective cuts will be made in the nationalised industries and in the local authorities. A Tory Chancellor is taking advantage of the fact that the public sector is the only plannable sector when we want the economy to respond to public policy. In fact, for two or three years of this Government it was the only sector in which investment increased when he wanted investment to go up. Now, when the right hon. Gentleman wants restraint in investment, the private sector begins to catch up and starts to embarrass the Chancellor.
That being so, what does the right hon. Gentleman do? He cuts down on the public sector in ways that are liable to cause great damage to our economy. I regret that although the Chancellor gave way many times this afternoon, he has not answered the questions put to him by sonic of my right hon. Friends. We are not at all sure what is to happen about the roads programme. It looks as if it is to be cut. As one of my hon. Friends said, if one scales down a programme even over a period of years, that means cutting the programme year by year.
I hope that the Economic Secretary to the Treasury will answer our queries about education. We have had some very brave words recently from the Minister of Education, and I would remind the Chancellor, who, apparently, is now to introduce these new cuts in education, that if he were to come to my constituency he would find children of six years and even of seven years of age being told that there is no school available for them. That will be the position. [An HON. MEMBER: "Have they got boots?"] They have all got boots now, because the Labour Government brought full employment to Merseyside. That is why some have shoes there whose parents did not have them before the war.
On the question of housing, the Chancellor was equally evasive despite the
1114
question of my right hon. Friend. It is clear that the programme will be cut to £300,000. What we do not know is how many council houses will he built. I think it is clear from what the Chancellor has said that the brunt of the cut will fall upon council houses, because the Chancellor harbours the extraordinary economic fallacy that if a house is built with some degree of public money, or entirely with public money, it is inflationary, but if it is built for private sale it is not. He therefore cuts down the building of council houses.
Mr. Osborne: The Chancellor has not cut it as low as the right hon. Gentleman's Government did.
Mr. Wilson: The hon. Member's mind works in a rut. It is time that he got out of it.
I would point out that if we had not had to build 1,700 factories in the old derelict areas which we inherited from his Government, and if we had not devoted a great deal of our resources to building up the oil-refining industry—from which the Chancellor now derives great benefits—and also the steel and chemical industries, we should have had far more resources available for building houses. We also had to repair 4 million bomb damaged houses. What are the Government doing today? [An HON. MEMBER: "Building houses."] The hon. Member had better come to my constituency, where they are pulling them down.
The Government have given instructions to pull down "prefabs" and have promised that the people will be rehoused, but this afternoon the Minister for Housing and Local Government could give no assurance that the local authority would be given a housing allocation—and that is in respect of a council whose council house building has totally stopped because of the policy of the Government. That authority must rehouse all the people on its housing list, together with those whose houses have been pulled down by the Government. That is the housing policy that we are now getting. [Laughter.] If hon. Members think that it is funny they had better come to my division.
I now turn to the Chancellor's remarks and announcement about consumption. Here again we have an illustration of one

1115
of the strange obsessions—as my hon. Friend the Member for Stechford (Mr. Roy Jenkins) pointed out—on the part of the Chancellor, that the only kind of consumption that we need to deal with is that which is paid for upon deferred terms. This is largely a question of reducing the consumption of working-class and, to some extent, middle-class people, and of no one else at all. In fact, in his Budget the Chancellor encouraged consumption by the higher taxpayers, as he has done in successive Budgets. He was boasting in the Election about how much he has done by way of Income Tax cuts, and he said:
"The only thing I have not been able to do is to reduce the price of beer, and that I would like to do before I die, because I would like to think it would be on my tombstone."
The Chancellor has done nothing to cut luxury expenditure, which has been going on from tax-free capital gains. Now he says that we must reduce consumption. That is a new doctrine. What did the President of the Board of Trade say, only a month ago? We were querying some of these concessions and he said:
"What about consumption? Do not let us be too afraid of our people consuming things. Sometimes, to hear the right hon. Gentleman, one would think it was terribly shocking for our people to be consuming things which ought to be all going into the export market."—[OFFICIAL REPORT. 10th June, 1955; Vol. 542, c. 162.]
Now the Chancellor says that they have to be stopped consuming things—if they pay for them on hire purchase.
Motor cars and initial allowances have been mentioned. It is interesting to note that the Chancellor is now alarmed at the number of cars produced, because in the Budget debate the Minister of Supply went into rhapsodies about the number of cars available for the home market, and he made a long and eloquent speech about it. The Chancellor referred to the load placed upon the metal-using industries—and we would all agree with him there. It is true that motor cars are one of the main users of metal. Indeed, as my hon. Friend the Member for Edmonton pointed out, they are one of the main users of the imported steel which we are now having to pay for with our scarce reserves.
One of the serious things about the metal-using industries has been that metal has been going more and more into the
1116
production of cars for the home market. We have not the figures for 1955. but the figures for last year compared with 1951 show that of the increase in the total of engineering production in this country of £490 million. defence accounted for £190 million and £135 million went in more cars for the home market. It is, therefore, not only a question of the burden on the metal-using industries but the burden on the balance of payments due to imports of additional steel.
I hope that the Economic Secretary will tell us the Government's plans for defence. I would remind the Government that last year we divided against the Government's defence programme as being unrealistic and unbalanced. Now we are told we have an easement in world tension. "There is not going to be any war" says the Foreign Secretary. That may help to reduce the burden on our defence industry, but there is anxiety in some parts of the world—Wall Street, and places like that—about the danger of peace breaking out. No matter how easily that attitude of mind can be explained in economic terms, it is repellent to most ordinary people, who feel that there should be some great advantage from peace breaking out.
The Government must be ready for a big change in world affairs, if peace breaks out. In the Budget debate, in 1953, we pressed the right hon. Gentleman, when there were the first signs of easement of tension after Stalin's death, and he quite rightly referred us to a speech by President Eisenhower on 16th April, 1953, in which the President said that the way to mobilise the resources of the world if there was disarmament was by a vast expansion in the war against poverty in the backward areas of the world. I hope that the Government, who have been very backward on this question, especially in relation to the United Nations efforts in this direction, will be working out plans along these lines. Perhaps that is a question more appropriate to tomorrow's debate than to our debate today, but it has its relevance to our economic affairs.
What is the position about the Chancellor's speech today? The truth is that his pre-Election boasts have suddenly turned sour, in the light of the events which he disclosed yesterday. The truth is coming out, that the Government, as

1117
the "Economist" said months ago, have been enjoying for the last three years a batsman's wicket and now the batsman's wicket is crumbling a bit. The Chancellor's own reputation as a batsman is due far more to the wicket than to his ability in using the bat. Indeed, now that the Chancellor is discarding it during this period, by dismantling controls and deciding to throw away his bat altogether and rely on his pads, I would remind him of the fate of five English batsmen in the first innings in the Test Match which ended today.
Nothing that the Chancellor has said fills us with any confidence that he has the economic situation in hand. This afternoon we had a further example of double talk from him. This was not a crisis, he said, but he went on to describe a critical state of affairs, especially in our gold and dollar reserves. I must remind the Chancellor that appeals to confidence by statements of the kind we had yesterday, and of panic increases in the Bank Rate, have only a short-run effect. We must judge the economic situation not by any movement of hot money but by basic movements of our exports and imports, of production, and production of the right things.
On these tests, as the Chancellor's statement yesterday showed, the Government's policy has failed, and nothing that the Chancellor has said today suggests that he has any policy for dealing with this except to wait for a change in the economic weather. It is because the Chancellor has, in our view, most irresponsibly changed his tune from month to month during the year and has, in our view, deliberately misled the country both before and during the Election about our economic position, that, having heard him today, we shall find it necessary to divide the House this evening.
9.30 p.m.
The Economic Secretary to the Treasury (Sir Edward Boyle): I listened with great interest to the right hon. Member for Huyton (Mr. H. Wilson), and it seemed to me that every argument he adduced led to the conclusion that the statement which my right hon. Friend made yesterday, and the measures he announced, were very much on the right lines. At the start of his speech the right hon. Gentleman had something to say
1118
about my right hon. Friend's remark on national solvency in his broadcast. I think that it is fair to remember that, during the last month when hon. Members opposite were in power we lost 300 million dollars and £90 million of gold to the European Payments Union; and that, when my right hon. Friend made that broadcast we had, in the previous months gained 19 million dollars to the reserves. Therefore, taking the whole position over the three-and-a-half years, I think that my right hon. Friend's statement was perfectly justified.
The right hon. Member for Huytonsince I am at this moment replying to him—asked a Question yesterday on the subject of the purchase of dollar commodies, such as grain. He said that those should have been obtained from the sterling area. Perhaps I can clear up this matter of grain purchase. The policy of the Government is, as far as possible, to give our importers the greatest possible freedom to buy basic foods and raw materials in the cheapest market, and this is important in order to maintain our competitive position. In the case of wheat, the dollar proportion of our wheat imports has, in fact, fallen each year since 1950. From 1950, when it was 90 per cent., it fell in 1954 to 69 per cent.
I would also point out that the statement of the right hon. Gentleman that we were buying dollar rather than sterling wheat does really rather miss the point. The wheat we get from the dollar area is hard wheat which we cannot do without. There is nothing in the sterling area which could replace that particular wheat. The right hon. Gentleman, I think, knows perfectly well that the level of dollar imports of basic commodities depends far less, in the long run, on whether or not there are import controls than on the level of our requirements, which would be largely met even if we maintained import licences.
Before I go on to make any more controversial remarks I should like, if I may, to join in congratulating the hon. Baronet the Member for Walsall, South (Sir H. d'Avigdor-Goldsmid) on his very able maiden speech. He said that he represented a town of a hundred trades. As a representative of the city of a thousand trades I am particularly pleased to have this opportunity of congratulating him. Like me, he represents a borough in the

1119
industrial Midlands; like me, he lives also in the south-east of England. I am sure that he will feel, as I do, that we both have very much the best of both worlds in living in the south-east of England and representing one of the most interesting parts of the country.
I pass now to the speech made by the right hon. Member for Leeds, South (Mr. Gaitskell) in opening the debate. He chided us on this side of the House because, he said, my right hon. Friend's statement yesterday was not consistent with his Budget speech. He also talked about bribing the electorate. He had a lot to say about what he called blatant electioneering. I am sure that the House has not forgotten that during the course of the Election the right hon. Gentleman himself was holding before the electorate possibilities of an increase in Government expenditure which, at a conservative estimate, was put at £600 million a year. The right hon. Gentleman shakes his head. That is all very well, but towards the end of the campaign there was not much dispute about the figure. The only dispute was about how it was to be paid for. I have here, if the right hon. Gentleman would care to hear it, some excerpts from his "Daily Herald" article of 11th May. He simply told us that we should devote the increase in production under a future Labour Government to increases in Government expenditure.
Mr. Gaitskell: I said we should devote part of the increased revenue to expenditure for the community.
Sir E. Boyle: I am glad to find that in his more recent speeches the right hon. Gentleman has said that the increase in production should be devoted, as it certainly ought to be devoted, to strengthening our balance of payments. Of course, it is also not so long since the right hon. Member for Bishop Auckland (Mr. Dalton) suggested that the beer tax might have been reduced in the Budget.
Coming to the point about the relation between the Budget and the measures which my right hon. Friend has announced today, I would point out that the whole purpose of my right hon. Friend's policy, ever since he became Chancellor, has been to strengthen confidence in sterling. I am quite sure that nothing could have done more harm to
1120
confidence in sterling than a second consecutive standstill Budget at a time when we had a Budget surplus of £280 million. I am sure my right hon. Friend has been right to make it more difficult for people to borrow money than to increase their real earnings. My right hon. Friend has always believed in the twin weapons of an expansionist budgetary policy and monetary discipline. That is right if the economy is to be run on a sound basis.
I should like to say a word in answer to the right hon. Member for Leeds, South on the subject of the sale of Treasury-owned dollar securities. He asked about that. As my right hon. Friend has stated in reply to Questions in the House, it is not the practice to disclose details of the assets held by the Exchange Equalisation Account, but I will tell the right hon. Gentleman that the securities are worth substantially less than the figure of 2,000 million dollars which he mentioned this afternoon. I cannot give the precise figure but I will say that it is less than half what the right hon. Gentleman suggested, if that will satisfy him.
As my right hon. Friend said last February, there has been no radical change in the policy which the right hon. Member for Leeds, South followed when he was Chancellor, of continuing to hold and manage those securities in the national interest. They are not part of the reserves but they should be considered as part of the national block of foreign investments, and in pursuance of this policy it may become appropriate from time to time to sell a certain number of these securities. In that case surely the long-run national interest is best served by giving British investors an opportunity to acquire these securities for sterling, because in that way the securities remain part of the national patrimony and the dollar income continues to accrue to this country.
Before I come to the two main points with which I want to deal—I shall say something about monetary policy and about investment—there are one or two matters on which I should like to comment briefly. The hon. Member for Stechford (Mr. Roy Jenkins), who told me he would be unable to be here tonight, suggested in his speech that my right hon. Friend's Budget had itself caused the troubles which we have today. I do not

1121
think anybody could seriously believe that. [HON. MEMBERS: "Why not?"] It is quite ridiculous to suggest that my right hon. Friend's Budget in April this year has had a substantial effect on the volume of investment at the present time. It is complete nonsense to suggest that.
The hon. Member for Edmonton (Mr. Albu) and the hon. Member for Leeds, South—East (Miss Bacon) asked about the education programme. I am sorry that I was not here when they spoke, but I will gladly answer the point. There is certainly no truth in the allegation of the hon. Member for Edmonton that the Government are cutting down the plans for higher technological education which were announced only last week. The programmes for 1955–56 and 1956–57 remain firm. Indeed, the programme for 1956–57 has only just been announced. I am sorry that I was not here when the hon. Member for Edmonton spoke, but I understand that he made a helpful and constructive speech, and I have the notes of it.
I now come to the question of monetary policy and how it has worked. I should like to make it absolutely clear that there is no warrant at all for any suggestion that the monetary authorities are now going to relax their use of orthodox monetary methods. It has been suggested in the "Financial Times" only this morning, and also in "The Manchester Guardian," that the decision to make a direct appeal to the banks to reduce lending means that the authorities are not going on with the drive to restrict lending through orthodox monetary controls, and I should like to make it perfectly plain to the House that there is no truth at all in that suggestion.
I think that it would be helpful if for a few minutes I spoke about the work of the monetary instrument during these last months, because I think that the orthodox monetary weapons have worked more effectively than some people realise. Since 24th February the 4½ per cent. Bank Rate has been fully effective, and week by week the market has been in the Bank. Treasury bill rates, as a general rule, have been pressed up to within ½per cent. of the Bank Rate, and the current tender rate is now £3 19s. 5d. I know that the two sides of the House differ about the desirability of a higher Bank Rate and a higher Treasury bill rate. I will not pursue
1122
that point, but I should like to make plain that the Bank Rate has been effective pretty well throughout.
Moreover, there has been no attempt to insulate the public sector from the rest. The local loans rate was raised to 4¼ per cent. on 8th July and the tax reserve certificate rate rose to 1¾ per cent. on 11th July, reflecting a higher rate for Treasury bills and bankers' deposits.
Furthermore, the objective of keeping money tight in the market has on the whole been consistently maintained. That is a very difficult matter, as hon. Members may know, not least at this time of the year. The difficulty one is up against is this: a high volume of Treasury bills to soak up cash in the market tends to relax the pressure on the bankers' liquidity ratio which we are trying to keep up at the same time. Except for certain occasions when money has been easier—there have been a few days at a time when this has happened—on the whole those two objectives of keeping banks tight on their ratios and keeping the money market tight have been fairly consistently maintained.
Furthermore, in the four months from 16th February to 30th June the net bank deposits have fallen by £92 million, but as my right hon. Friend said, the figure for bank advances has not been satisfactory. We freely admit that. There is no dispute about that at all. The reason is that whereas the bankers' liquidity ratios have been respectable, they have made these ratios respectable rather by selling investments than by restricting advances.
Hon. Members may ask—and it is a fair point to make—whether there is all that much difference, from the point of view of warding off inflation, between selling securities and restricting advances. There is the considerable difference that it is very often what bankers would call less active deposits which are used to buy securities sold by the banks, and the great point about restricting advances is that we restrict active deposits—
Mr. Gaitskell: I should not like the hon. Gentleman to end this passage of his speech without offering our congratulations to him on doing what the Chancellor has never attempted to do, and that is to explain to us the mechanism of the Bank Rate. Would he mind, in the course of his remarks, explaining exactly

1123
in what way the effect of the monetary policy since February has increased exports and reduced imports.
Sir E. Boyle: I agree that it is difficult to measure these things precisely. But I am quite sure that, so far as imports are concerned, the trade figures for April and May—and particularly the May figures—did reflect the effect of putting up the Bank Rate.
The April figures may still have reflected the earlier dock strike, but the May figures did not. I think there is no doubt that that favourable month reflected the effect of the measures taken by my right hon. Friend. Since then—I admit this completely—the most recent dock strike has made it very difficult to measure these matters accurately. The whole point about the dock strike is not that we want to use it as an alibi, but that it has made it extremely difficult to evaluate trends.
Mr. Gaitskell: Would the hon. Gentleman explain the theory to us a little?
Sir E. Boyle: I am much obliged to the right hon. Member, and on another occasion I should be glad to respond to his invitation. I have a certain amount more to say, and I think it would be desirable now for me to pass to the next part of my speech.
I want to come to grips with the most important point which the right hon. Member has made. I refer to the question which he asked yesterday, as to whether my right hon. Friend was
"satisfied that the monetary policy in which he believes really does have a sufficiently sharp enough effect upon consumption generally, or whether, by this means, he is not cutting back investment very much too hard."—[OFFICIAL REPORT, 25th July, 1955; Vol. 544, c. 830.]
I want to say a word on the subject of investment because that is extremely important. There is no dispute in the House about the enormous importance of a high rate of investment in productive industry if we are to maintain our position as a trading nation in a competitive world.
It is really not fair for hon. Members opposite, like the hon. Member for Islington, North (Mr. Fienburgh)—whose speech I much enjoyed—to blame us because, as he said, the figures for investment were so unsatisfactory during the
1124
first two or three years of Conservative Government. I am sure the hon. Member knows perfectly well that his right hon. Friend the Member for Leeds, South suspended the initial allowances in the 1951 Budget. That suspension only took effect in the following financial year, 1952–53. Hon. Members opposite must not underrate the effect of the policies of their own Government.
When we came to power in 1951, as hon. Members will recall, we found a state of affairs in which our metal goods industries were very severely overloaded. We simply had not all the resources we needed for exports, defence and home investment. It was therefore quite impossible for my right hon. Friend, in the Budget of 1952, to take special steps to encourage investment in productive industry. We also had an extremely serious balance of payments crisis at that time.
In the next year, 1953, my right hon. Friend restored the initial allowances and reduced Income Tax, but that only had its full effect in the following financial year, 1954–55. I think it fair to remember, also, that the Excess Profits Levy was still operative during the financial year 1953–54. So it is not surprising and not in any way discreditable to this Government that it has only been during the last year that investment in productive industry has gone up so encouragingly.
My right hon. Friend gave the figures this afternoon. The expenditure by private manufacturing industry on new factory building rose by approximately £25 million between 1953 and 1954, an increase of about 25 per cent. There is every indication that that rise is still going on. As I say, it is of the highest importance that we should have a high rate of investment.
The point was made to me the other day, and there is much in it, that there are certain real advantages in some large companies planning important items of investment at a time when labour is short because that encourages them to put the most modern up-to-date machinery in their factories. I think there are real advantages in that.
Having said all that—and none of my hon. Friends will wish to deny a word of it—the fact remains, however, that it is a great mistake, in times of boom, to try to do everything at once. We simply

1125
cannot plan our rate of industrial expansion regardless of our external economic position. The Government, from the moment we took office, have always realised the intimate connection between our economic policy at home and balance of payments abroad. There can be no question about that at all. If we overstrain the economy by trying to do too much at one time, the inevitable result must be that once again we shall get into balance of payments difficulties.
Mr. A. Woodburn: I gather from what the hon. Gentleman is saying that there are some things which are good and others which are not so good. Is it left to the bankers, after they get the letter from the Chancellor, to decide what is to be developed? Is it to be left to the bankers' understanding of the Chancellor's letter, or will the Government decide what ought to be developed?
Sir E. Boyle: I am glad that the right hon. Gentleman has been paying close attention to my argument. I am just coming to that point.
The view of the Government is that it is no use trying to do everything at one time. Therefore, in a time of super-boom, marginal investment projects which are not of the first importance to the economy should so far as possible be postponed. In addition, where it is possible, we want to encourage people to slow down the replacement of their fixed assets.
I quite agree that this is not an easy policy to operate; there is no dispute about that. It is not easy for the banks to decide to whom to make and to whom not to make advances. None the less—and in the Government's view this is absolutely right—the banks have been asked to make a significant reduction in the total size of their advances. It is not an easy policy but that does not in any way disprove that it is a right policy. The very fact that it is so difficult to decide exactly by what criteria to measure urgency shows how dangerous it is to try to do everything at one time.
It is of the greatest importance that we should concentrate on those projects which are of first importance to the economy and postpone those which can be postponed.
Mr. H. Wilson: In the case which has been mentioned—housing—it is obvious that the Government regard council houses as less essential. Public houses are being built. Will the hon. Member explain the mechanism by which the building of "pubs" is to be stopped and the building of council houses is to continue? How is the building of petrol stations to be stopped but the building of essential dollar factories to continue?
Sir E. Boyle: I will say only one thing about housing. Under the present Government, there are more houses for letting and more houses for sale—in fact, more houses for everybody. My right hon. Friend said today quite categorically that we hold to our programme of 300,000 houses a year, and that is much better than hon. Members opposite ever did.
I should like to say one word on the foreign aspect. I do not intend to repeat what my right hon. Friend said today about what was transacted at the Paris conference; but when the hon. Member for Stechford says, as he said this afternoon, that my right hon. Friend's visit to Paris was a costly affair, I should like the House to realise one thing. There can be no doubt whatever that it was by the unanimous will of every country represented that my right hon. Friend the Chancellor of the Exchequer became Chairman of the O.E.E.C. for a further year.
Mr. Gaitskell: It was not by the unanimous wish of this House.
Sir E. Boyle: I have absolutely no doubt that from both the political and the economic view, the conference in Paris did a very great deal of good, and that my right hon. Friend is genuinely fully deserving of the support, not only of this House, but of the country, for the work he did at that conference.
We have heard today from many speakers on the Government side of the House what is perfectly true—that the national economy is basically in a very sound position. My hon. Friend the Member for Scarborough and Whitby (Mr. Spearman), in a very helpful speech, has underlined that point. There is absolutely no truth at all in any talk today about this country being in a state of crisis; on the contrary, there can be

1127
no doubt that this country is enjoying the greatest period of prosperity that it has ever known, and it is only a very short time since the electorate showed quite clearly that it did not wish to go back to the siege economy of a few years ago.
Certainly, we do not pretend that there are not problems ahead of us. My right hon. Friend, in his Budget speech, following the passage which the right hon. Member for Leeds, South quoted, made it perfectly plain that he was not fully satisfied in April. For our part, we believe that it is very much better to take
essential measures in time before a crisis develops, instead of letting that crisis develop so that the whole nation becomes engulfed in it, as happened in 1951, the last year of the Administration of right hon. Gentlemen opposite. We intend to pursue this policy upon which we have embarked, and we are quite sure that we shall succeed in attaining our objective of securing a free economy in a peaceful world.
Question put, That this House do now adjourn:—
The House divided: Ayes 231, Noes 290.

Division No. 28.]

AYES

[9.57 p.m.

Alnsley, J. W.

Evans, Albert (Islington, S.W.)

King, Dr. H. M.

Albu, A. H.

Evans, Edward (Lowestoft)

Lawson, G. M.

Allaun, F. (Salford, E.)

Evans, Stanley (Wednesbury)

Lee, Frederick (Newton)

Anderson, Frank

Fernyhough, E.

Lever, Harold (Cheetham)

Bacon, Miss Alice

Fienburgh, W.

Lever, Leslie (Ardwick)

Baird, J.

Finch, H. J.

Lewis, Arthur

Balfour, A.

Fletcher, Eric

Lindgren, G. S.

Bartley, P.

Forman, J. C.

Lipton, Lt.-Col. M.

Bellenger, Rt. Hon, F. J.

Fraser, Thomas (Hamilton)

Logan, D. G.

Bence, C. R. (Dunbartonshire, E.)

Freeman, Peter

MacColl, J. E.

Benson, G.

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

Molnnes, J.

Bevan, Rt. Hon. A. (Ebbw Vale)

Gibson, C. W.

McLeavy, F.

Blackburn, F.

Gooch, E. G.

MacPherson, Malcolm (Stirling)

Blenkinsop, A.

Grenfell, Rt. Hon. D. R.

Mahon, S.

Blyton, w. R.

Grey, C. F.

Mallalieu, E. L. (Brigg)

Boardman, H.

Griffiths, David (Rother Valley)

Marquand, Rt. Hon. H. A.

Bottomley, Rt. Hon. A. G.

Griffiths, Rt. Hon. James (Llanelly)

Mason, Roy

Bowden, H. W. (Leicester, S.W.)

Griffiths, William (Exchange)

Mayhew, C. P.

Bowles, F. G.

Grimond, J.

Mellish, R. J.

Boyd, T. G.

Hall, Rt. Hn. Glenvil (Colne Valley)

Messer, Sir F.

Braddock, Mrs. Elizabeth

Hall, John T. (Gateshead, W.)

Mikardo, Ian

Brookway, A. F.

Hamilton, W. W.

Mitchison, G. R.

Broughton, Dr. A. D. D.

Hannan, W.

Monslow, W.

Brown, Thomas (Ince)

Harrison, J. (Nottingham, N.)

Moody, A. S.

Burke, W. A.

Hastings, S.

Morrison, Rt. Hn. Herbert (Lewis'm, S.)

Burton, Miss F. E.

Hayman, F. H.

Mort, D. L.

Butler, Herbert (Hackney, C.)

Healey, Denis

Moyle, A.

Butler, Mrs. Joyce (Wood Green)

Henderson, Rt. Hn. A. (Rwly Regis)

Mulley, F. W.

Callaghan, L. J.

Herbison, Miss M.

Neal, Harold (Bolsover)

Carmichael, J.

Hewitson, Capt. M.

Noel-Baker, Francis (Swindon)

Castle, Mrs. B. A.

Hobson, C. R.

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

Champion, A. J.

Holman, P.

O'Brien, T.

Chapman, W. D.

Holmes, Horace

Oliver, G. H.

Clunle, J.

Holt, A. F.

Oram, A. E.

Coldrick, w.

Houghton, Douglas

Orbach, M.

Collick, P. H. (Birkenhead)

Howell, Charles (Perry Barr)

Oswald, T.

Collins, V. J. (Shoreditch & Finsbury)

Howell, Denis (All Saints)

Owen, W. J.

Corbet, Mrs. Freda

Hubbard, T. F.

Padley, W. E.

Cove, W. G.

Hughes, Emrys (S. Ayrshire)

Paling, Will T. (Dewsbury)

Craddock, George (Bradford, S.)

Hughes, Hector (Aberdeen, N.)

Palmer, A. M. F.

Cronin, J. D.

Hunter, A. E.

Pannell, Charles (Leeds, W.)

Crossman, R. H. S.

Hynd, H. (Accrington)

Pargiter, G. A.

Daines, P.

Hynd. J. B. (Attercliffe)

Parker, J.

Darling, George (Hillsborough)

Irvine, A. J. (Edge Hill)

Parkin, B. T.

Davies, Ernest (Enfield, E.)

Irving, S. (Dartford)

Paton, J.

Davies, Harold (Leek)

Isaacs, Rt. Hon. G. A.

Peart, T. F.

Davies, Stephen (Merthyr)

Janner, B.

Price, J. T. (Westhoughton)

Deer, G.

Jay, Rt. Hon. D. P. T.

Probert, A. R.

de Freitas, Geoffrey

Jeger, George (Goole)

Proctor, W. T.

Delargy, H. J.

Jeger, Mrs. Lena (Holbn & St. Pncs, S.)

Pursey, Cmdr. H.

Dodds, N. N.

Jenkins, Roy (Stechford)

Rankin, John

Donnelly, D. L.

Johnson, James (Rugby)

Reid, William

Dugdale, Rt. Hn. John (W. Brmwch)

Jones, Rt. Hon. A. Creech (Wakefield)

Rhodes, H.

Dye, S.

Jones, David (The Hartlepools)

Robens, Rt. Hon. A.

Edelman, M.

Jones, Elwyn (W. Ham. S.)

Roberts, Albert (Normanton)

Edwards, Rt. Hon. John (Brighouse)

Jones, J. Idwal (Wrexhm)

Robinson, Kenneth (St. Pancras, N.)

Edwards, Rt. Hon. Ness (Caerphilly)

Jones, T. W. (Merioneth)

Rogers, George (Kensington, N.)

Edwards, Robert (Bilston)

Kenyon, C.

Ross, William

Edwards, W. J. (Stepney)

Key, Rt. Hon. C. W.

Royle, C.

Short, E. W.

Sylvester, G. O.

White, Henry (Derbyshire, N.E.)

Silverman, Julius (Aston)

Taylor, Bernard (Mansfield)

Wilcock, Group Capt. C. A. B.

Silverman, Sydney (Nelson)

Taylor, John (West Lothian)

Wilkins, W. A.

Skeffington, A. M.

Thomas, George (Cardiff)

Willey, Frederick

Slater, Mrs. H. (Stoke, N.)

Thomas, Iorwerth (Rhondda, W.)

Williams, David (Neath)

Slater, J. (Sedgefield)

Thomson, George (Dundee, E.)

Williams, Rev. Llywelyn (Ab'tillery)

Smith, Ellis (Stoke, S.)

Thornton, E.

Williams, Ronald (Wigan)

Snow, J. W.

Timmons, J.

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

Sorensen, R. W.

Turner-Samuels, M.

Williams, W. R. (Openshaw)

Sparks, J. A.

Ungoed-Thomas, sir Lynn

Williams, W. T. (Barons Court)

Steele, T.

Viant, S. P.

Willis E. G. (Edinburgh, E.)

Stewart, Michael (Fulham)

Wade, D. W.

Wilson, Rt. Hon. Harold (Huyton)

Stokes, Rt. Hon. R. R. (Ipswich)

Warbey, W. N.

Winterbottom, Richard

Stones, W. (Consett)

Watkins, T. E.

Woodburn, Rt. Hon. A.

Strachey, Rt. Hon. J.

Weitzman, D.

Yates, V. (Ladywood)

Strauss, Rt. Hon. George (Vauxhall)

Wells, Percy (Faversham)

Zilliacus, K.

Stross, Dr. Barnett (Stoke-on-Trent, C.)

Wells, William (Walsall, N.)

Summerskill, Rt. Hon. E.

Wheeldon, W. E.

TELLERS FOR THE AYES:

Swingler, S. T.

White, Mrs. Eirene (E. Flint)

Mr. Popplewell and Mr. Pearson

NOES

Agnew, Cmdr. P. G.

D'Avigdor-Goldsmid, Sir Henry

Horsbrugh, Rt. Hon. Dame Florence

Aitken, W. T.

Deedes, W. F.

Howard, Hon. Greville (St. Ives)

Allan, R. A. (Paddington, S.)

Digby, S. Wingfield

Howard, John (Test)

Alport, C. J. M.

Dodds-Parker, A. D.

Hudson, Sir Austin (Lewisham, N.)

Amery, Julian (Preston, N.)

Donaldson, Cmdr. C. E. McA.

Hudson, W. R. A. (Hull, N.)

Amory, Rt. Hn. Heathcoat (Tiverton)

Doughty, C. J. A.

Hughes, Hallett, Vice-Admiral J.

Anstruther-Gray, Major W. j.

Drayson, G. B.

Hughes-Young, M. H. C.

Arbuthnot, John

Dugdale, Rt. Hn. Sir T. (Richmond)

Hulbert, Sir Norman

Armstrong, C. W.

Duthie, W. S.

Hurd, A. R.

Ashton, H.

Eden, Rt. Hn. Sir A. (Warwick& L'm'tn)

Hutchison, Sir Ian Clark (E'b'rgh, W.)

Astor, Hon. J. J.

Eden, J. B. (Bournemouth, West)

Hutchison, James (Scotstoun)

Atkins, H. E.

Elliot, Rt. Hon. W. E.

Hyde, Montgomery

Baldock, Lt.-Cmdr. J. M.

Emmet, Hon. Mrs. Evelyn

Iremonger, T. L.

Baldwin, A. E.

Errington, Sir Eric

Irvine, Bryant Godman (Rye)

Balnlel, Lord

Enroll, F. J.

Jenkins, Robert (Dulwich)

Banks, Col. C.

Farey-Jones, F. W.

Jennings, J. C. (Burton)

Barber, Anthony

Fell, A.

Johnson, Dr. Donald (Carlisle)

Barlow, Sir John

Finlay, Graeme

Johnson, Eric (Blackley)

Barter, John

Fleetwood-Hesketh, R. F.

Jones, A. (Hall Green)

Baxter, Sir Beverley

Fletcher-Cooke, C.

Joynson-Hicks, Hon, L. W,

Bell, Philip (Bolton, E.)

Fort, R.

Kaberry, D.

Bell, Ronald (Bucks, S.)

Foster, John

Keegan, D.

Bennett, Dr. Reginald

Fraser, Hon. Hugh (Stone)

Kerby, Capt. H. B.

Bldgood, J. C.

Fraser, Sir Ian (M'cmbe & Lonsdale)

Kerr, H. W.

Biggs-Davison, J. A.

Freeth, D. K.

Kershaw, J. A.

Birch, Rt. Hon. Nigel

Galbraith, Hon. T. G. D.

Kirk, P. M.

Bishop, F. P.

Gammans, L. D.

Lagden, G. W.

Black, C. W.

Garner-Evans, E. H.

Lambert, Hon. G.

Body, R. F.

Glover, D.

Lambton, Viscount

Boothby, Sir Robert

Godber, J. B.

Lancaster, Col. C. G.

Bossom, Sir A. C.

Gomme-Duncan, Col. A.

Langford-Holt, J. A.

Boyd-Carpenter, Rt. Hon. J. A.

Gower, H. R.

Leavey, J. A.

Boyle, Sir Edward

Graham, Sir Fergus

Legh, Hon. Peter (Petersfield)

Braine, B. R.

Grant, W. (Woodside)

Lindsay, Hon. James (Devon, N.)

Braithwaite, Sir Albert (Harrow, W.)

Grant-Ferris, Wg Cdr. R. (Nantwich)

Lindsay, Martin (Sollhull)

Bromley-Davenport, Lt.-Col. W. H.

Green, A.

Linstead, Sir H. N.

Brooke, Rt. Hon. Henry

Gresham Cooke, R.

Llewellyn, D. T.

Brooman-White, R. C.

Grimston, Hon. John (St. Albans)

Lloyd, Rt. Hon. G. (Sutton Coldfield)

Browne, J. Nixon (Craigton)

Grimston, Sir Robert (Westbury)

Lloyd, Maj. Sir Guy (Renfrew, E.)

Bryan, P.

Gurden, Harold

Lloyd, Rt. Hon. Selwyn (Wirral)

Bullus, Wing Commander E. E.

Hall, John (Wycombe)

Lloyd-George, Maj. Rt. Hon. G.

Butler, Rt. Hn. R. A. (Saffron Walden)

Hare, Hon. J. H.

Longden, Gilbert

Carr, Robert

Harris, Frederic (Croydon, N.W.)

Low, Rt. Hon. A. R. W.

Cary, Sir Robert

Harrison, A. B. C. (Maldon)

Lucas, Sir Jocelyn (Portsmouth, S.)

Channon, H.

Harrison Col. J. H. (Eye)

Lucas, P. B. (Brentford & Chlswlck)

Chichester-Clark, R.

Harvey, Air Cdre. A. v. (Macclesfd)

Lucas-Tooth, Sir Hugh

Clarke, Brig. Terence (Portsmth, W.)

Harvey, Ian (Harrow, E.)

Macdonald, Sir Peter

Conant, Maj. Sir Roger

Harvey, John (Walthamstow, E.)

McKlbbin, A. J.

Cooper, Sqn. Ldr. Albert

Harvle-Watt, Sir George

Mackie, J. H. (Galloway)

Cooper-Key, E. M.

Head, Rt. Hon. A. H.

McLaughlin, Mrs. P.

Cordeaux, Lt.-Col. J. K.

Heald, Rt. Hon. Sir Lionel

Maclay, Rt. Hon. John

Corfield, Capt. F. V.

Heath, Edward

Maclean, Fitzroy (Lancaster)

Craddock, Beresford (Spelthorne)

Henderson, John (Cathcart)

McLean, Neil (Inverness)

Crookshank, Capt. Rt. Hon. H. F. C.

Hicks-Beach, Maj. W. W.

Macleod, Rt. Hn. Iain (Enfield, W.)

Crouch, R. F.

Hill, Rt. Hon. Charles (Luton)

MacLeod, John (Ross & Cromarty)

Crowder, Sir John (Finchley)

Hill, Mrs. E. (Wythenshawe)

Macmillan. Rt. Hn, Harold (Bromley)

Crowder, Petre (Ruislip—Northwood)

Hill, John (S. Norfolk)

Macmillan, Maurice (Halifax)

Cunningham, S. K.

Hinchingbrooke, Viscount

Macpherson, Niall (Dumfries)

Currie, G. B. H.

Hirst, Geoffrey

Maddan, Martin

Dance, J. C. C.

Hopkinson, Rt. Hon. Henry

Maitland. Cdr. J. F. W. (Horncastle)

Davidson, viscountess

Hornsby-Smith, Miss M. P.

Maitland, Hon. Patrick (Lanark)

1130

1131

Manningham-Buller, Rt. Hn. Sir R.

Raikes, Sir Victor

Teeling, W.

Markham, Major Sir Frank

Ramsden, J. E.

Thomas, Rt. Hn. J. P. L. (Hereford)

Marlowe, A. A. H.

Rawlinson, P. A. G,

Thomas, Leslie (Canterbury)

Marples, A, E.

Redmayne, M.

Thomas, P. J. M. (Conway)

Marshall, Douglas

Remnant, Hon. P.

Thompson, Kenneth (Walton)

Mathew, R.

Renton, D. L. M.

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

Mawby, R. L.

Ridsdale, J. E.

Thorneycroft, Rt. Hon. P.

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

Rippon, A. G. F.

Thornton-Kemsley, C. N.

Medlicott, Sir Frank

Roberts, Peter (Heeley)

Tiley, A. (Bradford, W.)

Mllligan, Rt. Hon. W. R.

Robinson, Sir Roland (Blackpool, S.)

Tliney, John (Wavertree)

Molson, A. H. E.

Robson-Brown, W.

Touche, Sir Gordon

Monckton, Rt. Hon. Sir Walter

Rodgers, John (Sevenoaks)

Turton, Rt. Hon. R. H.

Moore, Sir Thomas

Roper, Sir Harold

vane, W. M. F.

Mott-Radclyffe, C. E.

Ropner, Col. Sir Leonard

Vaughan-Morgan, J. K.

Nabarro, G, D. N.

Sandys, Rt. Hon. D.

Vickers, Miss J. H.

Nairn, D. L. s.

Schofield, Lt.-Col. W.

Vosper, D. F.

Neave, Airey

Sharpies, Maj. R. C.

Wakefield, Edward (Derbyshire, W.)

Nioholls, Harmar

Shepherd, William

Walker-Smith, D. C.

Nicholson, Godfrey (Farnham)

Nicolson, N. (B'n'm'th, E. & Chr'ch)

Simon, J. E. S. (Middlesbrough, W.)

Wall, Major Patrick

Nugent, G. R. H.

Smithers, Peter (Winchester)

Ward, Hon. George (Worcester)

Nutting, Rt. Hon. Anthony

Smyth, Brig. J. G. (Norwood)

Ward, Miss I. (Tynemouth)

Oakshott, H. D.

Soames, Capt. C.

Watkinson, H. A.

O'Neill, Hn. Phellm (Co. Antrim, N.)

Spearman, A. C. M.

Webbe, Sir H.

Orr-Ewing, Charles Ian (Hendon, N.)

Spelr, R. M.

Whitelaw, W. S. I. (Penrith & Border)

Orr-Ewlng, Sir Ian (Weston-S-Mare)

Spens, Rt. Hn. Sir P. (Kens'gt'n, S.)

Williams, Rt. Hn. Charles (Torquay)

Osborne, C.

Stanley, Capt. Hon. Richard

Williams, Gerald (Tonbridge)

Page, R. G.

Stevens, Geoffrey

Williams, Paul (Sunderland, S.)

Panned, N. A. (Kirkdale)

Steward, Harold (Stockport, S.)

Williams, R. Dudley (Exeter)

Peake, Rt. Hon. O.

Steward, Sir William (Woolwich, W.)

Wills, G. (Bridgwater)

Pickthorn, K. W. M.

Stewart, Henderson (Fife, E.)

Wilson, Geoffrey (Truro)

Pilkington, Capt. R. A.

Stoddart-Scott, Col. M.

Wood, Hon. R.

Pitt, Miss E. M.

Storey, S.

Woollam, John Victor

Pott, H. P.

Stuart, Rt. Hon. James (Moray)

Powell, J. Enoch

Summers, G. S. (Aylesbury)

TELLERS FOR THE NOES:

Price, David (Eastleigh)

Sumner, W. D. M. (Orpington)

Mr. Buchan-Hepburn and

Prior-Palmer, Brig. O. L.

Taylor, Sir Charles (Eastbourne)

Mr. Studholme.

Profumo, J. D.

Taylor, William (Bradford, N.)

Question put and agreed to.

RATING AND VALUATION (MISCELLANEOUS PROVISIONS) BILL
Lords Amendments considered.

Clause 5.—(ASCERTAINMENT OF RATEABLE VALUE.)
Lords Amendment: In page 10, line 42, leave out subsection (8).
10.11 p.m.
The Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. W. F. Deedes): I beg to move, That this House doth agree with the Lords in the said Amendment.
I think that this Amendment will prove generally acceptable and that it requires but a few words of explanation from me. We have now had an opportunity of considering the decision of the Lands Tribunal in the City of Birmingham case which was mentioned in the earlier proceedings on this Clause. It is not a simple issue by any means, but the essential point in the context of this subsection is that the sinking fund provision was reduced from £300,000 claimed to £200,000.
My right hon. Friend is prepared to assume that the principles underlying that judgment will apply in parallel cases, and in those circumstances he feels that the proper course is to withdraw the subsection. I do not think I need go further than that at the moment.
Mr. G. Lindgren: On behalf of my right hon. and hon. Friends, I wish to express appreciation of the manner in which the Minister and the Parliamentary Secretary have dealt with this matter. It shows some courage to withdraw a provision that was included in a Bill when it has been shown in debate and by subsequent findings that it is desirable to withdraw it. I think we should say, "Thank you, very much" to the Minister and the Parliamentary Secretary for having done so.
I should like further to compliment the Parliamentary Secretary on the manner in which he held a conference with the water undertakings to which he was so courteous as to extend an invitation for me to attend following my observations in a previous debate. That sort of
1134
attitude is appreciated by hon. Members on this side of the House.
Mr. Derek Walker—Smith: I do not wish to detain the House, but may I say that the attitude of the Minister and the Parliamentary Secretary in listening to informed discussion in this House and adjusting the Bill accordingly is a very good instance of Parliamentary democracy?
Question put and agreed to. [Special Entry.]

Clause 8.—(PROVISIONS AS TO RATES PAY ABLE BY CHARITABLE AND OTHER ORGANISATIONS.)
Lords Amendment: In page 13, line 33, leave out from "by" to end of line 34 and insert:
"an authority having, within the meaning of the Local Loans Act, 1875, power to levy a rate."
Mr. Deedes: I beg to move, That this House doth agree with the Lords in the said Amendment.
This Amendment requires some explanation. It substitutes a new definition of local authority for the one in the proviso to Clause 8 (1). The effect of this substitution is to extend the class of local authorities excluded from the benefit of the reliefs given by the Clause so as to embrace parish councils and joint education authorities—they are the most important bodies envisaged—and all other local authorities in the ordinary meaning of the term. That is the whole point of the Amendment, and I hope that it will be accepted.
Mr. G. R. Mitchison: That seems acceptable to right hon. and hon. Gentlemen on this side of the House, and to myself. May I congratulate the Parliamentary Secretary on going back for 73 years, to a Statute which appears to have no connection whatever with this Bill, to include parish councils, joint education authorities and, possibly, some other ratemaking odds and ends?
Lieut.-Colonel Marcus Lipton: As one of the very few parish councillors who is also a Member of the House, may I express my gratitude to the Parliamentary Secretary for putting parish councils on the map to this extent?
Question put and agreed to.—[Special Entry.]

Clause 8.—(PROVISIONS AS TO RATES PAYABLE BY CHARITABLE AND OTHER ORGANISATIONS.)
Lords Amendments agreed to: In page 14, line 3, leave out from "than" to end of line and insert:
"it would have been."
In line 4, leave out "that amount is" and insert "it is thereby."—[Mr. Deedes]
Lords Amendment: In page 14, line 46, at end insert:
(6) Nothing in this section shall affect any exemption from, or privilege in respect of, rates under any enactment other than this section.
Mr. Deedes: I beg to move, That this House doth agree with the Lords in the said Amendment.
This Amendment is necessary because the old Clause 6, dealing with churches and charities, was split by the Committee of the House into two Clauses—Clauses 7 and 8—and the saving which was in the original Clause 6 is now in Clause 7 and is also needed in Clause 8.

Clause 12.—(INCREASE OF CONTROLLED RENT IN CONSEQUENCE OF REVALUA TION.)
Lords Amendment: In page 20, line 43, leave out "the proposal was settled" and insert:
"the date on which the next demand for rates in respect of the dwelling—house is made."
Mr. Deedes: I beg to move, That this House doth agree with the Lords in the said Amendment.
The House will recall that the purpose of Clause 12 was to avoid the possibility of hardship on landlord or tenant resulting from an adjustment in rates on revaluation, but as the Clause left the House it was defective in one small detail. This Amendment enables the tenant to recover the full amount of the excess rent which has been paid. It is a small point. but not an unimportant one.
Mr. Mitehison: For this crumb from the rich landlord's table we are duly grateful.
Further Lords Amendments agreed to: In page 20, line 44, leave out "from the landlord."
In page 21, line 8, leave out "from the landlord."—[Mr. Deedes.]
Lords Amendment: In page 21, line 10, at end insert:
"and any rent recoverable by virtue of this subsection shall be recoverable from the person (if any) who on the said date is the immediate landlord of the tenant of the dwelling-house (being a tenant of the whole of the dwelling-house who has no sub-tenant of the whole of the dwelling-house) or, if there is then no such tenant, shall be recoverable from the person who is then the owner of the dwelling-house."
Mr. Deedes: I beg to move, That this House doth agree with the Lords in the said Amendment.
This is very little more than a drafting Amendment. All it does is to make clear that where there has been a change of landlord, the landlord from whom the tenant is entitled to recover any excess rent which he has paid is the landlord at the time of settlement.

Clause 13.—(CHARGES FOR LEVYING DISTRESS FOR RATES.)
Lords Amendment: In page 22, line 17, leave out from "1827" to "(which" in line 18.
Mr. Deedes: I beg to move, That this House doth agree with the Lords in the said Amendment.
This Amendment and the next one with it correct an error in drafting which would have deprived rating authorities of their existing power of recovering costs incurred by them in obtaining from the justices distress warrants for the rates. A small point, but an essential one.
Further Lords Amendment agreed to: In page 22, line 21, at end insert:
"and in section one of the Distress for Rates Act, 1849 (which relates to warrants for distress), the reference to reasonable charges, in relation to distress for rates, shall be construed as a reference to the fees, charges and expenses chargeable in accordance with any order for the time being in force under this section."—[Mr. Deedes.]

Filth SChedtlie.—(ADJUSTMENT OF RATES PAYABLE BY CHARITABLE AND OTHER ORGANISATIONS)
Lords Amendment: In page 34, line 24, leave out from "made" to "that" in line 25 and insert:
"(whether before or after the passing of this Act) in the valuation list in force in."
Mr. Deedes: I beg to move, That this House doth agree with the Lords in the said Amendment.
This is mainly a drafting Amendment. It makes clear that in calculating the limit of the rates payable by a charity in the year 1956–57 the effect of a structural alteration in the property which took place in the previous year is taken into account even though the valuation list is not altered until after the end of the previous year.
Question put and agreed to. [Special Entry.]
Further Lords Amendments agreed to: In page 35, line 6, leave out from "than" to "apart" in line 7 and insert "it would have been."
In line 8, leave out "that amount is" and insert "it is thereby."—[Mr. Deedes.]

Eighth Schedule.—(ENACTMENTS REPEALED.)
Lords Amendment: In page 41, line 36, at end insert:

"32 & 33 vict. C. 40.

The Sunday and Ragged schools (Exemption from Rating) Act, 1869.

The proviso to section one."

Mr. Deedes: I beg to move, That this House doth agree with the Lords in the said Amendment.
This is really a drafting point. It corrects an oversight by repealing the proviso to Section 1 of the Sunday and Ragged Schools (Exemption from Rating) Act, 1869.
Lords Amendment: In page 42, line 35, column 3, leave out from "words" to end of line 38 and insert:
"from 'and every notice' to the end of the subsection."
Mr. Deedes: I beg to move, That this House doth agree with the Lords in the said Amendment.
This is a minor drafting point. The Amendment is consequential upon the repeal by Part I of the Eighth Schedule of Section 35 of the Local Government Act, 1948, relating to the procedure in connection with draft valuation lists, which is superseded by the new procedure provided for in the Bill.

COLLIERY WORKERS (INDUSTRIAL INJURIES)
Motion made, and Question proposed,
That the Draft National Insurance (Indus-trial Injuries) (Colliery Workers Supplementary Scheme) Amendment (No. 2) Order, 1955, a copy of which was laid before this House on 8th July, be approved.—[Mr. Marples.]
Mr. Bernard Taylor: May I ask where the Minister is? We should like an explanation of this Order. Perhaps the hon. Gentleman is unavoidably absent; the business of the House may have proceeded too rapidly. I see that he has now come into the Chamber.
10.22 p.m.
The Joint Parliamentary Secretary to the Ministry of Pensions and National Insurance (Mr. Ernest Marples): The business of the House finished a little earlier than I expected, and I am sorry that I am a second or so late.
The Order further amends the National Insurance (Industrial Injuries) Colliery Workers Supplementary Scheme, made in 1948, which is the parent Scheme. That Scheme is a contributory one, providing supplementary benefits for persons receiving benefit under the National Insurance (Industrial Injuries) Act, 1946, in respect of colliery accidents and diseases. The Minister is responsible for paying supplementary benefits in certain cases, and in the remainder the National Coal Board acts as the paying agent.
It should be made clear that the Scheme imposes no charge upon the Exchequer or upon the Industrial Injuries Fund. That is an important point to make. In either case the payment is made out of moneys provided by the Fund formed by the contributions from the National Coal Board—4d. a ton on the total saleable tonnage of deep-mined coal—and 4d. a week from the employee; less for boys and women.
The general administration of the Scheme rests with the National Committee, which consists of five employers' representatives and five workers' representatives. The proposed amendments are to increase the benefit. Like those of the earlier Orders, they have been asked for by the National Committee and will be the second set of
1140
amendments this year. Since the earlier amendment a detailed Report has been received by the Government Actuary on the finances of the Scheme. This has revealed a substantial and growing surplus. The increases in benefit now proposed are regarded by the Actuary as well within the surplus which can be prudently released without changes in the contribution rates. In other words, the Actuary is of opinion that the increases now proposed can easily be made out of the money at the disposal of the Committee.
There are many changes. I do not think the House would like me to detail all of them, but I will mention one or two by way of illustration. It is proposed to increase the rate of supplementary injury benefit for adults from 22s. 6d. to 25s. per week, with proportionate changes for juveniles. Secondly, it is similarly proposed to increase the rate of supplementary disablement benefit for 100 per cent. disablement from 22s. 6d. to 25s., with corresponding increases for juveniles. This increase will apply where two or more disablement pensions amount to the 100 per cent. rate, or where the person is receiving approved hospital treatment. It is also proposed to increase the supplementary disablement gratuity from its present proportion of one-quarter of the basic disablement pension rate to one-third, thus bringing it into line with the supplementary disablement pension for less than the 100 per cent. rate, which is already paid at one-third of the basic disablement pension rate.
It is proposed to increase the rate of supplementary widows' pension for the able-bodied childless widow from 6s. 3d. to 7s. 6d. per week, while that for other widows is to be increased from 22s. 6d. to 25s. per week. The final proposal which I will mention is the introduction of a new supplementary benefit. I think this is of great importance to almost everyone. A gratuity is to be payable on the remarriage of a widow entitled to a supplementary widow's pension at the rate of one-third of the gratuity awarded her under the main Industrial Injuries Act. The present industrial injuries remarriage gratuity is equivalent to one year's pension. The supplementary pension will therefore be £39 in the case of a widow on the higher rate of pension.

1141
That is a rather brief and perhaps slightly belated explanation of the Order which I ask the House to approve. I hope the House will accept it. I know that the hon. Member for Mansfield (Mr. B. Taylor), who has followed the course of this class of benefit, would like to say a few words about it on behalf of the Opposition. I believe that this is an agreed Measure, and I hope that the House will pass it with reasonable expedition at this late hour.
10.28 p.m.
Mr. Bernard Taylor: We accept the hon. Gentleman's apology for being a little late, particularly in view of the very lucid explanation that he has given of the Order. My observations will be very brief, in view of what the Parliamentary Secretary has said.
I should like to make these observations because the mining industry is the only one which has initiated a supplementary scheme under Section 83 of the Industrial Injuries Act, and it has been of great help and benefit to people incapacitated in the industry. We have been talking earlier today about economies by the Exchequer; I would emphasise that this supplementary scheme is financed by the joint contributions of so much from the N.C.B. per ton of coal raised and so much per week from the miners themselves. During the past seven years the scheme has been of great help to our incapacitated people and to widows whose husbands had the misfortune to meet with a fatal accident or who died from pneumoconiosis or other industrial diseases.
One all—important observation I must make. In spite of the untiring efforts of the National Coal Board and of the National Union of Mineworkers to promote safety and to reduce accidents in the mining industry and the incidence of pneumoconiosis and other industrial diseases, the figures for the industry are still alarmingly high.
The number of awards of benefit made during 1954 for the mining industry alone is no fewer than 340,000. This House would do well, in a short debate of this kind, to pay a compliment, in view of those circumstances, to those responsible
1142
for the initiation and progress of the Scheme, and, as the Parliamentary Secretary pointed out by inference, to the very healthy state of the Fund. It is indeed a compliment to both sides of the industry, and many of us know that thousands of miners have been very grateful for the additional benefit which the Supplementary Scheme provides.
As the hon. Gentleman intimated, the Actuary and the National Committee representing both sides of the industry are completely satisfied that the Fund can bear this cost without any increase at all in contributions. I wish to reinforce what the hon. Gentleman said about the new feature. It is only a new feature so far as this Scheme is concerned. It has been characteristic of the Industrial Injuries Scheme since its inception in 1948, but here the Committee, I think wisely, has decided that this feature shall now be embodied in the Supplementary Scheme and that a remarriage gratuity shall be paid to the widows who remarry.
We on this side of the House welcome, the Order, and we are very anxious to expedite its passage through the House. We appreciate the efforts of the hon. Gentleman, his right hon. Friend and the Department in bringing the Order before us before the House rises for the Recess so that payments can be made much earlier than they would have been had the Order been delayed until the autumn. We welcome the Order, and I am obliged to the hon. Gentleman for being so expeditious.
Resolved,
That the Draft National Insurance (Industrial Injuries) (Colliery Workers Supplementary Scheme) Amendment (No. 2) Order, 1955, a copy of which was laid before this House on 8th July, be approved.

COLLIERY WORKERS (INDUSTRIAL INJURIES)
  SUNDAY CINEMATOGRAPH ENTERTAINMENTS
  Order made by the Secretary of State for the Home Department, extending Section 1 of the Sunday Entertainments, Act, 1932, to the Rural District of Tow-cester [copy laid before the House, 20th July], approved.—[Sir H. Lucas-Tooth.]

HOUSING (REGULAR EX-SERVICE MEN)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Legh.]
10.34 p.m.
Mr. Charles Doughty: I wish to discuss the question of the housing of Regular soldiers upon release. This matter was down for discussion yesterday week when, unfortunately, my hon. Friend the Parliamentary Secretary to the Ministry of Housing and Local Government could not be here, through a temporary illness. We are all pleased to see him here today ready to deal with the question and, I hope, to deal with it in a way in which certainly the Regular soldiers hope that it will be dealt with.
This is no new question. It is one which, to my knowledge, was raised almost exactly a year ago by my hon. Friend the Member for Harrow, East (Mr. Ian Harvey) in an Adjournment debate on the last day of sitting of this House before it rose for the Recess on 30th July, 1954. In that debate he said:
"It is not a good thing for Regular Army recruitment or for any of the Services that there should be publicity given to the series of eviction cases of people occupying married quarters, even though the Services have got to regain possession of these premises for those who need them more than those who are being evicted."—[OFFICIAL REPORT, 30th July, 1954; Vol. 531, c. 907.]
He went on to say that his right hon. Friend the Minister of Housing and Local Government had appointed a sub-committee which was still sitting, although the question was well and ably raised before the House at that time.
After the sub-committee had reported, the Minister of Housing and Local Government made this statement to the House:
"I have been considering the difficulties confronting Regular ex-Service men, who wish to apply for council houses in areas where a residential qualification is required by the local authority. Sailors, soldiers and airmen, returning to civil life after a period of years in the Forces, as often as not possess no fixed abode anywhere at all. To insist, in such circumstances, on a residential qualification is to make it quite impossible for many of them to get their names put onto the housing list, however great may be their need. That these men should be penalised in this way, solely by reason of the fact that they have been serving
1144
their country, is a most grievous injustice which should not be allowed to continue. I consider that an application for a council house, made within one year of his leaving the Forces, by a Regular ex-Service man, who has found employment in or near the district, or has family connections with it, should be considered exclusively on the basis of his housing needs, without any regard whatsoever for the length of his residence in the locality."—[OFFICIAL REPORT, 1st March, 1955; Vol 537, c. 1886–87.]
The reception of that scheme can hardly be called an unqualified success, as the figures given in a Written Answer to my hon. Friend the Member for Harrow, East by the Minister of Housing and Local Government showed. It was:
"Out of 1,467 authorities in England and Wales to whom the circular was sent, 860 have so far replied. Of these, 612 assured me that they were already applying these principles; 154 stated that, whilst they had not done so hitherto, they would in future bring their practice into conformity with my recommendations; five authorities are reconsidering their practice and 63 gave replies which were partially satisfactory. The number of negative replies was 34."—[OFFICIAL REPORT, 6th July, 1955; Vol. 543, c. 106.]
Only about two-thirds of the councils brought themselves into line with the Minister's recommendation, but even if that recommendation had been carried out it would not have brought the matter to a satisfactory conclusion, because the local authorities merely placed the retired soldier upon the waiting list with very few points.
I should like to draw attention to a case about which I had occasion, after the Minister's statement, to write to a council. It concerned a distinguished soldier who had retired. Although I mentioned the Minister's statement and the circular, this is the reply that I received:
"I have your letter of the 21st March and regret to have to reply to you in the following strain. The circular pronouncement dated 8th March to which you refer has been received by the Council, together with a copy of the statement in the House made by the Minister on 1st March. These have been considered by the Housing Committee. The Committee were of opinion that the position of ex-Service men generally was not less favourable than that of many of the applicants on the Council's waiting list, being those who had little if any hope of being housed or rehoused by the Council for some considerable time, if at all. Full reference was made to the circumstances of the decision made on the 15th April, 1954, to close the waiting list, and to compile there-from a priority list comprised of applicants with an urgent housing need, and who fulfilled on the whole the necessary qualifications under the 'points' scheme."

1145
It would appear that even if the council did follow the Minister's advice, the position of the Regular soldier on release would not be very different in practice from what it was before the Minister made his statement.
The problem concerns a very large number of soldiers and, I presume, Navy and Air Force men. In 1953, over 50,000 Regular soldiers were released, in 1954 23,000, and this year from January to May over 24,000 Regular soldiers were released. At least one-third of those were married, and that very large number must be people who have great difficulty in finding houses. Are they, therefore, to be left completely homeless? Worse still, are they to do what so many have done —remain in Army married quarters, if that be their last residence when in the Army and not leave when they become civilians? Such a course is certainly not justified. If one cannot find a house, there may be no excuse for remaining in someone else's property, but I can quite understand their doing so.
So far as I have been able to ascertain, no fewer than 340 such married quarters are at present irregularly occupied by ex-soldiers and their families—people who are now, of course, civilians. So far as the Army is concerned, it is a vicious circle. Serving soldiers who should be occupying married quarters cannot do so. That makes for discontent in the Army and also makes recruiting more difficult, and it has an adverse effect upon the general standing of the Army.
To a large extent, what I have so far said has been criticism, and I appreciate that mere criticism is not of much use to anybody. What solution can there be to this problem? First, of course, in every housing problem—whether it relates to Regular soldiers on release or to people who are civilians—one should re-member that to own one's house is far better than to rent somebody else's, even though one's landlord is a council. In June, the Minister of War announced the Army Savings Scheme to help soldiers to have money for a deposit and for furniture on their release. That scheme does not start until 1st September, and it must be some time before sufficient money is accumulated for Regular soldiers to be able to follow that excellent course.
When we come to the question of how the problem is to be dealt with before
1146
the necessary time has elapsed, then certainly—though, perhaps, only as a temporary measure—I think something more effective can be done on the lines which I have indicated. Local councils could surely give more points for what is properly called housing need. There is nothing unfair in that. Those families to which I have referred as occupying Army married quarters have a very great housing need, and it is quite futile to say that those people and others must wait until a court has made an eviction order —with costs which someone has to pay—before extra points can be given on the ground of housing need.
It would not be in order for me now to suggest that legislation should he introduced to that end. Indeed, legislation is not required if the proper cooperation can be obtained on the lines which I have suggested; that is, that not only should the Regular soldiers on release be placed upon housing lists in the localities where they obtain employment or in which they have other grounds for being placed on the housing list, but, in addition to their residential qualifications which they are deemed to have, they should have further points on the ground of housing need. That would place them high enough on the list to have a reasonable prospect of being housed in the particular localities where they have cause, by reason of employment or of pre-Service residential qualifications, to require a house.
I know that both the Minister and the Parliamentary Secretary are sympathetic towards the problem. I would ask them to assist this very large number of Regular soldiers who have this very serious problem, and to devise some means of solving it.
10.44 p.m.
The Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. W. F. Deedes): My hon. and learned Friend the Member for Surrey, East (Mr. Doughty) has raised a matter of general concern and, as he says, not a new one. I welcome the opportunity to meet some of the points he has made about it, and I apologise for the fact that I was not available to meet them last week, when he first sought to raise this matter in debate.
I must first say one word about the background of this problem, of which,

1147
I am sure, my hon. and learned Friend the Member for Surrey, East is aware, but which he did not mention and which must not be overlooked. As he knows, under Section 83 (1) of the Housing Act, 1936, local authorities are responsible for the management and control of their houses, including the selection of tenants. It is their responsibility, and while my right hon. Friend and the Ministry can advise, guide, and persuade, there are clear limits beyond which we cannot go, and that applies to all aspects of housing. I should like to stress that point.
As my hon. and learned Friend has just said, the main criterion in selecting tenants should be housing need. But some local authorities give weight to residential claims. They either insist on residential qualification before accepting the application, or they take residence into account when they select tenants. It is, therefore, fair to say that the Regular Service man is handicapped in the circumstances. More often than not he has no residential claim in any area and his wife will have no claim, if she has been living with him in married quarters. In addition, he may not know where he will seek employment when discharged, and so not know to which local authority he should apply before he leaves the Service.
That very difficult situation was most fully investigated by the Housing Management Sub-Committee of the Central Housing Advisory Committee, whose Report appeared only a few months ago. I am sure that my hon. and learned Friend has studied the Report. It has a great deal to say on the problem which he has raised tonight. It is the fruit of very careful and painstaking investigation. It concerns itself very largely with this question of residential qualification and the Regular Service men; and the two subjects are interrelated.
I want now to refer to the recommendation. Local authorities, except those obliged to "export" population and those with Service establishments in their areas, are urged to waive residential qualifications for Service applicants on discharge. The excepted authorities, and I think that my hon. and learned Friend is probably concerned with more than one of the excepted authorities, should waive their requirement when Service men obtain employment in their
1148
area, or have residential connections with them. Having admitted Service men to their lists, the authorities should see that their applications receive parallel treatment with those of civilians, and are not prejudiced by any weight given to residence in selecting tenants.
A great deal of guidance is also offered in this Report to Service men themselves. They are advised to make their application as early as possible and to keep in touch with local housing departments, and other possibilities in the Report are brought to their notice. It is not to be expected that Service men can or will wish to study a Report of this nature, but I want to say how the Report was followed up by my Department and by other Departments concerned.
My hon. and learned Friend has already referred to the statement which my right hon. Friend made in the House on 1st March in which he gave the Report a very fair wind. Moreover, in Circular 24 /55, which drew attention to the subject, my right hon. Friend recommended all housing authorities to adopt the principle enunciated in his words, which I will not repeat because my hon. and learned Friend has already quoted them, and to let him know their existing practice. My hon. and learned Friend said that the result was hardly an unqualified success. I can, however, bring a little more up-to-date the analysis of the replies which he mentioned.
Out of 1,467 local authorities we have so far had 1,151 replies and 838 are already applying the principles in the circular, while 174 will do so in future. That makes 1,012 out of 1,151 replies promising positive action; 16 are considering action, 82 replies are only partially satisfactory and 41 are negative. My hon. and learned Friend referred to one authority, but I cannot say into which category it falls and whether it is satisfactory or will be reconsidered.
That is not the final return, but I do not agree that it lacks success. I think that in three months it represents a considerable advance on the position at which we arrived before the sub-committee published its Report. We have taken quite definite steps to bring the Report before local authorities and show them our wishes in respect of it. In addition, the three Service Departments have issued instructions on how to apply

1149
for council houses explaining the responsibilities of councils in this regard. Not everyone understands that quite clearly. That guidance has appeared on unit and mess notice boards and will be brought to the attention of Service men at frequent intervals. Those instructions are being revised, following the circular, so that the men will have up-to-date information.
My hon. and learned Friend clearly feels that this course of action does not go far enough. We cannot discuss the possibilities, but I would say that any form of more definite or statutory action which we could exercise in this field would be more directly opposed to the well-established principles, laid down by the Housing Acts, of giving local authorities the responsibility of providing and managing their own houses. I think it fair to say that it could create resentment among a body of civilians and, without asking whether it was justified or not, that is the one feeling one
1150
does not want to generate in respect of any of the Services.
To sum up, we know very well this problem of housing Regular ex-Service men. I consider that we have done a great deal about it in recent months. We have a great deal of evidence as a result of the circular that local authorities are increasingly sympathetic to ex-Service men's housing needs. Replies to the circular bear that out. If we wish to increase this sympathy I am convinced that this is the best way of doing so. I am well aware that some local authorities have a real difficulty—I mention one which concerns my hon. and learned Friend, Caterham. We are sure that we shall solve the problem along the lines we are pursuing, that is, by the willing co-operation of those concerned, the Ministries, the local authorities and the Service men.
Adjourned accordingly at seven minutes to Eleven o'clock.

LOCAL GOVERNMENT
  Flood Damage, Neath
  Flood Damage, Neath
NATIONAL SERVICE
  Agricultural Workers (Deferment)
  Agricultural Workers (Deferment)
  Classification
  Classification
  Fishermen (Call-up)
  Fishermen (Call-up)
  Deferment Applications (Hardship Grounds)
  Deferment Applications (Hardship Grounds)
  Call-up (Industrial Production)
  Call-up (Industrial Production)
  Post-Service Employment
  Post-Service Employment
EMPLOYMENT
  Transport Companies' Staffs (Dispute)
  Transport Companies' Staffs (Dispute)
  Co-partnership and Pension Schemes
  Co-partnership and Pension Schemes
  Factory Inspectorate
  Factory Inspectorate
  Cost of Living
  Cost of Living
  Furniture and Upholstery Industry (Short-time Working)
  Furniture and Upholstery Industry (Short-time Working)
  Agricultural Workers, Norfolk
  Agricultural Workers, Norfolk
  Redundant Workers, Dundee
  Redundant Workers, Dundee
  Staff Recruitment, Storthes Hall Hospital
  Staff Recruitment, Storthes Hall Hospital
  Remploy Ltd. (Report)
  Remploy Ltd. (Report)
  Disabled Workers
  Disabled Workers
  Elderly Workers (Report)
  Elderly Workers (Report)
SCOTLAND
  Cumbernauld (New Town)
  Cumbernauld (New Town)
  National Health Service Charges
  National Health Service Charges
  Coal (Price Increase)
  Coal (Price Increase)
  River Purification
  River Purification
  Death Sentences and Reprieves
  Death Sentences and Reprieves
  Capital Punishment (Women)
  Capital Punishment (Women)
  Stone-Building Industry
  Stone-Building Industry
  School Teachers (Wastage)
  School Teachers (Wastage)
  Glasshouse Horticultural Products (Coal Prices)
  Glasshouse Horticultural Products (Coal Prices)
MINISTRY OF WORKS
  Victoria and Alexandra Gates, Hyde Park
  Victoria and Alexandra Gates, Hyde Park
  "Burghers of Calais"
  "Burghers of Calais"
  Hutments, Ludford (Sale)
  Hutments, Ludford (Sale)
  Government Chemist
  Government Chemist
PALACE OF WESTMINSTER
  House of Commons Library
  House of Commons Library
  Westminster Hall (Commonwealth Law Conference)
  Westminster Hall (Commonwealth Law Conference)
RESEARCH
  Nuclear Radiation (Committee Members)
  Nuclear Radiation (Committee Members)
  Poliomyelitis
  Poliomyelitis
BRITISH ARMY
  Rules of War (Pamphlet)
  Rules of War (Pamphlet)
  Helicopters (Joint Experimental Unit)
  Helicopters (Joint Experimental Unit)
  Ration Allowance
  Ration Allowance
  Territorial Army
  Territorial Army
  Personal Cases
  Personal Cases
  Chelsea Pensioners' Burial Ground (Brookwood Cemetery)
  Chelsea Pensioners' Burial Ground (Brookwood Cemetery)
TRADE AND COMMERCE
  Nylon (Import Duties)
  Nylon (Import Duties)
  Index of Manufacturers' Stocks (Publication)
  Index of Manufacturers' Stocks (Publication)
  Departmental Envelopes (Economy Labels)
  Departmental Envelopes (Economy Labels)
  Steel Supplies
  Steel Supplies
  New Industrial Buildings, Stalybridge and Hyde
  New Industrial Buildings, Stalybridge and Hyde
  Tomatoes (Import Duties)
  Tomatoes (Import Duties)
NATIONAL FINANCE
  Imperial College of Science and Technology
  Imperial College of Science and Technology
  Fuel Oil (Tax)
  Fuel Oil (Tax)
  Sterling Liabilities (Balance of Payments Figures)
  Sterling Liabilities (Balance of Payments Figures)
  Registered Luggage Premises, Victoria Station
  Registered Luggage Premises, Victoria Station
  £ Sterling
  £ Sterling
  Valuation Officers, Inland Revenue (Promotion)
  Valuation Officers, Inland Revenue (Promotion)
  Waterproof Garments (Tax)
  Waterproof Garments (Tax)
  Car Tax
  Car Tax
  Hire-Purchase Restrictions
  Hire-Purchase Restrictions
  Life Insurance Policies (Medical Examination)
  Life Insurance Policies (Medical Examination)
  Income Tax (Allowances and Reliefs)
  Income Tax (Allowances and Reliefs)
  Profits and Income Taxation (Royal Commission's Recommendations)
  Profits and Income Taxation (Royal Commission's Recommendations)
AGRICULTURE, FISHERIES AND FOOD
  Fishing Vessels (Coal Prices)
  Fishing Vessels (Coal Prices)
  Imported Meat (Loss)
  Imported Meat (Loss)
  LEGAL AID CASES (SETTLEMENT OF COSTS)
  LEGAL AID CASES (SETTLEMENT OF COSTS)
  SUPREME COURT TAXING OFFICE (DELAYS)
  SUPREME COURT TAXING OFFICE (DELAYS)
  JAMAICA (BANANA INDUSTRY)
  JAMAICA (BANANA INDUSTRY)
EDUCATION
  School Building Programme, Staffordshire
  School Building Programme, Staffordshire
  Posts of Responsibility (Allowances)
  Posts of Responsibility (Allowances)
MINISTRY OF HEALTH
  Manchester Regional Hospital Board
  Manchester Regional Hospital Board
ROADS
  A1 Road, North Mymms-Woolmer Green (Accidents)
  A1 Road, North Mymms-Woolmer Green (Accidents)
  Cromwell Road Extension
  Cromwell Road Extension
HOME DEPARTMENT
  Heroin (B.M.A. Deputation)
  Heroin (B.M.A. Deputation)
Preamble
The House met at half past two of the clock. The LORD CHANCELLOR on the Woolsack.

Prayers
The Earl of Yarborough—Took the Oath.
The Lord Kennet—Took the Oath.
The Lord Congleton—Sat first in Parliament after the death of his father.

SALFORD CORPORATION BILL
2.36 p.m.
Read 3a, with the Amendments; further Amendments made; Bill passed, and returned to the Commons.

BRISTOL CORPORATION BILL
Read 3a, with the Amendments, and passed, and returned to the Commons.
CHESHUNT URBAN DISTRICT COUNCIL BILL
Read 3a, with the Amendments, and passed, and returned to the Commons.
STOCK EXCHANGE CLERKS' PENSION FUND BILL
Read 3a, with the Amendments, and passed, and returned to the Commons.

OXFORD RING ROAD
2.39 p.m.
LORD LUCAS OF CHILWORTH: My Lords, I beg to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether the order authorising the work necessary to construct the Botley-Wolvercote section of the Oxford ring road has been signed in accordance with the undertaking given to the House on 21st June.]
THE PAYMASTER GENERAL (THE EARL OF SELKIRK): My Lords, I am glad to be able to inform the noble Lord that the draft order in respect of the Botley-Wolvercote section of the Oxford Ring Road was published last Friday, July 22.
LORD LUCAS OF CHILWORTH: My Lords, may I thank the noble Earl for the satisfactory nature of his reply. May I also congratulate him on missing the fall of the Sword of Damocles by three days? May I farther ask whether he will bring forcibly to the notice of those who will be responsible for the construction of this much-needed highway that the work should be carried out with all possible speed? And could the noble Earl, without in any way committing himself—I know this is a difficult question for him to answer—be kind enough to give some indication of when he, or Her Majesty's Government, think that this road should be completed?
THE EARL OF SELKIRK: My Lords, we know that the noble Lord, Lord Lucas of Chilworth, is not interested in this road just because he lives in that area: he is concerned with much broader considerations, as I am sine we all appreciate. At the same time my right honourable friend is reluctant to enter into any specific Parliamentary undertaking in regard to different roads. I am sorry, but I cannot add much to what my noble friend Lord Hawke said earlier this year in regard to the possible date of completion. But I assure the noble Lord, Lord Lucas of Chilworth, that, within the limitations imposed upon us, we approach this matter with all possible urgency. My right honourable friend does realise the importance of this particular road in joining up other roads in the neighbourhood.

USE OF COMMON LAND
THE EARL OF LISTOWEL: My Lords, I beg to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government what conclusions they have reached as a result of their undertaking of February 23 to examine the use of common land.]
THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF AGRICULTURE, FISHERIES AND FOOD (EARL ST. ALDWYN): My Lords, my right

975
honourable friend the Prime Minister is making a statement on this subject in another place this afternoon. Noble Lords will understand that I cannot anticipate that statement now, and so, with the noble Earl's permission and with your Lordships' leave, I will make a statement later in the afternoon, at a convenient point in our proceedings.

ARMY BOYS' UNITS
2.42 p.m.
VISCOUNT BRIDGEMAN: My Lords, I beg to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government what steps they have taken or propose to take to implement the recommendations in the Report of the Committee on the organisation and administration of boys' units in the Army.]
EARL FORTESCUE: My Lords, as recommended by the Report, my right honourable friend the Secretary of State for War has appointed a full-time Director of Boys' Training. He has also set up a committee, under the chairmanship of the Director-General of Military Training, to help in putting the many recommendations contained in the Report into effect as quickly as possible. The daily life of the boys in boys' units has already been greatly altered and after the summer holidays will generally conform with the policy outlined in the Report. The system of selecting boys, which was changed at the end of last year to improve the standard of entry, is already showing promising results. Further, more officers have been provided for boys' units, and great care is being taken to select suitably qualified staff. These changes, combined with longer tours of duty for instructors, are securing the improvements which the Committee considered necessary. We have also adopted a number of the other recommendations contained in the Report.
VISCOUNT BRIDGEMAN: My Lords, is my noble friend aware that that reply goes a long way, and is very satisfactory, so far as it goes? But in view of the far-reaching and important nature of the Report, will he urge upon his right honourable friend the Secretary of State for
976
War the need to take proper Estimate action in order to implement the remaining recommendations of the Report?
EARL FORTESCUE: My Lords, in reply to what the noble Viscount has just said, I shall have much pleasure in bringing his remarks to the notice of my right honourable friend.

NATIONAL INSURANCE (INDUSTRIAL INJURIES) (COLLIERY WORKERS SUPPLEMENTARY SCHEME) AMENDMENT (No. 2) ORDER, 1955
2.43 p.m.
THE EARL OF SELKIRK: My Lords, this Order is no more than an amendment of the rates of benefit of the revised scheme which was approved by this House on March 23 of this year. The scheme which the House then approved was consequent on the passing of the National Insurance Act of 1954. Since that time the Government Actuary, in his capacity as adviser to the Trustees, has carried out a comprehensive review of the whole scheme. As a result of this review, it is now possible to increase the maximum benefits under the scheme from 22s. 6d. to 25s. a week. This rate applies to supplementary injury benefit and also to 100 per cent. disablement benefit, and there are corresponding increases to juveniles. The supplementary disablement gratuity is increased from its present proportion of one-quarter of the basic disablement gratuity under the Industrial Injuries Act to one-third. There are also increases to supplementary widows' pensions.
The Order also introduces a new supplementary benefit. This is a gratuity payable on the remarriage of a widow entitled to a widow's supplementary pension. It will be at the rate of one-third of the gratuity awarded to her under the main Industrial Injuries Act. The scheme is now costing rather over £3- million, and these proposals will mean an additional cost of £270,000 for the first full year. This cost will be borne by the existing contributors—that is, the National Coal Board and those engaged in the mining industry, without any additional contribution. Of course, there is no grant from the Exchequer for this scheme. I feel sure that the scheme will be welcomed by your Lordships' House.

977
I beg to move that the Order be approved.
Moved, That the Draft National Insurance (Industrial Injuries) (Colliery Workers Supplementary Scheme) Amendment (No. 2) Order, 1955, reported from the Special Orders Committee on Wednesday last, be approved.—(The Earl of Selkirk.)
VISCOUNT HALL: My Lords, in thanking the noble Earl, Lord Selkirk, for his explanation of this draft Order, I should like to tell him and the Minister of Fuel and Power that the miners are very grateful for the expedition with which this Order has been brought forward. As the noble Earl has rightly said, it provides additional benefits for a number of disabled men and for the widows of men who have been fatally injured in the mining industry. The amounts are not very large but they are welcome and on behalf of the National Union of Mineworkers and on my own behalf I thank the Government for their expedition in this matter.
On Question, Motion agreed to.

POTATOES (GUARANTEED PRICES) ORDER, 1955
EARL ST. ALDWYN: My Lords, this Order represents a further step in the changeover from emergency to permanent powers as the basis for providing guarantees for agricultural produce listed in the First Schedule to the Agriculture Act, 1947. Like the corresponding Orders for fatstock and cereals which your Lordships have already considered, this Order is made under Section 4 of the Act. It brings under the legislative authority of Part I of the Act the administrative arrangements for providing the guarantee for potatoes. I beg to move.
Moved, That the Potatoes (Guaranteed Prices) Order, 1955, reported from the Special Orders Committee on Wednesday last, be approved.—(Earl St. Aldwyn.)
LORD WISE: My Lords, before this Order is approved, I should like to ask the noble Earl one question about the financial provision. I understand that the amount of money involved is approximately £4 million. I presume that that is the loss which the Ministry will incur by the sale of potatoes, either for human
978
consumption or for stock feeding, as against the support price which the farmers receive—that may be a varying amount, according to the losses and the quantity of the crop. I wonder whether the noble Earl can tell the House the basis on which the sum of £3,900,000 has been arrived at: whether that has been obtained from the experience of the past, whether it is estimated to be the maximum amount of loss, or whether, in fact, it may be more money than is required.
EARL ST. ALDWYN: My Lords, this figure is calculated on averages worked out on past years and by the appearance of the crops at the beginning of this season. The figure of £3·9 million includes all running costs as well, and is not just the difference between what is paid for potatoes and the price at which they are sold for feeding-stuffs.
On Question, Motion agreed to.

WHITE FISH SUBSIDY (UNITED KINGDOM) SCHEME, 1955
EARL ST. ALDWYN: My Lords, the present White Fish Subsidy Scheme expires at the end of this month. The purpose of this Scheme is to provide for the subsidy to be continued at the same rate and on the same conditions until next autumn. We shall then have had a chance to discuss with the trawler owners the changes in costs and prices which have occurred since the current Scheme was introduced and which might necessitate an alteration in the rate of subsidy. After the Summer Recess a new Scheme will be laid before your Lordships which will, among other things, take account of the effect on fishing costs of the recent increase in the price of coal. I beg to move.
Moved, That the White Fish Subsidy (United Kingdom) Scheme, 1955, reported from the Special Orders Committee on Wednesday last, be approved.—(Earl St. Aldwyn.)
THE EARL OF LISTOWEL: My Lords, I entirely agree with the noble Earl, Lord St. Aldwyn, that the best thing is to continue the present Scheme for a short period, pending the introduction of another Scheme which will take into account the increased costs which the fishermen have had to bear. At the same time, may I put this question now to the

979
noble Earl? The object of this very considerable subsidy is to enable the inshore, near and middle fishing fleets to modernise their vessels, to substitute oil fuel for coal, and to pay their own way. When the noble Earl introduces the new Scheme, after the Recess, I think it would be interesting to your Lordships if we could have a short account of the degree to which the fishing industry have succeeded in modernising their fleet, thanks to the subsidies which have been paid to date.
EARL ST. ALDWYN: My Lords, this Order is not quite what the noble Earl is referring to. I believe he is referring to the Order which I had the honour to move in your Lordships' House a few days ago, which was responsible for giving grants for vessels direct to the fishermen and the trawler owners. I said then that under that Scheme we had dealt with some 30 per cent. of the fleet, but that there was still another 70 per cent. to deal with. If the noble Earl would like further information at a later stage, I will certainly give it to him.
THE EARL OF LISTOWEL: My Lords, with the permission of the House, I should like to apologise to the noble Earl for not being able to put this question last week, as I intended to do, because I was abroad at the time. Nevertheless, if I may, I should like to put it now in order that we may have a fuller statement next time.
On Question, Motion agreed to.

SUNDAY ENTERTAINMENTS ACT, 1932
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR THE HOME DEPARTMENT (LORD MANCROFT): My Lords this Order is in the usual form and contains nothing to which I need draw the attention of your Lordships. I beg to move.
Moved, That the Order made by the Secretary of State for the Home Department, for extending section one of the Sunday Entertainments Act, 1932, to the Rural District of Towcester, be approved.—(Lord Mancroft.)
On Question, Motion agreed to.

LEEWARD ISLANDS BILL [H.L.]
2.53 p.m.
Order of the Day for the Second Reading read.
THE PARLIAMENTARY UNDER-SECRETARY OF STATE FOR THE COLONIES (LORD LLOYD): My Lords, in introducing this Bill, it is appropriate, I think, that I should say a few words about the historical background. The present federal constitution of the Leeward Islands under which the four Presidencies of Antigua, St. Kitts-Nevis-Anguilla, Montserrat and the British Virgin Islands are grouped together to form the Colony of the Leeward Islands, dates from an Act of Parliament of 1871, the Leeward Islands Act. This Act established a Federal Executive Council and a General Legislature which has power to make laws for the Leeward Islands or any part thereof on certain subjects specified in the Act—for example, postal matters, currency, audit, mercantile and criminal law, the police force and immigration—and, as respects any Presidency, on any other subject that is declared by the Legislature of that Presidency to be within the competence of the General Legislative Council. Presidential Legislatures also have power to make laws on these matters, but a law of a Presidency Legislature is void if it is repugnant to a law of the General Legislature; and any law of a Presidency Legislature relating to any of the subjects mentioned above may be repealed or altered by a law of the General Legislature.
The Act of 1871 by no means represented the views then held by Her Majesty's Government about the desirable extent of federation. It was intended to be but a first step which would be followed by federation of the Windwards and then federation of the Windwards and Leewards. But this first step was never followed by a second and third owing to the strength of opposition in the Wind-wards; and the limitations of the federal authority set up—temporarily as it was then thought—in the Leewards in 1871 have prevented it from developing into a strong and economic form of government. In recent years the unpopularity of the Leewards Federation in the island has been steadily growing. Some time ago the General Legislative Council

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passed a unanimous resolution which asked the Government
"to ascertain what action is necessary and thereafter to take appropriate steps to bring an end to the Federation of the Leeward Islands."
Meanwhile it has become clear that it would be easier for the Leeward Island,, to enter the projected West Indian Federation as separate units, which is the proposal in the West Indian Federation plan and that the existence of a Leeward; Federal Government would be an inconvenient anomaly.
In these circumstances, my right honourable friend the Secretary of State announced in a Written Parliamentary Answer on December 21, 1954, that he hoped to introduce legislation as soon as practicable to abolish the Leeward Islands Federation. Hence the present Bill. I should add that the financial consequences of the abolition of the Leeward Islands Federation will be negligible. The future Colonies (three of which—Antigua Montserrat and the British Virgin Islands—are grant-aided) will take over certain items of federal expenditure and will have to strengthen their administrations, hut the cost of this should correspond roughly to the reduction in expenditure on central services.
Let me turn now to the Bill itself. Clause 1 effects the main purpose of the Bill, namely, to abolish the Colony of the Leeward Islands—or in other words the Federation—which was established by the Leeward Islands Act, 1871, and to provide that the four Presidencies of that Colony, namely, Antigua, St. Kitts-Nevis-Anguilla, Montserrat and the British Virgin Islands shall become four separate Colonies. They will remain under one Governor and the position will then be the same as that in the Windward Islands where there are also four separate Colonies under one Governor. Clause 2 contains some rather complicated legal provisions that are consequential upon the dissolution of the Colony of the Leeward Islands. Broadly speaking, the effect of subsection (1) is to restore the position as regards the law-making powers of each Presidency—or Colony as they will now become—which obtained before the passing of the Leeward Islands Act, 1871. Before 1871 the Presidency had constituent powers. The Act of 1871 changed its position for not only did it set up a general Legislature for the Colony of the Leeward Islands but also
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made provision for the enactment of laws by the individual Presidency Legislature. To this extent, therefore, the original constituent powers possessed by each Presidency were replaced or overlaid by the provisions of the Act of 1871.
This subsection therefore does two things. First, it provides that upon the repeal of the Act of 1871 the provisions of the Presidency Constitution Ordinances relating to law-making powers, which are at present of no effect, shall come to life, thus restoring the position which obtained before 1871. Secondly, the subsection goes on to provide that the remaining provisions of those Ordinances—for example, provisions relating to such matters as the composition of the Legislative Councils and the holding of elections—shall as from the appointed day have effect as if they had been enacted by virtue of the law-making powers which are contained in the Ordinances themselves. This will avoid any doubt as to whether the provisions in question can be amended by the exercise of these powers. The object of subsection (2) of this clause is, first, to enable Her Majesty by Order-in-Council to provide for the continuation and adaptation of existing Orders-in-Council and perhaps one or two local laws, and, secondly, to enable the Governor or the Legislature of each Presidency to provide for the continuation and adaptation of existing local laws other than the few that may be dealt with by the Order-in-Council.
Among the consequential matters for which provision will have to be made by Order in Council is the transfer to the four new Colonies of the assets and liabilities of the Government of the Colony of the Leeward Islands. In this connection it is obviously important that provision for the continuation and. adaptation of existing laws should, where possible, be made in advance so as to take effect upon the appointed day. Subsection (3) makes it clear that such a. course is possible.
I turn now to Clause 3. This clause empowers Her Majesty by Order in Council to make, or to authorise the making of, emergency laws for the four new Colonies. The possible emergencies which one has to take into account are not only riot and civil disturbance but also such things as hurricanes and earthquakes, which are not infrequent in the West Indies. A period of emergency is

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defined by subsection (4) and an emergency law may be made only during a period of emergency and expires at the end of the period of emergency unless the Legislature of the Colony concerned continues it in force. In general I need only say that this clause provides in respect of these new Colonies powers which already exist in respect of most other Colonies.
I turn finally to Clause 4, which empowers Her Majesty by Order in Council to make provision for the establishment of courts for the four new Colonies, and makes such amendments to the Leeward Islands and Windward Islands (Courts) Order in Council, 1939, as are consequential upon the creation of the four new Colonies. There are complicated legal reasons for the inclusion of this clause. Briefly, the point is that at the moment the authority for the Leeward Islands and Windward Islands (Courts) Order in Council, 1939, which sets up the Supreme Court of the Wind-wards and the Leewards and the Wind-wards and Leewards Court of Appeal is, so far as the Leewards are concerned, an Act of the General Legislature of the Colony of the Leeward Islands. This has not in fact given rise to difficulties so far, but we do not feel that after the "appointed day" it will be satisfactory to have these courts ultimately dependent for their existence upon four different Legislatures.
There is no reason to suppose that this clause will provoke any controversy in the Leeward Islands. Indeed, there is no present intention of making an Order under it since the present Supreme Court, with which all concerned in the Leewards are perfectly content, will continue in existence. This provision merely enables another Order in Council to be substituted for the present one should that ever become necessary. My Lords, I hope that I have explained this Bill adequately to the House. It is, as I have already said, a measure which is desired by the Leeward Islands themselves and which is. in my view, a desirable prerequisite to the wider Federation in the Caribbean which we all hope will now be not long delayed. I therefore commend it to your Lordships, and hope that you will give it a speedy passage. I beg to move.
Moved, That the Bill be now read 2a.—(Lord Lloyd.)
3.5 p.m.
THE EARL OF LISTOWEL: My Lords, all Members of your Lordships' House who know the Leewards will welcome this Bill. As the noble Lord opposite said, the federal structure has been unpopular for a long time, and, indeed. it does not correspond to any sort of collective loyalty. The loyalty in the Lee-wards is to the individual islands, and not to any sort of collective entity; they are so far separated that it is impossible to conceive of any genuine communal or collective will or spirit. The first reason, therefore, why the Bill should be welcomed is that it does away with this anomalous, top-heavy, federal structure and will, therefore, increase the efficiency and the popularity of the administration of the Leeward Islands. The second reason, as the noble Lord rightly pointed out, is that it will facilitate the accession of the Leeward Islands, as separate Colonies, like their neighbours, the Windward Islands, to the West Indian Federation, when it is set up.
There is one question that I should like to ask the noble Lord in relation to this matter. As he is well aware, the only island territory in the Caribbean which has expressed desire not to federate is the Virgin Islands, and they are afraid that this will prejudice their relationship with the American Virgins. Under this Bill the Virgins will become a separate Colony. What is the intention of the Government in relation to the accession of the Virgin Islands to a Caribbean Federation? Have they given consideration to this matter from the point of view of public opinion in the Virgins? As the noble Lord is well aware, the principle adopted in the case of the other territories has been that federation has depended on the desire of the local inhabitants to join in the wider political set-up. I should like to know whether the noble Lord has addressed his mind (I realise that my question may be a little early because the setting up of this Federation is some way ahead) to this particular problem, which I think arises out of the Bill.
LORD LLOYD: My Lords, I must admit that I perhaps have not addressed my mind as much as I should to this particular problem. I know there is a feeling in the Virgin Islands that they do not want to federate. Whether that feeling will continue indefinitely, I think

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neither the noble Earl nor I would be rash enough to say. Clearly, if they do not cone into the Federation, some new system of dealing with the continuity of the Colony will have to be devised. Quite frankly, while we have considered the point, I am not in a position to give the noble Earl a considered opinion on it this afternoon, except to say that it has not entirely eluded us. But we feel, despite that difficulty, that this de-federation must take place; we must jump that fence when we come to it. That is really the position at the moment.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

COUNTY COURTS BILL
3.7 p.m.
House in Committee (according to Order): Bill reported without amendment.
Then, Standing Order No. 41 having been suspended (pursuant to the Resolution of July 19):
THE LORD CHANCELLOR (VISCOUNT KILMUIR): My Lords, I do not think I need take up any more of your Lordships' time by dealing with this matter further. I am sure your Lordships will appreciate that that does not indicate any discourtesy to the House, because the Bill was fully discussed in the last Parliament and we have had a Second Reading debate in this Parliament. I beg to move that the Bill be now read a third time.
Moved, That the Bill be now read 3a.—(The Lord Chancellor.)
EARL JOWITT: My Lords, I do not at all complain of the short way in which the Lord Chancellor has dealt with this matter. We had a full discussion in the last Parliament, and on the Second Reading debate I ventured to point out to the Lord Chancellor that in substance our Amendments had been incorporated in the Bill in its present form. I want to say only this. The county court is intended to be, and has always been, the poor man's court. It would be a great
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pity if the poor litigant, who brings a small case for £5 or £10 or what you will, a case which to him is of vital importance, were in any way crowded out because actions involving higher finance had any form of precedence. I hope that the noble and learned Viscount will keep that matter under his close personal survey, as I am sure he will. I think that the effect of this Bill will be that many of these smaller cases will be tried by the registrars. That may be good or may be bad; it depends on the registrar. That, too, is a matter which I know the noble and learned Viscount will keep under his personal view.
Then the whole matter is, to some extent, a leap in the dark. We have to see how it works. I believe that it will work well, but I know that the Lord Chancellor will not mind my saying that it will work all the better if he keeps the whole matter under his careful personal view from time to time. Having said that, we on this side of the House give this Bill our blessing and hope that it will do what we certainly intend should be done.
THE LORD CHANCELLOR: My Lords, I intervene for one moment only to give the noble and learned Earl the assurance for which he has asked. He and I have happy memories of the county courts. I can assure him that it will be a subject always near my heart and my mind.
On Question, Bill read 3a, and passed.

ALIENS' EMPLOYMENT BILL
Brought from the Commons; read 1a, and to be printed.
CONSOLIDATED FUND (APPROPRIATION) BILL
Brought from the Commons, endorsed with a Certificate from the Speaker that the Bill is a Money Bill, within the meaning of the Parliament Act, 1911; and read 1a.
VALIDATION OF ELECTIONS BILL
Brought from the Commons; read 1a, and to be printed.

THE EXPANDED ROADS PROGRAMME
3.13 p.m.
EARL HOWE EARL HOWE rose to ask Her Majesty's Government whether they are satisfied that the expanded roads programme will be sufficient to meet the future needs of traffic, particularly in view of the experience gained throughout the country during the railway strike; whether a return can be issued showing the progress so far made with the expanded roads programme and the progress likely to be made during the next three years; whether the programme as a whole is being dealt with as a matter of urgency; and whether it is the intention of Her Majesty's Government to bring forward additional proposals in view of the huge increase of traffic which will take place during the next three years; and to move for Papers. The noble Earl said: My Lords, when a Member of your Lordships' House ventures to introduce a Motion relating to roads, we are sometimes told: "They want racing tracks for speed-crazy motorists." In order to try to lay that ghost, I should like to recite three facts. One is that for every ton of goods that goes by rail, three tons go by road; secondly, only one-tenth of the goods arriving, at the London Docks for export arrive by rail; thirdly, in the case of Liverpool and Birkenhead 79 per cent. of all the tonnage of goods carried goes by road. Having made those few remarks, I am sure your Lordships will realise the seriousness of the Motion which I venture to submit to your Lordships this afternoon.
It was on February 2 that the Minister of Transport introduced the expanded roads programme. In introducing it he used these words [OFFICIAL REPORT, Commons, Vol. 536, col. 1097]:
"…the work done in the early years … must necessarily be mainly in connection with the improvement of existing routes."
Here we are now, five months later, and I want to ask the noble Lord who is going to reply to this debate—I hope your Lordships will forgive me for reciting a list of extreme focal points of traffic—what steps have been taken to deal with the congestion at Newark, on A.1, at Stamford on A.1, and I would also include Stevenage, Biggleswade and Grantham. What has happened with regard to Markyate, on A.5, and St. Albans, on A.5? We are told that there
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are to be by-passes, ring roads and so on, but no sort of idea has been given to any of us when these extremely necessary things will be completed. To show your Lordships how serious the problem is I may say this. Whilst any of your Lordships who motored up the A.5, say, between three and four o'clock in the morning might expect to find the road fairly free of traffic, in fact he would find the traffic going through such places as Markyate even heavier at that time of the day than during the midday hours, because of the enormous quantities of goods, cars and so on for export coming by road from the Midlands.
Then, again, with regard to A.48, what is happening about Newnham, Newport and Chepstow? The importance of Newnham, Newport and Chepstow, for those who do not already know it, is this. The Minister has talked, and Ministers have talked, quite a lot about the Ross spur as a substitute for the Severn Bridge—it is a road which they very much want. But the Ross spur will decant its traffic, if it ever gets going, into A.48, where there are these extreme focal points at which traffic is completely hung up. And what, for example, has happened with regard to Maidstone and the Ashford bypass on the A.20? Maidstone is a point of extreme concentration for traffic going in that direction. The Ashford by-pass is largely but not fully complete: there the end of it sits, without a sod being turned and no work at all apparently being done. The Minister has said, I believe, that he was going to authorise a fly-over junction at that point. I hope that he does; but I would urge him: for heaven's sake, get on with the work instead of merely putting it in a programme!
Then what is happening with regard to Reigate? That has not featured in any of the Minister's utterances. Reigate is on the No. 2—some may call it the No. 1—main road to Brighton. The road goes through a tunnel, and there is extreme concentration at the level-crossing there. Horsham is another extreme focal point. Then I come to Staines, on the A.30. There must be many of your Lordships who endeavour, at holiday and other times, to get through Staines. I met a friend the other day who told me that it had taken him one and a half hours to get through Staines. That is not an unusual experience,

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but I have not seen any particular allusion to Staines in these problems and the Minister's programme. If you go a little further down A.30, you come to Sunningdale, with its level-crossing. There again, on occasion, tremendous hold-ups occur. What is happening at Ingatestone, on A.12? What is happening at Lancaster, on A.6, or at Worcester, on A.44? At all of these points traffic is so congested that, on occasion, it piles up literally for miles. The expanded roads programme does not give us much hope with regard to much of this congestion.
On June 9, the Rime Minister, speaking in another place, said [OFFICIAL REPORT, Commons, Vol. 542 (No. 3), Col. 65]:
"Traffic is multiplying at a most alarming rate. I am told that there are likely to be another 1½ million vehicles on our roads in the course of the next three years."
He went on to say:
"There has not been any major road reconstruction plan at all over the last sixteen years."
Further on he said (Col. 66):
"In all this we have very much in mind the need to reduce accidents which is at least as important as the reed for new roads for industry."
I will come back to that aspect of the matter in a moment. Then he went on to say:
"We have also tried to get to grips with the special problem of the congestion of London and other great cities."
One would like to ask the Prime Minister what really has been done. We have heard about the Cromwell Road extension, and that work on that extension has actually started, but the whole of the original plan has been bogged down somewhere in Hammersmith because of interference with amenities. I understand that the viaduct which was an essential portion of the Cromwell Road extension is now out. Are we really tackling the question of London traffic?
Turning to Paris, which I am sure your Lordships know as well as I do, and probably better, they have gone in for a large system of tunnels. Instead of one main road being allowed to cross another, they tunnel under. A great deal of work of that kind has been going on all along the banks of the Seine, where they are tunnelling under the bridges and decanting traffic on to the north or south banks. Cannot the Minister or the Government
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give us some little hope with regard to a similar plan for London? There are points where tunnels could be cut in order to relieve the congestion of London traffic. Take another town—Stockholm. Stockholm has gone in for a big fly-over junction system which has, I believe, proved to be of immense benefit to the city. Then in Rotterdam, in Holland, they have gone in for a big sunken road scheme to get the through-traffic through the city without interfering with the city's traffic.
I pass from that matter. The Prime Minister went on to say (Col. 66):
"Work on a number of these schemes, in-eluding the London ones, will actually begin quite soon."
I put a mark against those words, because they really gave a little hope that we had not to wait for three to ten years before something was done. If only the Prime Minister or somebody could tell us which schemes have been started or are about to be started ! Above all, could we be told when they will be completed? No Minister in the Government has given us any particular forecast about that. Speaking on July 6, the Minister of Transport said (OFFICIAL REPORT (Commons), Vol. 543, No. 22, Col. 1100):
"In my statement on February 2 I named twenty-seven large schemes."
I have a list of them here; it is the expanded roads scheme. He went on to say that he hoped to authorise them this year; that actual work will have started on at least a quarter of the schemes by the end of September, and that work on practically all the remainder will start before the end of the financial year. All that is magnificent, so far as it goes; but Ministers always stop short—they do not give us any idea of the estimated date of completion, and it is that information that believe the country is really anxious to have.
On July 5 the Minister of Transport held a Press conference at which he indicated that about 340 miles of motorways should be built within ten years. Within ten years! When one looks back at the history of what various Governments have proposed in order to deal with road questions, one feels that the matter is pretty hopeless. In 1946, the Government of the day brought in a great scheme involving 800 miles of road—it may even have been more than that. It was a great

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scheme, and if only it had been carried out it would have done much to solve our present-day problems. Unfortunately, it was abandoned in 1947. Here we have our present Minister of Transport expecting to build some 340 miles of motorways within ten years.
None of these plans was additional to the expanded roads scheme. I should like to give your Lordships a criterion by which to judge how long it takes, or how long it can take, to produce these motorways. They were to comprise six lanes of traffic, with three lanes in each direction. It was a grand scheme. In the United States they have a motorway between New York and Baltimore—118 miles of road, with six lanes and seventeen clover-leaf junctions on the way. That was completed in two years. The same sort of road, I agree slightly longer (340 miles of road as against 118 miles), should, if one estimated it at twice the time, take four years to build. That would sound fairly hopeful and reasonable. It is almost three years ago to the day since Lord Leathers, then Secretary of State for the Co-ordination of Transport, Fuel and Power, rose in this House and said [OFFICIAL REPORT, Vol. 117 col. 965]:
"I want to tell your Lordships that we shall be ready to proceed as soon as we get the green light."
That was on July 9. 1952. We are now in July, 1955, and I suppose the Minister has not yet given the green light. But if he is ready to proceed, or if it is true that the Ministry are ready to proceed, what is stopping them?
I come now to present delays to traffic. Most of your Lordships find yourselves on the roads at holiday times. at fine week-ends and the like, or at any rate listen to the wireless reports wherein the motor organisations tell us that there arc blocks on this, that or the other road, three to five miles long. One knows from one's own experience that that is all too true. The Roads Improvement Association has told us that delays to traffic are costing the country £250 million a year. Naturally, I cannot vouch for that statement, or for its accuracy, but I have reason to believe that it is not far wrong. If it is true that delays to traffic are costing £250 million a year, I submit that that is a direct charge on the cost of living. The cost of living is rapidly
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becoming, if it has not a long time ago become, one of the most serious problems with which we are faced to-day. Surely we ought to do something that will begin to bring down the cost of living. It has been estimated that motorways would save at least 12½ per cent. of the general cost of delay. Surely that is worth while. Practically everything that is used, everything we wear, everything we consume in our daily lives, at some stage goes on to the roads. If it is delayed in transit on the roads the cost will have to be borne by all of us: we shall have to pay a little more. Surely we ought to be able to do something about that.
Then we come to the question of accidents. I often wonder whether we are in earnest when we talk about accidents on the highway. Do we really know what we say? I have often heard in this House expressions of universal horror, and one reads them in the Press as well as hearing them in debates. The Royal Society for the Prevention of Accidents estimate that accidents on the highway cost this country something like £157 million in 1954. Wherever roads have been improved an immediate reduction in the number of accidents has been found possible. Road accidents can be very effectively dealt with by road engineering. I have with me a booklet, published by an organisation which I will not advertise, which is complete with pictures, and any noble Lord who wishes may gladly see it. This booklet shows what has been done in the matter of road accidents and how, by the improvement of various black spots, road intersections and other examples of bad road design, accident figures have been reduced by 100 per cent. We may therefore look forward without doubt to a reduction of accidents if we improve our roads as the Minister of Transport said, in February, that he was going to do.
The reason for the reduction in accident rates is that road improvements can remove those features which cause errors of judgment. I could quote figures from American experience, but I will give noble Lords an example of what can he done by road improvements in this country. In 1932 a new road, A.580, was built between Liverpool and Manchester. There is an old road, A.57, which went through Warrington. In the three years ended March, 1951, there were, on the old road, 741 casualties. Vehicles pass

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along that road at the rate of 4,000 a day. In the same period on the new road there were 492 casualties, yet there were 7,000 vehicles using that road every day. There was, in fact, a 75 per cent. reduction in accidents. That is the sort of improvement for which we may hope if we improve our roads and get on with the work instead of just talking.
Today there are over 6 million vehicles of all kinds on the roads of this country. The Road Research Board, which cannot be said to be a biased or motoring organisation, has said that the number will double in eight years; there will be 12 million vehicles on our roads eight years from now. The Minister of Transport has also stated that the number will increase by 1½ million in three years. Our roads are pitifully inadequate today. Does not all this underline the absolute and crying necessity, from the point of view of industry and our national life, for a real sense of urgency to be imparted into the Government's proposals to deal with this problem? I often wonder to what extent Ministers themselves actually appreciate the urgency of this problem from their personal experience. I wonder how many drive their own cars or depend upon the Government pool for their motor transport. They must surely realise that the position is becoming completely intolerable.
Recently the Minister of Transport held a Press conference He referred to the expanded roads programme but gave no idea that the problem was being tackled as a matter of real urgency. Various references were made to proposals and the Minister gave estimates of when authorisation might take place, but there was no estimated date of completion for any particular proposal. The Minister did not say whether tenders had been invited, or negotiations for acquisition of land had begun. I believe that they have, but that is only hearsay, for there has been no Government announcement to tell us the real position; and I hope that the noble Earl who is going to reply will be able to give us some real information this afternoon. The Minister left in the minds of those who heard him at that Press conference, or who afterwards read the proceedings in the Press, the impression that most of these schemes were at the drawing-board stage and might so remain almost indefinitely.
Her Majesty's Government must realise: that Governments have long shilly-shallied over this problem. One moment it has been said, "Yes, we must have roads," and the next moment, "The national situation being what it is, we cannot have roads." People are now naturally a little suspicious. I hope that Her Majesty's Government will not overlook the fact that the next Election will be coming within four or five years, perhaps depending on the activities of noble Lords opposite and their Party. If nothing effective has been done by the time the next Election takes place, having regard to what has been said by the Prime Minister and by members of Her Majesty's Government, there will be some 8 million thoroughly exasperated and frustrated people who will want to know why—and they may have votes.
I want to try to be constructive. I may be quite wrong, and. no doubt, if I am noble Lords will he able to show me where, but I believe that until we have an authority which can provide guaranteed continuity of finance we shall never get anywhere with the roads programme. We shall not get the development which alone can effect a real reduction in traffic congestion and thereby make its contribution to a reduction in accidents and in the cost of living. I want to submit, as I have done in the past. that we should have a national highways authority in this country, with power to raise money and control finance up to an authorised limit, and that that authority should deal only with new road construction and should be free from annual financial interference, as in the case of electricity, coal, gas, railways and aviation. That step has been taken in regard to all those services, so why not do so with roads? We do not expect our Minister of Transport to go down and examine all the details of Sir Miles Thomas's expenditure on B.O.A.C. or Sit Brian Robertson's proposals with regard to the railways. No doubt the Minister has these matters generally before him, but one does not expect him to be immediately responsible for everything. The same applies to gas and electricity. Surely the Minister would himself he better off were he to keep all these vast undertakings only under his general supervision, rather than be, as he is at the moment in the case of the roads, immediately and actually responsible for them.
Such a national highways authority should be able to negotiate the actual planning and expenditure with the various local authorities concerned. From what I happen to know through discussions with county surveyors and similar people, I believe it would be an enormous gain if there could be some real continuity, for local authorities could then look forward to steady programmes proceeding at an ordered pace through the years, rather than in fits and starts. I believe that they would then be in a much better position to organise their contribution to the general scheme of road improvements and that it would result in the making of roads as soon as possible and would give everybody concerned a chance to make up for lost time.
I believe that this national road authority should be given power to raise money as and when required. The ultimate requirement, I consider, in view of such information as I have been able to get hold of, is probably £750 million spread over ten years. Now if the money were raised at 4 per cent., repayable in thirty years as required, the servicing of that loan at the peak would need only £45 million a year. That is less than the Minister actually proposes to spend at the present time. It would enable a real programme to be worked out and started on without going along uneconomic paths or moving in fits and starts. The Government are now getting £400 million a year from motor taxation in all its forms, so they really cannot say that the proposal which I have put forward is an extravagant one. They cannot say that £45 million a year is an extravagant charge on revenue of £400 million a year.
Others may say: "That is all very well but you cannot provide the wherewithal." Sir George Burt, President of the Federation of Civil Engineering Contractors, has told us that the civil engineering industry can cope with 800 miles of new roads without undue strain. He said that on February 4 of this year. Sir Trustram Eve has stated that the cement makers can guarantee the cement. About 70,000 tons of steel would be required to complete the programme, and this is not an extravagant demand on a production of 15 million or more tons a year. The British Road Tar Association say that the necessary tar and bitumen would be available.
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This being so, it does not seem that it is beyond possibility for a national highways authority to be endowed with the necessary authority and power for the funds to be raised, and for the work to be got on with, and, moreover, got on with it at once. Practically every other country in the world outside this country is hard at work making roads adequate for the needs of its traffic, and has been doing so for years past. This is really a remarkable situation. Austria, Belgium, France, Italy, Holland, Malta, Portugal, Sweden, Western Germany, Iraq, Israel, Jordan, Persia, Turkey and many others are all hard at work making roads for the traffic in their countries. Look at Austria: that is a country which has only just been freed from occupation. Surely we are in no worse position than that of Austria—at least, I cannot understand it if we are. The same applies with regard to Belgium, Holland and all those small countries which I have mentioned.
In conclusion, I submit to your Lordships that "Stop" and "Go" tactics will not help the nation now. We are "up against it," and unless we adopt new policies and new methods in connection with our roads we shall find that such complete road stagnation is just round the corner as will bring vividly to mind our experiences in the General Strike—and even worse than that, in the words of Lord Leathers, give the nation a steady green light, and not one that flickers. My Lords, I beg to move for Papers.
3.45 p.m.
LORD LUCAS OF CHILWORTH: My Lords, the noble Earl, Lord Howe, in a most interesting speech—if he will permit me to say so—focused our attention on three major points. Does the Government's existing road programme measure up to the nation's requirements? Is even the road programme already announced under way with sufficient force? Can we hope for any substantial benefit or increased acceleration while our roads are under the authority of the Ministry of Transport and under the supervision, as regards finance, of the Treasury? In a debate that we had in your Lordships' House last week, when, for the last time, we buried the Road Fund and erected its tombstone, I asked the noble Lord who was replying for the Government how the Government proposed to finance the

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road programme in the future, when, at the behest of the Chancellor of the Exchequer, it could be brought to an end in any one year by his refusing—if I may be allowed to use the vernacular—to "sweeten the kitty" once every twelve months. Lord Hawke said that of course the road programme in the future will be financed in exactly the same way as it has been financed in the past. The noble Lord could not quite grasp the fact that that is what we are so afraid of; and that has been the prime reason for much of what the noble Earl has stressed so much to-day.
I want to start my contribution to this debate by asking le noble Earl, the Paymaster General, 'ho is going to reply—and, unless he belies his title, he is the one person who should be able to delve into this matter—this question: Do I already see a dark cloud on the horizon? Do I already see in the Chancellor of the Exchequer's statement a recurrence of history? The east wind which I predicted is just becoming a gentle breeze. Domestic spending is to be curtailed. Is Government spending to be curtailed? And will the first Government project to come under the Butler "axe" be the Government's road plan? I think we are entitled to know that; I think the nation is entitled to know that. Is the Boyd-Carpenter road plan going the same way as the Barnes road plan went, as the Chamberlain road plan went, and as every road plan in the history of this country has gone? I ask the noble Earl, in terms, to tell your Lordships whether the poor wretched unborn child is going to be strangled even before it sees the light of day. That is the first question I want to ask.
I agree with Lord Howe that, judged by any measure, the present programme does not measure up to the nation's requirements. I do not suppose the noble Earl, Lord Selkirk, will attempt to defend its inadequacy; I expect his defence will be the Treasury defence—shortage of money. But surely no-one would suggest that an expenditure of £147 million in three to four years can cope with the chaotic conditions on the roads of this country. And on what basis is it suggested that in this country, which has led the way in all forms of engineering ever since this nation was born, it will take ten years to build 340 miles of these new motorways? I cannot
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understand it. The noble Earl, Lord Howe, quoted the statement from the Minister's Press conference that we are going to have real roads—340 miles of them—in ten years' time; and that the Minister hopes to authorise the first in three years' time. If it were not desperately serious, that would be funny. It was not meant to be funny. The Minister is a serious man.
What is wrong? I intend to give my view of what is wrong. Perhaps the noble Earl, Lord Howe, will imagine that I am arguing, obliquely, his case for a national authority for roads. I am not going to mention that, because I understand that other noble Lords are: to develop that theme. The only thing I would say is that, from being a bitter opponent of the idea, I am now almost on the verge of being a convert to it, on the basis that things just could not be worse. I wonder whether there is sufficient dynamic force behind this scheme and whether we are going about it in the right way. I have here the Minister's Press conference report and I see that we are to have a 35-mile section of road with six fly-over junctions. This is the first time the fly-over has come into the nomenclature of road building in this country. We are to have dual-carriageways of three traffic lines on each side. To us this idea is something really revolutionary; but in America it died a natural death three or four years ago. They now have four lines, and even six lines of traffic going each way. The New Jersey turnpike and the New York Thruway have six lines of traffic—final is, twelve carriageways. And these two roads, which are far longer than 340 miles, were completed in one-third of the time it is going to take us to build our 340 miles of road. What has America got that we have not? Will the noble Earl tell me? Perhaps he will say that it is money: I am afraid that that is going to be the answer. I am not going to admit that it is constructional brains.
I believe that our road programme always has been, and while the present set-up remains always will be, tied up in a mass of red tape and contradictory officialdom. I believe that that is the root cause of the trouble. I am going to cite a case to illustrate precisely what I mean. In the £147 million programme there is a stretch of about four miles of road on the A.40 known as the Oxford Islip turn. Everybody who knows the

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A.40 knows that that is a very dangerous piece of road. A three-line road there was first suggested by the Oxfordshire County Council thirty years ago. After it was suggested, arguments and delays ensued. The Ministry said that a two-track road was sufficient for any main road in this country. Then the war came. Immediately after the war, the plan for rebuilding this road was resuscitated. The county council pressed for it and they were asked to put forward a revised plan. The Oxfordshire County Council did put forward a revised plan, and for six months they did not even get a reply. Then the argument started between the experts. The years rolled by and at last that road is included in this plan.
The road starts at the Oxford city boundary and the real trouble lies in the omission of the 771 yards from the city boundary to the by-pass which was built before the war. Under this plan we are to have a four-carriageway road funnel-ling into 771 yards of two-track road. Why cannot the 771 yards be widened at the same time? The argument goes that this is because the roads come under two highway authorities, the County and City of Oxford also that one scheme is going to cost £250,000 and the other a few thousand pounds, and therefore they are two different schemes. The quarter of a million pounds scheme will be finished in twelve months: the 771 yards scheme is not scheduled to be finished for four years. A start has been made on the paper work of the 771 yards scheme. I understand that the city authority have now received a letter from the Ministry of Transport asking that if they receive an invitation to act as the Ministry's agents when this scheme is authorized, will they please answer. "Yes" or "No". I ask the noble Earl to use his endeavours to complete this section of road while the contractors are there on the other section.
I cite only one example, but I could multiply it hundreds of times all over the country. If one studies this road plan, one sees where sections of road are started from nowhere and end nowhere. There are hundreds of four-line sections coming out of two-line sections and running into two-line sections. If a plumber fitted the plumbing of a house like that, I wonder what the result would be. There must be something wrong
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when there are all these circumlocutions and paper work and delays. I could keep your Lordships here for hours giving you examples. There are county authorities with first-class road engineers who have designed bridges and submitted plans to the Ministry of Transport, only to be told that they must have not a concrete bridge but a steel one. Heaven knows why! The result is a two-year delay while the steel is obtained and before it is delivered. Right in the middle of any one of these schemes we may have another east wind and the Chancellor of the Exchequer may say that the Government cannot go on with the scheme anyhow.
I think that what is wrong is that we are trying to plan the roads of this country with a horse-and-cart mentality. The Government are prone to point the finger of scorn at industry because of the delays in delivery that are cutting us out of the export markets. Have noble Lords ever heard of the delivery date of 340 miles of road ten years hence? If anybody in a commercial concern did a thing like that, he would get "the sack." That is what I think is wrong, and that is why I support what the noble Earl, Lord Howe, has said. First of all, the plan is totally inadequate. Before this £147 million road scheme is completed we shall be so swamped with transport that the scheme will be out of date before some of the plans are even authorised. Bearing in mind the rate at which vehicles are coming on the roads, and also the present congestion on the roads, we must do something better.
I want to make some comment, and I do net think it is necessary to offer any apology for so doing, upon what I consider to be one of the most important matters we have to consider in this country in connection with construction. It is a continuation to the Question which the noble Earl so kindly answered this afternoon and it has excited leader page articles and leading articles in the Press. I refer to the road congestion which forms upon our one trunk road through the centre of this country, the A.34, when it gets to Oxford. The noble Earl stated this afternoon that authority has been given for the commencement of the next section of the Oxford ring road. So now we have a ring road for about three-quarters of an hour if we look upon

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Oxford as a clock. We have the main east-west entering Headington by-pass; we have the southern by-pass—one of those comic things built years ago which started nowhere and finished nowhere; and we now have the Botley-Wolvercote by-pass promised—at least, we have signed a paper. That will complete about three-quarters of the circle. I want to press the noble Earl that in the national interest—and he was kind enough to pay me the compliment that I have no personal interest in this—what is known as the Sandford link, a scheme that has been accepted by the Ministry, and also what is known as the Little-more-Headington-Cowley section should be completed, thereby completing the circle. Until that is done we shall never solve the Oxford traffic problem.
It is at about this time of the year, when the Birmingham holiday week starts and all the West Midlands close down and make one dash for the sea, that chaos reigns. If your Lordships tried to get into Oxford this afternoon you would see about 400 coaches lined up along the Woodstock and Banbury roads, and you would be unable to get anywhere near the centre of Oxford. This matter has been the subject of controversy between the University authorities, the City authorities and the Oxford Preservation Trust—all estimable bodies; but if all three had set out with malice to bedevil this problem, the) could not have succeeded better. The outcome is that there is a serious suggestion that the biggest act of vandalism has a chance—I hope only a faint chance—of success: the proposal that in some spurious effort to solve the problem of the main road congestion, two roads shall be driven, one through Christ Church Meadow and the other through the Parks at Oxford. Never have I heard a more insane proposal to solve a traffic problem. It will not get near it.
I am stressing this point because I want to end by asking the noble Earl, Lord Selkirk, whether he will represent to the Government that this is a national and an international problem—the city of Oxford is one of the most priceless heritages this country has—and it should be taken out of a road programme and dealt with entirely separately. As one who has some knowledge of transportation and has studied the road question for years, I say
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that you will never be able to solve the problem of Oxford traffic, you will not preserve the University amenities of Oxford, or its historical associations, until you have diverted the colossal through-traffic which has to go through Oxford from the North and the Midlands to the South because there is no other road. If some of the wild-cat schemes put forward by people with axes to grind and vested interests to safeguard could be forgotten and it could be left to road experts to handle the problem, I am sure we should see better results.
I want to ask the noble Earl a specific question. Into this turmoil of discussion comes the Minister of Housing and Local Government. After four years of consideration of a development plan put forward by the city authorities, he writes to them declining to pass the City of Oxford development plan until they have put forward proposals for relief roads. Have we another Minister of Transport? Have we another road authority? I say this with respect, but is not the Minister of Housing here usurping the functions of the Minister of Transport? What will happen if the Minister of Transport says he does not agree? Do we go on wrangling and talking for another ten years? No, my Lords. This is a matter for the Government to decide. I hope they will decide to go on with the completion of this ring road by the building of the Sandford link and the building of the Headington Cowley section, so that it will not be necessary for any traffic from north, south, cast or west to go through the City of Oxford.
Also perhaps the city authorities will learn the lesson that the London authorities learned during the railway strike—the value of putting a complete prohibition on all waiting in certain streets between specified hours. What they should do, I believe, is to put a complete prohibition on waiting in about 100 to 200 yards of every road leading to Carfax, the High, Corn Market and Queen Street. In that prohibition I would include bicycles. I do not know whether your Lordships realise but if a bicycle is put against a kerb it takes four feet of that roadway. If you watch a bus driver passing a pedal cycle up against the kerb you will see that he will pull out four feet to miss it. Here, in this celebrated "High," the greatest street in the world without any question at all—with one part of it, as I

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think, sufficiently wide for six traffic lanes, and at its narrowest having room for four lanes, you will find that in the 200 yards where there could be four lanes, tradesmen's vehicles are allowed to stand on both sides of the road from morning to night. There are bus stops, bus crew change-over stops; and anybody who likes to prop himself up against the kerb can do so. So what happens? Sometimes there is not even one carriageway left there, and the jam starts. Prohibition on waiting is the solution. I hope that the Government—for in the end it will be the Government who must decide—will never allow the proposed vandalism of cutting through Christ Church meadow. Oxford University parks are the most beautiful spot and have memories for many thousands of people. Oxford is a modern Rome, and I sincerely hope that the Minister of Transport will not cast himself for the role of a modern Nero, and be content just to play a tune on a fiddle.

USE OF COMMON LAND
4.12 p.m.
EARL ST. ALDWYN: My Lords, with your Lordships' permission, I will intervene to give a reply to the Question asked earlier today by the noble Earl. Lord Listowel. Her Majesty's Government are aware that the present law relating to common land in England and Wales needs to be reviewed. The Prime Minister has recommended to the Queen, and Her Majesty has been graciously pleased to approve, that a Royal Commission should be appointed to undertake a comprehensive review of the present law. The names of the Chairman and the members, together with the terms of reference, will be announced later.
EARL JOWITT: My Lords, I am glad to hear that a Commission is to be appointed, but I hope the Government will have some sense of urgency in this matter. It is over a year since the noble Earl himself told us that there were something like 2 million acres of land in this country gradually going derelict. I am afraid that if we have a Royal Commission which has to explore the whole country, it will be years before it reports. In the meantime, the Forestry Commission has been brought to a standstill for
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lack of land. Will the Government do all they can to speed this matter up, perhaps by dividing it and considering county by county by separate committees? Do the Government realise how vitally important this matter is?
EARL ST. ALDWYN: My Lords, I can assure the noble and learned Earl that the Government fully appreciate the urgency of this matter. I would correct him on one point, if I may. He said that over a year ago I referred to 2 million acres. I did not have the honour to occupy my present office a year ago.
EARL JOWITT: It is a considerable time ago. It seems like a year, at any rate.
THE EARL OF LISTOWEL: My Lords, may I ask one supplementary question of the noble Earl? I agree with my noble Leader's emphasis on urgency. The noble Earl, Lord St. Aldwyn, said that the names of the Chairman and the members of the Commission and the terms of reference would be announced later. We are now about to adjourn for a three months' Recess. Does that mean that the names of the Chairman and members and the terms of reference will not be announced until after the three months' Recess, and, therefore, that the Committee itself will not get down to work until towards the end of the year?
EARL ST. ALDWYN: My Lords, obviously I cannot commit my right honourable friend the Prime Minister without reference to him, but I imagine he will probably announce it through the Press during the Recess.

THE EXPANDED ROADS PROGRAMME
4.15 p.m.
Debate resumed.
LORD TEYNHAM: My Lords, your Lordships will recall that the subject of roads and conditions on the roads has already been debated twice this year, a fact which I suggest indicates the importance that your Lordships attach to this subject. The noble Lord, Lord Lucas of Chilworth, said that there may be a dark cloud on the horizon. If there is, I hope that it will prove to be a cloud with a silver lining; but I hope there will be no cloud at all. No doubt we may hear something in that direction from the noble Lord who is to reply.

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It was on March 2 that the noble Lord, Lord Lucas of Chilworth, raised the question of Her Majesty's Government's road and rail policy; and on June 21 the noble Lord, Lord Wolverton, initiated a debate on a Motion asking whether Her Majesty's Government would
"consider maintaining as permanent features the special schemes which proved so helpful in facilitating the flow of traffic during the … railway strike."
The noble Lord, Lord Mancroft, winding up the debate, indicated that the Home Office, the police, the London County Council, the Road Research Laboratory and the Ministry of Transport were all engaged in examining evidence to see what lessons might be learned from the railway strike. I should like to ask Her Majesty's Government what conclusions have been arrived at by these various bodies, or, if they have not yet reached their conclusions, when they are likely to do so. The motoring organisations feel sure that a grave traffic crisis will arise in and around Lone on in the near future unless extensive reconstruction and improvement of roads is commenced forthwith. But this must, of course, be allied with a comprehensive parking plan to provide adequate off-street parking accommodation and to relieve busy streets of the standing vehicle for which at present there are no other parking facilities. That is absolutely essential. We must have parking places which do not exist now. I do not want to go into all the various details of these parking places, because they are well known to your Lordships and I think it would be a mistake to repeat them.
I believe it is true to say that the principal effect of the railway strike outside London and other large cities was to increase congestion on the roads and thereby to increase the cost of transport to the detriment of industry. If the strike had gone on much longer, we should have seen the effect on our export trade. I happen to be a director of two shipping companies, and I know that even now we are having great difficulty in getting our goods to the ships and getting our cargoes away. Ships are held up, and the delivery of goods to our customers is thereby delayed. This problem is getting worse and worse every week. I cannot help feeling that the recent announcement of the Ministry of Transport concerning the new road programme, although it is excellent and a great advance on previous
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schemes, does not go far enough. Why cannot we have, for instance, the tunnelled roads which they have in Paris, as the noble Earl, Lord Howe, told us? I was in Paris last week and inspected one of these tunnelling schemes, and I think it will be excellent.
The new road programme of Her Majesty's Government is really, I would say, a statement of schemes which may be authorised during the next four years; but it seems that little actual construction will take place. I think I am correct in saying that in the present financial year the expenditure of Her Majesty's Government and local authorities on new road construction will not exceed £8 million, rising to about £17 million in 1956-57, £30 million in 1957-58 and about £42 million in 1958-59. Of course, these figures are in addition to about £30 million spent on maintenance and minor improvements. I suggest that this total expenditure reflects very slow progress indeed, especially when it is remembered that, on present figures alone, during the next four years Her Majesty's Government will collect no less than £1,600 million from vehicle tax and fuel taxation.
I should like to ask Her Majesty's Government whether it is their intention, as it appears to be, to announce programmes of four years from time to time, and whether they have any proposals to make for speeding up the provision of roads. No doubt one of the principal difficulties is the acquisition of the necessary land. Could this matter not be speeded up in some way which would still give justice to the owner? It seems to me that that could be done. There are one or two ways, but I do not want to go into them at the moment. I would say that even paying a little more than the market value of the land before the scheme is announced would be better than having no new roads at all for a long time. Of course, once the scheme is announced the land value goes up, but if we were prepared to pay a little more before the scheme is announced, we could go ahead very quickly indeed.
There is no doubt that the loss to the nation in bad roads is mounting daily, and something drastic will have to be done. I am still of the opinion, like many noble Lords on this side of the House and, I think, most noble Lords on the opposite side of the House, that the best way of handling this whole

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matter is to have a National Highways Board which would raise loans, in a somewhat similar manner to other public utility undertakings. I suggest that there is a great advantage in this scheme which would ensure continuity and would enable long-term plans not only to be made but to be completed. I hope that the Minister who is to reply for Her Majesty's Government will be able to assure your Lordships that schemes are in hand for speeding up not only the acquisition of land but the commencement of construction on land that is already available. There is a considerable amount of land that is already in hand. I fully appreciate that the present Government are perhaps the first for many years to take active steps to improve the conditions of our roads. Other Governments have passed Acts, but nothing has been done. We have now made a good start, but time is not on our side. I earnestly suggest that speed of development is now an essential factor of the whole plan to prevent chaos on our roads in the very near future.
4.22 p.m.
LORD SANDHURST: My Lords, in the Motion before us at the moment there are really four questions, but only two of them are to my mind of real importance. First, are the Government satisfied that the expanded roads programme will be sufficient to meet the future needs of traffic? Secondly, is the programme as a whole being dealt with as a matter of urgency? With regard to the former, I am sure that no Government spokesman, let alone the noble Earl, Lord Selkirk, who always seems to be put up to reply when there is a really "sticky wicket" to bat on, will have the nerve to say that the programme is sufficient. What I imagine he will say is that, much though the Government regret it, the programme is all that the national economy will stand at the present time. With that I should have to agree if I accepted the view that new roads and major improvements which are capital expenditure should be paid for out of current revenue; but I cannot agree with that view. No firm which is increasing the size of its factory would dream of trying to do it out of current revenue; it would do it either out of accumulated reserves or by raising new capital. Whichever method it adopted, it would
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not even start work without making certain that adequate communications, both inside and outside the factory, were provided for. It would most certainly not economise in that direction.
To-day, this country is an expanding factory, and if we are going to maintain full employment and our present, let alone an improved, standard of living, we have to expand fast. The existing communication system is completely inadequate even for the existing factory and is the first thing that must receive attention if the expanded factory is going to work and produce results. If we do not improve our communications, then it is not a bit of good improving our factory machinery. We have no accumulated reserves and must therefore raise new capital; there is no alternative. There would be no difficulty about raising the money. A road loan could be raised as easily as money for gas, electricity or the railways, and is now just as urgent. I am told that the answer that we should get is that there is no return on the money; that in the case of the other utilities the consumer pays and the Exchequer gets back its 4 per cent. But what about the owners of motor vehicles? Do they not pay? They are already paying in extra taxation—applicable to them alone, mark you, not to the other taxpayers—more than ten times as much as they are getting back.
Even if they were not, and quite disregarding the question of loans, what about schools and houses? No one will deny that they both are essential. And nobody should deny that roads are essential. Yet what are the figures for schools and roads? This, mark you, is paid out of income. In the case of schools, since the Conservative Party came into power new buildings costing £190 million have been competed, and others to cost £121 million are at present under construction. Those new buildings bring with them increased costs in the form of teachers' and others' salaries. Against the £190 million spent on schools, in the same period £15 million has been spent on new roads and major improvements—£15 million against £190 million. And increased costs in salaries against what?—a very small sum for increased maintenance. Against those figures, let us also take the amount spent on new houses over the same period.

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This amount, in subsidies, now comes to £216 million, and no account again is taken in this figure of the resultant sum disbursed in rent subsidies.
We are told that we cannot have this money because there is no return on it. There are enormous expenditures that not only get no return but involve additional expense. We get nothing for it. Those figures, though boring, prove how starved, at the expense of everything else, are the roads, and in them lies the answer to the second question: are the Government treating the road programme as a matter of urgency? No doubt they will say "Yes," but no one who thinks for two minutes will agree that they can be said to be treating the matter urgently whilst they go on trying to pay out of current revenue for what is capital expenditure. We do not do it in our private lives. Firms do not do it. Why should the country try to do it? Unless this matter is treated urgently and it is realised that capital is capital and revenue is revenue, and one should be spent on one purpose and one on another, we shall never get the roads, and eventually we shall find ourselves just sitting down in one place because we cannot move.
4.29 p.m.
LORD DERWENT: My Lords, I shall deal solely with the financing of road construction and highway authorities, but I shall go into rather more detail than did the noble Lords who have spoken on that question. I shall try not to be too repetitive, but I am afraid that to sonic extent I must be. Before I get on to that subject, may I ask Her Majesty's Government to note the point made by my noble friend Lord Sandhurst about what may be the Government reply, that while gas and electricity boards and authorities, and so on, earn money, that does not apply to highway authorities. The whole case for new roads is that they would save the country money, and although the amount saved may be difficult to put clown in a cash book I thought that the fact that it would save the country money was already part of Her Majesty's Government's policy.
Coming back to the question of road finance, when we "killed" the Road Fund last week I stated, and I should like shortly to state it again, that in the construction of new roads annual budgeting has been a complete failure. One
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of the principal causes of our troubles now, the fact that we have not the roads we need, is not so much that small amounts that have been spent on roads—times have been difficult—but that there has been no continuity of finance. When constructing roads, it is better definitely to have £10 million a year than to have a problematical £20 million a year. Perhaps one year you get £5 million; then you get a gap hen you get £20 million; then you get £10 million. Under those conditions it is impossible to undertake a major industrial operation, which is what the making of new roads is.
When a large commercial undertaking or company starts to build a new factory or to sell a new line of goods, the first thing it does is to see that its finance for that operation is in order, and will be there when required. Under this system of annual budgeting, nobody ever knows when this finance is going to be there. One consequence of that lack of continuity in finance is that we are paying more than we need for our road construction, and, for that matter, for our road repairs. What happens is this: you start to make a stretch of road—say a stretch of fifty miles; you stop it the next year because there is no money—there is a financial crisis. Two years later you start it up again. But you cannot start where you left off. Or recommencing the work, the whole preparation has to be gone through again, and there is invariably a delay of several months, non-productive months, all of which costs money.
There is also the question of road construction contractors. I am well aware that the Ministry of Transport know, though I sometimes doubt whether the Treasury yet know, that in these days new roads are riot made with picks and shovels: they are made with expensive machines needing skilled crews. The road contractors sink a great deal of capital into these machines. To get a proper return on the capital sunk they must keep the machines working the whole time. The proper way of making the new stretch of road is to put the heavy machines with their crews on the first section breaking up the land ready for making the road bed. When they have completed that section they move on to the next, and the next lot of machines come along and actually make the road bed. Then they have to move on again, and the surface contractors come in. That

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is the cheap way of making roads. Under annual budgeting the contractors never know what is going to happen next year. These machines may be working a year; they may be working for three months, six months or nine months; and if the work on the particular site is stopped the machines have to be moved right across country to where there is other work for them. All the time they are moving they are non-productive. This is nonproductive capital. So what do the contractors do? Quite properly, when they put in their tenders they have to make allowances for the time when, under annual budgeting, these expensive machines may not be working fully. So again, we are paying too much money for the roads that we are making.
I would suggest to Her Majesty's Government that there are two ways of providing continuous finance, and I would suggest that in both cases a scheme for financing should be set up under a special and separate Act of Parliament. I say that because at present it is always possible for a Chancellor of the Exchequer to go to Parliament and say, "I want amending legislation to wipe out this Act because we cannot afford to carry out what we have approved." Very properly, Parliament would then say, "Obviously, we are in a crisis; we cannot afford this scheme, and we must not go on with it." Under the annual system of budgeting, the Chancellor can just cut it out. If there were a special Act of Parliament he would have to ask for amending legislation. When the Road Fund was abolished by Mr. Neville Chamberlain, the country was not road conscious, as I believe it is now called. Before a Chancellor of the Exchequer went to Parliament and said "We cannot afford it," he would need a very strong case, and I very much doubt whether, just because he was a little "hard up" in a particular year, he would attempt to introduce special legislation to do away with those Acts of Parliament. That is the suggestion.
There are two ways of getting continuous finance under these Acts. One is that under a special Act a certain percentage of a particular road tax—say one-third—should be allocated to a fund under the Act. For example—and at the moment I am giving it only as an example—the present tax on fuel oil is 2s. 6d. a gallon. If 10d. of that tax were permanently
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allotted to a fund (I am using that general term at the moment) it would provide £75 million a year. Much the same sort of amount could be raised by taking a proportion of the money raised by the tax on vehicles. That is one method of getting continuous finance. I know that there are many objections to it. I know, for instance, that the Treasury would not like it. I will not go into all the arguments against it; the only reason I mention it is that it has been suggested in various quarters.
We then come to the other system which has already been mentioned—namely, the question of a road loan. I suggest that such a scheme could be operated by Parliament giving authority for a maximum sum to be raised in a particular period. If I remember aright, my noble friend Lord Howe took as an example £750 million over a ten-year period, which would seem to be £75 million a year. The advantage of this scheme is that if that amount were raised on the open market by an authority—I have not yet gone into the question of the authority—finance would be raised as and when construction demanded it. Parliament would give authority for the overall amount over a period of, say, ten years, and that money would be raised by loans only as the construction demanded it. To lighten the burden on the Budget in those ten years—because the Government would have to service the loan—the interest and repayment could probably be spread over a period of about thirty years. That is a perfectly normal transaction, and it seems to me that the Government would be spending no more per annum, even in a peak year, than it is their intention to spend now.
So much for the actual raising of loans. I cone now to what I believe in Government circles, and certainly in departmental circles, is considered a much more unorthodox proceeding, the setting up of a highway authority. There are other authorities but from the departmental viewpoint—and from that viewpoint quite rightly—this would be a non-profit-making authority, although I suggest that, from the Government point of view, it would be very much a profit-making authority, for it would save so much money to the country. I suggest this highway authority for two reasons. The first is that a Government Department

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is not, either in outlook or organisation, suitable for handling a major industrial project: that is not its function. Secondly, there is the difficulty that if loans are to be raised on the open market it will be extremely difficult to let a Government Department raise its own loans. So far as I know, a Government Department has never been allowed to administer the proceeds of a loan raised on the open market. I may be wrong, but I can find no trace of such a happening. The Treasury keeps things of that kind in its own hands. I believe that that is almost an insuperable difficulty. If this highway authority were set up, however, the Minister's relationship to road transport would be exactly the same as with other forms of transport, such as the Transport Commission. He would have the very important supervisory powers. I submit that it is the Minister's job to exercise these supervisory powers; his job is not to make roads. At the moment he is trying to do both jobs.
I do not want to go now into details of the organisation of such a highway authority, but in general terms it would be an authority composed of a small number of men. It need not be as large as other authorities because it would not employ direct labour. That small body of men would be doing that work, and nothing else, full-time. As the Minister now does, they would work through and with local authorities. I suggest that they should have a strong advisory committee, composed of representatives of local government authorities, trade and industry, and civil engineers. Those people would be only an advisory body: the actual controlling body would be full-time. I need hardly add that, if they are to be of the requisite calibre, though small in number they should be well paid. It would be their business to raise loans on the open market and to submit plans of future new road construction to the Minister. The Minister would submit those plans to Parliament, just as the scheme for modernisation of the railways was submitted. Parliament would then give authority for the amount of money to be raised over a period; and from that moment until the roads were completed, the Minister and Parliament having approved the plans and given the money, the highway authority would have complete control to work through the
1014
local authorities. A big staff would not he needed, for most of the technical staff are already with the local authorities, and I am told that at the present time those men are not employed in their full technical capacity.
LORD LUCAS OF CHILWORTH: If the noble Lord will forgive me for interrupting him, so that I may better follow his argument, would he propose that such a road authority should take over all roads or only trunk roads? Where would they stop?
LORD DERWENT: I am sorry if I did not make that point clear. As the noble Lord will understand, this is only a suggestion at this stage but I propose that they take over all new road construction. Further, I visualise that this authority would be comparatively temporary. When a trunk road was completed it would be handed over to the Minister for maintenance, as is done now. When a classified road was completed it would be handed over, as now, to the local authority. If the urgency brought about in road construction by the inauguration of this authority were such as I believe it might be, then possibly in thirty or forty years' time the authority could be abolished. We should have the road system we want and maintenance would still come under the Minister or local authorities. That is an outline of the proposal. Perhaps I have gone into too much detail too early, but there has been so much vague talk that I am putting forward certain suggestions for the consideration of Her Majesty's Government.
I would again stress the important point that the authority would be making roads and doing nothing else. I am told that the Minister has other duties. This is not an attack on my right honourable friend the Minister of Transport, or on the Ministry of Transport. I believe that they are now beginning to see, or have already seen, the green light; but there are one or two others who have not. I do not believe that a Government Department can make the road system that we need. They have other things to do, and this is a whole-time job for technical experts. I am not expecting my noble friend Lord Selkirk, when he comes to reply, to say, "We love the idea of a highway authority and we think road loans are marvellous." But these are not only my ideas: they are the collective

1015
ideas of civil engineers, members of local authorities, road users, road contractors and others. I beg Her Majesty's Government to give an assurance that a plan such as I have outlined will receive their detailed consideration without any hostile feeling; for without wishing to say anything that I should not say, I know that in Government circles (and I use the term in its widest sense) there are certain vested interests who will naturally give such a proposal a hostile reception at the start. I beg the Government to consider this matter seriously.
4.48 p.m.
LORD WALERAN: My Lords, with many other noble Lords, I am grateful to my noble friend Lord Howe for putting this Motion on the Order Paper today. Many noble Lords seriously believe that if road construction is not tackled firmly and at once, the industrial life of this country will stop growing, like a bed of flowers that is covered with weeds. The ground has been pretty well covered by previous speakers and I will confine myself to four points. Three of them are questions of which I have tried to give the noble Earl who is to reply for the Government notice, though I regret it was rather short notice. Like the noble Lord. Lord Sandhurst, I do not think that the present £147 million plan can really tackle this problem; but assuming that it will do so, I should like to ask the noble Earl, in regard to the spending of that particular money over the period 1955–59, whether any amount allocated but unspent in a particular year may be added to the amount already allocated for the following year, so that we do not lose money which was envisaged to be spent but has remained unspent. So often money can be allocated for a purpose and, when it is not all spent, instead of continuing the work afterwards, that unspent money is shown as a surplus and is never devoted to the purpose for which it was allocated by Parliament.
Now two questions of detail, but important detail. I should like to know what is the estimated cost of the Severn Bridge itself. I do not ask what the cost will be with all the suggested by-passes and so on; I want to know the cost of the bridge itself and the simple roads to it connecting with the nearest existing main roads. This is important, for we have
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had this proposal turned down time and time again because it was said that the cost would be far too great. I do not believe that it would be if, to start with, we just went for the bridge alone and the simple roads to it connected to the existing main roads. It is a scheme for which plans already exist. I believe that the steel was there at one time, but it was used during the war for other purposes. This is a scheme which could be got on with right away. It would make an enormous difference to the traffic of South Wales, even without large by-passes and connecting roads. A further question which I should like to mention is one which was raised earlier by the noble Earl, Lord Howe: I refer to the question of the Cromwell Road extension and the fly-over or viaduct. Can the noble Earl tell me what views have been put forward by the London and Home Counties Traffic Advisory Committee who, I am certain, must have discussed this matter? Will the scheme work without the flyover? I do not think it will. I think you will get a perfectly fantastic bottleneck in Tolgarth Road, and therefore you might as well not start out upon this project. I suggest that it is futile and that you might as well save the money.
The noble Lord, Lord Hawke, answered a question the other day about the serving of London Airport. When I was a member of the London and Home Counties Traffic Advisory Committee, I got to hear that the Ministry of Civil Aviation several years ago produced a Report which they gave to the Ministry of Transport, and in that Report they estimated the additional movements that would generate from London Airport when it was fully completed, over and above the normal traffic, and the difference it would make to the traffic on the Great West Road and traffic conditions in and out of London, over and above normal traffic. I believe that that Report is still with the Ministry of Civil Aviation, and it is known to the Ministry of Transport. I believe the estimate was that there would be an additional 2,000 vehicles an hour, in and out. Now will the Cromwell Road extension handle that without a fly-over? I believe not. I only hope that this House can be told the views of the London and Home Counties Traffic Advisory Committee on this problem.

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I have a further point to make. The noble Earl, Lord Howe, quoted remarks made by the Prime Minister on June 11, including an allusion to the fact that new roads and good roads would help in reducing road accidents. I would draw your Lordships' attention to the very first resolution of the special conference of road safety organisations which was held at the end of 1952 and early in 1953. I think the noble Lord, Lord Llewellin, was the Chairman. The Conference was convened under the auspices of His Royal Highness the Duke of Edinburgh. The Ministry were represented, and so were all the road safety organisations. The first resolution—it was passed on January 5, 1953—stated that the Conference
" declares its strong conviction that more expenditure on road construction, maintenance and improvement is vital to the interests of road safety and calls upon the Government to take more effective action to deal with this most urgent problem."
As has been asked by a previous speaker, if that was the considered opinion of those road safety organisations as long ago as that, have we really been serious in our efforts to get the accident rate down?
I have one more point and it is this. It may sound an add statement in the way in which I put it. The Government have said in the past that more oil is going to he used to ally itself with atomic energy to produce the power we need in this country. As we are not getting as much coal as we should do, this is very desirable. But do not think the oil that will be obtained will be sufficient if we do not have the right amount of roads on which to run enough vehicles to use enough petrol. And the reason is this. In this country we now have some new refineries—very modern refineries. These refineries carry out various processes, including "cat-cracking" and polymerisation. With these processes the amount of fuel oil and petrol obtained from, say, a ton of crude oil are almost the same, together with, of course, much smaller quantities of paraffin lubricants and diesel oils. We shall not get the fuel oil that we shall require if these refineries do not have a demand for the petrol which they are producing in a practically equivalent amount at the same time. That is a thought which I leave with your Lordships. I think it well worthy of consideration.
LORD LUCAS OF CHILWORTH: Is the noble Lord putting forward the most interesting idea that the time will arrive when petrol will have to be given away so that sufficient industrial oil may be produced?
LORD WALERAN: It could easily come to that, if the roads get jammed.
4.59 p.m.
VISCOUNT STONEHAVEN: My Lords, I am not going to follow the noble Lord who has put before us some interesting ideas on financing future road programmes. I am merely going to say a few words which will apply even if Her Majesty's Government turn down flat suggestions which have been made. In that event, there would still, I think, be a great deal that might be done within the amount of money that has been proposed. One must realise that the only source of money for the roads in one shape or another is taxation, and the only way to increase the size of the slice of the cake which you can cut for the roads is to bake sa bigger cake—that is, unless some of the suggestions put forward today are acceptable. Lord Lucas of Chilworth asks what has America got that we have not got. I would reply that something we have that America has not got is the Welfare State, and it is very, very expensive. It takes a big slice out of the same cake—the only cake there is, I agree that a state of emergency exists, in connection with the subject we are discussing, and it must be considered and faced with imagination and determination. Rapid action is necessary if we are not to suffer damage to our export market on which the whole country depends.
I want to consider for a moment whether Her Majesty's Government have any chance of spending the money with-in the time which they propose to allocate. I am not going to concern myself greatly with the main motorways, except to point out the anomaly that the Government appear to be quite happy about designing arid constructing 70 m.p.h. motorways at vast expense, and at the same time are completely unable to abolish the 20 m.p.h. speed limit. I am not trying to be funny. Somthing must be done about the 20 m.p.h. speed limit.
Before a national road project can be started, approximately twelve administrative stages have to be gone through, a

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number of which concern more than one Ministry. With the best will in the world, if the scheme goes through without a hitch, it will take a year: it cannot be done in less. Then, after the stage when the project has gone before a public inquiry, the chairman of the investigation committee has to submit an impartial report to the Minister. In practice, in the past there has been a delay of another eighteen months before an Order is made by the Minister, and no one has given any reason to think that it will be any different in future. I do not know what happens during that eighteen months and no reason has ever been given for that long delay. After the Minister of Transport has made his Order, the money for the project has to be authorised out of the main yearly authorisation. If the date happens to be wrong, the promoters of the project may have to wait until the next financial year before they get any money; and it is not until they have the money that they can start detailed drawings and designs of the scheme.
Having done that, they have to produce tender-documents and the contractors are given six weeks or two months in which to submit tenders. I have tendered for many jobs and I know that it is a big task. Finally, the successful tenderer must have a month or more in order to get his plant on to the site. Often if there is a lot of concrete work, the contractor has to set up a batch of plant, and it may be two or three months after that before the contractor can start earning money, which means before the Government can start spending money. National schemes have little chance of getting away to a flying start. As things stand at the moment, if the money allocated is not used by the end of the year, it goes into the general pool and may be used to buy false teeth and wigs; and those who look for road improvement have missed their money.
I think that a certain amount might be done on other lines. The results of the traffic census taken last autumn have not been published yet, but I know the results for my own county. They show that, compared with through roads, the Class 1 roads carried 43 per cent. more traffic. If that is the same in other counties (I have no means of telling, but that is likely), it shows the importance of Class 1 roads. Class 1 roads are 25 per cent.
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rate-borne. Everyone talks of the unfair burden of taxation on industry, but factories are not normally rated, and the people who are rated pay for 25 per cent. of the Class 1 roads—though possibly that is beside the point.
In a large number of cases, for a trifling expenditure compared with the sort of figures we are accustomed to use in talking of road construction, ordinary two-lane roads could be converted into three-lane roads, which then would be able to carry somewhere in the region of double the amount of traffic. In most cases the sum involved would be in the vicinity of £6,000 a road mile, which is far different from the £250,000 a mile for sonic of the big schemes. We are fortunate in having the Road Research Laboratory, which is doing successful, thorough, painstaking and plodding, research work. It is not in the forefront, but its work is going on all the time behind. We have scientists second to none in the world. The results of the research work done in America. Europe and the Commonwealth are studied and I think we can consider with justification that we can establish our road construction design on a sound basis. The old days of guess-work and of the fads of one person or another are over. The design of a road should be based on the traffic flow with which it is intended to deal and it should be capable of carrying the critical flow.
I would ask noble Lords to notice, the next time they drive around the countryside, that there is sufficient ground within the fences of most roads already to enable another five or six feet to be taken in to turn the road from a two-lane into a three-lane 33 ft. road. If we do that, the carrying capacity of the road is doubled for a comparatively small cost. The cost of the purchase, where it is necessary, of a strip of ground, is insignicant, because an acre of ground two yards wide is 2,420 yards long. That is a long way and an acre of ground does not cost very much; and that is all that is necessary to turn some of our smaller roads into good three-lane roads.
Then there are lay-bys and off-road bus stops, of the advisability of which scientific opinion has no doubt. The idea that a lay-by or an off-road bus stop must be up to the same standard as a running road is absolute rubbish. Why not scrape

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the turf off, lay a Somerfield track and so construct a lay-by or off-road bus stop for a few pounds? And if the bus stop is put in the wrong place through lack of experience, it can be shifted farther along the road with the greatest ease. At the same time sources of accidents and traffic jams arc removed from the road. This sort of work could be done without all the permits and paraphernalia that has to be gone through for a major scheme. An enormous amount of that kind of work could be done within the amount of money allocated—money which, so far as I can see, is not likely to be used anyway.
On the Continent and in America they have built off-road parking places on their great motorways, and so important do they consider this that they have provided continuous parking strips right alongside. Again, all we need to do in this country, as an interim measure, is to abolish that dangerous hazard, the high kerb. That descends from the day of the old whin-stone kerb and iron tyre. Last week the Ministry of Transport finally gave up the Battle of the Kerb. Since last week, or possibly the week before, we have been allowed to construct a road without a high kerb, and get the grant. That is a great step forward. You cannot get off the road if there is a high kerb to bounce over. Not only that, but a road, like ground, is not all it appears. If the Government or a local authority compulsorily purchase ground it has one value, but if sold in the open market it has a different value. A road has its measured width, and it has its apparent width to the driver using it. You will find that if there is a high kerb no driver will go within two feat of it, which means that the road is diminished by 4 feet anyway. With a clear definition of the edge, a flush kerb and traffic lanes marked so that the driver can see where he is, the driver might utilise the road to its full capacity. That is all I have to say on the actual roads.
LORD DERWENT: I hesitate to interrupt my noble friend, but before he leaves the question of roads I may say that I am interested in his suggestion of lay-bys. Has he thought of the problem that if the turf is just scraped or, in wet weather dirt and muck will be carried on to the road and the surface will become unsafe? Could my noble friend amplify that?
VISCOUNT STONEHAVEN: I recommended the use of the Somerfield track, which, I believe, even if it did not entirely abolish that, would make it a minimum consideration; and sand could be used under the Somerfield track. That would get over the difficulty, although it would be more expensive.
Then there is the question of bottlenecks. In my opinion, it is useless spending money on a road and running traffic on to a bottleneck. As other noble Lords have said, we might just as well not spend the money. It is like water going through a pipe: you get no more water through the tap by merely putting a bigger pipe behind it. Moreover, it is useless for one local authority to improve their stretch of road if the next-door local authority do not improve theirs. Therefore, I suggest that all these improvements—and they are minor improvements—should be considered, and the Ministry of Transport, or some appropriate authority, should make a cost benefit appreciation of a whole route between two destinations, not batches here and there. They should consider the cost of widening to a standard width throughout, a slight realignment, elimination of bottlenecks, elimination of black spots—based on results of before-and-after experiments carried out by the Road Research Institute here, and by other people in collaboration with them, which have had spectacular results —the provision of flush kerbs and marked traffic lanes, lay-bys and off-road bus stops, and (an important point in certain places) improved signs.
I think those matters should all be considered on a cost benefit appreciation, and if the cost is too great and the benefit too little there are plenty of other schemes which have a better cost benefit result which could be done first. Nearly all this work could be started almost at once, and funds should be made available out of the existing allocation of money. I do riot think there would be a shortage of funds, because I am sure they cannot be used up, anyway, in the early stages. Another point that should be borne in mind is that, with increasing traffic, Her Majesty's Government may find that in five or six years' time they are faced with such a problem that they will be digging up every road in the country, and no one will be able to move at all. If a start is not made now the situation will get worse and worse.

1023
The practice of freezing funds to the year has been touched on as being expensive, and there are two other reasons for this view which I should like to give. A job may last longer than the surveyor thought it would when he estimated; he cannot foretell weather conditions; he cannot foretell his difficulties of access; he cannot foretell whether the land is going to be bought or whether there will be a hold-up when he has to put in his estimate. Therefore he starts the job, and he sees the time by which his money must be used up approaching nearer and nearer. It happens in my county, I know —and one finds local authorities working costly overtime in order to get the money spent. Another thing one sees is a bituminous carpet being put down in doubtful weather. It may be said: "It is not perfect, but if I do not put it down now I shall not get the money for it." The result is that that carpet has not the life it would have if it were put down in ideal conditions, and money is wasted on that score. Those are two other points to amplify what noble Lords have said.
I am not convinced that we are tackling this accident problem as we might. I believe that the Ministry of Transport have a potent new weapon to their hand —namely, television. Why not take the television camera on to a busy main road and have a commentator pointing out good and bad driving, selfish and dangerous driving? Why not demonstrate the Highway Code on the television in the home and then dramatise an accident? One can think of all sorts of ways of putting it over to people who do not read—and some of them cannot. The Highway Code is fine, but it is not put over. On television there could be shown a pretty girl on the back of a motor cycle and how four or five seconds' carelessness involves her in an accident. I think good results would be forthcoming from something of that sort. I have detained your Lordships too long already, and in conclusion I want only to offer my sympathy to the Minister of Transport in the difficult problem he has to face and to assure him that, if I have teemed critical, I have not intended to be so.
5.18 p.m.
LORD RITCHIE OF DUNDEE: My Lords, it has been said that our climate consists of nine months winter and three
1024
months very bad weather. I think that the recent good weather, coupled with the railway strike, has made us all acutely aware of the appalling problems of our roads. I do not propose to take up much of your Lordships' time, but there are three small points that I should like to put forward for consideration. The first deals with sonic suggestions for modification of our present roads; the second concerns access to the new trunk roads when they are built; and the third is a plea for a speed restriction.
My first point is a little on the same lines as one made by my noble friend Lord Stonehaven, who suggested that we might increase the capacity of some of our existing roads. I do not know that the noble Lord, Lord Lucas of Chilworth, would entirely agree, but I believe that much might be done by increasing, the number of sections of first-class roads which might be inserted in the existing roads. In my view, such a provision would help to clear some of the interminable delays and blockages which occur on our so-called main roads. I should like to give your Lordships one example of the kind of thing we all know so well —it is a road extremely well known to me and, I do not doubt, to a number of your Lordships. I refer to a stretch of the London—Hastings main road between Tonbridge and Flimwell. The distance is roughly fifteen miles and, broadly speaking, throughout that fifteen miles it is impossible to pass a slow-moving vehicle. If you get stuck behind a lorry or other slow traffic, the position is hopeless, and at the week-ends the traffic piles up into an endless slow-moving stream. I believe that if one or more sections of first-class double-track road—I mean a two-way road—could be inserted into bits of main road of that kind, it would have the immediate effect of clearing the trouble and allowing a reasonable passage for vehicles proceeding at a normal speed.
My second point concerns the question of access to the proposed new roads. I suggest to Her Majesty's Government that they should take steps to deny absolutely any access of any kind to these new roads after they are built. No doubt the Government will take the necessary steps to restrict building. That is not my point. I would commend to your Lordships the idea which exists on the Continent in many places, and certainly on the

1025
autobahnen in Germany—that is to say, where all access of any kind is denied. By doing this, any temptation to try to overcome building restrictions is removed, because, obviously, if you may have no approach to a house or a building, if you may not have a front gate, you do not build. The road, in a sense, becomes something like a railway line upon which it is an offence to stray. I think many of us will remember the construction of the Great West Road. It was to be a sort of lifeline out of London; a wide highway sweeping, not without some beauty, through the countryside. If some provision as I have just suggested had existed it would have remained so; instead, it has become not only a death-trap but probably one of the most hideous stretches of country in Europe.
With regard to my third point, a speed restriction, I do not want to be misunderstood. What I am asking for is a minimum and not a maximum speed limit. I believe that on these new roads we should take steps to control slow traffic and, perhaps even more important, traffic which wishes to proceed slowly. These provisions exist on many of the trunk roads in America. Traffic has to proceed at 40, 45 or 50 miles per hour, according to what is decided; or, alternatively, it must use another route. I believe that there ale some people who would like to see some such provision as this brought into force on some of our existing roads. But that, I fear, would hardly be practicable, and might not be altogether popular. We are accustomed to seeing on the back of cars little notices put up by courteous drivers, "Please pass—running in." During the strike I happened to come up behind a car driven by an equally courteous driver, and he had put up a notice, "Please pass—worn out."
I think we have all had the experience of driving along a twisting road and coming behind a somewhat elderly car, driving a yard or a yard and a half out from the left-hand curb at 25 or even 20 miles per hour. Through the back window you see an upright and rather dignified figure, perhaps wearing a grey hat, and all over the back of that figure is written, "I know my rights. I am a careful driver." No doubt beside him sits the wife, placidly admiring "George's" careful driving. What
1026
"George" is really doing is setting the stage for a major accident, because, sooner or later, as the traffic piles up behind him, somebody is going to do something foolish. I hope that I am not being too light-hearted, but I went not long ago to an American gangster film. At one stage the gangster got hold of his victim and was hustling him from one place to another. He turned to his victim, and said. "Now, no funny business because I irritate easy." I think that in the circumstances which I have just described, we all "irritate easy;" and sooner or later someone pulls out of that stream, and that is when a major accident occurs. I do not like restrictions any more than do your Lordships, particularly those of us who sit on these Benches. But in all seriousness, I think there is much to be said for the control of slow-moving traffic. It may be that in time to come we shall find ourselves in the rather odd and unforeseen position of having, in addition to "speed cops" on our roads, what may in time coma to be known as "sloth cops."
5.27 p.m.
LORD GIFFORD: My Lords, we have had a most interesting debate this afternoon, and I do not intend to detain your Lordships for more than a few minutes. I heartily agree with what the noble Lord, Lord Ritchie of Dundee, has said about the slow menace, the grey-coated gentleman who "knows his rights." Of course, that is what our American visitors at once notice in this country—the slowness with which our traffic moves on the main roads. In their country all their cars are more powerful than ours, and practically every car moves at the same speed. I listened with great interest to what the noble Viscount, Lord Stonehaven, had to say about "make do and mend"—I think one might use a naval expression—and I am sure a great deal could be done at less cost by adopting some of his ideas.
The only point I wish to make is to add my plea to hat of the noble Earl, Lord Howe, and the noble Lord, Lord Waleran, in regard to the fly-over at Hammersmith Broadway. I should not have mentioned it again this afternoon, after it had already been spoken about by two other noble Lords, but I happened I to sit on the Private Bill Committee of

1027
the London County Council and Middlesex Improvement Act in 1936. It was the very first Private Bill Committee on which I ever sat after joining your Lordships' House, and it created a great impression on me. As your Lordships know, on these Committees every detail of the scheme is investigated thoroughly. I am sure that all of us who sat in that Committee room would have been absolutely horrified if we had thought the lynchpin of the whole scheme, which is this flyover, was to be abandoned. I know that Her Majesty's Government will not allow the scheme to be ruined, as I am sure it would be, by omitting this fly-over.
5.29 p.m.
LORD CHERWELL: My Lords, I have only two points to make. The first is that I should be sorry to see it go out from this House that one can do anything very much by having loans. Whether you have a loan, or get the money in any other way, you will cause inflation unless you reduce your other investments. There is only a limited amount of national effort available. If you simply take it out of consumption goods there will be fewer consumption goods for sale, and prices will go up. You cannot take it out of your export goods because our balance of payments is already in a difficult position. The only way in which you can get the money without inflation is to force the people to consume less by taxation. Any loan, or anything of that sort, unless it is counterbalanced by a reduction of other investment, will not do any good at all in our present financial position. It may be that spending money on the roads may be a better investment than investing it in some other way. That would have to be considered; but one cannot have it both ways.
I should not actually have intervened if it had not been that the noble Lord, Lord Lucas of Chilworth, referred at some length to Oxford and its problems. On the last occasion that these matters were mentioned, I think a somewhat inaccurate description of the University's attitude may have found its way into the debate. In order to anticipate any acidity from the noble Earl, Lord Selkirk, in his reply, I would say at once that I have lived in Oxford for thirty-five years and, to that extent, it may be considered that
1028
I am biased. On the other hand, it may be considered that I know something about the place. Possibly knowledge is equally as valuable as bias in this matter.
The Oxford traffic problem is entirely bound up with the congestion round Carfax, the centre of the city. Not only do the east—west and north—south roads cross there, but it forms the principal shopping centre. For years Oxford City, the University and everybody have begged Whitehall to complete the outer by-passes. As the noble Lord, Lord Lucas of Chilworth, said, two quadrants have been built, not even adjacent quadrants, and the other two quadrants have been left unfinished. At last, one, the northwestern by-pass, is now to be completed. That has just been agreed. The city will build a junction between the London and Cowley roads and the Abingdon road which adjoins the south-western by-pass. We hope that this will considerably ameliorate the position of the through-traffic. The through traffic, of course, consists mainly of very large vehicles, and they cause far more congestion than the small vehicles which carry the local traffic.
There has, however, been a traffic count, and we shall be told: "Ah, but 80 per cent. of the traffic is local traffic." I very much distrust those counts, because they were made a long time ago and the position varies from day to day and season to season. One can never be sure whether or not they are counting bicycles and equating them with great lorries. But supposing we admit that there may be some truth in the assertion, for the streets are relatively empty on Thursday afternoons (Thursday is early closing day in Oxford), obviously, the proper solution is to build up a shopping centre on the other side of the river. There are now more people living on the other side of the river than in the City of Oxford proper, but all the big shops in Oxford are within 200 yards of Carfax, the centre of the city.
The plan of the city, which was approved by the University and the Preservation Trust, was to complete the by-passes and build up a shopping centre in Cowley, and see whether that would not save the situation. After years of delay the Minister insisted that he would pass the plan only if proposals for internal by-passes were added; and that, of

1029
course, "put the cat amongst the pigeons." All the "cranks" in Oxford came forward with their own particular plans—including, as the noble Lord has pointed out, vandalism such as cutting right through Christ Church meadow and the University Parks and all sorts of schemes like that. Most of us believe that that is a completely useless suggestion. Carfax is crowded because people want to go to the shops at Carfax. It is no use having other roads to Carfax: it will only make the situation worse. If you are annoyed by a lot of wasps coming round the honey or the jam at your breakfast table, you do not make things better by opening a couple more windows. You take the honey or the jam and put it outside. That is what we propose should be done in Oxford.
As I have said, not many University people support these weird plans. Your Lordships may have noticed that a few days ago a letter appeared in The Times which gave a good description of the situation. It was signed by most of the heads of colleges in Oxford. I hope that due notice will he taken of that. One proposal, made by the Minister and supported by one or two people, including the Warden of New College who, in the course of rotation, is at this moment Vice-Chancellor, was that we should close Magdalen bridge and, thereby, the High Street. You might just as well say that you should reduce the congestion round Charing Cross by closing the Strand at Aldwych. If people who want to go there have to go by another road, it will, not make the congestion less in the centre of the city.
It has been said: "If we close the High Street we can put the relief roads further out and the motorists will have to use them—though otherwise they would prefer the High Street." But all motorists go, not by the shortest way in miles, but by the quickest way. No motorist would mind going an extra half mile along an unencumbered road rather than by the crowded High Street because it is a few hundred yards shorter. We in Oxford—and I speak here for the majority of the city and the University— should like to go back to our original plan: complete the outer by-passes, if possible, or at any rate complete the one that has been agreed; let the city join up the London road and the southwestern by-pass; and build up shopping
1030
centres on the other side of the river. We believe that that will solve most of our problems. At any rate, let us proceed step by step and see whether that does not solve the problem. Then we can examine the possibility of tunnels or other methods. What we want to do is to go ahead with the plan and not have imposed on us the so-called inner relief roads which we believe would bring no relief and would certainly spoil our existing amenities.
5.37 p.m.
THE EARL OF SELKIRK: My Lords, I think it is fair to say that this debate has been characterised by contributions from speakers many of whom have spoken with great authority on the matter of urgency. Also it has been characterised by a certain sense of suspicion of alt Governments. I think there is a certain justification for that view, although if any third party had listened to some speeches and had not known the facts he would hardly have guessed that we were just: introducing a substantial new road programme. In fact, anyone listening to the noble Lord, Lord Lucas of Chilworth, would never have guessed that the programme is at something like ten times, the level it was when the noble Lord was at the Ministry of Transport. But I do not want at this time to argue the broad issues, which we dealt with just over a year ago, on the importance both to the economy and to the safety of the country. I do not want to cover that ground again, but will go straight on to the points raised by the noble Earl, Lord Howe, and say what we are doing to answer them.
I should like to take straightaway the noble Earl's questions which we have written out in front of us and deal shortly with them. First, he asks whether the expanded roads programme will be sufficient to meet future needs. What has been announced so far is simply the second instalment of an expanding programme which, as the Minister said on February 2 of this year, is intended to provide this country with an up-to-date system. This is merely an instalment of a programme, and we hope that other instalments will follow in due course. It is an expanded programme and, indeed, an expanding programme, and should be regarded as such. It is much larger than what has been possible in the years that

1031
have passed and it is considerably bigger than is probably realised at the present time.
Secondly, the noble Earl asked for a return to show the progress which has been made—I imagine he has in mind something akin to the returns of house building which we have been putting out month by month. I doubt whether it is possible to put forward a progress report of the road programme in any statistical form, or indeed whether it could be usefully modified for presentation in that sort of way. At the same time my right honourable friend the Minister of Transport will be glad, should he be asked to do so, to make statements from time to time showing what progress is taking place—as the noble Earl is aware, he in fact made one last Wednesday describing the general progress that has been made.
The third question he asked was whether this matter would be dealt with as a matter of urgency. Here I can assure the noble Earl that that is what my right honourable friend is seeking to do, and that is the view which is shared by the highway authorities who, in the majority of cases, are acting as his agents in the construction of trunk roads, and upon whom to a large extent the necessary work is falling. I will deal with that point a little further in a moment.
The fourth question which the noble Earl asked was whether the Government propose to bring forward additional proposals. In considering this point it is quite clear that the statement which my right honourable friend the Chancellor of the Exchequer made yesterday must be borne in mind. At the same time, I can say that the Government intend to carry through the programme on roads which has already been announced. That programme covers ten of the fifteen places which I think the noble Earl, Lord Howe, mentioned in the course of his remarks. It also covers thirty schemes which have been authorised, all of over £100,000 each. I think the noble Earl can rest assured that this is a considerable programme; but in regard to additional programmes I can only answer that the decision which the Government will come to will necessarily depend on the continuing economic strength of the country in the future.
A good deal of emphasis has been laid in the course of this debate on the word
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"continuity." Of course, in any subject continuity will depend in the first place on peace abroad and stability at home. Those are the first conditions which necessarily will permit any continuity to take place. But I can say that what the Minister of Transport said on February 2 requires no alteration. He said [OFFICIAL REPORT (Commons), Vol. 536, col. 1100]:
"It is the Government's firm intention to continue with a substantial programme of road construction and improvements—at least on the scale I have indicated—until the roads of this country are adequate for the traffic they have to bear."
A short time ago he said it was necessarily a matter of legitimate discussion whether the programme should be larger or not, and he said frankly that he was working on the basis not only that there is, but that there will be, a very great expansion in the number of vehicles on the roads—he considers it quite likely that by 1980 there will be four times the number of private cars on the roads as compared with 1939.
It is no more than a platitude to say that no Government can bind itself for the future. Far less can it bind any other Government. But I should like to examine some of the proposals, which have been made to-day with great determination and a great deal of thought, to see whether there cannot be some assured continuity. One proposition which has not been made, but which I suppose could have been made, is that we should draw a map showing the final development of our road system in this country and then work backwards to decide how much should be done each year. I do not think that gets us very far. It would rather tie us down to a programme which in the end might not be entirely what is wanted. A great deal of support was suggested for floating a substantial loan. I was glad to hear what my noble friend Lord Cherwell, who speaks with such authority in this matter, said, because I think it is substantially the answer to this question. The limits of road construction today arise from the strain that a too rapid expansion would impose on an already extended economy. There are, of course, other considerations which enter into it, but it is impossible to build up a road programme very quickly; it has to be built up step by step. At the present time there is no difficulty in carrying this

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programme from budgetary sources. None the less, if it should prove necessary or desirable at some future time, we have no objection in principle to using the loan system.
A number of noble Lords mentioned the possibility of a highway authority. I wonder whether that takes us a great deal further in solving this problem. If one takes the railways, one finds they were held up for a long time from carrying out what everybody agreed were necessary capital improvements but which the economy of the country did not permit to take place. They were an independent corporation. What noble Lords want (this applies particularly to the noble Lord, Lord Dement, who made a very interesting speech to-day) is, to put it bluntly, to obtain money from taxation without Parliamentary control. That is just what it amounts to.
LORD DERWENT: Surely Parliament would have the power both of granting loan facilities and of withdrawing them. That seems to give Parliament control.
THE EARL OF SELKIRK: That is exactly the position; therefore in that case you are not one step ahead of where you are now. That is the difficulty with all these proposals: you come back exactly to the same position. Parliament must be in control of any money raised from taxation, and if Parliament does riot want to spend the money then no system, whether it be by way of loan or by way of highway authority, will really be in a position to avoid this difficulty. That is why I doubt whether there is a great deal to be said on that line, or whether there is a great deal of advance to be made at the present time in that direction. I think by far the most important thing of all is that there is absolutely no disagreement in this House, or in any part of it, that this programme must go forward. I think that that agreement extends much wider than that: it is all over the country. There is a determination that we will have a better road system in this country. Quite frankly, in a country such as this that is by far the best assurance that something will continue to be done.
There was a great deal of talk to-day about the slowness with which things were developing. As is always the way when a programme is announced, everyone hopes and expects that it will be com-
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pleted almost before the Minister of Transport has stopped speaking. There has been a lot of talk and the usual accusations on all sides of bureaucratic delays and controls. It is proper to remember that we do not live in a dictatorship country, and that whatever disadvantages there may be in having a dictatorship, that form of government has considerable advantage when it comes to planning roads. It is no coincidence that the first big roads in Europe were all built under a dictatorship of one kind or another. We in this country do not do it in that way; we have a number of other considerations in mind. For instance, my right honourable friend has to early out the provisions laid down in the Trunk Roads Acts of 1936 and 1946 and the Special Roads Act, 1949. The procedure necessarily varies a good deal, but I was interested to note that the only noble Lord who had any sympathy with this point of view was the noble Viscount, Lord Stonehaven, who, as a civil engineer, speaks with great authority and knows the difficulties which have to be faced when one carries out a programme of this character.
At the risk of boring your Lordships, may I explain these statutory provisions? It is no good being unrealistic and pretending that they do not exist. In the first place, what one might call the general preparatory scheme has to be laid out: that is to say, roughly, a proposed new road drawn on the map in outline. It is no use doing that too hurriedly, for if you do so you will probably have to start all over again. When this is done, the next step is to publish a Statutory Order setting out the general line of the route. Three months must elapse after publication, during which objections to the Order may be made. With any substantial Order one has to expect that there will be objections. One or more of these may require the holding of a public inquiry which will be conducted by a member of a panel completely independent of the Department. A report is made to the Minister for his consideration and it is quite possible that, as result of that consideration, it may be necessary to alter the scheme.
The possibility that the whole procedure will have to be carried out again only serves to emphasise that the preparatory work has to be done as carefully as possible. The further difficulty arises in

1035
connection with motorways inasmuch as they inevitably cut across a number of existing roads, generally requiring alteration of their line, and a Statutory Order must be published in respect of each point of intersection, with the usual opportunity for objection. It is really not possible to blame a Minister for observing the procedure which Parliament has laid down. He would be blamed for failing to carry out that procedure and, if he departed from it, he would be ultra vires; so there is no question of short-circuiting.
LORD LUCAS OF CHILWORTH: My Lords, I followed the noble Earl's catalogue of time-schedules and, so far, I quite agree; but there is a gap for which he has not accounted. This afternoon he gave me the date on which the Order for a section of the Oxford ring road was signed—last Saturday, July 23. Three months has to elapse for all the various processes to be gone through, as the noble Earl quite rightly says; but the actual engineering proposals for that road were made, and passed by the Ministry, years ago. It was announced that those proposals were to be in the programme five months ago. Why does it take five months to sign an Order inviting objections to a scheme that has been in cold storage for five years?
THE EARL OF SELKIRK: The noble Lord asks why it takes five months to prepare a scheme—
LORD LUCAS OF CHILWORTH: No, the scheme was prepared five years ago, as were most of these schemes in the £147 million programme. This particular scheme was put in cold storage throughout the war. Why did it take five months to sign the Order?
THE EARL OF SELKIRK: I can only conclude, and I believe I am correct in saying, that though the scheme was there, it was not there in sufficient detail. A certain amount of detail has had to be developed to bring the scheme up to date. There may have been changes. I will look into that point, but, of course, that is a matter of possibly only two or three months by which the scheme could be cut down.
I must go on with this somewhat gloomy catalogue. When we have completed the stage I have described, and
1036
when the Order has been made and the scheme authorised, we come to the third stage, the engineering work, working out intersections, bridges and borings, studying subsoil and foundations and bridge designs. Thereafter there are specifications and bills of quantity to be prepared. Then at that stage there is the acquisition of the land required. To some extent that can take place contemporaneously with other stages, or even earlier, but if compulsory powers have to be invoked it may well take up to eight or twelve months at least. Only then does the construction work begin. I have given your Lordships these details because I believe it is important to realise that we cannot go forward unchecked unless we are prepared to some extent to sacrifice our respect for individual rights, and Her Majesty's Government are not prepared to do so. That is the price we have to pay, and I believe that in these circumstances we are quite right.
The first stage of the motor road is now being put in hand and it is hoped that the Order in respect of the first section, from the St. Albans by-pass to Dun-church, will be ready for publication in September of this year. This motor road will consist of a dual carriage-way with three traffic lanes each way and will also have a shoulder or hardstanding on each side to enable any car which wishes to stop to pull out at any point along the road. I consider that is a very valuable addition. The noble Lord, Lord Ritchie of Dundee, mentioned the question of access. I can assure him that there will be no access. There will be only six junctions between St. Albans and Dun-church and all these intersections will be constructed so as to enable traffic to pass through unimpeded.
May I say a word on the size of the programme. The noble Lord, Lord Lucas of Chilworth, has referred to the New Jersey Turnpike or the Baltimore Road. It is easy to give illustrations of American accomplishments, but one must be careful about making comparisons. I am told that all the preliminary work on this road, the acquisition of land and the detailed engineering, was done before the period of two years which has been calculated.
LORD LUCAS OF CHILWORTH: The noble Earl is quite right.
THE EARL OF SELKIRK: I think that we can do exactly the same thing arid that the actual construction work will take exactly the same time here. Moreover, I am told that one of these roads was constructed along the line of an old railway and that there were foundations which substantially assisted the progress of the work, though that is a matter on which I am not very well informed. I should like to speak on the size of the programme, because people sometimes get confused over the aspects of commitments and of expenditure. Our commitments last year were a little under £20 million on major improvements and new construction. This year it will be £27 million, and next year and in the two following years it will be about £40 million each year. This means that our commitments have increased over tenfold in a period of five years. The noble Lord, Lord Waleran, asked about these commitments extending over a number of years. A commitment is not exactly a Parliamentary Vote; there is no question of its slipping back into the Exchequer at the end of the year. It is an undertaking to meet that amount when it arises. I believe that the noble Viscount, Lord Stonehaven, asked about grant unexpended at the end of the year returning to the Exchequer. This arises only in respect of maintenance and not in the case of major improvements. The difficulty with commitments is that people may say they give an exaggerated picture of how far we are going. Taking the other measure, expenditure, this considerably underestimates what has been achieved, because it is surprising how long it is after the completion of a scheme before the bill comes in.
I will give the picture as we see it—the figures were substantially quoted by the noble Lord, Lord Derwent. Last year the expenditure was £5 million; this year it will be rather over £8 million; and in the following three years expenditure will be rising fairly sharply to about £90 million over the whole of that three-year period. It is worth remembering that this is only central Government expenditure and excludes local government expenditure, for which can be added about 12 or 15 per cent. The figures also exclude expenditure on maintenance, local and national, running at about £70 million a year. Moreover, they take no account of expenditure on motor roads,
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which is over and above the expenditure, and indeed the commitments, which I have already mentioned.
I think it is fair to say that, by any criterion, we are taking a really substantial step forward. I will add this in regard to the future. We are now picking up with the matter of the preparation of schemes for the future. Up to now, in a great many cases we have not been able to do much more than exercise planning control in areas of development, which of course are a relatively small percentage of the areas in which roads will be required. Now, however, we hope that as the programme gains momentum planning will be carried out very much further ahead, so that the detailed engineering work can proceed almost as soon as the schemes are approved. I can assure the House that the two further motor ways, both from Birmingham to the Preston by-pass and the road to the Doncaster by-pass, are being carried out. Preparatory schemes are going ahead, and the programme includes tunnels and fly-overs.
Lord Derwent—and Lord Stonehaven also—emphasized the question of efficiency in constructing our roads. I entirely agree. While I will not attempt to reply in detail to the whole of the points raised by the two noble Lords, I can say this with regard to the question of kerbs. I think we are all glad to know that the Ministry only last week sent out a circular in which they advised local authorities that they should not in future put vertical kerbs on the side of the roads except where a footway adjoins the carriageway or where, for any reason, it is dangerous for the vehicles to leave the carriageway. What is now required —and I should like this to get as much publicity as possible—is that local authorities should implement the recommendations made by the Minister. Another recommendation was that where kerbing is necessary to prevent the roads spreading, kerbs should be flush with the carriageway or splayed at an angle of forty-five degrees. We think this will tend to make the roads more useful over their whole extent, safer and less expensive, and I hope that local authorities will pay full attention to the recommendations in the circular.
I hope that noble Lords will not think I am unduly cowardly if I do not enter

1039
into this Oxford discussion, Lord Lucas of Chilworth has expressed himself very strongly on this point. I will only express the view that this is certainly a matter of national importance. I can assure noble Lords that it is engaging the attention both of the Minister of Transport and of the Minister of Housing and Local Government. The noble Lord suggested—and it is a highly improbable suggestion —that perhaps they might not agree on the subject. The noble Lord is well aware that there is a perfectly normal constitutional procedure which can be adopted if that highly unlikely contingency ever eventuated. The noble Lord, Lord Waleran, asked about the Severn bridge. He probably knows these figures, but, none the less, I will give them to the House. The bridge itself, it is believed, would cost about £10 million, and what we think would be proper approaches would cost £6 million. It is also true that approaches of a sort could be provided for about £2 million; but we think that these would be quite inadequate for the scheme as such.
The noble Lord raised other questions including that of the Hammersmith flyover. This is a classified road and, therefore, responsibility for it lies with the London County Council. That Council is not convinced that the fly-over is necessary. Frankly, my right honourable friend would like a fly-over. I am not sure that I know what the London and Home Counties Traffic Advisory Committee say about this, or whether they have made a recommendation upon it. But, as I have said, my right honourable friend would like to see a fly-over. The position, however, is that the London County Council are going ahead with the scheme in such a way that a fly-over can be added at a later stage if it should prove necessary.
LORD WALERAN: I do not want to interrupt the noble Earl unduly, but the London and Home Counties Traffic Advisory Committee, I think, is a statutory body under the 1924 Act. Does not any such scheme have to come before the Committee?
THE EARL OF SELKIRK: I am told that they do not make specific recommendations on matters of this character. In any case, the matter lies with the
1040
London County Council, and it is for them to take the decision.
The noble Viscount, Lord Stonehaven, mentioned lay-bys. I agree that probably it would be better if we had more of them. On classified roads, of course, lay-bys are the responsibility of the highway authorities concerned. So far as trunk roads are concerned, the Department is providing additional—lay-bys where necessary.
My Lords, I am afraid that I have not answered all the questions raised in the debate this afternoon. I can assure noble Lords that my right honourable friend will be grateful for the care which noble Lords who have spoken on the subject have taken in the preparation of their speeches. Finally, I should like to say just this. This is only the beginning of an expanded road programme, and it would be quite wrong to pretend that the problem of traffic in this country will not be with us for a large number of years. In fact, I dare say it will be with us as long as motor cars continue to be a form of transport in this country. But I think we can fairly claim that we have made a start of real significance. We are most anxious to do it well, and my right honourable friend is determined, within the statutory limitations which I am afraid I bored your Lordships by describing, that it shall proceed with the utmost expedition.
LORD LUCAS OF CHILWORTH: Before the noble Earl sits down, may I say that I regret—though I quite understand—that he has been unduly cowardly. He has not answered a number of specific questions which I asked him. I know his difficulties and I am not going to press him for answers this afternoon. But perhaps he would look at my questions and consider them in consultation with the Minister. May I have the noble Earl's assurance that he will consider them, and that he will write to me, because I shall not be able to return to this subject until after October 25, which is a long time ahead? If the noble Earl will give me that assurance, then I do not want to press him to answer this afternoon, except in the case of one question which was really important. I asked him in the course of my first two or three sentences whether the House was to take it that the road construction programme

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would be in danger of curtailment because of the Chancellor of the Exchequer's speech yesterday. May I take it that the answer he gave the House, to the effect that that speech would have to be borne in mind, was an answer to my question, and that there is a risk that the road programme may have to be curtailed owing to economic circumstances?
THE EARL OF SELKIRK: My Lords, I thought that I answered the noble Lord, Lord Lucas of Chilworth, quite fully when I spoke. What I said was this. We meet here after the Chancellor of the Exchequer has made a speech, and clearly we have to consider the implications of that speech. I said that the programme as announced would go forward as announced. I thought that that was a full answer to the question. If the noble Lord thinks that there is any other question of significance which I have not answered I shall be only too glad to communicate with him; but I was under the impression that I had answered all the noble Lord's questions.
LORD LUCAS OF CHILWORTH: I am satisfied with that answer. The other questions, apart front the one which I have mentioned, were technical questions. I asked the noble Earl for an assurance about the A.40 road. I do not wish to press him on that, but will the noble Earl undertake to give me an answer after he has consulted his right honourable friend? I understand that the noble Earl assents, and I thank him.
6.10 p.m.
EARL HOWE: My Lords, I should like to thank the noble Earl, Lord Selkirk, who has replied on behalf of the Government as fully as he could. He was obviously suffering under certain difficulties which he did not like to say anything about, as they were, perhaps, connected with matters behind the scenes. Before I reply to him, I should like to say a word about the speech of the noble Lord, Lord Cherwell. My Motion was drawn to relate to the roads of the country as a whole. The noble Lord, Lord Cherwell, seemed to think I said something about Oxford. Oxford is a great national town, but it is a very small one and a small piece of the general road traffic situation. I agree that it is an important one, but there are others just as important from the point of view of
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traffic. If we compare Oxford with Staines, Staines is just as important and much more difficult to deal with.
LORD CHERWELL: My Lords, I mentioned Oxford because it was raised by the noble Lord, Lord Lucas of Chilworth. I had no intention of raising it, but the situation of Oxford has often been misrepresented. I cannot say that I derived much comfort from the noble Earl's assurance that the Minister is considering the matter. What we want is to be allowed to get ahead with our own plans without ministerial interference.
EARL HOWE: Be that as it may, the noble Lord, Lord Cherwell, also had a word to say about loans. I thought his arguments were first-class, but they would be equally sound if applied to electricity, the railways and all the rest. His argument was against loans in general. I was glad to hear from the noble Earl, Lord Selkirk, that the Government do not altogether exclude the possibility of loans for road-building.
The reason why I submitted this question of loans to the noble Earl was not because I wanted to avoid Parliamentary control—that is the very last reason I can think of. The reason, which I tried to make clear in my remarks, is that we must get a guaranteed continuity of finance, and it does not seem to be possible to get that in any other way. If we have to depend on revenue, we get such speeches as we had from the Chancellor of the Exchequer in another place yesterday, and as no doubt are being made to-day. Everybody realises the difficulty, but we cannot run the roads of this country on a "Stop" and "Go" policy. Either we have new roads or we do not; and if, in our wisdom, we decide not to have them, I tremble to think of what will be the state of affairs in a few years' time. I put it that in four or five years' time we shall be in a real mess. The Government have to consider that at the moment we have a prosperous motor industry sending valuable exports abroad. But we are being heavily challenged overseas, and we cannot expect to have a prosperous motor industry unless we have a prosperous home market, and for that people must be able to take the cars on the road. It seems to me vital to consider the whole of this programme in that light.

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The noble Earl talked about urgency. I wish I could think that the Government were tackling this in the spirit I am praying to see. It may be that, in common with many other people, I do not appreciate this half enough, but it seems to me that there is not sufficient urgency about their approach. With regard to the general programme, the noble Earl has not told us when any single item is likely to be completed. I repeatedly asked him whether he could tell us something about the completion of various schemes. If he is not able to reply to that now, perhaps he may be able to do so later on.
THE EARL OF SELKIRK: My Lords, I did not go into the future of what will be done, but our general picture is that the preliminary procedure which I have described will take about two years; and the first motorway will take two or three years for construction after that date. That is the general broad picture: I do not want to go into more detail than that.
EARL HOWE: Take the Ashford by-pass, which did not feature on February 2. It is practically completed, all except about 100 yards, and all the Minister is doing is to add a fly-over junction at the end of it. Surely we can be told the position of the Ashford by-pass.
THE EARL OF SELKIRK: My Lords, so far as we know there is no reason why the work should not have been begun already, as it was authorised some time ago.
EARL HOWE: That is exactly what we wanted to hear from the noble Earl. So far as one can judge from one's own observations, not a sod has been turned. Why? If this has been considered as a matter of urgency, could not something have been done? Can the noble Earl not tell us something of his own suggestion, the construction of a second carriageway in Western Avenue between Park Royal and Greenford Halt? As the land is available, there are no difficulties about acquiring land and the work is merely an alteration to the plan of the road as it exists at the moment. Surely we can be told something about that?
The noble Viscount, Lord Leathers, said a short time ago that when he got the green light, he would be ready to go ahead. The light was beginning to turn green in February, and from what the
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noble Earl has said to-day, it is now well and truly green. Surely with a real sense of urgency about it, we should have been able to "get cracking" on many things. Another thing about which the noble Earl said nothing in his reply was the question of accidents. I gave some figures with regard to the local Manchester road and tried to show how we can reduce casualties by improving the road system; but nothing whatever has been said by the Minister on the subject of accidents. I am most grateful to the noble Earl for replying so far as he did. I only hope that he and his Department will not think I am too critical, but we are all bound to be critical in our extreme anxiety with regard to the road position as a whole. I do not think the programme is big enough or ambitious enough, but perhaps it is the best that can be done at the moment. I can only end by thanking all noble Lords who have supported me in this Motion. I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

THE HIGH COMMISSION TERRITORIES
6.17 p.m.
THE EARL OF LUCAN THE EARL OF LUCAN rose to ask Her Majesty's Government whether they have any statement to make on their policy for the High Commission Territories. The noble Earl said: My Lords, only a week or so ago we debated the annual report on the Colonial Territories. We have had a number of colonial debates but the subject this afternoon—the High Commission Territories—is one that has rarely appeared on the Order Paper in this House. I think it would be true to say that there has been no debate on the general conditions in these territories and no Government statement for a considerable number of years. That is the reason why I put down the Question that stands in my name on the Order Paper. The territories have come into the limelight once or twice, on occasions when there have been internal crises which have focused attention upon them for a short time, but in general there is a feeling in the country that these territories are in a state of what might almost be called stagnation. They are in a backwater off the main stream of colonial progress and development.
It is common knowledge that the future status of these territories is a matter in

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dispute between Her Majesty's Government in the United Kingdom and Her Majesty's Government in the Union of South Africa. What I want to put to the noble Earl is that that state of affairs does not relieve Her Majesty's Government of the responsibility for governing these territories and for pursuing policies that will ensure the progress and wellbeing of their inhabitants, which number well over 1 million in the three territories. Nearly all of them are Africans, and they suffer from problems which are not dissimilar from those of any other African territory. There is the same set-up of the traditional society; tribal forms of government, sometimes highly developed and organised; the ancient beliefs; and the impact on those of Western civilisation and industrialisation. If the stresses are the same as in the colonial territories, then I submit that the reactions must be the same. Therefore, the first question I want to ask Her Majesty's Government is what is their aim in the political field. Is the political advance in these territories adequate; and are they aiming at the same goal that the Colonial Office aim at in respect of the territories under their control?
Recently there has been published the Report of the Administrative Reforms Committee in Basutoland—the Moore Committee. It appears that the reception of that Report in Basutoland was not at all favourable. Of the three territories, Basutoland is probably the most advanced politically, and the most articulate, and I think it is true to say t net practically every organisation that gave evidence before the Moore Committee put forward the demand for further political advance—that is, to the stage of a Legislative Council: in other words, they asked to be put on the first rung of the ladder leading towards self-government. I wonder what the views of Her Majesty's Government are on the Report of that Committee. A similar demand is now being heard in both the other territories. I do not think anybody could say that the inhabitants of these territories are any less advanced than the inhabitants of many other colonial territories were at the time when they were given their first step towards responsible Government. Moreover, we owe it to the inhabitants of these Territories to give them every assistance in achieving their aims. We must not forget their remarkable war record: some 35,000
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men from the three territories served id Her Majesty's Forces, most of them in a combatant role in the Mediterranean and in Italy. I think their attitude in the war was expressed by the words of the Paramount Chief of the Basuto, who in September, 1939, in a proclamation to the Basutos, said that "as our King is at war, we are at war, too." I feel that we owe them something for their line record in the war.
There are social as well as political problems, and many of them derive from the fact that a large percentage of the population is absent working in the Union of South Africa at any one time. In one year, 1953, some 90,000 young men from the three territories went officially, by licence, to work in the Union, the great majority of them in the mines. And allowing for numerous others who stay on for more than a year, arid those who may have gone by other routes, something like 20 per cent. of the population must have been working away tram their homes. Naturally, that has produced many social problems, and I should like to hear what Her Majesty's Government have to say about that. On the education side, there seems to be a good deal of unevenness between the three territories. Basutoland—owing to the missions, I think—has always had an outstanding educational record; I believe they still have, and from the reports I have read their facilities seem to be considerably in advance of those of the other territories. We hope that Her Majesty's Government will be doing what they can to raise the level in the other territories. As to higher education we have heard that the new University of the Federation of Rhodesia, which is opening shortly, will take students from these High Commission Territories.
I should like to say a word about cooperatives because, from the reports I have read, it seems that, while in Basutoland there are the beginnings of a cooperative movement which shows some promise, there is nothing of the kind in the other two territories. It has been found in almost all the other colonial territories that co-operation is a potent influence in improving the agricultural basis of the country and in assisting agriculture and marketing. I hope that Her Majesty's Government are doing all they can to plant the seed of a co-operative movement in the other two territories. On the economic side, I do not think it

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is generally known how much money is being spent in these territories. Their Annual Reports are not easy to come by, and those of the Colonial Development Corporation do not give much detail. Having read the reports, I admit that I was impressed by the amount of money being spent and the number of schemes being carried out in these territories, and I think it should be more widely known that some £3 million has been spent in the three territories up to the end of last year. It seems that they are in no way being neglected on the economic side.
The Colonial Development Corporation have big interests in two of the territories: in Swaziland with forestry and irrigation, and in Bechuanaland with ranching; but there is no Colonial Development Corporation interest, so far as I can see, in Basutoland. I wonder whether there is not scope for some assistance of that kind to assist the wool and mohair industries, to try to get secondary industries, or in other ways. While on the subject of Basutoland, what has happened, I wonder, to the Orange River Hydro-Electric Scheme? It is a bold scheme which, when carried out, will bring enormous advantage not only to Basutoland but to the Union of South Africa. There is talk in certainly two out of the three territories of mineral development, and there are promising signs in Bechuanaland and in Swaziland. We should like to know what Her Majesty's Government envisage as the system of development of the mineral rights, and how the rights of the tribes owning that territory are to be safeguarded. I have tried to sketch out the subjects on which I think we should hear something from Her Majesty's Government but above all I hope that the noble Earl will be able to tell us that Her Majesty's Government's policy is directed to steady progress and advancement of the people in those territories. I beg to ask the Question standing in my name.
6.32 p.m.
LORD HADEN-GUEST: My Lords, I should like to support my noble friend in what he has said. I do that for a personal reason, because for three years of my life in the middle part of this century I lived within an easy ride on horseback of the borders of Basutoland,
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and actually rode into Basutoland. I was practising as a doctor, and I employed in my house Basuto servants. I formed the highest opinion of their intelligence. I was not engaged in sociological research into what was going on in Basutoland, but I did inquire as to what was happening there and why all the Basutos I came across (who were intelligent people. and well developed physically as well as mentally) had not developed their country more than they had. There was rather a simple answer. As my noble friend has said. Basutoland was one of the recruiting grounds for the Rand Mines, and at the age of about twenty the young men were offered terms which then seemed luxurious in the way of money. They went up to the Rand and got money there, and then they came back but did not develop their own country. Perhaps the Minister who is to reply can say what is being done to develop the natural resources of Basutoland in the way of agriculture and the production of foodstuffs. That is a most important thing, and I hope something is being done about it.
I give my opinion for what it is worth and I hope it is worth something—that the Basutos are a very intelligent people who would be able to do not only good agricultural work (they certainly have done good work in the mines) but also good industrial work if small units of production could he set up. I gather from what I have recently been looking up that there has been little development indeed in Basutoland. I am afraid the answer is a simple one—that the young men have been taken away from Basutoland and when they come back their energy is exhausted and they go back to the primitive, tribal life and carry on their tribal customs as in the past. But I believe there is a great opportunity in Basutoland for development of the other Basutos, and for the making of a State as far advanced as, for instance, Nigeria. In 1940, when I visited Nigeria with other Members of the House of Commons, of which I was then a Member, we went all over the country and found that the people were not very highly developed and never mentioned any possibility of self-government. Now, after the lapse of a short time, they have got self-government. I believe that the Basutos are, if anything, superior to the Africans in West Africa, and I think we ought to

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make it the duty of this country to see that they are given the chance which their natural abilities and their peace-loving qualities—there has not been any trouble for a long time—give them a right to ask for.
6.35 p.m.
LORD MILVERTON: My Lords, in dealing with this question, it seems to me that it is quite impossible to discuss the policy in relation to the High Commission Territories without considering, first of all, its relation to the Union of South Africa. Any question of minor policy must inevitably hinge upon the reply to the question: what future do Her Majesty's Government envisage for these territories? If I may say so, I think the noble Lord who spoke last, in referring to the future which he hoped would be guaranteed to these people, overlooked the fact that none of them are viable units, and it is not possible for any of them in any foreseeable future to be self-governing and independent in the sense that Nigeria or the Gold Coast—
LORD HADEN-GUEST: May I intervene to say that I thought nothing of the sort? I think they are quite capable of self-government, probably at the present time, and I see no reason at all why they should not be given early self-government in their own interests, just as well as other countries.
LORD MILVERTON: Personal capacity is not the only thing necessary to make a country a viable unit; but perhaps I may develop that point as I go on. It is, it seems to me, easy to talk of this subject because of its superficial simplicity, but it is really an extremely complex one, as I see it. It is so easy to say that the reason why the High Commission Territories were not handed over to the Union in 1910 was doubt about the native policy of the Union. Time has not removed that doubt. Furthermore, the British Government are pledged not to consent to the transfer of these territories until Parliament here has had an opportunity of expressing its opinion, and until the people have been consulted. It is, I think, generally admitted that there was an understanding, rightly or wrongly, that the two Governments of the United Kingdom and the Union would collaborate in extending to the people of
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the territories the reasons why absorption in the Union would be of benefit to them. It is also understood that no promise was given that the lack of agreement by the majority of the people concerned would necessarily bar such a transfer if it was considered by the British Government to be in the best interests of the people.
I appreciate fully that the temper of world opinion, and so forth, has changed since 1910, and it would make such a transfer perhaps more difficult. But in 1933—I think it is worth looking hack at these points—the noble Lord, Lord Hailey, who is of unquestioned authority in this matter, stressed that, though formal consent of the inhabitants was not necessary, a greater measure of good will was needed; and machinery for creating good will had not been established. The same authority also said, significantly enough:
"It may perhaps he added that the task of those who oppose the transfer might have been easier if it could have been shown that the British Government had made more active attempts in the past to improve the material condition of the territories. The facts given elsewhere show, however, that it is only since the question of transfer has come to the fore that they have made any serious attempt to do so."
That is why I could not entirely agree with the noble Earl who asked this Question, unless his references were meant to be to very recent years. A good deal of money has been devoted to these territories in recent years, both from the Colonial Development and Welfare Fund and from the Colonial Development Corporation itself, but before that I think it would be true to say that they were neglected. On several occasions during the past forty-five years, the transfer of these territories has almost been arranged, and then events have caused delay.
I suggest, with respect, that it is not enough to sit back and say that the onus is on the Union of South Africa to produce conditions which will make the inhabitants ask for incorporation and so honourably warrant the transfer by the British Government. Personally, I do not call that a policy: I call it drifting—unless drifting can be called a policy. It is very dangerous, in this case particularly, to allow the matter to drift. If the British Government do not intend actively to facilitate the transfer, I should like

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to ask what is their policy. None of the territories, as I see it, is economically viable as a separate State. They are not, and never will be, so far as I can see, eligible candidates for independent self-government. Meanwhile, their economic and political progress is held up by uncertainty about their destiny. In regard to consulting the people, Tschekedi Khama pointed out some years ago that in Bechuanaland there were no reliable means of ascertaining the views and wishes of the people. Their own chief said that if the British Government wished to consult them he did not know of any suitable way of really ascertaining their views. He said that consultation with chiefs and tribal assemblies would not be satisfactory as they were too easily misled. Advisory councils and joint advisory councils, he said, had no constitutional status and they were not accepted by Africans as qualified to represent them.
Let us look, for a moment, at the map. Basutoland, a country about the size of Belgium and with a population of 560,000 Africans, is completely surrounded by Union territory. Swaziland, a country about the size of Wales and with a population of 181,000 Africans, is bounded on three sides by Union territory and on the fourth by Portuguese East Africa. Bechuanaland, the third of them, a country about the size of France, England and Wales put together, and with a population of only 292,000 Africans, is bounded on three sides by Union territory and on the fourth by Southern Rhodesia. It seems to me that they are obviously inseparable parts of the same economic system. They cannot survive as separate, independent economic units. The Union to-day is the natural market for their cattle and agricultural produce, as well as for their labour. By incorporation in the Union, the inhabitants would enjoy all the benefits which accrue to comparatively undeveloped countries as a result of closer association with an advanced and progressive State. The financial and technical resources of the Union would be extended to them, as well as transport facilities to tap their resources and hasten their development.
Noble Lords who spoke earlier perhaps overlooked the fact that to develop these territories it would be necessary to spend immense sums on transport, roads, rail-
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ways and air services. Moreover, agricultural schools would be open to them in the Union, and also help in combating erosion, in the provision of water supplies, roads, bridges and all those things. If you ask a South African why they should want the High Commission Territories, which are at the moment a liability and not an asset, he may reply, as Lionel Curtis said when he was advocating their transfer some years ago: "Suppose that the Hudson Bay Territories in Canada, the North of Australia and the Maori Reserves in New Zealand were to-day protectorates, controlled and administered from Whitehall, would not those Governments regard it as an intolerable infringement of their natural sovereignty and a mark of distrust of their ability to administer them justly?"
It is not possible to discuss this subject without some reference to the stumbling block, which is the racial policy of the Union of South Africa. Its aims and objects are so imperfectly understood in this country and so frequently misrepresented that perhaps a brief reference may be justified. In any case, the only factor that will change native policy in the Union is public opinion in the Union itself. The South Africans feel that this is their problem. It is one of life and death importance to them. They cannot leave it to be settled on abstract principles by people sitting in impartial and Imperial security 6,000 miles away, who perhaps do not understand the atmosphere. They hold, rightly or wrongly, that the future relations of black and white must be worked out on the spot, just as Cecil Rhodes believed that South African problems could be solved only by eliminating the Imperial factor. The policy of apartheid, as practised by the Union Government, may not command acceptance here, and it certainly differs widely and fundamentally from our Colonial policy; but it is based on principles sincerely held there as to what is best for the African and for the European. It bears little resemblance to the popular misconception of it here. This is not the place or the time to discuss the native policy, or its aims, objects and goal generally in that part of Africa, but it is necessary just to refer to it.
Apart from the economic reasons to which I have referred, claims for the

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transfer of these territories are strongly based on history and geography, on military security and internal security, and on the general welfare of the inhabitants. Let us take the figures, which I know are apt to be misleading at times: in 1954–55 the Union Government were spending £3 7s. per head annually on Union native education, health and social services, while in the protectorates we were spending only 19s. per head on the same services. Migrant labour from the protectorates sends back annually from South Africa about £1 million sterling to their families. Wages are higher and taxes are lower in the Union.
The real bar then, to transfer, remains in the field of racial policy, the loss of human dignity by the denial of full equality in political rights. To some extent we are here sealing with a distorted sense of values. The bulk of the Bantu people are still largely unfitted for the exercise of such political rights. The absence of a sense of personal freedom is, of course, a very real obstacle. I am not attempting to minimise it; I am merely contending that time alone can alter it.
LORD HADEN-GUEST: Why are they unfitted for the rights of citizenship?
LORD MILVERTON: Because they are not yet educated to a standard where they would appreciate it.
LORD HADEN-GUEST: Excuse my saying "Rubbish!"
LORD MILVERTON: To compare the two policies, the policy of putting a growing measure of Bantu political and administrative power into the hands of the Bantu is in accordance with apartheid policy. The difference between that and our colonial policy, and one that we must try to understand, is that the development of local self-government with us is a preliminary to wider political rights; in the Union it is a substitute for them. Mr. Leo Marquand, a well-known writer on these subjects, has pointed out that a better understanding of the South African racial problem might occur if it were more generally realised that the Union is herself a great Colonial Power. She is at once a motherland and a colony at the same time. South Africans who administer Africa and who bring Western civilisation to Africa do not go home on periodic leave or retire to a distant
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country. South Africa is, by every known right, their own home. British Colonial policy, accepted by all Parties here, aims at training Africans for self-government as soon as practicable.
The demand for fully responsible government is increasingly clamant throughout Africa. But there is a vast difference between the position of the United Kingdom and that of the Union. Britain's colonial subjects demand self-government, not a share in the Government at Westminster. But South Africa's subjects demand a share in the Government at Cape Town. The consequence of failure for Britain would be, at worst, that she would lose her Colonies; and for the Africans concerned it would be either anarchy or, for a shorter or longer period, mis-government. But the consequences of such a policy for South Africa, if it failed to create a society with a common purpose, where political divisions were not also at the same time racial divisions, would be that the white South African would not merely forfeit a colony; he would lose a home and ruin a civilisation so hardly and so ably built. We here believe with Mr. Marquand that Western civilisation is not a matter of colour, and that it is not ultimately preserved by protecting it by hot-house methods. But our situation is, as I say, a different one. I am not saying that our views are not right, but I sometimes feel that a little less self-righteousness on our part, a little more care to understand the difficulties and to avoid misrepresenting the aims and the goal of South African policy, would considerably help those statesmen who are there responsible for solving one of the most intractable problems of our age. We think we know that tribalism cannot survive contact with Western civilisation and industrialisation, and that the policy of native reserves carries with it the seeds of inevitable decay. But for the time being it is, I suggest, a protection both to African and to European, and on a very short-term view it may be right.
My Lords, in conclusion, should we not remember that the High Commission Territories could not continue to exist without the benevolent help of the Union Government which has been freely given to them in the past? Their currency is South African; they Share a customs agreement with the Union; their trade and markets all go that way; and in time of drought and trouble they have turned

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to the Union Government and have not been denied assistance. I suggest that what is needed is more mutual trust and understanding between the Union and the United Kingdom. Expressions of friendship and co-operation are meaningless unless each side assumes the good will and bona fides of the other and genuinely seeks a compromise on opposing views. Such a foundation can hardly be established if South Africa is to be suspect and if her ability to administer and accord justice to a Bantu territory continues to be judged on the distorted picture so often presented to the United Nations and to the world. The maintenance of friendship with the Union is of vital importance to us, and it is surely not incompatible with the fulfilment of our trust for the welfare of the people of the High Commission Territories and the protection of their property rights. That is why I venture to plead for an active and not a passive policy in connection with the High Commission Territories, in the conviction that mutual trust and understanding might build a strong and lasting accord between Britain and South Africa and. incidentally, a happier future for the Bantu race.
6.58 p.m.
LORD WINSTER: My Lords, I think the noble Earl. Lord Lucan, is to be congratulated on bringing this matter to the notice of your Lordships—indeed, as he has said, the High Commission Territories have tended to be overlooked in our debates, and they are perhaps worthy of an even fuller debate than is possible to-night. In the course of his remarks the noble Earl used such expressions as "stagnation" and "back-water." Those terms may well have been justified in the past, but of recent years the necessity for progress and development in the High Commission Territories has been recognised and certain plans and programmes have been put on foot
My real object in rising is because of the speech to which we have just listened from the noble Lord, Lord Milverton, who, as I understood him, with great thoroughness and a wealth of argument was making the case for the transfer of these territories to the Government of the Union of South Africa. I cannot agree with him: in fact, I was distressed to hear what the noble Lord said. I con-
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fess at once that my objection to the transfer of the territories is due to the racial policies being pursued by the Government of South Africa. Were it not for that, were the racial policies of the Union of South Africa as we should desire to see them and as, with our responsibilities in other parts of Africa, we must desire to see them, I should be the first to agree that the three High Commission Territories and South-West Africa, with the Union of South Africa, would form a very natural and desirable South African Dominion. It is because of those racial policies that I do not feel able to agree to anything of the kind.
We have responsibilities to the African people in these territories and to Africans in other African territories. I am sure that all those African people would regard it as a grave breach of trust and a negation of the many declarations concerning racial policy that we have made if, things being as they are, we were to agree to the transfer of the territories. In London only last week, before a conference of jurists, a South African Q.C. said that the jury system was inapplicable in South Africa because juries could not be trusted to act without bias against Africans. I, myself, while in South Africa recently, was shocked and horrified at several cases in which European juries pronounced sentences which were a travesty of justice and were due simply to European prejudice against the African. While those things are so I cannot believe that any Government in this country, of whatever political shade it might be, could hope to obtain from Parliament consent to the transfer of the High Commission Territories to the Government of South Africa. But that is a long argument to enter upon and we are very late to-night. I have only one other brief remark to make after uttering that protest against the remarks of the noble lord, Lord Milverton—
LORD MILVERTON: May I interrupt the noble Lord? I think he has rather misunderstood what I was trying to say. I was not arguing for an immediate transfer of the territories as things are at present; I was suggesting that it is difficult to see what future they can have except in partnership with the Union; therefore it would be advisable for this Government to enter into friendly talks with Union officials to try to discover a

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basis on which the territories could be handed over with satisfaction to both sides.
LORD WINSTER: The noble Earl who is to reply may have something to say on the question of entering into discussions with the South African Government. I imagine that there would be no great reluctance but I do not believe that much result could conic from such discussions so long as the racial policies of the South African Government are what they are at present. I believe that those policies are a bar to such talks as the noble Lord proposes.
The short question I venture to put to the noble Earl is this: in any consideration of the future of the High Commission Territories, and of the proposals and wishes of the Union Government for the transfer of those Territories, are the strategic implications of such a transfer being studied? When I was in South Africa I became aware of influences at work about which we have heard something tonight, influences which might conceivably make the strategic position of those territories of great importance. Not only economic questions and questions of racial policy are involved here. My main object in rising was to ask the noble Earl whether the House may be assured that those considerations, of which I am sure he is fully aware, are not being overlooked in considering the problems of the High Commission Territories.
7.5 p.m.
LORD MATHERS: My Lords, at this late hour, for your Lordships' House, I will not delay you long. I have been interested in this subject for a number of years. It is one which appears annually in the Report to the Church of Scotland of its Church and Nation Committee. Having been a member of that Committee for some years, I know the earnestness with which that body seeks to be impartial, objective and fair in looking at this subject. There is a reiterated call upon those who have the decision on these matters that the people of these territories shall not be brought under the rule of the Union Government without full consultation and without their consent. Quite clearly, the policy of the Union Government with regard to its coloured populations is at the bottom of this attitude.
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I agree with the noble Lord, Lord Milverton, that there would be advantages to the people of the High Commission Territories if they were to be incorporated in the Union. At present they have to leave the individual territories to work in the Union so as to maintain their families. It is perfectly true that many economic advantages could be held out to them for allowing themselves to be incorporated in the Union. But some things are of even greater value than economic considerations. While it is true, as the noble Lord says, that benefits could be obtained by the absorption of the territories into the Union, there are also disabilities which they would suffer were they brought under the rule of the Union Government, especially in the light of its present attitude.
Many educated Africans are doing good work in their own countries. I am thinking of a doctor with whom I have come in contact, a great specialist in child disease, who covers a wide field in his own territory as a highly qualified doctor with many degrees. That man, of real education and great culture, would through the policy now being pursued by the Union Government be looked upon as of less consequence and with less entitlement to the dignity of his human personality than someone who was sent out from this country in disgrace because he would not behave himself at home and who is living there on an. allowance. Under the system which prevails there at the present time, the latter, because lie has a white skin, will be looked upon as of more consequence than that highly qualified doctor.
This is a very difficult and complicated subject, and it is unwise, I believe, to be too sweeping in one's assertions with regard to it. I had the opportunity a month or two ago now of listening to a speech by the present High Commissioner for South Africa. It was a speech made in public, so there is no reason why I should not refer to it. As a matter of fact, it was published in the Journal of the Royal Empire Society, for it was in the Society's hall that the speech was matte. The High Commissioner showed how much the Union Government were doing for their Bantu population. I cannot remember all the details, but I remember particularly these actual figures.

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He said that of £30 million that the Union had provided for raising the standards of the Bantu population, £8 million was for education. Well, the kind of question I feel like putting to the noble Earl who is going to reply on behalf of the Government to this debate is: How do we stand so far as the High Commission Territorities are concerned with respect to providing in that way for the populations who come directly within our jurisdiction and who are subject to our rule?
I am afraid that up till very recently we have not paid a great deal of attention to the economic needs of those territories. I believe that in Swaziland and Bechuanaland there is the possibility of considerable industrial development. I do not think the same considerations apply to Basutoland, which, perhaps, is less blessed with exploitable economic resources. And there is the question of what are we doing to help maintain these peoples within our own Empire, within British jurisdiction, apart from the Union, so that they will not readily become, because of economic pressure upon them, willing to secede and leave our own Commonwealth in order to come within the jurisdiction of the Union Government. There is something valuable, surely, in our being able to maintain the loyalty and affection—if I may put it that way—of the peoples in those territories, and it seems to me that it would be a sorry day if we caused these peoples, by reason of economic circumstances which we could relieve, to take the choice of leaving the Commonwealth to which we belong and which we should seek to make attractive to those who are within its bounds.
7.14 p.m.
THE SECRETARY OF STATE FOR COMMONWEALTH RELATIONS (THE EARL OF HOME): My Lords, your Lordships will welcome this opportunity of a discussion of the problems of the High Commission Territories, and I am grateful to the noble Earl who asked his Question. One question he asked me was whether Her Majesty's Government accept responsibility for the well-being and progress of the peoples in these territories. I can answer at once that we do. The population of these territories is, of course, predominantly African, and this afternoon I shall be concentrating on the African aspects. But I think we should
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do well to remind ourselves at the start that there are 4,000 Europeans in Swaziland and 2,000 in Bechuanaland who are making an essential and constructive contribution to the social and economic life of these Territories.
If it is suitable to your Lordsips, I will cover this subject as shortly as I can, under three headings—administration, social services and economic expansion. Native administration in all three territories has been built on the chieftainship. That is the system to which the people are accustomed and to which they are loyal. Therefore, I would suggest it is right that any new institutions which are built up should be built upon that foundation. If this is accepted, I think the next step is to broaden the basis of government by seeking to achieve a devolution of responsibility and the development of more representative institutions. Although the basis of the native administration, as I have said, has been the chieftainship, one cannot even in these three territories generalise, because they have different characteristics. Therefore I will take each of the territories in turn.
As the noble Earl, Lord Lucan, has said, Basutoland has had the advantage of the recommendations of what is known as the Moore Committee. The Moore Committee made three recommendations: that there should be popularly elected district councils, with a fair degree of responsibility for local affairs; that the Basutoland National Council should have an elected majority, and that it should be able to make by-laws. The word "bylaw" is, I think, a little misleading as understood in this country; I have had a look at the list of the by-laws which the Committee proposed the Basutoland National Council could make, and they cover some very important aspects of Basuto affairs. The third proposal was one designed to strengthen the chieftainship. The Moore Report has, I think, been misunderstood; it was never really discussed on its merits, and, so far as I have been able to discover, the chief cause of misunderstanding was that the Basuto people interpreted it as an attack upon the chieftainship. That is really not so, because the Report expressly recognised that the chieftainship is an essential part of the political structure of Basutoland. Also it made proposals to improve cooperation between the Paramount Chief and the Resident Commissioner.

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I am glad to say that there are now indications that the Basuto people are willing to give further consideration to the Report; they have been asked to consider it at the district council level and to indicate which parts of the Report they favour and which parts they would like to see amended. There are a number of recommendations in the Moore Report which are, as a matter of fact, very close to proposals which the Basuto themselves have made over the past few years. Therefore I hope that when the National Council assembles in September we shall get some constructive suggestions from them. I can say here and now that the High Commissioner's recommendations and the final decision which is taken will take full account of the Basuto views. So it seems to me that we have the probability of progress in and advantage to Basutoland.
I turn for a moment to Bechuanaland, where steps are being taken to develop a more representative system of government. With the agreement of the chiefs and the people, a start has been made in encouraging the establishment of councils to assist the chiefs and the subordinate native authorities. It is proposed that these councils should be one-third nominated by the chiefs and subordinate native authorities and two-thirds popularly elected. As these councils gain in experience, it is contemplated that all major aspects of local government and tribal administration will come within their scope and that they should have their own funds to control and spend. Already there is an African Advisory Council and it is hoped that very soon a large percentage of that council will be elected by the tribal councils. Then there will be a pyramid of elected representatives and a body at the summit able to speak for all Africans. So again in Bechuanaland we have a system which is developing to the advantage of the natives of the territory.
Swaziland is rather different. The traditional system of government, as your Lordships know, is that of a Paramount Chief acting with a Council which is fully representative of the people. That system has worked well and I think it would be a mistake to try and force the people of Swaziland into a mould for which they are not fitted. With the full co-operation of the Paramount Chief and
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his advisers, committees are being set up to deal with local problems. Here again are the germs of the devolution of authority.
On the subject of constitutions perhaps I may say something rather more general. I think we all have a tendency when constitution-making to think in terms which are familiar and in terms of a fixed pattern. The British Constitution is not a sort of ready-made suit which we can put on any social body with the hope that it will fit. The same thing applies to the legislative council; because a legislative council is appropriate for one set of social conditions, we are apt to argue that it is necessarily right for all. Legislative councils would require an official majority and an elected European element, and in some ways they would be less representative than the kind of representative institutions we are seeking to build up in the territories. I think that these proposals are probably the most appropriate and most hopeful line of administrative progress, which we can pursue, at any rate for the present.
I turn from the constitutional side to the social services. Here, if it is agreeable to your Lordships. I should like to make a proposal —that is, that I should publish a White Paper containing the details of the social services and economic development in the three territories, for it is quite impossible to cover them adequately this evening. However, I want to extract the main features of two social services which perhaps will interest your Lordships—namely, health and education. In all three territories expenditure from revenue on health has increased, as has expenditure by grant from Colonial Development and Welfare Funds. In Basutoland new hospitals, new health centres and mountain dispensaries in outlying districts, are being built. In Bechuanaland, hospital facilities have been improved. There is now one doctor to every 17,000 persons and one bed to every 555 persons. The World Health Organisation is active in Bechuanaland in trying to counter prevalent diseases. In Swaziland, hospitals have been enlarged and a public health laboratory has been built.
By reason of the skilful campaigns which have been pursued and with the aid of modern drugs, malaria has been nearly eradicated and the elimination of

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leprosy is within sight. Under all these headings there are plans for development with which we are ready to press on. In regard to bilharzia, which is becoming more prevalent and dangerous, it is planned to create a team to try to bring this under control and eradicate it. I have no wish to convey in the least that the path has been completely cleared by the progress that has been made. There is much to be done. Tuberculosis, for instance, is a scourge. There are no specialist facilities in the territories, and there is much to be done in the field of nutrition and hygiene. Nevertheless, I think we can claim that in the last ten years there has been very real progress in the field of public health services.
If I may, I will also briefly sketch the development of education. In all three territories, school buildings have been improved; the percentage of qualified teachers has increased and the size of classes has been reduced—it sounds almost like a debate on education in this country. But in the territories it is a very large problem, and we are certainly not satisfied. In Swaziland the number of schools offering higher primary education has been increased from ten to twenty-nine in the last few years. A trade school has been built. In Basutoland the Administration plan to build in the next five years an agricultural training school, six new secondary schools and two new teacher-training institutions. In Bechuanaland new junior secondary schools, a new teacher-training college and a trade school are being built, as well as extensions to the Bamangwato College, which is designed to serve the whole Protectorate.
At present as the noble Lord, Lord Mathers, has said, the territories cannot afford to pay the cost of these services out of their own revenues, and a great deal therefore falls on the United Kingdom. I think it would be short-sighted to follow a policy of indefinitey subsidising the social services whereby they are fixed at a level at which the territories could never hope to keep them out of their own resources. While some direct assistance is certainly necessary, the bulk of the money which comes from the Colonial Development and Welfare Fund is being spent on economic development for increasing the wealth of the territories, because, as in
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every other country in the world, unless their wealth is increased, their welfare cannot be increased.
I turn from the social services to the economic development of the territories. There is the possibility that diamonds may be found in Basutoland. A private prospector is prospecting at the moment, but I have not heard the result. The Orange River power station is a practical proposition, we are advised, but of course the market for its power is in the Union, and the Union have to consider whether or not they wish to take it. The noble Lord, Lord Haden-Guest, asked about agriculture in Basutoland. The development of Basutoland is largely a question of soil conservation, first of all; secondly of the productivity of the soil and then of making successful marketing arrangements. Therefore a large part of the Colonial Development Fund is being spent on remedying the damage to the soil which has arisen from a mixture of over-population and bad farming in the past. The result—the noble Lord will see more details in the White Paper—is that the whole territory of Basutoland can be protected against soil erosion within the next few years.
The next problem is the improvement of agricultural methods, so that the Basuto can grow enough for themselves and possibly a surplus for export. The White Paper will give details but I may mention that an experimental agricultural station has been established, and a complete catchment area has been taken over and is being developed to demonstrate the problems of land conservation and more effective production—that is to say, better farming. The programme includes the introduction of tractors operated on a co-operative basis and there is more marketing of wool, also on a co-operative basis. So in Basutoland, so far as the development of the soil is concerned—and that, as I say, must be the foundation of the economy of the territory—I think the White Paper will show a tale which your Lordships will feel is at any rate a move very much in the right direction.
In the past, the economy of Bechuanaland has been based largely on cattle. The problem is really one of water. Therefore, the money from the Colonial Development and Welfare Fund here is

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being spent to bring more water, particularly to the sparsely populated areas where it is estimated that there are 10.000 square miles which could produce 150.000 head of cattle. Much thought is being put into the siting of dams and of boreholes in order to bring water to this Territory. In the preparation of a water plan (if I may so call it) the chiefs and the elders in Bechuanaland are, I am glad to say, co-operating to the full. That aims at an inevitably long-term expansion of agricultural production. The best hope for more immediate prosperity lies undoubtedly in the discovery of easily worked minerals. A geological survey has been made which has revealed the presence of a variety of minerals. Copper, coal, asbestos and kyanite have all been found, and they have attracted commercial interests. There is one proposal for a reconnaissance survey which will take three years and on which something like £50,000 will be spent—the details will appear in the White Paper. The proposal is under consideration by the chiefs of tribes, since the ownership of the minerals lies in the tribe. I think it was the noble Lord, Lord Haden-Guest, who asked what protection a tribe has against an unscrupulous exploiter. The answer is that they cannot make any move without the assent of our High Commissioner; and his advice, and that of the resident Commissioner, will always be at the disposal of the tribal chief. There is, therefore, some protection there.
Lastly, I turn from Bechuanaland to Swaziland. The economy of Swaziland is already largely based on minerals, mainly asbestos. A geological survey has again disclosed that there are other minerals there which it is possible to exploit, and there are possibilities, too, of hydro-electric power. But perhaps your Lordships will be interested more than anything else in this fact: since Swaziland has the benefit of a good climate, good soil and plenty of water, forestry on a large scale is an economic proposition. Fairly recently. 160,000 acres have been planted with pines, and if prices and costs maintain roughly their present proportions, then from timber the Government will get as much revenue in a few years' time as they get from all sources put together now. So timber is going to be a considerable asset to the territory. Irrigated farming is
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another new development. An area of 30,000 acres is already producing bananas, rice, citrus fruit and vegetables and the extent of the development is perhaps illustrated by the fact that in four years the revenue of the territory has been doubled.
All this rather intensive economic development in Swaziland obviously raises acutely the question of communications between these different areas of development, and they can be tackled successfully only by the building of roads or railways, or both, financed by loan or grant. I am glad to say that the revenue of the territory is so buoyant that it can service such loans as may be necessary for these developments. Your Lordships may he interested in the attempts being made to ensure sufficient land for the natives' needs—and again, I will give details of this in the White Paper. About 345,000 acres have been bought with Colonial Development and Welfare Funds and developed into model settlements and the Paramount Chief, who is co-operating fully, has set up a Central Rural Development Board which is making rules for the use of land.
I had no thought, and certainly no wish, that this debate would take a turn in which the domestic policies of South Africa and the question of the possible transfer of the territories to the Union should be debated, and I do not wish to spend much time on that particular aspect of the question. But since my noble friend Lord Milverton has mentioned it, 1 will just refer him to the statement made by my predecessor on April 13, 1954, and, in particular, to these words:
"I think it is right to state that, in the conditions which exist at the present time, the Government would not be prepared to recommend such a transfer to Parliament."
But short of this question of the transfer of the territories to the Union Government, of course we want the fullest cooperation with the Union Government; and, indeed, I think I can safely say that it already exists over a wide range of practical matters, such as trade, transport, agriculture, health and development generally. It is the firm wish of Her Majesty's Government that these contacts should be maintained and developed, and I shall do all I can to promote good feeling and understanding in these matters of administration.

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So, over all, in answer to the Question asked by the noble Earl, Lord Lucan—for which, I repeat, I am most grateful—I think I can say this: the administrative system in the territories is being developed on more representative lines; social services are being expanded, so far as the money will allow; and the economic resources of the various territories are being rapidly developed to the great advantage of the native inhabitants. Economic development is the crux, and we intend to push on with it as fast as we possibly can. Though conditions may vary in the territories, it is our firm intention to see to it that the general wellbeing of the people of these territories is promoted in every way in which Her Majesty's Government can assist.
7.39 p.m.
THE EARL OF LISTOWEL: My Lords, with your Lordships' permission, perhaps I may be allowed to thank the Secretary of State for his important statement, which I think will give a good deal of satisfaction, both here and in the three territories, and will certainly remove a great many misconceptions. I am sure he will appreciate that we should not wish to express a final judgment about this statement until we have had an opportunity of reading it in Hansard and also of studying the White Paper which the noble Earl has promised to publish. I should like to make only two brief comments. It is evident from what the noble Earl has said that the basic principle of British policy towards our dependencies—the principle of mutual expansion of self-government by representative persons, both locally and at the centre—is, in fact, being carried out in these territories and will continue to be carried out in time to come. I cannot help feeling that a great deal of the controversy on this subject is verbal and is due to the fact that people do not see the realities behind words. In this regard, I was particularly glad to hear the Secretary of State say that the Basuto are having second thoughts about the Moore Committee's Report. I am quite sure that many of its recommendations will take them a long step forward, and I am glad that the Government are
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not trying to impose any of its proposals but are rather waiting for the good will and approval of the Basuto.
The other matter which I think will give satisfaction is the obvious evidence of improved social services and new economic development in recent years. I am grateful to the Secretary of State for his promise of a White Paper which will set out these improvements in full detail. As my noble friend Lord Lucan said, the affairs of these territories are seldom discussed in Parliament, and it would be an appropriate conclusion—and I believe I speak for everyone—to pay a warm tribute this evening to the executive and administrative technical officers of these territories, whose devotion to duty has made this remarkable measure of progress possible, and also to express our cordial good will towards the peoples of the territories, who, although they are very far away, are not forgotten, and to their traditional and represenative leaders.

WILLOUGHBY DE BROKE ESTATE BILL [H.L.]
Bill (in the form approved by the Personal Bills Committee) presented, and read 1a.
HILLINGDON ESTATE BILL [H.L.]
Bill (in the form approved by the Personal Bills Committee) presented, and read 1a.
LONDON COUNTY COUNCIL (MONEY) BILL
Committed: Bill reported without amendment.
CROSBY CORPORATION BILL
Committed: the Committee to be proposed by the Committee of Selection.
SWANSEA CORPORATION (FAIRRWOOD COMMON) BILL [H.L.]
Reported from the Select Committee, with Amendments.
RUNCORN-WIDNES BRIDGE BILL [H.L.]
The Queen's consent signified, and Bill reported from the Select Committee, with Amendments.
GLOUCESTERSHIRE COUNTY COUNCIL BILL [H.L.]
The Queen's consent signified, and Bill reported, with Amendments.
SANDOWN-SHANKLIN URBAN DISTRICT COUNCIL BILL
Returned from the Commons with the Amendments agreed to.
DEWSBURY MOOR CREMATORIUM BILL [H.L.]
Returned from the Commons, agreed to with an Amendment: the said Amendment considered and agreed to.
CHATHAM AND DISTRICT TRACTION BILL [H.L.]
Returned from the Commons, agreed to.

LIVERPOOL CORPORATION BILL [H.L.] MAIDSTONE CORPORATION BILL [H.L.]
Returned from the Commons, agreed to with Amendments: the said Amendments considered and agreed to.
House adjourned at eighteen minutes before eight o'clock.