Sitting of 24 July 1956

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  FELIXSTOWE DOCK AND RAILWAY BILL [Lords]
  As amended, considered; Amendments made to the Bill; Bill to be read the Third time.
  ABERDEEN HARBOUR ORDER CONFIRMATION
  Bill to confirm a Provisional Order under the Private Legislation Procedure (Scotland) Act, 1936, relating to Aberdeen Harbour, presented by Mr. J. Stuart; and ordered (under Section 7 of the Act) to be considered Tomorrow and to be printed. [Bill 165.]
PETITION

  Welsh Sunday Closing
  Sir T. O'Brien: The humble petition which I beg to ask leave to present concerns the opening of licensed premises in the Principality of Wales and in the English County of Monmouthshire. It is presented on behalf of 120,000 of Her Majesty's adult subjects in the Principality and the County of Monmouthshire.
  These are the three short points of the Petition:

  (1) the existing licensing laws which prohibit the sale of excisable beverages in licensed premises in Wales and Monmouthshire on Sundays are an anachronism which besides interfering with the liberties of people in Wales and Monmouthshire by depriving them of facilities to obtain alcoholic refreshment in licensed establishments if they so desire, is also causing untold harm to the development and maintenance of the tourist trade;

  (2) that the restrictions are grossly unfair to the licensed victuallers in Wales and Monmouthshire who are prohibited from supplying alcoholic liquors on Sundays although registered clubs in those same parts of the United Kingdom are enabled by law to supply alcoholic liquor on Sundays without the strict surveillance and control to which licensed premises are subject;

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  (3) that such restrictive legislation is a form of discrimination which weighs heavily on a very large number of people and should, in the view of your petitioners, be removed.

  Wherefore your petitioners pray that your honourable House will be pleased to introduce and pass legislation to remove the existing prohibition on the sale of excisable beverages in Wales and Monmouthshire on Sundays.
  And your petitioners, as in duty bound, will ever pray.
  To lie upon the Table.

ORAL ANSWERS TO QUESTIONS
  BRITISH ARMY

    Casualties, Cyprus
    Mr. Hector Hughesasked the Secretary of State for War the numbers, ages and units of casualties among men of Scottish Highland Regiments now serving in Cyprus to the latest convenient date.
    The Secretary of State for War (Mr. Antony Head): Up to 17th July, two had been killed and 22 injured as a result of terrorist action and 13 killed and 11 injured in the forest fire of 17th June.
    I will, with permission, circulate details of their ages in the OFFICIAL REPORT.
    Mr. Hughes: Can the Secretary of State say how many of them were sent home to Britain, where they are now, and what has become of those who were seriously injured? Are there any permanent disablements?
    Mr. Head: I could not give particulars of the wounded without notice, but if the hon. and learned Member wants the information I will write to him.
    Sir A. Gomme-Duncan: Can my right hon. Friend say which Highland Regiments are not Scottish?
    Mr. Head: I should not like to intervene in that.
    Following is the information:

    Killed

    Injured

    Aged 28

    …

    1

    Aged 30

    …

    1

    22

    …

    1

    29

    …

    2

    21

    …

    1

    26

    …

    1

    20

    …

    2

    25

    …

    1

    19

    …

    8

    22

    …

    3

    18

    …

    2

    21

    …

    1

    20

    …

    3

    Total

    …

    15

    19

    …

    19

    18

    …

    2

    Total

    …

    33

    Mr. R. Edwardsasked the Secretary of State for War whether, in view of the distress caused to the relatives of British soldiers who have lost their lives in Cyprus, he will consider the establishment of funds so as to bring transportation costs, from Cyprus, within the resources of the relatives concerned; and if he will further consider the establishment of mobile embalmment arrangements or, alternatively, mobile cremation facilities, so as to enable the next of kin of deceased soldiers to have the remains repatriated for burial in this country if so requested.
    Mr. Head: Any such arrangements would in fairness have to apply to all overseas commands. Whilst I have full sympathy with the relatives, I am convinced, for reasons which have frequently been gone into in great detail in the House, that there are very strong objections to departing from our present policy.

    London Assembly Centre
    Mr. Hector Hughesasked the Secretary of State for War how many of Her Majesty's troops, and belonging to which units, were accommodated in Goodge Street underground assembly centre from its first use for the purpose up to the date of the recent destruction by fire; and, from that latter date up to the latest convenient date, how many of Her Majesty's troops, and belonging to which units, have been assembled in or near London on their way to embarkation for abroad.
    Mr. Head: As I explained in answer to a Question by the hon. and learned Member on 10th April, the detailed information required to answer the first part of this Question is not available, but about 50,000 troops a year passed through the London Assembly Centre when it was at Goodge Street. Since the fire, about 9,000 men of many different units have passed through the Centre's temporary accommodation at Woolwich.
    Mr. Hughes: Can the right hon. Gentleman tell us how many of those troops were Scottish?
    Mr. Head: No.

    National Service Men
    Mr. Ian Harveyasked the Secretary of State for War what steps he is taking to ascertain from Territorial units their
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    opinions as to the effectiveness of training National Service men for a period of one year only.
    Mr. Head: We are and will continue to be in close touch with Territorial Army units and commanders throughout the present training season. There will be a conference towards the end of the training season.
    Mr. Swinglerasked the Secretary of State for War what proportions of the Army are at present made up of National Service men and Regulars on three-year engagements, respectively; and what would be the strength of the Army if National Service was abolished forthwith.
    Mr. Head: Fifty-two per cent. of other ranks are National Service men and 24 per cent. are Regulars on three-year engagements. If all National Service men were released at once, the strength of the Army would drop to about 170,000 other ranks.
    Mr. Swingler: Is the Secretary of State aware that his statement last night on the subject of the ending of conscription will cause the utmost dismay in the country, where an early end to it is expected? Is he aware that he will be blamed for putting the Army on a short-service basis? Will he tell the House what is his conception of ending conscription, and when he expects it to be ended?
    Mr. Head: I think it is much more likely that hon. Gentlemen opposite will be blamed for making irresponsible statements about the ending of National Service.
    Mr. Strachey: Will not the Secretary of State agree that these are very early days in his own recruiting policy, after the changes in pay, for him to be as dogmatic as he was yesterday and as he is again today on the subject of the rate of recruiting which he will get? Is he not really being extremely pessimistic even about his own efforts?
    Mr. Head: I am not being dogmatic or pessimistic. As the right hon. Gentleman can see if he will study my speech, all I tried to point out was that even if recruiting is a splendid success and we get very large numbers, inescapably there is a trough or run-down in the Army between 1958 and 1962, and nothing that anybody can do will avoid that.
    Mr. Callaghan: What, then, did the Minister of Defence mean when he said he hoped to abolish National Service well before the next General Election. Does not that arouse hopes and expectations in the minds of countless thousands of young people? What kind of muddle are the Government getting into on this matter?
    Mr. Head: I am unaware of the quotation which the hon. Gentleman is making. [HON. MEMBERS: "Oh."] All that was said some considerable time ago—six months ago. If the hon. Gentleman will study the matter he will see that there is an inevitable rundown that ensues. Nobody has abandoned the idea of eventual abolition of National Service, but the rundown between 1958 and 1961 is inevitable.
    Mr. Stokes: Is it not absurd for a Secretary of State for War to say he is totally unaware of what the Minister of Defence has said? [HON. MEMBERS: "Oh."] He said that. [HON. MEMBERS: "No."] Yes, he did. Is the right hon. Gentleman not aware that his own staff consider that it is impossible with any real approximation to assess what the results of the improved attractions to recruitment will be in under one year?
    Mr. Head: I hope that I know as well as the right hon. Gentleman does what my own staff are saying, but everybody is agreed, however improved recruiting may be, that between 1958 and 1961 we have a void which must be filled somehow.
    Mr. Callaghan: Muddle, muddle, muddle.
    Mr. Sorensenasked the Secretary of State for War approximately how many National Service men avail themselves of facilities available for training for employment in civil life; and what further steps have been taken to encourage those who are unskilled or have no particular civilian employment to secure suitable vocational training during their period of National Service.
    Mr. Head: National Service men have a right to reinstatement in their former employment, and therefore no general scheme of resettlement training has been set up for them. All are however encouraged to carry out vocational or other study at Army education centres or to
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    take one or more of the 600 correspondence courses which are available. Those serving at home can also attend local evening classes free of charge.
    Available statistics do not show the number of National Service men undergoing vocational training of one kind or another, and very great clerical effort would be required to obtain it.
    Mr. Sorensen: Could the Secretary of State inquire from those who are responsible for educating these young men approximately how many are receiving such vocational training who have not already had their employment guaranteed to them? Will the right hon. Gentleman encourage such training among the large number of young men who drift out of the Army without being properly trained for future employment?
    Mr. Head: When men join the Army we give them a pamphlet about educational facilities in the Army, a copy of which I will send the hon. Member, if he wishes to have it. It lays out very fully what facilities are available during their National Service.

    Senior Officers (Employment)
    Mr. H. Hyndasked the Secretary of State for War how many of the 536 officers of the rank of brigadier and upwards are in diplomatic posts; how many are on Army duties overseas; how many are on Army duties at home stations; and how many are otherwise employed.
    Mr. Head: Four of these officers have retired, three are military attachés at embassies abroad, 333 are on Army duties at home, and 165 are serving overseas. Thirty-one are on courses, sick or temporarily unemployed.
    Mr. Hynd: As this seems a rather large number of high-ranking officers for a shrinking Army, will the right hon. Gentleman endeavour to see that it is kept in proportion to the number of other ranks?
    Mr. Head: Of course, the number will shrink as the Army shrinks. The proportion is about 0·1 per cent. of the Army as a whole.
    Mr. Simmons: How many of those brigadiers are Members of this House?
    Mr. Head: None.

    Scottish Units, Cyprus (Leave)
    Mr. Hector Hughesasked the Secretary of State for War how many members of Her Majesty's Forces belonging to Scottish units now serving in Cyprus have applied for permission to spend their leave in Great Britain; how many of these applications have been granted and on what financial and other conditions; and how many of the applicants have in fact spent their leave in Great Britain.
    Mr. Head: About 75 have paid then-own fares and have come home from Cyprus for leave. A few applications have been refused, mainly for absence without leave.
    Mr. Hughes: Apart from those who have paid their own fares, what arrangements are made in these cases for the transport home of such soldiers?
    Mr. Head: On the free leave scheme?
    Mr. Hughes: Yes.
    Mr. Head: Men who qualify for the free leave scheme are transported home by the trooping service, but this battalion has been out there only a year, and so the men do not qualify for this scheme yet.

    Service Rations
    Lieut.-Colonel Liptonasked the Secretary of State for War what improvements are to be made in Service rations.
    Mr. Head: I cannot say anything at present.
    Lieut.-Colonel Lipton: We were told that two months ago. Is the Secretary of State aware that the present inadequate scale of rations has to be supplemented by soldiers out of their own pockets? Can he give an assurance that if there are to be any economies they will not be at the expense of the men's food?
    Mr. Head: It was only a month ago, I think the hon. and gallant Gentleman will find—
    Lieut.-Colonel Lipton: Two months.
    Mr. Head:—but the whole question, as I have told hon. Members before, is being gone into, and I hope that I shall be able to say something about it in the near future.

    Discharges (Security Grounds)
    Mr. Edeasked the Secretary of State for War what entry is made on the discharge papers of a man discharged on security grounds to indicate the reason for such discharge.
    Mr. Head: The entry is,
    "His services being no longer required for the purpose for which he enlisted."
    Mr. Ede: Is that fair to other people who may employ him?
    Mr. Callaghan: Is it fair to him?
    Mr. Head: I think that if we were to put on the conduct sheet particulars of the matter there would be strong complaints that it would be unfair to the man in seeking future employment.
    Mr. Edeasked the Secretary of State for War how far, in the case of a man discharged from the Army on security grounds, the assessment of his character is affected by the reason for discharge.
    Mr. Head: It is not affected.

    F.N. Rifle
    Sir J. Hutchisonasked the Secretary of State for War what progress has been made in arming the forces with the F.N. rifle; and whether he will make a statement on the present position.
    Mr. Head: Over 14,000 have been received by the Army; 12,000 of these are being used in, or are on their way to, overseas theatres.
    Sir J. Hutchison: May I ask my right hon. Friend two other questions in that connection? When is the rifle likely to be manufactured in this country? Have any in fact been manufactured in this country? Are there any prospects that Germany, in the interests of standardisation, will adopt the same rifle?
    Mr. Head: The answer to my hon. Friend's first supplementary question is that production is up to—and, I hope, may be a little ahead of—schedule. The answer to the supplementary question about Germany is, "Not at present."
    Mr. Strachey: Will the right hon. Gentleman tell us whether these 14,000 are all Belgian rifles, manufactured in Belgium? Is not the manufacture of the

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    rifle in this country intolerably delayed? The delay goes on and on from year to year, and we never see the start of production here at all.
    Mr. Head: The answer to the first part of the right hon. Gentleman's supplementary question is "Yes." The answer to the second part is that I have frequently explained the production dates to the right hon. Gentleman, and they have not altered since I first stated them. Indeed, they have slightly improved, if anything.

    Personal Case
    Lieut.-Colonel Liptonasked the Secretary of State for War whether he will review his decision not to allow Mr. G. Frost, of whom details have been submitted, to rejoin the Army.
    Mr. Head: I have had this case reviewed. Mr. Frost was discharged from the Army as permanently unfit for service on medical grounds, and I am advised that this decision should stand because of the considerable danger that he would once again fail to stand up to Service conditions.
    Lieut.-Colonel Lipton: Is the right hon. Gentleman aware that, however odd it may seem, that young Brixton man is anxious to get back into the Army, and that he considers that he is much better now than he was? Is it fair to exclude him from the Army on the basis of a medical report which is now two years old?
    Mr. Head: As the hon. and gallant Gentleman calls himself a lieutenant-colonel, I do not see why he should think it so odd that this man should want to rejoin the Army. We do not wish to turn down men who are fit, but we should be doing a dis-service to the Army and to the man himself if we were to accept him when he is below the medical category.

    Forces, Germany (Requisitioned Houses)
    Mr. Fernyhoughasked the Secretary of State for War the number of requisitioned houses in Germany occupied by British Service men's families.
    Mr. Head: About 2,550, including all three Services.
    Mr. Fernyhough: Is the right hon. Gentleman aware that on 15th June, the Bundesrat made it clear that this property was available to Allied forces, which include British forces, only until, at the latest, 31st December this year? Does that mean that, therefore, we have to construct about 2,000 houses? Will the cost of those 2,000 houses come out of the £34 million which the Germans are going to allow us in support costs, or will the cost be borne by the Germans additionally? If we build the houses and pay for them, what happens if we withdraw our forces from Germany?
    Mr. Head: This was foreseen some considerable time ago. There were well over 4,000 houses, and we have already disposed of 2,000. We shall aim at disposing in the near future of another 2,000, and then move into quarters built at German cost previously. We shall probably retain, if they are needed, about 500, on long leases, if that can be negotiated with the owners.

    Forest Fire, Cyprus (Casualties)
    Mr. Emrys Hughesasked the Secretary of State for War if he is now in a position to make a statement on the deaths of twenty-one soldiers in the forest fire in Cyprus.
    Mr. Head: This forest fire occurred during the season of forest fires in Cyprus and had been burning for twenty-four hours at the time when the fatal accident occurred. At this time troops were engaged in attempting to round up terrorists who had been located in the area.
    Efforts were also being made by both soldiers and civilian fire fighters to bring the fire under control when the wind suddenly increased in strength. It caught the fire at the bottom of a steep wooded slope and drove it rapidly upwards to a narrow track along which vehicles were trying to escape from the fire. In doing so, they met a scout car coming in the opposite direction, and, because the track was too narrow for vehicles to pass, they were delayed while the scout car turned round. In these few moments the fire reached the road.
    Because it was travelling at a speed of between 15 and 20 m.p.h., it trapped the men in their vehicles and prevented them

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    from escaping on foot. The casualties occurred in a matter of a minute or two. Rescue efforts were made immediately by troops and civilians in the neighbourhood and their behaviour in fighting the fire and giving first aid to the injured was most commendable.
    What caused the fire is not known, but it may have been started accidentally by a mortar bomb or intentionally by terrorists.
    Mr. Hughes: Is the Minister aware that I had it from a soldier in Cyprus that the fire was caused by mortars thrown by our own commandoes? Is he aware that twenty-one men, many of them National Service men, were burned to death as a result of this accident? Does the right hon. Gentleman not think that better precautions should have been taken, and can he explain why, six weeks after, this is the first time that we have had any expression of regret in the House for the murder of these men?
    Mr. Head: The hon. Member has no right to say that. I have referred twice before to this matter and have expressed deep regret and sympathy with the relatives. Nobody regrets more than I do this tragic fire, but if there is a battle in dry weather in a forest area there is always the possibility of a fire. The casualties that occurred are a great tragedy. I am giving the hon. Member the results of the court of inquiry which we held to try to establish the cause.

    TRADE AND COMMERCE

      Timber
      Mr. Vaneasked the President of the Board of Trade what consultations he had with woodland owners in the United Kingdom before deciding to release large stocks of timber from the strategic reserve, thus endangering the stability of the home market.
      The Parliamentary Secretary to the Board of Trade (Mr. Derek Walker-Smith): The associations representing woodland owners in the United Kingdom were told in confidence of the Board's plans for release of hardwood at a meeting of the Home Grown Timber Advisory Committee on 25th April, and were invited to make any representations they wished. No such representations have been received. I have no reason to think
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      that our releases of timber endanger the stability of the home market.
      Mr. Vaneasked the President of the Board of Trade whether he is aware of the annually increasing quantity of home-grown timber suitable for both sawn and round mining timber; and what plans he has to ensure that full use is made of all this material and that no foreign exchange is spent on supplies from abroad which could be found equally well from home-grown resources.
      Mr. Walker-Smith: Yes, Sir. I am aware that supplies of home-grown mining timber are increasing steadily. The National Coal Board is almost the only buyer of mining timber, and its buying policy in this and other spheres is determined by commercial considerations. I am informed, however, that the Board is at present taking all the available home-grown mining timber which is offered to it and is suitable for its purposes.
      Mr. Vane: Is my hon. and learned Friend aware that there is reason to believe that the National Coal Board could take a small extra amount of timber, and that the amount available will increase every year? Is he also aware that about one-third of our imported mining timber is either paid for in dollars or comes from the Soviet Union, prepared presumably by slave labour or something nearly equal to it? Will he give an assurance that the home trade will not be made to take second place?
      Mr. Walker-Smith: I have already said that the National Coal Board is taking all that is offered to it and is suitable for it. In 1955 that was 45 per cent. of its requirements. The proportion this year, my hon. Friend will be glad to know, is expected to be slightly higher.
      Mr. Callaghan: Will the hon. and learned Gentleman undertake not to bring any pressure on the National Coal Board which will result in it taking pit props which might be unsuitable for its purposes?
      Mr. Walker-Smith: Clearly it would be false economy to try to make the Board take unsuitable pit props, and I am sure that my hon. Friend the Member for Westmorland (Mr. Vane) did not have that in mind.
      Mr. Vane: Naturally.

      Petrol Distribution
      Mr. George Craddockasked the President of the Board of Trade if he has now completed his inquiries into petrol distribution in the United Kingdom; and if he will make a statement.
      Mr. Walker-Smith: My right hon. Friend is considering the representations which have been made to him that the distribution of petrol should be referred to the Monopolies Commission, but he is not yet ready to make any further statement.
      Mr. Craddock: Is there any truth in the statement that distributors who do not join the large combines are charged 4d. a gallon more for their petrol?
      Mr. Walker-Smith: I could not answer that question, at any rate without notice. If the hon. Member wants further specific information, perhaps he will agree to put a Question on the Order Paper.
      Mr. H. Wilson: Is the hon. and learned Gentleman not aware that in the last three or four years the whole machinery of petrol distribution in this country has been revolutionised, and practically all garage proprietors, against their will in most cases, have been forced into these exclusive arrangements, and that the majority of consumers have shown that they are against them? In these circumstances, if the hon. and learned Gentleman is not going to refer the matter to the Monopolies Commission—and we understand that he cannot announce at this moment whether he is going to do so or not—will he consider establishing a Departmental inquiry into the whole question of oil distribution and the distribution by garage proprietors of accessories in the motor trade?
      Mr. Walker-Smith: That is a large question, and I do not think that it arises at present.
      Mr. Craddock: Do I understand from the Minister that in the inquiries made so far this point has not emerged?
      Mr. Walker-Smith: I did not mean to suggest that. All I said to the hon. Member was that, as it was not a point on which I was on notice, it was not a point that I had in mind. That is all that I intended to say.
      Mr. Wilson: Has the hon. and learned Gentleman not studied the various representations made from this side of the House and through the authoritative article in the Economist on 14th January this year, more than six months ago? Has he not received a copy of the authoritative announcement issued by the Motor Accessories Manufacturers' Association?
      Mr. Walker-Smith: Yes, Sir. I have studied a large and comprehensive literature on this and allied subjects, but I am not in a position to confirm whether statistics of the kind to which the hon. Member for Bradford, South (Mr. George Craddock) referred are correct or otherwise, except on notice.

      Soviet Trade Delegation (Textile Industries)
      Mr. George Craddockasked the President of the Board of Trade if the leaders of the Soviet trade delegation will be given facilities to meet representatives of the woollen textile trade at Bradford with the object of increasing woollen exports to the Union of Soviet Socialist Republics.
      The Minister of State, Board of Trade (Mr. A. R. W. Low): Mr. Malyshev and his trade delegation are mainly concerned with the purchase of plant, machinery and instruments. But we have reminded them of our interest in the export of consumer goods. I specifically told Mr. Malyshev I would welcome a visit by him or a member of his delegation to the woollen and cotton textile industries before they leave.
      Mr. Craddock: Is the right hon. Gentleman aware that I am sure that the manufacturers and the trade unions in Yorkshire and Lancashire will be delighted with that statement?

      Newsprint (Import Licensing)
      Mr. Bottomleyasked the President of the Board of Trade for what purpose he finds it necessary to keep import controls on newsprint.
      Mr. Low: There are two reasons. The first is that we could not yet afford the substantial increase in imports necessary to satisfy the full estimated home demand. We are, however, at present prepared to licence imports of a greater quantity of newsprint than is available.

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      Import licensing does not therefore restrict supplies.
      The second reason is that since demand is substantially greater than total supplies, my right hon. Friend has been asked by the newspapers generally to continue the rationing of newsprint by statutory order until the industry has worked out a voluntary scheme to protect the small user. Import licensing is necessary to enable us to control distribution.
      Mr. Bottomley: Is it a fact that newsprint is allowed for papers without an import licence? Why not use the import licensing system for more essential purposes?
      Mr. Low: As I have explained, import licensing governs the import of newsprint, and licences are necessary; but it does not restrict supplies at the moment.

      Indian Textiles (Imports)
      Mr. Greenasked the President of the Board of Trade whether his attention has been drawn to the official plans of the Indian Government to increase production of textiles for export from that country by approximately 300 million yards; and what conversations he has had with the Indian Government regarding the proportion of such increased production of Indian textiles to enter this country.
      Mr. Low: Yes, Sir; my hon. Friend will be aware that my right hon. Friend the Prime Minister mentioned to Mr. Nehru, whilst he was in London recently, the anxiety in Lancashire about the possible growth of duty-free textile imports and suggested to him that it would be in the interest of both the United Kingdom and India if there were discussions between representatives of the textile industries of the two countries. The way lies open for such talks.
      Mr. Green: Whilst welcoming this initiative and expressing my hope that it will have some success, may I ask my right hon. Friend if he could arrange for any reports of conversations that may take place between Lancashire and Indian industrialists on this matter to be made available to those of us who are interested?
      Mr. Low: I think that is a matter for the industry. The talks will be between
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      businessmen, and I have a feeling that my hon. Friend may have closer access to them than he indicates.
      Mr. Albu: Will the right hon. Gentleman bear in mind that if the Indians cannot export the simple products which they are capable of manufacturing at the present time, they will be unable to buy the plant and machinery with which to carry out their development plans?
      Mr. Low: Yes, Sir, but I hope that the hon. Gentleman will also bear in mind the other factors indicated.

      United States Raw Cotton (Price Policy)
      Mr. Fortasked the President of the Board of Trade if he will protest to the United States Administration against its granting export subsides on cotton textiles which constitute unfair competition with British exports of the same goods.
      Mr. Low: We have told the United States Government on a number of occasions of the dangers and difficulties liable to be created by their raw cotton price policy. The United States Government have assured us that they do not intend any unfair advantage for their exporters, but we have specifically reiterated our opposition to subsidies on the export of textiles and other manufactured goods.
      Mr. Fort: Has my right hon. Friend taken up the proposed policy of the United States Government to subsidise exports of textiles by making a formal protest to G.A.T.T. in Geneva?
      Mr. Low: I do not think that the time has yet come for what my hon. Friend has suggested, if it should ever come. The United States has not yet published the exact details of these export subsidy proposals. It is expected that it may do so before the end of this month, and I think we should look at the details first.
      Mr. H. Wilson: Yes, but will the right hon. Gentleman say whether export subsidies which are not matched by corresponding subsidies for production in the home market are or are not an infringement of G.A.T.T., and if an infringement is shown here, will the right hon. Gentleman take action by raising this matter at Geneva, and demand either the

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      withdrawal of these subsidies or compensation in some other part of Anglo-American trade relations?
      Mr. Low: I hope that neither the right hon. Gentleman nor the House will think that we intend to be backward in this matter. We attach great importance to it. What G.A.T.T. provides for is that any new subsidy on exports which results in export prices becoming lower than domestic prices for comparable goods would be contrary to the revised Article 16.

      Pottery Industry
      Mr. Ellis Smithasked the President of the Board of Trade what action he has taken to assist the pottery industry since short-time working commenced and discharges were made; what representations have been made to him or letters received from the trade unions and manufacturers' organisations; and what reply has been made and what action is proposed.
      Mr. Walker-Smith: My right hon. Friend visited Stoke-on-Trent in January and had a very full discussion with both sides of the industry. Since then he has received periodical reports on the situation from the British Pottery Manufacturers' Federation, and officials of the Board met the Federation's Export Promotion Committee in Stoke-on-Trent on 11th July to discuss the latest report.
      We are by the aid of these reports and others keeping a close watch on the situation in the industry, and the Board's services are available to give all possible assistance to the industry in its efforts to take advantage of every export opportunity that presents itself.
      Mr. Ellis Smith: But has his right hon. Friend reported to the Parliamentary Secretary what the manufacturers told him?
      Mr. Walker-Smith: My right hon. Friend does not report to me in that sense, but we seek to advance these matters in full co-operation.

      Paper-Making Material (Import Controls)
      Mr. Leeasked the President of the Board of Trade why, in view of the need to solve the balance of payments problem, he has lifted the import controls on
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      paper, paper board, wood-pulp and all paper-making material.
      Mr. Low: The United Kingdom, along with other members of the Organisation for European Economic Co-operation, accepted in January, 1955, the obligation to free 90 per cent. of the imports from other member countries from import restrictions. To achieve this we had to remove import controls from pulp, paper and board. Until recently, for balance of payments reasons, we felt bound to maintain all existing import restrictions. In deciding to remove these controls as from 22nd July we had in mind that the maintenance of a high degree of liberalisation of trade in Europe is one of the main objectives of our commercial policy, not least in the interest of our own exports and so of our balance of payments.
      Mr. Lee: Is the Minister saying that our balance of payments problem is now so much less difficult than it was and that, therefore, we can afford this kind of thing; or is he able to tell us that we get some compensating increase in our export business to balance the increase in imports?
      Mr. Low: No, Sir, what I am saying is that the liberalisation of trade in Europe is very important to our commercial policy and to our balance of payments, that there has been some improvement since last year, and that now seemed to be the right time to take this step forward.

      Cricket Balls (Prices)
      Mr. D. Jonesasked the President of the Board of Trade if he is aware that there is a price ring in regard to the retailing of cricket balls; and what action he proposes to take.
      Mr. Walker-Smith: I would refer the hon. Member to the reply which my right hon. Friend gave to the hon. Member for Stockton-on-Tees (Mr. Chetwynd) on 19th July.
      Mr. Jones: Is the hon. and learned Gentleman aware that the North Yorkshire and South Durham Cricket League, which claims to know something about this game, alleges that when it sought quotations recently, every one of the firms asked to quote quoted 50s. 6d. for a grade A cricket ball, and that quite a number of quotations were received from

      195
      a number of firms? If this is evidence that there is a ring, and I think it is, will the hon. and learned Gentleman do something about it?
      Mr. Walker-Smith: If there is such a ring it would be registrable under the Restrictive Trade Practices Bill, and would in due course be a matter for the consideration of the Restrictive Practices Court.

      Canadian and United States Goods (Imports)
      Mr. Spenceasked the President of the Board of Trade the total dollar value of import licences for manufactured goods from Canada and the United States of America granted by his Department for the last convenient twelve-monthly period.
      Mr. Low: Information about the total value of licences issued is not available

      IMPORTS INTO THE UNITED KINGDOM FROM CANADA AND UNITED STATES OF AMERICA JUNE, 1955–MAY, 1956

      £ c.i.f.

      —

      Canada

      U.S.A.

      Total Canada and U.S.A.

      CLASS D.—MANUFACTURED GOODS

      1.

      Chemicals

      7,479,519

      24,336,823

      31,816,342

      2.

      Leather, Leather Manufactures and dressed Furs

      703,500

      114,543

      818,043

      3.

      Rubber Manufactures

      221,476

      226,737

      448,213

      4.

      Wood and Cork Manufactures (excluding Furniture)

      2,843,377

      1,976,456

      4,819,833

      5.

      Paper, Paperboard and Manufactures thereof

      17,828,070

      5,329,777

      23,157,847

      6.

      Woollen and Worsted Yarns and Woven Fabrics

      97,527

      91,842

      189,369

      7.

      Cotton Yarns and Woven Fabrics

      17,051

      35,616

      52,667

      8.

      Synthetic Fibre Yarns and Woven Fabrics

      90,858

      231,898

      322,756

      9.

      Miscellaneous Textile Manufactures

      36,043

      437,480

      473,523

      10.

      Miscellaneous Non-metallic Mineral Manufactures

      481,965

      445,691

      927,656

      11.

      Silver, Platinum and Jewellery

      40,479

      1,451,245

      1,491,724

      12.

      Iron and Steel

      5,275,756

      37,101,140

      42,376,896

      13.

      Non-ferrous Base Metals

      76,611,909

      7,931,310

      84,543,219

      14.

      Manufactures of Metals

      1,263,508

      1,011,308

      2,274,816

      15.

      Machinery other than Electric

      1,999,123

      34,307,493

      36,306,616

      16.

      Electric Machinery, Apparatus and Appliances

      1,452,911

      5,818,875

      7,271,786

      17.

      Railway Vehicles

      1,084

      401,209

      402,293

      18.

      Road Vehicles and Aircraft

      931,875

      11,536,616

      12,468,491

      19.

      Ships and Boats

      2,221

      11,791

      14,012

      20.

      Sanitary, Plumbing, Heating and Lighting Fixtures and Fittings; Buildings, Pre-fabricated; Furniture

      12,815

      116,011

      128,826

      21.

      Clothing, Footwear, Travel Goods and Handbags

      331,941

      642,861

      974,802

      22.

      Scientific Instruments; Photographic and Optical Goods, Watches and Clocks

      213,427

      3,925,826

      4,139,253

      23.

      Miscellaneous Manufactured Articles

      357,333

      3,869,542

      4,226,875

      TOTAL, CLASS D

      118,293,768

      141,352,090

      259,645,858

      since, for economy in administration, the Department does not compile records in this form.
      Mr. Spenceasked the President of the Board of Trade if he will make available a list showing the description of all manufactured goods imported from Canada and the United States of America under licence from his Department during the past twelve months.
      Mr. Low: Yes, Sir. A specific licence by value or quantity is required for the import from North America of most kinds of manufactured goods and I am circulating in the OFFICIAL REPORT a table showing recorded imports from Canada and the United States under Class D of the Import List for the twelve months ended May, 1956.
      Following is the table:
      Mr. Spenceasked the President of the Board of Trade upon what basis the allocation of import licences for manufactured goods from Canada and the United States of America is made.
      Mr. Low: The basis of allocation varies between commodities. If my hon. Friend would let me know which commodity he has in mind I will give him the details.

      Tractor Lubricants (Exports to U.S.S.R.)
      Mr. Langford-Holtasked the President of the Board of Trade whether he is aware that agricultural tractors supplied by makers in the United Kingdom for export to the Union of Soviet Socialist Republics should be supplied with grease and lubricants of a grade recommended for use with these tractors by the manufacturers for the proper running of the machines, and if he will therefore grant the necessary export licences of these lubricants.
      Mr. Low: Applications to export such lubricants will be considered on their merits.
      Mr. Langford-Holt: Can my right hon. Friend say, therefore, how it comes about that export licences for this type of grease have already been turned down, and would he reconsider those applications?
      Mr. Low: The fact is that we have exported since the war eleven agricultural tractors to the Soviet Union, and I think that the application for the lubricants concerned enough lubricant to lubricate about 2,000 tractors. That is quite a different matter.
      Mr. Bottomley: In view of the fact that the Russians themselves are exporting lubricants and oils, what conceivable reason can there be why British interests should not be safeguarded by sending the oil, even if it is in excess of the tractors supplied?
      Mr. Low: The right hon. Gentleman knows very well the importance of the Soviet List, and of adhering to international agreements in this matter.

      National Film Finance Corporation
      Mr. Swinglerasked the President of the Board of Trade which organisations in the film industry and cinema trade have
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      made representations to him in favour of the publication of the report of the National Film Finance Corporation on future film policy; and if he will now reconsider the question of publication in view of these representations.
      Mr. Walker-Smith: My right hon. Friend has received representations from the Cinematograph Exhibitors' Association. In addition, the film trade unions in their memorandum to the National Film Finance Corporation, which. was copied to the Board, urged that the Corporation or, if appropriate, the Board, should publish the Corporation's report, together with all memoranda of evidence received from the various trade bodies. However, my right hon. Friend has not so far altered his view that the advice given to him by the Corporation should be treated as confidential.
      Mr. Swingler: Will not the Parliamentary Secretary make representations to his right hon. Friend about this matter, in view of the fact that the most important organisations in the trade have now made representations in favour of publication? And as very important decisions about the film quota will be based on this Report in the next few months, surely those who work in the industry are entitled to know what recommendations and conclusions the N.F.F.C. reaches on the basis of their evidence?
      Mr. Walker-Smith: All these recommendations are being given, and will be given, very careful consideration. However, the hon. Gentleman will appreciate that a wide range of bodies have been consulted, and certainly not all of those expected that the advice which they gave would be liable to publication.
      Mr. H. Wilson: Yes, but does the hon. and learned Gentleman not recall that the device of using the N.F.F.C. for this purpose was the rather feeble response of the Government to the proposal that we put from this side of the House, namely, that there should now be a full inquiry into all aspects of the film industry in this country, including the serious growth of monopoly in the film industry under the present Government? It is now many years since there was such a comprehensive inquiry and since we had the Plant-Palache Report, the Gater Report and the Plant Report. Does he not feel it is essential

      199
      therefore, that anything coming out of this inquiry should be made generally available to this House and to the public?
      Mr. Walker-Smith: No, Sir. The committee which was proposed by the right hon. Gentleman was rejected for various good and sufficient reasons. This is a different exercise in which the Government are seeking advice so that they can make up their own mind about the right policy to pursue. It by no means follows that all advice tendered to Governments should necessarily be available for publication.

      Colonial Territories
      Mr. Sorensenasked the President of the Board of Trade what consideration has been given to the possibility of developing reciprocal trade agreements between this country and those British Colonial Territories now approaching self-government.
      Mr. Low: We shall consider this question as each country attains self-government.
      Mr. Sorensen: Does not the Minister agree that that is an inadequate reply, in view of the invaluable nature of the economic bridge between these Colonial Territories and ourselves? Cannot he indicate some overall plan which, with imagination and generosity, can help us look forward to a closer economic link between the Colonial Territories and ourselves?
      Mr. Low: I agree with the hon. Gentleman about the invaluable nature of the economic link between this country and the Colonial Territories, but I think an agreement entered into during the period of dependence might be liable, by that very fact, to be viewed critically by the Government of the Colonial Territory when it became independent. I think it much wiser to go on as we have been doing, trusting in the element of mutual interest and the maintenance of understanding and cordial relations between our countries to keep our trade at its maximum.
      Mr. Bottomley: Surely that would not mean that if a dependent territory made a request for a reciprocal agreement the President of the Board of Trade would not encourage such development?
      Mr. Low: If it was a dependent territory, there might be difficulties about that inherent in the phrase itself, but we should certainly consider such a request.
      Mr. Biggs-Davison: Will my right hon. Friend bear in mind that Nigeria and the Gold Coast, which are approaching full self-government, do not at present give any Imperial Preference?
      Mr. Low: I am aware of that.

      Factory, Shorts
      Miss Herbisonasked the President of the Board of Trade when a new tenant will occupy the factory in Shotts vacated by Francis Sumner Limited.
      Mr. Walker-Smith: My right hon. Friend has not yet succeeded in securing a new tenant for the factory which Francis Sumner & Company are to vacate. As he told the hon. Lady on 5th July, we are doing all we can to get one.
      Miss Herbison: Can the hon. and learned Gentleman be more specific and tell me exactly what he and his right hon. Friend are doing to get a new tenant for the factory? Is the hon. and learned Gentleman aware that, according to the Minister of Labour, there is very little likelihood of 166 women who are unemployed getting any work at all in the surrounding area?
      Mr. Walker-Smith: That is why we are as desirous as the hon. Lady is of finding a tenant to go into the factory. We have communicated full details of the factory and its facilities to our controllers in all the regions other than the Development Areas themselves.

      Anglo-Australian Discussions
      Mr. Sorensenasked the President of the Board of Trade if he will make a further statement in respect of trading agreements or adjustment of fiscal policy between Her Majesty's Government and the Australian Government.
      Mr. Low: I have nothing to add to my right hon. Friend's Answer to the right hon. Member for Rochester and Chatham (Mr. Bottomley) on 12th July.
      Mr. Sorensen: Surely the right hon. Gentleman ought to be able to make some more encouraging statement than

      201
      the one made on that occasion, particularly in view of our recent losses in the export trade and the harm caused to our home trade itself? Cannot he give us some indication of what might happen?
      Mr. Low: There have been statements about the full range of subjects discussed, and I think it much better to adhere to the normal practice of making a statement at the proper time.

      Large-scale Private Enterprises
      Mr. Proctorasked the President of the Board of Trade if he will set up a committee to consider the management and control of large-scale private enterprise, and to report to what extent the national interest is protected by the present methods of control and management by boards of directors and the interests of the workers are adequately considered, how far it is desirable that the organised workers should be represented on the boards of management of private industry, and what effect there is on privately controlled large-scale enterprises by take-over bids.
      Mr. Walker-Smith: No, Sir.
      Mr. Proctor: Does the hon. and learned Gentleman realise that under the present management and control in some of our large-scale private industries we are being led straight to disaster? Does he not think that the present system, which vests complete control in managements which are prepared to use workers to the full in times of prosperity but will throw them on the scrap heap immediately trade slackens off, is wrong? Does he not realise that a new and dynamic force, which can come only from the workers, is needed in British industry? Has he read today's Daily Express, which calls for an inquiry into one great enterprise, B.S.A., by the President of the Board of Trade, and will he reconsider his decision and hold such an inquiry?
      Mr. Walker-Smith: I have not read the article about the B.S.A., but it would obviously be directed to a subject different from that dealt with in the Question. On the generality of the matter, the Government, as the hon. Gentleman is
      202
      aware, welcome machinery for joint consultation, and there already exists very elaborate and extensive machinery for this purpose.

    NATIONAL FINANCE

      Western Europe (Common Market)
      Mr. Ripponasked the Chancellor of the Exchequer (1) what discussions took place at the recent meetings of Commonwealth Prime Ministers in London on the subject of the establishment of a common market in Western Europe; and whether he will make a statement;
      (2) what discussions took place and when decisions were reached at the recent meeting of the Council of Ministers of the Organisation for European Economic Co-operation in Paris on the subject of the establishment of a common market in Western Europe; and whether he will make a statement.
      The Chancellor of the Exchequer (Mr. Harold Macmillan): I will, with permission, make a statement at the end of Question Time covering these Questions.

      Economic Statistics
      Mr. Ripponasked the Chancellor of the Exchequer what steps he has taken to improve the form and timing of the statistical information at his disposal.
      Mr. H. Macmillan: I hope to make a statement before the Recess on the plans which we are making to improve our economic statistics.
      Mr. Rippon: While thanking my right hon. Friend for that assurance, may I ask him to bear in mind the possibility of acompanying the monthly trade figures, which are subject to so many distorting factors, by some explanatory memorandum on the terms and trends of trade? Would he not agree that if we do not have something of that nature there is a danger that our economic destinies may be conducted by economists who form unintelligible conclusions on non-existent premises?
      Mr. Macmillan: I will bear that in mind.

      Company Directors (Expenses)
      Mr. Emrys Hughesasked the Chancellor of the Exchequer what further proposals he has for restricting the sums which company directors are allowed to charge as expenses.
      Mr. H. Macmillan: I shall keep this matter under close review, but I would point out that the law already provides substantial safeguards for the protection of the revenue in the handling of claims for expenses.
      Mr. Hughes: Does the Chancellor really think that this talk about substantial safeguards will satisfy public opinion, which has been aroused as a result of the Docker revelations? Does he not realise that people are now asking to what extent this charging of expenses is going on in a wide range of industries?
      Mr. Macmillan: Yes, Sir, but I cannot make statements about individual cases. All I say, which is true, is that I believe that the law has specific safeguards, and that those safeguards are applied.
      Sir R. Boothby: Is it not the case that poor Sir Bernard Docker's claim for expenses was turned down?
      Mr. H. Wilson: Since recent evidence has shown that what my hon. Friends and I said in the Budget debate about the inadequacy of these safeguards was more than abundantly justified, will the Chancellor, in keeping the situation under review, bear in mind the suggestion that a number of us made that only a percentage of the amount devoted to business expenses by any firm should be accepted by the Revenue as expenses deductible for Income Tax and Profits Tax purposes?
      Mr. Macmillan: I would, of course, bear in mind any representations the right hon. Gentleman has made or may make, but he must not expect me now to anticipate my next Budget.

      Income Tax (Expense Allowances)
      Sir L. Plummerasked the Chancellor of the Exchequer how many taxpayers in this country are being allowed claims for expenses in excess of £10,000 a year.
      Mr. H. Macmillan: Statistics of this nature about individual claims are not available. But I would remind the hon.
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      Gentleman that there is frequently a wide difference between the amount of expenses reimbursed by a company and the amount allowed for tax relief.
      Sir L. Plummer: Why is the Chancellor being so coy in refusing to give this information? Does he not realise that great damage is being done to industrial relations by the revelation that some people are able to get away with enormous expenses? Is he also aware that hon. Members feel that they are treated by the Income Tax assessors very differently from the way in which Sir Bernard Docker is treated?
      Mr. Macmillan: It would, of course, help me very much if I could break a long-established rule and give the facts of individual cases which are known to me, but it would be a breach of a privilege which has long been established, and it would be a very dangerous practice if Ministers were to be questioned about the tax returns of individuals.
      Lieut.-Colonel Bromley- Davenport: Can my right hon. Friend say how much were the expenses of the hon. Member for Deptford (Sir L. Plummer) when he was running the groundnuts scheme, which cost the country over £36 million?
      Mr. H. Wilson: My hon. Friend the Member for Deptford (Sir L. Plummer) was not asking the right hon. Gentleman to disclose the circumstances of individual taxpayers. However, since the Chancellor has told us that he is keeping the matter under review, will he explain how he can keep it properly under review if he does not collect for his own use the kind of statistics referred to in the Question? Secondly, is he not aware of the very strong feeling held in all parts of the country, and, I am sure, on both sides of the House, about the different treatment as between Schedule E employees, whether wage earners or salary earners up to a considerable figure, and those who can take advantage of business expenses?
      Mr. Macmillan: The second part of the Question deals with a subject which we have discussed many times and is always a matter which can be reviewed. With regard to the first part, we make sample inquiries and of course we collect the statistics, but I am very loth to be drawn, even to my own advantage in the

      205
      argument, into dealing with what would gradually become questions about individual taxpayers.

      Government Departments (Regional Offices)
      Mr. J. Harrisonasked the Chancellor of the Exchequer what procedures are laid down for consultation with the staffs of Government Departments before decisions are taken affecting the closing down of regional offices and the transfer of their staff to other regions.
      Mr. H. Macmillan: It is for the head of the Department concerned to decide whether or not a regional office should be closed. The normal Whitley procedures apply. This means that the staff would always be consulted about the arrangements for putting any such decision into effect, but would not necessarily be consulted before the decision was reached.
      Mr. Harrison: Will the Chancellor take note of the fact that recently the regional office of the Ministry of Works in Nottingham was closed and the staff abruptly informed that it was to be transferred to Birmingham? Does it not make a mockery of joint consultation when a decision is reached before consultation takes place?
      Mr. Macmillan: That matter of a decision is surely a matter for the Government of the day, or for the Ministers concerned. What is important is that there should be full consultation and ample time for any transfer to take place without inconvenience to those concerned.

      Price Indexes
      Mr. McKayasked the Chancellor of the Exchequer what was the percentage rise in the consumers' index from 1946 to 1948; what has been the percentage rise in the retail price index from 1948 to May, 1956; and, by comparing the percentage increase in the retail price index with the percentage increase in the consumers' index, what is the combined percentage increase on the basis of 1946.
      Mr. H. Macmillan: Between 1946 and 1948 the Consumer Price Index rose by 15 per cent. Between 1948 and May, 1956, the Index of Retail Prices rose by 46 per cent. It cannot be assumed that if the Retail Price Index could be carried back to 1946 it would show the same movement as the Consumer Price Index
      206
      between 1946 and 1948. The two indices could not therefore properly be linked in the way suggested in the last part of the Question.
      Mr. McKay: Is the Chancellor aware that the figures clearly indicate that since 1946 the consumers' index has risen every year by 1 per cent. less than the retail index, and that the two indices taken together show a rise of 71 per cent. from 1946 to May, 1956; and that if those figures were applied to pensions, old-age pensions would be increased to 71s. 9d. a week?
      Mr. Macmillan: That is what one might call the 64-dollar question. I found great difficulty and worked very hard to get the answer to the Question, but the trouble is that the hon. Member's right hon. Friends changed the system in 1947. I did not change the system; they did. I am informed by the highest mathematical and statistical authorities, and what the hon. Member has just said leads me to suppose that he has drawn the wrong inferences from insufficient premises.
      Mr. H. Wilson: When the right hon. Gentleman has fully imbibed and studied the statistical advice given to him by my hon. Friend, will he go further into the question of how far these indices are affected by the rising costs of mortgages by building societies? Will he explain to the House how the latest increase in the interest rates of building societies squares, first, with his proposals for a plateau of stability, and, secondly, with the Prime Minister's "property-owning democracy"?
      Mr. Macmillan: The right hon. Gentleman is usually so courteous and so relevant that I do my best to answer even his supplementary questions, but that one had nothing to do with the Question on the Order Paper.

      Wages and Salaries
      Mr. McKayasked the Chancellor of the Exchequer what has been the percentage increase in men's earnings, women's earnings, and salaries, separately, from 1946 to the latest possible date.
      Mr. H. Macmillan: Average weekly wage earnings increased by 85 per cent. for men and 77 per cent. for women between October, 1946, and October, 1955. Comparable figures for salaries are not available.
      Mr. McKay: I am rather surprised. It is amazing to think that the Chancellor can tell the House that he cannot find the figures for salaries when they are in a Blue Book. Is it not correct that under the head of "salaries" are the earnings of practically all the professional men in the country and almost the whole of the middle classes? When the salaries and wages are rising so fast—men's earnings 84 per cent., salaries 90 per cent.—is it not time, when old-age pensions have risen by only 55 per cent., that something was done for pensioners?
      Mr. Macmillan: The hon. Member has asked me whether certain classes of statistics are available for a period between October, 1946, and October, 1955. I regret to have to inform him that the statistical apparatus necessary to answer the Question was not available at that time, was not provided by the authorities in charge at that time, and is therefore not available to me.

    HYDROGEN BOMB TESTS
    Mr. Swinglerasked the Prime Minister if his attention has been drawn to the official announcement that the Soviet Government is prepared to stop hydrogen bomb tests either by agreement in the United Nations or by agreement between the nuclear Powers or by separate undertakings by each of the three Powers; and if he will now communicate with heads of States for the purpose of swiftly concluding an international agreement on this subject.
    Mr. V. Yatesasked the Prime Minister if he has considered the official announcement of Soviet policy declaring that the banning of nuclear tests should be undertaken as a first step towards a comprehensive agreement and suggesting three possible methods of procedure; and if he will now take the initiative in calling a meeting of the appropriate powers to consider the suggestions made.
    Mr. Allaunasked the Prime Minister if he will consider the possibility of accepting one of the three alternative proposals for banning hydrogen bomb tests made in the recent Soviet official announcement.
    The Prime Minister (Sir Anthony Eden): I dealt with the question of limiting and controlling test explosions in my
    208
    speech yesterday. I would not wish at present to go beyond what I said then.
    Mr. Swingler: In view of the Prime Minister's very welcome statement yesterday, that Her Majesty's Government—I quote from HANSARD—
    "… are quite ready now to discuss that matter separately from the disarmament convention."—[OFFICIAL REPORT, 23rd July, 1956; Vol. 557, c. 47.]
    —are Her Majesty's Government prepared to initiate such separate discussions? When does the Prime Minister think it would be appropriate that such separate discussions should be initiated?
    The Prime Minister: My statement yesterday was quite clear, and I do not want to elaborate it now. It may be discussed in the course of today's debate, and if so, that would be useful. I certainly do not preclude our taking the initiative in this matter, but it is a complicated matter which we must work out carefully for ourselves.
    Mr. Yates: While expressing appreciation of the Prime Minister's statement yesterday, may I ask whether he will consider not hedging around this discussion with complicated methods of control? I should have thought that it was possible to reach limitation or even abolition, without necessarily going into a long-drawn-out discussion of control.
    The Prime Minister: I am in agreement with the hon. Member in the sense that that is why we chose limitation. I hope that it may be possible. It is not the easiest question in the world, and I can say only that we will sincerely see what we can do to work out a reasonable scheme.
    Mr. Allaun: Is the Prime Minister aware that Professor Haldane believes that tests already completed have cost 100,000 lives among our children's children? Since the scientists are clearly working in the dark, would not the Prime Minister agree that the only safe way to limit and control the tests is to ban them altogether?
    The Prime Minister: I really do not think that the hon. Member's statement is at all borne out by the findings of either the Medical Research Council, or the similar body in the United States which presented a report. I hope that we shall not debate the matter now. There will be opportunities to do that shortly.
    Mr. Gaitskell: The Prime Minister will recall that my right hon. and learned Friend the Member for Rowley Regis and Tipton (Mr. A. Henderson) last night put a number of questions particularly on procedure. May I ask whether the Foreign Secretary will make some reply to that in the course of his speech?
    The Prime Minister: I think that my right hon. and learned Friend will deal with that topic in the course of the debate.
    Mr. Robens: In considering the question of banning all nuclear tests and the offer of the Russians to consider the matter now, will the Prime Minister consider whether he and the Government are prepared not to test the British bomb in favour of international agreement, or does he take the view that the British bomb should be tested before any talks take place?
    The Prime Minister: I do not think that it presents itself like that. The question is whether we can agree on international limitation of these tests, and I agree with hon. Members below the Gangway that that is the right way to try to do it. If we can get limitation, which will depend on a certain amount of international confidence—one can do it no other way—perhaps we can move forward to other matters. Yesterday, I rightly spoke only of limitation.

    BUILDING SOCIETIES (INTEREST RATES)
    Mr. Boardmanasked the Prime Minister if, in furtherance of his efforts to arrest the rise in the cost of living, he will follow up his talks with industrial and trade union leaders with talks with the Building Societies Association in view of a threatened further increase in interest rates to borrowers only four months after the last increase.
    The Prime Minister: No, Sir; my discussions with industrial and trade union leaders have been of a general character. The hon. Gentleman's suggestion is not one which I could adopt in this context.
    Mr. Boardman: Does the Prime Minister appreciate that this idea of a property-owning democracy is being strangled by these vicious demands of the building societies? Will not he take some
    210
    urgent action to prevent any further addition to the already cruel burden which has been imposed upon so many young married people?
    The Prime Minister: If the hon. Member will allow me to say so, that is not exactly the Question that he asked. He asked whether I would raise this question in the context of the discussions I have had. I said that I cannot do that because it does not fall within the sphere of the discussions which I have had.
    Mr. Black: Is my right hon. Friend aware that in the great majority of cases the effect of the increase in the rate of interest will be to extend the period of repayment, with no alteration at all in the amount of the instalments?
    Mr. J. Griffiths: Since I understand that the intention of the talks with industrialists and trade unionists was to seek their aid in fighting inflation, does not the Prime Minister think that he ought now to follow up those talks by meeting the proprietors of building societies?
    The Prime Minister: The detailed question has been dealt with by the Economic Secretary. All I was dealing with was the question whether I should introduce this matter into the sphere of our talks, and my answer was "No."

WESTERN EUROPE (COMMON MARKET)
Mr. H. Macmillan: With permission, I will now make a statement in reply to Questions 38 and 58.
As indicated in the agreed statement issued at the end of the meeting, Commonwealth Prime Ministers were informed of current proposals regarding the development of closer economic co-operation in Europe. The House will not expect me to give any details of these discussions. Nevertheless, I am glad to have the opportunity of informing the House about the proceedings of the Ministerial Council of O.E.E.C., which took place in Paris last week.
We had useful talks on a variety of subjects, including nuclear energy, agriculture, the general economic situation in Europe, and trade questions. Copies of the various resolutions will be placed in the Library.

211
On the liberalisation of trade, the Organisation agreed to prolong the decision providing for liberalisation of 90 per cent. of trade until the end of 1957. In our discussion on tariff questions in general we had all, of course, to take into account an important new factor in the European scene, that is, the plan of the Messina group of countries to set up amongst themselves a common market in the form of a customs union. On the proposal of the Secretary General, it was agreed to study possible forms of association between the proposed customs union and other member countries of O.E.E.C. The study group which we set up for this purpose is to take into account the possibility of creating a free trade area, to include the customs union itself and other members of the Organisation. If the report of the study group holds out any prospect that substantial progress can be achieved along this line before the end of 1957, then the group will be told to press on with its work as rapidly as possible.
At the same time, the Organisation had already been discussing the possibility of reducing tariffs on a range of goods which are called "European commodities." The Organisation was not able to agree on approving certain specific proposals put before it in this field, but it has arranged for them to be further studied. It has further decided that if the study group on the relationship between O.E.E.C. and the plans of the Messina group does not offer the prospect of substantial progress, then it will ensure that the European commodities plan will be completed without delay, so that it can consider whether it could be accepted and put into operation by 1st January, 1958.
I ought to make it clear that no country is committed at this stage by the action which we have taken in this wide field of possible action; personally, I do not regard this work as any less important or significant on that account.
Mr. J. Edwards: I recognise the importance of this question and that it deserves to be discussed fully some time, but at this stage may I ask the right hon. Gentleman whether the fact that O.E.E.C. is setting up a study group to consider possible forms of association between members of the proposed customs
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union and other countries in any sense implies that Her Majesty's Government have already decided that consideration cannot be given even to the possibility of the United Kingdom being a member of the customs union?
In that connection, would the Chancellor please bear in mind the widely held view upon the subject of the common market, as expressed in two Motions standing on the Order Paper?
[That this House expresses agreement in principle on the establishment by stages of a common market in Western Europe and urges Her Majesty's Government to accept the invitation to participate in the negotiations currently taking place on the subject between the representatives of Belgium, France, the Federal Republic of Germany, Italy, and the Netherlands, with a view to ensuring that if, or when, any treaty is signed the way will be open for British participation in the common market on an acceptable basis and in accordance with the interests of the Commonwealth and Empire.]
[That this House, while recognising that there would be both advantages and disadvantages for this country in membership of the proposed common market, and that it would be necessary for the United Kingdom, as for each other country, to seek appropriate compensating concessions for the risks and sacrifices involved (such as Imperial Preference), none the less urges Her Majesty's Government to accept the invitation to participate in the negotiations among the other six member countries of Western European Union and endeavour to negotiate arrangements which would make it possible for the United Kingdom to participate in the advance towards a common market without detriment to the interests of the Commonwealth.]
Finally, will the Chancellor state by what date he expects the study group to be able to report?
Mr. Macmillan: I have two separate responsibilities in Paris; one of which, as Chairman of O.E.E.C, is to try to guide the work of O.E.E.C. into useful collaboration with what are roughly called the Brussels Powers, or the Messina Powers. That I attempted to do, and the Organisation agreed. The position of Her Majesty's Government is completely open. We welcome these

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studies because it is only in the light of them that we can see by what method—all methods being open in principle—we can most usefully co-operate.
Mr. Rippon: I welcome my right hon. Friend's encouraging statement, which, I am sure, will give general satisfaction, but can he say a little more about the consultations which took place with the Commonwealth Prime Ministers? I understand that no details can be given, but were they merely informed, or were their views sought and obtained? In particular, were they consulted about the decisions taken at the recent O.E.E.C. meeting?
Mr. Macmillan: It has always been the practice for individual members of the Commonwealth Prime Ministers' Conference not to go beyond the statement or communiqué which is issued at the end of the meeting. My hon. Friend must rest assured that that statement meant what it said, and that there was a discussion on this matter from the Commonwealth point of view.
Mr. Healey: Can the Chancellor of the Exchequer say whether it is true, as reported in the Press, that he announced that Britain would not join in the O.E.E.C. organisation for co-operation in the peaceful uses of atomic energy? If it is true, can he say how he reconciles this position with the speeches which he used to make in Strasbourg as the champion of European unity?
Mr. Macmillan: It is very easy to do that, because that statement is not true. If he will read the resolution and the text of the statement made by the British Government, he will see that we went a very long way to make available both all the knowledge we had and a great many of the resources we had, and even to co-operate in the making of a particular kind of plant.
Mr. McAdden: When my right hon. Friend is being encouraged to lend support to the idea of a common market in Western Europe, will he bear in mind that there are still some people who
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believe that the best place for a common market is the Commonwealth?
Mr. Macmillan: Yes, Sir, and it is. Everybody knows that the problems before us are very difficult and complicated. We have to try to reconcile, in our commercial policy, all these interests—the long-term, long-standing and traditional interests and connections that we have with the Commonwealth—with the new possibilities of an expanding market in Europe. I do not say that they can be solved, but I do say that it is right for us to give every possible assistance, both through O.E.E.C. and through the Commonwealth, and approach this subject with an open mind.
Mr. J. Edwards: Will the Chancellor be good enough to answer my last supplementary question? When does he expect the study group to report?
Mr. Macmillan: I do not know. No doubt we shall have an interim report, probably by the end of the year. But it was made clear that there are two methods of approach. One is to consider how the Messina Powers and the Eleven can combine, and the other is the reduction of tariffs. What was made clear, and will be seen in the statement, is that one is not to be used to stop progress with the other. Therefore, if there is not sufficient progress upon one set of studies, that is not to be used to bar the prospect of a lower tariff arrangement, which is the other possible method of solving the problem.
Mr. Bowen: Can my right hon. Friend inform the House of the specific proposals referred to in his statement in relation to European commodities?
Mr. Macmillan: As I say, the method of advance urged by some countries of a low tariff on European commodities was not acceptable to the Organisation as a whole. I did not say "we"; I said "the Organisation". I carefully said that "the Organisation" was not able to agree on the proposals put forward by certain countries and, therefore, it was resolved to continue further study of that method of approach.

EASTERN REGION, NIGERIA (COMMISSION OF INQUIRY)
The Secretary of State for the Colonies (Mr. Alan Lennox-Boyd): With your permission, Mr. Speaker, and that of the House, I should like to make a statement, which is rather long.
A dispute has arisen in the Eastern Region of Nigeria about the relationship between the Premier, Dr. Azikiwe, and the African Continental Bank Limited.
This Bank was founded by Dr. Azikiwe. On assuming office the Premier informed the Governor that he had resigned his directorship of the bank. He had enterprises with which he has been associated are still shown as large shareholders in it. I have been informed that during 1955 £877,000 of public money was invested in the Bank—and other large sums deposited with it—out of funds made available from Marketing Board reserves to the Finance Corporation, which the Eastern Region Government had established.
I have also been informed that, following this investment, the bank was a party to certain documents contemplating that the Premier should be life Chairman of the bank and purporting to give him the right to nominate certain other directors.
As long ago as last November I took the matter up with the Premier in London and we have been in correspondence since. In April of this year Mr. Eyo, a member of the Regional House of Assembly, who had until then been the Government's Chief Whip in that House and Deputy-Speaker and Chairman of the Regional Development Corporation, tabled a Motion in the House relating to the association of the Premier with the Bank. He subsequently called for the appointment of an independent commission of inquiry. Dr. Azikiwe has now instituted libel actions against Mr. Eyo and certain newspapers.
On 14th July, after receiving a report from the Governor, I sent a personal message through him inviting the Premier to agree to my appointing a commission of inquiry. I considered it essential that these matters should be fully cleared up before the next Nigerian Constitutional Conference. This Conference will consider further constitutional advance for
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Nigeria, and, in particular, the grant of regional self-government to those regions that desire it, in accordance with the undertaking given by Her Majesty's Government in 1953 as recorded in the London Conference Report.
I pointed out that such a commission was appointed in the United Kingdom when last the conduct of a Minister was called in question. I suggested that I should appoint the commission as at least one of the matters to be inquired into is reserved to the Federal Government and the Governor of the Region is not competent to appoint a commission to inquire into federal matters.
On 16th July I received from the Premier a message couched in terms which, I must confess, disappointed me. His message, which has been quoted extensively in the Press, implied a rejection of my invitation. Shortly afterwards, I was informed that the Premier and his colleagues, after considering my message, advised the Governor of the Region to appoint a commission with a sole commissioner of their own choosing. Such a commissioner could not inquire into matters reserved to the Federal Government, of which banking is one.
On 18th July I made a further approach to the Premier, explaining this again. I also said that, although it would not be proper for the Premier to suggest the full membership of the commission since he would be personally involved in its proceedings, I would nevertheless be prepared to invite the person whom he had proposed as sole commissioner to be a member of it. I said this as I was satisfied that the person proposed was suitable for appointment.
I regret to say that the Premier rejected this second approach, also. Instead, he and his colleagues now advised the Governor to appoint a committee of inquiry and nominated three persons to serve on it. Such a committee could not compel the attendance of witnesses or heat evidence on oath, and its investigations of matters reserved to the Federal Government would be of doubtful propriety. The Governor did not consider that to proceed in this way was, in the words of his Royal Instructions "in the interests of public faith" and informed the Ministers that he felt unable to act on their advice. This decision of the Governor, who has a most difficult and

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invidious task, has my unqualified support.
In these circumstances, I have decided that in order to secure a speedy, impartial and full investigation as to the investments made in the bank, and the grave allegations that have been made—matters closely affecting the conduct of Government—it is necessary that I should now appoint a Commission of Inquiry. I have invited Sir Stafford Foster-Sutton, the Chief Justice of the Federation of Nigeria, to be Chairman, and he has accepted my invitation. The names of the other members and the terms of reference will be announced as soon as possible.
I earnestly hope that the Premier and his colleagues will accept the decision I have reached as in their own best interests and in the best interests of public life in Nigeria as a whole. I need hardly say that there is no question of any attempt on Her Majesty's Government's part to impose a British banking monopoly in Nigeria, or to dictate financial policy.
The Commission will, I am sure, complete its work and report with all possible speed, but I am afraid that its appointment must almost inevitably mean some delay in convening the Constitutional Conference, which was to have met on 19th September. I hope that this will not be long, and I have asked the other Nigerian Governments to accept this delay, regrettable though it is to all of us, because in the interests of the Territory as a whole these serious allegations must first be fully investigated.
At the same time, I have made it clear to them that Her Majesty's Government stand by the undertaking given in 1953 about the grant of regional self-government to those regions that desire it. I trust that after the Commission has reported we shall be able to resume our work together.
Mr. Bevan: I am sure the right hon. Gentleman will appreciate that this is a very serious statement and may have serious consequences in Nigeria. First, I should like to ask the right hon. Gentleman whether he has any idea how long the September Conference will be postponed, because I am certain that that will have a bearing on the response to his statement in Nigeria?
Secondly, may I ask whether it was not possible for him to have set up this
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Commission a little earlier, so as not to interfere with the September Conference?
Thirdly, is it not a fact—as has not been made in the statement—that the Speaker in the Eastern Nigerian Parliament stated that an inquiry could not be held, because proceedings were taking place in court and that such a committee, or rather, the Resolution of the Assembly, would be sub judice; and that the Commission which the right hon. Gentleman has set up is the only sort of judicial tribunal which can, in fact, withdraw proceedings from the court in the meantime? If the right hon. Gentleman made that statement, it would be clear to people in Nigeria.
Fourthly, would the right hon. Gentleman also recognise, with some degree of humility on behalf of himself and his hon. Friends, that the association of politicians with banks is quite notorious in Great Britain as well as Nigeria?
Mr. Lennox-Boyd: Save for the ending thrust of the right hon. Gentleman, I am grateful for the helpful questions he has asked. I do realise that this is a serious matter, but I could not reconcile it with my responsibility to take any action other than that which I have taken. I very much hope that the restrained way in which he and other hon. Members have taken the statement will also be echoed in the Eastern Region and in Nigeria as a whole.
About the postponement which this will almost certainly mean for the September Conference, I should not like to bind myself to any particular period, save to say that I hope it will be a short postponement. I very much hope that the facts will justify this expectation.
I have taken action in this matter as soon as it was possible for me to do so and I shall do all I can to see that the necessary preparatory work is carried out as quickly as possible. I agree with the right hon. Gentleman that the Speaker in the Eastern Region Assembly did say that, in a sense, the matter was sub judice, because of the forthcoming libel action, and that was the reason why this was not ventilated in the Eastern Region Assembly, where, indeed, the Premier had asked that it should be so ventilated. I share with him the view that the action I have taken is the best possible way in which this matter can be brought to a speedy decision.
Sir R. Robinson: Can my right hon. Friend say why he was not content with the suggestion that Dr. Azikiwe's libel action might well settle this matter?
Mr. Lennox-Boyd: This is a public matter, requiring public inquiry, and cannot, I think, be left to private litigation. Apart from that, private litigation might well prove very protracted, and even longer delay the convening of the Conference. The issues in the libel action might not cover the full field which should be investigated by the Commission.
Mr. Fenner Brockway: Is the right hon. Gentleman aware that all of us are concerned that Nigeria and the rest of West Africa shall progress in an orderly way towards self-government, and that it is in that spirit that we are asking our questions?
Is it not the case that Dr. Azikiwe and the other Ministers of Eastern Nigeria have to go even beyond the point of Ministers in this country? Have they not only to resign their directorships in any limited liability companies but actually to reveal to the Governor all their financial interests? Was that not done by Dr. Azikiwe? Is it not the case that Dr. Azikiwe was appointed as permanent chairman of this bank without his own knowledge and that he repudiated that appointment and resigned it when he became Prime Minister?
Did not the Governor himself recommend that the Eastern Nigerian Government should invest these large sums in this bank? Will the terms of reference to the Commission not only refer to Dr. Azikiwe and his colleagues, but to those who are responsible for British administration in Eastern Nigeria?
Mr. Lennox-Boyd: The. first three questions which the hon. Gentleman asked are matters to which, clearly, the Commission will pay attention. It would be wrong for me to make any comment on them in advance of the sitting of the Commission. As for the action that the Governor took, undoubtedly he is anxious—as I am—to encourage indigenous banks in Nigeria and elsewhere, and the advice the Governor gave and the action taken as part of his advice will also be a matter which the Commission will inquire into.
Mr. Tilney: Would my right hon. Friend consider the appointment as members of the Commission of those from other Commonwealth Territories?
Mr. Lennox-Boyd: I certainly would not rule that out.
Mr. J. Johnson: Is it not a fact that alleged corruption like this has been talked about as long ago as 1953, when there was a crisis in the Legislative Council in Enugu associated with the Natal Council of Nigeria and Cameroons Party?
Is it not a fact that there is nothing new in all this? Why is it that the Governor, Sir Clement Pleass, is so insistent on pressing this matter with the support of the Colonial Secretary, on the eve of the September Conference? Is it not the case that a similar charge of alleged corruption was made on the Gold Coast? Why cannot we have the whole thing settled by an inquiry inside Nigeria, by their own people on the spot, as the Governor, Sir Charles Arden Clarke, did in regard to Kwame on the Gold Coast? Is that not much better than having a Commission sent out from the United Kingdom to look into their affairs?
Mr. Lennox-Boyd: As the hon. Member knows well, the Gold Coast is not a Federation. It is precisely because banking is outside the sphere of the Regional Government that a regional inquiry would not be appropriate. As to the length of time certain stories have been floating around, I had a prolonged discussion with the Premier last December, and it was only in April of this year that certain charges, going far beyond anything that had been suggested, were made. In the name of good faith in Nigeria, those charges should be ventilated.
Mr. Bevan: So that there may be no confusion left about this matter, may I ask whether it is not only that these are Federal matters in Nigeria and that, therefore, a Federal inquiry must be held, but, as I understand the constitutional position, that it would not be proper for a committee of inquiry, which alone the East Nigerian Parliament could create, to remove the matter from the court at the moment? Only the action and the authority of this House could establish a commission of inquiry of sufficient status.
Mr. Lennox-Boyd: The right hon. Gentleman is quite right in saying that and, to put it beyond doubt, he has said it again.
Mr. J. Griffiths: Do we understand that the setting up of the Commission will prevent the libel case going on? Otherwise, we shall have two inquiries going on at the same time?
Mr. Lennox-Boyd: That is not a matter for me, but I understand that it would not prevent it continuing.
Mr. Brockway: In view of the unsatisfactory statement made by the Secretary of State for the Colonies, and the unsatisfactory position in which the matter has been left by the curtailing of Question Time—I am not referring to you, Mr. Speaker—I wish to give notice that I will raise this matter at the earliest opportunity.

BRITISH MOTOR CORPORATION (STRIKE)
Mr. Ellis Smith: May I ask the Prime Minister a question arising out of yesterday's OFFICIAL REPORT? In normal circumstances, it would have been my duty to ask the Leader of the House, whose absence we all regret. In the circumstances, I am forced to ask the Prime Minister.
Mr. Speaker: I do not think that that is in order. I have had no notice of the question and there has been no notice on the Order Paper. The hon. Gentleman cannot just spring a question on the Prime Minister like that.
Mr. Ellis Smith: On a point of order, then. My point of order is based upon
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yesterday's OFFICIAL REPORT, in which certain definite promises are given. I desire to speak on behalf of thousands of men who are in a very difficult position. The Minister of Labour and National Service made this statement yesterday:
"I shall… be glad to help the parties towards a settlement as soon as the opportunity arises."—[OFFICIAL REPORT, 23rd July, 1956; Vol. 557, c. 33.]
May I ask the Prime Minister whether that opportunity has arisen?
Mr. Speaker: Order. The hon. Member has not put his question in order by calling it a point of order. It cannot be asked now.
Mr. Ellis Smith: Does that mean, then. Sir, that we are to have long reports about many other parts of the world, but that on behalf of our own men, who are in a very difficult position through no fault of their own, we are not to be given an opportunity of speaking inside this House, especially after the way they have been treated by the British Motor Corporation?
Mr. Speaker: The hon. Member has, with great ingenuity and persistence, said quite a lot on this matter. I cannot allow any more to be said at the present time.
The Prime Minister: May I say, Sir, that no kind of notice has reached me on this matter. Had notice been given under the rules, I would have been quite prepared to give an answer.

BUSINESS OF THE HOUSE (SUPPLY)
Ordered,
That this day business other than the Business of Supply may be taken before Ten o'clock.—[The Prime Minister.]

ORDERS OF THE DAY

  SUPPLY
  [24TH ALLOTTED DAY]
  Considered in Committee.
  [Sir CHARLES MACANDREW in the Chair]

  CIVIL ESTIMATES AND ESTIMATES FOR REVENUE DEPARTMENTS, 1956–57
    CLASS II

      Vote 1. Foreign Service
      Motion made, and Question proposed,
      That a sum, not exceeding £9,419,720, be granted to Her Majesty, to complete the sum necessary to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1957, for the salaries and expenses of the Department of Her Majesty's Secretary of State for Foreign Affairs, including Her Majesty's Missions and Consulates abroad, and the salaries of two Ministers of State.—[£5,500,000 has been voted on account.]
      Whereupon Motion made, and Question, That the Chairman do report Progress and ask leave to sit again—[Mr. Heath],—put and agreed to.
      Committee report Progress; to sit again Tomorrow.
      Motion made, and Question proposed, That this House do now adjourn.—[Mr. Heath.]

  FOREIGN AFFAIRS
  3.58 p.m.
  Mr. Hugh Gaitskell: The Prime Minister gave us an interesting and encouraging analysis yesterday of the changed international situation, and particularly of the changes in the European scene and in our relations with Soviet Russia. The whole House, or, at any rate, most of the House, agreed largely with what he said on that subject.
  We would all assent to the proposition that the two basic changes which have occurred recently have been the development of thermo-nuclear weapons and internal changes in Soviet Russia. We would further agree that these have led to certain changes in Soviet foreign policy, as evidenced, for instance, by Russia's agreement on the settlement in
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  Austria, their new attitude to Yugoslavia and their acceptance of our proposition in relation to Vietnam; I would say, too, their more forthcoming disposition on disarmament and—perhaps we are more conscious of this than of anything—their new attitude to cultural exchanges and contacts with the outside world. I would agree, also, that in all probability this involves for them a switch from emphasis on military considerations to emphasis on economic and political activity.
  Finally, I would say that what the Prime Minister described as this greater flexibility on the other side of the Iron Curtain ought to be matched by a similar flexibility on our side. How this is to be done, how far it has been done, and what exactly greater flexibility among the Western Powers implies, are matters which we must discuss further. Before I come to those, I should like to say a word or two about the two basic changes to which I have just referred.
  We would all agree that the Prime Minister's statement that in a global war the thermo-nuclear deterrent was certain to be used is unquestionably true. I would say, also—and I think the Prime Minister will agree with me—that, because of that, it is now very unlikely that there will be such a war. That may be rather a bold statement to make, but I myself believe that the realisation on the part of any potential aggressor that, provided that nuclear deterrent is effective, the aggressor country itself stands a very good chance of being completely annihilated, makes aggression in the full sense much less likely than it has ever been before. It is a strange paradox that the discovery of this appalling weapon should have produced this consequence; but so I believe it to be.
  Having said that, and having accepted the implications of what the Prime Minister calls the global war, which I prefer to call "out-and-out" war, I believe that we are still left with a number of questions unanswered, on which the Prime Minister yesterday did not comment. The first is this: can anybody really contemplate the use of the hydrogen bomb except in the very last resort? I cannot imagine that any Government in this country—and, I would hope, in any other country of the world—would dare to use this weapon unless

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  that Government were really driven to it and had no alternative.
  If that if so, we must, I suggest, put out of our minds the idea, which is sometimes put abroad, that we use the hydrogen bomb, or we even threaten to use the hydrogen bomb, at any disturbance which takes place anywhere. Plainly, that is nonsense; it simply could not be done, and no other country, I think, is likely to believe that it will be used.
  We are thus faced with the problem of what alternative protection we may have. Some distinction should be drawn here, I think, between Europe and the rest of the world. Certainly, most of us feel, as regards any possible aggression in Europe, that it would be, so to speak, of such a straightforward character that it would necessarily invoke the use of the ultimate weapon, the deterrent, as the Prime Minister calls it, and that, therefore, a war in Europe would be the global war of which he spoke. That may be so; but if it is so—and I think it was implied in the Prime Minister's speech—we face at once the question of what we then require in the way of ordinary or conventional forces in Europe.
  I think it was Sir John Slessor who first spoke—and others have spoken of it, too—of a trip wire being necessary. At some time the Government should tell us what they understand by a phrase of that kind. What is the exact purpose of the trip wire? Is it simply to give warning? Is it to be a delaying action? In what sense is it used? I think the House will agree with me when I say that there is here, at any rate, a major problem to which we certainly have had no answer so far in this debate. Yet it is not a problem, I venture to suggest, which can be regarded as purely military in character. In fact, upon the answer to that problem must to some extent turn the policy of the West in respect of Germany and European security. The further question is: what happens outside Europe? I shall not attempt to answer that question; I am certainly not capable of doing so. I merely raise it.
  I believe that we must be very careful not to get into the frame of mind that because global war with the nuclear deterrent is now very unlikely, we need not worry at all about anything else. I draw, in particular, one vital conclusion from this, that whatever may be the position
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  with regard to global war, the need for properly controlled international disarmament of conventional forces and, if we can get, of nuclear production, too, is still overwhelmingly important. I shall return to this subject a little later.
  As to the change in Russia, the Prime Minister gave a very fair, and, if I may say so, very carefully and wisely worded statement upon that and upon its implications in Eastern Europe. I wish to say only that I thought his speech was complemented by the speech of my hon. Friend the Member for Woolwich, East (Mr. Mayhew), who pointed out—and I think the Prime Minister did not disagree—that while these changes were taking place and had taken place, it remained true that both in Russia and in the satellite States, the Communist Party retains the full monopoly of power and that Russia still retains full control over the satellite countries; and it is quite obvious, I think, from what has been said by Marshal Bulganin recently, that they intend to continue that. It is equally clear that Soviet policy is fully integrated in foreign affairs and defence with the satellite countries of Eastern Europe.
  Finally, we must still assume that the Soviet leaders have not given up their belief in the Marxist-Leninist doctrine of the inevitable struggle between the forces of world Communism and, as they describe it, capitalist imperialism. The Prime Minister spoke of Soviet Russia—I think he meant that by implication—pursuing "a similar objective by different methods," by economic, political, propagandist methods rather than military methods, but still pursuing the same or a similar objective.
  I would draw a conclusion from that, also. It seems to me to be a corollary of this switch in emphasis from military to economic activity that the focal point of such struggle as may exist between Communism and the free world is likely more and more to be in the so-called uncommitted areas of the world. It is in those territories that competitive coexistence is likely to be seen in its clearest form. I propose to say a little more about that later on.
  Having said that this is the position in Soviet Russia up to the moment, I must add that we should be making a mistake if we were to assume that this position will never change. I do not take such

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  a pessimistic view. I think it is possible that in time public opinion in Russia and in the satellite States may procure more freedom, may procure higher living standards, and may change and make more relaxed the outlook of the Soviet Government on foreign affairs. There may, of course, be a long period during which the doctrines of Marx and Lenin will continue to be uttered and echoed in those territories; but it is possible that although speeches on these lines are made, policy may diverge from them. For my part, I can only hope that that will be so. For the moment, I think that we must take the Soviet leaders at their word, at their own valuation and accept, therefore, the qualifications which I have mentioned.
  The next question that I come to is this: how should the West react to this new situation? I think that the first point is whether we, the democracies of the West, should or should not continue to stand together. There are some people who sincerely believe that the existence of N.A.T.O., being a bloc, is itself an obstacle to peace, and who believe that it would be best if, in fact, N.A.T.O. were broken up; or perhaps they may feel that the progress towards understanding with Russia has now gone so far that we can afford to allow the break-up of the Atlantic Alliance. For my part, I do not share that view.
  I have no doubt whatever that, although there have been these favourable developments, it is much too premature to contemplate any break-up of the Anglo-American Alliance and N.A.T.O. I do not think that I need argue that point very seriously. Most of us, at any rate, hold that the establishment of N.A.T.O. was in itself the major cause of the maintenance of peace in recent years, and most of us would agree that we should not contemplate abandoning it until, in fact, the danger of war has vanished altogether, that is to say, until there has been full-scale, all round disarmament and general world settlement so that the need, the occasion and the fears have all disappeared.
  I come to another rather important point. If we believe that N.A.T.O. must be maintained; I venture to say that it is not enough merely to say that. It is
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  always difficult for democracies to work together. Under the danger and threat of immediate war they do come together, as they did in 1948, and remain together, but as soon as that threat is removed, or appears to be removed, the tendencies causing them to drift apart seem to me to be very powerful. I am bound to say that there seem to be far too many signs of this drifting apart in recent months. I would go so far as to say this. If we stick to N.A.T.O., as we want to, then surely the logic is that we must meet this new situation together; we must make up our minds how it should be met and act accordingly. But, frankly, there has been very little sign of that so far.
  Let me make my position clear. I am not for one moment suggesting that we should adopt a rigid attitude to the changes which have been made—on the contrary—but I want the new policy we are to adopt to be hammered out jointly with our friends and Allies and not to be adopted as each country thinks independently on its own. May I give one or two illustrations of the danger, of what I mean by the danger of disintegration—I will use that word—of N.A.T.O., which my hon. Friend the Member for Woolwich, East used yesterday?
  First, with regard to defence. For a long time many of us have complained about the refusal of the N.A.T.O. Powers to share their secrets, standardise their weapons and pool their resources, but these are points which can be dealt with much more appropriately in a general defence debate, and I will leave them on one side. I think that we have something else to criticise here and that is what seems to me to be the complete inability, so far, of N.A.T.O. and the Atlantic Alliance to decide jointly on the implications of the new situation. What we have, frankly, is different countries each saying aloud what they expect to do in the circumstances. We have had a spate of hints, suggestions, rumours of various kinds in the United Kingdom itself.
  I do not think that Ministers are entirely blameless here. It is not good enough for the Chancellor of the Exchequer to address a meeting of the Foreign Press Association and talk about the heavy burden of defence in terms which suggest that in his mind, at any rate, is the nice idea that we could get down to 5 per cent. of our national

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  income, the same as the European average, and not expect remarks of this kind to be misinterpreted in many places.
  There is no doubt that the people of this country received the impression, despite the guarded phrase which he used afterwards, that the Government were contemplating very substantial cuts in defence. I hope that such cuts prove possible, but I warn the Government that if they have led the people of this country up the garden in this matter, if, by their hints and their rumours—which have not been denied—they have led everyone to suppose that there are to be substantial reductions in defence expenditure, and then these prove impossible to achieve, they will have something very serious to answer for.
  As I say, we first had the speech of the Chancellor of the Exchequer and then we had a very convincing news their willingness to bring their forces Manchester Guardian. I cannot imagine that that was a pure invention of a newspaper of that kind. It must have come from somebody with some kind of authority. We had, if I may say so to the Minister of Defence, his remarks a little time ago that he hoped that National Service would be abolished long before the next Election—there is a certain contrast between what he said and what the Secretary of State for War said last night. I realise that the right hon. and learned Gentleman may not have meant very much but, undoubtedly, people read into those words a great deal. Then we had the Prime Minister saying yesterday, not in his speech but in replying to an interjection during, I think, the speech of the right hon. and learned Member for Montgomery (Mr. C. Davies), that he did not think that anybody could deduce from his speech that there was an expectation of substantial cuts in defence.
  I have no intention of discussing here the merits of what cuts should or should not be made. That is a matter which belongs more properly to another debate. What I am complaining about is the extreme confusion in the public mind resulting from these unguarded and general statements which have been allowed to be made. If the Prime Minister and the Foreign Secretary answer, "We did not actually say that", I say that the Government have the responsibility for seeing that the public are
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  properly informed on these matters and if they feel, as I think that they may well have done, that the public were getting the impression that too big cuts were to be made, they should have said so. But no official statement was made at all until the Secretary of State for War's remarks last night.
  Of course, the British Government are not by any means the only people responsible for this confusion. The same kind of thing has been happening in other countries. The U.S.A. has been speaking of cuts that will be made in the Army, of cutting down their armed forces, and Dr. Adenauer, on the other hand, has been expressing alarm and despondency at the prospect. One can only describe this as a picture of the wildest confusion among the N.A.T.O. Powers as to what the defence policy really is.
  Surely what should have happened months ago, because, after all, the development of the thermo-nuclear weapon is not a new thing—both the Russians and the Americans had the hydrogen bomb in 1953—was that there should have been a careful joint reappraisal by the N.A.T.O. Council of the full implications of this new situation, so admirably described by the Prime Minister. It really is not enough for the Prime Minister to say, as he said yesterday, "We have begun to exchange views with our friends."
  That is something which should have happened long ago. At least one might have expected it to happen at the last meeting of the N.A.T.O. Council in April, but the opportunity was missed. Far from bringing the N.A.T.O. countries together, that Council meeting was described in The Times as "an example of how an important international organisation should not work." We were told by the newspapers that it had been insufficiently prepared. Despite the brave attempts of the Foreign Secretary to make out that all was well, the entire impression created was one of confusion and of disorder.
  Equally, I must say that on the political side I do not feel that the reaction of the N.A.T.O. countries to the new situation has been at all unified or clear. For instance, when the Russian Government announced their unilateral cuts in arms, one would have supposed that the N.A.T.O.

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  countries would not find it very difficult to agree on what they should say; but, in fact, we had totally different statements by Mr. Dulles in Washington, by the Prime Minister here and by Dr. Adenauer in Germany, all saying quite different things about their views on the Soviet arms cut. Hon. members may say that this is not a very important matter, but it illustrates the point that the West does not seem to have been able to meet what everybody knew was coming with any kind of sensible and agreed statement.
  I mention, in passing, a small illustration of the same kind of thing—the extraordinary affair of the Arab broadcasts from Cyprus. There have been Questions in the House about this, and I know that Questions were asked and Answers given in the House of Lords, but what are we to make of the situation when, on the one hand, Sir Gladwyn Jebb sends a message to the French people saying,
  "We are on your side in Algeria. We understand your pride in your civilising mission, in your political success, in the peoples you have led to autonomy, and your rejection of accusations of colonialism."
  When the Cyprus broadcasting station, at the same time, apparently describes M. Mollet as "a pitiful figure" when he goes to North Africa?
  I know that the Prime Minister and the Foreign Secretary will say that this broadcasting station has nothing to do with us and is a private affair, but is it right at this stage, when our relations with France and the Arab States are so vitally important, that broadcasts should be allowed from private stations on political matters—and from Cyprus of all places? I think the Government must take this matter in hand. Surely from their own point of view it would be far more satisfactory to control these broadcasts and to take them over.
  Mr. R. H. S. Crossman: They do control them.
  Mr. Gaitskell: I was giving them the benefit of the doubt. If they do control them, all I can say is that the contrast between what our ambassador in France said and what the broadcast said is so extraordinary as to be hardly believable. If they do not control them, then, particularly as I understand that one of the
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  directors is an ex-Foreign Office official, I suggest that it would be far better to take them over.
  The next point I want to mention, again in connection with N.A.T.O.—and I do not want to spend very much time on it—is the situation in the Eastern Mediterranean. It is not possible for hon. Members opposite to continue to behave as if Cyprus is not a matter of interest to N.A.T.O. It is of the very greatest interest to N.A.T.O. It is bound to be, because, quite apart from the strategic importance of the island, the conflict between Greece and Turkey which is now developing undermines the whole basis of the alliance in that part of the world.
  I should like to say a word or two about some remarks made by the hon. Member for Preston, North (Mr. J. Amery) in the Cyprus debate last week. He was taking me to task because I suggested that the question of Cyprus should be considered by N.A.T.O. I find it very difficult to understand him. He said:
  "…I should have thought that the importance of Cyprus, at least to us, was much more in respect of our oil resources in the Middle East and in respect of the Bagdad Pact and in respect of the tripartite guarantee to Israel and the Arab States."
  Let us take those three things. First,
  "our oil resources in the Middle East."
  Why does the hon. Member speak about them as if they were ours? They are not ours. They belong, physically, to the countries from which the oil is produced. If he is talking about the oil from the consumers' point of view, he is surely aware that every other country in Europe can say the same thing. This idea that the Middle East is a special British preserve because we get some of the oil from there, is so out of date that it is extraordinary that people like the hon. Member go on talking in this way. [An HON. MEMBER: "What about the Prime Minister?"] The Prime Minister said the same, but I replied to him some weeks ago.
  The hon. Member went on to speak about the Bagdad Pact. Admittedly, we are the only member of N.A.T.O., apart from Turkey, which is also a member of the Bagdad Pact, but I think the hon. Member will agree that we have been doing our best to associate the United States with the Bagdad Pact for a very long time. As for the Tripartite

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  Declaration, that is not our Declaration alone; it was made by France, America and ourselves. How he can say that Cyprus and the Middle East are purely our affair, I do not know.
  The hon. Member went on to say something even more extraordinary. He said:
  "I find it difficult to understand… how anybody who has seen the American attitude over Palestine, over Abadan and over Egypt, could seriously stand at the Front Bench opposite and advocate referring the question of Cyprus for decision to an American-dominated organisation."—[OFFICIAL REPORT, 19th July, 1956; Vol. 556, c. 1450–1.]
  First, I never suggested that N.A.T.O. should decide the issue, although I asked that it should be considered by N.A.T.O. I felt that a little mediation, with the help of the United States, might have been a very good thing in bringing Greece and Turkey together, and I still believe that, but to stand here as the hon. Member did the other day and talk as though we have the sole responsibility for the defence of the Middle East is inexplicable to me. How does he imagine that on our own we could defend that area? It is quite obvious that we could not do it for one moment.
  The real difficulty has been—and here he would be on stronger ground—that the Americans have been very reluctant to be associated as closely as some of us would have liked in policy regarding the Middle East. But that is no reason for not trying to induce them to come a little closer and to co-operate more with us than they have done in the past.
  Mr. Julian Amery: The right hon. Gentleman has made it plain that he was not proposing to refer the matter to N.A.T.O. for decision, but if he were to have it referred to N.A.T.O. at all it would be very difficult to escape the conclusion that what N.A.T.O. said would have a decisive influence on the future.
  Turning to "our oil resources"—to quote a phrase which I used and which he took up—they are our oil resources in the sense that the industry of this country depends on the freedom to raise that oil. So does the effective work of the industry of a number of European countries, some in N.A.T.O. and some outside. I should have thought that we were on very strong ground in saying that our interest in Cyprus was in relation
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  to these oil resources in their application to the existence of the sterling area and the economy of Western Europe, which are quite different matters in many respects from N.A.T.O.
  Mr. Gaitskell: I am afraid that I regard that as little more than an unusually tortuous evasion of the issue. The real issue is a serious issue; as oil consumption rises, it is, I think, clear that more and more Western Europe will depend for its lifeblood upon the Middle East, and it is no use one country in Western Europe thinking that it can handle this situation. There is an overwhelming case, not for a N.A.T.O. in the Middle East—that is not the point—but for the discussion of Middle East policy amongst the countries which are most closely concerned. The trouble with the hon. Member is that although he is highly intelligent and expresses himself admirably, somehow half of him is always way back in the past and unable to catch up with the present.
  I conclude, from this brief survey of the difficulties which N.A.T.O. is having, that we must make a greater effort here to keep the N.A.T.O. countries together. I am glad that the committee of the three Ministers was appointed, but I want to make it plain that, in my opinion, what is wanted is not to convert N.A.T.O. into an economic organisation. That is unnecessary in so far as it is concerned with Europe—that is the concern of O.E.E.C.—and it is unwise if it is thought of as a channel for economic aid for other areas. What is wanted is simply a readiness to consult more effectively and to try to hammer out policies together. Frankly, that has just not been evident in recent months.
  The next question is: what policies? I should like to begin with disarmament to which, as I say, I still attach immense importance. Controlled international disarmament is the only permanent solution to the problem. I would refer to the admirable speech of my right hon. and learned Friend the Member for Rowley Regis and Tipton (Mr. A. Henderson) last night, and I would just say this. There is no doubt that the general impression which has been created by the discussions in the United Nations is that, whereas up to the spring of 1955 the greatest difficulties in the way of a disarmament agreement were undoubtedly caused by the

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  attitude of the Soviet Union, since that spring and, in particular, since 10th May, when, quite surprisingly and suddenly, the Russians turned round and accepted a great deal of what we had been proposing, the West has become more evasive. In that connection I would refer, in particular, to three matters which, I hope, the Foreign Secretary will be able to clear up.
  First, there are the manpower ceilings. It is the plain fact that until recently we had proposed that, for the major Powers, the ceiling should be 1 million to 1½ million troops, and we did not, as has been suggested by the Government, put that forward as the last stage. On the contrary, those were the figures which we wished to see introduced into an agreement, and which we hoped would lead to further reductions. I can quote many statements by the Minister of State to the effect that further reductions could be made.
  When, however, the Russians accept the ceiling of 1 million to 1½ million troops, although at first this was warmly welcomed by the Minister of State—and, again, this is all on record—the Western Allies go back to 2½ million. What is the explanation of that? What sort of impression does the Foreign Secretary think that that kind of behaviour creates on the world as a whole? It is fortunate for us, I think, that the Russians have now agreed, apparently, to the higher ceiling. That, at least, is something. I hope we shall now not go back on it and put on a still higher ceiling.
  Secondly, there are the political conditions. Of course, it is obvious that political settlement helps disarmament and that disarmament helps political settlement, but surely that has never meant that we should make disarmament depend on prior political settlements. Let us take, for instance, the question of German reunification. Why should it be more difficult to get German reunification with disarmament on both sides than it is to get German reunification without disarmament on both sides?
  After all, we are not proposing to fight for the reunification of Germany and, so long as the reductions are parallel, I cannot see that there is any disadvantage at all. On the contrary, there should be a far greater advantage, because the introduction of controlled disarmament, of
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  course, improves the atmosphere, reduces fear, and makes it much more likely that reunification will be achieved. We did not say this sort of thing, originally, in 1952 or in 1954. This is a new line which has been introduced within the last few months.
  Finally, there is the question of whether nuclear or conventional arms should be the main object of control. Originally, we said that they should both be in—that everything should be in. Then someone drew attention to the problem of detecting stocks of hydrogen bombs—a very real problem, as we all admit. So the British Government, and the French said "No, we will concentrate now on conventional weapons," but as soon as the Russians said, "Yes, we will agree to that," we switched back and said that we must have control of nuclear weapons. This kind of round and round the mulberry bush process is not good enough; I must ask the Foreign Secretary for an adequate explanation.
  I turn to the really important question: what is now really outstanding? Why is it that we have not agreement? As my right hon. and learned Friend said last night, and, I think, perfectly rightly, there are only two things: the first is the American proposal for aerial photography, and the second, the precise rights of enforcement of a control organisation. I agree with what he said then. I do not think that it is reasonable for the Russians to oppose aerial control as well as the other controls which they themselves have suggested. I would hope that we would be able to persuade them to do so.
  As for the Control Commission or organisation, and exactly what its powers should be, I find, frankly, that more difficult to judge, but let us have no illusions about this. Whatever power we may give to that body, ultimately the success of disarmament will depend on whether or not the great Powers as a whole are prepared to play. We cannot, I think, prevent a breach, if there is a breach, of the disarmament agreement coming back to the United Nations and coming back to the Security Council. Therefore, while I do not wish to be dogmatic on this point, I do not believe that it is something we should absolutely stand out on. I welcome, of course, what the Prime Minister said about the H-bomb tests, and I only repeat my hope that we shall have

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  answers from the Foreign Secretary to my right hon. and learned Friend's questions.
  So much for disarmament. I need not say very much about Germany—that matter was dealt with very admirably by my right hon. Friend the Member for Blyth (Mr. Robens)—nor, I think, is there a great deal between us on this. I welcome the Prime Minister's statement, but I would ask him what he means by "further study." What sort of procedure has he in mind here? Is this country to take the initiative among the Powers most closely concerned—America, France and Western Germany—to have some private talks—and they should be private—on this matter? I should like an answer to that. The Prime Minister has made a proposition and, naturally, we want to know how he is to follow it up.
  I would here underline what my right hon. Friend said. There is a real danger that, unless we are careful, public opinion in Germany may more and more come to regard Western Germany's commitment to N.A.T.O. as an obstacle to reunification. That is a dangerous situation, because we might have a future German Government voluntarily renouncing its right to opt for N.A.T.O., and making its own terms with the Russian Government. Obviously, those terms might be terms which were most unwelcome to the Powers of the West. Therefore, I say that we should at least see, in conjunction and in association with the three other Powers, whether, perhaps on the lines suggested by the Prime Minister, agreement could be reached. Nor would I rule out bringing into the discussion other matters, which are, indeed, almost certain to arise as it is. I have in mind such matters as the future frontiers of Germany and the question of the satellite States.
  I do not propose to say anything about either the Middle East or the Far East, which were dealt with very adequately by my right hon. Friend. I turn to a rather wider subject in the concluding part of this speech. The new Soviet offensive in Asia and Africa involves a struggle for men's minds and men's hearts, particularly in the uncommitted areas of the world. The question is what we in Britain and the other democracies are to do to meet that challenge. What is our answer to be?
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  It is a curious fact that although Russia has so far done very little in the way of economic assistance for those territories, and although one would not suppose that countries which have either just won their independence or are hoping to win it soon, would be attracted by a totalitarian régime or would fancy enjoying the same experience as the satellite countries of Eastern Europe, nevertheless, there are very substantial attractions in the uncommitted areas towards Russian Communism. Let us pause for a moment and ask why.
  There are, I think, five reasons. First, Russia has not been a colonial Power—not in the accepted, ordinary sense of that word, though, of course, as I have frequently pointed out, she dominates Eastern Europe and has over-run those territories—and if one liked one could describe that as an empire—but, in the sense in which the phrase is used in the uncommitted areas of the world, she would be so described.
  Secondly, Russia is only half a Western Power, and that is, T am afraid, an advantage in some of these places. Thirdly. she is still thought to be poor, and she is. per capita, a great deal poorer than the West. Fourthly, so far as T am aware, and certainly the impression is fairly widely accepted, there is no colour discrimination inside Soviet Russia. Finally, she is carrying through industrialisation at an extremely rapid rate by State action.
  These are the reasons which make Communism and Russian Communism so attractive to these under-developed peoples. How do we answer them? I would say, first, that we must, if we are to hold these people for democracy, remove from our policy, our administration and our activities every possible taint of colonialism. In practice, this means, first, carrying on, as I readily concede the Government are carrying on, the progress towards self-government in West Africa, the Gold Coast, Malaya, and the West Indies, but I must refer to two sore points which I think are a great handicap to us in this enormously important struggle.
  First, the need for racial equality in Africa particularly. We say, and we have said it in a recent document, that the British Government should at least do

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  what they can do in this field by ending all official colour bars at once. Secondly, we say that if we are to meet this challenge, we must accept as the ultimate principle, recognising the transitional difficulties, the idea of one man, one vote. It is no use treating this problem of the feelings in the Colonies about the colour bar as though they were problems peculiar to the territories in which they arise. In fact, what happens in South Africa, in East Africa and in North America as well, influences hundreds of millions of people all over Asia and in other parts of Africa. It has world-wide implications.
  Secondly, I say—and I say it avowedly—that we must reject the doctrines of the imperial fortress which have been put forward by the other side of the House—the "what we have we hold" attitude. I need add only a few words to what my right hon. Friend said on this matter. First of all, it is no use holding on to a base in hostile territory, because it would be of no use to us. Secondly, we should not accept that there is necessarily any conflict in these cases between the maintenance of bases, if we need them, and what is politically desirable. It is not so in Malta and is not so in Ceylon. I think and hope that the agreement which the Prime Minister announced will lead to a satisfactory solution there. There is no reason, in my view, to believe that there should be this conflict in Cyprus, and I do not believe there need be in Singapore. Thirdly, we must be certain that in modern conditions we really do need these bases. We have to appraise here, also, the effects of any nuclear war.
  I may say, in passing, that this idea that if we are to have bases we should have them as the result of treaty negotiations is not something that is peculiar to the Labour Party. It is, of course, the point of view of the American Government, and that is how they hold their bases at the moment. I do not see why we should not do the same.
  Thirdly, we must accept that if these areas wish to remain neutral they should be allowed to be neutral. It is no use forcing pacts on unwilling partners. We should allow them to develop themselves in freedom. Next, I would say that we have to look at our own propaganda in
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  all these territories. I have already mentioned the points of substance here, and unless we get that right the propaganda will not be much good. At the same time, all that we do in the way of broadcasts and any other contacts is certainly worthy of review.
  Finally, I come to what is perhaps most important of all, and that is what are we to do to help them economically. I cannot do more, I am afraid, than deal in generalisations here. While there are differences between the different territories, I should like to make a few points which I think are true of most of them. First, these territories need industrialisation. They want to get through the industrialisation phase, because they know and can see around them that that is the basis for a higher standard of living. They want to get on to the "escalator of progress" as it has been described, to the stage when in fact they have achieved a certain degree of industrialisation, and can go on by higher saving and investment to raise their productivity year by year—the phase which the Western world and Soviet Russia have reached.
  Incidentally, this industrialisation will not be carried out in these territories except by State action, and that must be accepted. It is an interesting fact that the Congress Party of India, although not labelled Socialist, nevertheless is carrying out the industrialisation of that country by public enterprise to an overwhelming extent. The problem is this. These countries want industrialisation, but if it is to continue they cannot depend on their own resources, for that would only mean screwing down the already low level of consumption so far that it would be extremely doubtful whether democratic processes could be maintained.
  Surely the point is that we need to help them in order that they may avoid the appalling sacrifices and political implications of such a situation, which would otherwise follow. We need to help them so that they can maintain democracy, and carry through the industrialisation programme at the same time.
  I do not wish to belittle what has been done in recent years. But the present amount of aid is inadequate to the problem which faces these countries. I believe that there should be a new and imaginative plan developed. I should like to see, as I have said on another occasion.

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  this done through the United Nations, because it would immensely enhance the prestige of the United Nations, which is a good thing, and secondly, if we can do it that way, and if Russia agrees to take part in it, we would, so to speak, sterilise the conflicts that are liable to break out in these uncommitted areas between Communism and the free world.
  I do not propose to go into further detail, because I have not got the time. I would only say that there has been this so-called S.U.N.F.E.D. proposal, which the Government have always rejected on the grounds that it must wait for disarmament. I beg them not to take that rigid line on this question. I do not know what they mean by waiting for disarmament. If we express defence as a proportion of the national income, we are spending less on it today than two years ago. Is it to be an absolute cut? What is the Government's point of view? I think it is a great mistake to leave this problem untouched and with nothing done about it, except what we are doing today, which is not nearly enough.
  Mr. Cyril Osborne Mr. Cyril Osborne (Louth) rose—
  Mr. Gaitskell: Naturally, hon. Members will say, "Can we afford it?" I expect that the hon. Member for Louth was going to ask me that, and I say to him that we accept in full our responsibilities for achieving a balance of payments surplus for this country, which will enable us to do all the things that have to be done; in other words, to reduce our debts, to build up our gold reserves and invest abroad, and investing abroad must include any contributions that we may make to schemes of this kind. I accept that fully, but, of course, we shall be enormously helped if we can get defence savings. I do not know where we stand about this; none of us does at the moment, and I hope that we will have some clarification of the position before long.
  Do not let us imagine that our present economic problems are simply due directly to the defence burden. It is a burden, but I must remind hon. Members that we had no balance of payments crisis two years ago—in fact, we had a surplus—when the proportionate expenditure on defence was much larger. But, of course, it is a burden, and if we can lift that burden we shall acquire thereby a
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  windfall. It is the disposition of that windfall that I am concerned about. I hope that we shall get it. It is enormously important that if we do that it should not be dissipated.
  We need to use it exclusively for two things: first, to catch up on home investment, where we still lag a long way behind Russia and other countries; and, secondly, to play our part in the plan for aiding undeveloped areas.
  Mr. Osborne: Does the right hon. Gentleman say that there should be nothing for our own people?
  Mr. Gaitskell: No, I do not think that there should be at this time. I say that savings on defence and investment should go to home investment and overseas investment including aid.
  The Prime Minister has given us a hopeful picture and mentioned two steps forward. I am afraid that we must ask for more. There is a great opportunity today. In N.A.T.O. we want a real appraisal, an objective appraisal, of the situation which is long overdue. We want discussions on Germany and we want the Government to take the initiative there. We want much closer collaboration on other problems. On disarmament, we must really press the Government for speedy action. The public are thoroughly dissatisfied with the present situation; we must get away from the appearance of evasion in which every time the Russians accept something we withdraw. It would be a real tragedy if when apparently agreement is so close to us we should lose it at this stage.
  In the Middle East we want the initiative of the United Nations of which my right hon. Friend spoke. Above all, in the uncommitted areas we must take up the new challenge of Soviet Russia by ending the colour bar, by removing all trace of colonialism and by a bold programme of economic aid, preferably through the United Nations, to make it possible for those hundreds of millions of people to achieve their higher standard of living and nevertheless to maintain the democratic institutions in which we believe.
  4.52 p.m.
  The Secretary of State for Foreign Affairs (Mr. Selwyn Lloyd): A large number of interesting speeches were made yesterday. I wondered whether I was

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  hearing aright when I listened to the hon. Member for South Ayrshire (Mr. Emrys Hughes)—who is just leaving the Chamber—praising the Prime Minister and criticising Mr. Khrushchev. I shall not be able to deal with all the points raised yesterday but the main theme, I think it is agreed, which is the background to any view of international affairs at present is the change in the Soviet Union. The Prime Minister indicated yesterday some of the tendencies which are showing themselves in the internal life of the Soviet Union and the right hon. Member for Leeds, South (Mr. Gaitskell) referred to them again today in passing.
  I think we feel they are only a beginning and there is plenty of room for their development. As yet they do not appear to extend to greater freedom of political thought or any sort of right of political opposition. Nevertheless, I think those tendencies are significant. The development of the new classes of technologists and scientists, the professional men and women, changes in the educational system, the use of incentives to increase production—in all those there are grounds for believing that an evolutionary process has begun which it may be impossible to stop.
  I agreed with much of what the hon. Member for Woolwich, East (Mr. Mayhew) said. He talked of political disarmament and indicated that the Soviet is still engaged in a political and economic drive for power. I think his conclusion was that we must not engage in political disarmament but be prepared to meet that drive. I entirely agree. We consider our ideas better than Communist ideas and our conception of a free society the best for any developing community and we must be determined to meet the challenge in that field. Although I agree with the hon. Member, the point for us to remember is that we are moving from a period of rigidity, or a phase of rigidity, to one of flexibility. My feeling is that the one mistake we must not make is to adopt an attitude of immobility towards these developments. We really must not do what the Soviet Union did under Stalin from 1946 to 1953.
  Mr. Crossman: Hear, hear.
  Mr. Lloyd: We must not adopt a rigid attitude towards these developments so
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  as to cause the situation between East and West once again to congeal. The hon. Member for Coventry, East (Mr. Crossman) approves of what I am saying in a rather mocking manner, but I think the party on this side of the House has done a great deal to secure flexibility and to prevent the situation from congealing. We want more contacts, more trade, more exchange of ideas and in that way I think eventually we shall have further relaxation and better understanding.
  The view is also widely held in the House that while this process of evolution is taking place we must not break off the alliances which have contributed to our security. The right hon. Member for Blyth (Mr. Robens) advised us yesterday not to base our foreign policy on military groupings. Whatever his thoughts might be upon that I do not think we can allow our alliances to crumble away either in N.A.T.O., S.E.A.T.O. or the Bagdad Pact. In the ideal world, of course, military alliances will not be necessary, but we are still far from that happy state. Hon. Members may have read with interest of the speech which Marshal Bulganin made in Warsaw on Saturday when he said:
  "Marxists believed each country should choose its own way to Socialism. They intended this should happen. But they could not tolerate attempts to break up their international solidarity under the pretext that there were national differences and peculiarities."
  I think that equally we should not tolerate attempts to break up the international solidarity of those countries which are our partners in defensive alliances. That, however, does not mean—I agree in part with what the right hon. Member for Leeds, South said—that those free and equal associations should remain exactly what they have always been. Take N.A.T.O. for example. I do not want to go into matters which I think are more appropriate to the defence debates to the definition of the "trip-wire" and the "plate glass window" and so on, but we do believe that, whilst the military framework of N.A.T.O. should be maintained, its other activities should also be developed.
  The right hon. Member for Leeds, South spoke about a picture of the wildest confusion. He seemed to me to have a sort of professorial idea that one can

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  dictate to an association of fifteen partners and get from that audience a sort of stereotyped solution—
  Mr. Crossman: Nonsense. He never said so.
  Mr. Lloyd: We have been working on this for months. These matters have been raised, raised in December, raised again in May, and we are seeking to get from or with our allies a change—an adaptation—of N.A.T.O. suitable to present conditions. I agree with what I gathered the right hon. Member to mean that it is in this field of political cohesion that there is hope of making most progress. I think any idea of channelling economic aid to under-developed countries through N.A.T.O. would be a mistake. There is room for an improvement in the consideration by N.A.T.O. of economic matters, but the way in which we must work for greater cohesion of the alliance is in the political field, at the same time making a reappraisal of the military strategy and military demands.
  One of the disadvantages, which I think right hon. Gentlemen opposite knew when they were in Government, about a considerable number of nations in an alliance is that these matters take a long time to consider, particularly when those nations are free and have independent views. I think it is right to secure the appointment of three statesmen who shortly will produce a report on these matters. I entirely agree that though we cannot allow these defensive alliances LO crumble, nevertheless it is important that they should adapt themselves to the new situation.
  I now want to say a word about Germany and European security. A good deal was said about this yesterday. There is general agreement, on both sides of the House, I think, that the first step must be the reunification of Germany. Without German unity, any new system of European security would be an illusion. Her Majesty's Government and our allies have constantly maintained that they are not prepared to enter into any new security arrangements which do not end the division of Germany.
  Therefore, in practice, the problem of European security consists of devising arrangements which would ensure that a reunified and rearmed Germany does not constitute a menace to her neighbours.
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  The Western Powers believe that German membership of N.A.T.O. and W.E.U. in itself provides security because of the restraints and limitations inherent in membership of those organisations.
  Mr. Crossman: Might I put a question to the right hon and learned Gentleman for clarification? I want to get this clear. Is the effect of what he is saying that if we get proposals from Russia for the thinning out of forces on both sides of the present partition line, we shall reject them absolutely unless they are accompanied by the reunification of Germany? We should like to know just what the right hon. and learned Gentleman meant. I was not sure whether he was going as far as that in denying any form of security arrangements unless reunification is agreed.
  Mr. Lloyd: That is a different matter. I do not regard the question of some arrangement for thinning out as coming within the point with which I was dealing, that of new comprehensive security arrangements for Europe. That is a different matter upon which my right hon. Friend spoke yesterday, indicating the possibility of limited agreements of that sort, but—
  Mr. Crossman Mr. Crossman rose—
  Mr. Lloyd: I have not finished what I was seeking to say. In addition to the restraint inherent in membership of N.A.T.O. and W.E.U., as was first suggested by the Prime Minister at the Summit talks at Geneva the Western Allies offered a treaty which provided reciprocal assurances from which the Soviet Union would directly benefit, and also a system for the limitation and control of forces and armaments in which the Soviet Union would directly participate. That, I submit to the House, is a realistic approach. As was said yesterday, the Western Powers are not dictating a choice to the Germans. Under what is called the Eden Plan the Germans are left free to make their own choice. Nothing in the proposals advanced by the Western Powers limits their freedom of action. Our offer was not conditional upon Germany joining N.A.T.O.
  Mr. Alfred Robens Mr. Alfred Robens (Blyth) rose—
  Mr. Lloyd: Perhaps I might just finish what I want to say about this. It is true that certain of the guarantees proposed

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  in the treaty of assurance could be effective only if Germany became a member of N.A.T.O. and W.E.U., but the Western Powers did not take the line that until a reunified Germany joined N.A.T.O., there could be no security treaty. On the contrary, they indicated that they would be ready to sign a treaty concurrently with the signature of an agreement upon the Eden Plan. This treaty would enter into force in conjunction with the reunification of Germany and its provisions could be brought into effect by stages to be determined by common consent. Unfortunately, no progress was made at Geneva on the basis of those proposals, because of the Russian refusal to agree to the reunification of Germany by free elections.
  Mr. Robens: Might I put a short point to the right hon. and learned Gentleman? I do not think we need pursue it much further now. Apparently, The Times has had the same sort of confusion as I have had. Can the right hon. and learned Gentleman tell us what is really meant by the words on page 100 of the Government White Paper, Cmd. 9633, in relation to the collective security offer:
  "The final stage would become effective"—
  that is, the agreement would come into operation—
  "when a reunified Germany decides to enter N.A.T.O. and the Western European Union."
  Surely that must mean that the collective security agreement for Europe would not come into operation if a united Germany did not enter N.A.T.O. and did not enter the Western European Union?
  Mr. Lloyd: I think there is a genuine misunderstanding about that. The point of view put forward by the Prime Minister was not related solely to the contingency of Germany entering N.A.T.O. I agree that that document was drafted as though it had that contingency in mind. However, that was not a condition. It was meant to meet a certain contingency against which it was thought the Russians needed security protection.
  Suppose a reunified Germany were to decide to join the Warsaw bloc. That type of security arrangement would then have been inapplicable and another one might have been necessary. In the same
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  way, suppose a reunified Germany were to decide to join neither bloc. Another sort of security arrangement might then have been necessary. The document in question was drawn up to meet the contingency of a re-united Germany deciding to join N.A.T.O.
  Mr. William Warbey: Might I make the point clear? It appears that we have moved forward since what was proposed at Geneva. Apparently, whatever they proposed at Geneva, the Government are now ready to put forward proposals for a security pact in the event of Germany not joining N.A.T.O. Are they now prepared to put forward such proposals which would include mutual guarantees of assistance in the event of the violation of frontiers?
  Mr. Lloyd: I do not think the hon. Member can have been listening to what I have been saying. I indicated what the Prime Minister put forward at the Summit talks, the first Geneva Conference, and by that we stand. I am not going to read out the exact words again, but we offered at the time of the reunification of Germany a security arrangement which was not conditional upon whether or not Germany joined N.A.T.O. Therefore, I think it is right to say that we envisage, however a reunited Germany determines her future, a security arrangement for Europe if it can be arranged.
  Having dealt with that, and I hope, made the position clear—[Laughter.] Right hon. and hon. Gentlemen opposite laugh, but I really should have thought that as a matter of common sense they would have accepted the fact that the security arrangements required if Germany joined the Warsaw bloc might be different from those required if Germany joined N.A.T.O. If that is accepted, I am glad the House is with me on that point. I would repeat that these arrangements were drawn up to meet what everybody admitted to be the probable contingency. It really was not worth while wasting time on the others, because it was confidently thought that this was the choice which a free Germany would make.
  Mr. Robens: Do we then have this—[HON. MEMBERS: "Oh."] We regard this as important. Does it really mean that the view of the British Government at the moment is that they are prepared

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  to enter into a collective security pact for Europe regardless of what a reunified Germany decides to do?
  Mr. Lloyd: That is exactly what the Prime Minister made clear at the first Geneva meeting. That has been our position and is our position. There is no room for any doubt about it. I admit that the document was drawn up to meet the contingency of a reunified Germany joining N.A.T.O.
  As to the Middle East—
  Mr. Gaitskell: There is another question I asked about Germany and the procedural point. The Prime Minister made some interesting suggestions. We want to know how the Government propose to follow them up.
  Mr. Lloyd: I do not think the right hon. Gentleman is entitled to expect an answer to that question. [HON. MEMBERS: "Oh."] If in these matters one indicates beforehand exactly what one is going to do at every stage, then it does not always contribute to the possibility of agreement. The right hon. Gentleman may know, for example, that Dr. Adenauer has said that he will send a Note giving his ideas about the reunification of Germany to each of the four Powers concerned. It may well be that when we have received that, further steps will have to be taken, but it would be wrong and not in the public interest to disclose beforehand every step that is going to be taken in the negotiations.
  If I may come to the Middle East, the right hon. Member for Blyth asked a number of questions. He suggested, first of all, that the Bagdad Pact was the Government's policy in the Middle East. Of course, that Pact is part of our policy, but the inference that I got from the right hon. Gentleman was that it was the whole of our policy for the Middle East.
  I was glad to hear the hon. Member for Gloucestershire, West (Mr. Philips Price) so staunchly defending that Pact. It is, of course, attacked by the Russians as an aggressive military grouping. That is untrue. Its purpose is solely defensive.
  I was vary glad, and I am sure hon. Members were, too, to see the statement made by His Majesty the Shah of Iran during his recent visit to the Soviet Union. He said:
  "The Iranian Government have never joined and never will join an aggressive bloc directed
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  against the Soviet Union. The Iranian Government have undertaken measures for defence. They have been dictated by the needs of the State on the basis of past experience and the present international situation."
  I think that that is a very calm and realistic appreciation of the reasons which led Iran to join the Bagdad Pact.
  The hon. Gentleman asked for more details of the work of the Economic Committee. There is very much I should like to tell the House about that. In the last few months subsidiary organisations of the Economic Committee have been going ahead with their work. A joint agricultural training centre is to be set up, with machinery to be loaned by British firms. Experts have met to consider means of carrying out regional projects affecting two or more of the members, and a meeting is now taking place in Ankara to study the possibility of a joint development of the water resources of the Tigris and Euphrates basins.
  The Economic Committee is tackling the problems of animal diseases, measures to improve public health and medical training in the area, and the soun pest and locust problems. There are to be interchanges of educational staffs and students, and a joint study is taking place of import licensing procedures and other means of facilitating the flow of trade. Plans are being considered for the standardisation of agricultural products as a means of facilitating marketing, and good progress is being made with the atomic training centre in Bagdad for the peaceful use of atomic energy. We have promised financial aid for technical assistance and are considering what further help we can give in that sphere.
  Some of these things may sound to hon. Members rather humdrum activities, but I would ask the House to think of them against the general picture of the situation in the Middle East. I think that they then appear as an imaginative beginning to processes of general cooperation in an area where such co-operation has been singularly lacking hitherto.
  Since the last foreign affairs debate there has been a visit to this country of the Libyan Prime Minister. We received assurances from him of his attachment to the Anglo-Libyan Alliance. He referred to the excellent relations which

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  exist between British troops in Libya and the people of Libya and expressed the hope that our co-operation would long continue. We are examining sympathetically his requests for our help in the expansion of Libyan armed forces, and a technical examination of the problems involved will shortly take place.
  The Libyan Prime Minister also pointed out that, owing to the bad harvests and the level of public expenditure, the contributions promised in 1953 would not suffice for this year or next year, which are the last two years of the quinquennial period. The sums promised would have been sufficient only had the money earmarked for development been diverted to ordinary budgetary expenditure. That we particularly wanted to avoid, and accordingly we have offered an extra £250,000 in the year 1956 to 1957, and we have agreed that further budgetary aid should be made in 1958 up to a total of about £750,000. Owing to certain adjustments, the net cost to Britain in the second year will not be as high as the figure I have mentioned. Of course, these proposals will be submitted for the approval of the House in due course. I do not think we shall regret this further contribution for Libyan development and Libyan independence.
  We of course desire friendly relations with Egypt, and whatever contemporary propagandists may say we believe that the long association between Egypt and the United Kingdom has been beneficial to both, and there need not be any issues to divide us, but the development of more friendly relations in the future will depend upon facts and upon the willingness of Egypt not to undermine legitimate British interests in the Middle East. There has recently been a welcome improvement in the tone adopted by the Press and radio in Egypt towards this country. If this continues, then there is scope for the re-creation of a better understanding, and we for our part will do nothing to diminish the possibility of the fulfilment of that hope—
  Mr. Denis Healey: Aswan.
  Mr. Lloyd:—but shall do what we can to maintain friendly relations between the two peoples.
  An hon. Member has just interrupted me, mentioning the Aswan Dam, and I
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  think the House will expect me to say something about the High Aswan Dam. We are proud of what we have done in the past to harness and exploit the waters of the Nile, and we have thus done a very great deal for the benefit of the peoples of the Sudan and Egypt. This project, if it could be realised, would affect the standard of living of all those people who live on the banks of the Nile, provided there were to be equitable distribution of its benefits. It is, however, a scheme requiring not only a very large amount of external financial aid but the most rigorous control by Egypt in her internal economy.
  Recent developments in Egypt have made us doubt whether the scheme is any longer feasible. The continued high rate of expenditure by Egypt on defence imposes a heavy burden on the Egyptian economy. There have also been increasing signs of the Egyptian Government's plans for industrial expansion, vehicle factories, dockyards and the like. We do not question for a moment Egypt's right to undertake those commitments, but we have to take account of their economic consequences, and we came to the conclusion that the Egyptian Government would no longer be in a position to devote to the dam project that degree of priority necessary to secure its success. Her Majesty's Government, therefore, after close consultation with the United States, concluded that the economic premises upon which their offer of assistance was based had ceased to exist. That does not, however, mean that we have lost interest in the future development of the waters of the Nile in the best interests of all those who live there.
  The right hon. Gentleman in his speech referred to the Tripartite Declaration regarding Israel. I agree with him that it has performed a valuable function over the last six years in preserving peace. I also agree with him that it cannot and should not replace the United Nations. One of the satisfactory results of the visit of the Soviet leaders was the desire expressed on both sides to work more closely together in the United Nations on the Arab-Israel problem. I remind the House of what was said in the communiqué, that it was agreed
  "… to give necessary support to the United Nations in its endeavour to strengthen peace in the region of Palestine and to carry out the appropriate decisions of the Security Council."

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  The right hon. Gentleman indicated that in his view the only settlement of the Arab-Isael dispute would be a United Nations settlement. We very much agree with that view. That is why we are now endeavouring to work through the Security Council, against the background of the agreement to which I have just referred, trying to keep the peace and ultimately to achieve such a settlement. We have acted in close unity with the United States and our other Allies in the matter. Mr. Hammarskjold's first mission arose from a resolution put forward by the United States, and I think it was more successful than some had expected. I think it made a considerable contribution towards pacifying the frontiers. We followed up with a resolution in the Security Council, another resolution, with the idea of consolidating that progress that had been made.
  Although there have been one or two disquieting features lately, particularly in the situation around Jerusalem, nevertheless I think the visit which Mr. Ham-marskjold has just completed has also been of value. We have no doubt he is going to keep in close touch with the situation, and if he can secure full compliance with the Armistice Agreement—I think it is with him or his agents that the possibility of success in that task chiefly lies—the next step will be either to try to reach agreement upon a settlement of one or more of the major problems or else to try to seek a comprehensive settlement.
  My hon. Friend the Member for Farnham (Mr. Nicholson) said yesterday that we ought to impose a comprehensive settlement. It is easier said than done. I think we should much rather see whether we can make some agreement. Whenever we have tried to reach a comprehensive settlement before we have failed, but it is better to try to reach settlement of some of the questions, such as waters or refugees, and to see where we go from there.
  I now come to the question of arms for the Middle East. I do not think that there has been any other topic which has caused Ministers in both administrations so much difficulty over the past six years. In the Tripartite Declaration we recognised that the Arab States and Israel needed to maintain a certain level of armed forces for the purposes of assuring their internal security and their legitimate
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  self-defence and to permit them to play their part in the defence of the area as a whole. Those are the words of the Tripartite Declaration. At the same time, we declared our opposition to the development of an arms race between the Arab States and Israel. That is still our primary objective.
  I think that hon. Members opposite will agree with me that it would be unwise for Israel to think that her safety depends upon arms alone. Nevertheless, we accept that she should have arms for self-defence. I was invited yesterday to enter into an examination of the comparative military strength of Middle Eastern countries. It would be quite wrong for me to do that publicly. It would mean revealing all the information within the possession of the Government about those strengths, and that would lead at once to inquiries about the sources of the information.
  Wherever it was shown that one country was weaker than another in a particular arm it would lead to requests for the deficiency to be made up. Every argument deployed would be used as a reason for stepping up arms deliveries to one side or the other. One would get drawn into the questions of offensive and defensive equipment and whether particular Arab States were capable of resisting an Israeli attack. Such a public discussion would add to tension and increase the chances of an arms race. Very much the same considerations apply to questions about particular arms transactions.
  The right hon. Member for Blyth questioned me about an answer which I gave to a supplementary question of his on 2nd July. He asked:
  "Is the right hon. and learned Gentleman satisfied as at this date that the balance of arms in the Middle East is as complete as he has indicated that he wishes it to be?"
  My reply was,
  "I think that at the present time the balance is as has been indicated before in this House—I would say rather in favour of Israel."—[OFFICIAL REPORT, 2nd July, 1956; Vol. 555, c. 995–6.]
  On the basis of the advice available to me I believe that what I said was the truth. I was, of course, dealing with military strength. In forming the opinion which I expressed, I took into account many factors working in Israel's favour such as unified command, internal lines of communication, technical skill, the

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  state of training and capacity to maintain and use the arms possessed. [HON. MEMBERS: "Oh."] If it is suggested that it is unreasonable to take those factors into account in assessing the military strength I am surprised. I believe that Israel is in a position at the present time to defend herself successfully, and, after all, that is the commitment which we entered into in the Tripartite Declaration. From the quotation by my hon. Friend the Member for Carlton (Mr. Pickthorn) yesterday, it rather looks as if Mr. Ben Gurian thinks the same.
  Mr. George Chetwynd: Does the right hon. and learned Gentleman mean the position of Israel against the whole Arab League together or against each Arab country when he is assessing the parity of strength?
  Mr. Lloyd: The position is taken into account generally. The hon. Member for Coventry, East has said that he thought Israel could take on all the Arab States together. I prefer to limit myself to saying that I believe she can defend herself successfully.
  Mr. Robens: Would the right hon. and learned Gentleman at this stage permit one simple question? First, may I preface it by saying that two weeks ago he invited me to put a Question on the Order Paper when he undertook to explain to the House how he arrived at his judgment that the balance of arms was in favour of Israel. Today he has indicated that for certain reasons he is not able to give that information. He has indicated that unified command, internal lines of communication and so on are factors. I should like to ask him one simple question. Would he explain how the Israelis, by the use of the things he has mentioned, are able to deal with Russian bombers that can fly at 50,000 feet with fighters whose ceiling is 35,000 feet?
  Mr. Lloyd: One has to take into account the current availability of the bombers and the fighting resources which may be available to Israel at the time that those bombers should be capable of their offensive capacity. I repeat that on the advice available to me at present I believe what I have said is true.
  Mr. Crossman: The right hon. and learned Gentleman has twice quoted me as supporting his view that the balance was wholly in favour of Israel. He must allow me to tell him what I actually said. I said, as the right hon. and learned Gentleman has quite rightly said, that Israel could then do as well as the Arab States. I said:
  "Under the Tripartite Declaration the Israelis have sufficient defensive power to take on all the six Arab States. The fact remains that the Russian arms, which include the latest type of bomb, fighter, submarine and Stalin tank, will over a period of time, shift the balance of power to the other side. I am not an expert and I do not know how long it will take."—[OFFICIAL REPORT, 24th January, 19S6; Vol. 548, c. 96.]
  I think that the right hon. and learned Gentleman is a little unjust to take the speech in which I said quite honestly at that time, that is, last January, that Israel, with the old weapons before the others came along, was stronger.
  I spent the rest of that speech saying, in effect, for heaven's sake keep the balance and to do so you must provide her with new weapons to compensate for the new weapons going to Egypt. The Foreign Secretary is most unjust to pervert my meaning in this way.
  Mr. Lloyd: I apologise. I had no intention of implying that the hon. Member was saying that today. The hon. Member for Stockton-on-Tees (Mr. Chetwynd) interrupted me to ask whether I was talking of Israel taking on one Arab State alone and it was in that connection that I referred to what the hon. Member for Coventry, East said, which, I agree, was in January.
  Another suggestion which the right hon. Member for Blyth put was with regard to the embargo on arms.
  Mr. Robens: Before the right hon. and learned Gentleman gets to that point, will he now say something about the question he was asked in relation to arms to Syria?
  Mr. Lloyd: I have no precise information to give to the House about the supply of arms to Syria at present.
  As to the question of an embargo on arms to the Middle East under United Nations control which I take it is the policy of the right hon. Member for Blyth and his right hon. Friends, I do not think that that proposal is practicable. Is the embargo to take effect after certain

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  further deliveries have been made to particular countries? If so, how much, to which countries and who decides? What countries are to be included in the embargo? Is it to be limited to those with common frontiers with Israel? If not, where is the line to be drawn? Is it to include Turkey and Iran and Iraq? How would it be consistent with our treaty obligations to Iraq, Jordan and Libya? How would it be enforced?
  There is no doubt that the countries concerned would violently object. It may be remembered that in 1948 Czechoslovakia paid no attention at all to an embargo. Taking the situation as it is, there are countries outside the United Nations which would not be affected. Having regard to all the circumstances. I believe that this proposal is not practicable and that the policy of Her Majesty's Government to urge restraint in the delivery of arms to this area is the correct one. If it is followed, as I hope it will be followed, by other countries, it is the best hope of avoiding an arms race.
  I come now to the question of disarmament. I agree with hon. Members who say that disarmament discussions have become somewhat tangled. There has been so much argument and counterargument, proposal and counter-proposal, that it is difficult to keep the main principles in mind. I want to spend a few minutes in trying to set out in simple terms what I think is the present situation, and I will try to answer the questions of the right hon. and learned Member for Rowley Regis and Tipton (Mr. A. Henderson).
  The first fact about the present situation is that the great Powers seem to be willing, indeed anxious, to disarm in certain directions. They are willing to reduce what was useful for the older-fashioned type of conventional war, that is to say. large numbers of men. The Soviet Government announced a cut of 640,000 last year and a new cut of 1·2 million in May. The United States have indicated their willingness to bring their forces down to 2½ million men as part of a partial disarmament agreement, and we ourselves, over a period of five years, are reducing our forces from 870,000 to 700,000.
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  These reductions, I think, are acceptable to the States concerned for practical reasons. We welcome the reductions, but it would be wrong to suggest that the sole motive for them is disarmament. It is to a large extent the need for the efficient use of manpower which has led to these reductions. That is one fact—there is a general desire to disarm in a certain respect, but as I have said, it is not primarily for the sake of disarmament but in order to have an effective use of manpower.
  On the other hand, in spite of that feature, which I agree is to be welcomed, no desire has become apparent to reduce expenditure on the more modern types of weapons and equipment. We know that the Soviet Union are stepping up their programmes for nuclear weapons, for guided missiles, for ballistic rockets, for heavy bombers and the rest. There are signs that in that field the effort of the Soviet Union is being increased rather than diminished. Our American allies are also devoting huge resources to this kind of effort and we are doing quite a lot ourselves.
  Those are the two background points, but there are two approaches to be made to that situation which are under consideration at the present time. The first is the approach of a partial disarmament scheme. The other is a plan for a comprehensive disarmament scheme under effective controls. It was the United Kingdom last autumn which put forward the idea of partial disarmament, and since then various other ideas have been put forward from one side or the other. I see no reason why, when the Disarmament Sub-Committee meets again, it should not make rapid progress in the formulation of some such partial disarmament agreement.
  That agreement should include the reduction of conventional forces and armaments, it should include the control of those limited reductions, it should also incorporate the Russian ideas about precautions against surprise attack, and it should certainly include some provision for air reconnaissance, as the right hon. Gentleman said. Without that, there cannot be satisfactory control even in this limited field. Such an agreement should also include provisions for limiting and controlling nuclear test explosions, unless this has already been arranged by other

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  means, and it would cover much of the ground suggested by the right hon. and learned Gentleman the Member for Rowley Regis and Tipton yesterday.
  However, I say this to the House. We must not be fobbed off by this interim conception from our pursuit of the ultimate objective, and that is a comprehensive, properly controlled disarmament agreement. In my view that is the great prize, and it is one in which I have always believed. We can have excellent international debating societies. We can have international co-operation in economic matters. We can have a whole series of non-aggression pacts. But if we want to prevent future war, I believe we have to create on the soil of all the significant States of the world some form of international supervision and control of armaments.
  It is an ambitious plan. There are many scoffers, there are plenty of difficulties, but I think that once we have achieved this then we have procured from each country such a surrender of sovereignty in the military field that a major war really is impossible so long as that control continues.
  Mr. Gaitskell: Does not a partial plan also include controls of this kind? Will the Foreign Secretary make that clear?
  Mr. Lloyd: That is the whole point, that the partial plan involves only a very limited form of control. That is one of the points to which I shall come in a moment, because the right hon. Gentleman has asked about them. The extent of control which would be tolerated under the partial disarmament plan is nothing like what I have envisaged as an appropriate control organ supervising the whole field of armaments.
  One of the difficulties in this conception is the problem presented by nuclear weapons. What a tragedy it is that Mr. Baruch's imaginative proposals of 1946 were not accepted by the Soviet Union. I believe that was one of the occasions when humanity missed a turning. Nevertheless, dealing with things as they are, I appreciate that it is common ground that it is now impossible lo guarantee that existing stocks of nuclear fuel will not be misused.
  However, that is no reason why we should not continue to try, because, apart
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  from the actual stocks of nuclear fuel, there is a great deal which can be controlled; not only all the conventional armaments, but also the future production of nuclear fuel and the means of delivery of nuclear bombs and rockets. I still think that it would be within the wit of man to devise a system of control which would make it exceedingly difficult for any power to prepare for global nuclear war.
  Therefore, it is not a propaganda exercise when Her Majesty's Government continually come back to the question of a comprehensive disarmament agreement and a proper control system. It is one matter on which I have never been able to get satisfactory assurances from any of the Soviet statesmen with whom I have discussed it. Strictly limited control, really amounting to limited observation, is what it is suggested should be acceptable, but they will not accept any control which constitutes a real interference with their sovereignty.
  Mr. Crossman: In the first place.
  Mr. F. Beswick: Will the right hon. and learned Gentleman recall that at the Disarmament Sub-Committee talks Mr. Moch, speaking on behalf of his own Government and I believe on behalf of this Government, admitted that in fact the Soviet proposal for control, in his own words—
  "… goes further even than the control in the first stage of the Anglo-French Plan."
  Why, then, does the right hon. and learned Gentleman still complain that we have never got any satisfaction from the Soviet Union?
  Mr. Lloyd: What was being referred to then was a limited control compared with control in the first stage of the Anglo-French Plan. If the hon. Gentleman will look up the record, he will see that in the first stage of that plan there was only the beginning of any sort of a control system. I have argued this by the hour with Mr. Vyshinsky, Mr. Gromyko and Mr. Malik, and I do not believe that we can have an effective control organ if its actions are subject to the veto of the Security Council; if the only thing its agents can do is to send in a report that something is being done. I have always believed that the control organ must have some right to stop some malpractice. Of course, when we come to military action

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  or sanctions, that is a matter for the Security Council, but short of that I believe that the control organ must have much greater power than has ever been envisaged by any Russian with whom I have discussed the matter.
  The right hon. and learned Gentleman the Member for Rowley Regis and Tipton made some mildly critical remarks about the attitude of the Government on the question of the force levels. The proposal of 1–1½ million was originally put forward as a final figure; I repeat, as a figure at the end of the phases of the Anglo-French Plan. If my recollection is right, the Anglo-French Plan had three phases. It was always considered that after that we might go on to further reductions, but at the period—[Interruption.] No, with respect, anyone who has seriously considered this suggestion will have seen that there was a question of carrying out agreed reductions—perhaps a half, then another quarter, then another quarter. Within that bracket of agreed reductions the end figure was 1–1½ million. It was after that, when we had carried out agreed reductions and had also carried out the complete elimination of all nuclear weapons, that we might go on beyond 1–1½ million to further reductions. [An HON. MEMBER: "Not final."] The figure which matched the elimination of nuclear weapons, does not compare with the figure of 2½ million. That is the figure at the end of the first stage of partial disarmament, when nothing at all has been done about nuclear weapons, so the two are not comparable.
  Then the right hon. Gentleman the Leader of the Opposition rather suggested today that we had inserted only at the last moment the idea that the attainment of these figures must depend upon a political settlement. That is not the case. I am sorry to bore the right hon. Gentleman with what I said myself, but at the very first meeting of the Disarmament Sub-Committee on 13th May, 1954, I myself said:
  "It is true that substantial disarmament cannot come about unless there is a real relaxation of world tension, including a settlement of the major international differences dividing the world today."
  That is what I said at the very beginning. That has always been our position. We have maintained that this does not prevent an attempt to seek a comprehensive agreement. It is the difference between
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  reaching agreement and the complete fulfilment of an agreement. Therefore, we believe—and this is not very different from something that the right hon. Gentleman said—that disarmament and the settlement of outstanding disputes must proceed pari passu. The right hon. Gentleman said that they must go along equally; they help one another.
  As I have said in the House many times, if we can arrive at a comprehensive agreement, that will of itself help to reduce tension. I do not believe, however, as a matter of practice that that comprehensive agreement will ever be carried out unless we also settle some of the outstanding differences.
  Mr. Arthur Henderson: Does not the right hon. and learned Gentleman remember saying in this House on 30th July, 1954, that
  "if we were able to reach a measure of agreement on plans for disarmament, that of itself would begin to lower world tension. If we can manage to reach agreement between the two sides upon these two matters, that of itself will help towards a solution of other problems."—[OFFICIAL REPORT.30th July, 1954; Vol. 531, c. 897.]
  Mr. Lloyd: That is exactly what I thought I said a moment ago. We reached an agreement—or, rather, we hoped for an agreement—with three phases in it with disarmament proceeding along with those phases. What I was saying is that those phases would not be carried out unless we also managed to settle some of the outstanding differences in the world.
  Mr. Gaitskell: Does the right hon. and learned Gentleman also recall what the Minister of State said just at the time when the Russians were accepting our proposals, in the spring of 1955? He said, curiously enough:
  "I hope Mr. Malik will be able … to reassure me that he envisages that a properly controlled disarmament programme can begirt and can go ahead without necessarily awaiting a settlement of all the other outstanding political problems. I think this very important indeed, and I hope that he can reassure me that that is the position and the point of view of the Soviet Government That is the view which we have always held and I hope that we can register agreement on it."
  Mr. Lloyd: Right hon. Gentlemen opposite are not doing themselves justice. I quite agree that my right hon. Friend said:
  "begin … without … a settlement of all…"

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  There is nothing inconsistent between the two statements, If right hon. Gentlemen opposite are so divorced from reality that they think that a comprehensive disarmament agreement is to be carried out with matters like the reunification of Germany and other problems throughout the rest of the world still to be settled, I can only say that I have my doubts about that.
  I am glad that the Prime Minister's statement with regard to the limitation of nuclear tests has been so warmly welcomed. The matter has been committed by the Disarmament Commission to the Sub-Committee. That, however, does not mean that no work will be done on this matter until the Sub-Committee meets again. As was stated, we are ready to discuss the matter separately from the question of a disarmament convention. We are working, and have been working for some time, on possible ways in which we might achieve this object. We hope that others will do the same and we shall seek to exchange ideas. The right hon. Gentleman asked me which countries we would approach and when we would approach them I think it is undesirable for me to be more specific, but the Government have strongly in mind the views which, I believe, are held by the majority of people in this country about the desirability of getting this kind of thing under some sort of control, before it is too late.
  I apologise to the House for being so long, although the fault is not altogether mine, but I want to deal with the question of aid to under-developed countries. I was rather sorry that the Leader of the Opposition used the phrase "the taint of colonialism". Colonialism has many fine things to its record, but when right hon. Gentlemen in this House start talking about the taint of colonialism, other people begin to believe it elsewhere.
  The accusation is sometimes made that aid to under-developed countries from Her Majesty's Government is not on a sufficiently bold and imaginative scale at the present time. We are doing all that we can possibly do within our existing resources. In fact, we are doing rather more than we can currently afford. In the past five years, we have given economic aid to Colonial Territories at the rate, I understand, of about £50 million a year.
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  We have helped with the development of Jordan and Yugoslavia and I have mentioned Libya. We have made a decisive contribution to the Colombo Plan. Last year, we announced that we would contribute a further £7 million to the Colombo Plan technical co-operation scheme during the seven years beginning April, 1956. We have offered certain sums to the Economic Committee of the Bagdad Pact for Technical Assistance and we are planning more aid for that. Besides this, after the United States we are the largest contributor to the United Nations aid funds, such as Technical Assistance and Special Relief Funds for the Arab refugees, for example. Our total aid under all these heads, including colonial development, comes to something like £70 million a year over the past five years. This figure, of course, does not include private investment, which from 1952 to 1955 was running at between £150 and £175 million a year, mostly in the Commonwealth.
  Mr. Harold Davies: The point that some of us are trying to make about aid is this. Nobody denies that much aid is being given to backward areas, and the Pacific areas are the example par excellence. But will the Foreign Secretary apply his mind to the fact that despite all these billions of dollars and sterling of aid, the production of food per capita in those areas, according to the E.C.A.F.E. Report, is still 14 per cent. below pre-war? Will the Government apply their minds to where this aid goes and to the stability of the price of raw materials from the area?
  Mr. Lloyd: I quite agree that that is a factor to be taken into account. It is one of the matters which are the subject of a special study within the United Nations. My point was not so much the way in which the aid is given, but the quantity of it.
  Mr. Osborne: And how much we can afford.
  Mr. Lloyd: The Government are doing a great deal of which we have cause to be proud.
  There is talk at present about aid without strings. We would all feel it quite wrong to impose political conditions—in other words, to say to a country that unless it took such and such a political action, it would get no aid. We would

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  regard that as wrong. On the other hand, we believe that our friends and our allies and the members of the Commonwealth and Empire are, surely, entitled to have more assistance from us than those who are openly or secretly hostile.
  Mr. Harold Davies: Love your enemies.
  Mr. Lloyd: While we acknowledge the importance of the United Nations Agencies and we support them there is nothing inconsistent or undesirable in our taking action along the additional lines which we are doing. As far as S.U.N.F.E.D. is concerned, the right hon. Gentleman knows as well as I do that it will not be a success unless what are called the developed countries put up a very large amount of capital for it. He knows quite well that at present it is not within our power to put up the sort of sum which would make S.U.N.F.E.D. worth beginning. [An HON. MEMBER: "Nine million pounds."] If the idea is that it should begin on a capital of £9 million that sum is too small. Right hon. Gentlemen opposite know quite well that the Government of the United States have said that they will not contribute. One has to accept it.
  I have tried to deal with a large number of points. My hon. Friend will deal with any that I have not dealt with. My general conclusion is that there is a definite relaxation of tension. The risk of world war is less. We must not lower our guard. The Soviet drive for political and economic power will continue and we must refurbish our ideas and our alliances to meet this new situation. We must meet it not necessarily in an unfriendly manner. Because we meet their drive for economic and political power does not necessarily mean hostility. The greatest contribution that the people of this country can make towards the United Kingdom being able to give a lead in these world affairs is to strengthen the economy of the nation.
  5.50 p.m.
  Mr. James Johnson: I find it hard to compete with the Foreign Secretary either in the length of his speech or in what the late Ernest Bevin would have called his "plethora of clichés." I do not intend to comment on his tour d'horizon, and I shall not be as unkind as was the Manchester Guardian, which described him as a "messenger
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  boy" of the Prime Minister. I have listened to his speech very carefully. I have never seen a Foreign Secretary so badgered by the Opposition. He was interrupted 24 times. Listening to him as Foreign Secretary makes me think that he is an excellent Minister of Defence.
  Having said that, being a back bencher called for the first time in a foreign affairs debate, I wish to speak shortly and about one topic. I hope that I shall not be thought too parochial in speaking about Ethiopia and the dispute there between the Ethiopians and ourselves about the Somali boundary. I happen to be the only hon. Member who has been there, with the exception of the Joint Under-Secretary, the hon. Member for Banbury (Mr. Dodds-Parker). I hope that it will be not thought too much of a tête-à-tête if I primarily address my remarks to him.
  On 10th July, The Times had a leading article entitled "Four Years to Trouble". In my view—and the Joint Under-Secretary may later confirm this—that may be "Four Months to Trouble". The facts are quite simple. About the time of the Tudors, 2½ million Somalis came from Arabia to the Horn of Africa. They wandered backwards and forwards in this area for centuries with no boundaries to their grazing areas. In 1897, some thirteen years after we got there for the first time, we wanted to safeguard our flank when moving down the Nile to Khartoum to attack the Mahdi, and so we made a treaty with Menelik II.
  In that treaty, we said that we would hand over to the Abyssinians about 25,000 square miles of what we now call the Somaliland Protectorate. For forty years no one, least of all the illiterate Somali herdsmen who wandered with vast flocks of sheep, cattle and goats, knew anything about that. In the thirties it burst upon them. Then came the 1939–45 war; and ultimately, in 1954, Her Majesty's Government signed a treaty with the Ethiopians confirming the handing over of that 25,000 square miles of no man's land in the Reserved Area of Haud.
  The difficulty is that some 500,000 Somalis wander annually backwards and forwards over the line. The Ethiopians are determined to assert their sovereignty over this particular belt of territory. I think that they are mistaken to act as they do, and they are building up for

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  themselves an enormous fund of ill-will and even enmity among the 2½ million or more Somalis who are on their east and southern borders. At the moment, we are allowed to have 200 illalos, or police, to look after British interests in that area; and I hope that we shall increase that number to 700. I shall return to that topic shortly.
  We have had continual bother ever since the treaty was signed. Having been there on the spot, it is my impression that the Ethiopians do not intend and, at the moment, are not carrying out the terms of the treaty. I have had a cable—as no doubt has the Foreign Secretary—about present conditions there from Mr. Hassan, President of the National United Front. I am convinced that the Ethiopian position is quite simple. At the head of the Ethiopian Government administration there is what one might term a veneer of Sorbonne and Oxford men; below that there is a large gulf, and then we get, particularly in Harrar and the borders, people not unlike the Saudis and Yemenis who, without wishing to be unkind to them, are nearer to the medieval times when the Somalis first came over.
  There is hostility and open enmity in the clash between those peoples. The Somalis are politically conscious. Their sons leave the territory and go as sailors to Brooklyn or Barry Dock; they mix in the world, and then return politically conscious. The action of the Ethiopians in persecuting them is cementing and consolidating not only their unity based upon their Moslem faith and their ethnic past, but also their political consciousness in the modern world.
  In 1947 the late Ernest Bevin had a scheme for this area. He wanted to unite all Somalis in one united Somalia. At this moment, what was formerly Italian Somaliland is due to get independence in 1960 and will, of course, get it. Many of the 2 million Somalis are there. Ernest Bevin wished to unite those 2 million with our 750,000, and obviously later with the Ethiopian Somalis and, perhaps, with the French Somalis, if he could get consent to that form of a new nation in the Horn of Africa.
  Unfortunately, the Americans and the Russians at that time did not assist the late Foreign Secretary at New York in
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  this plan, and it lapsed. What a pity that we did not carry on with it. There is no doubt that at the moment our prestige and our capacity for good will and influence in this part of Africa are slumping. The Ethiopians are appointing their own akils or headmen among our Somalis—and indeed by gifts of land and other measures are persuading British Somalis to become Ethiopian citizens; others go over because of the lack of protection which we are offering to our people.
  In the Daily Mail last Monday there was a statement to the effect that at Barnard Castle, some Commandos of the Durham Light Infantry were standing by in case they had to be flown out to the borders of Ethiopia, should a dispute flare up. The Joint Under-Secretary may say something about that. I do not believe that it will be advisable to fly out Commandos or use other troops. It would be preferable to increase the number of illalos or police, and perhaps send in the Somali Scouts to give protection; but it would be a very delicate matter indeed to use forces on what is acknowledged to be Ethiopian soil.
  The Joint Under-Secretary, who early this year attended an Anglo-Ethiopian conference in Addis Abbaba—after I was at Harar in January—he has been with Lord Lloyd and knows the mentality and outlook of Ethiopians on this matter—might consider, as the late Ernest Bevin wished to do, calling a conference with the French of Djibouti, the Italians at Mogadishu, our people from Hargeisa and the Ethiopians in Addis Abbaba. There might be possibly a fifth party, the Americans, who have oil interests here, and who are alleged to have much influence with the Ethiopians because of their technical assistance, economic help and financial aid to Ethiopia.
  At such a conference the future of the Somali peoples could be discussed. I am afraid that if we do not do something like that soon in Somalia, we will lose our present influence for good will. The Somalis are intensely loyal and wish to stay in the Commonwealth if and when they become united in the 1960s. I hope that this suggestion will be considered, and that Her Majesty's Government will attempt to hammer out what all the Somalis can do together in the 1960s.
  In this connection, I do not know whether the Government would care to make some overtures towards the

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  Egyptians. Despite what the Foreign Secretary said earlier today, I believe that the Egyptians have been most mischievous in this quarter of Africa. They are not only attacking us, with wireless propaganda, at Aden and elsewhere; but, more important, have been infiltrating in a very subtle way into the Horn of Africa with their teachers. The Egyptians have flooded Mogadishu and Italian Somali-land with more than 200 teachers in the past year or so; and they are offering very lucrative bursaries at Cairo University for Somalis.
  It is shattering to think that, although we have had the Somaliland Protectorate in our care for over seventy years, the Joint Under-Secretary and I are the only Members of Parliament who have been to this neglected possession. At the moment we have only 19 of these loyal subjects in the United Kingdom, receiving higher education, but Colonel Nasser has welcomed about 60 in Cairo, doing the same thing.
  Mr. F. M. Bennett: I did not want to interrupt the hon. Member but, as a matter of fact, he must not claim that he is the only Member who has been there. I have been there upon two occasions—and to the places that he has mentioned.
  Mr. Johnson: I am delighted to hear that. It is a pleasant shock to hear the hon. Member say that, because I was told that no Member of Parliament had been until I went—and, of course, the Under-Secretary of State followed shortly after. I am happy to correct my statement. I do not know what sort of impact the hon. Gentleman made upon the people; obviously it was not much, because they soon forgot him.
  It would be a fine and hopeful thing to get some agreement amongst all the nations in the Middle East upon the future of the Somali people. Politics, like nature, abhors a vacuum. I am convinced that it is not in the best interests of Ethiopia herself for things to continue as they are. If we allow the Ethiopians to continue behaving as they are there is no doubt in my mind that they will drag us down into some future war in the Horn of Africa. I fear some situation in these coming years on the lines of what we now see in the Middle East between the Israelis and Arabs. The
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  Moslems fear and hate the Amharic Imperialists on the Ethiopian plateau above them. Ethiopia is expanding. She has now got to the sea at Massawa, in Eritrea. She is pushing out, and unless we can reach a modus vivendi upon this matter, only a nation like Egypt or the Communists will benefit—and they are fishing in these waters—and people like ourselves, Ethiopia, the Italians, the French and the United Nations, whose job it is to look after this part of the world, will all be disadvantaged.
  6.2 p.m.
  Sir Robert Boothby: The hon. Member for Rugby (Mr. J. Johnson) will not expect me to follow him in the rather specialised subject about which he speaks with such knowledge. I could not follow him even if I wished to. All I would say is that I listened with great interest to what he had to say; and, as far as I am capable of doing so, I concluded that the conclusions which he reached were the right ones. I hope that the Government will adopt all the suggestions that he made. No doubt we shall hear something upon this matter from the Joint Under-Secretary at the end of the debate.
  After the Adenauer-Dulles conversations in Washington a little time ago Mr. Walter Lippmann wrote, in The New York Herald-Tribune:
  "It is safe to predict that if the leadership of the West is to be like these Washington talks—inflexible, sterile, unrealistic and wishful—then the troubles of the Western alliance will become worse and worse. The alliance will crumble if it is led by men who think it a virtue to be unchanging in a changing situation."
  I think that Mr. Lippmann had something there. He went on to describe in extremely forcible language—too forcible for me to quote—what Dr. Adenauer and Mr. Dulles had said and done, and the conclusions that they had reached. The moral that he drew was that, although the political situation in Europe had radically changed during the past five years, there had been no change whatsoever in the policy of Mr. Dulles or Dr. Adenauer so far as Germany was concerned—and I think he was quite right.
  The Prime Minister did much to allay that fear yesterday. In speaking as he did of the changes which have taken

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  place in Russia, the problems of disarmament and the hydrogen bomb, and the future of Germany, I thought that he displayed a most refreshing flexibility of mind, which almost everybody in the debate has agreed is perhaps more desirable than anything else. The Prime Minister swims easily in these deep waters, as anyone who has watched him negotiate at Berlin and Geneva, with the Russians and the Chinese, can testify.
  The fact remains that the Western World is not united, although we all proclaim, almost incessantly, that it is. We talk a great deal about "the three unities". Is it not rather wishful thinking? They are not unities.
  I agree with that part of the speech of the Leader of the Opposition in which he complained of the fact that there was great disunity in the Western world today and not nearly enough co-ordination of policy. I was mildly irritated by the prim little lecture which he gave to the Government upon the subject of what they say about disarmament. He implied that Ministers should not mention National Service in any shape or form. He said that it showed a great lack of responsibility on their part to do so. [Interruption.] He practically said that, anyway; and I could not help wondering, while he was saying it, how soon he is himself going to come out in favour of the flat abolition of National Service, and whether he will give a date for it.
  After what the right hon. Gentleman said this afternoon I do not think he can give a date—and that will be a disappointment to the party opposite, because it is a certain vote-winner. But I really thought it was intolerable for him to read lectures to Ministers for even daring to mention the possibility of abolishing military service in this country. We all want to abolish it, or at least reduce it, in the measurable future.
  There will be little chance of any Government in this country abolishing or reducing National Service unless N.A.T.O., to which we all belong, brings its military thinking a little more up to date. N.A.T.O. is where the power of the Western world resides, and it is the only place where it resides. N.A.T.O. is at present conducting a global struggle against the forces of
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  Communism without any central organ of decision to direct its military strategy or political policy upon a global scale. It is at present quite immobile; and it is not open to dispute that its strategic thinking is out of date.
  There is no agreement about the size or disposition of the conventional forces that we must have in this military alliance, although they are now barely one quarter of the Lisbon figures. The joyous military arithmetic of Lisbon mentioned 30 armoured divisions, fully equipped, in Europe. They have gone by the board. There is now less than one quarter of that force. But that does not appear to have made any difference to our strategic thought. We have not really decided whether to concentrate, in Europe, upon a defence force of considerable strength, or upon the deterrent effect of our retaliatory power.
  The climax of absurdity was reached in a leading article in The Times of 29th May, which recommended, first, large ground forces in Europe; secondly, that these ground forces must have what it called "atomic capabilities" to make them more effective in action; and, thirdly, that every country should have two years' military service indefinitely. It then said that the Germans would have to "buck up" and get their full Army into being as quickly as possible, and that the French would have to bring back their troops from Algeria as soon as possible.
  But even that was not enough. We must also have an enormous strategic bomber force, as a deterrent to total war. [An HON. MEMBER: "Who wrote the article?"] I do not know who wrote it; he is anonymous—fortunately for him; but as a straight road to total bankruptcy I have seldom seen anything to equal it. If I had been one of the Russian leaders in the Kremlin, I should have said, "I hope to goodness they go ahead with that."
  I do not know what other hon. Members think, but I am not sure that the alternative to a general nuclear war is a local conventional war, as we have known it, for example, in the case of Korea. I am inclined to think that if we now prepare for another war upon the Korean model we may be preparing for one which will never again take place. I should have thought that the alternative was

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  much more likely to be guerilla warfare and political infiltration; and that we should consider whether we ought not to have small but very mobile and effective conventional forces to take care of that kind of war and, for the rest, to rely upon the strategic bombing weapon.
  Even so, with costs mounting as they are, we are under an illusion if we think that we can make vast reductions in expenditure on defence. These four divisions in Germany are now preposterous. It has been argued by the hon. Member for Ashfield (Mr. Warbey) that we are bound by the Western European Agreement to keep four divisions there. So we were; but subject to consultation, and it is a burden which cannot be sustained.
  If, as the price of getting the French to join the European Army, we have to keep four fully equipped military divisions on the Continent, it is a price we cannot afford to pay. We shall be made bankrupt if we go on paying it. We should get the full sympathy of the French if we say we cannot pay it, because they have already withdrawn most of their divisions; and we shall get a considerable amount of sympathy from the Germans, because they have not even started building up their divisions. Meanwhile, with the United States, we are carrying a greater part of the burden of European defence than are our Allies.
  I believe that N.A.T.O. is capable of discharging the function which British sea power performed in the nineteenth century. Committed to free institutions, and pursuing a coherent policy in common, it could preserve the peace of the world; but at present there is no machinery to frame and to implement such a policy. Nor will there be until we decide—this was the point which was nearly, but not quite, made by the Leader of the Opposition—whether N.A.T.O. in itself is anything more than a temporary military alliance designed to meet a given military emergency in 1950; or whether we should try to build up out of it an organic union of nation-States as the basis—not a League of Nations but a commonwealth of nations. I think we should try to realise the larger aim and, as peace perhaps begins to pervade the world a little more, we should expand N.A.T.O. from a purely military alliance into the wider field of political association.
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  I wish to turn for a moment to the subject of the Middle East. I have pointed out that there is no great unity of purpose or policy in the Western world so far as N.A.T.O. is concerned. Unfortunately, that is not the end of the story. I agree with the right hon. Member for Ebbw Vale (Mr. Bevan)—for once—that in the Middle East our interests and those of the United States are identical. I do not altogether agree with some of the comments of my hon. Friend the Member for Preston, North (Mr. J. Amery) or those who make out that, in some way or another, our interests diverge from those of the United States. They do not.
  What are our main interests in the Middle East? They are, first, to protect the oil supplies—not our oil supplies—but those supplies upon which industrial Western Europe is utterly dependent. Secondly, to restore the shattered N.A.T.O. defences in the Eastern Mediterranean. We have already discussed Cyprus, so I will not go into that again; but I will say that we must restore the defensive system of N.A.T.O. which no longer exists in the Eastern Mediterranean. Thirdly, to prevent an Arab-Israeli war. These are our common objectives, but there is no common policy. Indeed, there is no policy at all. Frankly, I blame the United States much more than Her Majesty's Government for that, although I think it was a pity that at the time of the Washington Conference with President Eisenhower in January we indicated that an agreement had been reached on policy, when in fact no agreement had been reached.
  I confess that I found the statement by the Foreign Secretary about the supply of arms to the Middle East profoundly disturbing. I do not ask my right hon. and learned Friend to give details of the figures, but I was not at all satisfied with his explanation of why he had come to the conclusion that the balance of power had shifted in favour of Israel. It seems to have been largely because he thought that the Israelis were cleverer and braver than the Arabs, that they were better fighters, and had better lines of communication. Such considerations may have to be taken into account in assessing military strength, but I do not think that undue weight should be given to these particular factors.

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  We know the numbers of heavy bombers and heavy tanks and MiG fighters which Czechoslovakia has sold to Egypt. The numbers are on paper, and there is no concealment about that. We also know from the Israeli Government that we have not given them any Centurion tanks, or Canberra aeroplanes, or any modern jet fighters at all. That leaves me profoundly disturbed, and I wish to ask the Joint Under-Secretary of State to give, if he can, one categorical assurance. It is that Her Majesty's Government are really trying, and will continue to try, to preserve a general balance of power in the Middle East in accordance with the terms of the Tripartite Declaration.
  If we go on denying to Israel the sort of arms which the Arab countries are receiving, either from us or from somebody else, the time will come when the balance of power will be irretrievably upset; and from that moment tension will increase. In default of a settlement—which is not round the corner whatever we may think—I feel it vital that the balance of military power should be kept as steady as possible. The Foreign Secretary said that an embargo on the export of arms was not practicable. If we cannot achieve that, let us at least try to keep the balance as best we can.
  I wish to say one other word about Israel. I believe this situation to be one of immense importance, and great danger. We are accustomed to the danger, we have lived with it for so long that we take it for granted. But it is there, and could result in an explosion at any time. I believe that the worst cause of trouble in the Middle East, the root of the trouble, is the festering sore of the refugees. Whether the Israelis or the Arabs are responsible, I believe that we are also to some extent responsible; not merely because we have not spent money, or enough money, but because the refugees will never move from these filthy camps unless they are absolutely certain that they can never go back to their homes in Israel.
  There should be a categorical declaration by the Governments of Britain and the United States that whatever else may happen—whatever adjustment of frontiers may take place, or anything else through U.N.O.—Britain and the United
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  States will never stand by and see the State of Israel destroyed with Communist arms. We know it to be true. It does not matter whether we are pro-Zionist or pro-Arab, or whether we are neutral, we all know that if it came to the crunch, if Israel were attacked by the Arab States with MiG fighters and Skoda tanks, neither Great Britain nor the United States could stand aside and watch Israel destroyed.
  If we came out with a categorical declaration that we could not, and would not, do so, I believe that we should see the refugees begin to move, and there would be an immediate relaxation of tension in that area. There are many opportunities for resettlement. There are some quite good settlements actually waiting for them; but they will not go at present, because they are waiting to go back to Palestine.
  I wish to say a word about another rather sombre picture—wherever we go at present we find much the same story. So far as China is concerned, I suppose we have to wait for positive action until after the Presidential election in the United States. But we cannot go on basing our policy in the Far East indefinitely on the proposition that the Republic of China does not exist, because it does. It is a very important fact in the world today, and I believe that we are missing golden opportunities for trade with China. At present there are over 400 items still on the banned list. There is scope for great expansion so far as the capital goods industries are concerned, and so far as tractors are concerned; and I simply say to the Government that I think they could move a little faster—even though there is a Presidential election in the United States—than they are doing in the way of taking some more items off the banned list, and getting on with trade.
  When I was in Hong Kong I found that there were twelve American consuls all trying to stop us trading with China, and they were doing it pretty well. I think that we should now have a shot at trying to drive through those consuls, and I do not believe that the United States' would mind very much if we succeeded.
  Even in the economic field, the policy of the free world is still governed by the Bretton Woods Agreement, which,

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  although there might have been something to say for it at the time it was made, is now hopelessly out of date. We are saddled with a rigid international currency system, imposed ten years ago in a different world, which does not work any longer. We are also governed by G.A.T.T., which also does not work. Secondly, there has been no attempt by the Western Powers to establish any agreed standards or system for the direction of economic aid. This argues a mental rigidity bordering upon lunacy.
  Finally, I turn to Europe. There has been a lot of talk about Germany, in some most interesting speeches. There has at the same time been a good deal of hot air about German reunion. We might as well begin to face some facts about German reunion. First, it is very doubtful if the Russians will ever agree to German reunification on any ground. It is time someone said so, instead of paying endless lip service to the idea of reunification with such remarks as, "No more peace in Europe, and no more hope for the world unless Germany is reunited". Suppose that Russia says "No". That is as far as we shall be able to go unless we want to go to war with Russia in order to get back East Germany for the West Germans; and that is not a prospect which attracts me in any way.
  Secondly, it is certain that the Russians will never agree to the reunification of Germany except on the basis of the OderNeisse frontier and of no German participation in N.A.T.O. We have heard a lot of speeches on the line that, when Germany is reunited and joins N.A.T.O., we shall be able to take all the necessary steps to see that she will not be a menace to the Soviet Union or to anybody else. She will just be Germany in N.A.T.O.; and that will be very nice and cosy, and we shall all be very much better off.
  There is only one difficulty. The Russians will not "wear" it; and anybody who supposes that they will is suffering from mental aberration. To go on talking about a reunited Germany in N.A.T.O. may be wishful thinking, but it is also very silly thinking.
  I come to the common-market proposal, about which the Chancellor of the Exchequer said something today. Here I think the Government are faced with a decision of major importance. The
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  threat from which this country suffers today is automation, applied on a gigantic scale in the economies of the Soviet Union and of the United States. Both of those countries have capabilities of doing it on a scale which we can never look at. That is the major economic problem which will confront us over the next ten or fifteen years. The Russians art-beginning to apply automation on a very big scale, and the Americans have been doing it on a very big scale over the last five years. The process will go on intensively, and will cost an awful lot of money, which they have got and we have not.
  Closer economic, industrial and fiscal integration of this country with the countries of Western Europe will, I believe, be vital over the next few years, if we are to remain a great industrial Power. Flanked by these tremendous continental economies to the east and the west, we cannot otherwise hope to survive. I do not think that that integration is incompatible with our Commonwealth interests. The two are, to some extent, complementary. In the first stage, agriculture may have to be excluded; but, whatever happens, we shall never get economic unity in Europe of a size and on a scale that will make it worth while unless Britain gives a lead.
  We have rejected the leadership of Europe, as I know to my cost, for the last eight years. One has to have been to Strasbourg to realise how frustrating it has been. We cannot reject it much longer. If we decide to go on into Europe we must do it in a good spirit, the spirit of trying to make it work, and not of carping and finding difficulties all the way, which has been the policy of successive Governments since the war.
  In conclusion, I want to say that I regard the Communist challenge as very serious indeed. It is no longer a military challenge. It is twofold. First, it is technical, and centrally directed; and it will succeed unless we match it with superior techniques and direction of our own. We must weld the three great cantilevers of the free world into an interlinked, organic union strong enough to withstand the challenge. We can build it out of the Council of Europe, the Commonwealth, and N.A.T.O. Those three can be combined into a comprehensive union, pursuing a common policy.

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  The challenge is also ideological. This is fundamentally a struggle for the minds of men. We must offer a better way of life to the uncommitted areas of the world than the naked materialism of the Marxist creed; and get our ideas across. Our basic strength is individual freedom. Despotism is no new thing. In their attempt to combine economic planning and efficiency with freedom the Social Democrats are the real revolutionaries of the twentieth century, not the Communists. I count myself, in every sense of the words, a social democrat.
  I read the other day a pregnant sentence in an article by Sir Norman Angell.
  "Every Russian schoolboy can expound the philosophy of Communism according to Marx: not one British schoolboy in a thousand could explain the philosophy of freedom as outlined by Locke, or Milton, or Jefferson or Mill."
  That is profoundly true. That is why we are not getting our ideas across.
  The main dangers that confront us are disunity, rigidity and lethargy. Disunity, for the reasons which I have given: rigidity because, in a rapidly changing world, we flinch from the effort to change our minds, our ideas or our policies. Once in a mould there we stick, and hesitate even to look out over the edge: lethargy, because of indolence and complacency. I sometimes wonder whether the people of this country are at present seriously interested in anything but racing, cricket, Marilyn Monroe and Jack Spot. If we read the papers we might think that those are the all-absorbing topics.
  Here we are, in a half empty House of Commons, discussing the destinies of the human race. Everybody else is probably at the tape machine, looking at the Test Match results. [An HON. MEMBER: "The Test Match has ended".] Everybody would be looking at the tape if there were a Test Match. The other day I read a sentence in the second volume of Sir Winston Churchill's "World Crisis," which was:
  "Events continued to drift steadily forward".
  I thought to myself, "To what extent are they doing that today, against us and in favour of the Communists, slowly but gradually, without very much resistance on our part?"
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  The task confronting the West now is to regain the initiative, and to base it on a theme. It will tax our staying power. But it has been well said that we shall have to live with this Communist challenge for a long time, unless we prefer to die with it.
  6.29 p.m.
  Mrs. Barbara Castle: On this side of the House we always enjoy the speeches of the hon. Member for Aberdeenshire, East (Sir R. Boothby), but they are usually based upon one familiar formula which never lets the hon. Gentleman down.
  He begins by paying a charming compliment to the Prime Minister, and he proceeds to demonstrate with cruel clarity what a failure the Prime Minister and his Government are. This afternoon he gave a catalogue of catastrophic consequences, all of which came from his own Front Bench, because of the Government's policy on Germany, China and the Middle East. Is it not time that the hon. Member faced up to some of the obligations that are upon him, in the seriousness of the present situation? Has he the right to go on sustaining with his votes a Government which he destroys every day of the week with his voice, as he has done so effectively tonight?
  Sir R. Boothby: Constructive criticism is very helpful.
  Mrs. Castle: I do not know whether the hon. Gentleman considers it constructive criticism, in a situation the seriousness of which he has brilliantly shown this evening, to refer to the refreshing flexibility of mind shown in the speech of the Prime Minister yesterday when we all know that that is only a flattering way of describing the flabbiness of his policy. The hon. Member surely is much too intelligent not to realise that.
  So far from the Government Front Bench in this debate having a refreshing flexibility of mind, we had quite a remarkable analysis by the Prime Minister yesterday—with which no one will disagree—of the fact that the situation has changed since the Berlin Conference, from rigidity to flexibility, the great changes in Russia and opportunities which we must seize, but we have not had a single example in the form of policy of how they are to be seized and what changes in policy the

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  Government are to adopt to meet this changing and challenging situation.
  The only new item is the policy on the Aswan Dam. That was a classic example of how not to behave in the new situation, how not to give and to withhold economic aid in a world which is tired of out-of-date imperialist handouts on the basis of self-interest.
  I want to concentrate on some of these specific items and policies, and particularly on the speech of the Foreign Secretary. I assumed that we would get from the Foreign Secretary today the follow-up of the opening innings of the Prime Minister yesterday, and that we would begin to realise how the fine phrases which we had yesterday were to be translated into action by the Government. We have had no evidence whatever of that in one specific field on which the right hon. and learned Gentleman dwelt at considerable length—disarmament—which is the most hopeful field available to us at the moment. The only evidence that we have got, which is indisputable, is that within the last few days alone this Government have let another opportunity go by. They allowed the Disarmament Commission to meet yet again, to talk yet again over the old, stale tirades of one side against the other and to adjourn once again in that situation, which was full of opportunity.
  The Foreign Secretary told us that the question of disarmament was somewhat tangled. I must say, after listening to his speech, that it was pretty clear that he played his part in tangling it. I say quite definitely that I lay at the door of the Government the charge not only that they have thrown away the opportunity of a positive achievement in this field over the last two years, but that they have done it not by bungling, but deliberately.
  Here I disagree very strongly with my hon. Friend the Member for Woolwich, East (Mr. Mayhew). The Government, spurred on in this by the United States of America, are afraid of military disarmament just because they are afraid of political disarmament. They are afraid of a start being made in a practical way over a practical area of the international scene because if we really got international co-operation, if we got—as we could get tomorrow—Russia, America, France, Britain and all the other Powers working together in practical co-operation on disarmament, it would be impossible
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  any longer to go on resisting the political disarmament which some people are afraid to see. The whole policy of keeping the world divided into rigid camps watching one another with suspicion with a political war all the time and an economic war would become fluid, and we might go forward to real co-operation over a wide area. I think that is what the Government are afraid of.
  We had some absolutely staggering statements from the Foreign Secretary about disarmament today. They were statements of which I challenge the veracity. I have gone to as much trouble as any hon. Member in reading the records of the Disarmament Sub-Committee's debates, reading the speeches made last week by our Minister of State in the Disarmament Commission, and trying to get at the truth. That is not easy, because of the complexity of the situation. It is really incredible that the Foreign Secretary could come to the House this afternoon and say that he had never had any satisfactory assurance from the Russians on the question of control, and that the partial disarmament plan which we now know is available to us contained only very limited provisions for control. I suggest to hon. Members that if they read the records of the disarmament talks it will perhaps begin to come home to them what is within our grasp in the very near future.
  It is true of course that this is a recent change. I am not saying the Russians are angels and we are devils. I do not say that for a moment. In fact I frankly admit that only eighteen months ago we could rightly claim that agreement on disarmament was impossible because of the absolute incompatibility of the two points of view. Those points of view were incompatible because their interests were incompatible. Certainly, immediately after the war, when America had the H-bomb and Russia had not, they were talking at cross-purposes. Russia was moralising about the need to ban the bomb that she had not got and America was wanting to cut the vast land armies of the Soviet Union, but as soon as the Soviet Union got the bomb and the deterrent was operating, there came about a balance of strength which could be reflected in a balanced disarmament programme.

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  In May, 1955, that balanced programme became acceptable to both sides, when the Soviet Union marked the entry into a new era by accepting the Anglo-French proposals. I suggest that she did it because she was a realist—not because she was idealist, but she was realist. She realised that in the situation of nuclear stalemate it was mad folly for the world to go on with an arms race without any attempt to get control.
  I lay this at the door of the Government. When the Russians announced their acceptance of that plan, what happened? The Minister of State said it was a dividend of British and allied policy—a welcome dividend—and at last patience had been rewarded, but what did they do? They disbanded the Sub-Committee for three and a half months to make sure that agreement was not reached, just as they did when Mr. Gromyko said last week that he would accept the new Western proposals, changed once again. The world is becoming suspicious when, at the moment we can achieve a dividend, all the boys are sent home to see if they can think of some new snag.
  What has happened since then? When the basis of disarmament agreement was reached this Sub-Committee adjourned. Then the summit talks were held at Geneva. Most of us thought that the purpose of those talks was to make a relaxation of tension possible, but all that has happened as a result was that one particular item of policy has been advanced by the Americans and has since been made an absolutely irremovable stumbling block to disarmament agreement. That was President Eisenhower's "open skies" plan as his contribution to the talks. That was one of the points which might have been discussed, but since then the Americans have made the introduction of an aerial survey the sine qua non of any method of control, and not only of control when disarmament starts, but control before disarmament starts.
  Mr. Stassen came back from Geneva and said to the Russians, "Look, we now advance as a test of your sincerity that you should forthwith adopt the aerial survey plan as an initial operation of initial inspection" before any disarmament is started. What kind of answer did our Government give to that? There
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  was no talk now of the Anglo-French plan. That was out of date because the Russians had adopted it—so all that was dropped. It is as the result of all these months of tedious delay that we have at last had the latest Russian plan before us. I want the House to dwell for a moment on the contents of that plan, because it goes far further on this question of control than the Foreign Secretary is prepared to accept.
  Mr. Gromyko, in March this year, put forward a programme of conventional disarmament which began with a worldwide freeze of arms levels and then reductions in two instalments to the levels of 1 million and 1½ million for the two big Powers. He suggested that the savings in arms expenditure could be allocated to improving the living standards of the world and distributed through a United Nations fund. Thus, what we could have is an agreement, the beginning of the end of the economic war. We could have made a start in the channelling of economic aid from all the great Powers through the United Nations. How dare this Government throw that away, as if it were of no importance?
  The plan visualised the setting up before the disarmament programme ever came into operation—"in good time" are the words used in the Russian plan—of an international control authority which would have its control teams at ports, railway junctions, airways and main highways, and it would have its international inspectorate
  "given unimpeded access at all times"—
  that is the wording of the document—to military units, munition factories and large bases. The Foreign Secretary tells us tonight that this partial plan for conventional disarmament did not visualise any real control.
  Imagine it—we could have it tomorrow —this control agency working and these international teams working. As for the aerial survey, the Russians have always said that they would not accept it on the basis which the Americans were trying to push down their throats, that this was to be made the test of their sincerity, that American planes should fly over Russia and blue print all the bombable places before disarmament started. The plan says that as disarmament develops and confidence grows, the use of aerial photography shall be considered.
  Mr. Martin Maddan: I think that my right hon. Friend the Foreign Secretary made it quite clear that it was not that he despised these arrangements, but that mere inspection without some method of enforcement would not be helpful to anybody.
  Mrs. Castle: Let me deal with that question. That is another unreal obstacle. We should have international teams and an international inspectorate which could go on to any air field to see if they could find a whole range of jet bombers there which could not be accounted for. What the Russians say is that the teams will report to the Security Council and say, "This country is violating this plan. We are not satisfied that this plan is being implemented in this particular area." The West say that the control teams must have power of enforcement. What are they going to do? Will they blow up the aeroplanes, or drop H-bombs on them? Are they to shoot the pilots? All that the control teams can do and all that this international body can do is to place on record, in the limelight of world opinion, that a country is violating the disarmament agreement, and that is a warning to all the other great Powers.
  There is no other sanction except war. I hope that this is a disarmament plan not to plunge us into war. Therefore, I say that this question of enforcement is just nonsense. In the last resort enforcement must come from the Security Council, which is the only body which can operate sanctions, apart from the sanctions of world opinion that can be brought into operation as soon as the report is published.
  There is another item in this remarkable document from Mr. Gromyko. He proposes that there should be an area of limitation in the two Germanys and adjacent States where the limitation of armaments could be tried out and the inspection scheme studied on a limited basis. Is not that what the Prime Minister was referring to yesterday? I was very interested when he suggested that his great idea was that there should be a gradual limitation of forces in certain areas. It is there in the plan. If he is so pleased with the idea, why did he not, when this plan was announced, welcome it with open arms?
  The scheme also includes a ban on test explosions, and a 15 per cent. cut in military budgets. It is remarkable that
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  when the Disarmament Commission met in New York last week, our Minister of State spent three speeches in tearing the plan to pieces on the ground that unfortunately the Russians have moved away from their proposals of 10th May, 1955. He said that those were the days when the Russians were talking realism. What did we do when they were talking realism in May, 1955? We dropped our proposal.
  How long is this farce to go on? We have had all this argument about who wanted political settlement first and who did not. The remarkable fact is that our Government are on record in contrary directions every time the Disarmament Commission meets. They say one thing one time and another thing another. One of the main drawbacks, they said, was that the Russians—naughty people—now wanted too much disarmament. They were still standing by the Anglo-French levels of 1955. That showed what mischief makers they were.
  Mr. Gromyko says, "If that is what is standing in the way, we will go back to your levels now on the American suggestion of 2½ million for the big Powers." What happened? "This is a sad day," said Mr. Lodge, "The Russians have said that we do not really want disarmament. We are talking the cold war talk. We had all better go home and think about it." That is what we did. The last words by Mr. Lodge, the American delegate, were, "We are only willing to take this step of accepting the new Russian levels provided that there is adequate inspection, including aerial reconnaissance"; and, therefore, the whole possibility of implementing this plan now hinges on the fact that Russia must first and foremost accept the "open skies" plan.
  What did our Government do? The Minister of State, having made all the usual noises about how he hoped that we should at last reach an agreement if we went home for long enough to think about it, said:
  "I cannot see how any system of disarmament inspection or of protection against surprise attack could be developed in the present day unless the control organ disposed of an aerial component."
  This was a rather more wordy way of saying what the Americans have said.
  Mr. Selwyn Lloyd: Does the hon. Lady disagree with that?
  Mrs. Castle: Yes, I do. That is exactly what I have been saying. I was attacking the right hon. and learned Gentleman very vigorously when he was no doubt having a well-earned cup of tea. The whole point which I am making is this: let us start with what disarmament we can get. Let us start by controlling what is controllable. Let us stop chasing the moon and make a start somewhere.
  The Russians have now accepted for the big Powers certain levels of arms by 1958; and in any case British forces will by that time be lower than that level. In exchange for that, the Russians are prepared to agree to the establishment of an international control inspectorate and international control teams with wide-ranging powers of invasion of national sovereignty. In other words, they are giving us something for nothing. The arms will be reduced in any event. The Russians are prepared to set up this international control system in exchange. The Russians have now come back to control without disarmament.
  What they are not prepared to do is to allow American bombers to fly over their territory and get a blueprint of bombing targets, while the Americans are saying that there can be no disarmament until we have a full agreement over the whole range, and are saying, "We cannot make a start because of this objection and that objection". The Americans will not ban the H-bomb tests until they have a total agreement to eliminate nuclear weapons—having said, two days ago, that such elimination was impracticable.
  What do we stand to lose? There is to be a cut in arms in any event. Can it be that it is the West which is afraid of control and inspection? Is it the West which is not prepared to have Russian teams, international teams, in our factories and military bases? Is not that the truth? The evidence emerges conclusively from this story of disarmament. If that is not the truth, why has this Russian offer of a level of control and inspection not been accepted? We could get it tomorrow. Instead of that, we say, "Aerial survey must come first", knowing that the Russians will refuse it. One of these days they will accept it and we shall be out on a limb.
  My final words are about hydrogen bomb tests. The Government have told us time and again that they are prepared
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  to discuss a limited control of H-bomb tests. They have had the chance. This matter was raised within the Disarmament Commission. The delegate of India made a strong plea for the total suspension of the tests. The Americans said, "Nothing doing". At first they said there was no real danger to human health from these tests, and then they said that until there was agreement to eliminate all nuclear weapons the tests must go on as essential to their national defence and the security of the free world.
  That put us in the never-never land. The Minister of State, in the name of the British Government, said that an agreement to prohibit test explosions must be accompanied by an agreement to prohibit the manufacture of nuclear weapons. That is in the never-never land, too.
  Now the Prime Minister has been cheered to the echo because he said that we are prepared to consider some control scheme independent of a full-scale disarmament agreement. Why did he make that announcement as soon as the Disarmament Sub-Committee had adjourned? What had we been there for it not to discuss disarmament? Why has no concrete proposal been put forward by this Government during the last few months?
  In my opinion the Government are playing for time. They mean to blow up their own little bomb and they will kill time until their test explosion is over. We shall have no initiative from this Government for disarmament or for peace until that test has been completed. I therefore suggest that instead of the so-called flexibility of the Prime Minister yesterday, what we need is the demonstration of action in the right direction.
  6.55 p.m.
  Mr. David Ormsby-Gore: When one listens to the speeches of the hon. Lady the Member for Blackburn (Mrs. Castle) in foreign affairs debates one tends to get the impression that she thinks that the only stumbling block in the way to peace over the last few years has been the United States. A typical example of her partiality in this debate was her reference to the Eisenhower plan for aerial survey. How did she refer to it? She referred to it as a plan for American bombers to fly over Russia and blueprint those targets which they wanted

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  to bomb. Does she think that that is a fair assessment of President Eisenhower's plan for aerial survey? He made it perfectly clear that the aeroplanes which flew over these territories would be at the command of the International Control Force and would be just as much at liberty to fly over the United States as to fly over Soviet Russia.
  Mrs. Castle: My reason for putting that interpretation on the plan is the context in which it was put forward. It was put forward suddenly at Geneva when disarmament proposals had been agreed by the Russians. When the Disarmament Sub-Committee reassembled the Americans said, "We must reserve all our previous decisions on disarmament. We now put this aerial survey first as the test of Russian sincerity."
  Mr. Crossman: That is quite correct.
  Mr. Ormsby-Gore: That still does not in any way meet the point I made. The hon. Lady treated in a completely partial way the whole of President Eisenhower's plan for aerial inspection. It was, I think, typical of the whole of her speech, and in fact typical of all her speeches. Until she rose to her feet in the debate I think we had had a large measure of agreement on all sides of the House on our fundamental policies.
  Mr. Crossman: Does the hon. Member also refer to his hon. Friend the Member for East Aberdeenshire (Sir R. Boothby)? Does he warmly agree with it, too?
  Mr. Ormsby-Gore: My hon. Friend the Member for East Aberdeenshire (Sir R. Boothby) quite rightly described his own speech as constructive criticism of the Government—a very fair statement. Nevertheless, he has been broadly in agreement, as have most hon. Members on both sides of the House, with our foreign policy over the past five or six years. We have always held that by building up N.A.T.O.—indeed, the Leader of the Opposition himself said so today—we were likely to bring about a relaxation of tension in the world. By matching the threat from militant Communism with such a body as N.A.T.O. and by building up our strength and our unity, we thought we would bring about a more flexible situation. That was the object of our policy, and the vast majority of hon.
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  Members on both sides of the House subscribed to that policy. The important thing to be said about it is that it has proved remarkably successful.
  We now have an entirely new situation in the world which requires the most careful examination. It is, of course, true that a section of the Labour Party never supported that foreign policy. They claimed that if we built up our strength in the West it would merely provoke Russia, who would in turn build up her strength, and at the end of it all the situation would be worse than it was five years ago. This has proved to be entirely false, and I am sure they are all very glad about it.
  Today we have a more peaceful world and a more flexible situation. We are all extremely glad of it. We can all afford to be Bevanites nowadays in this matter and we can afford to discuss methods of reducing the amount of our resources which we devote to military purposes. That is what we have always desired; we have always desired to see some of this immense burden switched to more productive purposes.
  When we study the situation, while we recognise that it is more flexible we must realise, at the same time, that we are by no means the only people who will switch their resources in this way. It is not only in the West and in the free world that there is to be a rapid switch of resources from the military to the economic sphere. I do not know that we all fully appreciate what this new era of competitive co-existence will mean or are fully aware of the immense challenge which we may have to meet from the economy of the U.S.S.R. in the years to come.
  I believe that that challenge will be very formidable indeed, and particularly formidable, as has already been said in this debate, in the so-called uncommitted nations and in the undeveloped parts of the world. We have recently had a number of assessments of the rate of growth of the Russian industrial potential. There was, if I may say so, an extremely good article en the subject this spring by the right hon. Gentleman the Leader of the Opposition. In the April issue of the Lloyds Bank Review there was another assessment of the great increase in production in the U.S.S.R.
  Although it is fairly difficult to arrive at exact figures and to make an exact

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  appreciation of this rate of growth, one thing is perfectly clear. The rate of growth in the Soviet Union vastly exceeds that in the United Kingdom or, indeed, that in the United States of America. The figures show that the rate of growth of the national product of this country is rising by about 3 per cent. a year; in the United States it might be as high as 5 per cent. per annum, but in the Soviet Union—even making a rather guarded estimate—the rate of growth is likely to be of the nature of 10 per cent. per year.
  What does that mean? It means that in the year 1963 the total production of the Soviet Union will be roughly equivalent to the total production of the United States of America today. That is an extremely formidable figure. Let us also remember that the Soviet Union has this additional advantage that, being a totalitarian dictatorship, it can see that a great deal more of its resources are diverted to foreign investment; and that foreign investment can, without very much difficulty, be taken from the home consumption of their own people. The Russians, therefore, have that further advantage over us when it comes to competitive co-existence in other parts of the world.
  I think, therefore, that we are likely to see a considerable increase in the offers which are made by the Soviet Union to help under-developed countries everywhere. It will be on a very massive scale, and I do not for one moment believe that the Soviet Union means to channel that aid through United Nations Agencies. It means to make its offers of aid direct to the countries concerned, hoping to gain political advantages thereby. After all, some of us can remember what the Russians did in the 'thirties when, in spite of the fact that at home they had a very considerable famine and that, as a result, millions were dying, they were still exporting grain to other countries because they thought that there was a political advantage to be gained.
  Mr. G. A. Pargiter: Can the hon. Gentleman tell us if that was when the Americans were burning wheat?
  Mr. Ormsby-Gore: I do not think that that question is very relevant. At any rate, I want to picture to the House what I think will be a very serious challenge in the coming years, and to see how this
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  will affect one particular area—because it is quite impossible tonight to cover the implications all over the world.
  The area which is of the greatest importance to us is the Middle East. We are becoming increasingly dependent on the oil supplies there and, indeed, nearly 70 per cent. of the total reserves of oil in the world are to be found around the Persian Gulf. Therefore, the maintenance of our friendly relations with the Powers round the Persian Gulf is of supreme importance, not only to us but to the whole of Western Europe—and probably to America as well, in the years to come.
  If our friendships there were to be poisoned and undermined, we would suffer a really shattering blow. How are we to display friendship? How are we to demonstrate our good will there? We can do it only by helping them to build up their own industrial potential and to raise their own standards of living. That means that we shall have to meet the kind of requests which they will make of us. What will be their demands? Basically, they will be for increased educational facilities, because it is on improved education throughout these nations that the whole foundations of their growth will depend. They will also expect large numbers of technicians and experts.
  If we do not provide them, they will find those technicians, those experts, those teachers, those facilities from other sources, and the other sources may be very much less friendly disposed towards this country, and that might well have the most dangerous results.
  Mr. R. T. Paget: But surely, with their oil royalties, those countries are in a position to buy those facilities anywhere they like? How are we to stop them?
  Mr. Ormsby-Gore: I was about to come to that. My next remark was to be that, in this part of the world, finance will not be a problem. Nevertheless, those financial resources will make demands on the rest of the world, and the question is: who is to meet those demands? There are, of course, other problems elsewhere where there is not the money available, but the countries in this area will be able to pay for what they want, and what they want are experts, technicians and education of one kind or another.

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  I wonder whether we are now laying plans to ensure that we can supply these demands when they are made? In Iran, Iraq and Kuwait, to take just three examples, we must be prepared to help in every way in the setting up of schools, technical colleges and universities. We must also lend experts on a massive scale. In addition to that, we shall probably have to try to provide facilities for education and training here in the United Kingdom for these people.
  I know that it has already been said that we have done a great deal on those lines already. When we look at the way in which we have helped with the United Nations technical assistance programme, the Colombo programme, and in other ways we can see that we have at least borne our share of the burden and, indeed, carried more than our share. We have provided a remarkable number of technicians—and it is British technicians for which many of these foreign countries are always asking. We are now right down to the bone. I have heard of many cases recently where we could not find even two or three men who were badly needed in some of the under-developed countries. We must make a most prodigious effort in this field.
  There has been a tendency in this debate to under-rate the importance of the Bagdad Pact. I do not want to talk about the defensive side of the Pact at the moment, although it is worth pointing out that the original conception was of a Pact formed between Turkey and Pakistan, who thought that they needed it for their mutual defence. It was adhered to by Persia and Iraq, two free, independent, sovereign States. They, too, think it necessary for their defence.
  We would do a great deal of damage if we tried to under-rate the importance of that Pact as a security arrangement, but it has been quite truthfully said that in this more peaceful world in which we are now living we should switch towards the economic side of the Pact. That is perfectly true, but when some hon. Members say that that is what should be done they are really pushing at a very open door. Already the economic committees set up under the Bagdad Pact are hard at work. I heard only the other day some reports of the kind of work which they were doing, but one of the things that became quite apparent from a discussion
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  of their work was that the demand for experts and technicians will be prodigious. I was told that for Iran alone there was a demand for no fewer than 300 experts and technicians in the economic field.
  There has also been a suggestion that we should have a great United Nations economic plan for the Middle East. I do not for one moment rule out the possibility of certain United Nations organisations playing their part in many of these economic plans in that part of the world, but I think it quite unrealistic to suppose that these Arab countries, which are at the moment intensely nationalistic, are going to accept an economic plan imposed upon them by the United Nations. [HON. MEMBERS: "Imposed?"] Well, to some extent, imposed. We discuss it airily here, but I have not heard it discussed a great deal inside the Arab countries themselves.
  Mr. Crossman: What does the hon. Gentleman mean by saying that the United Nations economic plan will be imposed? The Arab bloc is a very important part of the United Nations, and, presumably, any economic plan of the United Nations would be one of a kind to which they would agree. I think the difficulty would be that, if it were imposed, they would veto it, as they have done the question of refugee aid.
  Mr. Ormsby-Gore: Perhaps imposed was not the right word. What I was trying to indicate here is that to say that the only way to pursue our policy in the Middle East is by means of a United Nations economic plan for the whole area of the Middle East is unrealistic, taking into account the extreme nationalism of those States. If the Arab nations want aid and ask us for it, and if they ask the United Nations for it, I have already said that any way in which the United Nations can contribute would be welcome; but I do not think it is realistic to believe that Saudi Arabia will set aside large amounts of oil royalties in order to help the economic expansion of Jordan. I may be quite wrong, but it does not sound to me to be very realistic to try and plan for the whole of the Middle Eastern area.
  I think it is much more likely that we will get requests and demands for help directly from those individual countries,

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  and that, in meeting those requests, we will continually find ourselves in competition with Soviet Russia, which will offer to supply both technicians and material on a very large scale indeed. I was very glad to hear my right hon. Friend the Foreign Secretary say this afternoon that, in giving this aid to other parts of the world, it is quite a good plan to distinguish between our friends and our enemies. I think there is a great deal to be said for making it clear to the rest of the world that there are advantages in being friends with Great Britain, and that there are certainly some disadvantages in being Great Britain's enemies.
  I quite appreciate that in other parts of the world where this finance is not available quite other difficulties will arise, but, whatever these problems are, we can be sure in years to some that we will have to meet this challenge from the new Soviet policy of competitive co-existence, and I hope we shall in the next year or so equip ourselves to meet that particular challenge.
  There is one other aspect of this new era of competitive co-existence which, I think, will become of increasing importance, and I refer to propaganda and information. I hope that when we are considering a reduction of expenditure on our military forces, we will transfer at least some of these savings to this propaganda front. Just because we conclude that our way of life is no longer under attack from a particular quarter, it would be the greatest mistake to imagine that it will not come under attack from a different direction. In this connection, it is true to say that the recommendations of the Drogheda Committee have never been fully implemented.
  It is possible to point out that the recommendations of the Drogheda Committee are now somewhat out of date, but something along those lines is necessary, and that a great deal more is necessary is I think unquestionable. I do not consider that either side of the House has a very good record on information services, grants to the B.B.C. or suchlike matters. When we run into any kind of economic difficulties, that is one of the first things to be cut. I remember that there were almost whoops of delight among some of my hon. Friends when
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  it was announced that there was to be a cut in the budget of the B.B.C, the British Council and the Information Services. I think that would be a most misguided attitude in the present situation. I think we can all agree that in the years ahead, with this more flexible situation that has now developed, we ought to devote more and more of our resources to the battle of ideas, because that is what it will be, in the coming struggle for the souls and minds of men.
  Finally, I cannot sufficiently emphasise how much I welcome, as I am sure every other hon. Member welcomes, this less dangerous and more flexible world situation, but it will impose upon us entirely new tasks that will demand of us entirely new and different policies, and I hope that I have indicated at least two of the lines along which those policies should develop.
  7.16 p.m.
  Mr. Geoffrey de Freitas: I must begin by pointing out to the hon. Member for Oswestry (Mr. Ormsby-Gore) that he was wrong at the beginning of his speech in assuming that there was agreement between the two sides of the House in this debate. It is true that on certain aspects, such as N.A.T.O., there has been broad agreement, and that has been made clear, but it was made equally clear that, on matters such as disarmament, and especially after the speech made recently from this side of the House, there is a great deal of disagreement.
  One point on which I should like to comment is the Government's action in regard to this new economic competition that there is to be between the Russian bloc countries and ourselves, because the hon. Member for Oswestry referred to the Middle East and the competition facing us there. It was clear even a few months ago to certain of our traders who went behind the Iron Curtain that the Skoda motor car and motor bicycles works was to start an invasion of the territories of the Middle East and would undercut us. One of the reasons why I happened to learn about this was because I attended for a few days the Leipzig Trade Fair in Eastern Germany last February.
  It is on the Government's attitude towards the Leipzig Trade Fair that I should like to comment, and I hope the Government will give me some answers. I have noticed throughout several of the

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  Speeches made recently in the debate that no notes whatever have been made on the Front Bench, which makes one wonder if there is going to be any reply to this debate at all. I ask these questions, in spite of that, because representations were made to the Government after the last Leipzig Fair about the British delegation, which was a military delegation.
  I want to know whether the Government have learned anything as a result of the representations made by traders who came back from the Leipzig Trade Fair. Did not these traders report that they felt that they had been done down completely by the West German Government, which had persuaded us to take no official recognition of the Fair, when West Germany itself had more floor space at Leipzig than the rest of the free world combined? Did they not think that the West German Government themselves had had an unfair commercial advantage? Was it not also a fact that the West German Government had concluded with the East German Government a trade pact which the East German Government reported as being as official as those concluded with India and Finland?
  Is it not also a fact that respectable firms like Rolls-Royce, Massey-Harris, David Brown and the Standard Motor Company, which sent representatives to Leipzig, were made to feel that they were doing something dishonourable, or at least their representatives were made to feel that? Is it not a fact that, at the hotel in Leipzig where the delegations from the countries assembled, the British and American delegations were the only two delegations which were not in ordinary civilian clothes?
  Was it not the fact that the British and the Americans sent a delegation not of traders but of a lieutenant-colonel each, a captain each, a driver, and a lady who was presumably the wife of one of the officers? Did they not sit in uniform at the door of the main room where all the other delegations were, with their national flags on the table, so that the Communists could point out to those who came from Vietnam, Mongolia and China, who had never before seen a British or American person, that those were the British and American delegations, and say, "They are not interested in trading, so they send military people, That is what they always do. They are militarists"?
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  If we ask why we sent a military delegation, we are told we were acting on our rights as occupying Power. Of course we were. But is that going to happen in September at the next Leipzig Trade Fair? Are we going to lose not only the economic war by failing to trade, but also the political propaganda war by insisting on displaying ourselves as militarists to these men and women from Asia and the new countries there, while the Communist countries present themselves as being concerned with peaceful trading?
  Representations have been made, and I should like to have some answer as to what is going to be done. Will the Government encourage traders to visit the next Leipzig Fair? We cannot afford to luxuriate in a huge domestic market like the United States or the Communist bloc. We must go out and get trade. It is surely most important now that we should do everything we can. to look to our future. The hon. Member for East Aberdeenshire (Sir R. Boothby) referred to the fact that there were some 400 items on the banned list, under embargo, for export to China. One of them is marine engines, which are made in my constituency. What is to happen? There is full employment in Lincoln still, but in a few years' time, when we shall want the trade which we have had for decades, through this Lincoln firm, exporting marine engines to China, there will be no orders for engines or for spare parts because, in the meantime, the West Germans, the Swedes, the Czechoslovaks and others will have captured the trade.
  This policy must be reversed. We must encourage traders to go behind the Iron Curtain so that they can learn what is happening and not be surprised at what the effect of the embargo has been. Year after year, those men who go are impressed not only with the quality but with the quantity of the different types of manufactured goods which are being produced in Iron Curtain countries.
  As an example of the ignorance there is about these vital matters, I recall that in 1949, when I was at the United Nations Assembly, the first Soviet atomic bomb was exploded. There were important men in positions of authority in Western Governments who refused to believe that the Russians had really deliberately exploded an atomic bomb. They said that it must be some moujik who had

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  tripped over a wire in the Urals. That was the attitude displayed towards the Soviet Union, and it gives some measure of how we underestimated what the Russians were doing. It is important that traders and other people besides Army officers in uniform should go and see what is really happening.
  As I said a few moments ago, there have been few dissentient voices during the debate yesterday and today on the subject of N.A.T.O., though nearly all hon. Members have agreed that there should be some changes in the military, political and economic dispositions of the West, especially in relation to N.A.T.O. Some have wanted more military changes, others more political changes, others more economic changes. It is a fact, of course, that when N.A.T.O. was set up, it was recognised that there might well be changes in the future, and Article 12 expressly provides for, or holds out the possibility of, review, but not until 1959. Of course, that is out of date; events have marched so much faster than that.
  We have had Prime Ministers, Presidents and Foreign Secretaries all speaking of changes in N.A.T.O., but there has been nothing more than the throwing out of ideas, many of them ill-conceived and ill-considered. If the ideas are not remarkable, the people who have said that there should be some change are. The suggestion has come from President Eisenhower, President Gronchi of Italy, Herr Adenauer, Herr von Brentano, Herr Lange, Mr. Pearson, Sgr. Montino, M. Mollet, M. Spaak, M. Pineau, and many others.
  Though there have been these ideas advanced, there has not been any place in which they could be debated or discussed. Indeed, there have been almost as many suggestions advanced as there have been contradictory ideas put forward by Members of the Government as to what should happen to N.A.T.O. at the moment. We have N.A.T.O., and yet there is no forum in which these matters can be discussed. The Council of Europe on the other hand, which is a relatively unimportant body, has a forum, an excellent secretariat, and all the equipment for providing a place to meet and discuss these things. By its
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  very nature, its discussion is of much more parochial European problems because, by turning its back on the United States and Canada, it has ignored the aspect of power in politics, and its debates and the subjects for discussion are unrealistic.
  I submit to the Government once more that they should work towards transforming this Consultative Assembly of the Council of Europe into a Consultative Assembly of N.A.T.O. I speak of turning it or transforming it into the other Consultative Assembly in that way, because I do not suggest that we should set up another Parliamentary body.
  Mr. Osborne: Hear, hear.
  Mr. de Freitas: I am glad that I have the hon. Gentleman's agreement; I was not suggesting that there should be another such body.
  Mr. Osborne: It is a dining club.
  Mr. de Freitas: It is not a dining club; the hon. Gentleman is very narrow-minded if he believes that it is. We cannot go on multiplying these assemblies. The smaller European countries find it difficult already to find members for the Council of Europe, Western European Union, the European Coal and Steel Community, and so on. Instead, we must transform the Council of Europe into a Council of N.A.T.O. This new Assembly could draw on the experience of the Council of Europe, with its over-elaborate organisation, and from the experience of the N.A.T.O. parliamentarians who met in Paris last year. The right hon. Gentleman the Member for Kelvingrove (Mr. Elliot) was the distinguished leader of the British delegation to that meeting, but it operated without any staff at all. The new Assembly can draw on the experience of both those bodies, not having too much or too little organisation for its purpose.
  I hope that in the autumn, at the Council of Europe and at the next meeting of the N.A.T.O. parliamentarians which will be in November, the members will consider transforming the Council of Europe into this Assembly. There will, of course, be objections. Sweden, Ireland and Austria will be out; they are in the Council of Europe, but they are not members of N.A.T.O. Nevertheless, I believe that their exclusion would be far more

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  than compensated by the addition of the United States and Canada.
  I suggest, too, that in the next Assembly, in view of the many points which are up for discussion now on the future of N.A.T.O., there should be discussions on the widest range of subjects. For instance, they should discuss military problems such as one which the Americans hardly ever discuss—the fact that the Strategic Air Command of the United States, the West's most powerful military weapon, is not subject in any way to the influence of the European Allies. That would be an important subject for discussion in an Atlantic Assembly.
  Secondly, there are certain political aspects, such as the recognition of the Chinese Government, which has been mentioned today. United States Congressmen do not realise that they are in step only with themselves. Thirdly, there are economic problems. Oil has been mentioned and I have referred to East-West trade. Not only Americans, but many others also, do not realise the enormous incentive we have given to the building up of the industrial power of the Iron Curtain countries by our ridiculous embargo. We, of course, in Europe will have a lot to learn, too, from the American point of view.
  My quarter of an hour is up, and I ask whoever replies for the Government to assure me that they can bring their economic policy on East-West trade, and on Germany in particular, into line with their political policy, and also that the Government will use their influence to create a N.A.T.O. forum.
  7.31 p.m.
  Mr. Geoffrey Rippon: I have listened with great interest to what has been said by the hon. Member for Lincoln (Mr. de Freitas), but I am sorry that he started his speech by trying to emphasise the divergence of view between the two sides of the House. Much of what the hon. Gentleman had to say I felt would commend itself to all hon. Members. Inevitably in a debate of this kind there are divergences of opinion even between hon. Members on the same side of the House. We have seen that quite often in the course of this debate, and I should have thought it was a good thing to see in a democracy.
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  Whilst we may regret the tone of the speech of the hon. Lady the Member for Blackburn (Mrs. Castle), I think that on the whole this debate has shown a considerable unanimity of thought on the broad questions of foreign policy. We listened yesterday to a speech by my right hon. Friend the Prime Minister which I think commended itself to the mood and feeling of most hon. Members, particularly in the way in which it focused attention on the implications of the growing recognition by all nations of the terrifying potential power of nuclear weapons.
  Certainly the grim picture of destruction presented in the testimony of the United States military experts at a recent meeting of a Senate Committee must tend to diminish the possibility of a general war. Many hon. Members may have seen reports of General James Gavin's estimate of the casualties that would follow an all-out assault by the United States Strategic Air Command, assuming that the prevailing winds carried the fallout in a south-easterly direction over Russia. He said that
  "current planning estimates run in the order of several hundred million deaths"
  whichever way the wind blew. If it were in a south-easterly direction, most of them would be in Russia, though the fall-out would probably extend to the area of Japan and the Philippines. If the wind blew in the opposite direction, the casualties would extend "well back up into Western Europe".
  It would appear that against this background we can say that the likelihood of military attack has diminished, and that a new situation has been created in which it ought to be possible to secure a measure of agreement upon disarmament. if we follow the policy advanced by Her Majesty's Government and not the partisan and biassed viewpoint expressed by the hon. Lady the Member for Blackburn.
  If, however, the possibilities of a direct military attack have diminished, it is clear from this debate that we cannot afford to rely merely on the deterrent effect of modern weapons of war. Whether the wind blows one way or another, or whether it does not blow at all, we cannot afford to abandon the shield of N.A.T.O. We cannot, as the Foreign Secretary put it, allow our alliances to crumble away.

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  I should have thought that it would have been clearly contrary to our obligations to N.A.T.O. if we threatened to withdraw our troops from Germany, as one or two speakers yesterday appeared to suggest, because of the German attitude over support costs. On the other hand, if we have accepted the agreement to pay £34 million this year, or £30 million less than our local costs, in the interests of European solidarity, I think we ought to leave the German Government in no doubt of the strength of public opinion in this country on the point. Our request for £50 million was not unreasonable in view of the present state of German defence expenditure, and the offer to buy arms in this country is not, I think, regarded generally as a suitable alternative to payment in cash.
  We have been told that the way is still open for negotiations on support costs in the future, but we also know that Herr von Brentano told the Bundestag on 27th June that no more support costs would be paid after this year. Whilst we must remain willing to fulfil all our obligations in regard to the maintenance of our troops in Germany pending any alternative arrangement after consultation, we should make it clear to the German Government that there is a strong feeling that their attitude is not the proper way in which to build up good relations between our two countries.
  If we accept that the military framework of N.A.T.O. must be retained, then we are all agreed that, as the Foreign Secretary has said and as my hon. Friend the Member for East Aberdeenshire (Sir R. Boothby) said in his forceful speech, it must be adapted to a changed situation. I think that that involves improvement in the political and economic strength of that organisation.
  In the new situation about which we have been speaking there must be a more positive impetus to co-operation and unity than fear of aggression. The Russian steamroller of today is an economic rather than a military machine. I agreed very much with what the hon. Member for Lincoln said on the question of trade, which tied up closely with the observations made by the hon. Member for East Aberdeenshire from this side of the House. No doubt this economic conflict is infinitely preferable to military war,
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  but its dangers for us are no less great, as the Prime Minister has warned us from time to time.
  Unfortunately there is a lack of comprehension in some quarters of the close relationship between international trade and the problems of peace and war, albeit the Soviet leaders are not unconscious of it. In that context I welcome very much the recent announcement that Sir Roger Makins is to be appointed in the autumn to the post of Joint Permanent Secretary at the Treasury. It shows a recognition of the close link there is in these days between economic and foreign affairs.
  I share the view expressed by the hon. Member for East Aberdeenshire and also to some extent by the Foreign Secretary, that we and the Commonwealth must play an increasing part in opening up trade and other contacts with the Soviet Union and with the Chinese people as well.
  I also believe that the economic, and so the political stability of the Western world depends in large measure upon this country taking the lead not only in Commonwealth but also in European affairs. Here again I do not think there is a great deal which divides the House.
  Yesterday a number of hon. Members on both sides of the House raised the implications, for us and for the Commonwealth, of the common market project now under discussion by the six countries of the European Coal and Steel Community—the Messina Powers. I expressed my own opinions on this subject in the House recently, and I shall not weary hon. Members with a repetition of them, except to say that I agree entirely with what was said by my hon. Friend the Member for East Aberdeenshire. I would also reiterate that I do not believe there is any fundamental divergence of opinion between the views of, for example, my hon. and gallant Friend the Member for the Isle of Ely (Major Legge-Bourke) or my hon. Friend the Member for Chigwell (Mr. Biggs-Davison) and those of the large number of hon. Members on both sides of the House who subscribe to the two Motions and Amendment on the subject which have recently been tabled. I believe that Commonwealth trade and European trade must be regarded as complementary and not antagonistic.
  Major H. Legge-Bourke: As my hon. Friend has referred to me, might I make this clear to him and the House? The Amendment to his Motion on the subject of the common market was not meant to imply that if the common market were set up we should have nothing to do with it. It was meant merely to indicate that there is a better answer than a common market which we ought to try to bring about.
  Mr. Rippon: I appreciate my hon. and gallant Friend's point. I think it illustrates my point that it is really a question of a difference of method rather than a difference of a fundamental nature.
  Since the tabling of the Motions and the Amendment, something has happened—I do not suggest that there is any significant connection between the two events—which has somewhat altered the situation. It is the recent meeting of the Council of Ministers of O.E.E.C. in Paris, at which it is perfectly clear, from the important statement which the Chancellor made this afternoon, that a number of decisions have been reached which take us a long way further towards the principle of greater liberalisation of European trade. I think the Chancellor's statement will be generally acceptable to hon. Members on both sides of the House as representing a significant step in that direction.
  What I think that we should all be agreed on—my hon. and gallant Friend the Member for the Isle of Ely and others—is that whatever the outcome of the discussions and the decisions at O.E.E.C, which will be pursued by the working party which is to study the common market project with a view to getting an association between the Messina countries and the other O.E.E.C. members, it is essential that any action, military or economic, which this country takes should be based on the full approbation and co-operation of our partners in the Commonwealth and Empire. I do not think that there will be any divergence of opinion on that.
  That is why I was concerned, as I think were a number of other people, at the communiqué which was issued after the recent meeting of the Commonwealth Prime Ministers in London. It merely said that
  "They were informed of current proposals regarding the political and economic activities of the North Atlantic Alliance and the
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  development of closer economic co-operation in Europe."
  It appeared to many people that an opportunity had been missed and that no fresh initiative had been devised to reconcile the interests of this country and the Commonwealth and with those of Western Europe in the field of economic co-operation. However, although the Chancellor could not go beyond the communiqué in the answer which he gave to me this afternoon, he indicated that there were discussions, and I think we can assume that Her Majesty's Government, as at present constituted, will carry the Commonwealth with them in all the stages of the development of economic co-operation in Europe.
  It may well be that, although there will always be scope for conferences of the Prime Ministers of the Commonwealth, there is also a need, which had been expressed by Mr. Menzies among others, for more functional conferences, political or official, on specific matters, such as this question of the liberalisation of trade in Europe.
  We must proceed together. While I am sure that we must strengthen the machinery that we have for securing the co-operation and good will of the Commonwealth in these matters, I am sure that there is no fundamental conflict of interest between the aims of those who urge an expanding Commonwealth and those who believe that, in the changing situation of the modern world, we must participate on an increasing scale in the promotion of Western European unity in the military, political and economic spheres.
  7.45 p.m.
  Mr. Percy Daines: A phrase which has been very much used in our debates is "elasticity and the new flexibility". I propose to relate what I say solely to the Prime Minister's speech, and I hope that the quotations which I use are representative and fair. I listened, as I am sure some hon. Members did, with great care to the right hon. Gentleman's speech. After all, he is the Prime Minister of this country, and what he says counts for far more than what the Opposition says or what some sections of his supporters say. He speaks for England. Therefore, I treat him with respect, and I propose to analyse his speech.

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  As to his first argument, the right hon. Gentleman referred to the deterrent—a nice, fashionable word—effect of the H-bomb in that it can blow mankind to pieces. He said:
  "I call it the ultimate weapon, since it has power enough to destroy the human race…"—[OFFICIAL REPORT, 23rd July, 1956; Vol. 557, c. 38.]
  The right hon. Gentleman implied that the weapon was so terrible that it could not conceivably be used by ourselves, the Americans or the Russians.
  Let us examine that. I do not disagree for one moment about the destructive power of the H-bomb. I accept what the scientists tell me, that human society could be blotted out in these islands, in Western Europe, in most parts of America and in most parts of Russia.
  Let us examine it in the light of recent history. Let us take the case of the monolithic state of Germany under Hitler. We now know, however different it may be from what we were told by our propaganda at the time, that when Hitler gave an order, even if the general at the front knew that he was sending his armies to their death, it was carried out. In the case of a monolithic State with a paranoiac type like Hitler at the top, is there anyone who can really say with safety that if he had had the H-bomb or the atom bomb twelve months before the end he would not have used it? These are cold hard facts, and facts that we have to face. Take Russia—
  Mr. Frank Tomney: Khrushchev.
  Mr. Daines: No, let us take Stalin, who also had paranoiac tendencies. It is interesting to note in passing that Tito is quoted in yesterday's Daily Telegraph as saying that Stalin was most likely murdered. If Stalin in the last few years of his life had faced a challenge to his rule and power and that of the party he controlled, is there anybody who can say with safety that the H-bomb would not have been used by him in those conditions?
  Therefore, however terrible this issue is—I admit all its horrors and terrors—it it no good if we try to avoid the truth. We must face the truth and take account of it in our reckoning. The simple fact is that what happens inside Russia concerns us very much. I do not believe it is
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  possible for the H-bomb to be used by the authorities within this country without some measure of agreement at the top. I believe the same is true with the diversification of power in the United States. The distinguishing feature of democracy is not only that it is representative, but that its power is diverse and there are checks and balances. Can anybody see these checks and balances in monolithic Russia today?
  The Prime Minister apparently drew many deductions from the Twentieth Congress, but did not that Congress accept Khrushchev's revelations just as it accepted, worshipped and deified Stalin a few years ago—as Khrushchev himself also did? What authority and what trust can we place in a Russia where those conditions still operate? I freely accept that to talk of political Parliamentary democracy in our terms for all other countries is sheer moonshine, but what trust can we have until power is diversified through the checks and balances that work in a democracy?
  When the Prime Minister inferred that there was some tinge of democracy in Russia because of the so-called collective leadership, I very much wondered. I remember making a speech some time ago—I do not make them often, and then generally at ten minutes to nine, so that I am somewhat limited—I dealt exhaustively with this process of collective leadership and put forward the theory that on analysis it was far more likely that the Russians agreed not to bump off each other than anything else. When they faced the threat of a new Stalin emerging—because Beria was the potential Stalin—they ganged up and agreed to work the collective leadership principle. That means that a mere handful of men are determining the whole fate of Russia and the whole shape of her policy in the world. There is no accountability to Parliament, or anything that looks like Parliament, or an assembly of the people.
  The Prime Minister said that because of the rise of the demands of the managerial, technologist and scientific elements in Russia, another new element for progress and liberalisation had come. Is that really true? Does that stand the test of analysis? Are not all those men—if not all, enough for control—integrated in the party in any event? What we are seeing in Russia is the

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  rise of State capitalism with a new bourgeoisie with power based, not on ownership, but on political power and with a vested interest in maintaining the monolithic State.
  Mr. Tomney: Does not my hon. Friend recall that seven of the present leaders were in the Praesidium with Stalin and Beria, so that the top mechanism has not changed?
  Mr. Daines: I agree with my hon. Friend. That is what I am trying to say, and I thank him for the support which he has offered me.
  The problem of Russia is not a secondary matter. We must spend as much time as we can examining it and trying to understand it. It is difficult, because the ordinary methods of expression and public opinion do not operate. With all respect to the Prime Minister, not only I but most students of Russia profoundly disagree with his conclusions.
  In the great storm and great publicity which arose over the State Department's publication of Khrushchev's speech—and I say this emphatically and chance the criticism—with the exception of the statement about Kharkhov there was not a single fact not known to me, not because I am possessed of any profound insight, but because it had been there for many months for any student of Russia to read if he got down to the facts.
  To finalise what I want to say on this subject; in Russia today we have the so-called collective leadership with the Army playing a far bigger part and exercising far more power than it did in Stalin's day. We have a neutralisation in power with the M.V.D. very much down. We have to watch the situation carefully, because I am afraid that unless we know what is happening inside Russia we cannot appreciate her external policy. In other words, if we know what is really happening inside Russia we have the key to its external relations.
  Let us examine some of the optimism of the Prime Minister and also of my right hon. Friend the Leader of the Opposition. When I listened to my right hon. Friend's praises dealing with the changed attitude in Russia and how new winds were blowing—that is what he inferred; he mentioned Austria and the change in Russian policy—I automatically equated with that the situation of
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  Russian interference in the Middle East. When we blow away the dances, the speeches and the dinners and we equate the so-called give-away in Austria with the offensive action in the Middle East, is there a single concrete action which the Russians have taken which can justify that optimism? They have given nothing.
  Last week Bulganin told the Polish Government and the Polish people about criticisms in their Press and, with all the other inferences, I am beginning to wonder how much the wind is blowing. The position in the satellites is exactly the same as in Russia. There are cases where we know more about the satellites than we do about Russia, but when the party starts loosening up and reaching any form of liberalisation, when it gets to the point where the party's power is threatened, the party automatically clamps down. It must do so. Once the process of freedom starts, particularly with a people who have known it, it becomes like a raging fire which cannot be controlled. What we are seeing, as I have said, is a rise of a new State bourgeois class whose power is based upon political action and which cannot afford to indulge in liberalism as we understand it.
  I want now to deal with the subject of competitive co-existence. How I hate this political paraphrasing and thinking that one solves the problem if one coins a new phrase. It is something like doctors who think that if they put a name to the disease that cures it. Now we are in for competitive co-existence and economic co-existence. What does that mean? Does that mean that we are to have a game of giving away and competing with the Russians to see who gives most? Or does it mean that our economic help and development will have a political purpose and a political aim—that is the substance of what has been said from the Front Bench about the Middle East, whether my comrades on the Front Bench like it or not.
  We cannot avoid political direction unless we waste it. There may not be tags, but there must be political emphasis. The Russians have no illusion about how they apply political aid. I felt a long while ago—even before the Aswan Dam announcement—that they were overextended. Of course, they take political

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  action; they get the maximum propaganda from the maximum political action. Equally important is the fact that they are beginning to use this method in countries which are ripe for a tiny disciplined Communist party to get the maximum results.
  I agree with my right hon. Friend the Member for Blyth (Mr. Robens) that the bulk of our trouble in the Middle East and the Far East is due to the poverty of the masses, but there is a new factor which is fast becoming of great importance. There is a new power-hungry élite at the top, educated in the West, but which has seen the Communist party and what has happened in Russia and how economic power can be based upon political action, and it is going over to the Communist party. Communism has nothing to do with Socialism and the working class; it is a technique of power, if only we could see it in its true reality. I accept the fact that the first people who have to go to the wall are the Social Democrats.
  I want to quote from the speech which the Prime Minister made yesterday. He said:
  "The anomalous position of Communist parties in so many countries owing allegiance to a Power outside their own frontiers, has done nothing but harm. Whatever, in the past, Russian leaders may have thought of it, judged as a world policy it never did Soviet Russia any good.…"—[OFFICIAL REPORT,23rd July, 1956; Vol. 557, c. 41.]
  My understanding of that is that Communist parties outside Russia have done more harm than good to her. Let us examine the truth and see what happened in the immediate post-war years. It is true that the Russian Army was upon the frontiers of Hungary and Czechoslovakia, but it is equally true that the Communist party inside those countries was the tool which effected Russia's purpose. In both cases, it was a clear instance of Communist parties acting for the Russians, and, to a greater or lesser extent, the same thing happened in all the satellite countries.
  It is simply not true to say that Communist parties have not been an advantage to the Russians. My right hon. Friend the Member for Ebbw Vale (Mr. Bevan) stated—I believe that I am quoting him fairly accurately—that Communist parties are not political parties but organised conspiracies. That is quite true. Nothing
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  is more misleading than to look at the Communist parties in terms of the piece that is above the surface. It is more likely to happen that the visible Communist party above the surface is, like an iceberg, indicative of a far bigger chunk underneath—an underground movement which infiltrates into the trade union movement and also establishes organised sabotage and espionage groups.
  That brings me again to the Prime Minister's speech, and to the question of the pay-off which Communist parties have delivered to Russia in the past. I am sorry if I am going on too long, but I am determined to say this, because there has been far too much sloppy thought in this debate, and it is just as well for us to have a spot of straight speaking—to which I am never averse. I will take another example of the way in which Communist parties have paid off within the field of espionage.
  It is easy to jest and say that somebody has a Communist under the bed every time he goes to sleep, but let us consider soberly what espionage has done. Fuchs was recruited by the Communist party; Alan Nunn May was recruited by the Communist party. Pontecorvo was a member of the Communist party and disappeared to Russia, and there were all the Gouzenko disclosures. I do not want to go into the sidelights of the Petrov affair. The fact is that America and Canada in the mid-'forties were honeycombed with Communist cells. We should bear this fact in mind before making anti-American jibes about the way in which they deal with Communists. Anyone who has studied the Gouzenko disclosures knows that in the United States armed services, most of its economic activity and even its governmental activity, right up to the White House, had a definite web of Communists within them.
  I make this point not merely to bring it up again, but in order to show that when the Prime Minister says that Communist parties have not paid off, he overlooks the facts, and that every one of the individuals to whom I have referred was recruited by the Communist party.
  It is highly probable, and a perfectly safe assumption to make, that the information derived by the Communists from Fuchs, plus that obtained from the Americans, put Russia in a position to manufacture the H-bomb, and that its

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  production might at least have been delayed for a number of years but for that fact. Right through every free country where Communists can operate in the name of democracy they have the worker-correspondent system. Their job is to feed back to the Russians every item they can get in regard to new industrial and technological processes, and the progress made in them, in order to help to equip the Russian system. All this is done through the Communist party.
  The plain fact is that we are facing something entirely new in history; something which transcends all national boundaries. We cannot push it back into a safe little enclave. I agree that the Russians have given the world struggle a new emphasis, both economic and social, but they are equipped with a civilian army in every country which pays them the maximum dividends.
  If anybody challenges me about that, I recommend a careful study of the vast amount of material now available in connection with the work of Communist parties. What simply horrifies me at times is the fact that when we face a spot of industrial trouble which is deliberately organised and fomented by the Communist party—and I exclude completely the present strike—it is almost impossible for anybody to get up and say so. There is virtually a conspiracy of silence about so many of these problems which almost makes one feel sinful to state the truth as one sees it.
  But I believe that it is the duty of every hon. Member to tell the truth as he sees it, whatever may be the party line-up. I can imagine nothing more disastrous to the future of our country and of the world than for members to say, "How can I benefit my party, and how can I chuck bricks at the other side in a matter of this sort?" What I have to say about the Prime Minister's speech I say to the best of my ability, and, I hope, objectively and sincerely.
  Having taken some time in giving my views of the Prime Minister's speech, I now want to deal with what is not in the Prime Minister's speech—which worries me much more. I am not unduly worried about Russia. I have lived with and studied these problems ever since 1920. I read everything I can about it,
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  and I hope that I have some understanding of it. It has never unduly worried me. I am worried far more about what is happening to us than what is happening to the Russians and what they control.
  Yesterday the hon. Member for Woolwich, East (Mr. Mayhew) dealt with this subject in his very pleasant and light way. I propose to deal with it much more heavily. Despite all the pretty words which have been said during the last two days about the necessity for maintaining N.A.T.O., there is an amount of feeling expressed which causes me to think that some Members would welcome the disintegration or—what is the best word to use, I do not like "emasculation"—the weakening of N.A.T.O. I rule out my comrades who approach all these problems from the point of view, "My Russia, right or wrong." When we faced overt action by Stalin, when we could not escape the logic of events because of what happened in Czechoslovakia, we "ganged up". The Americans came in and we rapidly began to build up a military machine. Now we are beginning to split apart; this is disastrous until we can be sure that we can accept that the honeyed words of Russia match up to their policy.
  I also have an unpleasant feeling that underneath what you, Mr. Prime Minister, were consciously thinking and saying was a political and economic subconscious which was concerned and disturbed about the internal condition of this country. It is all very well for the Leader of the Liberal Party the right hon. and learned Member for Montgomery (Mr. C. Davies) to talk glibly about cutting £500 million, and it is all very well for other of my comrades to say that we must do this and that before the Tories do it. That is wrong and dangerous, and it may land us in a position where you, Mr. Prime Minister, must also be careful—
  Mr. Deputy-Speaker (Sir Rhys Hopkin Morris): I do not wish to interrupt the hon. Gentleman, but he must address his remarks to me.
  Mr. Daines: I am sorry. May I say to the Prime Minister, through you, Mr. Deputy-Speaker, that he had better be guarded about his political and economic subconscious so far as home affairs are concerned and ensure that it is not warping his judgment about what is necessary in the interests of this country.

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  I am not sure whether we are on the right lines so far as Europe is concerned. I believe that we must face the possibility that in the next decade there will be in West Germany a repetition of what happened in Czechoslovakia. The noble Lord the Member for Dorset, South (Viscount Hinchingbrooke) is not in his place in the Chamber. But in a letter to the Daily Telegraph, he said something which I think represents a point of view that ought to be considered. He said that Russia has no material aims in Europe, and is satisfied. It may be that that colours some of the thinking of the Prime Minister and the Foreign Secretary. It it highly probable that it is palpably false.
  If we study Lenin's policy, at the beginning, his whole idea of the success of the Russian Revolution was based on the assumption that Germany would go Communist and come into the Russian orbit. That was the position then, and I assert that it is still the Russian objective. I agree with the hon. Member for East Aberdeenshire (Sir R. Boothby), who said that when we talk about German unity we are talking nonsense, because the Russians do not intend to agree. Of course he is right. The Russians will agree on their terms, or alternatively, under conditions where they know they can obtain complete control of the German Ruhr. The noble Lord had better look up his history and examine the hard facts, because that is the central core of Russian policy in Europe. They have to get control of the Ruhr, and it is our task to see that they do not do so.
  Mr. William Yates: Is the hon. Gentleman suggesting that the Prime Minister of England was paying more attention to our country's economy and was going to cut down our defensive arms because of the internal condition of our country?
  Mr. Daines: I did not say that. I carefully said that I thought it was the effect of the political subconscious of the Prime Minister. It is always fascinating when listening to a speech—and I listen to a lot of speeches—to ask oneself why the Member is making such a speech—not only what he is saying but why he is saying it—and so a reference to the subconscious is not out of place.
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  I wish now to come to my final point. I have dealt sketchily with N.A.T.O., and I now wish to come to by far the most important aspect of this problem. A little while ago I said to the hon. Member for Coventry, East (Mr. Crossman) that the strange thing about this debate was that I had not heard a single reference, or rather an extended reference, to what is happening in America today. Of course I mean the United States. I agree that it is an extremely difficult subject to speak about just before the Presidential and Congress Elections, but I intend to say something, because I think our debate would be unreal unless we face the situation.
  With some other hon. Members I was fortunate in being able to go to the United States on a somewhat extended tour—I say "somewhat extended." In all the contacts I made, both with the ordinary people and at State level, I could not escape the fact that in the United States there is a very powerful and growing feeling, if not of isolationism, of neo-isolationism, and that is a most disturbing fact. I believe that, in the long run, it would not only be a disaster for the West, but we should play into the hands of Russia and give them complete control of Europe if we facilitated a situation in which America went out of Europe. Particularly when I study the statements made by Mr. Dulles and Admiral Radford, I can see a clear indication that today the Pentagon and the American Government are seriously considering a policy of neo-isolationism; of retiring behind an H-bomb screen.
  Look how popular are the cries, "Bring the boys back" and "Cut economic aid." These cries are already being uttered. It is argued that military aid could be cut and the job could be done effectively with the H-bomb. I believe that the factor which more than others made possible World War II was the withdrawal of America from Europe.
  Let me finalise. I have been critical not only of the Prime Minister and of the policy of the Government as expressed by him, but, by inference, of some of the Members of my own Front Bench. We must have hope in circumstances of today, but hope must be based upon facts. That hope can be justified only when the free nations of the world, including the United States of America,

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  accept the full responsibility of their economic power. We must again take the initiative and not always fall back in face of those whose long-term objective is to destroy everything for which we stand.
  8.21 p.m.
  Mrs. Evelyn Emmet: I have hesitated for some time about intervening in a foreign affairs debate because I have realised that in this subject a little knowledge is a very dangerous thing, and I know just enough to realise how little I know. Wishful thinking in foreign affairs is very risky, especially in connection with the United Nations, which has already achieved some very excellent and concrete results. Its scope in the future seems to be full of promise but it certainly is not at the moment a guarantee for peace, and it could not be used as a substitute for local defence systems until there is a greater degree of reasonableness among the nations.
  Those who sit round the committee tables at the United Nations—I have seen them myself—are still at school. They cannot always get on with each other and they are at different stages of development. The democratic nations are still in the minority. When concerted action is possible, it should be used to its utmost, because success will strengthen the organisation.
  I turn to two points which have not been raised in the debate. Mention has been made of almost all our foreign problems, from Germany to China. I would draw attention to the tools which are at our disposal in carrying out our foreign policy, and especially to the changed background against which our Foreign Office and our foreign missions have to work. Have we really become aware of how changed those circumstances are? In my father's day, at the outbreak of the 1914–18 war, the embassy at Rome consisted, except for my father and his counsellors, of a staff of seven with two chancery clerks.
  In those days when our ambassador expressed the policy of his country, he knew, and his hearer knew, that it was reinforced by the Navy, the Army and the Air Force of the British Empire. That carried weight in any proposal
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  which he put forward or any undertaking that he gave.
  During the period of peace after the 1914–18 War, and until the next war, heads of State and the Secretaries of State for Foreign Affairs were always in touch either personally or by telephone or cable. That constant contact with each other diminished the influence of the heads of missions. As the influence and the importance of the embassies declined, so did their staffs increase. Now, when I visit some of the missions, I wonder how the immensely swollen staffs can find enough to do. I have a secret feeling that they collect statistics which are sent to London and are pigeon-holed in the Foreign Office.
  One of the dangers of the very swollen staff is that the younger members, instead of integrating their lives with those of the people in the countries to which they are accredited, may remain in their little English colonies and not achieve the purpose of their appointments. I should like the trend which started during the 1914–18 War reversed, embassy staffs streamlined and their influence greatly increased.
  We are entering a new era in diplomacy when missions, though they may have lost the important rôle of taking decisions on the spot, will fulfil a tremendously vital purpose in putting forward our Western way of life. Though it is true that they have not the military backing that they used to have, they have nevertheless a tremendous responsibility on their shoulders to represent their country's way of life better than they have ever done before.
  The hydrogen bomb has turned the threat of a hot war into the threat of a cold war. We have heard this afternoon and yesterday that the clash of ideologies will finally be resolved in men's minds. If modern diplomacy is to fulfil its purpose in easing tension and increasing understanding among the nations it will have to learn how to deal with psychological warfare and to perfect its own. I wonder whether the Foreign Service is geared at the moment to this new type of activity.
  The hon. Member for East Ham, North (Mr. Daines) reminded us forcefully of the tremendous skill of the Russians in subversive diplomacy. How far is the recruiting board at the Foreign Office

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  taking that new situation into consideration when choosing candidates? As this is an ideological battle, I suggest that brilliance of intellect may not be as useful as integrity of character; it is certainly quite useless without the latter.
  In an ideological conflict in which there is intelligence balanced on both sides the personal qualities will tip the balance eventually. Therefore, I feel that unless we have first-class tools to carry out our foreign policy, we may fail in a purely executive capacity. The time has come when those responsible for recruitment to the Foreign Service should look very carefully again at the duties which those men will have to carry out.
  Another point which I wish to make which I think has a bearing on the international situation has not been mentioned and probably has not even entered the minds of hon. Members. The hydrogen bomb and total warfare have attracted the attention of women to foreign spheres. Hitherto foreign affairs has been a rather glamorous and mysterious profession carried out entirely by the male sex, generally wearing black hats. Total war has brought the attention of women to the international situation. Probably they feel that if they run the risk of being involved in total destruction they may as well see what is going on and perhaps have a share in the responsibility.
  I think that is important from this point of view. Women's inclination is naturally for peace; they are not the fighting sex. It would be very dangerous under present circumstances to leave part of our troops, as it were, a prey to subversive, extreme Left peace propaganda. That has happened before in our country. If we leave people uneducated in what lies behind foreign affairs that may happen again. A country which takes the trouble to bring its women into the know-how of foreign affairs will gain enormously in strength.
  I think it is especially important to support those women who have come forward in public life in countries such as Germany, where before the war they took no part in public work, The effect of leaving the men entirely to their interest in government and of the women being kept entirely to the kitchen may have had a very definite bearing on the ultra-militant point of view of the German man.
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  In the last week or so there has been a conference in London of eminent women from six countries of Europe. They are anxious to maintain contact in their fight at home against Communist penetration. It was a most interesting conference. We think it was a most successful beginning for further work.
  I hope that in our own country the importance of educating women in foreign affairs will be increasingly appreciated, so that we may use all our resources in this uneasy period of coexistence which we hope will finally resolve itself into the superiority of the free way of life.
  8.32 p.m.
  Mr. G. A. Pargiter: I hope to be brief in order that other hon. Members may have an opportunity of speaking in the debate.
  The Prime Minister received a great deal of congratulation yesterday for his opening speech. He gave one the impression of being able to swim along very easily with the tide. That general impression is one we often have of the Prime Minister; so long as the tide is going nicely he can swim with it, but he never gives the impression on behalf of the party opposite that they are able to swim ahead of the tide or to use the initiative which should be with them. I am sorry to say that that remains the position now. The Prime Minister told us that things are moving in our favour and that with care and by going steadily we may get somewhere, but he has not given much indication of where we are likely to get.
  References to disarmament yesterday and today showed clearly that it is time we had an indication from the Government that they really have a policy of their own on these problems and on where we ought to go. It is not good enough to keep shifting their ground. Every time a proposal comes up the Government appear to shift their ground. Many technical arguments have been used to explain why that is necessary, but they do not appeal to the man in the street in the least. All he sees is that proposals are put forward and are given headlines. Everyone says, "Those are the British proposals and the Russians say something like it". Then it would appear that our Government say, "That is not quite what we meant but something different". It all starts over again.

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  That kind of thing has been going on for far too long. It reminds me of the position which we were in before the war. The League of Nations had a long conference on the problem of disarmament. The Russians came along and said, "Of course, let us disarm ". That was regarded as a terrible piece of sabotage and the whole disarmament procedure broke up. Today we seem to be heading for the same sort of situation. Russia is the villain of the piece, and is putting forward proposals for disarmament which for some reason are not acceptable to the Western Powers. There may be very good reasons for that.
  I can understand very well the point of view of the hon. Member for East Ham, North (Mr. Daines). The last thing on earth which would suit him would be any measure of disarmament. He can see no possibility of co-existence at all, but merely that we have to go in for an all-out attack on Communism. We must understand that so far as the Communist countries are concerned, once a régime is properly and firmly established it never gets shifted from without. It can only be shifted from within, and only shifted from within very largely of its own volition, when there is a general feeling of confidence and stability, and tyrannical and dictatorial régimes tend to ease themselves. That has proved true in the past, and will probably prove true again. I think that is the real reason behind the present changes which we are witnessing so far as the Soviet Union is concerned.
  I want to deal for a moment with the problem of East Germany. It is rather interesting to draw a parallel between the position in Germany and the position in Vietnam. According to our very solemn agreements, there should be an overall election taking place there at the present time. I think that this was the month when the election should have taken place. Vietnam said: "We are not having any election. We cannot possibly win a free election and therefore we are not going to have one". So the Powers who agreed on this have obligingly said, "We will not bother to have an election; we will put it off." I think that the Eastern bloc might be given some credit for agreeing to that in the conditions under which they have agreed to it.
  When it comes to the question of having free elections in Germany, East
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  Germany would probably say, "If we had free elections now of our 17 million people against the 70 million in West Germany, we should not have a chance of winning the election." We would regard that as thoroughly reprehensible. Is it equally reprehensible that Vietnam is not to have elections because it cannot possibly win? Because that happens to be in our favour, we are acquiesing in the situation in Vietnam by endorsing the stand which it has taken.
  We can only go forward in so far as we are prepared now to proceed on the basis of co-existence. We have not to endorse what the Communist States do but we have to live with them. If we are to have disarmament we shall have to learn to live with them, and in getting disarmament we have to recognise that this country depends, from an economic point of view, very considerably on the question of reaching agreement on disarmament.
  The question of conscription is closely tied up with the need at the present time to use our manpower to better advantage. Whether that will remain the case under the Government's policy of creating unemployment is another matter. All this seems to me to be tied up with the general question of agreement with the Communist Powers. I hope that we shall learn something of the Government's intention. I should like to hear more of their intention with regard to the testing of atomic weapons, particularly hydrogen bombs.
  The Prime Minister was applauded when he said that we were going forward with the suggestion that they should be limited. It was suggested by one hon. Member on this side of the House that we certainly were not going to try to get agreement until after we had exploded a hydrogen bomb ourselves. That did not draw any protest from the Government Front Bench. I should like to know whether that is the position and whether, if agreement is possible tomorrow on the limitation of hydrogen bombs, the Government will say, "We are prepared to agree to this, although we have not exploded a hydrogen bomb."
  Personally, I should also like to hear from the Prime Minister that, whether agreement is reached or not, we shall say that it is high time that somebody took

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  the initiative and that whatever other Powers may do we shall not explode hydrogen bombs. That would be giving a lead. It would not be very popular, perhaps, in many ways, but nevertheless it would be a lead on one of the most vital questions before us.
  I turn next to the problem of trade with China. We are in grave danger of making precisely the same mistake about China as that which we made about Russia in the period immediately after the Russian Revolution. At that time we endeavoured to destroy the Revolution, we refused to trade with Russia, and in the end we threw her back on her own resources, as a result of which she pulled herself up without our help. Many of the problems which we now face are becoming more and more acute because of our failure then to recognise the new system growing up in Russia and to trade with her.
  I gather that in the last few days China wished to place an order in this country for Land Rovers. The Land Rover is a vehicle peculiarly suited to agriculture, especially in rough country where the roads are bad. It may, of course, be used for other purposes. I understand that the Board of Trade blandly refused a permit for the export of Land Rovers. In view of the present conditions in the motor industry, I should have thought that we ought to be stretching ourselves to create trade in that direction. That is not the way in which we shall maintain peace with China.
  In my view, it is time that the Government looked at the situation, not solely from the point of view of the Board of Trade, but from the point of view of overall policy. They must decide whether we are to trade with China at present, when trade is available, or to wait until Russia has given China all the economic help she needs, and until she has been able to develop her own industry and no longer needs our help. We shall then rub our hands in despair because trade opportunities have been lost. I suggest that it is high time that the Foreign Office began to look at this problem in the light of our economic needs.
  Another important question affecting China is disarmament. We are debating the question of disarmament and the number of troops which China should
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  be allowed to maintain. It is a most peculiar situation that at the same time the United States has gone firmly on the record with the statement that China is not to be admitted to the United Nations. It is nearly time Britain put her foot down and stated that, whatever America may say, it is time that China was admitted to the United Nations and given her proper place on the Security Council. How can we negotiate a disarmament agreement affecting China unless we take her into consultation and bring her into the community of nations?
  These are vital questions upon which we have heard nothing from the Government. I hope—although it may be a faint hope—that we may hear something in the winding-up speech tonight which will give us a little more cause for hope and confidence in the future than anything which we have heard so far.
  8.44 p.m.
  Mr. F. M. Bennett: I think the hon. Member for Southall (Mr. Pargiter) was more than usually unfair to the Prime Minister in his opening remarks when he said that the general consensus of opinion yesterday had been that the Prime Minister was all right as long as he was merely drifting along with the tide. To be fair, that was not the reception which my right hon. Friend's speech received from the Leader of the Opposition this afternoon, or from a number of other hon. Members opposite.
  Whether we are Conservatives or Socialists, I should have thought that there is one matter on which we had no quarrel—and I say this in no form of obsequious flattery: it is that if the Prime Minister has shown himself during the last few years quite exceptionally a leader, it is in taking initiative in the solution of international disputes and trouble. Indeed, I have sat on these benches and listened on occasions—for instance, on the occasion of the Geneva meeting which resulted in bringing fighting in Indio-China to an end—to fulsome tributes being paid by hon. Members opposite to my right hon. Friend, not for having drifted with the tide, but for the initiative which he had taken. The same applied to Trieste; tributes were paid to the initiative of my right hon. Friend, the then Foreign Secretary, which resulted in the settling of a problem which

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  had proved intractable—I am not making a party point—for years before the present Prime Minister took over the Foreign Office and while the Socialists were in power.
  Thirdly, out of the many examples that one could choose, there were my right hon. Friend's initiative and efforts which resulted, after the collapse of E.D.C. in the entry of Germany into the comity of Western nations. Hence, I certainly do not think that the hon. Member has been fair in asserting that the Prime Minister has drifted with the tide. In the last five years many more disputes that previously proved incapable of solution have been solved than were solved during the whole previous six years under another Administration.
  Then again, it was not fair of him to make a comparison between our attitude to free elections in Vietnam and Russia's in Eastern Germany. This country has done nothing to persuade Vietnam not to have free elections. So far as I understand, all our advice has been to the effect that the Vietnamese should fulfil the Geneva Agreement. To say that in the matter of free elections the Soviet Union is behaving to East Germany as we have behaved towards Vietnam is a parody of the truth.
  Mr. Pargiter: May I point out that we are acquiescing in not having free elections that should have been held?
  Mr. Bennett: I do not know whether the hon. Member wants force to be used. After all, we cannot force people to have free elections, but that is an entirely different matter from the Russians' behaviour in flatly refusing in any circumstances to let the East and West Germans have free elections. However, I shall not pursue any further the many discrepancies between fact and fiction that there are in what the hon. Gentleman has said.
  Like the hon. Member for Rugby (Mr. J. Johnson), I shall make no attempt to make a great tour de force of the world. I want, instead, as he did, to talk of one specialised matter. Great stress has been laid in speeches from both sides of the House on the dangers to world peace that lie in the continued division by military force of various disputed parts of the world. We have heard speeches about
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  Korea and the continued dangers that flow from the artificial military barrier drawn across that country. We have heard of Indo-China and what is happening in Vietnam and Vietminh and the dangers coming from artificially-created divisions there. On both sides, too, there has been quite a lot of discussion about East and West Germany and how the present division of Germany does nothing to contribute to peace and stability in Europe—whatever may be our individual ideas about its solution.
  Yet another part of the world, where a similar state of affairs continues, receives no notice at all. In view of the constant and continuing tension in that area, I am always amazed that more is not said about it. I refer to Kashmir. I suppose that because both the contestants are Commonwealth countries—and I can well understand the reasons—there is a tendency to play down this dispute, almost to hide our heads in the sand and not to appreciate how serious that dispute is. I believe that just as other parts of the world that have been mentioned have the seeds of future disaster, so we have the seeds of future disaster in Kashmir at the moment.
  Quite apart from the fact that because of the tensions which exist between two under-developed countries—India and Pakistan—far too high a proportion of their national incomes is being devoted to arms because of the need to maintain this artificial frontier in Kashmir, at any moment we might waken up and read in the newspapers that actual local warfare has broken out.
  As a humble student of political affairs, it has always seemed to me that in most international arguments there is a good deal of right on both sides. The difficulty is to know where the real right lies. But, whatever individual mistakes of policy may have been made, I submit to the House that in Kashmir we have a pretty clear case for us to decide which side is right and which is wrong there. The Pakistanis at this moment are burning with resentment about this affair. I want the House to appreciate how many of them have expressed themselves to me and how sincere they are in what they think. They say that when the Indian sub-continent was divided there were various grounds on which the princely States went to one side or the other.

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  There is, first of all, the question of religion—whether the Moslems or the Hindus have a majority in the State. There was a question of the contiguity of the length of frontier attaching to one or other of the two great Powers there, and which had the longest. There was the question of strategic considerations and what is really necessary for basic strategic reasons, and there are the economic considerations involved. If one is a Pakistani, and one knows that 85 per cent. of the population of the State of Kashmir is Moslem, if one knows that there is a continuous 600 miles of frontier with Pakistan and only 300 miles of continuous frontier with India, when one knows that Kashmir forms a natural mountain barrier for Pakistan, and if, on top of all that, one knows that the only two roads for trade purposes go from Kashmir into Pakistan and that out of the five rivers that form the very life-blood of Pakistan two rise in Kashmir, then one ought to be able to understand, even though as far away as we are here, why they feel as resentful as they do about it.
  When one has done that, and one looks further at what has happened in two other particular States, we see what happened in the case of the little State of Junagadh, where there was a Moslem ruler with an 85 per cent. Hindu population.
  That Moslem ruler tried, as the Kashmir Hindu ruler tried to do to India, to accede to Pakistan legally against the supposed will of the majority. The Indian argument in Junagadh was that because the ruler, representing only a minority of the people, decided to accede to Pakistan, that could not be tolerated, so Indian troops marched in, a plebiscite was held, and there being a Hindu majority, they decided to upset the ruler's decision and go into India. In the case of Hyderabad, where again there was a Moslem ruler and a Hindu majority, the Moslem ruler also decided not to accede to India but to remain independent. As we know, Indian troops marched in and Hyderabad was compulsorily ceded to India.
  In view of the facts which I have outlined, I think that in this country we ought to start now to pay a little more attention than we have done hitherto to the solution of this problem. I wish to say something about the attempts at settlement
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  that have been made up to now, and then offer a brief suggestion as to how we can go on from here. At the Commonwealth Prime Ministers' Conference in 1951, there was agreement in principle that a plebiscite should take place, and the only outstanding question in 1951 was how that plebiscite should be carried out. There were several suggestions as to how it should be supervised.
  One suggestion put forward by the Prime Ministers at that time was that Indian and Pakistani troops should be withdrawn from the positions they then held, and that neutral Commonwealth troops should move in. That was accepted by Pakistan and turned down by India. The next suggestion made was that Indian and Pakistani troops should divide the functions of supervising the plebiscite between them. That suggestion was accepted by Pakistan, and it was that the majority of the troops should be Indian and the minority, about one-third, should be Pakistani. India turned down that suggestion, even though her own troops would be controlling the majority of the country, while Pakistan, once again, accepted it.
  There was the final suggestion that both Indian and Pakistani forces should get out and that a force to control the country during the plebiscite should be a locally raised force under the United Nations administrator. That suggestion also was accepted by Pakistan and turned down by India. In 1948, the matter had already also moved into the world forum of the United Nations. In the Security Council in 1949, in 1950, in 1951 and again in 1953, similar recommendations were brought forward that this question should be decided by plebiscite. In every case Pakistan agreed and India failed to agree to the plebiscite being carried out. Our position today is thus a complete and dangerous stalemate.
  I wonder how many hon. Members know that the former Prime Minister of Kashmir, Sheik Abdulla, who was originally a supporter of the Indian cause but who later, in 1953, showed himself to be too unenthusiastic to suit the Indian Government, a man who, although a Muslim, went forward at the beginning with the idea that Kashmir should join India, was arrested in 1953 and is still in a cell in Kashmir, having been there for three years without any trial or any

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  charge being brought against him. I would in all friendliness say to the Indian Government and to the Indian Press, which has so often criticised various aspects of British Imperial policy, particularly when one or other Government has had to arrest some colonial extremist leader or deport him, that if they are to make those sort of criticisms, they should wear something of a white sheet.
  I wonder what their and world criticism would have been if we in this country had not just deported the Kabaka or deported Archbishop Makarios to the Seychelles—I do not want to get drawn into that now—but had arrested a colonial Prime Minister and kept him in prison, not just in limited restraint in some other part of the world, but actually in a prison cell, for three years without any charge of any sort being preferred against him. One is really amazed at how little attention is being paid in the world to the fact that Sheik Abdulla is at this moment so immured.
  I would suggest to my right hon. Friend that this question should not be allowed to go by default on the premise that nothing dangerous will follow if it is allowed to go on as it is. One has reason to believe that the question will be raised again at the coming session of the United Nations in New York this year or, if not at the coming Session, then at the next one. I suggest that when it is raised, we do not just allow it to be referred back, but we take it seriously and make a new and determined effort, through the Security Council, to get some sort of agreement and get world opinion ranged along with us, to have something done to obtain a settlement, whether it be by partition, by plebiscite, or a mixture of the two.
  I believe that the Indian Government, and Mr. Nehru in particular, are very sensitive to world opinion. If it could be shown plainly what our feelings and world feelings were on this subject, then there would be rather more chance of a settlement than appears at the moment. I regret to say this, because there is no one for whom I have more respect as a world leader in these difficult times than Mr. Nehru, but I really believe that he should in this matter of Kashmir practise a good deal more of what he preaches to others. There really is here a classic example of a man who ought to practise
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  what he preaches; and when I suggest what should be done at the United Nations this year, my principal appeal is to Mr. Nehru and to the Indian Government, who have more chance than anyone else of bringing about an end to this problem.
  8.59 p.m.
  Mr. Barnett Janner: I do not propose to cover the general ground, and I am sure the hon. Member for Torquay (Mr. F. M. Bennett) will forgive me if I do not follow him in the matters which he was discussing. I wish to answer certain points made in the speech by the hon. Member for Farnham (Mr. Nicholson). As I intended to make a few comments on his speech, I am sorry it is impossible for him to be present. I did inform him of my intention, and he told me that he would not be able to be present; but I hope that he will not mind my dealing with them, because they are of considerable general interest.
  The hon. Member for Farnham said that because a person happened to be a member of or connected with a group, or happened to know what was taking place in a particular direction, and was keen and sincere about something, it was not appropriate for him, so the hon. Gentleman intimated, to speak in what he called a partisan matter. If that were so anybody advocating any proper cause which he understood would be placed in a position of having to leave to those who did not appreciate the cause as well as he the advocacy of that cause. That obviously is not the position in this House.
  One would never expect in a debate on Welsh affairs that it should be said that anyone who happened to live in Wales or to be interested in the subject should not speak. That would be rightly resented, and so it would if a person happened to be a Methodist and it was said that because he was a Methodist, therefore he was partisan, and was not entitled to participate in a debate on a religious matter in which he was concerned. That would be absurd.
  On this question of Palestine, I do not suppose that the hon. Member for Farnham would have objected to Disraeli making the comments that he made when he suggested in his writings that there

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  should be a national home in Palestine for the Jewish people. Nor indeed should he object to any other people who are Jewish or connected with Jews doing the same thing.
  The fact of the matter is that the hon. Member for Farnham, and I am sorry to say some other hon. and right hon. Members, have not really appreciated the facts relating to the State of Israel as they exist. The hon. Member raised several questions, and I want to deal with them. He talked, first, of who was responsible for there being Arab refugees. He outlined a position which indicated that the Jewish settlers in Palestine were responsible for the Arab refugee problem.
  I agree that it is essential to try to reach a solution of this problem, and I think that the speeches which have been made from time to time by the Israel Government and by those who support Israel have indicated that they are most anxious to deal with the position and to ensure that no one shall suffer; but we must consider the facts, before coming to a wrong conclusion which suggests that the Jewish settlers there were responsible.
  What did happen in this region? It is essential not to lose sight of the fact that the Arab refugee problem arose from the war which the Arab Governments launched against Israel. That is irrefutable. The problem is the result of an attempt to overthrow by force the United Nations Resolution of 29th November, 1947. I want to put some facts on record so that in future debates we shall know the position. If I am wrong, I should like those who are discussing the matter to let me know where I am wrong so that at least I may argue the position with them. I am sure, however, that I am not wrong.
  These are the facts as I understand them. On 15th May, 1948, the Secretary-General of the Arab League declared at a Press conference in Cairo:
  "This will be a war of extermination and a momentous massacre which will be spoken of like the Mongolian massacres and the Crusades."
  It is a fact that some 200,000 Arabs live in Israel today but in all areas in Palestine which came under Arab occupation after the U.N. decision not a single Jew remains. Who was responsible
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  for the exodus? The Economist said, in its issue of 2nd October, 1948:
  "The Jewish authorities are now in complete control… urged all Arabs to remain and guaranteed them protection and security.… However, of the 62,000 Arabs who lived in Haifa, not more than 5,000 to 6,000 remained. Various factors influenced their decision to seek safety in flight. There is little doubt that the most potent of these were the announcements made over the air by the Arab Executive, urging all Arabs in Haifa to quit. The reason given was that upon the final withdrawal of the British, the combined Armies of the Arab States would invade Palestine and drive the Jews into the sea. And it was clearly intimated that those Arabs who remained in Haifa and accepted Jewish protection would be regarded as renegades."
  So much for the first point. Secondly, I want the House to understand that Israel and everyone connected with the Zionist movement with which I am concerned is most anxious that the refugee problem should be solved. We feel that it can be solved. We feel that, if the Arabs would only do what the Israelis have done in Israel, they could solve this problem easily. Time after time Israel has offered compensation, but also time after time there has been pressure to bring into Israel a force of 100,000 or 150,000 fifth columnists, although the whole of Israel is not the size of Wales. That is an absurd suggestion, and it is time it was made clear to the Arabs that this cannot happen.
  What should happen is that the compensation which has been offered by Israel before should be accepted in the future. What are the facts about the numbers of the refugees? We were told by the hon. Member for Farnham that Jews have done a great injury to 1¼ million Arab refugees in not letting them come back after the war. The hon. Gentleman has overlooked the fact that at the end of 1944 the entire Arab population of Palestine was officially estimated to number 1,179,000, which included 67,000 Bedouins. The Foreign Secretary will know that these figures are approximately accurate.
  The hon. Member for Farnham also forgets that Transjordan annexed a part of the former mandated territory with a substantial portion of Arab population. He has not taken into consideration the fact that there are at present 200,000 Arabs in Israel who are being treated equally as well as the other citizens and who are contented. One has only to

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  walk into the Arab village near Jerusalem to find an example of how the people who did not fight against the Israelis at the time Israel was declared to be a State are contented with their lot. The Arabs are accepted as citizens, with representation in the Parliament of Israel in the same way as their Jewish fellow citizens.
  I shall take advantage of the few minutes I have left to deal with a few more figures. The difficulty of determining the true number has plagued United Nations officials ever since the Arabs crossed the border. The United Nations Economic Survey Mission, which studied the problem thoroughly in 1949, put the figure of Arab refugees in need of relief at 635,000. The first director of U.N.R.W.A. referred to "the 600,000 refugees "in November, 1950. The United Nations Conciliation Commission accepted a figure of 711,000, and an analysis of the population records of the Palestine Mandatory Government shows the total Arab population of what is now Israel as less than 800,000, and 200,000 of those are still in Israel. Putting it at its highest, this leaves 600,000.
  I am not saying that this is a negligible figure. On the contrary, but we ought to know what figures we are dealing with, and how the position has been worsened by the fact that the Arab nations have refused to allow these people to lead decent, ordinary lives, and have used them as a political facade for the rest of the world—indeed, have kept them in the front line as political propaganda.
  I would commend to the House the speeches that have been made by Israeli statesmen. Time after time the Arabs have been appealed to to come together with the Israeli to discuss settlement. The Prime Minister of Israel, Mr. Ben Gurion, himself has said that he is prepared to go to Egypt, that he is prepared to go almost anywhere, to meet the various leaders of the Arab States, but they have bluntly refused to meet him. He was prepared to settle the refugee problem separately. The Foreign Secretary knows that very well. This has been made clear by appeals from Israel from time to time. On the other hand, the statements made from the Arab side have been incitements to the Arab people to attack.
  Why is Israel refused the opportunity of arming herself, not to attack the Arabs—the Foreign Secretary knows as well as
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  I do that there is no intention to do that—but at least to make them understand that if they attempt to attack Israel there is a possibility—not even necessarily a certainty; that is not asked for—of their being defeated? If Israel were given this opportunity, Nasser and the people he is trying to influence would come to the conclusion that it was not worth while again attacking Israel and risking defeat. Consequently, the problems would become soluble. It is not true to say that there is a balance of arms. Why does not the Minister ask the Prime Minister of Canada what he thinks about the position. Has he yet discussed the position with the Prime Minister of Canada? In a recent speech the Prime Minister of Canada referred to the "unbalance of arms." These things must be dealt with.
  Lastly, I want to ask the Minister this. Why are trade agreements being discussed without pointing out to the Egyptians that the boycott which they are imposing upon the citizens of this country who happen to be of the Jewish faith cannot possibly be tolerated? The Minister knows the kind of thing that is going on. The Egyptians have no right to defy the Charter of the United Nations, the Declaration on Human Rights, and the ordinary principles of civilisation by attempting to discriminate against and boycott certain people because of their religion or race.
  9.12 p.m.
  Mr. Kenneth Younger: In the course of my remarks I shall come to some aspects of the subject just discussed by my hon. Friend the Member for Leicester, North-West (Mr. Janner), which arouses very deep feelings in the House. I wish first to make one or two more general comments.
  This two-day debate covering the whole world scene has provided a remarkable contrast. The Prime Minister may be said to have sent the Government off to a fairly smooth start yesterday, and his speech, so far as it went, appeared to command the assent of the House. Today the Government have run into much rougher water as the House has attempted to probe what lay behind the generalities and to define, subject by subject, precisely what it is that the Government have in mind to do.
  I feel that, compared with most foreign affairs debates in which I have taken part,

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  the general analysis of the situation in which we find ourselves has commanded even more agreement than usual. There have been very few voices, if any, which have challenged the opening remarks by the Prime Minister about the immediate danger of war having receded and about the changes which have occurred over the last two years, or the reasons which he thought lay behind it, such as the deterrence of the new weapons and the change from Stalinism in the Soviet Union.
  Of course, various hon. Members have expressed more or less optimism about the developments in the Soviet Union, on whether the question of co-existence is going to be an angry, hostile, competitive thing or whether there is at least a chance of genuine co-operation and so on, but, broadly, there has been very little disagreement on that side of our discussion. There has also been agreement, and that is very useful, that the fact that we are all hoping to have better relations with the Soviet Government does not mean that we need have worse relations with our Allies. It is not a question of choosing between friendliness with Russia and friendliness with our Allies.
  Much has been said about solidarity with the United States and the need to maintain the North Atlantic Treaty Organisation and so on. It is agreed that all our policies must continue to be joint policies. I do not know whether it has been clearly stated how much more difficult it will probably be to maintain effective joint policies in the new situation than it was when we all felt ourselves to be facing a common danger. The tasks are less clear-cut. There is probably more room for a difference of opinion. It may be that this difficulty in part provides the explanation why the clear-cut principles which have been put forward have not today been matched by clear-cut policies.
  It may well be that the true explanation on many of these topics is not so much that the Government are wrong in their thinking, but that they have failed to convince their Allies and, consequently, cannot get a joint policy; and the Government spokesmen are in difficulty in doing justice to themselves without appearing to criticise their Allies. I do not know. The Foreign Secretary today did say rather plaintively something to the effect
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  that an alliance of free nations took a very long time to get under way or produce action. Whatever the reason, I am afraid that it has to be recorded that we have not had a clear picture of the action proposed by the Government in these various situations.
  Before the debate began, the Press, and notably The Times, which I shall quote, was talking of
  "the clouds that obscure so much of British policy,"
  and was asking and, indeed, demanding of the Government that in this debate they should give a clear line on a whole list of topics. Those hon. Members who have sat through the debate will recognise that all the topics have come before us in the last two days—defence, disarmament, the British attitude to Western Europe, the Arab-Israel dispute, the position of Germany in N.A.T.O. and so on.
  I think that the Prime Minister might agree that on a number of these topics his speech did not get us much further on precise policy. We on this side of the House were waiting in the hope that the obvious gaps—and I do not think that he was attempting to take us into every subject—would be filled in by the Foreign Secretary, but I am afraid that the Foreign Secretary failed in most respects. All we have got from the Government is that they intend to agree on policies with their Allies, but they did not say, any more than they did when we complained about it in February and March, what they propose to attempt to agree about.
  There were one or two examples in the subjects which have already been fully discussed. Speaking at this stage in the debate, I cannot hope to say many original things. On the question of Western defence and the North Atlantic Treaty Organisation, we start from a basis of agreement. Whether we may want to argue about the level of forces under the North Atlantic Treaty, we are all agreed on the need to maintain its framework and unity of purpose. But when we consider what has been done or not been done in recent months, we must agree that the last meeting of the N.A.T.O. Council, so far as the world knows, was a flop. It was certainly hailed as such by the Press.
  So far as any of us not in the know are concerned, it did nothing except one

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  damaging thing. It had been heralded as a meeting which opened up new possibilities for N.A.T.O., and as apparently it did nothing of the kind, it contributed to the lowering of morale.
  Various recipes, including some during the debate, have been put forward as to what should be done about N.A.T.O. I have always thought that the most important thing was obvious and simple. It is that there has to be, in an alliance of this kind, a sensible joint plan for defence, a purely military plan for the defence of the area which it is supposed to defend, and consultation among the members on ail political questions so far as they affect the job which the alliance has to do, which I have always believed to be primarily a military job. Those are the things that matter, and not the frantic searching for new and different tasks which might be given to N.A.T.O.—a body which is not designed to carry out tasks other than the defence of a certain area.
  Even after all the discussion that we have had, I should like to ask what were the United Kingdom's proposals on these topics. I do not think that we know. I do not think that anything which emerged from the N.A.T.O. Council meeting—no communiqué or anything of that kind—suggested that the British Government put forward proposals which were not accepted. Equally, nothing very much seems to have emerged in the way of a joint decision. All that the Foreign Secretary was able to do today was to protest, when attacked earlier upon the same lines, that we—that is, Her Majesty's Government—have been working for months on the necessary adaptation of N.A.T.O. We must accept that, but all I can say is that the next N.A.T.O. Council meeting, which is only a month or two ahead, had better begin to produce results for the public if it does not want morale to drop very low indeed.
  I do not think that the answer is likely to come primarily from what are called the "three wise men," greatly as I respect all three as individuals. I think that it will have to come from joint agreement between the Governments upon the military requirements of the defence of Western Europe, adequate military plans, and, perhaps above all, availability to meet those needs. As the hon. Member for East Aberdeenshire (Sir R. Boothby)
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  said, it is no use doing the sort of thing which was done in The Times recently, namely, to list a whole number of things that the soldiers might well like but which there is not the faintest chance of any Government being willing to produce.
  I shall not talk specifically about the German problem which has been thrashed out in great detail. I think that most of us feel that the Prime Minister's general attitude to the question of a security agreement in Europe was satisfactory once it had been clarified by means of many interventions and interruptions. If his proposals appeared to be rather vague I suppose that he could answer that, after all, he had put forward plans in some detail in the past, at Geneva and elsewhere, and that any future discussions would be based upon them.
  What was again disappointing to us, however, was that the Government were not willing to tell us what they proposed to do about it. They were asked whether they were going to take the initiative. My right hon. Friend the Leader of the Opposition rose during the course of the Foreign Secretary's speech to ask him if he could say anything about the procedure which the Government proposed to adopt in order to promote the sort of things which the Prime Minister had indicated in general terms. He got a flat negative. He was told that it would not be appropriate—or some such phrase—to go further at this stage. I do not know; perhaps we are not entitled to be told these things, but the Government cannot complain about our attitude if, the moment we try to obtain a hint of the next move by Her Majesty's Government we are simply told, in connection with subject after subject, that no information can be given to us at the present time.
  In another connection, especially about disarmament, references have been made to confidence-building measures, and we had hoped that something of that kind would have been announced about the proposal for what has been called the thinning out of forces in Central Europe. We thought that such a thing might be contemplated as an interim measure. It was not quite clear from the Foreign Secretary's speech whether this is a topic which the British Government are prepared to tackle in a practical way, because he said at one stage that he was not prepared to contemplate any security

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  arrangement which would not end the division of Germany.
  When he was challenged upon that I think he said that he was referring only to a final and comprehensive security agreement. He left us to infer that, while we still have the division of Germany, he might nevertheless contemplate some lesser measure in the shape of the thinning out of forces. If the Joint Under-Secretary can say anything about that matter, I shall be grateful.
  I do not want to spend too much time upon what I believe is the most unhappy subject of this debate, namely, the Government's performance in the disarmament discussions. I shall not go back over the past; I think that my right hon. Friend the Leader of the Opposition, my right hon. and learned Friend the Member for Rowley Regis and Tipton (Mr. A. Henderson) and my hon. Friend the Member for Blackburn (Mrs. Castle) adduced a devastating argument against the handling of the Government's case in recent months. There is no doubt that in recent months, even if their attitude has been sensible behind the scenes, the Western Powers have failed to make their case with the public. They have left the impression that every time the Russians came to meet them, they, as it were, raised the ante, and were not prepared to accept what previously they had been thought to accept. That applies particularly to the level of the forces and the necessity for prior political settlements before any real disarmament can be agreed upon.
  There has undoubtedly been a change, particularly over the levels of forces, in the attitude of Her Majesty's Government. Maybe this again is one of the cases where United States policy has changed, and we felt that we had to go along. So far as political settlements are concerned, in the light of the tone of the Prime Minister's speech, when he rightly indicated what a great improvement there has been, it was a little difficult for us to accept the fact that it was because of political conditions and the failure to reach a political settlement that we had to raise the acceptable level of forces from 1½ million to 2½ million.
  What are we to do now? What is it in fact—and on this I think the Foreign Secretary was not very clear—that stops
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  the partial agreement which I think he said he favoured? We should welcome some kind of partial agreement if we cannot get the whole thing immediately. I think that the right hon. and learned Gentleman agreed, and the points which he appeared to put forward to be included in such agreement were some reduction in conventional forces and some control—I think he said limited control—in order to supervise those reductions; and then he referred to the two proposals, that of Marshal Bulganin for control of strategic points and that of Mr. Eisenhower on what are called "open skies".
  Apart from the last point about "open skies", I cannot see why, if these are the ingredients, we cannot have them quickly. All the other ingredients, including a limited form of control, seem to me to be included, not only in our plans, but in the plans of the Soviet Union. If the thing is really sticking only on the question of "open skies", I can only say that until that was put forward by Mr. Eisenhower at Geneva last year I do not believe it was considered by any of the Powers as something which must be accepted before we could have an initial agreement on the first stage. If we have reached the point where that is a condition, we have undoubtedly changed, and I do not believe that it is justifiable.
  Mr. Selwyn Lloyd: The right hon. Gentleman does recognise that such a partial disarmament agreement would exclude anything to do with nuclear weapons? That would be very unfortunate indeed. It may be necessary to go along without it—it may be—but it is not necessarily a step forward if we disregard any attempt towards nuclear disarmament.
  Mr. Younger: Really, I get more confused with each intervention of the Foreign Secretary. We all realise that for a disarmament agreement finally to be satisfactory, it has virtually to cover everything, though now we are in doubt whether scientifically everything can be covered at present. But I thought that the whole point of an interim solution was to cover a limited measure of conventional disarmament without tackling the more intransigent question of nuclear disarmament. There have been changes in Western policy, but I thought that

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  this proposal to support conventional disarmament first was considered fully acceptable.
  Mr. Lloyd: I advise the hon. Gentleman to read what Mr. Jules Moch, a prominent French Socialist, has said about the inter-relationship of this matter with nuclear disarmament.
  Mr. Younger: I will not go further into the details of this. At one time or another I have read all these statements, and I will look at this one again. But if the Foreign Secretary or the Joint Under-Secretary will clarify this matter, so much the better. We are not satisfied that there is any real obstacle to the sort of partial agreement to which the right hon. and learned Gentleman referred.
  On the more limited, though related, question of the bomb tests, I thought that the Government were very negative. They seem in principle to have accepted more or less what we want, that we should try to get agreement on this, even if we have not yet got a general disarmament agreement. But when we asked what they were going to do, we got a double negative from the Foreign Secretary. He said, "That does not mean that no work will be done until November ". When pressed, he said it was "undesirable to be more specific". I do not see why we should not have an answer to the question. Following particularly the statement of Mr. Shepilov, are the Government, in fact, proposing to approach any Governments and if so, which Governments, to suggest that any discussions should start on this matter; or are they just approving it in principle but hoping that someone else will raise it?
  I have very little time to cover the numerous topics which have been left unresolved even by this lengthy debate. I have two brief points to make about the Middle East. The first is that we are glad to note how far the Government have moved, since the debate after the turn of the year—in February—in their views about Soviet intentions and the possibility of discussing Middle Eastern questions with the Soviet Union. We are glad that the United Nations has been invited to take charge of the more urgent questions relating to the dispute between the Arabs and Israel, a course which we were originally told, some six or seven
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  months ago, was extremely naive on account of the mischievous intentions of the Soviet Union in that area.
  There are numerous pieces of evidence that the Soviet Union is anxious to persuade the Arab States to accept a policy of "live and let live" with Israel. There have been signs also that she is prepared to accept that policy herself with the Western Powers. If the Prime Minister were to tell me that that was the product of his discussions with Mr. Bulganin and Mr. Khrushchev in London I should be delighted to give him credit for it. Whatever may be the reason, the Government's attitude towards this matter has changed.
  On the question of balance of arms, which has been raised more than any other issue of foreign affairs in this House, the explanations given by the Foreign Secretary are not satisfactory. I know that he is handicapped because he cannot give us any detailed facts, but I ask him whether he disputes that in recent months there have been very large deliveries of modern arms from Czech or other sources to Egypt. I do not think he can, because in another part of his speech, referring to the withdrawal of the proposals to give aid in connection with the Aswan Dam, he gave as one of his reasons the enormous Egyptian expenditure on the arms programme. I think there was a link between those two matters.
  If the Joint Under-Secretary accepts that the delivery of arms has been growing, as does almost everybody outside the Foreign Office, I ask whether Israel has been getting equivalent deliveries, and if so, from where? Not from us, I think, and certainly not from Communist countries. I do not see where she can get them. If not, the arms balance must have been swinging heavily against Israel in the last six months. The Foreign Secretary said last February that there was a balance, so therefore it is not the case that Israel has started with an enormous preponderance of arms which the Arabs are now balancing up.
  The Foreign Secretary stated that the balance would not last. We have a deep suspicion that the balance is not lasting, and that Her Majesty's Government—and I presume one must include the other signatories to the Tripartite Declaration—are pursuing a policy of drift in this

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  matter, which is very dangerous. I join with the hon. Member for East Aberdeenshire in asking the Minister who is to wind up the debate to repeat and to restate with the utmost firmness the Government's intention to maintain the balance in the Middle East. That at least may be something. We cannot get all the facts, but the facts as we know them all tend against the conclusion which the Foreign Secretary is asking us to accept.
  I am afraid I shall be cutting short the time of the Joint Under-Secretary if I speak very much longer, but there is one more point which I should like to make. We all seem to be agreed that we are moving away from the cold war, but it is much more difficult to agree on what we are moving towards. It may be that that is partly due to the quadrennial blight which the American elections always put on Western policy, but it is very difficult to discern any positive general policy or any shape of things that the Government or the Western Powers are hoping to see in replacement of the cold war.
  I do not think that we should wait for the American elections to state our views. I think we shall probably find after the elections that the reappraisal of world policy which seems to be hanging fire in the United States will, as often happens, take place with a big bang. We shall find that a great deal of thinking has been going on, and decisions will come thick and fast. We do not want to be left behind.
  I should like particularly to refer to certain matters in Asia—the question of Chinese admission to the United Nations and the question of breaking down the now absurd restrictions on East-West trade. Both those matters are urgent. I think that now, much more easily than a year or so ago, we can persuade our American Allies that the civilian, social and economic aspects of policy in South-East Asia are more important than the military organisation of the South-East Asia Treaty.
  If we were to pursue, and pursue publicly so that the world knows, issues of that kind, that would be some evidence of the vitality of the Commonwealth Conference. We always expect the communiqué at the end of the Conference to
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  be uninformative, and we do not complain about that, but we hope to see afterwards some sign of the fact that this gathering of important States, covering Asia as well as the West, has led to some kind of general approach to some of the major problems.
  Since the Commonwealth has not been mentioned very much, I hope to end with this point arising out of the Commonwealth Conference. Now we hope that we can begin to look at matters in a rather longer perspective without fearing war in the next few years in Europe, can we not allow ourselves to pay a great deal more attention to the world-shaking issue which is going to be determined in India? I believe that in the course of the Indian second five-year plan and perhaps in the following five-year plan the decision will be taken whether the industrial revolution in Asia is to occur by democratic, free means or not.
  It is a tremendous task, and the Indians, like the rest of the people in Asia, are going to require a great deal of help from outside. They are going to get it from where they can, and that will undoubtedly include some Communist countries. I hope we shall not join in the futile warnings given by Mr. Nixon in telling the Asian countries that if they accept aid from Communist countries they are facing some kind of slavery. They will not listen to such warnings. They are not afraid of that kind of Communist domination.
  What will determine their attitude on the future political framework and affect them much more will be a sympathetic political attitude and, so far as we are able to give it to them, economic aid of that nature in their enormous task. I am well aware of the limitations to our resources for these purposes, but the West as a whole—organised through the United Nations in particular, I hope—could do a great deal. If we believe that our influence is great in world affairs, as so many hon. Members have said in this debate that they do, I think we should exercise it more strongly than we have done in these fields, and let it be known that we are doing so.
  The Government have said they recognise that this is a moment of fluidity and flexibility in world affairs. This second day's debate has suggested, alas, that they are letting the moment slip.
  9.39 p.m.
  The Joint Under-Secretary of State for Foreign Affairs (Mr. A. D. Dodds Parker): Eleven years ago today the right hon. Member for Grimsby (Mr. Younger) and I and many other hon. Members had just been elected to this House for the first time. I must admit that at that time I did not think I should be winding up a debate on Foreign Affairs, which is not limited to any one aspect of human problems, many of which are quite beyond the immediate responsibility of a Foreign Office Minister. To go back to that day, 25th July, 1945, no atom bomb had at that time been dropped. Many of us will remember the headlines in the papers when atom bombs were dropped earlier the next month. Thinking back, I believe that we can say that the most tremendous changes have happened in the world, far greater than anything that we would have envisaged at that time.
  The Prime Minister and the Foreign Secretary have given the House statements on the salient points of the foreign policy of Her Majesty's Government. The right hon. Gentleman the Member for Grimsby has referred to one or two of those and disclaimed his satisfaction with them. I hope that the House will not expect me to go in any detail into disarmament. It is an intensely complicated problem and I, like other hon. Members, try to tie my brains around it.
  But to sum up, as briefly as I can, the point about partial agreement to which the right hon. Gentleman referred, Her Majesty's Government were the first to propose this last year. The Soviet Union only accepted the idea on 12th July this year, and we still do not know exactly what elements the Soviet Union want to include in a partial agreement; but we hope to find out at the next meeting of the Sub-Committee. We will also consider the report from the Commission which met earlier this month in New York. I regret that my right hon. Friend the Minister of State cannot be here to give us a personal account of that; we still have to see what action we can take.
  The right hon. Gentleman referred to the question of the Middle East, and I would again say that we are waiting for a further report from the Secretary-General of the United Nations, who is labouring, I think with the support of
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  every one of us in this House, to produce some answer to this problem.
  On the question of arms balance, my hon. Friend the Member for East Aberdeenshire (Sir R. Boothby) asked me whether Her Majesty's Government are really trying to maintain a genuine balance of power under the Tripartite Declaration. The right hon. Gentleman the Member for Grimsby also referred to this question. I will repeat the words of the Tripartite Declaration, which are, of course, the intention of the Government, and which have been reaffirmed time and time again from this Box. It is that:
  "The three Governments recognise that the Arab States and Israel all need to maintain a certain level of armed forces for the purpose of assuring their internal security and their legitimate self-defence and to permit them to play their part in the defence of the area as a whole."
  I hope that my hon. Friend will be reassured that that is the intention of the Government which has been reiterated times without number from this Box.
  Mr. Janner: While the hon. Gentleman is dealing with this matter, will he answer the question which I put to him? Does he agree with the Prime Minister of Canada that there is an imbalance in arms? He calls it an imbalance, but he obviously means by that a non-balance.
  Mr. Dodds-Parker: I am afraid that, however unbalanced the hon. Member may feel on this, I am not responsible for what the Prime Minister of Canada said, and I have not seen the context in which he made the alleged remark.
  The right hon. Gentleman the Member for Grimsby also raised the question of India. Her Majesty's Government are, of course, fully aware of the need of the Indian Government for support. We have done our best to help in the years since the war. This is not a party matter. I had the privilege last year of working in the Commonwealth Office, and I know how closely the Indian authorities continue to work with this country. I like to claim, and I sincerely believe, that our relations with India have never been closer than they are at the moment.
  As I said earlier, we have in the course of this debate covered just about every problem of the human race, and I hope that hon. and right hon. Members will forgive me if I cannot answer all the points which they have raised, but I assure

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  them, particularly now that the Recess is near, that I will study them, and I hope, if their suggestions are constructive, to get something out of them for the benefit of all of us.
  My right hon. Friends have covered fairly widely the problems of Europe, and the right hon. Member the Leader of the Opposition also spoke about these, as did the right hon. Member for Blyth (Mr. Robens) and the right hon. and learned Member for Rowley Regis and Tipton (Mr. A. Henderson), who made a well-informed speech about disarmament. Other hon. Members have spoken about Euratom and the common market, both in the debate yesterday and today. My right hon. Friend the Chancellor of the Exchequer has made a statement about this which, I hope, will have informed the House of what is being done about those two problems.
  I was sorry that the Leader of the Opposition used the phrase "the taint" of colonialism. I do not know whether he includes his brother as one thereby tainted, like myself and many others. I do not think he has any reason to be ashamed, or any call to use that term, about what his brother did for 25 or 30 years in Africa.
  Mr. Gaitskell: I am surprised that the hon. Member should refer to my brother who did what, I think, is generally agreed was a remarkably fine job in the Sudan. For the hon. Member's benefit, I would say that I have no reason whatever to believe that my brother would disagree with a word of what I have said this afternoon.
  Mr. Dodds-Parker: That is as is may be, but I put it to him—and I will return to this in a moment—that it is a pity that he should use this word from those benches about the efforts of so many of his countrymen who have carried out this work in the past, and will carry it out in other ways in the future, to help people overseas.
  He spoke about Russia and about the fact that no colonialism exists in Russia, but I would point out to him that there are millions of Moslems in Russia who are living in what he would call a colonial status. It is a great mistake for him to stand at that Box and repeat the remarks made by the enemies of this
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  country that Britain alone is a colonial Power. He talked about the appeal of Russia to people in the uncommitted countries. Apparently he did not know that there are these millions of Moslems in Russia in what he would call a colonial status.
  The right hon. Gentleman also spoke about bases and the reliability of leased bases. Had he read the speech of my hon. Friend the Member for Preston, North (Mr. J. Amery) carefully, he would have seen that there are many grave objections to leased bases, as both ourselves and the United States have found in the period through which we have been passing.
  The hon. Member for Rugby (Mr. J. Johnson) raised a question on the Haud and Ethiopia, of which he had been good enough to give me notice, and I should like to tell him of the action which has been taken as a result of what has happened in the Haud and areas nearby. As I informed the House recently, Her Majesty's Ambassador in Addis Ababa lodged a strong protest against breaches by Ethiopian officials of the terms of the 1954 Anglo-Ethiopian Agreement. The most serious aspect of these incidents has been the repeated attempts to interfere with the tribal organisation of certain British-protected tribes who are now with their herds in the territory covered by the Agreement.
  Her Majesty's Government have received reliable reports that Ethiopian officials have convened meetings with these tribes and put pressure on them to acknowledge Ethiopian suzerainty and to accept Ethiopian nominees as their tribal leaders. This is a clear breach of the Agreement, which provides that the tribal organisation and leaders recognised by the Protectorate Government should continue to function while the tribes are in the territories.
  These incidents cause Her Majesty's Government grave disquiet. Not only do they contravene the spirit and the letter of the 1954 Agreement, but they also run counter to assurances given to me during my discussions in Addis Abbaba earlier this year that the Ethiopian Government intended to work the Agreement in closer harmony with our local officials. Her Majesty's Ambassador has also been instructed to lodge a protest against the

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  killing by Ethiopian forces of a number of British-protected Esa tribesmen during the course of an incident which took place well inside Ethiopia in February of this year. I sincerely hope that we shall receive satisfactory replies from the Ethiopian Government to these two protests. The state of affairs which has made them necessary can hardly fail, if it continues, to cast a cloud over Anglo-Ethiopian relations—an event which Her Majesty's Government would deeply regret.
  Mr. J. Johnson: But what are the Government to do about this? Do they intend to step up the number of our police and armed people inside the territory, or what action do they propose to take?
  Mr. Dodds-Parker: That is a matter for my right hon. Friend the Colonial Secretary, to whom the hon. Member has addressed a Question, as he knows.
  The other point that he raised was about the British Protectorate of Somali-land and its possible future relationship with Somalia. Her Majesty's Government's policy remains the same as was set out by the Under-Secretary of State for Colonial Affairs in his statement in Hargeisa on 29th May. This statement not only envisaged an acceleration of economic, educational and constitutional development in the Protectorate, but also indicated that Her Majesty's Government would be prepared in principle to give favourable consideration to the possibility of a closer association some time in the future between the two Somali territories, if the peoples concerned should desire it.
  I do not think that the hon. Member would expect me to comment, at the moment, on the other points he raised, but I am sure that he realises that we do regard them as being important and will follow them up.
  In the very few moments left to me I should like to refer very briefly to what is sometimes called in this House, though some hon. Members dislike it, "competitive co-existence"—how we compete, as one hon. Member said, in living together. As my right hon. Friend the Prime Minister has said, we have to maintain our security in this world, to develop our material and economic benefits and to maintain peace within freedom, that is, as we understand freedom in the West.
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  I believe that this has met with the general approval of all right hon. and hon. Members in the course of this debate. It is the pattern of the methods that we propose to use that has not been so generally agreed, but I believe that the general pattern of the future development has been set. There is N.A.T.O., which was formed when the late Mr. Ernest Bevin was Foreign Secretary, and with which is associated the economic development of O.E.E.C. and the European Payments Union.
  Then there is S.E.A.T.O., which has done much more than many hon. Members are prepared to agree. If hon. Members saw as much as I do of people who live close to the Societ bloc, they would realise that both S.E.A.T.O. and the Bagdad Pact create far more confidence in those people than many who live somewhat further away from the scene may realise. I think that it would be a great mistake if the impression was given in the course of this debate that the military side of those two organisations was not regarded as of prime importance to their members, particularly to the members in the Middle East and in South-East Asia. Both organisations contain members of the Commonwealth. The Colombo Plan, which is the economic support, as it were, of the South-East Asia area, was started as a Commonwealth Organisation. It has carried out, as my right hon. Friend the Foreign Secretary said, valuable work in the development of the area in the last few years. Equally, the Economic Committee of the Bagdad Pact, of which my right hon. Friend gave the details, has already in quite a short time established itself and is working to the great satisfaction of the people out there. It is, I believe, of the greatest importance that we should have the Commonwealth in all these organisations, and also the United States in all except the Bagdad Pact itself, and I believe that the economic and what we might call the cultural developments which are being carried on under the Bagdad Pact are going to be of great importance.
  Sometimes, when I see the list of organisations and the jobs which are being done under the Bagdad Pact, it makes me think of all the organisations in the United Kingdom concerned in various aspects of Commonwealth relations which are given on page 72 of the

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  Commonwealth Relations Office list. I think these are of great importance, because they try to work up, without a great expenditure of money, the inter-change of educational staff and students and joint efforts to increase the flow of doctors and others.
  This practical method of co-operation with people in these parts of the world shows that we have a great deal to offer from this country. The Leader of the Opposition spoke about S.U.N.F.E.D., which we regard as being only one of the various ways in which aid could be given to these under-developed territories to win the struggle that lies ahead for the peoples of these uncommitted territories. I will not go into further details beyond what my right hon. Friend has already given concerning the economic aid which we have given, except to say that the colonial development and welfare fund, will contribute £120 million in the five years from now until 1960 in this matter of technical aid.
  But I should like to make one brief reference to the very great contribution which this country is making in education. There are over 26,000 overseas students in this country at the moment, and I believe that this is a very great contribution, which is stretching the teaching resources of this country, but is doing a great deal to help people. Those of us who come in to day-to-day contact with them realise that there is much more to be done. I should like to thank the hon. Member for Woolwich, East (Mr. Mayhew) for his contribution to the Soviet Relations Committee on the British Council, and also my hon. Friend the Member for Windsor (Mr. Mott-Radclyffe); they have both worked on it in order to develop these cultural acti-
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  vities which they and all of us feel are of great importance.
  I have not got time to talk about the B.B.C. and what it can do to help, but I think it should be noticed that the English services of the B.B.C. are of growing interest to people abroad. With the growth of English and all that it means, more and more people are listening to the services in English and not just the services in their own country.
  Finally, may I stress the fundamental basis of our foreign policy, about which the hon. Member for East Ham, North (Mr. Daines) spoke in connection with our American Allies. We believe that it is with the Commonwealth and with the United States of America that freedom in the world, as we understand it, and economic progress must be based.
  Mr. Crossman: What about Europe?
  Mr. Dodds-Parker: Well, yes. I am sorry, but I have already said that I believe that with the Commonwealth and the United States of America lies the absolute basis of freedom and of economic progress, in this world.
  I believe that in the months ahead, when the House will be in Recess, we will continue to pursue the objective which we set out in this debate, and which I believe has, by and large, the general support of this House as a whole. The measure of our success, not only as a Government but as a country, history will record. We on these benches intend to succeed. Ultimately, we believe, there is no other significance for human endeavour, and no other reward.
  The Parliamentary Secretary to the Treasury (Mr. Edward Heath): I beg to ask leave to withdraw the Motion.
  Motion, by leave, withdrawn.

  MILK (PRICE INCREASE)
  10.0 p.m.
  Mr. Frederick Willey: I beg to move,
  That an humble Address be presented to Her Majesty, praying that the Milk (Great Britain) (Amendment) Order, 1956 (S.I., 1956, No. 920), dated 13th June, 1956, a copy of which was laid before this House on 18th June, be annulled.
  If it will not inconvenience hon. Members from Northern Ireland, I suggest we might also consider at the same time the following Prayer:
  That an humble Address be presented to Her Majesty, praying that the Milk (Northern Ireland) (Amendment) Order, 1956 (S.I., 1956, No. 921), dated 13th June, 1956, a copy of which was laid before this House on 18th June, be annulled.
  Then, if necessary, each Prayer could be divided upon.
  I am sorry to see the Joint Parliamentary Secretary about to reply. He knows as well as I do that this is a matter the responsibility for which falls upon the shoulders of the Treasury Ministers; for that reason, and because I feel rather kindly disposed towards the hon. Gentleman, I will speak with some moderation, restraint and brevity. I realise, as he too realises, I am sure, that he did not do very well when we last discussed a Prayer of this kind, and I do not want him to lose his Parliamentary reputation for the sins of the Treasury.
  This Order deals with the price of full price fresh milk; it increases the retail price and reduces the subsidy. I say at once, so that there shall be no apprehension in any quarter of the House which might otherwise be caused, that the farmer, as I am sure the Joint Parliamentary Secretary concedes, obtains no benefit at all from this price increase. It is a straightforward reduction of subsidy.
  This full price milk was sold under the Labour Government at 5½d. a pint, at the time we went out of office, and, as this Order now reveals, it is now being sold at 7½d. a pint. This represents the latest of a series of retail prices increases. I want to say a word or two about the arguments which have been previously deployed by the present Postmaster-General in support of these price increases. Originally, when we had the first retail price increase, the Postmaster-General argued, and vehemently argued, that it would not lead to a decrease in consumption. On the contrary, he said, there
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  would be an increase in consumption, and he expressed the view that he would be very unhappy indeed if the price increase should lead to a decrease in production.
  I mention that because at that time, this being early in the Parliamentary career of the right hon. Gentleman, he enjoyed a reputation as being knowledgeable on matters of nutrition. He indicated at that time that the consumption of fresh milk had not, in his view, by any means reached the optimum level.
  The Postmaster-General became extremely melancholy and unhappy, because it was very soon revealed that there was in fact quite a sharp reduction in the consumption of milk. He then argued, when we had a subsequent price increase, that although there was a decrease in consumption owing to the price increase, the decrease was purely trivial. But, as the figures revealed that his margin of error was between 600 and 700 per cent., that argument was soon abandoned. I am dealing only with the major arguments upon which he relied. He then reverted to a third argument, saying that, after all, people spent twice as much money upon beer as upon milk, and obviously, to drink more milk, they should drink less beer. I do not know whether the Joint Parliamentary Secretary intends to rely upon that argument tonight, but if he is I should ask him in fairness whether he has had full and proper consultation with the brewers. He knows as well as I do that his party has a particular dependence upon the brewers. As we pointed out in earlier debates—if the Parliamentary Secretary has not refreshed his recollection—by and large the people whom we wish to encourage to drink more milk would not be well advised to drink beer.
  Having failed to convince the House upon that argument the Postmaster-General then relied upon a fourth argument. He said, "Well, I concede that there has been a decrease in the consumption of milk; I concede that I am most unhappy and melancholy. Having upset the brewers, I no longer rely upon this as being a disincentive to beer consumption. My argument now is that this reduction in the consumption of milk has been borne by the higher income groups." That was absolute nonsense.
  I am glad to see that the Postmaster-General has decided to join us in this discussion, because he will remember that

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  the only intervention made by the Parliamentary Secretary was upon this point. When I was ridiculing the Postmaster-General, he intervened to say:
  "Quite right."—[OFFICIAL REPORT. 24th June, 1953; Vol. 516, c. 2055.]
  He owes an explanation to the House. I do not know whether he meant that my ridicule was quite right or that the subject matter of my ridicule was quite right, but whatever the purpose of his intervention it is quite clear now that that argument is absolutely fallacious, because the Milk Marketing Board has provided us with some most interesting research, mainly into the consumption of milk in the nine towns.
  That has shown quite conclusively that the fall in the consumption of milk has been in the lower income groups, and particularly in the lower income groups with large families. In other words, although we have a far larger consumption of milk—even now under a Tory Government—than we had pre-war, it still remains a fact, as I am sure the Parliamentary Secretary will concede if he has read the report, that poor people with large families do not by any means consume sufficient milk.
  To summarise our experience under a past Conservative Administration, their price policy led to a reversal of the trend which we enjoyed under the Labour Government. Whereas we had had an increasing consumption of fresh milk, this trend was reversed, quite deliberately, under a Conservative Government, and we can see now, because the figures are available, that as a result of the price increases of the first Conservative Government the consumption of fresh milk fell by between 3 and 4 per cent.
  The interesting feature is—and this is the primary cause of the present Order—that during the early months of this year it appeared quite clear that the decline had been arrested. Although there was very limited evidence, it appeared that there was a slight increase in the consumption of milk. That was the position as it appeared at the beginning of the year. For that reason I said at once, without regard or particular consideration to the economic crisis that was brewing, that there would shortly be an increase in the retail price of milk.
  That anticipation, unfortunately, has proved correct. I do not think that the
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  Order is in any special way related to the problem of keeping our trade balance on an even keel. It is because the Government had noticed that it appeared that the consumption of milk snowed signs of recovering from its decline, and of increasing. I say this to the credit of the Chancellor of the Exchequer. Unlike the Postmaster-General, and, recognising the evidence that was now readily available to all of us, he made no bones about it. He said that one of the purposes of this increase in the retail price was to discourage consumption. In fact, if we look to the other documents published by the Government, it is clear that it is their policy to discourage increased milk consumption and that they look for some reduction in consumption.
  Our main quarrel with this price increase is that it seeks no particular effect. I think that the words of the Chancellor were that it would have no appreciable effect, but in seeking this limited effect of reducing consumption, which we deplore, the Government will drastically reduce consumption where we ought to be advocating and encouraging increased consumption.
  This overall relatively small decrease in consumption will be borne largely by poor people with large families, as the report of the Milk Marketing Board shows. After all, we have shown to the House in previous debates that what the researches of the Milk Marketing Board have revealed had already been revealed by reports which we had received from large co-operative societies. So we say that the purpose of the Government is deplorable, but that its effect in this particular instance is especially deplorable, and is directed against people with limited means who have large families.
  I concede to the Chancellor that he has put his case fairly. The second argument put by the Chancellor is that this is a further operation of Boyle's law, that this will lead to a general reduction in overall purchasing power. That is why I invited the Joint Parliamentary Secretary to say whether this Order was directed especially against the brewers, because it is directed against somebody. Perhaps we shall hear when the hon. Gentleman replies to the debate.
  In its application this is equally unfair because it is generally regressive, but again it is particularly directed against the

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  people with low incomes and especially those people with large families. Those are the people who will find that if they are to continue their present level of consumption, which is inadequate according to the evidence before us, they will go short of other things.
  Now I want to say a general word about subsidies. The subsidy was there until 1st July, so in effect this change is a tax, and a poll tax upon everyone. I want to remind the Joint Parliamentary Secretary of the previous debates and discussions which we have had about food subsidies. Probably he himself has argued, certainly many of his hon. and right hon. Friends have argued, that the food subsidies were not a social service—
  The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Harmar Nicholls)The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Harmar Nicholls) indicated assent.
  Mr. Willey: I see that the hon. Gentleman nods his head in agreement, but what did he and his hon. Friends argue that the food subsidies were? They argued that they were an economic device. For what purpose? To keep the level of wages and prices stable.
  In other words, in the past the Conservatives have argued that they could tamper with food subsidies provided that by other means they kept prices and wages stable. To upset food subsidies must make prices and wages less stable. This is what we really cannot understand, that at the very time when we are trying to achieve stability, both in prices and wages, the Chancellor of the Exchequer does his utmost to upset that stability. Yet he and many other of his hon. and right hon. Friends have argued that, not conceding the argument for a social service, food subsidies could only be justified on these grounds.
  So we oppose this Order because, in the first place, it seems politically stupid. It has repercussions which I am sure all of us on both sides of the House would wish to avoid. Nutritionally and socially, it is objectionable, because we have recent reports which show conclusively that there are many lower income groups, particularly those with large families, who ought to be encouraged to drink more milk.
  Finally, we oppose it because it is basically and patently unfair. If the
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  Government show this bias, they are not equipped to guide the country out of its economic difficulties.
  Mr. George Lawson: I beg to second the Motion.
  10.16 p.m.
  Mr. Harold Gurden: Perhaps, in his endeavour to be brief, the hon. Member for Sunderland, North (Mr. F. Willey) has avoided going deeply into the facts of the case. I will not accuse him of doing it purposely, but it is obvious that he has avoided mentioning milk products. This was not because it would be out of order to mention milk products, but he purposely confined his arguments to milk.
  Mr. Percy Shurmer: The Order is about milk.
  Mr. Gurden: Admittedly, but the right hon. Gentleman tried to draw a parallel between the facts of milk consumption today and during the time of the Labour Government, when, in fact, many milk products were prevented from being sold by rationing.
  Mr. Jack Jones: On a point of order, Mr. Deputy-Speaker. Is it not customary for hon. Members speaking about a certain industry to declare a present or recent interest in it?
  Mr. Deputy-Speaker (Sir Charles MacAndrew): If there is a direct pecuniary interest, an hon. Member declares his interest; otherwise it is not necessary.
  Mr. Gurden: Further to that point of order, Mr. Deputy-Speaker. Perhaps I might say that I have no interest whatever at the moment in the industry.
  Mr. David Jones: To whom did the hon. Member sell it?
  Mr. Gurden: I am not sure whether the hon. Member thinks I ought to have sold it to him.
  If one has to take into account milk consumption today and compares it with any other period, one must certainly take into account the consumption of other milk products. The consumption of other milk products is extremely high today, far higher than in the days of rationing.
  Mr. Willey: Surely the hon. Member is aware that he speaks in error. Surely he is aware that the main milk product, butter, is by no means in

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  adequate supply. If it were at a proper price, there would be a far greater demand for it.
  Mr. Gurden: I am sure that Mr. Speaker would stop me if I went deeply into the subject of milk products. Butter is only one of a tremendous variety of milk products. There are proprietary brands of milk products which figure very largely in this matter. I should say that the overall milk consumption in this country is far greater today per head of the population than it has ever been.
  There is a more important factor than that. In relation to nutritional values, milk is the cheapest food we have today, even at present prices. It does justify an increase, because at its present price milk is still too cheap—[HON. MEMBERS: "Oh."]—in comparison with other basic foods and, compared with non-essential foods, it is cheaper still. One can take calorific, chemical, or bacteriological values, and one will find that milk is still the cheapest food we have.
  If there is a criticism to be made, it is that the price emphasis and the subsidy emphasis in the whole of the dairy trade are now beginning to shift from the hygienic to the chemical values. I mean that the higher fat and solids content of milk is becoming more important. Over the years we have moved towards having more hygienic milk and, thanks to all Governments who have played a hand in this matter and to the trade, there has been a considerable improvement in the hygienic quality of milk. The bacteriological position is far better today than it has ever been, and it is still improving. Under the Labour Government very much was done to help in that direction. If I can say this without blushing, I tried to help and was told that I helped considerably at that time. At that time I should have had to have declared an interest.
  In the future the Minister could, with advantage, consider—it may be necessary to set up a committee for this purpose—a shift in the subsidies or prices charged, when there is control, to chemical quality, rather than, as has benefited us in the past, the hygienic and bacteriological quality of the milk. I am not for a moment suggesting that we should ignore the bacteriological factors in the matter, because they are extremely important, but
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  now we should try to get a better quality yield from our cattle.
  If there is to be criticism of profit, it should lie with proprietary milk products. We should not subsidise any proprietary milk products, because they are very little better than the non-proprietary brands. What proprietary brand is better than good old Cheshire cheese? Where we are subsidising we should shift the emphasis to ordinary brands away from proprietary brands.
  10.25 p.m.
  Mr. F. Beswick: A few moments ago we had one of the most extraordinary speeches any of us has ever heard from the Front Bench opposite. I am not certain that the speech we have just had from the back bench ran the speech of the Joint Under-Secretary of State for Foreign Affairs very close indeed. That milk is too cheap today must be one of the most extraordinary statements in the many extraordinary remarks which have been made from the other side of the House during the debate today.
  I hope that the Joint Parliamentary-Secretary will tell us in plain simple words, so that we and the people outside can understand, what good purpose will be served by the Order. The farmers are not going to benefit; the consumers are not going to benefit and our economy surely cannot benefit by another measure designed to put up the cost of living.
  It is necessary to realise the background to this matter. Here we have a proposal to increase the price of a basic foodstuff. This comes after last week's announcement of a 10 per cent. increase of imported bacon—the deliberate policy of the Government. We shall eventually have an increase in the price of bread and flour, and many other increases have been made in every essential article which goes into the kitchen through the increases in Purchase Tax.
  When the hon. Member for Selly Oak (Mr. Gurden) talks about milk being too cheap, he should appreciate, as a person having a wholesale interest in the matter, that milk is not something which one buys just now and again. An increase of a ½d. in the price of a pint of milk means 1s. 2d. a week to a family of four, if each member has a pint of milk a day.
  Mr. Gurden: The hon. Member should at least be fair. My remark was only in relation to other foods. I said that it was too cheap in relation to other foods.
  Mr. Beswick: Would the hon. Member at any rate agree with me that after a series of increases, which has increased the milk bill in my household—as I mentioned the other day—by about 6s. 6d. a week since the present Government came into power, this increase is of importance in a working class budget? I suggest that it is a most important item.
  What is the reason for introducing the Order? Would the Joint Parliamentary Secretary, who is speaking for the Government, and not just for his Department, be good enough to tell us why, at the present time, the Prime Minister is justified in demanding a standstill in the price of gas and electricity while the Government go out of their way to increase the cost of milk? How can we tolerate price increases in essential foodstuffs when we are told that it is absolutely essential to hold the prices of other basic commodities? What is the policy behind this Order? I hope that we shall get a plain, straightforward and simple explanation from the Joint Parliamentary Secretary.
  10.28 p.m.
  Mr. Sidney Dye: Although I am interested in agriculture, I am not a dairy farmer, although many of my constituents are. It may be argued that this Order has nothing to do with the production of milk; it is merely a question of increasing its retail price by a ½d. a pint, and as the hon. Member for Selly Oak (Mr. Gurden) has told us, even with the additional increase in price it is still cheap. The question is whether it is cheap enough to encourage our people to consume all that we can produce in as fresh a state as possible, and to maintain the industry to the advantage of the health of the nation.
  If the purpose of the Order is to rectify the unhealthy state of the finances of the country, we shall surely be worse off if we injure the health of the children and the babies in carrying out that purpose. That is the argument which I and my hon. Friends would use against the Order. So long as we encouraged the greater consumption of milk and kept its price at such a figure that it encouraged greater consumption, we were following a policy which was for the
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  benefit of the country. Now it is argued that, because the financial state of the country is getting out of hand, we must put up the price of milk along with the price of many other things in order to restore financial stability.
  Are we not doing something to injure the stability of the country? We could have taken other steps to restore financial stability. It would not be wise to pursue that argument, but I think it pertinent to say that the increased price of milk will result in a decrease in the consumption of liquid milk, which will upset the balance of our agricultural economy. Already we are producing more milk than we are consuming in liquid form. In the first half of this year Great Britain has risen from fourth to third place in the export of condensed milk. Are we not therefore calling on the consumers of this country to subsidise the export of milk to other parts of the world?
  Questions have been asked recently about what enabled certain men to maintain their stamina through the heat of Australian days on the cricket field. Now we are told that what enabled Tyson and Statham to continue to send down fast balls and get the "Aussies" out was the milk that they consumed. It was not beef, brawn, mutton, lamb, or anything of that sort, it was the milk and egg flips which they took for lunch and in the middle of the afternoon which kept them fresh even at the end of the day.
  Mr. Nicholls: Has the hon. Gentleman any record of what Washbrook had to drink?
  Mr. Dye: Now, look here—[Laughter]—it is an old dodge to try to get a person off the right point. My particular point at the moment is that milk is the great stamina-producing agent; and here is this wretched Tory Government putting up the price of milk at the very time when we are faced with the Australians.
  Today we have our greatest growing generation, the greatest ever number of children going through the schools of this country, and their parents are faced with this determined attitude on the part of the Government to do two things, to stabilise wages or bring them down, and to put up the cost of living. It seems to me that the Government are going mad—[HON. MEMBERS: "They have

  363
  gone mad."]—in dealing with agriculture when they should be dealing with the financial institutions and the methods by which affairs of State are financed. This is a bad Order. The Joint Parliamentary Secretary, who represents the Peterborough Division, knows that, and so do his constituents.
  10.35 p.m.
  Mr. Jack Jones: I would not have intervened in this debate but for the speech of the hon. Member for Selly Oak (Mr. Gurden). I speak as one who drinks milk and the hon. Member spoke as one who used to sell it. By looking at the pair of us it is plain to see who sold and who drinks it.
  We dragged out of the hon. Member the admission that he used to have a vested interest in the selling of milk, apparently under a Socialist Government which subsidised milk so that the good stuff our workers and children needed most was sold at the lowest price. When the profit was lost he sold out. I suppose he is wishing he had not come to Parliament in view of Orders such as those we are now discussing.
  I understand that there is a big chocolate-making factory in the hon. Member's constituency. I hope he will have the guts to go to his constituency and tell the housewives, particularly those with big families, that milk is too cheap and tell the workers of Bournville that their raw material is too cheap, that he wants it to go up in price so that it would be more difficult to sell and, therefore, there would be more of these workers out of work. I hope he does that, because the result would not be long in coming.
  10.36 p.m.
  The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Harmar Nicholls): I came to the House tonight with the usual apprehensions to answer a Prayer, but I must confess that my apprehensions were turned to terror when I was led to believe by the hon Member for Norfolk, South-West (Mr. Dye) that the result would be that we shall lose the next vital Test Match. That is a matter which would really strike terror into most of us.
  We know that the opportunity of a Prayer is an opportunity for the Opposition
  364
  to have a good all-round smack at the Government. The hon. Member for Sunderland, North (Mr. F. Willey) had some kind things to say about me in his opening speech. May I in turn say how delighted I am to see him back from his travels so that he can go back into battle with his ability. If there is one hon. Member who can claim the title of past master in dealing with Prayers, it is the hon. Member for Sunderland, North. The hon. Member was hard pressed tonight to find anything new to say. I do not know whether to commiserate with him on the slender grounds for argument or to congratulate him on the enthusiasm with which he did his work. He said some unkind things about the Postmaster-General, but he had almost nothing to say about the Orders we have before us. While my speech may be more prosaic than was his, I think it incumbent on me to say a few words on the actual Orders which are being prayed against.
  We welcome the fact that the two Orders are being considered together, but for convenience I shall confine my references to the Great Britain Order. The principal Order, which the Great Britain Order amends, prescribes a maximum price for each type of milk sold in Great Britain. The most familiar types are pasteurised, tuberculin tested and sterilised. The amendment to the principal Order increases the maximum price by ½d. a pint from 1st July this year. The increase, which ought to be on the record, is from 7d. to 7½d., which applies to pasteurised milk, 7½d. to 8d. in the case of tuberculin tested, and 7½d. to 8d. also for sterilised milk. Further details are in the Order.
  Another effect of the Order is a point which was touched on by my hon. Friend the Member for Selly Oak (Mr. GurdenX The Order will transfer the quality provisions of the principal Order, as they relate to the Channel Islands and South Devon milk, from the orbit of the wartime emergency legislation under which they have been operating to permanent legislation under the Food and Drugs Act, 1955. My hon. Friend was quite correct in paying so much attention to quality milk. The 4 per cent. minimum butter fat content, which was the basis of the quality provisions under the principal Order, will be maintained under permanent legislation. The House will

  365
  remember that my right hon. Friend discussed this in greater detail last month, when he asked the House to agree to the Milk and Dairies (Channel Islands and South Devon Milk) Regulations, 1956.
  It has been the policy of successive Governments to reduce our reliance on war-time emergency legislation in favour of permanent legislation, and this is another move in that direction. It makes no difference to the standard of the milk; it means that the 4 per cent. quality control will continue but that the enforcement will be the responsibility of the Food and Drugs authorities. It is right to have this on the record, because these are the bones of the Orders; they should be on record in addition to the political arguments of the previous speeches.
  We must bear in mind that the prices laid down are maximum prices for milk sold in Great Britain. The House will have noticed that the word "retail" does not appear in the Orders. This is because the maximum price in the Orders is the normal price which the housewife has to pay at her door. The two prices are one and the same and there was no necessity to identify the retail price by referring to it in the Orders.
  We have been asked for the reasons for this price increase. The House will remember that it was foreshadowed by my right hon. Friend the Chancellor of the Exchequer on 17th February, and I do not think I can do better than repeat the point which he made then. He said that with such a high level of employment and high wages it was
  "difficult to justify the continuance of these general consumer subsidies on their present scale."—[OFFICIAL REPORT, 17th February, 1956; Vol. 548, c. 2670.]
  particularly at a time when the Government were making great efforts to reduce expenditure and were asking every spending section throughout the country to do the same. If those words are reexamined, I think it will be seen that they were responsible words in the context of the problem with which the country is faced, and I think the House will accept them as a fair and proper statement of the position.
  Dr. Edith Summerskill: If that statement by the Chancellor of the Exchequer is valid, why has the consumption of milk dropped in the lowest income groups, where there are dependent families?
  Mr. Nicholls: I will deal with that point. The hon. Member for Sunderland, North made a point about what he described as the special burden this increase would be on large families, and I will deal with that. But I do not think it could be established that over the last few months the general consumption of milk has fallen in the way that the hon. Member suggested.
  In the economy drive, the Chancellor's first efforts were monetary and fiscal and bore principally on investment. It was never in the Government's mind, nor ought it to have been in the Government's mind, that the whole burden should be placed upon investment. The Government have always claimed that the consumer should play his part, particularly when such a high 'proportion of consumers have benefited from increases in wages, salaries or profits.
  As the hon. Member for Sunderland, North said, the demand for milk is fairly inelastic. Whatever their social positions, people have their regular standing order for milk. One of the weaknesses of food subsidies is that the Government have to put the screw on all taxpayers in order to get the money to pay the subsidies to benefit many who do not need or desire the help of subsidies. That is a fundamental weakness of the whole basis of such subsidies.
  Nor ought we to overlook the proposition that, in the long run, it is healthier and better that people should pay the proper price for the commodities which they are buying and using. I have been asked the reasons for the increase, and I am giving a reason which I hold sincerely and which is a basis of Government policy. To try to hide the imperfections in the normal working of our economy and to conceal indications which ought to be known will, in the long run, affect the general efficiency of the country.
  Mr. Willey: Perhaps the hon. Gentleman will allow me to intervene, because he is now saying something which is of considerable importance. Is he now giving forewarning that the Government intend to attack welfare foods?
  Mr. Nicholls: I will deal with that. What I say now is that the Government have said that, in order to face the problem now facing the whole of the country both investment and consumers

  367
  should play their part in bringing back stability.
  Until 1st July, the general milk subsidy was running at over £40 million a year, and that represented one point in the cost-of-living index. In putting up the price of milk by only ½d. a pint we get an immediate reduction this year of approximately £17 millions, and of £20 millions in a full year. That, I think, will be accepted as a very considerable contribution to the general effort of the Exchequer to see that there there are no hidden prices or hidden values.
  I would argue, too, that it is merely a transfer of the burden as far as milk is concerned. The people are getting the advantage of paying less as taxpayers and make it up in payment as consumers.
  Mr. Speaker, having made those points on the long-term value of the people paying economic prices, I think that we should recognise—and this, I think, is the point which the right hon. Lady had in mind—that there are exceptions which have to be faced. I do not think that any critics of the increase of ½d. a pint on milk should overlook the extra family allowances which are to be given by the Government. The hon. Gentleman made a big point of the fact that the Orders would put an extra burden on households with large families but, to make that statement and at the same time to ignore the fact that we are giving extra family allowances to those very households, is not very helpful. We either have to look at the picture as a whole or else put a very unfair interpretation on what the Government are doing.
  I heard comments about the old-age pensioners. What have the Government done? Are they ignoring the old-age pensioners? [HON. MEMBERS: "Yes."] I think that it should be remembered on the other side that when the party opposite were the Government the old-age pension was 30s. a week and today it is 40s.; that the widow's pension was then 26s. a week and today is also 40s. I know that it is part of the tactics of party conflict, but I do not think that it is fair that a special gloss should be put on an Order of this sort while completely ignoring all the countervailing improvements.
  Mr. Willey: I am grateful to the hon. Gentleman for giving way, because I want to be fair to his right hon. Friends. I did not mention the increase in family allowances, because the Chancellor of the Exchequer has never claimed any association between subsidy cuts and the increased family allowances. The increased family allowance has been given because of the rapid increase in the cost of living, disregarding, for that purpose, the increase which has been caused by this subsidy cut and by the bread subsidy cut.
  Mr. Nicholls: The hon. Gentleman really cannot get away with that. He made it the main point of his argument that the result of the Government's action was to put a burden on the households with big families. I am saying that, as a result of Government action, those households with big families are getting greater assistance from the Exchequer than ever they did when the hon. Gentleman was in office.
  Mr. James H. Hoy: Is the hon. Gentleman aware that only this week, in reply to a Question put by me today, the Secretary of State for Scotland has admitted that every child at a kindergarten school in Edinburgh will have its mid-day school meal increased in price from 4d. to l0d. a day?
  Mr. Nicholls: I do not see the relevance of that to what we are now discussing. Those families will also get the advantage of the increased family allowance.
  I do beg the House to keep a sense of proportion in this matter. The average consumption of full price milk, according to the records, is four pints per head per week. An increase of a halfpenny a pint will make a difference of twopence a head a week. To make the sort of speech which the hon. Gentleman did, on the basis of increases of this Order, at a time when expenditure on tobacco, beer, wines and spirits and sweets has gone up to £1,938 million a year, is really nonsensical.
  Any Government subsidising these essential foods should take into account that that amount of money is available from the profits, wages and salaries which all are enjoying, and that being a fact it is hard to establish that an extra twopence per head per week on milk is likely to be an intolerable burden.

  369
  On the question of welfare foods, I would make clear that we have already taken into account the necessity of continuing assistance on the welfare milk. Children under 5 years of age and expectant mothers will continue to receive milk at the rate of one pint a day at the old price of l½d., and in necessitous cases this milk is provided free of charge. That will not be altered. Also, our schoolchildren are not affected under this Order. They will continue to receive their daily third of a pint free of charge when at school. It is well to remember that those two schemes account for about 15 per cent. of the total amount of liquid milk consumed in this country.
  Mrs. Jean Mann: Is it not a fact that the Government have insisted that the children at nursery schools will have their consumption of milk reduced to 50 per cent.?
  Mr. Nicholls: The scales I have announced are the scales being adhered to in the schools—a third of a pint.
  The other suggestion made by the hon. Gentleman and his hon. Friends was that general consumption of milk was falling. I think that I should give the figures of liquid consumption to put that in its proper perspective. So far as the consumption of liquid milk is concerned, comparing January to June, 1955 with the same months of 1956 these are the figures: in January, 1955, liquid milk consumption was 128·2 million gallons; it went up in 1956 to 128·5 million; in February from 117·8 million to 123·4 million; in March, 1955, it was 130·9 million, and in 1956 it stood at 130·1 million; in April, it went up from 122·6 million to 124·3 million; May, 129·7 million to 130·4 million; in June. 125·8 million to 127·7 million.
  I quote those figures because the suggestion from hon. Gentleman opposite was that we had had a falling-off in consumption of liquid milk.
  Dr. Summerskill: Will the hon. Gentleman break that total down? What was the consumption in those families with dependent children?
  Mr. Nicholls: I have already dealt with the question of families which have more than two dependent children. I have not the figures which the right hon. Lady asks for, but if she will allow
  370
  me, her hon. Friend was suggesting that the consumption of milk was falling at an alarming rate. [HON. MEMBERS: "No."] I am merely wanting to show that over the last five months we have seen an improvement in liquid consumption, which I am certain will give a lot of satisfaction.
  Mr. Willey: I think we should try to get this matter right. I said that the consumption of full price fresh milk had fallen by 3 to 4 per cent. under a Conservative Government. Does the Joint Parliamentary Secretary deny that? Secondly, I said it appeared on the evidence before us, which was perhaps inadequate, that during the early months of this year there had been a slight increase in the consumption of full price fresh milk, and for that reason I said that I anticipated the Government introducing a further increase in the retail price.
  Mr. Nicholls: If the hon. Gentleman will take into account all the speeches which have come from the Opposition benches tonight, he will find that the speech of his hon. Friend the Member for Norfolk, South-West was not quite in keeping with that. If the hon. Gentleman has helped me to leave on the records of the House that over the last five months the anticipated general increase in price has not caused a falling off in consumption, we have both done our job extremely well.
  The way in which the debate on the Prayer has gone is in keeping with those on past Prayers. In so far as there has been criticism of what the Chancellor has tried to do, it is only fair to say that the improvement in our gold reserves and balance of trade and the general feeling of improvement even in our motor exports, in spite of German competition, have shown that he is winning through. If we take all the arguments together and look at the effort that my right hon. Friend is making to achieve a balanced economy, without trying to separate this small aspect from all the other aspects, we shall feel satisfaction that we are moving along the right road.
  However, we do not expect hon. Gentlemen opposite to say that. All I can do is to ask the House to say it, and show that it means it, by opposing the Prayer.
  Question put:—
  The House divided: Ayes 171, Noes 230.

  Division No. 268.]

  AYES

  [10.55 p.m.

  Ainsley, J. w.

  Harrison, J. (Nottingham, N.)

  Owen, W. J.

  Allaun, Frank (Salford, E.)

  Hayman, F. H.

  Paling, Rt. Hon. W. (Dearne Valley)

  Allen, Arthur (Bosworth)

  Healey, Denis

  Palmer, A. M. F.

  Allen, Scholefield (Crewe)

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

  Pannell, Charles (Leeds, W.)

  Awbery, S. S.

  Herbison, Miss M.

  Pargiter, G. A.

  Bacon, Miss Alice

  Hobson, C. R.

  Parkin, B. T.

  Balfour, A.

  Holman, P.

  Pearson, A.

  Beswick, F.

  Howell, Charles (Perry Barr)

  Popplewell, E.

  Blackburn, F.

  Howell, Denis (All Saints)

  Price, Philips (Gloucestershire, W.)

  Blenkinsop, A.

  Hoy, J. H.

  Probert, A. R.

  Blyton, W. R.

  Hubbard, T. F.

  Proctor, W. T.

  Boardman, H.

  Hughes, Cledwyn (Anglesey)

  Pryde, D. J.

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

  Hughes, Emrys (S. Ayrshire)

  Randall, H. E.

  Bowles, F. G.

  Hughes, Hector (Aberdeen, N.)

  Robens, Rt. Hon. A.

  Boyd, T C.

  Hunter, A. E.

  Roberts, Albert (Normanton)

  Braddock, Mrs. Elizabeth

  Hynd, H. (Accrington)

  Roberts, Goronwy (Caernarvon)

  Broughton, Dr. A. D. D.

  Hynd, J. B. (Attercliffe)

  Rogers, George (Kensington, N.)

  Brown, Rt. Hon. George (Belper)

  Isaacs, Rt. Hon. G. A.

  Short, E. W.

  Burke, W. A.

  Janner, B.

  Shurmer, P. L. E.

  Butler, Herbert (Hackney, C.)

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

  Skeffington, A. M.

  Callaghan, L. J.

  Jenkins, Roy (Stechford)

  Slater, J. (Sedgefield)

  Castle, Mrs. B. A.

  Johnson, James (Rugby)

  Snow, J. W.

  Champion, A. J.

  Johnston, Douglas (Paisley)

  Soskice, Rt. Hon. Sir Frank

  Chetwynd, G. R.

  Jones, David (The Hartlepools)

  Sparks, J. A.

  Clunie, J.

  Jones, Jack (Rotherham)

  Steele, T.

  Coldrick, W.

  Jones, J. Idwal (Wrexham)

  Stewart, Michael (Fulham)

  Collins, V. J. (Shoreditch & Finsbury)

  Kenyon, C.

  Stones, W. (Consett)

  Corbet, Mrs. Freda

  King, Dr. H. M.

  Summerskill, Rt. Hon. E.

  Cove, W. G.

  Lawson, G. M.

  Sylvester, G. O.

  Craddock, George (Bradford, S.)

  Ledger, R. J.

  Taylor, Bernard (Mansfield)

  Cronin, J. D.

  Lee, Frederick (Newton)

  Taylor, John (West Lothian)

  Crossman, R. H. S

  Lindgren, G. S.

  Thomas, Iorwerth (Rhondda, W.)

  Davies, Harold (Leek)

  Logan, D. G.

  Thomson, George (Dundee, E.)

  Davies, Stephen (Merthyr)

  Mabon, Dr. J. Dickson

  Timmons, J.

  Deer, G.

  MacColl, J. E.

  Turner-Samuels, M.

  Delargy, H. J.

  McInnes, J.

  Ungoed-Thomas, Sir Lynn

  Dye, S.

  McKay, John (Wallsend)

  Warbey, W. N.

  Ede, Rt. Hon. J. C.

  McLeavy, Frank

  Watkins, T. E.

  Edelman, M.

  MacPherson, Malcolm (Stirling)

  Weitzman, D.

  Edwards, Robert (Bilston)

  Mahon, Simon

  Wells, William (Walsall, N.)

  Edwards, W. J. (Stepney)

  Mallalieu, E. L, (Brigg)

  West, D. G.

  Evans, Albert (Islington, S. W.)

  Mann, Mrs. Jean

  Wheeldon, W. E.

  Evans, Stanley (Wednesbury)

  Marquand, Rt. Hon. H. A.

  White, Mrs. Eirene (E. Flint)

  Fernyhough, E.

  Mason, Roy

  Wilcock, Group Capt. C. A. B.

  Finch, H. J.

  Mayhew, C. P.

  Willey, Frederick

  Forman, J. C.

  Mikardo, Ian

  Williams, Rev. Llywelyn (Ab'tillery

  Fraser, Thomas (Hamilton)

  Mitchison, G. R.

  Williams, W. R. (Openshaw)

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

  Monslow, W.

  Willis, Eustace (Edinburgh, E.)

  Gibson, C. W.

  Moody, A. S.

  Wilson, Rt. Hon. Harold (Huyton)

  Gooch, E. G.

  Mort, D. L.

  Winterbottom, Richard

  Gordon Walker, Rt. Hon. P. C.

  Moyle, A.

  Woodburn, Rt. Hon. A.

  Grenfell, Rt. Hon. D. R.

  Mulley, F. W.

  Woof, R. E.

  Grey, C. F.

  Neal, Harold (Bolsover)

  Yates, V. (Ladywood)

  Griffiths, David (Rother Valley)

  Noel-Baker, Francis (Swindon)

  Younger, Rt. Hon. K.

  Griffiths, Rt. Hon. James (Llanelly)

  O'Brien, Sir Thomas

  Zilliacus, K.

  Hall, Rt. Hn. Glenvil (Colne Valley)

  Oram, A. E.

  Hamilton, W. W.

  Orbach, M.

  TELLERS FOR THE AYES:

  Hannan, W.

  Oswald, T.

  Mr. J. T. Price and Mr. Simmons.

  NOES

  Agnew, Cmdr, P. G.

  Bidgood, J. C.

  Chichester-Clark, R.

  Aitken, W. T.

  Biggs-Davison, J. A.

  Clarke, Brig. Terence (Portsmth, W.)

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

  Birch, Rt. Hon. Nigel

  Cole, Norman

  Alport, C. J. M.

  Bishop, F. P.

  Conant, Maj. Sir Roger

  Amery, Julian (Preston, N.)

  Black, C. W.

  Cooper-Key, E. M.

  Anstruther-Gray, Major Sir William

  Body, R. F.

  Cordeaux, Lt.-Col. J. K.

  Arbuthnot, John

  Boothby, Sir Robert

  Craddock, Beresford (Spelthorne)

  Armstrong C. W.

  Bowen, E. R. (Cardigan)

  Crouch, R. F.

  Ashton, H.

  Boyle, Sir Edward

  Cunningham, Knox

  Astor, Hon. J. J.

  Braine, B. R.

  Dance, J. C. G.

  Atkins, H. E.

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

  Davidson, Viscountess

  Baldock, Lt.-Cmdr. J. M.

  Brooke, Rt. Hon. Henry

  D'Avigdor-Goldsmid, Sir Henry

  Baldwin, A. E.

  Brooman-White, R. C.

  Deedes, W. F.

  Balniel, Lord

  Bryan, P.

  Digby, Simon Wingfield

  Barber, Anthony

  Buchan-Hepburn, Rt. Hon. P. G. T.

  Dodds-Parker, A. D.

  Barlow, Sir John

  Burden, F. F. A.

  Donaldson, Cmdr. C. E. McA.

  Barter, John

  Campbell, Sir David

  Doughty, C. J. A.

  Bell, Philip (Bolton, E.)

  Carr, Robert

  Drayson, G. B.

  Bennett, F. M. (Torquay)

  Cary, Sir Robert

  du Cann, E. D. L.

  Bevins, J. R. (Toxteth)

  Channon, H.

  Duncan, Capt. J. A. L.

  372

  373

  Duthie, W. S.

  Lambert, Hon. G.

  Price, Henry (Lewisham, W.)

  Eden, J. B. (Bournemouth, West)

  Lambton, Viscount

  Prior-Palmer, Brig. O. L.

  Elliot, Rt. Hon. W. E,

  Lancaster, Col. C. G.

  Profumo, J. D.

  Emmett, Hon. Mrs. Evelyn

  Langford-Holt, J. A.

  Raikes, Sir Victor

  Errington, Sir Eric

  Leather, E. H. C.

  Ramsden, J. E.

  Fell, A.

  Leavey, J. A.

  Rawlinson, Peter

  Fisher, Nigel

  Legge-Bourke, Mal. E. A. H.

  Redmayne, M.

  Fletcher-Cooke, C.

  Lindsay, Hon. James (Devon, N.)

  Remnant, Hon. p.

  Fraser, Sir Ian (M'cmbe & Lonsdale)

  Lindsay, Martin (Solihull)

  Renton, D. L. M.

  Freeth, D. K.

  Linstead, Sir H. N.

  Ridsdale, J. E.

  Galbraith, Hon. T. G. D.

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

  Rippon, A. G. F.

  Gammans, Sir David

  Lloyd, Rt. Hon. Selwyn (Wirral)

  Roberts, Sir Peter (Heeley)

  Garner-Evans, E. H.

  Longden, Gilbert

  Robinson, Sir Roland (Blackpool, S.)

  George, J. C. (Pollok)

  Lucas, Sir Jocelyn (Portsmouth, S.)

  Rodgers, John (Sevenoaks)

  Glover, D.

  Lucas-Tooth, Sir Hugh

  Roper, Sir Harold

  Godber, J. B.

  Macdonald, Sir Peter

  Ropner, Col. Sir Leonard

  Gomme-Duncan, Col. Sir Alan

  Mackeson, Brig. Sir Harry

  Schofield, Lt.-Col. W.

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

  McKibbin, A. J.

  Scott-Miller, Cmdr. R.

  Green, A.

  Mackie, J. H. (Galloway)

  Sharples, R. C.

  Gresham Cooke, R.

  McLaughlin, Mrs. P.

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

  Grimston, Sir Robert (Westbury)

  Maclay, Rt. Hon. John

  Speir, R. M.

  Grosvenor, Lt.-Col. R. G.

  Maclean, Fitzroy (Lancaster)

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

  Gurden, Harold

  McLean, Neil (Inverness)

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

  Hall, John (Wycombe)

  MacLeod, John (Ross & Cromarty)

  Stanley, Capt. Hon. Richard

  Harrison, Col. J. H. (Eye)

  Macmillan, Rt. Hn. Harold (Bromley)

  Steward, Harold (Stockport, S.)

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

  Macpherson, Niall (Dumfries)

  Stewart, Henderson (Fife, E.)

  Harvey, Ian (Harrow, E.)

  Maddan, Martin

  Stoddart-Scott, Col. M.

  Heath, Rt. Hon. E. R. G.

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

  Stuart, Rt. Hon. James (Moray)

  Hill, Rt. Hon. Charles (Luton)

  Maitland, Hon. Patrick (Lanark)

  Studholme, Sir Henry

  Hill, Mrs. E. (Wythenshawe)

  Markham, Major Sir Frank

  Summers, Sir Spencer

  Hill, John (S. Norfolk)

  Marlowe, A. A. H.

  Sumner, W. D. M. (Orpington)

  Hirst, Geoffrey

  Marshall, Douglas

  Taylor, Sir Charles (Eastbourne)

  Holland-Martin, C. J.

  Mathew, R.

  Teeling, W.

  Hope, Lord John

  Maude, Angus

  Thomas, Leslie (Canterbury)

  Hornby, R. P.

  Mawby, R. L.

  Thompson, Kenneth (Walton)

  Hornsby-Smith, Miss M. P.

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

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

  Hudson, Sir Austin (Lewisham, N.)

  Milligan, Rt. Hon. W. R.

  Thornton-Kemsley, C. N.

  Hughes Hallett, Vice-Admiral J.

  Monckton, Rt. Hon. Sir Walter

  Tiley, A. (Bradford, W.)

  Hughes-Young, M. H. C.

  Nabarro, G. D. N.

  Tilney, John (Wavertree)

  Hulbert, Sir Norman

  Nairn, D. L. S.

  Touche, Sir Gordon

  Hurd, A. R.

  Nicholls, Harmar

  Turton, Rt. Hon. R. H.

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

  Nicholson, Godfrey (Farnham)

  Vane, W. M. F.

  Hylton-Foster, Sir H. B. H.

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

  Vaughan-Morgan, J. K.

  Irvine, Bryant Godman (Rye)

  Nield, Basil (Chester)

  Vickers, Miss J. H.

  Jenkins, Robert (Dulwich)

  Noble, Comdr. A. H. P.

  Vosper, D. F.

  Jennings, J. C. (Burton)

  Nugent, G. R. H.

  Wakefield, Sir Wavell (St. M'lebone)

  Johnson, Dr. Donald (Carlisle)

  Oakshott, H. D,

  Wall, Major Patrick

  Ward, Hon. George (Worcester)

  Johnson, Eric (Blackley)

  O'Neil, Hn. Phelim (Co. Antrim, N.)

  Ward, Dame Irene (Tynemouth)

  Jones, Rt. Hon. Aubrey (Hall Green)

  Ormsby-Gore, Hon. W. D.

  Waterhouse, Capt. Rt. Hon. C.

  Joseph, Sir Keith

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

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

  Joynson-Hicks, Hon. Sir Lancelot

  Page, R. G.

  Wills, G. (Bridgwater)

  Keegan, D.

  Pannell, N. A, (Kirkdale)

  Wilson, Geoffrey (Truro)

  Kerr, H. W.

  Peyton, J, W. W.

  Wood, Hon. R.

  Kershaw, J. A.

  Pilkington, Capt. R. A.

  Woollam, John Victor

  Kimball, M.

  Pitt, Miss E. M.

  Yates, William (The Wrekin)

  Kirk, P. M.

  Pott, H. P.

  Lagden, G. W.

  Powell, J. Enoch

  TELLERS FOR THE NOES:

  Mr. Legh and Mr. Wakefield.

  Mr. Willey: In view of my failure to gain any support from hon. Members
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  from Northern Ireland, I do not propose to move the second Prayer.

  NATIONAL SERVICE (MR. MICHAEL PATCH)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Godber.]
  11.7 p.m.
  Mr. E. H. C. Leather: I rise to raise a constituency case which my hon Friend the Parliamentary Secretary knows as well as I do. It is the case of a young man by the name of Michael Patch, and it is typical of the kind of matter which comes from a farming community. It is the case of a young man running a smallholding, in this instance a holding of 27 acres, and if he is called up it will have to be sacrificed. It will mean the sacrifice of a life's work, and his parents will be devoid of any earning power of any significance during the period of his National Service. The smallholding will disappear, in effect, during his National Service.
  I do want to make it quite clear at the outset that we in the countryside fully appreciate that we have certain special privileges in the matter of the call-up. We understand that, and as the representative of a country constituency I do not want to say anything which might be taken as desiring an abuse of that privilege. From time to time all hon. Members have young men coming to us asking us to try to help them to get out of doing National Service, and the majority of those applications can be turned down without consideration. It is no part of my duty to help people to avoid a national obligation, but I have personal knowledge of the case which I raise tonight, and I must say that I regard it as quite exceptional.
  This is the case of a smallholder who is the unfortunate type of man who falls between two stools. If he had been the son of a large farmer, or on the other hand had he been a farm worker, he would doubtless have been deferred; but the smallholder appears to be nobody's concern. The first point in my argument is that many of my constituents, the local branch of the National Farmers' Union, and others who are interested, say that, in fact, the Minister and the regional office of the Ministry of Labour and the National Service Tribunal have all been acting under a misapprehension from the
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  start. We believe that a report was made by the county agricultural officer which was misleading.
  Therefore, the Agricultural Advisory Panel and subsequently the Minister of Agriculture, in advising the Minister of Labour, were acting under a misapprehension and not upon the correct facts. That being so, I am pleading with my hon. Friend to find some way in which this case can be reopened and we can go back to "square one." I am convinced, as are most of those who know the case, that the Agricultural Advisory Panel would then give a decision different from that which it gave originally, acting on what I believe was misleading evidence.
  I think that my allegation is borne out by a number of facts, the most notable one of which was the Ministry of Labour's suggestion to this young man that he could make alternative arrangements. Nobody who knows the conditions of these smallholdings, in a district consisting practically entirely of small farms, could make such a suggestion, because it is obvious to anyone with a true appreciation of the facts that such a suggestion is quite impossible to carry out.
  The evidence which we believe was misleading was that which was given at the start, which meant that all the subsequent negotiations have been bedevilled and "off the beam." Indeed, I believe that there is some evidence to support my contention. These are the kind of things which should not be said publicly, but things get around in a country community. Can my hon. Friend confirm or deny that one of the members of the Advisory Panel himself has in fact privately written to the Ministry urging that the panel be given an opportunity to consider the matter again?
  I will quote from a letter my hon. Friend wrote to me on 14th March, in connection with the Panel and the significance of this point. My hon. Friend said:
  "…it is the function of the agricultural members alone to give the recommendation as to whether or not deferment can be justified on agricultural grounds."
  Secondly, to support my view that the Panel was at the time acting upon misleading or inaccurate evidence, I would quote from a statement which I have and which I can substantiate, although it is

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  not from a letter but from a telephone conversation. The Ministry of Labour informed the National Farmers' Union in May, in the following words:
  "… the other information which this Ministry hold which states that Mr. Patch was not working full-time on the holding, but was doing work in gardens, maintaining machinery and working on other farms."
  My hon. Friend pointed out to me, in a further letter written on 13th July, that that had not influenced his decision. I fully appreciate that, but I think that it strongly influenced the Ministry of Agriculture when it advised him upon the decision. In other words, while I agree that it did not affect his view at the time, I am absolutely certain that it materially affected the advice which the Ministry of Agriculture gave him. This is a most important point, and again it is an illustration of how the report was misleading.
  The county agricultural officer reported that Michael Patch was doing work for other people and, in the words of one report put into the Ministry of Agriculture as long ago as December, 1955:
  "there was not sufficient work on the 18 acre holding to keep Mr. Patch fully employed …"
  Mr. Jack Jones: Is not it possible that a man with a smallholding might, in the winter months, do repair work and help other people when he is not too busy himself sowing or doing other agricultural work?
  Mr. Leather: Precisely; that is the point I was coming to. The point is that in a district such as this, where practically all the farms for miles around are one-man farms, there are periods of bad weather when a man might not be able to work on his own holding.
  Furthermore, there are periods, especially in the hay and harvesting time, in our part of the world, where a man must have help from his neighbours, and the only way in which he can get it is by helping his neighbours. The system of mutual help is general, and it is essential if people running one-man farms are to continue to exist. That is the reason why this young farmer was not working full-time on his own holding, and that fact was used as an important piece of evidence against him, whereas if it had been properly understood, and explained to the Panel in the first place,
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  it would have been strong evidence for him.
  Finally, we come to the very important question of what constitutes significant production. My hon. Friend wrote to me on the 20th March and said that the issue of deferment in such cases is determined by reference to two basic tests; namely, whether the farm or holding is making a significant contribution to food production, and if so, whether the call-up of the person concerned would make it impossible for this significant production to be continued.
  On the basis of the misleading report, on the basis of the misunderstanding about the work being a part-time job, this man's application was turned down. I have explained why we believe that the report was misleading, and have stated that to say that his holding was a part-time job was wrong. On the question of significant production, I believe that the case was so much in the balance because it was said to be a part-time job.
  My hon. Friend has been kind enough to send me figures of other cases. There was a case in my constituency in which a farmer in a similar situation was deferred. The difference between his figures and those of Mr. Patch is infinitesimal. I would point out that the figures do not give a true picture, and that had the initial advice and evidence been right a different picture would have resulted.
  In the case of another young man in my county it is true that his acreage, and the number of cows in milk, were larger than those of Mr. Patch. A significant point which the Advisory Panel did not consider was that the yields from Mr. Patch's cows and acreage were bigger. In other words, he was doing a better, a more efficient, job. He was getting more milk from each cow, and more tonnage an acre, than was the person with the slightly larger acreage and more cows.
  On the basic tests, and making comparisons with what the Ministry has agreed is significant production in other cases, I have no doubt that had the facts been known to the Advisory Panel in the first place it would have reached a different decision. I am convinced that the members of the Advisory Panel, now as private citizens, hold that view. The

  379
  fact that they do so is not unknown in my constituency.
  Production is, I believe, significant by the Ministry's standards. The picture would have been better if the true information had been given. If this man is taken away the whole of that production will be lost. The 27 acres will revert to pasture, and the farm will have to be sold to support the mother and father while the boy is away. It will be gone when the boy returns. On the test of the standard of production which will be lost if this man is called up, and on the facts which the Advisory Panel and Ministry of Agriculture did not have when they advised the Minister, this case ought to be revised. I again plead with my hon. Friend to find some method whereby the Panel can be allowed to look at the case again.
  11.19 p.m.
  The Parliamentary Secretary to the Ministry of Labour and National Service (Mr. Robert Carr): My hon. Friend the Member for Somerset, North (Mr. Leather) has pressed his constituent's case with great force, not only tonight in the House but in correspondence and interviews with my predecessor and with me. No constituent could have had an hon. Member who would have pressed his case more strongly.
  Of course, I sympathise with someone in the position of Mr. Patch who is liable to be called up in this way. But we must realise that National Service, by its very nature, causes hardship in many cases. The possibility of hardship is quite inseparable from the need for universal National Service. I take no pleasure in informing my hon. Friend that this possibility of hardship includes even the possibility that a small family business, built up over the years, and representing a family's savings, may have to be disposed of in order that a man may carry out his National Service.
  Had this not been a farming business—had it, for example, been a greengrocery business, selling food products in the retail market—Mr. Patch could not have applied for deferment. I wish to make clear that deferment is not, nor was it intended to be, a means of alleviating personal hardship. Deferment is granted on a large scale only in the mining and
  380
  agricultural industries and in the Merchant Navy, and to an extremely limited extent in individual cases in a few other industries where vital national interests are at stake. Personal hardship is alleviated through the granting of postponement of call-up, as distinct from deferment. That is as it should be. Were deferment the means of dealing with cases of personal hardship, it would be unfairly favourable to those in one or two special industries.
  Every man called up for National Service has the right to apply for a temporary postponement of his call-up on the grounds of hardship. My hon. Friend did not raise this question of postponement in detail and I do not think I need to say much about the machinery by which postponement is considered. Suffice it to say that the final authority is the umpire appointed by the Crown. If I may put it in this way, he is the sort of House of Lords in these postponement cases. The umpire has laid down that in all cases of business hardship such as this, if it becomes clear that an applicant can make no other arrangements for the conduct of his business, then the business must, if necessary, be disposed of. That, I fear, is the position.
  Mr. Patch has already had the benefit of this postponement procedure for a considerable period. He had six months' postponement from the time his application for deferment was turned down in June last year, and he had two renewals which ran until 8th June this year. When he applied for a further renewal it was refused on the grounds that sufficient time had been allowed for making alternative arrangements. If it was found impossible to make further arrangements the rule I have mentioned must come into force, and Mr. Patch must do his service.
  My hon. Friend has pressed the deferment aspect of this case, I have mentioned postponement only because I wished to make clear that it is postponement only and not deferment which can be granted on the grounds of personal hardship. In agriculture deferment is granted only in the interests of maintaining existing food production. As my hon. Friend said, the essential test is that the farm or holding on which the worker is employed must be making a significant contribution to food production. There are other tests, but that is the first one,

  381
  and the claim automatically fails if this first essential test is not satisfied. That is what happened in this case.
  It has been decided through the appropriate machinery—I will go into details in a moment—that the contribution of this smallholding is not sufficient to constitute significant production. It is, therefore, not sufficient to entitle Mr. Patch to deferment of National Service. I want to stress once again, because this must be made crystal clear, that the decision is based on economic considerations at the time the application for deferment is made. It does not take into account considerations of personal hardship, which is a matter for the postponement procedure.
  How do we decide whether a particular farm or smallholding is or is not making a significant contribution to food production? That is a difficult decision as agricultural production cannot be dealt with by standard units. There is infinite variation in the type of product and conditions are very different in different areas. Therefore, it has always been considered impossible to lay down centrally some standard national definition of significant production, attractive as that would be were it possible. It would be easy if each farm could be measured against a national yardstick, but because of the variations in agricultural conditions of production that has never been thought possible.
  For that reason, it has always been considered best to deal with all these applications at local level. That is done through a network of local National Service deferment boards throughout the country. These local deferment boards are advised by agricultural advisory panels which are composed of local farmers and farm workers. That procedure has long been agreed by all the farming interests involved. It is a human institution, trying to do an extremely difficult job, and however thoroughly and conscientiously those concerned do it there are always bound to be borderline cases. There are bound to be claims of inconsistency between one case and another, but my right hon. Friend and I are satisfied, and so, I believe, are the farming interests that not only is this the best machinery that can be devised but that it has been working as satis-
  382
  factorily as any machinery we can devise can work.
  Only if there is failure to reach agreement at local level is a case referred to the headquarters of my Ministry, which in turn consults the Ministry of Agriculture. In this case there was disagreement locally. The case was therefore referred to the headquarters of my Ministry and we in turn consulted the Ministry of Agriculture, which investigated the case in detail and advised that the production was in fact not significant and that deferment would not be justified. As a result in June, 1955, the deferment board notified Mr. Patch that his application had been rejected.
  That is the history of the case, and in the six or seven minutes which remain to me I should like to fill in that history in reply to some of the points made by my hon. Friend. First, he made the point that Mr. Patch was a smallholder. I think he felt that because he was a smallholder he was at a disadvantage. I can only assure my hon. Friend that I have not seen any evidence of that whatever. The only disadvantage which a smallholder may be under is that if the production of his smallholding is so small that by all the tests which can be applied the total production is not considered significant, his claim for deferment must unfortunately fail. That is what has happened here.
  There is no question of a smallholder, as a smallholder, being treated unfairly compared with a son of a farmer, or farm worker, who had a vested interest. It depends on the production of the farming unit. The difficulty in this case is that it has been decided that the production is not such as would justify deferment on grounds of significant production towards the food supply of the country. I can assure my hon. Friend that there is no question of any prejudice against this case because it concerns a smallholding. I have looked into it most carefully, and I can assure him that I am satisfied on the point.
  I now turn to the more serious question raised by my hon. Friend, as to whether the test of significant production was determined under a misapprehension, whether the report on which it was based was inaccurate, and whether the facts on which it was based are not the true facts. I can only assure him that the decision

  383
  was taken on facts supplied by Mr. Patch himself. No other facts were taken into account. The facts are supplied by the man making the application. They are checked by an agricultural officer. In this case there was no significant disagreement between them. Those are the facts on which the decision was taken.
  My hon. Friend asked whether the decision was influenced by the fact that Mr. Patch was working part-time. I should like to deal with that stage by stage. First, the deferment board did not know about it until December, 1955. because Mr. Patch had not stated it when supplying his initial information. When the Ministry of Agriculture made its investigation, however, it became aware of the fact. But the basis on which it made its decision was not whether Mr. Patch had been working elsewhere than on his own smallholding. The basis on which it came to its decision was the figures of production disclosed by an investigation by one of their county officers, which did not disagree with the facts about production given by Mr. Patch. The question whether he was working whole-time on his own unit was purely a secondary consideration compared with the production figures of that holding. The Ministry of Agriculture considered that those production figures did not show significant production.
  I should like to give these figures. At the time of his application Mr. Patch had 18 acres, four under arable crops. He had seven cows and 35 poultry. My hon. Friend mentioned one or two other cases which he seemed to think were the same, but in one of the cases he mentioned, in
  384
  Somerset, there was a slightly larger acreage, and the man had 13 cattle compared with seven and twice as many poultry as Mr. Patch. In another case he mentioned in which deferment was granted, in Yorkshire, there was only half the acreage but at least the same number of cattle and nearly five times as many poultry. The man also had more acres under arable crops.
  I do not believe that these matters can be decided by taking them case by case about the country, because the conditions vary tremendously from one area to another. That is why we have the local machinery. I can, however, assure my hon. Friend that the decision in Mr. Patch's case was made on the basis of the figures of production, and I am afraid that I cannot agree to refer this matter again to the board unless some entirely new facts about the production on Mr. Patch's holding come to light, of which so far there has been no evidence.
  Finally, my hon. Friend asked whether one member of the Agricultural Advisory Panel had written to the Ministry. That is the first suggestion I have heard of any such matter. I can neither confirm nor deny it, but I will certainly inquire and will let him know the result. But I can assure him that the case has been looked into and the decision taken on the figures of production. After full consideration, those figures were judged not to constitute significant production.
  Question put and agreed to.
  Adjourned accordingly at twenty-five minutes to Twelve o'clock.

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The House met at half past two of the clock, The LORD CHANCELLOR on the Woolsack.
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The Earl of Breadalbane and Holland—Took the Oath.
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PICTORIAL STAMPS
2.36 p.m.
VISCOUNT ELIBANK: My Lords, I beg to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they have any statement to make on the policy suggested in this House on various occasions since 1953, and strongly supported by, inter alios, the British Travel and Holidays Association and the Scottish Tourist Board, to substitute for some of the present stamps of low values small pictorial stamps of low values which would advertise to the world in extensive fashion some of the scenic beauties and historical monuments of the British Isles.]
LORD CHESHAM: My Lords, my right honourable friend the Postmaster General does not accept the noble Viscount's proposal that stamps of low value should feature scenic beauties and historical monuments even for advertising purposes. He thinks it wrong that in stamps for everyday use we should depart from the honoured and accepted tradition that the Queen's head should be the dominant theme, the country of origin remaining unnamed. The new stamp policy he announced last week is based on the maintenance of this principle. The new stamps will provide for a variety of design which has been warmly welcomed in the areas concerned while symbolising traditional unity under the Crown.
VISCOUNT ELIBANK: My Lords, I thank the noble Lord for his Answer. May I ask whether the Postmaster General, before rejecting my proposals for the small low-value pictorial stamps which I exhibited to this House, had trial designs of stamps printed in colour so that he could see what they would look like?
LORD CHESHAM: My Lords, I have no knowledge that my right honourable friend did anything of the kind. As I have previously informed the noble Viscount, it would certainly not be satisfactory to proceed to matters of detail before the policy was decided.
VISCOUNT ELIBANK: My Lords, may I ask the noble Lord whether, before announcing the new stamp policy, the Postmaster General had any designs printed in colour so that he could see what the proposed new stamps were going to look like?
LORD SALTOUN: My Lords, before the noble Lord replies to that, may I ask two supplementary questions arising out of his main Answer? The first is: Is not the engraving of separate national designs on postage stamps contrary to the Act of Union? I asked that question when we had a debate on the subject, and I repeat it now, I am sure the noble Lord will be able to reply to it. The other question is this. If so much attention is being given to these nationalist designs, can the noble Lord carry the matter a little further and have the lettering on the Welsh stamp printed in Welsh?
LORD CHESHAMM: My Lords, in answer to the noble Viscount, Lord Elibank, may I say that I do not know for certain whether my right honourable friend had such trial designs made. If the noble Viscount is very keen, I can certainly find out and let him know. I should have thought that my right honourable friend would not have done so, for the very reason I have just stated: that it is much more wise and practical to adopt one's policy before going into matters of detail. In answer to the second question of the noble Lord, Lord Saltoun, I may say that the whole matter of the design of the stamps is under consideration, and I should hesitate to say anything in anticipation of what they might look like, or what might be incorporated in the design. So far as the Act of Union is concerned, I am afraid I shall require notice of that question.
LORD SALTOUN: My Lords, is it not the case that I gave the noble Lord notice when we had a debate on the subject? I think that is sufficient notice, and he ought to have been prepared to answer.
VISCOUNT ELIBANK: My Lords, arising out of the last reply of the noble Lord, may I ask him whether, in actual fact, the policy did not depend upon the designs which were going to be incorporated in the stamps? if it is the case that the Postmaster General has not had any trial designs made, he does not know what the stamps will look like: in other words, with great respect to the Postmaster General, he is buying a pig in a poke.
LORD CHESHAM: I must utterly and completely reject the noble Viscount's insinuation. I have never yet heard of a motor car manufacturer building a motor car and then wondering whether he could sell it to anybody.
LORD MATHERS: My Lords, may I ask the Minister, with regard to this sidetracking statement that he has made on behalf of the Postmaster General, whether he is not completely ignoring the purport of the Question and the policy that is advocated by the noble Viscount? This is to encourage and facilitate the Pilgrim's Progress, and what could do that better than by putting on the ubiquitous stamps pictures of the Interpreter's House, the Delectable Mountains and the Celestial City? Will not the noble Lord have
92
another look at this matter, to endeavour to help us to overcome the Hill Difficulty?
LORD SALTOUN: My Lords, before the noble Lord answers, may I say that I gave the Government plenty of notice in the debate. If the Government are not prepared to give an answer, will they consider the matter and could an answer be circulated with the OFFICIAL REPORT?
LORD CHESHAM: My Lords, I have already said to the noble Lord, Lord Saltoun, that if I had proper notice of that Question I could answer it. I do not think that remarks made in the course of a debate can really be construed as proper notice, in view of the fact that the debate took place a matter of weeks before the existence of the stamps was announced. The noble Lord will recall that the debate was not on the subject of any form of national designs on stamps. In reply to the noble Lord, Lord Mathers, I would say that if I should appear to have made some form of side-tracking statement, perhaps he would like me to repeat what I thought were the very clear words of my right honourable friend: that he does not accept the noble Viscount's proposal that stamps of low value should feature scenic beauties and historical monuments, even for advertising purposes. I do not think the noble Lord can call that a sidetracking statement.
LORD MATHERS: It is that Hill Difficulty that I am asking the noble Lord to help us to overcome.
LORD SALTOUN: My Lords, I am sorry to press the noble Lord's memory. but he will remember that in the debate a national stamp for Scotland was suggested and I asked the Government whether that would not be contrary to the Act of Union. I received no reply in the debate. Surely, after that, the noble Lord cannot say that the matter was not properly brought to the attention of the Government.
THE LORD PRESIDENT OF THE COUNCIL (THE MARQUESS OF SALISBURY): My Lords, with all deference to the noble Lord, it may be a proper subsidiary question to ask but it does not arise from this particular Question. The Act of Union goes far wider than the Question that is on the Paper.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: We should like to see it on the Paper.
VISCOUNT ELIBANK: My Lords, with great respect to the noble Lord—
SEVERAL NOBLE LORDS: Order, Order!
VISCOUNT ELIBANK: —these stamps have been proposed, and whether or not they are contrary to the Act of Union is surely a primary consideration in the proposals.

LINGUISTIC PROFICIENCY IN FOREIGN SERVICE
2.48 p.m.
LORD TREFGARNE: 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 they will publish figures showing the number of officials of the Diplomatic Service whose current knowledge of one or more of the important foreign languages attains the stage of fluency or of reasonable proficiency, disregarding cases in which only a smattering of the language is known; and whether they are in a position to say that the professional competence of the Service as a whole does not suffer from its inadequate linguistic attainment, even in the languages of extra-European commercial importance such as Spanish, Portuguese, Chinese, Russian and Japanese.]
THE MINISTER OF STATE FOR FOREIGN AFFAIRS (THE MARQUESS OF READING): My Lords, the figures for proficiency in the more important difficult languages, in Branches A and B of the Foreign Service, are:—Arabic, 106; Burmese, 18; Chinese, 39; Japanese, 51; Persian, 48; Russian, 88; Siamese, 21; Turkish, 21. Similar figures for the more important easier languages are:—Portuguese, 71; German, 570; Italian., 252; Scandinavian languages, 59; Spanish, 404. No figures of French speakers are kept, because all members of the Service, except the most: junior, are expected to have, or to acquire, a knowledge of French.
Special full-time training for periods up to two years is given in the difficult languages. Selected officers are also sent
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for shorter periods, either on first entry into the Service or later, to France and Germany to study the language. All officers are expected and encouraged to learn the language of the country to which they are posted, and language lessons up to a reasonable maximum are paid for from public funds. Various examinations are held, and language allowances are paid both as an incentive to learn and to maintain proficiency. In general, I have every confidence that the Foreign Service is well-equipped linguistically to meets its responsibilities. There is at present a particular and increasing need for Arabic speakers, but good pro-grass has been made since the war in building up a cadre of Arabic speakers, and special attention is devoted to this in the training programme.
LORD TREFGARNE: My Lords, may I thank the noble Marquess for his most adequate reply and assure him that it will give a great deal of gratification to many people who have been somewhat anxious about this matter.

MAGETA ISLAND DETAINEES
2.50 p.m.
VISCOUNT STANSGATE: 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 they can make a statement explaining the reported increase in the prison staff in Mageta Island in Lake Victoria; for what offences the prisoners are confined, and for what terms.]
THE PARLIAMENTARY UNDER-SECRETARY OF STATE FOR THE COLONIES (LORD LLOYD): My Lords, Mageta Island is a special detention camp in which 1,995 Mau Mau adherents are detained for the purpose of maintaining public order. Persons are not subject to detention orders for predetermined periods: they earn their release through rehabilitation and their period in detention depends on the speed at which they respond to the rehabilitation process. Those now on Mageta Island have hitherto shown little response to rehabilitation. Mageta Island is a potentially valuable agricultural area covered with thick bush, which is being cleared by the detainees who are paid for the work they do.

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Since the 22nd June, however, the detainees have refused to do any work other than camp maintenance. Experience has shown that it is difficult to rehabilitate any detainee not given work to do, and an investigation was therefore carried out in order to identify the ringleaders. This was being resisted, and to prevent passive resistance turning to violence and to deal with it should this happen, security forces on the island were increased and 209 ringleaders identified and isolated without incident on the 20th July, in the presence of the Deputy Commissioner of Prisons.
VISCOUNT STANSGATE: My Lords, am I right in supposing that these 1,995 people had not been convicted of any offence? Secondly, am I right in supposing that they allege that the orders given them are not in accordance with proper orders? I should like to get answers to those two questions. I have one other.
LORD LLOYD: My Lords, since this matter was fully debated in your Lordships' House about a year ago, the noble Viscount should by now be aware of the situation of detainees in Kenya. Many Mau Mau terrorists were detained under emergency regulations and, as the noble Viscount should be aware, they were so detained because they could not be left at large, as they were a menace to public security and their activities were leading to the murder of innocent citizens. It is true that many of them were detained under the emergency regulations, without being convicted in the ordinary process of law, and the reason for that is that in the circumstances of the emergency it was quite impossible to obtain witnesses and go through the ordinary legal processes.
The noble Viscount is wrong in thinking that these people were being asked to do anything which under the emergency regulations they should not properly be asked to do. I would refer the noble Viscount to the Emergency Regulations, 1954. Regulation 22 (1) states:
"Every person for the time being detained in a special detention camp may be usefully employed in work which the officer in charge is satisfied will assist in bringing the emergency to an end, and to that end shall do such work of the nature aforesaid as he may be required to do by the officer in charge."
I hope the noble Viscount will feel that that is a satisfactory reply to his question.
VISCOUNT STANSGATE: My Lords, I am very much obliged to the noble Lord for his answer, but two things emerge from it quite clearly. First, these people have not been tried and convicted of anything. The second point is that it is stated on some authority that they allege that the work given to them is not covered by the emergency order. What is the correct course for them to pursue? To whom should they appeal? Also, is it the custom to allow members of the public and journalists to go and see this island and see what is going on?
LORD LLOYD: My Lords, I do not think that the whole situation of the detainees in Kenya can be raised under a Question of this kind. If the noble Viscount wishes to consider the wider aspects, he can, of course, put a Motion on the Paper. If the people claim that they are being asked to do things which the Order does not permit them to be asked to do, which I understand is the noble Viscount's point, if he will give the details of what he claims is wrong in that respect I shall certainly be prepared to look into it. The noble Viscount would know perfectly well that a number of people have been allowed to visit these camps and places of detention, and there is no reason why anybody who wishes to see the authorities, provided they do so in the proper manner, should not do so. Many have done.
VISCOUNT STANSGATE: My Lords, I am pleased to hear that the island is open to inspection, but I have not yet received an answer to the question whether these people allege that the work demanded of them is not covered by the emergency regulations. A statement in that regard appeared in The Times about ten days ago and it was upon that information that I based my question. I hope I shall not be told that I "should be aware" of the answer; it will save time if that is omitted. It comes to this: that these people are detained on the word of an officer, and until that officer says he considers that there is an improvement in their character, they remain there. They may be what are called "lifers".
LORD LLOYD: My Lords, I will not make any assumption about the noble Viscount's knowledge or his ignorance, and we will assume that the noble Viscount knows nothing—something that has

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occurred to me before. Nevertheless, the noble Viscount says that these people allege certain things. He has not told me what they allege or in what respect they are being ill-treated or misused in any way. It seems difficult to go into the matter if the noble Viscount does not tell me what the allegation is. I read the relevant section and the noble Viscount can read it in Hansard to-morrow. If he then still thinks he has a case, I shall be prepared to look into it.
VISCOUNT STANSGATE: My Lords, I will not pursue the matter except to say that it is a cause of great shame to think that about 40,000 people in the British Empire are detained on warrants without trial. As regards the specific character—
SEVERAL NOBLE LORDS: Order, order!
VISCOUNT STANSGATE: I have been asked what was their complaint. Their complaint was as reported in the newspaper, that the work required was not covered by the emergency regulations. That is clear enough, I think.

BUSINESS OF THE HOUSE
EARL FORTESCUE: My Lords, I have to inform your Lordships that it has been arranged, through the usual channels, that we shall, if necessary, sit through dinner to-night, but it is hoped that we shall finish by eight o'clock.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: My Lords, we should have finished much earlier if not so much business had been put down before the main business.

PIER AND HARBOUR PROVISIONAL ORDER (GREAT YAR MOUTH PORT AND HAVEN) BILL
Read 3a (according to Order), and passed.
PIER AND HARBOUR PROVISIONAL ORDER (WISBECH PORT AND HARBOUR) BILL
Read 3a (according to Order), and passed.

AGRICULTURE ACT (PART I) EX TENSION OF PERIOD ORDER, 1956
'THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF AGRICULTURE, FISHERIES AND FOOD (EARL ST. ALDWYN): My Lords, this is the Order which we have to make each year to extend for another year the operation of the various Orders which have been made under Section 4 of the Agriculture Act, 1947. The guarantee arrangements for all the commodities which qualify for guaranteed prices under Part I of the Agriculture Act (with the exception of sugar beet) are now authorised by these Orders, so it is clearly essential that they should be kept in force. I beg to move.
Moved, That the Agriculture Act (Part I) Extension of Period Order, 1956, reported from the Special Orders Committee on Wednesday last, be approved.—(Earl St. Aldwyn.)

WHITE FISH SUBSIDY (UNITED KINGDOM) SCHEME, 1956
EARL ST. ALDWYN: My Lords, with your Lordships' permission I will deal with the two White Fish Orders together, because they concern complementary aspects of the Government's fisheries policy. That policy is to subsidise the inshore, near and middle water fleets while modern vessels are being built, and to encourage the building of these modern vessels by providing grants towards their cost. By this means, and with the help of international measures for the conservation of fish stocks, we hope to have a fairly up-to-date fleet within the next seven years.
The White Fish Subsidy Scheme now before the House makes changes in both the amount and the form of the subsidy for near and middle water vessels. It also alters the form of the subsidy for certain smaller seine-net vessels, and it makes changes in the arrangements by which the crews of fishing vessels share in the subsidy. No change is proposed in the inshore subsidy. Mainly because operational costs have been rising faster than earnings, we propose to increase the subsidy for near and middle water steam vessels by about £650,000, and that for motor vessels by about £50,000. The

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seiners and inshore boats will continue to receive the same total subsidy as at present, because from the information we have we do not feel that any change is needed.
Earlier this year we conducted a special inquiry into the financial position of the inshore fishing industry and I remember that the noble Earl, Lord Listowel, when he heard that we were going to do this, asked that, when the inquiry was complete, a statement should be made about the state of the inshore fishing industry as a whole. Of the thousand inshore fishermen whom we approached in England and Wales only 116 replied, and only half of those replies were of any value. In Scotland the response was better. However, as I have said, such information as we have from this and other sources does not suggest that a change is needed. As to the form in which the subsidy is paid, I ought perhaps to mention that the near and middle water subsidy has been much simplified. We propose to turn it into a flat payment per day at sea, instead of the present combination of voyage and landing subsidy.
There is one other change affecting near and middle water trawlers. When the white fish subsidy was introduced in 1950 it was viewed as compensation for the falling prices of fish. As a large part of the pay of the crews of fishing vessels depends on the vessels' earnings we felt it right that the crews should share in the subsidy. The subsidy was therefore reckoned as part of the gross proceeds of the catch. Now the subsidy has come to be related to rising costs, rather than to prices, and, as costs do not directly affect the crews—those whose pay is settled on the vessels' gross earnings—we think that it would be anomalous for these crews to continue to share in increases in the subsidy. The Scheme provides that they shall keep their customary share up to the point at which the new rates exceed those now in force, but they will not share in any increase beyond that.
As matters stand at present, these subsidies are clue to end in March, 1958, but we propose to introduce new legislation next Session to authorise payment of the subsidy up to 1961 or, if necessary, to 1963. We also intend to provide for
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grants towards converting coal-burning vessels to oil-burning. The remaining Scheme is much less complex. It merely increases the maximum grant for new near or middle water trawlers from £25,000 to £30,000, because of rising building costs, and frees grant-aided vessels engaged in long-lining from any limitation on the number of voyages they may make to distant waters. I am sure that the continuation of these subsidies and the changes we are proposing will help towards our ultimate aim of a strong and independent fishing fleet. I therefore commend the Scheme to the House and beg to move that it be approved.
Moved, That the White Fish Subsidy (United Kingdom) Scheme, 1956, reported from the Special Orders Committee on Wednesday last, be approved.—(Earl St. Aldwyn.)
3.5 p.m.
THE EARL OF LISTOWEL: My Lords, this is the first chance we have had this year of discussing fisheries, but as your Lordships have much more important Business on the Order Paper I shall emulate the brevity of the noble Earl opposite. Perhaps I may remind your Lordships that when we last discussed this matter, in December of last year, those of us on this side of the House were far from satisfied by the Scheme then submitted by the Government in relation to the white fish subsidy. We said that it had been hastily drafted before any real effort had been made to find out about the trading results of inshore fishing, and we were also dissatisfied with the halving of the original cut in the subsidy as a direct result of Parliamentary pressure. I am glad to observe that the Government have not repeated either of these mistakes in the Schemes before us this afternoon.
These Schemes have been carefully prepared after intensive research by the noble Earl's Department and the Scottish Office into the costs, as well as into the earnings of inshore fishermen, and indeed of the near and middle water fishermen as well. They are based on information which the Government have been able to collect about the finances of the fishing industry. It is not surprising that when these Schemes were discussed in another place they had a much better reception from Members representing fishing ports

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than had the previous Scheme. These three Schemes (perhaps I may speak to the Scottish Scheme at the same time as the two other Schemes), in my view, which is shared by other noble Lords on this side of the House, are essential to the fishing industry if it is to survive until it can pay its way, as we all hope it will be able to do, and dispense with subsidies altogether.
I should, however, like the noble Earl to bear two points in mind. They are these. As I see it, the Government's policy has two main aims: first, to prevent the bulk of our fishing fleet from going out of commission because it is working at a loss with out-of-date equipment—the noble Earl will correct me if I am wrong; and secondly, to provide the financial assistance that this antiquated industry requires in order to replace steam by motor trawlers, and thus pay its own way. I have prefaced my remarks by those observations on policy because my criticisms are linked with this matter of policy. I think there is a danger that in practice the two aims may become incompatible. I take it that, as time passes, and as more and more steam trawlers are replaced by motor vessels, the subsidies will taper off and gradually stop. That is what we all want to see. But I agree with the noble Earl that the time for reducing these subsidies is not the present moment. I think he has done wisely to exempt the fishing industry from the economy campaign which the Government are trying in other directions.
Those are the two points about which I am worried, and about which I should like to be reassured. I am not at all sure whether the additional expenditure which will be made under these Schemes, increasing the total amount of the subsidy by £2½ million—a very substantial increase—will always go in the right direction. I am concerned lest too much may be going in some directions, and too little in others. What I should like to be convinced about is that inshore fishermen are not getting too little and the owners of the larger steam trawlers too much.
Your Lordships will remember that in December of last year—a very short time ago—the inshore subsidy for these small men was cut from 10d. to 8d. a stone of landed fish. They were the only section of the industry where such a cut was made. Since the start of the year the
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costs of inshore fishermen must have risen considerably, like the costs of the near and middle water fishermen; yet these men alone will get no increase. I know that the Minister has explained that he has not succeeded in getting information about the accounts of the English and Welsh fishermen, who seem to be much less business-like than their Scottish counterparts—something which, I am afraid, happens not only in the fishing industry. So long as this vital information is lacking, I do not see how the Government can be certain that what the fishermen are getting from the sale of their catch is, in fact, greater than what they are spending on their gear, their tackle, wages, and so on. It has been pointed out that many of them are already in debt and are finding it hard to keep up with interest payments on their loans. I hope the Minister will watch the position of these small men very carefully; that is all I am asking for. If he finds that they are in danger of being forced out of business, owing to their indebtedness. then surely when the time comes, their share in these subsidies should be increased. We certainly cannot allow this important section of the fishing industry to go bankrupt.
The second matter about which I feel some misgiving is the amount of the grants being made to large and inefficient steam trawlers. The largest will get £22 a day for every day out fishing; the next largest will get £19 10s. 0d. a day. While we all want these coal-burning vessels to be kept in commission until they can be replaced, I feel that there is a very real danger that a subsidy of this size will remove the incentive to the owners to replace them. Why should the owners go to the expense of buying new boats or engines if they can make a reasonable living with their present craft? I hope they are not being cushioned in any way by these payments. I should have thought that the aim in fixing the amount of these subsidies should be to afford a bare livelihood but no more. Otherwise we shall not get the replacement we want. I hope the Government. will make it clear to the owners of these older vessels that subsidies do not go on for ever and that they must expect them to be reduced and eventually, stopped.

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I welcome what the Minister had to say about legislation in the next Session. It is clear that the powers he has under the existing Act should be extended, and I am glad that the extension will be until 1963, although we hope that the payments will not go on as long as that. I am also glad to hear about the payments of grants towards converting and modernising these old ships. The only thing that puzzles me is why conversion has not been helped in this way before. I should like to say one further thing, in conclusion —I think it is something with which the noble Earl would agree. and something that might well reach the ears of the owners and men of the fishing industry. We all wish them well, and we appreciate their great services in war and peace. But we all hope. equally, that they will regard this public money they are now very justifiably getting as no more than an instrument with which to provide this island, the whole island, north to south, with an up-to-date, self-sufficient, fishing fleet that will hold its own in fair competition with any fishing fleet in the world. With those words, I welcome these three Schemes and I shall not detain your Lordships any longer.
EARL ST. ALDWYN: My Lords, I have explained why, without full information about the financial position of the inshore fishermen. it is difficult to get the facts which the noble Earl would like. But at least we know the value of the inshore landings, and we know that they have improved very considerably—in fact, they are up by over a third in England and Wales during the first five months of this year, as compared with last year. In the absence of exact information on costs. we have to use our judgment, and our judgment is that no change is needed. But I can assure the noble Earl that we will watch the position very carefully as he suggested.
As regards the coal-burning vessels, we are certainly in favour of replacing the less efficient steam vessels with up-to-date motor vessels as quickly as possible, and we should not wish to do anything which would in any way delay that. The difficulty is that the cost of operating the steam vessels has risen so sharply that there is a grave danger of their going out of use faster than they can be
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replaced; and to fix a subsidy level that will keep the rate of decline in the numbers of steam vessels in reasonable relationship to the increase in motor vessels calls for a very nice judgment indeed. We cannot be sure that we have struck exactly the right balance, but I can assure the noble Earl that we have done our best, and I think we are right.
On Question, Motion agreed to.

WHITE FISH INDUSTRY (GRANTS FOR FISHING VESSELS AND ENGINES) (AMENDMENT) SCHEME. 1956
EARL ST. ALDWYN: I beg to move that this Scheme be approved.
Moved, That the White Fish Industry (Grants for Fishing Vessels and Engines) (Amendment) Scheme, 1956, reported from the Special Orders Committee on Wednesday last, be approved.—(Earl St. Aldwyn.)
On Question, Motion agreed to.

HERRING INDUSTRY (GRANTS FOR FISHING VESSELS AND ENGINES) (AMENDMENT) SCHEME, 1956
THE MINISTER OF STATE, SCOTTISH OFFICE (LORD STRATHCLYDE): My Lords, the purpose of this Scheme is to amend the Herring Industry (Grants for Fishing Vessels and Engines) (Amendment) Scheme, 1955, by raising from £12,000 to £15,000 the maximum amount of grant that may be given by the Herring Industry Board towards building a new fishing vessel. Its purpose is, therefore, similar to one of the purposes of the corresponding White Fish Amendment Scheme which has just been agreed to.
Moved, That the Herring Industry (Grants for Fishing Vessels and Engines) (Amendment) Scheme, 1956, reported from the Special Orders Committee on Wednesday last, be approved.—(Lord Strathclyde.)
LORD SALTOUN: My Lords, may I ask Her Majesty's Government whether. in the operation of this Scheme, they will give some attention to the war service in the late war of some of the applicants? During the operation of what I think must

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be the great grandfather of this instrument at the end of the war, I was rather shocked to find that two men who had served in His Majesty's Fleet with distinction during the whole war, and were prepared to put down precisely the same proportionate price, were refused a grant to build a herring drifter, while their neighbour, who had been fishing all during the war, was given a grant. Nobody makes a fortune serving in Her Majesty's Fleet, and a man may well make a fortune if he has successful fishing during the course of the war. Whilst these considerations must have lost force in the eleven years since the war ended, I still think that they may be operative, and I should like an assurance from the noble Lord about this matter.
LORD STRATHCLYDE: My Lords, I will take note of what the noble Lord has said, but the matter is surely one for the Herring Industry Board to decide.
On Question, Motion agreed to.

RESTRICTIVE TRADE PRACTICES BILL
3.19 p.m.
Amendments reported (according to Order.
Clause 6 [Agreements to which Part I applies]:
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR THE HOME DEPARTMENT (LORD MANCROFT)THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR THE HOME DEPARTMENT (LORD MANCROFT) moved, in subsection (1), after "between" to insert "two or more". The noble Lord said: My Lords, I am happy to say that the first Amendment on the order paper is short and non-controversial. It is purely a drafting Amendment and it paves the way to Amendment No. 6. I beg to move.
Amendment moved—
Page 4, line 38, after ("between") insert ("two or more").—(Lord Mancroft.)
On Question, Amendment agreed to.
LORD MANCROFT: The purpose of this Amendment is to deal with the doubts which my noble and learned friend, Lord Hailsham, and the noble Lard, Lord Saltoun, expressed at the Committee stage. They were puzzled as to why "conditions" as well as "terms" were not included. We tried to explain this to them, and I am afraid we only made
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confusion worse confounded. We now hope that the best solution has been reached by removing altogether the words in brackets in paragraph (b), and I hope this will set their minds at rest. I beg to move.
Amendment moved—
Page 5, line 6, leave out from (" conditions") to end of line 6.—(Lord Mancroft.)
On Question, Amendment agreed to.
LORD MANCROFT: My Lords, this Amendment marches with Amendment No. 4. They are both consequential Amendments, albeit somewhat belated. I beg to move.
Amendment moved—
Page 6, line 9, leave out from ("association") to ("as") in line 11.—(Lord Mancroft.)
On Question, Amendment agreed to.
LORD MANCROFT: My Lords, this Amendment is also consequential. I beg to move.
Amendment moved—
Page 6. line 12, leave out ("those persons") and insert (" all persons who are members of the association or are represented thereon by such members").—(Lord Mancroft.)
On Question, Amendment agreed to.
VISCOUNT ALEXANDER OF HILLS-BOROUGH VISCOUNT ALEXANDER OF HILLS-BOROUGH moved, in subsection (7), after the second "members" to insert "or to any other person or persons". The noble Viscount said: My Lords, in view of the fact that the noble and learned Viscount who sits on the Woolsack promised that he would look into the terms of my statement, and having regard also to what he had already told me last time, if your Lordships will permit me I should like now to move this Amendment formally and to reserve my right to speak after the Lord Chancellor has spoken. I beg to move.
Amendment moved—
Page 6, line 18, after the second ("members") insert the said words.—(Viscount Alexander of Hillsborough.)
3.22 p.m.
THE LORD CHANCELLOR (VISCOUNT KILMUIR): My Lords, the noble Viscount has correctly stated what took place. I hope that it may be helpful if I make a further statement on the point which he raises. If noble Lords will refer to subsection (6) of Clause 7 they will find that it deals with specific recommendations made by trade associations to

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their members; and if those recommendations relate to any particular class of goods, and are in respect of such matters as are described in paragraphs (a) to (e) of subsection (1) of the clause, they will come within the range and scope of the Bill. The wording of the Amendment is such that it would seek to extend this provision to recommendations when made by a trade association to persons other than its members. Your Lordships may remember that when a similar Amendment was moved at the Committee stage I said that if subsection (7) of Clause 6 needed tightening I should be happy to look into it. The noble Viscount then withdrew his Amendment.
As I see it, this Amendment is aimed at informal agreements between traders that they will not supply, particularly, the co-operative societies. In my view, this is not really a question at all of trade associations making understandings between traders of the kind described, even if they are not part of a formal agreement and no binding commitments are made. In that case, as I say, even if they are not part of a formal agreement and the commitments are not binding, such agreements are registrable under subsection (3) of Clause 6. This applies equally, of course, to any arrangement of the kind between one trade association and another—for example, a manufacturers' association and a distributive association. Incidentally, your Lordships should note that under subsection (3) of Clause 9 particulars of oral agreements must be furnished to the Registrar. If there are no understandings of the kind mentioned, but individual manufacturers—I repeat individual manufacturers—entirely of their own volition, decide not to supply certain customers or classes of customers, that is not a state of affairs with which this Bill is designed to deal. But if, in fact, such an attitude were adopted by large undertakings, and that attitude were imitated by smaller firms in the industry, it would, of course, be possible to refer the question to the Monopolies Commission under the Monopolies Act of 1948.
The noble Viscount asked at the Committee stage, whether it would be possible for a person who is not able to obtain supplies to approach the court and bring evidence showing why such a practice should be registered. The court which deals with the question whether agree-
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ments are subject to registration or not is, of course, the High Court, and not the Restrictive Practices Court. Application to the High Court under Clause 12 can be made either by the Registrar or by any of the parties to an agreement to declare whether or not an agreement is one to which Part I of the Bill applies. If, however (and I hope that this may help the noble Viscount in his difficulties), any dealer considers that he is the victim of discrimination by reason of an agreement of a suppliers' ring which should be on the register and is not, he may, of course, approach the Registrar and give him reasons for thinking that there has been a default in registration.
Now I would ask the noble Viscount to consider (because I attach importance to this) the fact that under subsection (2) of Clause 1 the Registrar has the duty— not the right, the duty—of maintaining a register of agreements which are subject to registration under Part 1 of the Bill, and in pursuance of this duty he would be required to investigate any case where he had good reason to believe that the registration provisions of the Bill were being evaded. I think I ought to say at this stage, as has been said often before, that everyone realises the importance of the position of the Registrar. It is almost unique and a position of great importance. It is his duty to see that all registrable agreements are registered. I do not think the noble Viscount need have any fear that if any dealer finds himself in the difficulty I have mentioned and takes it to the Registrar he will find himself turned away. I have tried to explain the position. I hope that, in view of what I have said, the noble Viscount will see that this immediate Amendment would not help a position which is otherwise provided for in the Bill.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: My Lords, I am obliged to the noble and learned Viscount for his long and detailed statement, which was what I required. I shall study it carefully before the Third Reading, of this Bill on Thursday. It does seem to me that in respect of those practices, which arise not out of formal agreements but out of quite informal agreements, the people concerned ought to be able, somewhere under Statute, to submit a case. It ought not to have to be left to accusers to go to the Registrar in a particular matter.

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We are very anxious that if what is known to be an existing practice is found not to be registered, there should be a channel open to report the facts to the Registrar. I gather from what the noble and learned Viscount has said that it will be possible to do that. Of course, we should have been in much better fettle with regard to some of these matters if we had dealt with the whole question of these restrictive practices on the lines of the Majority Report of the Monopolies Commission. There seem to me to be so many loopholes by which it is possible for those receiving the necessary concentration of expert legal advice to escape from this clause that it very much undermines what would otherwise, no doubt, be the beneficial effect of the Bill in respect of collective agreements.
However, we shall have to prove this now in he making. The noble and learned Viscount may rest assured that when this Bill becomes law we shall watch two matters in particular. The first is in respect of gramophone records and similar goods, and the other is in respect of the extraordinary position in which, in a country which prides itself upon maintaining a free Press, an unwritten agreement can refuse supplies to a trader who has bought a newsagent's business, with all its goodwill, and thereby not permit him to carry on the business. That is an extraordinary position in a country which claims above everything else to be the country of a free Press—apparently free at the discretion of editors and publishers, but not free to disseminate knowledge with all the power the Press possesses. Perhaps I shall return to this matter on Thursday, after I have had time to study the answer which the noble and learned Viscount has been kind enough to give me to-day. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD MANCROFT: My Lords, this is a drafting Amendment. I beg to move.
Amendment moved—
Page 6, line 34, at end insert ("and for the purposes of this section, two or more persons being interconnected bodies corporate or individuals carrying on business in partnership with each other shall be treated as a single person.")—(Lord Mancroft.)
LORD LUCAS OF CHILWORTH:My Lords, the noble Lord has said that this is drafting: is it not something more
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than drafting? The noble Lord may be right, but would he explain it to us?
LORD MANCROFT: I am sorry if I hustled the noble Lord I was only "trying to get a move on". In the Bill as it stands, subsection (1) of Clause 7 exempts from Part I agreements to which the only parties are interconnected bodies corporate or individuals carrying on business in partnership with each other. This means that, for example, agreements between two interconnected bodies corporate and a foreign trader would not be exempt, although an agreement between a single United Kingdom company and a foreign trader would be. I am sure that the noble Lord would agree that: his would be anomalous, since it is the intention that throughout the Bill interconnected bodies corporate and certain partnerships shall be treated as single persons. As the noble Lord knows even better than I, this principle accords with the facts of commercial life. The Amendment removes the anomaly by applying the principle to all agreements falling within the scope of subsection (1) of Clause 6.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: My Lords, I can see how the matter arises in the terms put to us by the noble Lord, but I should like the noble and learned Viscount who sits on the Woolsack to know that we are a little anxious about the results of this provision in Clauses 6 and 7. I am not going to expatiate on the matter, but before the war a number of books were published with regard to Dupont, Imperial Chemical Industries, Limited, and their German counterparts, which still exist. I was then in another place, and exception was taken to the secret restrictive practices then existing between these organisations. This kind of exception in the Statute seems to be given to such arrangements as they had then, about which these books complained, and will make difficult the success of this measure. I hope the noble and learned Viscount will keep this in mind.
THE LORD CHANCELLOR: My. Lords, the noble Viscount has raised an important point and I am glad that he has done so. I think it ought to be borne in mind that at the time of which he was thinking, which I remember well, the companies he quoted were large-scale

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monopolies. They are caught already by the 1948 Act, which was introduced by the Government of which the noble Viscount was a member, and I would remind him that under that Act the test is one-third of the supply in a considerable area of the United Kingdom. This matter has already been dealt with in a case before the Monopolies Commission and it has been accepted that a "considerable portion of the United Kingdom" applies to central Scotland. Therefore the working out of the Act of 1948 shows that monopolies of any considerable size may be caught. I think that deals with one of the major fears in the noble Viscount's mind. Without laying down the law, I think that the companies he mentioned, at any rate in relation to certain goods, would come within the definition of the 1948 Act, if any question arose. Obviously. I am not saying anything final on that subject, because one would have to consider what goods were in mind.
The point of this Amendment is the much more restricted one of an amalgamation betwen two companies, after which the companies act together and are one person so far as their work is concerned; and they should be treated as one person. I think everyone would also agree that a partnership should be treated as one person. The only reason I have taken up the time of the House is to make clear that scale monopolies are now covered and this Bill will not cut into the working of the previous Act in regard to that matter.
LORD BENNETT OF EDGBASTON: My Lords, may I ask whether the companies to which the noble Viscount has already referred are not all covered by the Companies Act and forced to produce one consolidated balance sheet? If so, it is clear that they are one company and this is perfectly in order.
THE LORD CHANCELLOR: My Lords, I think that probably my noble friend is right, but I should like to verify that point and communicate with him.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: My Lords, it really means, then, if these companies are under one consolidated balance sheet, that the intention of the Bill is to make a special cover to protect them against action for
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restrictive practices. That has thrown new light on it.
THE LORD CHANCELLOR: My Lords, I do not think that is what my noble friend meant and it certainly was not what I meant. This covers the case where companies which have amalgamated and become one concern make an agreement with somebody else. It does not mean that by becoming one concern they would be in any better position under the Monopolies Act, 1948. They would still have to answer for the fact that they had control of a supply of one-third of the goods in a considerable portion of the United Kingdom. So far as I can see, this Amendment is only to deal with the reality that two become one, if I may put it that way.
VISCOUNT ALEXANDER OF HILLS-BOROUG: My Lords, does that not mean that the giving of this protection in this Bill protects an amalgamation of a number of firms from any move against them on the type of collective agreements dealt with in the Bill? I admit that a consolidated organisation which is guilty of a large monopoly can be proceeded against under the Monopolies Act. This seems to be a special cover against the provisions of the Bill for this type of concern. I am rather anxious about that.
THE LORD CHANCELLOR: My Lords, I am anxious to satisfy the noble Viscount. Really this is to cover the case, which I think is common sense, that you cannot make an agreement with yourself. It is only when the two become one that it applies. Perhaps the noble Viscount will again do me the honour of looking at what I have said, and if he sees any loophole, I shall be pleased to look at it.
VISCOUNT ALEXANDER OF HILLS-BOROUG: My Lords, certainly I will look at it again. It seems a doubtful proposition that because a holding company issues a consolidated balance sheet, as it has a number of subsidiary companies, some of which may be engaging in these practices and in which the share capital is held in part by the public and part by the controlling interest, they should seek protection under this Bill.
LORD SALTOU: My Lords, if there are to be many more Amendments like

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this one, would it not be better to stop here and now, re-commit the rest of the Bill, and then take it quite shortly on Report afterwards? If noble Lords speak once, twice and again on every Amendment—that is quite out of order on Report stage—I think we ought to recommit the Bill.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: My Lords, if that is a point of order., I should like to say that if on the Report stage of the Bill we are to be met with a number of Government Amendments for the first time, surely we are entitled to pursue them to a proper conclusion, to decide what is right in the interests of the nation.
LORD SALTOUN: My Lords, I am not in the least against what the noble. Viscount says; but in that case, we ought to re-commit the Bill.
On Question, Amendment agreed to.
Clause 7 [Excepted agreements]:
LORD MANCROFT: My Lords, this Amendment is consequential on the soidisant drafting Amendment to which your Lordships have just given a somewhat guarded approval. I beg to move.
Amendment moved—
Page 6, line 38, leave out lines 38 to 40.—(Lord Mancroft.)
On Question, Amendment agreed to.
LORD MANCROFT: My Lords, the next three Amendments, Nos. 7A, 7B and 7c, go together, and, with your Lordships' permission, I will take them together. They are concerned with the iron and steel industry. The first is little more than a drafting Amendment. The second, and the words to be inserted under the third Amendment, make it clear that it is the distribution of imported raw materials and products which is concerned. It is not the intention that restrictive agreements about the distribution of home-produced raw materials and products should be exempted from the Bill. The present wording understandably misled the noble Viscount, Lord Alexander of Hillsborough, on this point. I hope, therefore, that he will forgive me for putting down the Amendment, in the hope of helping him, arid not of obstructing business in any way. On the Committee stage the noble Viscount assumed that arrangements for the distribution of all iron and steel products were being exempted from
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the Bill. As I have said, that is not the intention, and as a result of the Amendments I hope that the matter will be left in no doubt. The third Amendment is consequential. I beg to move.
Amendment moved—
Page 7. line 5, at end insert ("which has been approved by the Iron arid Steel Board and by the Board of Trade").—(Lord Mancroft.)
LORD LUCAS OF CHILWORTH: My Lords, this certainly makes it clearer than it was before. What I understand the noble Lord seeks to do here is to exempt any arrangement or agreement approved by the iron and Steel Board and the Board of Trade for the importation of any material from the exercise of any restraint under this Bill. But are we to understand that it does not cover any distribution of the products upon the home market? In order to make it quite clear, could the noble Lord confirm that?
LORD MANCROFT: My Lords, I think that that is so.
On Question, Amendment agreed to.
LORD MANCROFT: My Lords, the next Amendment is consequential on that which we have just discussed. I beg to move.
Amendment moved—
Page 7, line 8, leave out from ("undertakes") to ("as") in line 9.—(Lord Mancroft.)
On Question, Amendment agreed to.
LORD MANCROFT: My Lords, this, too, is a consequential Amendment. I beg to move.
Amendment moved—
Page 7, line 10, leave out from ("industry") to ("or") in line 12 and insert ("the importation of those materials or products, 07 the distribution of those materials or products when imported").—(Lord Mancroft.)
LORD LUCAS OF CHILWORTH: My Lords, I hope the noble Lord will not think that we are being pernickety about this matter. I asked him the first question for this purpose. If he will read the third Amendment, he will see that the words are:
"the importation of those materials or products, or the distribution of those materials or products when imported."
What the noble Lord said originally was that, while this covers any arrangement upon importation, it does not exempt the Iron and Steel Board from any breach

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of this Bill when it becomes an Act when the products are distributed in the United Kingdom. Is that in line with what the noble Lord now seeks to put into the Bill under Amendment 7C? As I say, that says:
"the importation of those materials or products "—
that he has explained—
"or the distribution of those materials or products when imported."
LORD MANCROFT: My Lords, I think I shall have to ask the noble Lord to give me notice of that question. I do not want to give him bad information on an important point like this. I should like to consider what he has said in the light of these new Amendments.
LORD LUCAS OF CHILWORTH: My Lords, I am grateful to the noble Lord. He will appreciate the importance of this matter.
LORD MANCROFT: Yes, I do.
LORD LUCAS OF CHILWORTH: What my noble friend was afraid of originally was that this lifted the Iron and Steel Board outside the scope of this Bill, and we were somewhat disturbed. Then the noble Lord says: "We have clarified it. We did not intend that. It is only in so far as the importation is concerned." Now I have raised the doubt again. I am happy that the noble Lord will look at the point, and if he feels he can explain it in any different light, we can come back to it on Third Reading.
On Question, Amendment agreed to.

DR. AZIKIWE
3.48 p.m.
LORD LLOYD: My Lords, yesterday, in response to a question by the noble Lord, Lord Ogmore, I promised him that I would make a statement this afternoon. With your Lordships' permission, I should now like to make that statement, which is similar to one being made by my right honourable friend in another place at this moment. The statement is as follows:
A dispute has arisen in the Eastern Region of Nigeria about the relationship between the Premier, Dr. Azikiwe, and the African Continental Bank Limited.
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This Bank was founded by Dr. Azikiwe. On assuming office the Premier informed the Governor that he had resigned his directorship of the Bank. He and enterprises with which he has been associated are still shown as large shareholders in it. My right honourable friend has been informed that during 1955, £877,000 of public money was invested in the Bank (and other large sums deposited with it) out of funds made available from Marketing Board reserves to the Finance Corporation, which the Eastern Region Government had established. My right honourable friend has also been informed that following this investment the Bank was a party to certain documents contemplating that the Premier should be life Chairman of the Bank and purporting to give him the right to nominate certain other directors.
As long ago as last November, my right honourable friend took the matter up with the Premier in London and they have been in correspondence since. In April of this year, Mr. Eyo, a member of the Regional House of Assembly, who had until then been the Government's Chief Whip in that House and Deputy Speaker and Chairman of the Regional Development Corporation, tabled a motion in the House relating to the association of the Premier with the Bank. He subsequently called for the appointment of an independent Commission of inquiry. Dr. Azikiwe has now instituted libel actions against Mr. Eyo and certain newspapers. On the 14th July, after receiving a report from the Governor, my right honourable friend sent a personal message through him inviting Dr. Azikiwe to agree to his appointing a Commission of Inquiry.
My right honourable friend considered it essential that these matters should be fully cleared up before the next Nigerian constitutional Conference. This Conference will consider further constitutional advance for Nigeria, and in particular the grant of regional self-government to those Regions that desire it, in accordance with the undertaking given by Her Majesty's Government in 1953 as recorded in paragraph 28 of the London Conference Report. My right honourable friend pointed out that such a Commission was appointed in the United Kingdom when last the conduct of a Minister was called in question. My right honourable friend

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suggested that he should appoint the Commission, as at least one of the matters to be inquired into is reserved to the Federal Government arid the Governor of the Region is not competent to appoint a Commission to inquire into federal matters.
On July 16 my right honourable friend received from the Premier a message couched in terms which I must confess disappointed him. The Premier's message, which has been quoted extensively in the Press, implied a rejection of my right honourable friend's invitation. Shortly afterwards my right honourable friend was informed that the Premier and his colleagues, after considering his message, advised the Governor of the Region to appoint a Commission with a sole Commissioner of their own choosing. Such a Commission could not inquire into matters reserved to the Federal Government, of which banking is one. On July 18 my right honourable friend made a further approach to Dr. Azikiwe explaining this again. He also said that, although it would riot he proper for the Premier to suggest the full membership of the Commission, since he would be personally involved in its proceedings, he (that is, my right honourable friend) would nevertheless be prepared to invite the person whom the Premier had proposed as sole Commissioner to he a member of it. My right honourable friend said this as he was satisfied that the person proposed was suitable for appointment.
I regret to say that the Premier rejected this second approach also. Instead, he and his colleagues now advised the Governor to appoint a Committee of Inquiry and nominated three persons to serve on it. Such a committee would have no powers. It could not compel the attendance of witnesses or hear evidence on oath, and its investigations of matters reserved to the Federal Government would be of doubtful propriety. The Governor did not consider that to proceed in this way was, in the words of his Royal Instructions "in the interests of public faith" and informed the Ministers that he felt unable to act on their advice. This decision of the Governor, who has a most difficult and invidious task, has my right honourable friend's unqualified support.
In these circumstances my right honourable friend has decided that in order
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to secure a speedy, impartial and full investigation as to the investments made in the Bank, and the grave allegations that have been made—matters closely affecting the conduct of Government—it is necessary that he should now appoint a Commission of Inquiry. He has invited Sir Stafford Foster-Sutton, the Chief Justice of the Federation of Nigeria, to he Chairman. The Chief Justice has accepted the invitation. The names of the other members and the terms of reference will be announced as soon as possible. I earnestly hope that the Premier and his colleagues will accept the decision my right honourable friend has reached as in their own best interests and in the best interests of public life in Nigeria as a whole. f need hardly say that there is no question of any attempt on the part of Her Majesty's Government to impose a British banking monopoly in Nigeria, or to dictate financial policy.
The Commission will, I am sure, complete its work and report with all possible speed, but I am afraid that its appointment must almost inevitably mean some delay in convening the Constitutional Conference which was to have met on September 19. I hope that this will not be long, and my right honourable friend has asked the other Nigerian Governments to accept this delay, regrettable though it is to all of us, because in the interests of the territory as a whole these serious allegations must first be fully investigated. At the same time my right honourable friend has made it clear to them that Her Majesty's Government stand by the undertaking given in 1953 about the grant of regional self-government to those Regions that desire it. I trust that after the Commission has reported we shall be able to resume our work together.
LORD OGMORE: My Lords, in view of the long and important statement that the noble Lord, Lord Lloyd, has made, perhaps I may be permitted to ask a few questions arising out of it in order to throw more light on this difficult matter. In the first place, may I ask the noble Lord whether it is not a fact that the Governor approved—indeed, suggested—the deposit of public funds in the African Federal Bank Limited, and after consulting the Federal Financial Secretary's Office at Lagos? Secondly, did not Dr. Azikiwe declare his interest in this Bank—which is the bank in question—before

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being appointed a Minister in 1954? Thirdly, was not the original motion to deposit the first sum of public money in this Bank—namely, £30,000 —made by Mr. Eyo, the man who is now the objector to this practice? Fourthly, has not the Governor overruled the Speaker of the Eastern Region in constituting a Commission of inquiry whilst the case involving Dr. Azikiwe and Mr. Eyo is sub judice? Lastly, was not the suggestion of Dr. Azikiwe and his Eastern Regional Government at a certain stage that they should appoint a Commission of Inquiry consisting of a High Court Judge (a suggestion which was turned down by the Secretary of State) perfectly in order, as this was a Regional matter and the Regional Attorney General had so advised?
LORD REA: My Lords, before the noble Lord replies, may I add one more question? What is the present position of the Premier during the investigation of these serious allegations?
LORD LLOYD: My Lords, I have been asked a number of questions and I will do my best to reply to them, though noble Lords will appreciate that since the whole of this matter is sub judice I must exercise a certain caution over all I say. First of all, with regard to the noble Lord's allegations that the Governor approved of the investment of a sum of money in this Bank, it is perfectly true that he approved the principle. That confirms what I have already said—that it is not the policy, and never has been the policy, of Her Majesty's Government to try to set up a British banking monopoly in West Africa. But to say that the Governor approved in the circumstances of what has been done here is certainly not true. In so far as the Governor did or did not approve —in so far as the Governor's conduct in this matter is concerned—that is clearly a matter which falls under the general terms of reference of the Commission of Inquiry. That will all be gone into. He approved the principle, but that does not mean to say that he approved everything that was done. That is the first answer to the first question.
The second point was that the noble Lord suggested that Dr. Azikiwe had declared his interest. That is perfectly true, but the noble Lord will be aware of what
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I said in the statement. if I may quote again the words that I used in the statement, may I remind the noble Lord of this:
"My right honourable friend has also been informed that following this investment the Bank was a party to certain documents contemplating that the Premier should be life Chairman of the Bank and purporting to give him the right to nominate certain other directors."
That is a matter which, so far as I know, was not declared at the time.
Thirdly, the noble Lord has questioned the actions of Mr. Eyo. Whether Mr. Eyo did what the noble Lord alleges or not is something which will come out during the Commission. But the point is that Mr. Eyo has made grave allegations on which, as recent Chief Whip of the Party and close confidant of the Premier, he may be presumed to be in some position to comment. It is the view of my right honourable friend that grave allegations of this kind should not be made against any Minister without investigation, and I cannot see what harm there is that they should be investigated—on the contrary, it seems essential, for the sake of everybody, that they should be disposed of one way or the other.
Finally, the noble Lord suggested that the Governor acted improperly, overruling the Speaker. With great respect, I think the noble Lord is wrong. The Speaker ruled that the matter might not be discussed in the Legislative Assembly because of a libel action. That, of course, is a matter purely for the Speaker. My right honourable friend is advised that he has every power to appoint such a Commission of Inquiry as he thinks is desirable. That is not overriding the Speaker; that is a parallel action and has nothing to do with it. I think those were all the points raised by the noble Lord.
Dealing with the point raised by the noble Lord, Lord Rea, I may say that the last thing that my right honourable friend desires is that any Minister should resign or that he should not carry on as usual pending this Inquiry. Nothing has been proved one way or the other. This is an Inquiry to ascertain the truth or otherwise of some allegations that have been made. It is the proper thing to do—something which was done the last time such a situation arose in this country. That is why my right honourable friend has decided that, in the

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interests of everybody, this Inquiry should be called.
LORD OGMORE: My Lords, is it not the fact that in the Report on Banking and Finance in Eastern Nigeria (Sessional Paper No. 4, 1956), most of these matters, the subject of my question, were raised and fully discussed? Is it not a fact that it would have been more appropriate if some of the matters which have come out as a result of my question had been included in the noble Lord's original statement?
LORD LLOYD: My Lords, I am sorry, but I am afraid I cannot quite agree with the noble Lord. I consider my original statement a fair, honest and straightforward statement of fact. I make no apology for it. I have nothing more to say on that.

RESTRICTIVE TRADE PRACTICES BILL
Further considered on Report.
LORD LUCAS OF CHILWORTH LORD LUCAS OF CHILWORTH moved, in subsection (4), to leave out "for the supply of goods or for the application of any process of manufacture to goods." The noble Lord said: My Lords, your Lordships will remember that on the Committee stage I tried to he of assistance to the Government in including in the excepted agreements thousands of what I called tripartite, agreements which could be cited to your Lordships as being between a producer and a seller, with a wholesaler intervening at some stage in the agreement. The noble and learned Viscount on the Woolsack, immediately, as he always does, seeing the point, said that he would like to give it further consideration. I hope he has done so. I put down this Amendment because, after reading carefully what the noble and learned Viscount said, I thought perhaps that this Amendment might help him, and would at least give me the opportunity of raising again the whole subject to see what the noble and learned Viscount had to say. Now that he has had time to give it mature consideration, I will move the Amendment formally to hear his reply. I beg to move.
Amendment moved—
Page 7, line 16, leave out from ("agreement") to ("is") in line 18.—(Lord Lucas of Chilworth.)
THE LORD CHANCELLOR: My Lords, on the Committee stage the noble Lord, Lord Lucas of Chilworth, raised a very interesting and practical point. He has been good enough since that time to supply me with the further information that he promised. I must apologise to the House for again rather trespassing on its time, but, as this is a practical point in the running of a great series of businesses I feel that it would be useful if I were to indicate the views I have formed. The House will remember that on the Committee stage Lord Lucas of Chilworth's Amendment was designed to extend the exemption given by subsection (4) of Clause 7 to certain agreements for the supply of goods to such agreements when between a supplier, a wholesaler, and a dealer. I pointed out in that debate that such an agreement might not be an agreement for supply. because the manufacturer may accept restrictions vis-à-vis a dealer, although not supplying goods to him direct. The present Amendment is designed to get over this difficulty by deleting the qualification "for the supply of goods".
After reflection, I have come to the conclusion that the Amendment would not in fact, achieve this object. Subsection (4) of Clause 7 refers to
"any term which relates exclusively to… goods supplied …in pursuance of the agreement."
These words would be meaningless unless the agreement were an agreement for the supply of goods. Since the Committee stage, we have considered the point of substance which was raised by the noble Lord. As I said, he was good enough to give us more particulars of the agreements which he had in mind. The agreements described to us were not all tripartite agreements; in some cases they were agreements between a manufacturer and a dealer, or between a manufacturer and a wholesaler. I should like to deal with the points as I see them.
Agreements between a manufacturer and a dealer may provide for the dealer to place his orders for the manufacturer's goods through a wholesaler. Despite this, it seems to us that some of the agreements of this kind were purely agreements for supply and would be exempt from the Bill under subsection (5) of Clause 7. In other cases, however, the wording of the agreements did not indicate that they were agreements for supply. I think that

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this is really a matter of drafting, so that, in general, it should not be difficult to bring within the exemption provisions of the Bill the agreements between manufacturers and wholesalers, or manufacturers and dealers, where these contain restrictions relating exclusively to the goods supplied and restrictions of the kind described in paragraphs (a) and (b) of subsection (5) of Clause 7—that is to say, restrictions by the manufacturer in respect of the supply of goods of the same description to other persons, or restrictions by the party acquiring the goods, in respect of the sale, or acquisition for sale, of other goods of the same description. This falls clearly within our intention to exclude from the Bill vertical transactions between two parties which are simply part of the ordinary machinery of commerce. I hope that what I have said on this score will relieve the anxieties of the noble Lord, Lord Lucas of Chilworth, and his friends who have feared that a very considerable number of agreements of this kind would have to be registered under the Bill.
Perhaps I may summarise what I hope I have made clear to the noble Lord, Lord Lucas of Chilworth. By an alteration in drafting, the agreements about which he had some fears can be brought into the other category, in which case they would be clearly within the exemption which we had. So, to that extent, I hope, that half of my answer has been of some help to the noble Lord; though I am bound to say that it does not resolve the problem of the tripartite agreement. We have carefully considered whether we could bring this within the exemption provision of Clause 7 and, frankly, the problem has defeated us. The difficulty is that it would be difficult to make an exemption for this kind of agreement which did not extend to agreements between the suppliers of goods as to the terms of sale of the goods which each supplied—that is, a price ring, even though perhaps only a limited one. Your Lordships will understand that it would not be sufficient to exempt this kind of agreement provided that the restrictions in it related only to the goods supplied by the manufacturer, since in fact the restrictions extend to goods of the same description provided by other suppliers. We considered whether the agreements exempted should be described as agency
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agreements, since it seems to us that, in effect, that is what the kind of agreements the noble Lord described to us are. They arc not, however, agency agreements in form; indeed, it is stated in them that the wholesaler is not an agent. That possible avenue is therefore closed to us.
My Lords, perhaps I may at this point clear up a misunderstanding which I believe arose from something that I said at the Committee stage. In commenting on the noble Lord's Amendments, I said that the kind of agreements with which he was concerned would probably not in any case fall within subsection (4) of Clause 7, to which his Amendments related, since the restrictions in the agreement would not be likely to relate exclusively to the goods supplied. This did not, of course, mean that the only agreements which are exempted from the Bill are those in which the restrictions relate exclusively to the goods supplied. Subsection (5) of Clause 7 makes special provisions for agreements containing restrictions relating to other goods of the same description as those supplied. It was to this subsection that my noble friend Lord Mancroft referred, when he said that it was the Government's intention to exclude sole agency agreements from the Bill.
It may be useful if I refer also to a suggestion which has been made, that the agreements between manufacturers and dealers or manufacturers, wholesalers and dealers, to which the noble Lord, Lord Lucas of Chilworth, has referred, could be exempted from the Bill, because they stem from a root agreement between the manufacturers as to the conditions which they shall individually impose upon their wholesalers and dealers. However, the technique which the proviso in subsection (4) of Clause 7 applies to agreements relating exclusively to the goods supplied would be quite inappropriate for this other kind of agreement. The primary purpose of subsection (4) is to exempt from the Bill agreements for supply between a manufacturer and his customer. In some cases, however, manufacturers agree together that they will negotiate jointly with a customer or class of customer. The result of this will be an agreement between suppliers A, B and C. on the one hand, and a purchaser D on the other. This agreement is, however, merely a reflection of the agreement between A, B and C, to negotiate common terms. Under the proviso,

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therefore, the agreement between A, B, C and D need not be registered if the root agreement between A, B and C has been registered.
Agreements with which the noble Lord, Lord Lucas of Chilworth, is concerned, are, however, in quite a different case. There, the agreements which result from an agreement between manufacturers are not agreements to which they are all parties but agreements to which the individual manufacturer is a party, together with one or more other people. Each of the manufacturers individually makes an agreement with one or more other parties, and some of the restrictions in these agreements may be quite other than those which the manufacturers have agreed amongst themselves to impose.
I hope that this rather long and complicated explanation will make it clear to the noble Lord, eventually, when there has been time to read it, if not at the moment, that there are real difficulties in the way of exempting from the Bill all the kinds of agreements of which he has given us particulars. On the other hand, it would seem that many of the agreements between manufacturers and dealers or manufacturers and wholesalers, which he had in mind, would be exempt from the Bill in any case, and that the others could be adapted so as to attract the exemption. I hope that, with that explanation, he will not press his Amendment.
I want to add only one word about taking up so much of your Lordships' time. As I see legislation, it has two purposes. One is to carry through a policy, and the other is to be quite sure that what is put on the Statute Book really fits into the facts of business life; and that is why, since the noble Lord was good enough to send me most voluminous particulars, I thought it right to inflict this rather long explanation on your Lordships, so that those engaged in business will know where they stand. I apologise, and I hope that your Lordships will accept my explanation.
LORD LUCAS OF CHILWORTH: My Lords, the noble and learned Viscount need not apologise, for he has rendered a signal service to a large section of British industry so that they know just where they stand. I would not claim to understand every word which he has
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uttered, but I shall study his observations in great detail. It is far better for agreements to be re-drafted than for the law to be altered to try to take care of something which, as the noble and learned Viscount has said, cannot be taken care of. I am quite satisfied and, with your Lordships' agreement, I will withdraw the Amendment.
Amendment, by leave, withdrawn
LORD MANCROFT: My Lords, this is a drafting Amendment, paving the way to No. 13. I beg to move.
Amendment moved—
Page 7, line 30, leave out from beginning to ("this").—(Lord Mancroft.)
On Question, Amendment agreed to.
LORD MANCROFT: My Lords, this also is a drafting Amendment. I beg to move.
Amendment moved—
Page 7, line 31, after ("agreement") insert ("for the supply of goods").—(Lord Mancroft.)
On Question, Amendment agreed to.
LORD MANCROFT: My Lords, this also is a drafting Amendment. I beg to move.
Amendment moved—
Page 7, line 36, leave out from second (" accepted") to end of line 38.—(Lord Mancroft.)
On Question, Amendment agreed to.
4.18 p.m.
LARD MANCROFT: My Lords, this is a procedural, rather than a drafting Amendment. It assimilates the procedure or dealing with recommendations by trade associations relating exclusively to exports or overseas trading to the procedure already laid down in the Bill for agreements relating exclusively to these matters. Thus both agreements and recommendations, if they relate exclusively to overseas trading, will be outside he scope of the Bill altogether, and if hey relate exclusively to exports will be object to Clause 30. Under Clause 30 they must be notified to the Board of Trade and will be subject to reference to the Monopolies Commission. The particulars which are to he furnished in the case of a recommendation relating exclusively to exports will be similar to those or other recommendations by trade associations—that is to say, the constitution of the association must be provided,

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together with particulars of an implied term that the members will comply with the recommendations. I beg to move.
Amendment moved—
Page 9, line 9, at end insert (" and subsection (7) of section six of this Act shall not apply in relation to recommendations relating exclusively to such matters as aforesaid ").—(Lord Mancroft.)
On Question, Amendment agreed to.
LORD MANCROFT: This, too, is a drafting Amendment. I beg to move.
Amendment moved—
Page 9, line 28, at end add (" and any reference in subsections (5) to (10) of this section to such restrictions as arc described in subsection (1) of section six of this Act shall be construed, in relation to any agreement, as not including references to restrictions of which, by virtue of any other provision of this section, account cannot be taken in determining whether the agreement is an agreement to which this Part of this Act applies, or of restrictions accepted by any term of which account cannot be so taken ").—(Lord Mancroft.)
VISCOUNT ALEXANDER OF HILLS-BOROUGH: My Lords, this is rather a hefty drafting Amendment. I listened to the other three explanations given by the noble Lord, Lord Mancroft, and while it may well be an inherent purpose of the Bill to make distinctions between home trade and export trade, it seems to me to be rather inconclusive, having regard to the general recommendations of the Monopolies Commission, that there should be this distinction. If there is going to be collusion in practice in regard to trade in export, I do not see why it should not be brought within restrictive practices. I do not know whether I have missed some particular point — I am not a lawyer, and I do not study every word like the noble Lord does; but to describe the Amendment as a drafting Amendment seems to me to be extraordinary. I think the purpose behind these words is something more than drafting.
LORD MANCROFT: These are really, technically, only drafting Amendments. The distinction the noble Viscount wants to bear in mind between overseas agreements and home agreements is that the overseas ones—those confined to contracts and arrangements overseas—may bring within their orbit information which we cannot get at all in this country. If we are discussing, say, the diamond trade in South Africa, there may be information
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which we could not get at all. That is why the distinction is made so sharply between the two. I assure the noble Viscount that there is no more substance in these Amendments than that.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: What I had at the back of my mind was not diamonds but the particular arrangements that might be made with regard to the import into this country of certain foodstuffs. That is what I had in mind, and that is why I am rather anxious that we should not legislate to exclude altogether from the term "restrictive practices" businesses which are confined, or in respect of which the practice is confined, to export or import trade. I am not at all sure about this. However, I have not enough information with me this afternoon to put any more detailed questions. But I shall think over the matter.
On Question, Amendment agreed to.
LORD MANCROFT: My Lords, I still stick to my guns. This, also, is a drafting Amendment. I beg to move.
Amendment moved—
That Clause 7 be divided into two clauses, the first to consist of subsections (3), (4), (11) and (12) and the second to consist of subsections (1), (2), (5) to (10) inclusive, and (13). —(Lord Mancroft.)
On Question. Amendment agreed to.
Clause 9 [Particulars to be furnished for registration]:
4.22 p.m.
LORD MANCROFT LORD MANCROFT moved, in subsection (2), to leave out all words from the beginning down to "that", and to insert:
"Subject to the provisions of subsection (3) of this section, the duty to furnish particulars under this section in respect of an agreement which at any time is subject to registration under this Part of this Act shall not be affected by any subsequent variation or determination of the agreement; and if at any time after an agreement has become subject to registration as aforesaid."
The noble Lord said: My Lords, this Amendment is by way of explaining this clause a little more fully. The effect of these two Amendments, Nos. 15 and 16, is to give parties to an agreement up to the final date for registration to decide whether to terminate or vary the agreement. If they decide to terminate it, they need not register it at all; if they decide to vary it, only the varied

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agreement and not the original agreement need be registered. As the Bill is drafted, any agreement which existed on the appointed day—that is, the date of the beginning of the period of registration—would have to be registered, even if it were terminated or varied before the last date of the registration period. This, I think your Lordships may agree, is undesirable because it would discourage industry from voluntarily terminating or modifying existing agreements—a point which has frequently arisen in our deliberations. This breathing space, as it were, applies only to the period between the date on which agreements become subject to registration and the last date for furnishing particulars to the Registrar. The parties to an agreement cannot defer registration beyond the last date for registration on the grounds that they are subsequently going to terminate or vary it.
It may be helpful to the House to recall the procedure for registration and the Government's intentions as regards the agreements to be registered. After the Bill is enacted, the first step will be for the Board of Trade to make an Order under Clause 8 of the Bill. This Order, which requires approval of both Houses of Parliament, will appoint a date an which the classes of agreement specified in it become subject to registration and the period within which particulars of the agreements are to be furnished to the Registrar. It is expected that the first Order will come into effect some time in November, There will not be sufficient time for the Order to be approved by both Houses of Parliament until after the Summer Recess, but the Board of Trade will, in order to give as long notice as possible of its contents, make the Order and lay it before both Houses before Parliament adjourns for the Summer Recess. This is, of course, on the assumption that the Bill has passed into law by that time.
In accordance with the undertakings given by my honourable and learned friend, the Parliamentary Secretary to the Board of Trade, on the Second Reading of the Bill in another place, registration under this first Order will take place during a short period after the Order comes into effect and will cover the most important types of agreement—that is, those on prices and collective discrimination. These form the bulk of the restrict-
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tive practices in industry. It is the intention, in order to assist both industry and the Registrar, to stagger registration over a period of four months. Agreements will he divided into two groups according to the commodities to which they relate. In order to avoid possible misunderstanding, it should, perhaps, be said at once that the object of this is simply to ease the administrative burden arid that agreements which have to be registered in the first batch will not necessarily be the first to be taken before the Restrictive Practices Court. I hope that these Amendments and this explanation which I have inflicted upon the House will set people's minds at rest as to the procedure which we contemplate and will clear up some doubts. I beg to move.
Amendment moved—
Page 10, line 14, leave out from beginning to (" that ") in line 15 and insert the said new words.—(Lord Mancroft.)
On Question, Amendment agreed to.
LORD MANCROFT: My Lords, this is consequential. I beg to move.
Amendment moved—
Page 10, line 19, at end insert—
("(3) Where any agreement becomes subject to registration under this Part of this Act by virtue of an order made under section eight of this Act alter the making of the agreement—

(a) if, before the expiration of the period within which, apart from this subsection, particulars would be required to be furnished in respect of the agreement under this section, and before particulars have been so furnished, the agreement is determined (whether by effluxion of time or otherwise), subsections (1) and (2) of this section shall cease to apply to that agreement;

(b) if, before the expiration of the said period and before particulars have been furnished in respect of the agreement, the agreement is varied, the particulars to be furnished under subsection (I) of this section shall be particulars of the agreement as varied, and subsection (2) of this section shall not apply in relation to the variation.")—(Lord Mancroft.)

On Question, Amendment agreed to.
Clause 10 [General provisions as to register]:
(4) The register, other than the special section, shall be open to public inspection during such hours and subject to payment of such fee as may he prescribed by regulations made tinder section eighteen of this Act.
4.26 p.m.
VISCOUNT ALEXANDER OF HILLS-BOROUGH VISCOUNT ALEXANDER OF HILLS-BOROUGH moved to add to subsection (3)
"Provided that where an entry is made in the special section of the register an indication to that effect shall be given in that part of the register which is open to public inspection."
The noble Viscount said: My Lords, the noble and learned Viscount on the Woolsack gave a good deal of attention to this Amendment on the Committee stage and put up one or two postulations, if I may call them such, as to cases A and B and what might happen; but, on the whole, I am not satisfied that it is not essential that this Amendment, or something equal to it in its purpose, should be included in the Bill. When one is drawing up legislation, it is difficult to foresee every kind of matter which is likely to arise, but the need for keeping the citizenship generally informed on most of the matters to be covered by the Bill is recognised by the fact that the Bill provides that the ordinary register will be open to inspection by the public. Apparently, the purpose of having a special section would, at first sight, be purely in the interests of public security but, reading between the lines—the most careful lines, as one would expect of the noble and learned Viscount, in his answer on the Committee stage—one can see that there might be some secret trade matters not necessarily constituting a threat to the State or requiring protection from the point of view of public security, the registration of which in the interests of the particular people concerned ought, for some reason or another, not to be made known. I am most anxious to prevent that from being a basis for a special register.
I do not think that the question of public security can be in any way abused if a special register is kept open to the public. All that needs to be entered in that special register is that registration has been made of a certain matter dealing with a certain commodity. That would enable people who are suffering from discrimination in their trade in respect of a commodity or a distributive agreement to know whether or not there was in existence a special agreement which had been considered by the Registrar to be registrable but, for some purpose or other, needed to be put into the
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special section. I should feel much more happy about this matter if an Amendment, either in the words I have put down or something which would secure the same purpose, could be inserted in the Bill.
I come back to my pre-war reading of the books I mentioned earlier this afternoon, with regard to some matters in respect of which great public security was involved. It is a great pity that some of those were not known to the general public beforehand. I am not at all sure that it was to the advantage of the State that those secret agreements should have existed between particular firms in relation to the particular nations involved. I therefore think that no harm will be done by having a special section, as is suggested by the Bill, but that it should be open to the public. That is what I want, and I do not think it is unreasonable. I beg to move.
Amendment moved—
Page 11, line 36, at end insert the said proviso.—(Viscount Alexander of Hillsborough.)
THE LORD CHANCELLOR: My Lords, this is a very difficult point and I am sorry to say that I have not been able to agree with the view of the noble Viscount, Lord Alexander of Hillsborough. I appreciate what he has specially in mind, that someone may find himself discriminated against by an agreement of which he knows nothing because it is on the special list. From that point of view, there is a hardship. On the other hand, the noble Viscount's Amendment proceeds on the basis that there will be a special list. If there is a special list, that special list is to include agreements which may concern national security but, equally, may be agreements which, though not actually dealing with security, are very important for the position of this country. One must approach it on that basis, that there are such agreements which are worthy of being put in the special list. Approaching it on that basis, if we accepted the noble Viscount's Amendment, people would know that company A and company B had made some sort of agreement. They might guess the truth; that might be bad. But they would be sure to speculate, and make two and two add up six—and that would be worse. Speculation as to what might

133
be in agreements might do an immense amount of harm. I think one might well come to the position, with which your Lordships are familiar in many aspects of life, that speculation as to content does more harm than publication itself. That is the other side of the picture we had to try to balance. I am sorry, because I do not like disagreeing with the noble Viscount, but that is the view I have formed.
I said on the Committee stage, and I repeat it now, that it is not the Government's intention that intensive use shall be made of the special section of the register. That will be, of course, a matter for the President of the Board of Trade; but it is not intended to be an easy escape valve. The special section is there to deal with the problem that I have mentioned. I also said that it will be open to Parliament to inform itself, by asking the President of the Board of Trade, how many agreements there are on the special list, so that it will be quite possible, at any stated period, to know whether the number appears to indicate that this procedure is being abused. I give those two undertakings on behalf of my right honourable friend, the President. I do assure the noble Viscount that there is no intention to abuse the procedure, but I feel it is a procedure by which, not only for public security but the general position of trade n this country, we must stand, and I ask him not to press his Amendment to-day.
LORD LUCAS OF CHILWORTH: My Lords, I am sorry the noble and learned Viscount takes that point of view. I think he could meet us in this matter. We have no desire to make public agreements which would come under paragraph (a) of subsection (3):
"particulars containing information the publication of which would in the opinion of the Board be contrary to the public interest."
Only the Government of the day can be the judges of what is or what is not in the public interest: that we are not disputing at all. But other types of agreement which it might well be in the public interest to disclose can be put in the special register at the sole discretion of the President of the Board of Trade. I am not going to cast any doubt on the integrity of anybody holding the position of President of the Board of Trade, but the one object of this Bill is to let the
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cleansing wind of public opinion and public knowledge go through the whole of this thing. If there is nothing to hide, why are the Government afraid of public opinion knowing it?
I think the noble and learned Viscount might meet us in this way. Some of these matters can be very important to the whole of British industry and to the wider national interest of national security. I should have thought perhaps there might be a tribunal to decide whether public disclosure would damage the public interest outside the realms of security. If the President of the Board of Trade is to be given the sole right to say that one type of agreement shall be exposed to the public and another type of agreement shall not, I think it will be highly dangerous. I hope the noble and learned Viscount: will try to help us. Perhaps he will take it back and look at it. Could he set up some tribunal to decide whether an agreement shall remain secret? I do not want a lot of top-heavy machinery, but I do not want the object of the Bill defeated. The professed object of the Bill, when the noble and learned Viscount first introduced it in your Lordships' House, was to expose to the public gaze all those restrictive practices which the Monopolies Commission said were against the public interest. They are to be registered. But now some will be registered in a special register. I say that these should he a very small number, relative to the whole, and I am certain that the noble and learned Viscount does not want anything to be hidden which should be, in the opinion of every right-thinking person, exposed to the public gaze.
I do not like to make a haphazard suggestion too hurriedly, but perhaps the agreement could be submitted to the Court to see whether it shall be included in the special list, because the Court has got to decide whether it is against the public interest or not. It will have to come before the Court at one time or another—at least, I assume that every agreement registered will have to come before the Court. If that is so, could we not allow the Court to decide whether or not the particulars of that registered agreement should be made open to the public? Perhaps my noble friend would be inclined to agree with that as a safeguard. Would the noble and learned Viscount think about that? I do not like the idea that

135
the sole arbiter of whether any agreement shall be put in the special section shall be the President of the Board of Trade.
LORD DERWENT: My Lords, as my noble friend Lord Bridgman has just said to me: when is a secret not a secret? The answer seems to be: when it is put in the special register. If you are going to have a tribunal to decide whether it is in the public interest to put something in or not, what tribunal other than the Cabinet can possibly decide a matter of that kind? The President of the Board of Trade, presumably, if he thinks fit, will consult his colleagues. It may well be a matter of public interest that the Cabinet and the Government of the day do not want publicly known. As soon as the matter is submitted to a tribunal, people other than the Ministers know what is the point at issue—and that is something which they might well wish to keep concealed. Either a matter is going to be submitted to the Cabinet—which I maintain is impracticable—or it should be left to the Minister concerned. I believe that in this connection we cannot do better than leave it to the President of the Board of Trade.
LORD LUCAS OF CHILWORTH: The noble Lord says that the matter would become known to other people if it were submitted to the Restrictive Practices Court. Will he tell me why he thinks that?
LORD DERWENT: There may be certain matters which the Government of the day consider it in the public interest should be concealed inside Government circles—inside the Cabinet, if you like. Under this Amendment that has to be divulged to someone else. It may well be that it is a matter which should not be divulged to someone who is not a member of the Government.
LORD BENNETT OF EDGBASTON: My Lords, I hope that the Government will resist the Amendment. I have had a good deal to do with the Board of Trade over a good many years, both during the time of this Government and of the previous one. I have had contact with the Board of Trade during the time of the present Minister and, I, for one, do not think that there is any need in this connection to go any further than him.
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I should be quite content to leave matters of this sort to him. I entirely agree with the noble and learned Viscount who sits on the Woolsack, that there are certain matters in the case of which, if some indication of them were given, people would immediately start wondering what they were. I think that we should do much better to trust the President of the Board of Trade in matters of this sort. I believe that course would be perfectly satisfactory, and I hope that the Government will stick to their guns and not give way.
4.43 p.m.
THE LORD CHANCELLOR: My Lords, I hope that I shall not offend the noble Lord, Lord Saltoun, if I ask your Lordships' leave to say one further word on this matter. I have considered this point very carefully, and I see that it is a subject upon which there can be two views. On the other hand, I have spent a great deal of my political life trying to delimit the line between what is a matter for a Minister and what is a matter for an independent appellate body. After the best consideration that I can give to it, I think that this is essentially a matter for a Minister. I am always ready to consider points raised, as the noble Lord well knows. I could take this back and discuss it again with my colleagues, but it would not be really honest if I were to hold out any hopes to noble Lords who support this Amendment. When I say that I will examine a matter again, I like everyone in the House to know that there will be an examination, with at any rate a sporting chance of some part, if not the whole, of the matter being conceded. I could not hold out any such hope here. It is never my desire to appear—if I may put it colloquially—to "stall" anything. I like everyone to know what I have in mind. I have considered this, and therefore, for reasons which I have given, I hope that the noble Viscount will not press the Amendment.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: My Lords, I have listened very carefully to what has been said and I am not convinced. I referred at the Committee stage to the question of whether or not a matter which was put in the special section of the Register was one which was registrable. It would not be

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put in if it were not. Therefore, prima facie on the basis on which this Bill proceeds from the Monopolies Commission Report, it is something which is not in the public interest. There may be some aspects of it which would justify the President of the Board of Trade thinking that it should be in the general register, in which case there would be publication of the whole terms of the agreement. But where it is registrable because it is not in the public interest, why should it not then be known to the general public that that agreement, though details of it are not
Clause 14 [Power of High Court to order examination on oath]:
4.50 p.m.
LORD MANCROFT: My Lords, we now move into the calmer waters of Clause 14. The next four Amendments are concerned with the power of the High Court to order examinations. Paragraph (a) of subsection (2) of Clause 14 suggests that the High Court will itself examine persons on whom a notice has been served in accordance with the provisions of subsection (1)—that is, where the Registrar has applied to the Court for an order requiring a person whom he believes is or may be a party to a
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given, has been placed in the special section? That is the point, and I have received no real answer to that. As the noble and learned Viscount says that he holds out no hope of dealing with such an important question as that in the way which I think is in the national interest, I shall ask the House to divide.
On Question, Whether the said Amendment shall be agreed to?
Their Lordships divided:—Contents, 13; Not-Contents, 55.

CONTENTS

Attlee, E.

Archibald, L

Mathers, L.

Listowel, E.

Haden-Guest, L. [Teller.]

Morrison, L.

Lucan, E. [Teller.]

Henderson, L

Quibell, L.

Kenswood, L.

Wise, L.

Alexander of Hillsborough, V.

Lucas of Chilworth, L.

NON-CONTENTS

Kilmuir, V. (L. Chancellor.)

Goschen, V.

Ebbisham, L.

Templewood, V.

Fairfax of Cameron, L.

Salisbury, M. (L. President.)

Thurso, V.

Gifford, L.

Reading, M.

Glyn, L.

Ailwyn, L.

Grantchester, L.

Albemarle, E.

Ashton of Hyde, L.

Hawke, L.

Buckinghamshire, E.

Baden-Powell, L.

Howard of Glossop, L.

Ferrers, E.

Baillieu, L.

Jessel, L.

Fortescue, E. [Teller.]

Balfour of Inchrye, L.

Lyle of Westbourne, L.

Grey, E.

Barnby, L.

McCorquodale of Newton, L.

Home, E.

Bennett of Edgbaston, L

Mancroft, L.

Limerick, E.

Birdwood, L.

Milverton, L.

Onslow, E.[Teller.]

Blackford, L.

Moyne, L.

St. Aldwyn, E.

Brocket, L.

O'Hagan, L.

Shaftesbury, E.

Chesham, L.

Saltoun, L.

Swinton, E.

Conesford, L.

Sandys, L.

Congleton, L.

Strathcona and Mount Royal, L.

Bridgeman, V.

Denham, L.

Falmouth, V.

Derwent, L.

Teviot, L.

Furness, V.

Dinevor, L.

Thurlow, L.

Resolved in the negative, and Amendment disagreed to accordingly.

registrable agreement to appear before the Court and be examined on oath concerning matters relating to that agreement.
In practice, it will be the Registrar who will put questions to the persons who are before the Court, because he will be the only other person with knowledge of the matters in respect of which he has given notice to those persons under Clause 13. The first two Amendments, therefore, are designed to remove any misconception which might arise on this score, and to bring the clause into line in this respect with the appropriate precedent in subsection (4) of Section 167 of the Companies Act, 1948. The other Amendments are consequential. I beg to move.
Amendment moved
Page 14, line 23, at end insert (" concerning the matters in respect of which the Registrar has given notice to him as aforesaid ").—(Lord Mancroft.)
On Question, Amendment agreed to.
LORD MANCROFT: My Lords, this Amendment is consequential. I beg to move.
Amendment moved—
Page 14, line 26, leave out paragraph (a).—(Lord Mancroft.)
On Question, Amendment agreed to.
LORD MANCROFT: My Lords, this Amendment is also consequential. I beg to move.
Amendment moved—
Page 15, line 6, leave out from (" in ") to (" to ") in line 7 and insert (" subsection (1) of this section ").—(Lord Mancroft.)
On Question, Amendment agreed to.
LORD MANCROFT: My Lords, this Amendment is also consequential. I beg to move.
Amendment moved—
Page 15, line 11, leave out (" that ") and insert (" the last foregoing ").—(Lord Mancroft.)
On Question, Amendment agreed to.
Clause 20:
Presumption as to the public interest
20.—(1) For the purposes of any proceedings before the Court under the last foregoing section, a restriction accepted in pursuance of any agreement shall be deemed to be contrary to the public interest unless the Court is satisfied of any one or more of the following circumstances, that is to say—

(a) that the restriction is reasonably necessary having regard to the character of the goods to which it applies, to protect the public against injury in connection with the consumption, installation or use of those goods;

and is further satisfied (in any such case) that the restriction is not unreasonable having regard to the balance between those circumstances and any detriment to the public or to persons not parties to the agreement (being purchasers, consumers or users of goods produced or sold by such parties, or persons engaged or seeking to become engaged in the trade or business of selling such goods or of producing or selling similar goods) resulting or likely to result from the operation of the restriction.
4.57 p.m.
LORD BAILLIEU LORD BAILLIEU had given notice of three Amendments, the first being, in subsection (1), after "shall" to insert "not". The noble Lord said: My Lords, Amendments Nos. 23 and 24 are consequential on this Amendment so, with your Lordships' permission, I should like to speak to the three Amendments at once. The first two were moved by me, and supported by the noble Lord. Lord McCorquodale of Newton, and other noble Lords, in Committee. They were opposed by the noble and learned Viscount the Lord Chancellor, who then said [OFFICIAL REPORT, Vol. 198. col. 933]:
"The cardinal issue is that, under the Amendment, if the parties did not satisfy the Court on paragraphs (a) to (g) and the tailpiece, there would still be no grounds on which the Court could declare them to be against the public interest unless the Registrar satisfied the Court to that effect. The presumption about the public interest and the onus of proof hang together."
The third Amendment has been added in order to meet this objection, and we believe that it does so. At present, the clause sets up an initial presumption that restrictions are contrary to the public interest unless the Court is satisfied on the circumstances set out in paragraphs (a) to (g) and the tailpiece of subsection (1). Under these Amendments the order will be reversed. The Court would be directed not to declare a restriction contrary to the public interest if it was satisfied on all the circumstances (a) to (g) and the tailpiece; if it were so satisfied, it would not be directed—I would ask noble Lords to note that—to declare the restrictions contrary to the public interest. In other words, the Court is not left in a vacuum or left in any doubt as to what it must do.
I submit that these Amendments would in no way alter the legal effect of the clause, or impair the Government's policy. To use the words of the noble and learned Viscount in Committee, they would neither "undermine" nor "endanger" the solution of the Government. This remains intact. The amended clause, I am advised, would have the same legal effect as the present one. The onus of proof would still lie on industry—we never desired to shift it. The overriding presumption of the public interest, which we accept, would still operate. In the noble and learned Viscount's words,

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" they hang together." The Amendments do not make it one whit easier to justify agreements before the Court, but from a psychological point of view they would impart a different flavour to the question and would help to allay the resentment which is widely felt throughout industry. If the Bill is to work, surely it is desirable to obtain the generous and full cooperation of industry. The present wording will prejudice the reaction of industry to the policy of the Bill. As my noble friend Lord McCorquodale of Newton said in Committee, our wording is merely a more polite way of putting it, but it would go far, in our view, to meet these difficulties.
I would ask noble Lords to accept my word that I have not raised these issues as a matter of stubborn emotion, or pique, or prestige, but as a simple matter of principle and conviction, and in a belief that any discrimination in legislation is always bad policy. Our purpose to-day should be not to create or aggravate differences, but to seek, within the nation and between Parties, on matters affecting us all, the widest common measure of agreement. That has ever been the role and the outlook of British citizens in a crisis. To-day, and for many a long day to come, we shall be faced in the national and international sphere with issues which greatly transcend the differences of Party politics, and which will challenge our statesmanship to the limit. I think we should bear this constantly in mind when we are dealing with what may be regarded as the small change of the local political scene. But I would say that, in my view and that of my friends, the groundswell from this clause as drawn will he felt for many a year. Magnanimity in politics is not seldom the truest wisdom. So at this eleventh hour, I beg the Government to set the Bill on a fair course. I beg to move.
Amendment moved—
Page 19, line 40, after (" shall ") insert (" not ").—(Lord Baillieu.)
LORD MCCORQUODALE OF NEWTON: My Lords, I should like to support my noble friend Lord Baillieu in the clear and factual statement that he has made in moving this Amendment. It was through the courtesy of the noble and learned Viscount the Lord Chancellor, in giving a factual statement, when
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he said that he had it in writing so that he could read it to me clearly, that we got clown to the practical effect of the previous Amendment which my noble friend moved, and which I supported. We are advised that Amendment No. 24 meets in full the point made by the Lord Chancellor on Committee stage. If that is so, and bearing in mind all the advantages, which one does not wish to repeat, but on which we held forth on the Committee stage, as to the desirability of industry working with and not feeling hostile to this Bill, I would ask your Lordships and the Government whether it is not worth while, even at this late stage, putting in the words that we suggest, rather than having the words at present in the Bill. I go further and say that I believe that if the Government, or we ourselves, had at an earlier stage—perhaps it could have been done in another place—put this Amendment forward it would have been generally accepted.
I would ask the noble Viscount, Lord Alexander of Hillsborough, if he would devote his attention to this matter for a moment. He did speak on the Committee stage, but I do not think he actually understood what we were driving at. He is an old campaigner; I have met him many times in another place, and I know his astute debating power. He said (col. 925):
"When it comes to asking that the whole position should practically be reversed … "
But we do not ask for anything of the sort. We say that the position should be exactly maintained, but presented in a little more acceptable language. We are not asking that anything the Government: set cut to do in the Bill should be reversed, but merely that it should be put in acceptable language which will not give offence to the great bulk of the law-abiding citizens who trade and, by their trade, carry on the prosperity of this country.
LORD BARNBY: My Lords, it seems generally agreed that this Bill is necessary in these times. Like others, I have recorded my support of the Bill, but there ale some angles to it on which we have had the opportunity of expressing our thoughts, and I have had the opportunity to express vehemently some of my misgivings. I want to give my support now to the Amendment just moved, with clarity, reason and moderation, by my

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noble friend Lord Baillieu, and supported by my noble friend Lord McCorquodale of Newton. These are points that we discussed on the Committee stage, when we took the opportunity of expressing our views. Here is a clear-cut issue, as my noble friend Lord Baillieu put it, of merely turning things around. On studying Hansard and carefully reading what was said in the debate on the Committee stage, it would seem that this Amendment does meet the points which the noble and learned Viscount the Lord Chancellor made.
What we have now is a reasoned appeal from my noble friend Lord Baillieu, who speaks with authority about what a vast number in industry think. They are in constant touch with organised labour, whose view was very properly put from the Opposition Benches. The interests are the same. Those of us who feel like the two previous speakers, feel strongly about the matter. In Committee we expressed our views. That was met on the other side by an eloquent and reasoned appeal by the noble and learned Viscount, the Lord Chancellor, who told us that he could not give way. We must accept that, because the noble Lord, Lord Lucas of Chilworth, who followed him, said that the resistance of the Lord Chancellor was the minimum they could accept. Assuming that my noble friend divides the House on this Amendment, and succeeds in the Division Lobby, what would be the attitude taken in another place? My noble friend Lord McCorquodale of Newton, speaking with experience, has expressed the view that the Amendment could be accepted in the other place. That ought to have a strong influence on the view that the Lord Chancellor takes on this Amendment.
At this stage of the Bill it is often appropriate for any speaker to look at the implications of the Bill, as a whole. The noble Viscount, Lord Alexander of Hillsborough, used this same reasoning the other day. The real misgivings which some of us have are based upon past experience, and on that point I have in my hand the issue of Hansard in which the noble and learned Viscount the Lord Chancellor gave a most considered reply to the point I raised in Committee, and emphasised. He said [OFFICIAL REPORT, Vol. 198 (No. 116), col. 934]:
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"If we are going to deal with the major problem of the balance of payments…we have got to get rid of restrictions in all parts of industry."
The point I would make is that, while we agree that some restrictions are bad, there are others which, based on past experience, have been advantageous and. indeed, would have received the support of the Opposition, in spite of what the noble Lord, Lord Lucas of Chilworth, has said on this.
The Lord Chancellor went on to say (col. 932):
"…if we do not regard our economic position to-day through expansionist eyes, which means getting rid of restriction.…"
It is not timely to introduce controversial aspects, but let us take the electrical distribution industry. There, you have an agreement which in the past has been advantageous, and has been active under the Act of 1927. The sort of agreements which were desirable then are now taken out of the field of restrictionism because they have created a monopoly, and there is now the statement of the Government that you must raise the price of the commodity, regardless of the consumer, to meet the expenses of the service. That is why I have grave misgivings about this clause, based upon the thoughts of expansionism. That, surely, was in the minds of Governments in the past, and we can all be influenced by our own experience.
I have a vivid recollection of 1919, when we all thought, as we do to-day, in terms of an expansionist economy. I remember then, as a Member of another place, listening to the Minister recommending from the Treasury Bench the fixing of the price of wheat for a period of five years at what then seemed an extraordinarily high price. So little did they see what was required that, within a short time, the Government had to introduce legislation to renounce it. This is what we mean by rationalisation: that, in circumstances which the nation cannot foresee, the Government are here imposing fetters that will require revisionary legislation. It is here, and in the other angle of the difference between prices and commodities, and the prices of processing services—which many industries in this country stand on, to the advantage of the community—that I feel the noble Lord's proposals are moderate and reasonable, and, being based on legal advice that he

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has had, meet the point of the Lord Chancellor. We hope that that attitude for which the noble Lord has appealed, reversing the proposals of the Bill, may find favour and acceptance.
THE LORD CHANCELLOR: My Lords, I think it is essential that, before your Lordships make up your minds upon this Amendment, you should have in mind the way that this matter has progressed. The first two of these Amendments which we are discussing to-day were moved by my noble friend Lord Baillieu on the Committee stage. One of the grounds upon which I opposed them then was that, in effect, they removed the onus placed on the parties to an agreement to show that it was not contrary to the public interest by coming within one of the seven "gateways" and the tailpiece set out in subsection (1) of this clause.
It is relevant to-day that the speeches of my noble friends Lord Baillieu and Lord McCorquodale of Newton agree that my criticism on the Committee stage was a valid criticism, and that the Amendment at page 21, line 6, is designed to meet it. I do not dispute that, as a matter of legal construction, with the addition which I have just mentioned, the onus of proof remains on the parties to the agreement, and thus that the legal effect—and I stress "the legal effect" as opposed to the psychological effect—of the clause would not be changed by the Amendments. What then is the reason for the Amendment? As I understand my noble friends, the argument is that the presumption that restrictive practices are against the public interest is in some way distasteful to industry, and that the rearrangement of Clause 20 in the way he proposes would mitigate this implication. But I cannot follow that line of thought. As I said during the debate on the Committee stage, the onus of proof and the presumption as to public interest hang together—as my noble friend, Lord Baillieu quoted from my speech a few moments ago. Because it is assumed that restrictive trade practices are prima facie against the public interest, the burden must be on the parties to an agreement which is before the Court to disprove this presumption in their particular case.
My noble friends do not, apparently, contest this. And yet, so it seems to me, the purpose of the Amendments must be to blur the issue, and therefore we cannot
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accept them. How could we in all honesty, on the one hand argue that the basic principles of the onus of proof and the presumption as to public interest had not been compromised, and on the other accept the argument in favour of the Amendments—the argument, that is, that they will profoundly influence industry's attitude towards the Bill? The conclusion would inevitably be drawn—and this is the psychological point—that the Government had conceded something of substance.
It is relevant, as I think my noble friend Lord Barnby said a moment ago, that this Bill has been in existence broadly in this form for six months. If I assure this House, I am immodest enough to believe that in this House my assurance as to the legal effect will be accepted, because your Lordships are kind to me. But how could I expect people outside to believe that this change, made in the fifty-seventh minute of the eleventh hour, had no significance at all? It is a very difficult position, and I want your Lordships to consider that.
I want to make it clear that not only am I not prepared, as I said on the Committee stage, to concede anything of substance, but I am also unwilling—I must put it this; way—to do anything which would seem to detract from the clear-cut policy on which the Bill rests. I know the difficulty of those who are in the middle of the road, but I said last time that after grave consideration we had rejected the recommendation of the majority of the Monopolies Commission for prohibitions, and we equally rejected the minority opinion of the Monopolies Commission which was, broadly, to register and do nothing else. We are trying to take the middle path of registration, a presumption that restrictive agreements are against the public interest unless the parties to them prove that they can get through one of the "gateways" provided. That is our policy.
It is a year since my right honourable friend announced that policy in another place, and I think it will be a year to-morrow that I announced the policy in your Lordships' House. When I announced the policy, the noble Viscount. Lord Alexander of Hillsborough, and the noble Lord, Lord Lucas of Chilworth, said they would wait for the Bill to see whether we were going to put that policy, first clearly into words

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and then into action. That is what we have tried to do. We feel that it is incompatible with a free enterprise economy to endorse, as a generally desirable practice, restrictions on competition, and that is why the presumption as to the public interest is clearly stated at the outset of Clause 20. We believe that that is the right place for it, because the detailed instructions to the Court immediately follow in that clause. The application of these instructions may show that in a particular case restrictions are in the national interest and it is possible for the parties to satisfy the Court.
I now come to the point which my noble friends have mentioned, that this may be distasteful or even offensive to industry. Nothing is further from my mind or the minds of the Government. After all, the majority of us believe, and my noble friends who have spoken believe, very strongly—though I would not admit that they believe it any more strongly than I do—that a private enterprise society is essential. But it must not only be free it must also be enterprising, and enterprise demands competition. I have always said that the evil of monopolies, public or private, is that one rests on what one has established and puts less energy and initiative into work than one would do if there were not the bulwark of monopoly on which to rest.
I should like your Lordships to look at the Bill to see that I am not merely expressing an intention but that what I have said about "no desire to be distasteful to industry" is clearly shown. If your Lordships will look at Clause 19, you will see that subsection (1) says:
"The Court shall have jurisdiction …to declare whether or not any restrictions by virtue of which this Part of this Act applies to the agreement…are contrary to the public interest."
That is the issue which the Court has to decide under Clause 19. Then in Clause 20, subsection (1) begins:
"For the purposes of any proceedings before the Court under the last foregoing section. a restriction accepted in pursuance of any agreement shall be deemed to be contrary to the public interest unless the Court is satisfied of any one or more of the following circumstances…"
In other words, the machinery of this Part of the Bill is that Clause 19 gives the Court power to make a declaration that an agreement is contrary to the
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public interest, and Clause 20 says how it is to be done. It is deemed to be contrary to the public interest unless it can get through one of the "gateways" which I have mentioned.
Now let us look at this clause with my noble friend's Amendments in it. I am not going back, your Lordships will understand, on what I have said is my legal construction of the clause, but I want your Lordships to look at the effect. Clause 20, with these two Amendments in. would read thus:
"For the purposes of any proceedings before the Court under the last foregoing section, a restriction …shall not be deemed to be contrary to the public interest if the Court is satisfied …
and so on. That is the mischief of what was urged by my noble friends on the last occasion. That is purely negative. You know nothing further at all about public interest from that point. With respect, that was where my noble friends went wrong on the last occasion. The matter is simply left in the air. They say that a restriction will not be deemed to be against the public interest if it satisfies something, but they do not say what the public interest is. If they then say that something which is not proved to be within the exceptions—this is the effect of my noble friend's second Amendment—is against the public interest, that will be taken by many people, rightly or wrongly, to apply to those who have actually tried and failed to prove a case.
In this method of drafting the clause there is no clear guidance to the Court about where the public interest lies. It departs from what I have said is the logical method of setting it out, of saying. "There is a rule of public interest. Can you prove that you come within the exceptions?" I believe that whatever I say as to the legal position will be taken as a retreat from the position as to the value of competition—as I have said, when we say that we stand for free enterprise, it means that we stand for enterprise and competition, as well as for freedom. I would do anything that I believed was right to meet my noble friend, if I could. I have considered this matter extremely carefully, and I do not think it would be right. In the eyes of a large section of the Press and the public the effect would be to undermine the

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sincerity of the Government in what they have said they would do. I hope very much that, in spite of the fears of my noble friends, whose sincerity I do not question for a moment, they will not press this change which I am certain would be misunderstood.
I come for a moment to the speech of my noble friend, Lord Barnby. I am not saying that it was on a higher plane, but it was on an entirely different plane from those of my noble friends Lord Baillieu and Lord McCorquodale, who are accepting that the onus should be by way of the Amendments they are moving, and of the Government, who are trying to improve the drafting from the point of view of its acceptance by industry. The noble Lord. Lord Barnby, whose approach was on the merits and not on the drafting, warned us that from 1919 to 1921 we had had a position in which high hopes were raised, and that then,. at the end of 1921, we saw unemployment come, and continue through the 1920s and the 1930s. I hope that your Lordships will not form your views on this Bill by the experiences of that time. That is the difference between Lord Barnby and myself. He may well say that his view is more sound than mine, but I believe it is a view which may well take away a great deal of hopes of expansion which we have at the present time.
I do not want to go wide of this matter and lecture the House on general economics, but I should have thought most of your Lordships would agree with me that in our present economic situation three things are essential, The first is restraint—and I use the term for want of a better one—on both sides of industry. That means, on the side of management, the most careful selection of capital investment, with a view to getting the greatest production from it. That is the first point; and, equally, on the workers' side of industry there must be restraint in wage claims, a matter which has been dealt with so often. That must be a general policy. The second policy, which applies equally to both sides, is that we want great productivity at the present time. The, third point, which is relevant to both of these, is that somehow—this is where I respectfully join issue with my noble friend Lore Barnby—we have got to get rid of the restrictions on both sides of industry; and I say that the elimination of these restrictions is one of the
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most important problems that confront us. I do not believe that we can get rid of restrictions on the labour side of industry by legislation: I believe that it is a matter of negotiation in the National Joint Advisory Councils, and by example.
I have stated to your Lordships, again I am afraid at length, the faith which is in me and which makes me support this Bill. It would be an unutterable sadness, after all the effort of the past twelve months, which started in this House a year ago to-morrow, in the debate we then had, if, by blurring this issue, by appearing to soften our attitude on such an important point, we were to spoil the effect of the year's work. I hope that my noble friends, who have shown such consideration in this problem and, indeed, have shown a readiness to accept my own legal view by the addition to their Amendment, will also accept my psychological view, that it would be a great danger not only to the Bill but also to the hopes of a better state of things if this Amendment were pressed.
5.34 p.m.
LORD SALTOUN: My Lords, the noble and learned Viscount has given us a great many reasons why this Amendment should he rejected, and I shall turn to the first one, the question of time. He said that it would be a tremendous pity if, in these last minutes of this eleventh hour, this Amendment were passed. But the fact that we are in the last minutes of the eleventh hour is a matter entirely in the hands of the Government. This Bill has not been before your Lordships' House for effective debate for more than a fortnight I think. If the Bill has been before Parliament for six months and at the end of a fortnight in your Lordships' House we are told it is the last minute of the eleventh hour then I submit that your Lordships' House is not being fairly dealt with by the Government. I do not think we should pay too much attention to that argument.
The whole argument, as I understood it, of the noble Lord, Lord Baillieu, was psychological, and there is nobody better fitted to advise your Lordships on a psychological matter than the noble Lord. So far as l understood the two speeches, the noble Lord, Lord Baillieu, said that if this Amendment were carried it would encourage industry to accept the Bill and work it with enthusiasm. The reply of the noble and learned Viscount was,

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" Yes, but if you carry it, though I am not saying it makes any difference, it will have a frightfully bad effect upon the Government of the country." I think it is our duty to pass Bills into Acts in the form in which they will work best. The effect on the Government is a matter for themselves. The Bill is a matter particularly for us, and on this psychological question I should like to say a word or two.
The noble Lords opposite, when their Party were in office, carried through a Bill—in some ways a very good Bill—to become the Companies Act, 1948. And they will tell you that, in conversation with them outside this House, I always laughed at them, because I have said that the Bill proceeded from the supposition that all company directors were rascals and all auditors were saints. In spite of the fact that I am a chartered accountant, I do not accept either of those propositions, and purely from that (as I hold) slightly prejudiced attitude, I believe that the Companies Act does facilitate a gross and rather horrible fraud which may already have taken place, and certainly will take place, sooner or later, in consequence probably of that Act
Here the noble Lord, Lord Baillieu, says that if his words are accepted—and we understand that they make no difference to the real sense—it will greatly conciliate those people who have to register their restrictive agreements. Supposing all restrictive agreements, however important, however necessary, are tarred with some disputable brush—just as divorce is, in the minds of a large number of noble Lords—then you may have effects that you do not expect. In Clause 20 (1) (e) we see that a restriction will not be deemed to be contrary to the public interest if it can be shown
"that, having regard to the conditions actually obtaining or reasonably foreseen at the time of the application, the removal of the restriction would be likely to have a serious and persistent adverse effect on the general level of unemployment in an area …"
We had considerable discussion on that point during the Committee stage. A group of traders may say, "We are not particularly interested, as traders, in full employment—in fact, a certain mobility of labour is to our advantage; and we will not have the restrictive agreement. It is true that it might add to our profits but
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we will forgo them to forgo the disrepute." I submit that it is very important that the Government should conciliate these people who, after all, have been engaged in no crime and should thus help in working the Bill properly. If the noble Lord, Lord Baillieu, goes into the Division Lobby, I shall go with him.
5.40 p.m.
LORD SILKIN: My Lords, I do not think it is necessary to detain the House for more than a moment or two, but I should like to express the views of my noble friends on this side of the House. The noble and learned Viscount has described this as a psychological question, and I agree with him. It is also a political question. We on this side have accepted this clause as it stands, as a compromise; it is a compromise between the two views which the noble and learned Viscount expressed. It seems to me that it is important that that compromise should not be disturbed. Many of the measures that we in this Parliament pass are forced upon the Opposition, and at some time or other the Opposition feel that they might wish to disturb them. This is a measure which, so far as I know, as it stands will be acceptable, and it will stand, subject only to its workability; and for that reason I think it would be a great pity to disturb it.
Nobody is suggesting that the Amendment is fundamental and, having listened to the arguments in favour of it, I think that the noble Lords, Lord Baillieu and Lord McCorquodale of Newton, are mistaken in its effect upon industry or in what it suggests. It is not a reflection upon industry as a whole; it is not even a reflection on a part of industry; it is saying only that certain agreements which have been perfectly lawful up to now and which nobody could complain about should now become the subject of inquiry by the Court, with certain exceptions. I fail to see that that is in the slightest degree a reflection upon industry. If it is, then I am bound to say that I do not think that the Amendment which has been moved is going to make the slightest difference. The agreements will be judged by exactly the same criteria as they would be under this Bill.
I put the case simply. I do not wish to argue the matter, as the noble and learned Viscount has delivered a most important and weighty speech which I commend to every noble Lord to read

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again, even if he has heard it, and with which to a large extent I, personally, agree. I do not think it is necessary to argue the case on the merits; I merely submit these two points: first, that here is a compromise solution which is acceptable to the political Parties and should not be disturbed; and, second, that those who are wishing to amend the clause are really not achieving any psychological advantage, let alone any other advantage. I hope that the clause will be accepted as it stands.
LORD BAILLIEU: My Lords, I need hardly say that I am grateful to the Lord Chancellor for the time he has given to this Amendment and for the way he has handled the problems that are implicit in it. May I, however, before saying what I think on the question of carrying the Amendment to a Division, make one or two comments. I have noted that the Lord Chancellor (I think I am right here) does not dispute the legal effect of the clause. We were grateful to the Lord Chancellor when, in Committee, he gave us the opportunity of framing the clause which we thought provided the ideal solution to a matter which has been at issue ever since the Bill was launched. It is true that the Government stated their policy twelve months ago it is also true that industry twelve months ago took exception to this particular provision. because industrialists could not understand why the wider or deeper purposes of the Bill could not be met by a clause such as this. I venture to say that Lord McCorquodale of Newton is right, and that if we had thought of this earlier this House would have accepted it, industry would have been happier and the compromise therein achieved would have been approved by all.
I am sure the Lord Chancellor would not wish me to follow him into the philosophical reasons behind the Government's attitude to the Bill. So far as we in industry are concerned, we have done everything we can to improve the measure, both in this House and in another place—and let me say here, we will do everything to make it work; it is our duty as citizens. Nor do I think that the Amendment that I submitted lacked the clear guidance which the noble and learned Viscount suggested it did. It states that:
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"If the court is not satisfied of any one or more of the circumstances contained in paragraphs (a) to (g) of the foregoing subsection or if so satisfied is not further satisfied under the remaining provisions of the subsection, then the court shall declare that the restriction is contrary to the public interest."
With all respect, I should have thought that that was a perfectly clear direction to the Court.
The Lord Chancellor questioned whether the public would regard it as a sincere act on the part of the Government if he came forward with his colleagues and supported this Amendment. If I may say so, I think he underrates the range and weight of his voice and authority. I am sure that if the Government were convinced that this clause was due and proper to be made, then the Lord Chancellor's support and that of the President would carry conviction, not only to this House, but to the Commons and the wider public beyond. I deplore the conclusion reached by the Lord Chancellor because, as your Lordships know, I feel most deeply that this Amendment, simple in itself, would have provided a healing action; it is designed to that very end. In view of the strong appeal by the Lord Chancellor, I feel that I must withdraw my Amendment, but I shall have to consider with my colleagues whether or riot I should refer to the matter on Third Reading.
THE LORD CHANCELLOR: My Lords, would your Lordships allow me to say to my noble friend, without really speaking to your Lordships again, how grateful I am at the course he has taken. It would be difficult to say which of us has been right, but I value most sincerely his taking the course which I have urged to the House, and I know that he will accept from me that it is based on a most sincere belief or I should not have asked him to do it. I am very grateful to him.
Amendment, by leave, withdrawn.
5.50 p.m.
LORD JESSEL LORD JESSEL moved, in subsection (1) (a), after "injury" to insert "whether to persons or to premises". The noble Lord said: My Lords, this Amendment is a modified form of the Amendment which I moved on the Committee stage but which the Lord Chancellor thought went too far. My present Amendment merely extends the application of the subsection to injury to premises in addition

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to personal injury, and I hope, therefore, that in its modified form Her Majesty's Government will be able to accept it. I beg to move.
Amendment moved—
Page 19, line 45, after (" injury ") insert (" (whether to persons or to premises)").— (Lord Jessel.)
THE LORD CHANCELLOR: My Lords, I have considered the point that my noble friend Lord Jessel has made and I agree with him that the Amendment as now framed makes a very limited extension to the grounds of pleading under paragraph (a) of subsection (1) of Clause 20. We recognise that under the paragraph as at present drafted there might have been doubt as to whether danger, from fire for example, to premises would have been regarded by the Court as likely to cause injury to the public. Therefore I am glad to agree to what I think is an improvement in the clause and to accept the Amendment. On the Committee stage my noble friend Lord Saltoun asked whether the word "public" in paragraph (a) included employees of any firm concerned. I consider that there is no doubt but that it does. The words now proposed to be added to the Bill, which specify persons as well as premises, would in any case, I should think, remove any anxiety which my noble friend may have had on this point. I wanted to let my noble friend Lord Saltoun know that I have not omitted the point he raised on the Committee stage.
LORD SALTOUN: My Lords, may I thank the noble and learned Viscount, not only for the consideration he was kind enough to give to the point I raised but also for allowing me to feel that I am in London and calling me Lord "Salton", instead of making me feel that I am in a place called "Londoon".
VISCOUNT ALEXANDER OF HILLS-BOROUGH: My Lords, I should like to be quite clear what the noble and learned Viscount on the Woolsack is accepting. The clause in general is concerned with the presumption as to the public interest, and says:
"a restriction accepted in pursuance of any agreement shall be deemed to he contrary to the public interest unless the Court is satisfied of any one or more of the following circumstances",
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under which the restriction is operated. What kind of restriction is to be covered by the extension of these words? I do not quite follow the purpose of it. Can the noble and learned Viscount on the Woolsack tell me how this has improved the position of the signatory to an agreement which is going to be ruled out—how, by adding these words, it improves him in the eyes of the Court by adding these things? I do not know how it would work, especially when you talk about purchasers and consumers of goods.
THE LORD CHANCELLOR: My Lords, I am sorry I did not go into this point. I hope your Lordships will allow me to deal with it. The noble Viscount. Lord Alexander of Hillsborough, will see that the addition proposed by my noble friend "whether to persons or to premises" operates in line 45 of page 19—that is, it operates, so to speak, at "gate" (a). "Gate (a)" is:
"that the restriction is reasonably necessary having regard to the character of the goods to which it applies, to protect the public against injury",
and then my noble friend's words,
"whether to persons or to premises in connection with the consumption, installation or use of those goods".
" Gate (a)" is the gate for servicing provisions—that is, you can get out of the general presumption of being contrary to the public interest if you can show that your restriction is necessary in order to provide services with the goods which will protect the public against injury in connection with the consumption, installation or use of the goods.
Having shown that your restriction provides the services under "gate" (a) and that these services protect the public, you then have also to show, under the tailpiece at the foot of page 20, that the restriction is not unreasonable having regard to the balance between the services you supply and any detriment to the public that the agreement may cause. That is the position. This is a case where you may have dangerous goods. Our original words were that the services should be designed to protect the public against injury, and, as I said, my noble friend's Amendment extends that very slightly because the injury may be to premises as well as to the public. The dangerous goods might cause a fire in the premises, and if your services with the

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goods give protection against fire to the premises, that would be enough. It is a very narrow point and I assure the noble Viscount that I consider each of these gates like a terrier at a rathole.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: My Lords, I should like an example of the kind of injury that would be covered under "gate" (a) in relation to the question whether or not it is a trade restrictive practice. That is what we are up against and want to cure in this Bill, and I have not had an example yet.
THE LORD CHANCELLOR: My Lords, I did give an example; perhaps the noble Viscount did not hear it. The example I gave was that if you are producing goods which are dangerous in that they may cause a fire and you supply with the goods the services which will protect people against fire, that is one of the things at which the Court should look. "Gate" (a) deals only with services. As the noble Viscount knows, there is an immense variety of services. This is a very narrow point; whether the danger must he entirely a personal danger (that is, where, for example, you cut yourself with the goods), or whether, as Lord Jessel wants, it is a danger of setting your house on fire. It is a small point and. I think, a very reasonable one.
On Question, Amendment agreed to.
5.59 p.m.
LORD MANCROFT: My Lords, we now move on to the next "gate." At the Committee stage your Lordships may remember that my noble friend Lord Jessel said that the words "the public" in "gate (b)" might be interpreted as unduly limiting the class of beneficiaries. My noble friend said he thought it might be argued, for instance, that public authorities, or national or area utilities, would not be covered by the description. The Government think that there may be some substance in the noble Lord's arguments, and this Amendment is designed to remove any doubts. Your Lordships will see that the Amendment makes it clear that "purchasers, consumers and users" include not only public Authorities but also purchasers, and so on, of intermediate goods, such as plant and machinery. I think that meets my noble friend's point, arid I hope he will welcome the Amendment. I beg to move.
Amendment moved—
Page 21, line 7, leave out (" The ") and insert (" In this section 'purchasers ', ' consumers' and 'users ' include persons purchasing, consuming or using for the purpose or in course of trade or business or for public purposes; and ").—(Lord Mancroft.)
On Question, Amendment agreed to.
LORD MANCROFT: My Lords, this is a drafting Amendment to bring the provisions about partnerships in subsection (2) of this clause into line with other parts of the Bill, where partnerships are to be treated as single persons only if none of the partners is a company. I beg to move.
Amendment moved—
Page 21, line 9, after (" or ") insert t" individuals ").—(Lord Mancroft.)
On Question, Amendment agreed to.
Clause 22 [Rules of procedure and representation of Registrar]:
LORD MANCROFT: My Lords, the three next Amendments are drafting Amendments, put down to meet criticisms made at the Committee stage by my noble and. learned friend Lord Conesford and by Lord Alexander of Hillsborough. They were criticisms of paragraph (c) of subsection (2) of this clause, which is about the rules of procedure and the representation of the Registrar. It seemed clear to us, from the criticisms leveled against this particular wording, that the word "regulating" might be taken as implying that the evidence to be required or admitted before the Court might be restricted in some improper way. As I tried to explain, the intention of the paragraph is exactly the opposite—that is, to facilitate the proceedings before the Court by widening the range of evidence which may be brought before the Court so as to avoid undue expense or inconvenience. I hope that the re-drafting of the words will set the minds of Lord Conesford and Lord Alexander of Hillsborough at rest. It just goes to show that if you set out to do a really fine piece of draftsmanship you want not only all the precedents at your elbow but also that invaluable work,Conesford's English Usage. I beg to move.
Amendment moved—
Page 21, line 37, leave out from (" may ") to (" the ") in line 38 and insert (" make provisions with respect to ").—(Lord Mancroft.)
On Question. Amendment agreed to.
LORD MANCROFT: My Lords, the next Amendment is consequential. I beg to move.
Amendment moved—
Page 21, line 40, leave out ("and ").—(Lord Mancroft.)
On Question, Amendment agreed to.
LORD MANCROFT: My Lords, this Amendment also is consequential. I beg to move.
Amendment moved—
Page 21, line 41, at end insert (" and the evidence which may be required or admitted in any such proceedings; and such rules may provide— ").—(Lord Mancroft.)
On Question, Amendment agreed to.
LORD MANCROFT: My Lords, this Amendment allows the Lord Chancellor's rules, which are to be made under Clause 22, to provide for the grouping or consolidation of applications before the Restrictive Practices Court. As the Bill stands, the Court would have to deal separately with each agreement, even if there were a large number of agreements, say between a trade association and individual distributors, all of which were in similar terms. The advantage of this new provision will be not only that it will save the time of the Court and the parties to the proceedings, but also that it will enable the Court to look at a restrictive practice in a particular industry in the round. I may remind your Lordships that the rules made by the Lord Chancellor under Clause 22 are subject to annulment by either House of Parliament. I beg to move.
Amendment moved—
Page 22, line 4, leave out paragraph (c) and insert—
(" (c) for enabling a single application to be made to the Court in respect of a number of related agreements, or separate application made in respect of related agreements to be heard together; ").—(Lord Mancroft.)
On Question, Amendment agreed to.
Clause 23:
Prohibition of agreements for collective enforcement of conditions as to resale prices
23.—(1) Subject to the provisions of this section, it shall be unlawful for any two or more persons carrying on business in the United Kingdom as suppliers of any goods to make or carry out any agreement or arrangement by which they undertake—
(b) to refuse to supply goods for delivery in the United Kingdom to such dealers
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except on terms and conditions which are less favourable than those applicable in the case of other dealers carrying on business in similar circumstances;
or any agreement or arrangement authorising the recovery of penalties (however described) by or on behalf of the parties to the agreement from dealers who resell or have resold goods in breach of any such condition as is described in paragraph (a) of this subsection, or the conduct of any domestic proceedings in connection therewith.
6.6 p.m.
VISCOUNT ALEXANDER OF HILLS-BOROUGH VISCOUNT ALEXANDER OF HILLS-BOROUGH moved, in subsection (1) (b). after "favourable" to insert "to such dealers or their customers". The noble Viscount said: My Lords, I do not want to occupy a long time upon this Amendment. Clause 23 prohibits collective resale price maintenance and makes it unlawful for any two or more persons carrying on business as dealers in or suppliers of any goods to enforce certain arrangements in connection with the supply of those goods. We want to add these words to this clause because we are very much affected by it from the point of view of our members of industrial and provident societies. The way in which these things work ought really to appeal to the Government of the day, after all their assertions of their wish to meet us on this matter.
They ask us to believe that they are greatly concerned about the cost of living and want to bring it down. And yet under this clause, in seeking to obtain wide ranges of goods for sale, we can be required—and this is a matter of discrimination, as compared with the treatment of other traders—to add to the maintained resale prices what the suppliers consider to be a proper modicum in relation to the distribution of surplus or profit at periodic accounting intervals. That, we maintain, is completely unreasonable. I shall be saying something more about it on a later Amendment. In the meantime I am concerned at this particular practice. For example, in the case of a large number of commodities handled by the Proprietary Articles Traders' Association, they say, in effect:" You can have these goods provided that you charge a halfpenny, a penny, three-halfpence or twopence to what is the fixed resale maintenance price we apply to other people because you have a different method from

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other people of distributing your profits." That, we maintain, is completely unreasonable.
I am challenging the Government upon this point, in view of the fact that they say they want to reduce the cost of living and are taking some extraordinary economic measures in the belief that they will bring that about. However, perhaps the debate on the Finance Bill next Monday will be the appropriate time to go into more detail on that matter. The Government are allowing this sort of thing to go on, in spite of their pledge to take steps to bring down the cost of living. They are discriminating against the 11½ million members of the industrial and provident societies by saying that they are not to be allowed to pass on to their members and customers the great advantages of collective buying and collective distributive services. I beg to move.
Amendment moved—
Page 22, line 41, after (" favourable ") insert (" to such dealers or their customers) — (Viscount Alexander of Hillsborough.)
THE LORD CHANCELLOR: My Lords, this Amendment deals with a relatively minor aspect of the major point which I am quite sure the noble Viscount, Lord Alexander of Hillsborough, will make in his speech on Amendment No. 35. I hope that your Lordships will bear with me while I just explain the narrower position with which this Amendment is concerned. Clause 23 makes it unlawful for suppliers to agree or arrange to supply, or offer to supply, their goods to price-cutting dealers on terms less favourable than the terms on which they supply or offer to supply non-price-cutting dealers carrying on business in similar circumstances. That is the general effect of Clause 23.
The Amendment now before the House introduces the concept of terms which are less favourable to the customers of the retailers. A similar Amendment was moved on the Committee stage, but was withdrawn after my noble friend Lord Mancroft had said that, in his view, even if it were agreed that the co-operative dividend should be made the subject of some special provision, the Amendment would not achieve it. In making that point, Lord Mancroft made it clear (and I think he made an important statement, and one with which I
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entirely agree) that agreements among manufacturers about how the co-operative dividend was to be treated were registrable agreements; that is to say, agreements to the effect that every manufacturer would individually impose a condition that co-operative societies should not allow the dividend on the manufacturer's price-maintained goods would be registrable. I think the noble Viscount, Lord Alexander of Hillsborough, was relieved and indicated that that had never been stated clearly before. That is the position and with respect to my noble friend Lord Mancroft, I endorse it to-day.
The Government adhere to their view that, if some provision is desired to safeguard co-operative dividends from being regarded as an infringement of resale price conditions, the present Amendment is not successful in effecting this. I venture to submit that, if anything, it would place the co-operative societies in a more difficult position than that in which they are to-day, because manufacturers would not be able to allow co-operative societies to pay divide ads while other traders were prevented from doing so. At the present moment, some manufacturers sell their goods to the co-operative societies without any restriction, knowing that the societies would pay dividends, while they do not sell the goods to private traders. Since the Amendment does not allow customers of co-operative societies to be treated better than customers of private trailers, the effect of the Amendment might well be that manufacturers would bring themselves within the law by preventing co-operative societies from giving dividends or else refuse to supply their goods to them.
I suggest to the noble Viscount that it would be more appropriate to reserve our fire—and I know that the lire from his batteries will be heavy—until we consider the question of co-operative dividend in relation to Amendment No. 35. As was stated during the Committee stage, under the Bill as drafted agreements between manufacturers, to the effect that the co-operative dividend shall not be allowed, must be registered and must be justified to the Restrictive Practices Court. I think it is important that that should be made clear in your Lordships' minds. I hope that: the noble Viscount, having made the gesture of moving this Amendment, may feel disposed that we should join issue

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and argue a question on which I know he feels strongly and sincerely when we get to Amendment No. 35.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, it is always difficult to resist the pleading of the noble and learned Viscount. In response to what he has said I will withdraw the Amendment, but I would draw the particular attention of the advisers of members of industrial and provident societies to the situation which has been arrived at by the legal mind of the noble and learned Viscount and by the Department represented by the noble Lord, Lord Mancroft —namely that agreements of the kind I have in mind are registrable. That is a good thing to have brought out, and it will, I hope, be a guide to anyone who wants to exercise this practice against industrial and provident societies. They should be warned that we will see to it that the Registrar does register these agreements; and if he does not, we shall go to him to see the reason why. I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
Clause 24:
Individual enforcement by legal proceedings of conditions as to resale prices
24.—(l) Where goods are sold by a supplier subject to a condition as to the price at which those goods may be resold, either generally or by or to a specified class or person, that condition may, subject to the provisions of this section, be enforced by the supplier against any person not party to the sale who subsequently acquires the goods with notice of the condition as if he had been party thereto.
6.15 p.m.
LORD LUCAS OF CHILWORTH LORD LUCAS OF CHILWORTH moved, in subsection (1), after the first word "the" to insert "maximum" [price]. The noble Lord said: My Lords, I ask your Lordships' pardon for returning to this Amendment which we discussed on Committee stage, but we discussed it in conditions and at a time when the majority of your Lordships had a social engagement elsewhere, and I had to do it rather hurriedly. I consider Clause 24 to be the Achilles' heel of the Government in this Bill. if I could write shorthand and had taken down the speech of the noble and learned Viscount on the Woolsack in reply to Lord Baillieu's Amendment, I could not have had a better argument in support of this Amendment.
We have been told right the way through this part of the Bill that its whole object is to unfreeze trade, to get it out of the rigidity in which it has grown up through the enforcement of resale price maintenance. The noble Lord said definitely that the Government's object was "to do away with the restriction of competition." What the Government do right up to Clause 23 is to try to do away with all restrictive practices that are against the public interest. They make collective boycott unlawful; they prevent two or more people conspiring together to enforce a resale price; they open the channels of distribution. Then in Clause 24 they give power to any single producer of any article to nullify the whole of what they have done. Any single producer can defy the Government and say that he will have "none of this doing away with restriction of competition," and that nobody shall sell any article he produces at a price different from that included in an agreement. And Clause 25, with which I will deal when we conic to it, goes even farther.
Where I think the Government have gone wrong is that they have no real backing from the Monopolies Commission to do this. Paragraph 176 of that Corn-mission's Report says:
"We consider it to be within our terms of reference to consider whether it would be in the public interest to introduce legislation to facilitate the enforcement by an individual supplier of conditions as to the maintenance of resale prices and other conditions of sale."
That is what the Monopolies Commission say. The Lloyd-Jacob Committee on Resale Price Maintenance, who have been called in aid by the Government, in paragraph 114 of their Report say:
"It appears to us to be contrary to the public interest for a manufacturer to use his power to cut off supplies in such a way as to obstruct the growth of particular methods of trading, to impede the distribution by another manufacturer of competitive goods or to deprive the public of the benefits of low cost systems of distribution."
That is precisely what the Government do.
I have put this simple Amendment down again to give myself the chance of impressing upon the Government what they are doing. I have said that in the interests of the consumer—and it is the consumer with whom we arc really concerned—the only price enforcement should be that of a maximum price, and

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we should not legislate against the passing on to the consuming public of the benefit of the individual distributive unit's efficiency. That is what this does. This clause says that you do not trouble how efficient a distributive unit is: if it can distribute the goods on a lower price range it is prohibited from doing so. I do not think that that is in the public interest. I feel that this clause, as it stands, will operate very much against the public interest, because some manufacturers will enforce their price and others will not, and the good manufacturer, or the manufacturer who wants, perhaps, to conduct his business according to a decent plan, will possibly be subjected to vicious competition by another manufacturer.
One of the things that I believe have influenced the Government—and I think the noble Lord brought it out in his speech on the Committee stage—is that they want the individual manufacturer to have soma protection against what is popularly known as the "loss leader." In all my years in industry—I challenged the noble and learned Viscount, the Lord Chancellor, the last time on this point, and I challenge him or any other noble Lord in your Lordships' House now—I have never found that the "loss leader" made any lasting impact upon the distribution of a branded article, or the profits of the producer of a branded article. That is a myth. As I said last lime, the best "loss leader" I ever knew was a hot-cross bun—it was not a. branded article—which used to be given away by the dozen a week before Easter. This fear is a myth. The "loss leader" does riot interfere for any lasting period, although it may cause a temporary setback for a day or so. I think that Clause 24 nullifies the whole effect of this part of the Bill. Therefore, I beg the noble and learned Viscount on the Woolsack to give this Amendment reconsideration.
An acceptance of this Amendment would clear the point of my noble friend Lord Alexander of Hillsborough. There would be no discrimination against any particular type of trader: self-service and al: the newer forms of distribution would have a free run. Further, it would do the one thing which the Government have said they want above everything else; that is to say, it would bring down the retail price of goods. This is the only thing that can possibly do it. I would put this simple point to noble Lords. While
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you have a fixed margin, while you have resale price maintenance, the margin between the cost of manufacture and the cost to the retail consumer is always going to be fixed at such a level as will give an adequate remuneration to the least efficient distributive unit. That has been proved in commerce ever since the branded article and resale price maintenance made its mark, now snore than fifty years ago. Therefore, while you encourage the lowness of the production price by encouraging mass production, what you really do is to refuse to encourage the passing on of the benefits of mass distribution to the consumer, because you give the power to any producer to say that that shall not be done. That, in essence, is what is meant by the individual enforcement of resale price maintenance
I think the public should be protected by a ceiling, and any manufacturer should be able to say: "You must honour a maximum price." The Government want this part of the Bill to he a success and want to carry out what they have said is their objective; that is to say, to make some mark by unfreezing the frigidity of distribution in this country so that the consumer can get a lower price. They will never get that until they, if I may use a vulgarism, "go the whole hog." What is the difference between allowing six producers in one industry to combine together, and allowing one producer who has a monopoly of production, or a near monopoly of production in that industry, to effect individual price maintenance? I am not going to say more. That is the gist of my argument. I shall return to some of it later on in regard to another Amendment on the question of equity of enforcement, but that is my argument on this simple Amendment. I beg to move.
Amendment moved—
Page 24, line 18, after(" the ") insert (" maximum ") —(Lord Lucas of Chilworth.)
THE LORD CHANCELLOR: My Lords, the noble Lord, Lord Lucas of Chilworth, began by referring to this Amendment as the Achilles' heel of the Bill. I was wondering whether I could find anything better connected with Achilles with which I could compare it, and all I could think of was the Lady Briseis, to whom we used to refer slightly ungallantly as τυτθον 'αλλ' 'íµον—" a small thing, but mine own." Certainly in one sense this clause is our own,

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because it is the via media between the collective retail price maintenance which we have prohibited by Clause 23 and doing nothing about resale price maintenance. I know the noble Lord, Lord Lucas of Chilworth and I could have a great argument by selecting passages of the Lloyd-Jacob Report. but I suggest that the result of that Report is that individual resale price maintenance should not be barred, although I do not say for a moment that that Report suggests legislative action. All we say is that we are getting rid of collective resale price maintenance, and therefore we are going to give the manufacturer a chance of dealing with anybody who takes his goods with conditions as to price, and then cuts the price with full knowledge that he is breaking the conditions on which the goods came to him. That is what we have suggested: that the remedy will follow the goods, so to speak, and that the manufacturer will be able to deal with the person who cuts his prices in that way. That is the only point in Clause 23 which raises this issue between us. Is it wrong to make it somewhat easier for a manufacturer who is not in direct contractual relationship with retailers—because he supplies through wholesale intermediaries—to enforce resale price conditions against retailers? In other words, is it reasonable, given that collective action is forbidden by Clause 23, to put all manufacturers, whether they deal with retailers or through wholesalers, in roughly the same position in regard to enforcement of resale prices?
I must for a moment deal with the Amendment which is actually before the House, because your Lordships will appreciate that the Amendment the noble Lord has moved would not make individual resale price maintenance unlawful. It would still be possible to enforce resale conditions by contract. But it would make it extremely difficult or impossible for those manufacturers who deal wholly or mainly through wholesalers, and who find it difficult in practice to establish contractual relations with retailers, to enforce resale price conditions against retailers. That is what the Amendment will do. The Government consider that on balance it is reasonable to strengthen the powers of individual manufacturers—I repeat "individual"—in this respect
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as a consequence of the prohibition of collective enforcement.
I do not want to put my opinion against that of the noble Lord, Lord Lucas of Chilworth, with his great experience. All I can say is that the Government have collected information on the point, and many manufacturers claim that they can embark with greater assurance on mass production and sales programmes, or on building up proper servicing facilities, if he knows that a reasonably stable distributive system is available to deal with his products. There are certainly reasonable grounds for providing manufacturers with some protection against the disruption which "loss-leading" may cause. I have heard with great interest what the noble Lord. Lord Lucas of Chilworth, said about that. All I can say, with the greatest respect to his opinion, is that it is not a generally held view.
Again I crave in aid the view of the Lloyd-Jacob Committee, and I repeat that the whole tenor of that Committee's Report was that collective enforcement ought to be done away with, not only because of the use of secret courts but also because it had led to the strangulation of the distributive trades. That view was shared by the majority of the Monopolies Commission. But the Lloyd-Jacob Committee—and, after all, there is no other post-war Report on individual resale price maintenance in this country —came down firmly in favour of not depriving the manufacturer of power to exercise some control over the retail price of his goods. As I have said, they did not recommend legislation, but they did recommend what I have stated a moment ago. The problem that faced us was to provide for some measure of stability in distribution without causing stagnation or denying the public the benefits of new or cheaper methods. The abolition of collective enforcement, and the rigidities and inflexibilities which are associated with it, taken together with the provisions of Clause 24, appear to the Government to constitute reasonable and practical steps to meet these two objectives. Clause 24 is thus an integral part of the Government's proposals in resale price maintenance, and I am afraid that the Amendment cannot be accepted. I want noble Lords to know that I have considered it very carefully. We have chosen this via media in dealing with the matter and, I do not think, great as is usually the effect

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of the eloquence of the noble Lord, Lord Lucas of Chilworth, on myself, that after the consideration I have given this matter even he could prevail.
LORD LUCAS OF CHILWORTH: My Lords, I am grateful to the noble and learned Viscount for stating what the Government viewpoint is. We could go on arguing over this matter for a long time. I know what the Lloyd-Jacob Report said: I read all the evidence that was given before the Committee. As I did so, the words of the old song came into my mind:
"So they say, but what they say ain't always true."
What is popularly known as price-cutting has never yet hurt the manufacturer. What hurts the manufacturer, and what spoils the market for his goods, is either a drop in the quality of his product or the behaviour of the buying market through the action of Government, as we are seeing to-day. But to say that, because his distribution organisation is to be allowed to pass on the benefits of its efficiency to the public, that will unstabilise his market or his production methods is—with the greatest possible respect to anyone who says it—just a lot of nonsense to those who know industrial and commercial industry in this country.
I could mention names and tell your Lordships about producers of goods in this country who have a huge market, and whose article has suffered the biggest price cut in commerce. But what has always kept their market right up high is the quality of the article they sell. When you market a branded article, the quality of that article is the first and last medium for keeping up your sales. I will not ask your Lordships to divide on this Amendment. If I did, I think I should be trespassing upon the courtesy your Lordships always show to me, because I divided on this Amendment last time. I am certainly not going to ask your Lordships to weary yourselves by going into the Lobby again. But I shall come back to this matter in a further Amendment. History will prove that now you have stopped collective price maintenance, one day or another you will have to stop price maintenance wholly. With that, I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
6.40 p.m.
VISCOUNT ALEXANDER OF HILLS BOROUGH VISCOUNT ALEXANDER OF HILLS BOROUGH moved, after subsection (3) to insert:
"(4) The granting by a society registered under the Industrial and Provident Societies Acts, 1893 to 1954 of any discount, rebate or dividend to its members payable at intervals of not less than a quarter of a year in respect of amounts paid or payable by or to them on account of their transactions with the society shall not be treated as a breach of a condition as to the price at which any goods acquired by the society may be resold: and no proceedings under this section shall be taken by a supplier of goods against such a society solely on the grounds that the granting of a discount, rebate or dividend by the society in the circumstances hereinbefore mentioned is a breach of a condition as to the price at which the goods may be resold"
The noble Viscount said: My Lords, having saved your Lordships' the time of considering two very important Amendments, I hope that we shall get a great concession on this Amendment, which, to us, is a vital one. I am afraid that, as we were cut short by the necessity of so many of your Lordships having to go to Buckingham Palace last Thursday week, I did not then adequately state the case for this Amendment. It needs stating in some detail.
It is not at all a bad thing for your Lordships' House, in the present economic circumstances of the country, and with the many difficulties facing the Government and industry, that there should be some little recital impressed upon the minds of your Lordships as to what is really embodied in this Amendment. It springs from pure history. It arises from the time when the workers in this country were working under the new form of industrialism and the exploitation of their labour for very little reward and for long hours, with a low rate of direct taxation of incomes and with an ample provision of places in which people could sing themselves to the heavens on Sundays and nothing happened for the rest of the week. At that time, men were gathering together to try to learn new philosophies and to understand whether there was anything they could do for themselves collectively to improve their lot and position. That is where the movement of industrial and provident societies carne from. That is the basis upon which we move the Amendment to-day.
What did the workers do? They collected a few pence per week until, by a little collective saving from their miserable weekly wage, they got a small sum of money to start a distributive business and drew up a programme for themselves so that, as a club, they could begin to eke out the miserable existence that a prosperous capitalism was beginning to bring about in Lancashire and Yorkshire. That is how it arose. Ever since then, the industrial and provident societies have been steadily advancing, in the teeth of the very kind of boycott behind which we are seeking to get to-day. There would have been no Co-operative Wholesale Society in 1860, when it was started, if there had not been a deliberate boycott of co-operative societies for the supply of goods because they gave back their profits to the customer. Ever since then the fight has been going on. Never in the history of the industrial and provident societies have we had a Government like the present one. definitely up against the objectives of the industrial and provident societies. That is where we feel that we have a right to a most careful consideration by your Lordships of this Amendment.
The real fact is that much of the development of modern industry, especially in the distributive sense, has had a great deal to learn from industrial and provident societies. The principles of collective buying and the organisation of area distribution have been adopted by other organisations, though perhaps with different directives and different influences. But no matter what those organisations outside who handle branded goods and the like can save by way of their collective gain and knowledge, they must sell those branded goods at fixed prices, with the result that in the modern multiple shop profits soar and soar. So we have these huge fortunes made and distributed upon a limited number of shares in the multiple shop concern, instead of being spread over the great mass of the people in the industrial and provident societies, enabling them therefore themselves to become better individual purchasers and better demanders for goods, which means more employment in the country. That was why, in the old clays, so many Conservative Governments used to stand by us in their main objectives—and Liberal Governments, too. What is the situation
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now? The situation is that the industrial and provident societies grow alongside the multiple shops and there is a widening of agreements—agreements written, agreements not written, a practice arising, perhaps, only from the distribution of information from one firm to another, or one organisation to another, as to what is their intended practice.
Then we have the refusal to supply goods. If one looks back upon one's experience of the Proprietary Articles Traders' Association, covering almost every kind of range of popular proprietary medicine, photographic goods, electrical and wireless goods, and things far too numerous to mention, one finds these things are being withheld from cooperative societies which are driven over and over again into the same production—a production which they need not have attempted at all had they been given reasonable treatment in regard to supplies and terms of trade. That is a quite unnecessary duplication of productive effort, and one not at all in accordance with the needs of the country at a time when we wish to conserve our capital resources for a wise and unduplicated state of production at home to assist our capitalisation and development abroad.
From some of my experiences when appearing before tribunals on this matter from time to time. I thought we had established a case which was absolutely unbeatable, in argument at any rate. I have never found any tribunal before which I have appeared on this matter which could ever find a flaw in our case—none at all. I have listened to the noble and learned Viscount on the Woolsack in the course of these debates, and I cannot find that he is against us in principle: he is not against us in principle. All the Government are concerned with in this Bill is to find what has been described as "the middle way" between the recommendations of the Majority Report of the Monopolies Commission and those in industry who would be entirely opposed to the Majority Report of the Monopolies Commission. Sometimes the middle way is a very dangerous one to tread, and I fear that the. Lord Chancellor has felt that during the debate.
It reminds me of the present Chancellor of the Exchequer who wrote about the middle way before the war, in between the wars. I sometimes wonder

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whether he now feels that he ought to have written all the things he wrote at that time. He would have been much better advised to grasp the nettle in this case and to deal at last with what the general working class of this country have been crying out for for the last seventy or eighty years, and which up to this time, as a general rule, they have never found any Government, capitalist or otherwise, really opposed to in principle. The present Government, because of the experience in the First World War, when the Coalition Government then played such a foolish game and drove the co-operators to take their own political action, insist that they must go on treating them now as a hostile force; and so they will not give them justice upon this matter.
I wish your Lordships would all reconsider this matter in this House. This is a perfectly logical and sound business thing to do. The industrial and provident societies do not stand alone when they give deferred rebates, as some people call them, or, as we call them. the distribution of our profits and surpluses every six months, at the end of a balancing period. They are by no means the only people who do that. The great multiple shops, or the well-established family grocers and the like, are called up by the suppliers of goods because they give a discount, and it is so often done in a gentlemanly way! Take, for instance, a respectable district grocer like the International Tea Stores or Sainsbury's, who have a monthly account with the local squire or any of his relations upon that same basis. They could not be expected to come down and pay every day, or even every week, for their goods; they pay a monthly account, and the grocers are only too glad. They would give a discount on the lot, including branded goods. Nothing is said about that. But because the co-operative society produces a balance sheet which is readable and understandable by anybody who has been to an elementary school, and tells the truth about everything, there is a denial of the right to receive the same kind of supplies as are given to other traders.
I charge the Government here with—what shall I say?—cowardice in dealing with the Report of the Monopolies Commission. 'The biggest mass of evidence has been produced over and over again by the co-operative societies. The case
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has been proved over and over again. The Lloyd-Jacob Committee arid other Commissions have reported, and now, when it comes to being a Majority Report of the special Monopolies Commission, appointed largely as a result of co-operative pressure, what do you turn round and do? You give the people who are against the co-operative societies in this matter, for the first time, a special legal right to proceed against them in the courts of this land; and you establish by law something which ought never to be allowed to go on to the Statute Book. I think that that is a perfectly scandalous position to arrive at, and I submit that we have every reasonable right to propose this Amendment.
We had a reference just now to this being the fifty-seventh minute of the last hour of the debate upon this Bill. It is not quite as late as that—it is not too late for sinners to come to the penitence form. I assure members of the Conservative Party in this House that they would be doing better for their Party it they granted this Amendment. I assure them of that. Instead of that, you are running away from the issue. Why is it that you run away from the Monopolies Report? Do you run away because you have special advice from your experts? Of course not. You are handling this matter with the same sense of indecision with which you have handled so many matters in the last three or four years. You wonder which course is going to be best for the Conservative Party in order to please—should it be left or half left, right or half right, or centre? You decide upon what you call the middle way, and, judging from the speeches we have had from the noble Lord, Lord Baillieu, and others this afternoon you do not satisfy anybody at all.
We make our last stand here on the Report stage for real justice for the mass consumers in this country—and that is where you will find the mass consumers, in the industrial and provident societies. They are growing every day, and they will go on growing, in spite of this obstacle to which you arc going to give legal argument. You must take your choice. While I want the Amendment now more than anything else at this time—I want it tonight—I am quite certain that, if you throw it out, you will be making the chance for your political views to be on top at the next Election very much worse. I beg to move.
Amendment moved—
Page 24, line 39, at end insert the said subsection. — (Viscount Alexander of Hillsborough.)
THE LORD CHANCELLOR: My Lords, your Lordships have had the privilege of listening to a strong and forceful speech on a subject very near the maker's heart; and that is something we always like to hear. I am sure the noble Viscount will not take it amiss if I say that. However, there is one piece of his philosophy which I challenge. I am not going to take long because I know of the noble Viscount's interest in religious matters, but I would refer to a book which he may have read and which I am sure would interest him, The Marquess of Montrose, the life of a great figure in the Scottish Presbyterian Church in the 17th century which was written by an old colleague of some of us in this House and of some in another place—John Buchan, the first Lord Tweedsmuir. In that person the feeling for moderation burnt as clearly and as strongly as in most men does the feeling of fanaticism. I put it to the noble Viscount that the middle way, the way of moderation, sometimes requires just as much strength for the reason he mentioned: that one is attacked from both sides as taking an extreme course. Beyond that I leave it to him to read the far better words of an old friend of both of us.
VISCOUNT ALEXANDER OF HILLS BOROUGH: My Lords, I accept entirely what the noble and learned Viscount says about moderation; but moderation in pursuing a great spiritual objective I find neither in Daniel nor in Nazareth.
THE LORD CHANCELLOR: I shall never be ashamed, my Lords, if anyone in the future compares me with the great Marquess of Montrose. I want to deal with the point that the noble Viscount has made and to make one reference to the Amendment. I do not want to take any technical point of the Amendment, but it does demonstrate the difficulty of the subject on which I wish to speak. The noble Viscount will see that the first part of his Amendment reads as a general prohibition against resale price maintenance in the case of the co-operative societies, whether there is an intervening retainer or not and, whether there are contractual relations or not. The second part of the Amendment prohibits action
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under the clause we are discussing, Clause 24, which gives the special power of dealing with a retailer. I want to make it plain, despite what the noble Viscount has said, that in resisting this Amendment the Government have no antagonism or antipathy towards the co-operative dividend. My right honourable friend the President of the Board of Trade has already stated in another place our position on this point, and I state it again out of deference to the speech we have heard and to make the point perfectly clear. We see the greatest difficulty in singling out the co-operative dividend for special favourable treatment. It would be unfair to oblige all distributors other than the co-operative societies to take their chance with manufacturers in the matter of paying dividends and discounts. Therefore, in the Government's view, it would be necessary to go much further than this Amendment does, and it is out of this necessity of going further that the serious difficulty arises.
It would be a relatively simple matter to exempt all deferred dividend schemes from being regarded as equivalent to price-cutting. But merely to make provision for deferred dividends would be demonstrably unfair to those traders who, either because of the class of goods which they handle or because they cannot face up to the administrative problems involved, cannot operate a deferred dividend scheme and yet find themselves open to competition from the deferred dividend schemes operated by larger organisations. To regard people in that position may be considered a finicky search for justice, but nobody could say that it is vote-catching or leaning over to attract a powerful section of the community.
I want to follow this up logically. The question is how much further the Government would have to go. They might exempt any immediate discount scheme, but it is extremely difficult to see in practice how a distinction could be drawn between an immediate discount scheme of a bona fide nature and harmful price-cutting which injures not only the distributive trades but also the interests of manufacturers of branded articles. I do not want to repeat what I said in answer to the noble Lord, Lord Lucas of Chilworth. on, I think, the last Amendment we discussed. I know his view and I respect it. On the other hand, I have

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said that we have had put to us the serious effects of "loss leaders" and price-cutting on mass production and on sales programmes.
I have mentioned, when discussing the matter, in answer to the noble Lord, Lord Lucas of Chilworth, my general view of the effect of the Lloyd-Jacob Report. May I just quote the words which I had in mind? The Lloyd-Jacob Committee said that they saw no reason
"why a retailer who, for example, carries a wide range of relatively cheap and non-durable goods and finds himself able and prepared to operate an immediate discount scheme, should in any way be prevented from doing so."
It will be noted that this view of immediate discount schemes did not extend to all goods, and the Committee themselves said—this is the point that we must remember with the first quotation; I thought it only fair to give both:
"We recognise that there may be difficulties in applying the principle generally."
Those very words lend support to what my right honourable friend, the President of the Board of Trade, said—namely, that it is easier to make a recommendation of this kind than to translate it into legislation.
LORD LUCAS OF CHILWORTH: Would the noble and learned Viscount forgive me, but is he there not saying quite plainly that the Government cannot see their way to support the obvious desire to free the channels of distribution and allow wide-scale experiments so that the benefits of efficient distribution can he passed on to the public? Is he not saying that the Government's view, on the one hand, is that that should be done arid, on the other, that they want the rigidity of the present system preserved?
THE LORD CHANCELLOR: If it had not been for the last words of the noble Lord I should have said that he had put the case admirably. What the Government want preserved is, on the one hand, that the manufacturer should have some stability, through knowing that the retail prices of his products will not be frittered away, and, on the other hand, that distribution should have the greater flexibility which the prohibition of collective resale price maintenance by Clause 23 will undoubtedly give to him.
LORD LUCAS OF CHILWORT: I do not think that I am particularly
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stupid on this point, but you do away with rigidity with collective boycotting and then transfer it to the individual manufacturer who can do precisely the same thing.
THE LORD CHANCELLOR: That is exactly the point which I put to the noble Lord: that collective boycotting is a formidable joint operation and results in rigidity and inflexibility because it is a collective boycott. If it is left to the individual manufacturer he can deal now only with people with whom he has a contract—that is before Clause 24 comes into operation. That means that he has got to find the person with whom he is in contract and go to the courts about it. Nobody has suggested that he should not be able to do that—I except, for the first part, this Amendment relating to the co-operative society. Nobody has suggested that an individual manufacturer may not be able to make a contract as to the terms and conditions on which he sells his goods. Once you allow that, what is wrong with it—this is the point that i put to the noble Lord. If somebody takes these goods, knowing that the condition on which they are sold to the retailer is that there will be a minimum price, and then he breaks that condition, why should not the manufacturer be able to go, over the wholesaler, to the retailer who knows that he is breaking the condition on which these goods arc being sold? I cannot see anything wrong with that. I must say that, for once, the noble Lord and I do seem to see each other's side of the fence. We always think that our side is the correct one. But there it is. I have stated it once more and I do not think I need go further.
VISCOUNT ALEXANDER OF HILLS BOROUGH: I should like to know how the noble and learned Viscount on the Woolsack "squares" that with the avowed desire of the Government to reduce the cost of living. He says that it is perfectly open—and I agree—for a manufacturer to make a contract with conditions of sale. The contract is going to fix prices which give him, first of all, all his costs of raw materials, labour and overheads, plus his profit, and then he has these two other integrated prices to he charged on top of that. It can be shown that these goods can be sold far more cheaply than the ultimate price. How' are you going to get that into the

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hands of the consumer? How do the Government "square" their action with the fact that they are restricting the passing of that surplus over to the consumer, where it ought to be?
THE LORD CHANCELLOR: The answer to the noble Viscount is that I do not believe that all his premises can co-exist.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: They do.
THE LORD CHANCELLOR: Nor do I believe that manufacturers would be so stupid, in these circumstances, to take the course of maintaining a price which, on the hypothesis of the noble Viscount, is much greater than that at which other people can produce them. I put the other horn of the dilemma to the noble Viscount. I say: are you going to take away the right to impose prices by contract? I remember that when I suggested the slightest infringement of the rights of contract in the interests of bombed-out slum dwellers there was such a howl of protest from that Bench that I almost shuddered to mention the term "contract" again. The Labour Peers said: "This awful attack on the sanctity of contract!" It was in the interests of people who had been bombed out or who were dwelling in slums and had to buy property at increased rates. I was regarded as one of the greatest sinners since Karl Marx went out of fashion.
I come back to the point I was making: that this is an extremely difficult matter on which to introduce provisions in the Bill. The fears which have been expressed to the effect that the Bill places the co-operative dividend in danger are exaggerated. I just want to summarise the points. The Bill does not affect what the individual manufacturer may do, as I have indicated more than once. There are certain manufacturers who will not supply co-operative societies at all. There are other manufacturers who supply co-operative societies only provided that no dividend is paid, and these manufacturers will be free to continue this practice in so far as they are acting on their own initiative. If the Government were to compel them to accept payment of dividend in respect of their goods, there is no guarantee that they would continue to supply. But there are other manufacturers who supply co-operative societies
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and who place no restrictions on payment of dividends. There is nothing in the Bill to give them any cause to change their policy in this matter. Indeed, it must not be overlooked that the Co-operative Movement has, it is said, over 11 million members, and manufacturers cannot be blind to a market of that sort.
Then, when we come to collective action by manufacturers, the Bill in Clause 23 makes the radical change which I have mentioned, and which I need not go over again. Part II of the Bill deals with methods of enforcement. It will eliminate collective enforcement by means of the boycott or the stop list. But it does not seek to alter the resale price conditions which manufacturers can impose. As I said earlier, and the noble Viscount accepted it with some gratitude, where manufacturers agree—I repeat agree—to operate discriminatory resale price conditions, they must be prepared to register the agreements and justify them before the Court. But there are great difficulties in seeking to define what should and what should not be regarded as infringement of resale price conditions. Therefore the Government have decided to leave this to the decision of individual manufacturers, and cannot accept the Amendment.
I know that I have not said anything new; it has been said before. But I thought it right, in view of what he will allow me to say was a most forceful speech from the noble Viscount, to restate the difficulties in the way of the Government, and I have tried to do so. I am afraid we cannot accept the Amendment, and without any disrespect to the noble Viscount, I think this is an Amendment which has been discussed so fully, and he has done it so much credit tonight, that after he has demolished me with a few pungent phrases we might consider going to a Division on the matter.
VISCOUNT ALEXANDER OF HILLS BOROUGH: My Lords, I do not think we need wait long to go to the Division. The pity is that one should have to anticipate what the reply would be before one made the appeal. But there it is. We are getting, I am afraid. a re-hashing of Victorianism. I remember the Election of 1924 and the cry of "cheaper food." when the first step was the setting up of a Royal Commission on food prices. All

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that really happened was that a set of anonymous letters came to the Chairman of the Royal Commission attacking the co-operative societies, and when we produced the real evidence the Royal Commission was brought to an end and nothing was done, even about the price of bread and meat, the only commodities examined. This is a repetition of the same sort of situation. We are experiencing the deflationary efforts of the Government
Clause 25:
Supplementary provisions
25.—(1) For the purposes of this Part of this Act a condition as to the amount of discount which may be allowed on the resale of any goods, or as to the price which may he paid on the resale of any goods for other goods taken by way of exchange, shall be treated as a condition as to the price at which goods may be resold.
(2) In this Part of this Act any reference to selling goods includes a reference to letting goods under a hire-purchase agreement within the meaning of section twenty-one of the Hire-Purchase Act, 1938.
(3) In the application of this Part of this Act to Scotland, for references to the plaintiff, the defendant and an injunction, there shall be substituted references respectively to the pursuer, the defender and an interdict; and for the reference to a hire-purchase agreement within the meaning of section twenty-one of the Hire-Purchase Act, 1938, there shall be substituted a reference to a contract to which the Hire-Purchase and Small Debt (Scotland) Act, 1932, applies, or would apply if the limitation as to value contained in section one of that Act were omitted.
(4) In the application of this section to Northern Ireland for the reference to section twenty-one of the Hire-Purchase Act. 1938,
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and the maintenance of excessive profits that arc advanced by these collective arrangements, against which they would take no action. I think, therefore, we had better take the vote—and we will bear it in mind.
On Question, Whether the said Amendment shall be agreed to?
Their Lordships divided:—
Contents, 16; Not-Contents, 29.

CONTENTS

Listowel, E.

Amulree, L.

Lucas of Chilworth, L.

Lucan, E. [Teller.]

Grantchester, L.

Mathers, L.

Greenhill, L,

Milner of Leeds, L.

Alexander of Hillsborough, V.

Haden-Guest, L. [Teller.]

Morrison, L.

Stansgate, V.

Kenswood, L.

Quibell, L.

Lawson, L.

Silkin, L.

NOT-CONTENTS

Kilmuir, V. (L. Chancellor.)

Bridgeman, V.

Fairfax of Cameron, L.

Falmouth, V.

Hawke, L.

Albemarle, E.

Howard of Glossop, L.

Breadalbane and Holland, E.

Ashton of Hyde, L.

Jessel, L.

Buckinghamshire, E.

Barnby, L.

Killearn, L.

Fortescue, E. [Teller.]

Bennett of Edgbaston, L.

Mancroft. L.

Home, E.

Chesham, L.

Moyne, L.

Munster, E.

Conesford, L.

O'Hagan, L.

Onslow, E. [Teller.]

Congleton, L.

Strang, L.

St. Aldwyn, E.

Digby, L.

Strathcona and Mount Royal, L.

Selkirk, E.

Resolved in the negative, and Amendment disagreed to accordingly.

there shall be substituted a reference to any corresponding enactment for fae time being in force in Northern Ireland.
7.24 p.m.
LORD LUCAS OF CHILWORTH LORD LUCAS OF CHILWORTH moved, after subsection (1) to insert:
"(2) Where any supplier who supplies goods, subject to conditions as to the price at which they may be resold, enforces such conditions inequitably as between one dealer and another or fails to observe such conditions himself when effecting retail sales in competition with any dealer in his goods the Crown shall be entitled to secure the equitable enforcement or observance of such conditions by civil proceedings against the supplier."
The noble Lord said: My Lords, we now come to an Amendment which I think it will be very difficult for the noble and learned Viscount who sits on the Woolsack to refuse to accept. All the way through our debate upon Clause 24—that is, the clause relating to individual enforcement—the noble and learned Viscount put to us the right of the individual manufacturer to fix his prices. As your Lordships who support the Government have defeated us in the Division Lobby on that particular issue, we must

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accept the fact. So my energies now are concentrated on seeing that the enforcement of resale price maintenance is conducted on a basis of equity. I am sure that in this I shall carry the noble and learned Viscount with me, because when I attempted to argue this case at the Committee stage the noble and learned Viscount, rather unkindly, I thought—though let me say straight away that I do think he meant it unkindly—accused me of wanting to disregard the sanctity of contracts. I could not have made myself clear, for there is no one keener than I upon the sanctity of contracts. But my keenness in that regard is matched only by my keenness that a contract should have equity. I have no place in my theories or my practice for the individual who signs a contract with a manufacturer to maintain his prices and does not intend to keep it. But what will happen under this Clause is that the only individual or firm who will be penalised will be not the individual who signs an agreement with no intention of keeping it but the individual or firm who will not commit perjury by signing a contract pledging his word, or the firm's word, to carry out the obligation into which he has entered and then does not do it.
I am going to ask the noble and learned Viscount to take this fact into consideration. A producer of an article binds those who sell it right along, the run of the goods that they will maintain certain retail prices to the retail consumer. That producer who so binds those individuals is himself—let us say for the sake of argument—the controller of 60 per cent. to 70 per cent. of the retail outlet. Is it conceivable that he is going to take himself to court for a breach of his resale agreement? So the agreement starts off by being completely one-sided, and the producer of the article binds every one of his retailer outlets to honour those prices but allows himself the scope of being able to sell at what price he likes. I want to ask the noble and learned Viscount this question; does he not think that if you are going to give a manufacturer the right to tie a retailer to sell his goods at one specific price, the manufacturer should so bind himself that he will not compete with that retailer except on the price level which he binds that retailer
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to observe? Again, take the case of the individual manufacturer. Does the noble and learned Viscount think it conceivable that the individual manufacturer is going to take to court for a breach of the agreement a big retailer who may absorb 25 per cent. of his output? There is no compulsion on him so to do. Is that equitable?
So what you will get unless you do make provision for it in this Bill is that this clause can, and will, be operated only against the seller of an article who has not sufficient economic strength to stand up to the producer. That is not right. So much for sanctity of contract. If the noble and learned Viscount is going to give in this Bill the right to a producer to bind his retailer (leave out the wholesaler; that does not come into it at all; there is hardly any price maintenance on wholesale prices, it is on the price to the consumer that it is imposed), is it right for a producer to bind his seller and not be bound himself to honour the same agreement? That is a simple proposition and that is what I call equity. I could mention half a dozen of the largest industries in this country where the producer can bind his independent retail outlets to honour a price and have sanctions against them, while he competes either through his own depôts or through shops with different names over the top. And what about the large retailer? Can your Lordships imagine any producer taking some of the large stores that we could all name into court and suing them for breach of contract for not selling "XYZ Soap" at the right price?
Noble Lords may ask why I put my Amendment that the Crown should accept the onus. I do so because this clause, as it is written, will operate only against the small man. What chance has the small, independent shopkeeper of taking a large producer into court? If your Lordships will look at the preceding clause, Clause 23, upon the question of collective enforcement, you will see that subsection (8) states:
"Without prejudice to the right of any person to bring civil proceedings in respect of any contravention or apprehended contravention of this section, compliance with this section shall be enforceable by civil proceedings on behalf of the Crown for an injunction or other appropriate relief."

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If we can do it against somebody who makes a breach of collective price maintenance, surely we should do it against anyone who commits a breach of individual price maintenance. After what the noble and learned Viscount has said, I think he must accept this for the sake of equity. It is no good passing Clause 24 unless it is going to be worked in equity throughout the length and breadth of the land. I beg to move.
Amendment moved—
Page 25, line 9. at end insert the said subsection.—(Lord Lucas of Chilworth.)
LORD JESSEL: My Lords, before the noble and learned Viscount replies, I hope your Lordships will forgive me if I say a few words on this problem, as I put down an Amendment on Committee stage which dealt with it. I certainly support the idea behind Lord Lucas of Chilworth's Amendment, because its object is to protect a dealer against the unfair enforcement of price maintenance conditions by a supplier. I doubt whether he has the right method or whether his Amendment is any better than the one I put down. The noble Lord's Amendment attempts to put the onus of dealing with this matter on the Crown. I doubt whether this method is going to be acceptable to the Government. It seems to me to raise all kinds of difficulties about whether the proceedings are going to be for damages or by injunction. I agree that subsection (8) of Clause 23 gives the Crown power to proceed by injunction, and I shall be interested to hear from the noble and learned Viscount whether it can be extended to unfair methods by retailers under this Amendment.
If the Government are adamant against dealers having any collective agreements, I suggest that they might consider the American non-signer procedure. On Committee stage my noble friend Lord Lucas of Chilworth attempted to give an explanation of the non-signer procedure and I am now going to have a shot at it myself. I understand that once a supplier has entered into a contract with the retailer requiring the retailer to observe a prescribed price, the observance of that price becomes binding on all dealers selling the product, even though they have not signed a similar agreement
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to do so. That is why it is called "non-signer". The condition of price runs with the goods, as it does now under Clause 24. But the Amendment goes a step further and provides that this condition may be enforced not only by the supplier but by any dealer damaged by another dealer who knowingly breaks the condition.
I suggest that under the present Bill retailers have had taken away from them rights to protect themselves against competitors which they have had for many years. I can think of industries, such as the motor vehicle industry, the refrigerating industry and the radio industry, which are specially interested, as they are essentially service industries and have standards of service to keep up. I suggest that this non-signer procedure has great merits, in that it cannot be called collective price maintenance and it gives the dealer a chance to take some action against a fellow dealer who is not playing the game. As my noble friend Lord Lucas of Chilworth has said. Her Majesty's Government have come out strongly on the side of individual price maintenance. In my submission, what this Bill fails to do is to give the retailer any powers to implement this policy. Although I am not personally interested—I have never had any connection with retail business in my life; my only experience has been in manufacturing business—from what I know about it, I can say that the result is so unfair that I felt compelled to speak, and I shall be interested to hear what the noble and learned Viscount will tell us about it.
THE LORD CHANCELLOR: My Lords, we have had two interesting speeches on this subject, both with the same general inspiration, though starting from different angles of the problem. The noble Lord, Lord Lucas of Chilworth, raised two points. The first is: does individual resale price maintenance, through its inherent difficulties, operate unfairly? Secondly, can it be made to operate unfairly by someone who, either through his own property or through somebody else, controls the wholesale market or part of the retail market. On the first broad question, of whether the individual resale price maintenance operates unfairly, I do not think that it does. I think there is ample evidence that it appears to work reasonably satisfactory in certain trades in

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this country, and both the Lloyd-Jacob Committee and the Monopolies Commission Reports state that individual manufacturers do enforce their resale price conditions—and I could give an example of a trade where that is done. One knows (and this is relevant to what my noble friend Lord Jessel had to say) that collective enforcement is much easier and more convenient. But the one thing, where we have secured unanimous support in this Bill is in prohibiting collective enforcement, and that is now buried so far as the legislative course is concerned. Therefore, I do not agree, on the first point, that individual maintenance is necessarily bad.
On the second point made by the noble Lord, Lord Lucas of Chilworth, there are at least three matters that have to be considered. The first is this. If a manufacturer is immense he now becomes in danger of being a monopoly, in the ordinary sense of the term, and also a statutory monopoly within the Act of 1948. That may well be his danger if he is operating his own sales machinery and, it may be, his own retail organisation. Then one comes to the person that the noble Lord seems to fear most; that is to say, someone who operates his own retail organisation, but at the same time sells to people outside. The noble Lord, Lord Lucas of Chilworth, is afraid that he may not "chase" (if I may put it colloquially) his own organisation, or that wholesale organisation, but that he will "chase" the small man. If the hypothesis is that he depends on the small people (and after all, they are not entirely unorganised—at any rate, they were not unorganised in any of the matters with which I had to deal when I was at the Home Office, in regard to hours of shops and things like that; I then met strong organisations of all the people concerned—I should have thought it highly improbable that the monopolistic giant pictured by the noble Lord, Lord Lucas of Chilworth, would be, on one side, organising their machinery, and, on the other side, chasing the small man.
The third point is one which I am glad to be able to make, because the noble Lord, Lord Lucas of Chilworth, rightly took as his text, equity. We have a salutary rule in the law, which was started by my predecessors on the Woolsack, who introduced equity in order to deal with
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hardships of the law. At the same time as they introduced that, they formulated the rule that he who comes to equity must do equity. The relevance of that—and it is relevant to the noble Lord's point—is this. Imagine the situation that he has had in mind, where you have the manufacturer in a big way, who is treating his own organisation with the greatest consideration and allowing them to charge all they want so long as it suits him or some other organisation. Suppose he then goes to a court of equity, having let his own organisation do what they like with prices, and asks one of the Judges of the Chancery Division for an injunction against the small man. As President of the Chancery Division, I do not want anything that I say to be taken as guiding the decisions, but I can say that I would not give a great deal for his chances. That is a point that may be of some help to the noble Lord.
I recognise what is in the mind of the noble Lord, and also the difficulty of my noble friend Lord Jessel—and he stated it, I thought, with great candour and frankness. However, before this Part of the Bill was drafted, we considered this point carefully—and I assure my noble friend Lord Jessel that we went into the non-signer agreements, and the effect they would have—but we came to the conclusion that this would be so great a complication that it should not be put into the Bill. I am sorry that I cannot help the noble Lord, Lord Lucas of Chilworth, further so near the end of the Bill, because if I may say so—and this is not being fulsome at all—he has been of the greatest service to the House and to the understanding of the Bill in the most unselfish course he has taken of devoting so much time to these difficult problems and then putting them forward in your Lordships' House. I should like to be able not only to wave an olive branch to him, but to throw one at him; but I am afraid that it is not in my power.
LORD LUCAS OF CHILWORTH: My Lords, I can assure the noble and learned Viscount that he has thrown not only an olive branch at me, but the whole tree; because he has said precisely what I wanted. I do not want to get cheap legal advice from the noble and learned Viscount—I should not think of putting noble Lords on the other side of the

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House out of business—but if I understand him aright, he has said that any producer who goes to the courts of this country to try to enforce an individual resale price agreement which is so inequitable as to require the other party to the agreement to do things he is not required to do himself, would get short shrift. In my view, that pronouncement is far better than putting this in the Bill. I feel that the Lord Chancellor has said something that is of the greatest possible importance.
I had intended to divide the House on this Amendment, but the noble and learned Viscount has been so helpful that that would be a mere waste of time. However, before withdrawing the Amendment, I must remind him that when he talks, from his experience of being at the Home Office, of the small retailers not being unorganised, he should bear in mind his own Bill, because as soon as they organise themselves against a producer there is a restrictive practice. So that his own Bill puts any organisation of the small retailers out of court. I hope that the Lord Chancellor does not mind my reminding him of that. So, with my thanks to the Lord Chancellor for saying precisely what he has, of which industry throughout the length and breadth of this country will have to take strict notice, I ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
7.50 p.m.
LORD LUCAS OF CHILWORTH LORD LUCAS OF CHILWORTH moved to leave out Clause 25. The noble Lord said: My Lords, what I am about to say I ask the noble and learned Viscount to take seriously into consideration. I maintain that most of Clause 25 of this Bill is absolutely and completely unworkable. What does it purport to do? Subsection (1) reads:
"For the purposes of this Part of this Act a condition as to the amount of discount which may be allowed on the resale of any goods, or as to the price which may be paid on the resale of any goods for other goods taken by way of exchange, shall be treated as a condition as to the price at which goods may he resold."
In other words, what the Government are trying to control is the second-hand market of this country. If you want to go into that market you will be trying to do something which the wisdom of industry collectively has never yet been
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able to do. wish to ask the noble and learned Viscount whether he would like to control the second-hand car market, because that is what he is trying to do here. What he is saying is that, if a manufacturer makes an agreement as regards resale price, he can put a condition in that agreement which will control not only the price which is allowed for a second-hand article, but what it is sold for as well. That is just utter and complete nonsense.
How is the noble and learned Viscount going to get over this problem? Your Lordships know of my connection with the motor industry, and I will cite one problem. Before the war, the motor industry tried to control the second-hand car market. What happened was this. The manufacturers of the high-priced new car said that the price, or the intrinsic value, of a used car increased with the price that you were prepared to pay for the new car. If you bought a car for £500 to-day, you might get allowed for your old motor car, say, £100; but if you bought a motor car for £1,000, you would be allowed £200 for it. Perhaps the noble and learned Viscount will tell me how he is going to control the price at which those two cars are sold. It is just beyond the wit of man to enforce that. I could go on ridiculing the thing up hill and down dale. Take second-hand furniture. Supposing the noble and learned Viscount had a disused wardrobe, and he went down to the local furniture dealer and wanted to buy one of these latest branded cheap utility pieces of furniture. I expect he would be allowed half-a-crown for his wardrobe. But if he wanted to buy a walnut wardrobe, priced at about £500, I expect he would get about £100 allowed for his old one. How is he going to control that in his Bill?
I will not divide the House but I beg the noble and learned Viscount to look at this point before the next stage of the Bill and at least take out this proviso which seeks to control the second-hand car market, the second-hand furniture market, and, for that matter, the secondhand clothes market, too. How can the Government think of stepping in and saying, that a condition about the allowance or resale price of the second-hand article taken in part exchange for a new branded article shall be maintained through the courts of this country? Let

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me tell the noble and learned Viscount that at the present time there are about 2¾ second-hand motor cars taken in part exchange for one new one, and if the market goes on as it is at the present time there will be about four second-hand motor cars in succession taken for the sale of one new motor car. How are the Government going to control either the buying price or the selling price of the last one of all along a line like that? I need say no more. I think it is utterly ridiculous, and I hope that at the next stage of the Bill the noble and learned Viscount will have this silly thing removed, because it is absolutely unworkable. I beg to move.
Amendment moved—
Leave out Clause 25.—(Lord Lucas of Chilworth.)
THE LORD CHANCELLOR: My Lords, first of all, may I say that this Bill does not make any effort to control second-hand prices. All that the Bill does is to make it permissible for manufacturers to fix second-hand prices, if they can. After that it is up to the manufacturer. That diverts a certain amount of the noble Lord's fire, but I want to answer him in this way. First, I want to say what this clause does. I assume that the noble Lord is referring to subsections (1) and (2), and not to the subsections dealing with Scottish and Northern Ireland application. What these subsections do is first, for example, to make clear that Part II of the Bill covers resale price conditions attached to goods sold by hire purchase. Secondly, as I said, they make it clear that those manufacturers who wish to control allowances to be given on goods traded in part exchange may continue to do so. Furthermore, it is provided that where a manufacturer lays down that goods may be resold subject to a discount—for example, by a wholesaler to a retailer—he may continue in this practice. Those are the essential matters which must be provided for in this Bill.
If the noble Lord's Amendment were accepted, and these explicit provisions were removed, it would throw doubt on the meaning of resale price conditions in connection with Clauses 23 and 24. The removal of this clause might cast doubt on whether the ban on collective enforcement of resale price conditions extended
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to prohibiting the use of stock lists for enforcing resale conditions attached to goods sold by hire purchase. That would be a serious matter. That is the trouble about the interconnection of drafting in these matters. It might cast doubt on how far individual manufacturers could continue to specify different resale prices by reference to various discounts off a basic or list price. In other words, Clause 25 is a reflection of the fact that Part II of the Bill, as I have said, is concerned with methods of enforcement and is not concerned to legislate on or to alter the kind of resale price conditions which may he enforced at the discretion of manufacturers.
Clause 25 makes it entirely plain, in subsection (1), that individual manufacturers can, if they wish. continue to regard the payment by a retail shop of a discount or dividend as an infringement of a resale price condition. The individual manufacturers would be able to use the provisions of Clause 24 to prevent payment of dividend in the cases which we have discussed. There is nothing new in this. but it does, as I have said, preserve the position. It is a serious point which is difficult to pick up unless you have your mind directed to it, as I have. For that reason, I would ask the noble Lord, Lord Lucas of Chilworth, to withdraw the Amendment. All I can say is that we will ponder over what he has said, although he must not hold me to make any promise on it.
LORD LUCAS OF CHILWORTH: My Lords, I accept what the noble and learned Viscount has said—with the exception, perhaps, of what he has said about subsection (1) of this clause. He is not telling me, surely, that the manufacturer is given the right to control the price which may be paid on the resale of any goods taken by way of exchange. so as to enforce the outlawing of collective price control. Surely, the noble and learned Viscount is not saying that. I would beg him to look at that. Hire purchase is one thing; a discount is one thing. But the value of a second-hand article is precisely what it will fetch at any moment of time. It can vary from hour to hour and from day to day. In the history of trade people have tried for years to control this, and it has proved an utter failure. I will withdraw my Amendment, of course—I did

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not intend to press it—but I would ask the noble and learned Viscount to look at this point between now and the next stage of the Bill. I will try to help him if I can. I would say that this makes nonsense of matters already covered by the Bill. With those words, I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
8.2 p.m.
LORD LUCAS OF CHILWORTH LORD LUCAS OF CHILWORTH moved, after Clause 28 to insert the following new clause:
".—At the end of paragraph (b) in subsection (1) of section three of the Monopolies and Restrictive Practices (Inquiry and Control) Act, 1948, there shall be added the following paragraph—
'(c) any agreement or arrangement, whether legally enforceable or not, in respect of the distribution of any product on the United Kingdom market, the result of which is that the wholesale or retail suppliers thereof are restricted in the range of products which they are at liberty to supply in the ordinary course of their business '."
The noble Lord said: My Lords, I am hoping that the Government will accept this Amendment because I first contemplated, when the Second Reading of this Bill was before your Lordships' House, trying to include in the Bill a provision that would bring under review and control the solus or sole agency agreement. The sole agency agreements and solus agreements are not all altogether bad. There are some that are good, there are some that are thoroughly bad and there are some that hover between those two extremes. There are some that can be operated very much against the public interest and can also operate against what any Government of the day may think the national interest.
On Second Reading, I cited the petrol pump case. I asked your Lordships this question: Is it right and in the interest of the national economy at the present moment, when the Government want to stop unnecessary capital expenditure, that an oil company should enforce an agreement that one filling station, which they will subsidise in some way or another—I need not enter into that now—shall sell only one brand of petrol? You then get ten filling stations around a certain spot, each selling a different brand of petrol, because each filling station is prohibited by the terms of the agency agreement from selling any other brand of petrol. I should have thought it would
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be more in the national interest for one station to sell ten brands of spirit than for ten stations to sell one brand of spirit. I cite that as an example. There are many other agreements I could mention which have an adverse effect upon trade and industry. I do not think it is right for any accumulation of economic power to be vested in the hands of one concern which has the economic life and death of any large section of other trades in its hands.
The noble and learned Viscount said on a previous Amendment that a dealer or a retailer who makes an agreement does it of his own free will; he need not make it he can go to a competitor; he can choose to whom he will go to make an agreement. That held some truth some years ago, but, with the development of trade and industry in this country, where the supply of many commodities is getting into fewer and fewer hands, the choice is not there. All I am seeking to do in this Amendment is to have these cases referred to the Monopolies Commission, so that they can be reviewed. If the Commission come to the conclusion that there is nothing against the public interest, the matter drops. If they come to the conclusion that: certain types of solus agreement are against the public interest, then those cases will come before the Board of Trade and will be passed on, I take it, to the Restrictive Practices Registrar, to see whether the agreement will be registered as against the public interest. That is all I propose.
I think some of these agreements are good and some are bad. They should be sorted out. I understand—I hope the noble and learned Viscount will correct me if I am wrong—that this Bill in essence has nothing to do with monopoly.. The only thing it is concerned with is restrictive trade practices. Any form of monopoly, as I have just mentioned, is solely the preserve still of the Monopolies Commission which was set up under the 1948 Act. I hope the noble and learned Viscount will accept this Amendment. It is proper to refer this to the Monopolies Commission, for them to decide what is good and what is bad and to make their appropriate report, as they have done in so many cases in the past. I beg to move.
Amendment moved—
After Clause 28, insert the said new clause.—(Lord Lucas of Chilworth.)
THE LORD CHANCELLOR: My Lords, I do not find any fault with the basic and underlying arguments that the noble Lord, Lord Lucas of Chilworth, has used, but my only answer is that I do not think this Amendment is really necessary because, to put it broadly, a reference can already be made to the Monopolies Commission where there is one manufacturer who supplies, or two or more manufacturers who supply, one-third of the goods, either in the United Kingdom as a whole or in a substantial part of it—I took as an example central Scotland as showing what a "substantial part" means—and who employ exclusive sole agencies. Thus, if you have in an industry individual manufacturers who together account for more than one-third of the total supply of a substantial part of the country and use exclusive sole agencies, a reference can be made to the Commission. It is not necessary that there should be any agreement between the manufacturers in respect of the exclusive sole agencies.
I think this can be seen from the terms of the existing subsection (2) of Section 3 of the Act of 1948. I should like to read it to your Lordships because it is extraordinary how wide it is. The subsection includes, among the conditions to which the Act of 1948 applies, cases where two or more persons
"whether voluntarily or not, and whether by agreement or arrangement or not, so conduct their respective affairs as in any way to prevent or restrict competition in connection with the production or supply of goods of the description in question (whether or not they themselves are affected by the competition and whether the competition is between persons interested as suppliers or producers or between persons interested as customers of suppliers or producers)."
When I read that and saw its comprehensive nature, I took some credit for a very minor share in the admirably wide drafting.
LORD LUCAS OF CHILWORTH: My Lords, may I ask the noble and learned Viscount this question? He has referred to the case where the manufacturer produces one-third. A restrictive practice can, by a sole agency agreement, be operated very largely and detrimentally by a producer who manufactures less than one-third.
THE LORD CHANCELLOR: It can either be a manufacturer or two or more manufacturers who supply one-third but employ the sole agency.
LORD LUCAS OF CHILWORTH: Does the Lord Chancellor mean that the sole agency has to be operated by two manufacturers for the same person? Take my case of the petrol pumps. There might be five oil companies in this country, none of them doing a third of the business, but they have or may have, sole agency agreements which tie one seller to their brand of petrol or oil and will not allow him to have anything to do with any of their competitors. I want it to be referred to the Monopolies Commission as to whether that is a restrictive practice which is harmful to the public interest.
THE LORD CHANCELLOR: I should have thought that it would have been referred, but I hope the noble Lord will not hold me to that. That is my feeling on the very wide words of the clause, but I should like just to look at the specific point. We are anxious to see that the work of the Monopolies Commission is completely complementary to the work of this Court, so as to avoid any gap. I think that answers the spirit of the noble Lord's point.
LORD LUCAS OF CHILWORTH: My Lords, with that assurance I am very grateful to the noble Viscount. He will know that we on this side of the House started off with very strong objections. I will say, frankly, that it is only the charm and co-operation which the noble and learned Viscount has shown us all the way through that has made us rather try to go along with him. That is also true of the big Amendment put up by the noble Lord opposite on the whole basis of this Bill. If it is now said that it is the Government's intention and desire that the Monopolies Commission should operate alongside the Restrictive Practices Court, I think that is a very great advance. This is the last Amendment I shall speak on and the last Amendment I shall move, so may I personally thank the noble and learned Viscount very much for his courtesy, and also for the great trouble he has taken—although I have not always agreed with him—in explaining one of the most difficult Bills that has

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ever been before Parliament. With that, I beg leave to withdraw the Amendment.
THE LORD CHANCELLOR: My Lords, perhaps your Lordships will allow me the informality of thanking the noble Lord.
Amendment. by leave, withdrawn.
8.14 p.m.
LORD MANCROFT: My Lords, I shall do nothing to disturb the mellow atmosphere, because this is a wholly innocuous Amendment. Where an association makes a recommendation about both home and export matters, recommendations on exports which do not affect the home market do not have to be registered. though they will have to be notified to the Board of Trade. I beg to move.
Amendment moved—
Page 28, line 37, leave out subsection (1) and insert—
("(1) Where, apart from subsection (10) of section seven of this Act, particulars would be required to be furnished to the Registrar under section nine of this Act in respect of any agreement or term of an agreement which relates to the supply of goods by export from the United Kingdom, the like particulars shall be furnished to the Board of Trade, and sections nine, thirteen, fifteen and sixteen of this Act shall apply accordingly as if for any reference in the said sections nine and thirteen to the Registrar there were substituted a reference to the Board of Trade.").—(Lord Mancroft.)
On Question, Amendment agreed to.

MARRIAGE (SCOTLAND) BILL
Amendment reported (according to Order).
House adjourned at a quarter past eight o'clock.