Sitting of 7 March 1956

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

  Standing Orders
  The Chairman of Ways and Means (Sir Charles MacAndrew): I beg to move,
  That the several Amendments to Standing Orders relating to Private Business hereinafter stated in the Schedule be made.

  SCHEDULE
  Standing Order 220, line 3, leave out "(Finance Consolidation)" and insert "(Loans)".
  Standing Order 220, line 4, leave out "1912" and insert "1955".
  Standing Order 220, line 11, leave out "(Finance Consolidation)" and insert "(Loans)" and leave out "1912" and insert "1955".
  Standing Order 220, line 89, leave out "(Finance Consolidation)" and insert "(Loans)" and leave out "1912" and insert "1955".
  Standing Order 224, line 20, at end insert:
  "(2) The Examiners may inquire into compliance with Standing Orders 62 to 68 at any time after the Order for the examination of the Bill."
  The first four Amendments on the Paper are of a drafting nature. The Amendment to Standing Order 224, dealing with Hybrid Bills, would enable the Examiners to inquire at a single sitting into compliance with all the Standing Orders which are applicable to the Bill, instead of having to hold a second meeting to inquire into Standing Orders 62 to 68. The Amendment would remove an anomaly which arises from applying to Hybrid Bills a procedure which is appropriate for Private Bills.
  Question put and agreed to.

ORAL ANSWERS TO QUESTIONS
  ROYAL NAVY

    Scholarships (Successful Candidates)
    Mr. Haymanasked the Parliamentary Secretary to the Admiralty how many candidates were successful in the third competition for Royal naval scholarships; and how many came from county secondary schools, direct grant grammar schools, and public schools, respectively.
    The Parliamentary and Financial Secretary to the Admiralty (Mr. George Ward): Thirty-two candidates were successful, of whom five came from maintained grammar schools, three from direct grant grammar schools, nineteen from independent schools and five from nautical schools.
    Mr. Hayman: Is the Minister aware that most of these selected candidates come from fee-paying boarding schools? Is the selection by interview only, and if so, will the hon. Gentleman not ask the Admiralty to be honest about the matter and advise the non-paying grammar schools that they had better end the farce of submitting candidates?
    Mr. Ward: The final board accepted roughly the same proportion of candidates from each type of school who appeared before it—about 60 per cent. I can assure the hon. Member that the test is not by interview only and that everybody has the same fair chance.

    Royal Marine Barracks, Chatham
    Mr. Bottomleyasked the Parliamentary Secretary to the Admiralty if he will make a statement about the future use of the Royal Marine Barracks, Chatham.
    The Civil Lord of the Admiralty (Mr. Simon Wingfield Digby): I can now confirm that the main part of the existing buildings could not be converted satisfactorily or economically for any naval use. The possibility of using the site for a combined dockyard technical college and apprentices training centre is therefore being further examined. This scheme would certainly offer many advantages;

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    it would, however, be costly and it will be necessary to study it in detail before any decision can be reached. There is no possibility of its inclusion before the 1957–58 works programme, for which the scheme would have to be considered on its own merits and in competition with other items.
    Mr. Bottomley: Is the hon. Gentleman aware that statements of this kind have been made before, to the effect that either the Army or the Admiralty was going to use the Royal Marine Barracks? Is he aware that the barracks have been lying idle for nearly five years, resulting in great waste of public money? Would he consider referring the matter to the Prime Minister as a further indication of a waste of public money, so that some kind of examination could be made?
    Mr. Digby: We are most anxious to use the site, and there is quite a good chance now that we have found a good use for it as a new dockyard school.

    Oil Bunkerage Scheme, Gibraltar
    Mr. Doddsasked the Parliamentary Secretary to the Admiralty on what date discussions commenced in respect of the proposal to allocate oil bunkerage space from Government installations in Gibraltar for commercial purposes and what decision has been reached.
    Mr. Wingfield Digby: Discussions with the commercial interests concerned began a year ago. It became clear in May, 1955, however, that their participation depended on a decision being reached on the port development scheme as a whole, as a deep water berth was necessary for the bunkering scheme. As a result of the decision announced by my right hon. Friend the Secretary of State for the Colonies on 1st February, 1956, the discussions were at once resumed. I can assure the hon. Member that we are ready to start work as soon as they can be concluded.
    Mr. Dodds: Is the hon. Gentleman seized of the fact that Gibraltar is battling for its economic life against the unfriendly attitude of Spain? Can he give some hope of an early decision, and is he aware that this matter was being discussed in 1954?
    Mr. Digby: The Admiralty is most anxious to help Gibraltar in any way it can. We have pushed ahead in these discussions, and have actually made an offer.

    Officers (Uniform Buttons)
    Lieut.-Colonel Liptonasked the Parliamentary Secretary to the Admiralty what is the nature of the markings upon the buttons, to be worn by officers on the special duties list promoted from the lower deck, which will distinguish such officers from others.
    Mr. Ward: Following representations from commanders-in-chief, it has been decided not to introduce distinctive buttons for Special Duties officers. There will, therefore, be no distinction in uniform between officers of the General List and the Special Duties List.
    Lieut.-Colonel Lipton: Is the hon. Gentleman aware that the announcement that he has made will be cordially welcomed by all those who object to snob distinctions imposed upon people who come up the hard way, with a view to distinguishing them from people who have come from Dartmouth? Is he further aware that he is to be congratulated on having overridden the original intention of some barnacled old brass hat?
    Mr. Ward: This distinction was never intended to mark any difference in status, but only a difference in qualifications and training.
    Mr. Callaghan: So far from congratulating the Parliamentary Secretary, may I ask him what on earth possessed the Board of Admiralty ever to introduce such a farcical distinction, which is unworthy of a great Service?
    Hon. Members: Answer.
    Mr. G. R. Howard: Would my hon. Friend not agree that this is another example of the way in which a sensible decision can be reached as a result of discussions and representations made by those concerned who know what they are doing?

    Dockyards (Average Earnings)
    Miss Vickersasked the Parliamentary Secretary to the Admiralty if he will state what are the average earnings in

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    Her Majesty's dockyards of mechanics, skilled labourers, and labourers, respectively; and what percentage of the industrial employees are able to participate in incentive payments by results and fixed schemes of prices, respectively.
    Mr. Wingfield Digby: In the latest week for which figures are available, average earnings of men in the professional departments of the four main dockyards were £10 11. 6d. I regret that separate figures for mechanics, skilled labourers and labourers are not available.
    About 40 per cent. of the work of the professional departments is paid for under schemes of payment by result. Many more than 40 per cent. of the workpeople work under these schemes from time to time.
    Miss Vickers: Whilst realising that this matter is really one for the trade unions, may I ask my hon. Friend if he is aware of the fact that these unskilled labourers are trying to live on under £7 a week when it has been stated that the average figure for manual labour in the country is about £9? Are any negotiations going en in an effort to improve their circumstances?
    Mr. Digby: The hon. Lady should draw a distinction between the wage packet and wage rates. Wage rates compare well with those outside, but there is, on the whole, less overtime worked in the dockyards.

    Royal Marines (Functions)
    Miss Vickersasked the Parliamentary Secretary to the Admiralty in what respect the functions of Her Majesty's Royal Marines have been changed since their definition by the Admiralty in 1950.
    Mr. Ward: The functions of the Royal Marines remain unchanged.
    Miss Vickers: May I thank my hon. Friend for that statement, which I am sure will be very reassuring, particularly for young officers who are worried about the position at the moment?

    Reserve Battleships (Cost)
    Mr. K. Robinsonasked the Parliamentary Secretary to the Admiralty if he will state the annual cost of maintaining the four King George V class battleships
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    and H.M.S. "Vanguard" in reserve; and the estimated cost of bringing these ships to a state of operational readiness.
    Mr. Ward: The annual cost of keeping Her Majesty's ship "Vanguard" in reserve is about £700,000. The annual cost for the four ships of the "King George V" class is £46,000. Most of this is being spent on the "King George V" herself.
    The additional annual cost if all these four ships were to be dehumidified, preserved and effectively maintained in their present condition would be about £375,000.
    The estimated cost of bringing these four ships to a state of readiness is at least £4 million. The battleships of the "King George V" class are unmodernised, however, and their operational value would be limited accordingly. The cost of modernisation would be prohibitive.
    Mr. Robinson: In view of that reply, can the hon. Gentleman now say whether any decision has been taken as to the future of these ships and whether they are at last going to be scrapped?
    Mr. Ward: There is no question of scrapping the "Vanguard." The other four battleships are in extended reserve, and I think it would be unwise and imprudent to scrap them until it is certain that they have reached the end of their lives.
    Commander Agnew: Can my hon. Friend say in the case of H.M.S. "Vanguard" whether the state of readiness to which he referred is a state of readiness for limited warfare or for the more severe forms of warfare?
    Mr. Ward: Ships in operational reserve can be sent to sea quickly in any kind of warfare.
    Mr. Ellis Smith: Has the hon. Gentleman been up to Gareloch to see the ships for himself and, if so, is he satisfied with the amount of expenditure taking place there?
    Mr. Ward: We are not spending much on the four "King George V" class battleships. I have not been to see them myself, but I know more or less what condition they are in.

  SHIPBUILDING

    Structural Steel
    Mr. Hector Hughesasked the Parliamentary Secretary to the Admiralty if he is aware of the difficulties of providing structural steel of the requisite notch toughness for welded ship construction; that the relevant problems were discussed at a conference of classification societies in Paris last April and at a further conference in Zurich last September; that these problems affect ship builders, ship owners and steel makers throughout the world; that it is desirable to achieve substantial international agreement on requirements for shipbuilding steels suitable for modern conditions; and what steps he has taken and intends to take to achieve such international agreement.
    Mr. Wingfield Digby: Yes, Sir, but this problem is not confined to shipbuilding and affects all users of structural steel. Much research is going on in many countries, but much still remains to be done before the phenomena of the brittle fracture are fully understood.
    A prominent part is taken in all these investigations by the Admiralty Advisory Committee on Structural Steels, which includes in its membership shipbuilders and other users of structural steels, as well as steel makers and scientists.
    The results of research are freely interchanged and discussed internationally. and it is anticipated that international agreement will eventually be reached.
    Mr. Hector Hughes: Whilst thanking the Minister for that comprehensive reply, may I ask if he is aware of the very real problem arising from the fact that, owing to the high price of scrap, many ships are being scrapped but are not being replaced owing to the high price and the bad allocation of steel? Will he attend to that aspect of the matter in the interests of our maritime trade?
    Mr. Digby: I am aware of the steel position in the shipbuilding industry, but that is a somewhat different problem. My noble Friend has been in consultation with my right hon. Friend the President of the Board of Trade on this subject.
    Mr. Hobson: Will the hon. Gentleman kindly define "notch toughness"? It is humbug.

  POST OFFICE

    Christmas Mail
    Mr. Shepherdasked the Postmaster-General to state the volume of the Christmas mail this year; and how it compares with the volume in 1950.
    The Postmaster-General (Dr. Charles Hill): It is estimated that 735 million letters and cards were handled during the 1955 Christmas pressure period, an increase of 27 per cent. over the 1950 figures.
    Mr. Shepherd: Does my right hon. Friend appreciate that members of the public consider this to be a remarkable achievement in the present labour shortage and that this miracle performed by the Post Office is no less a miracle because it is an annual one?
    Dr. Hill: I am grateful for the tribute of my hon. Friend to the work of the Post Office in this immensely difficult task.
    Mr. Godfrey Nicholson: Has not the Christmas card racket become rather a nuisance?
    Dr. Hill: That is not a subject upon which I am called to comment.

    Postmen (Hours of Work)
    Mr. Shepherdasked the Postmaster-General if he will state the standard hours of work of postmen and the average hours of overtime, giving the figures for London and the provinces separately.
    Dr. Hill: Forty-eight hours gross. The average weekly overtime is eight hours in the London area and six in the provinces.

    Transferred Department (Accommodation and Saving)
    Mr. Hobsonasked the Postmaster-General the amount of accommodation vacated by the London Telecommunications Department consequent upon the transfer of the Telephone Manager's Department, N.W., to Shoot Up Hill, N.W.2, and the net saving in cost to his Department.
    Dr. Hill: Forty-six thousand square feet, mostly in requisitioned buildings. When the new building was opened in 1953, the saving as compared with previous rental payments was estimated at about £2,000 a year.
    Mr. Hobson: Is the right hon. Gentleman aware that this is a justification of the previous Administration, and will he look around for other parts of Britain where similar rationalisation of building space could be effected?
    Dr. Hill: I am glad to hear what the hon. Gentleman has to say. This is an excellent building, and I do not deny it for one moment.

    New Offices (Villages)
    Mr. J. Rodgersasked the Postmaster-General (1) if he will give an estimate of the cost of establishing a sub-post office at Ditton, Kent;
    (2) what factors are taken into account in deciding whether a village should have a sub-post office;
    (3) why Ditton village has no post office, whereas neighbouring smaller villages have such facilities.
    Dr. Hill: The additional cost of opening a sub-office at Ditton would be about £200 a year. The size of the community and the distance from the nearest post office, taken together, are the main factors in deciding whether a new office is to be opened. I am looking again at the circumstances in Ditton.
    Mr. Rodgers: Is the Postmaster-General aware that many of my constituents living at Ditton—including mothers and old-age pensioners—have to travel well over a mile to go to a post office? Is he further aware that they have been petitioning for a post office ever since 1913? Is he further aware that the population has more than doubled in that time, and will he, in the kindness of his heart, examine this matter again and grant a sub-post office?
    Dr. Hill: I am again looking at the circumstances in Ditton.
    Mr. H. Hynd: Have any representations been made by the hon. Gentleman to the bishop in that area?

    Employment
    Mr. Parkinasked the Postmaster-General what steps he is taking to offer more opportunities of extended employment to postal workers after the retirement age of 60; and, in particular, what are the nature and extent of the commitments and responsibilities which he has
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    undertaken towards men disabled in the First World War.
    Dr. Hill: It is Post Office practice to employ for as long as practicable all workers who are willing, fit and efficient. In recruiting postmen first preference is given to registered disabled persons and to ex-Service men.
    Mr. Parkin: Will the Postmaster-General bear in mind that not only in his, but in every other Department and, indeed, in nearly every other industry, schemes are in operation to meet the problem of those who in their later years cannot carry out the arduous duties connected with the most energetic part of work in an industry? Is he not aware that nevertheless we are now facing a special problem in that the average age of disabled men from the First World War is nearly retiring age? Will he consult his right hon. Friends the Minister of Labour and the Minister of Pensions to see that the Government lead in this matter is consistent all round?
    Dr. Hill: I am concerned with the particular problem which the hon. Gentleman puts forward in relation to the Post Office, and I am reviewing the arrangements in that respect.
    Mr. W. R. Williams: Is it not a fact that the Post Office has done everything possible to try to meet the position arising from the disabilities of these people and to get them fitted naturally and without any penalty into the ordinary day-to-day work of the Post Office.
    Dr. Hill: In general, that is true. One or two of these hard cases appear from time to time. The hon. Member for Paddington, North (Mr. Parkin) has raised one of these cases with me, and I am trying to deal with it, in consultation with the union, as sympathetically as possible.
    Mr. Parkinasked the Postmaster-General what steps he is taking to find employment in his Department after the age of 60 years for a war-disabled man whose case has been submitted to him.
    Dr. Hill: I am in touch with the Union of Post Office Workers on this case.
    Mr. Parkin: While not wishing to say anything which would make these discussions less hopeful, may I ask the

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    Postmaster-General to bear in mind that this is a fairly typical example of the sort of problems which he will have to face in the coming years? Is he not aware that it is nonsense in these days, when everyone preaches full employment, to claim that it is clever to take people out of the labour market when they want to stay in it? Is it not monstrous to refuse extended employment to a man of 60, solely on the ground that he has a disability—[Horn. MEMBERS: "Speech."]—I did not know that this was something at which to jeer—
    Hon. Members: Speech.
    Mr. Speaker: We should get on better if hon. Members did not interrupt questioners and if the questioners confined themselves to asking questions.
    Mr. Parkin: I intended my supplementary question to be, is it not monstrous that a man should be denied extended employment at the age of 60, solely on the ground that he suffers from a disability as a war-disabled man from which he suffered on the day he was enrolled as a fully-established postman twenty years ago.
    Dr. Hill: The case is not so simple as the hon. Member puts it, but I will not allow his supplementary question to interfere with my sympathetic approach to this case.
    Mr. W. R. Williams: While sharing to the full my hon. Friend's anxiety about any of these disabled people, may I ask whether it is not also the fact that it is quite impossible, in a service like the Post Office, where so many physical considerations have to be kept in mind, to keep every disabled man, irrespective of the effect of that on the particular office in which he is working? While I should be very glad if the Postmaster-General could do anything for individuals in need, I would ask him whether it is not a fact that neither he nor the House must start interfering with a practice which has produced such good results in the past?
    Dr. Hill: I have said that I propose to look again at these arrangements in general and at the individual case in particular. I think I should be wise to leave matters there.

  TELEPHONE SERVICE

    Exchanges
    Mr. Hobsonasked the Postmaster-General the number of telephone exchanges which are at present full and cannot be extended; and the number of new telephone exchanges to be built during 1956.
    Dr. Hill: About 470, including exchanges where only priority applications can be accepted. We expect to complete about 420 new exchanges in 1956.
    Mr. Hobson: In view of the amazing progress which has been made, will the right hon. Gentleman look specially into the needs of the industrial areas, where most of the exchanges are so full that they cannot be extended, and where there is a grave shortage of telephones which inconveniences the business community?
    Dr. Hill: I am much alive to the point raised by the hon. Gentleman, which bears with particular force on certain areas. In 1956, however, we propose to complete 420 exchanges as compared with 272 the previous year, thus giving us added opportunity to do what the hon. Gentleman has in mind.
    Mr. Ernest Davies: Will the Postmaster-General give an undertaking that the building of these exchanges will not be held up by the Government's capital development restriction programme, and that there will be no delay in starting the Enfield exchange?
    Dr. Hill: I should require notice of the point about the Enfield exchange. On the other point, the programme of telephone extension will remain as stated in the White Paper.

    Shared Lines (Rentals)
    Mr. McKibbinasked the Postmaster-General whether his intention has been called to the unfair incidence of the recent increases in the quarterly telephone rentals on private residences, in that they amount to 50 per cent. for an exclusive and 66⅔ per cent. for a shared line; and what action he proposes to take to remedy the grievance.
    Dr. Hill: The reasons for the differing incidence of the increases on various classes of subscriber are set out fully in

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    Section IX of the recent White Paper on Post Office Development and Finance (Cmd. 9576). Our object was to align rentals more closely with costs, and I could not justify an increase in the rebate of 30s. for shared service.
    Mr. McKibbin: Will my right hon. Friend agree that a public-spirited subscriber who helps the Post Office by sharing his line with a friend has a genuine grievance at having to pay a higher percentage rate than a person who does not share a line? While it is admitted that a subscriber pays less for a shared line, will my right hon. Friend bear in mind, in view of the differential, that if he deducted 10s. per quarter from the charge to each subscriber on a shared line, the Post Office would still be making an extra 5s. per subscriber per quarter compared with the revenue from an exclusive line?
    Dr. Hill: Broadly speaking, the sum of 30s. still represents the lesser cost to the Post Office in the case of a shared line, but I would draw the attention of my hon. Friend to the fact that the annual loss on current rental in the case of a provincial residential shared line is still about £3 2s. per year.

    Exchange Inquiries (Charges)
    Mr. Gowerasked the Postmaster-General if he will take steps to discontinue charges made in respect of necessary inquiries to telephone exchanges.
    Dr. Hill: The only such charge is that for advice on the duration of and charge for a trunk call, and I could not justify its discontinuance. If the comparatively few subscribers who use this service did not themselves pay the cost it would have to fall on telephone subscribers generally.
    Mr. Gower: Will my right hon. Friend agree that it is rather absurd that a person should have to pay when he merely inquires the cost of a service? Does the Post Office regard subscribers as customers, to be treated as such, or as awkward people who ought to be thankful for small mercies?
    Dr. Hill: My hon. Friend is not accurate in the statement that he makes. Anyone can inquire, without cost, the charge of a telephone call to a certain exchange. What we are dealing with here are inquiries in relation to a specific telephone call—the time it has taken—and,
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    in large part, the object of those inquiries is for the internal purposes of the organisation concerned—quite proper purposes—including the allocation of the cost between one department and another. As the cost is about 3d. a time, it seems reasonable that the Post Office should make such a charge.
    Mr. Gower: In view of the unsatisfactory nature of the reply, I give notice that I will raise the matter on the Adjournment.

    Kiosk, Church District
    Mr. H. Hyndasked the Postmaster-General why he has refused to erect a telephone kiosk in the Church Kirk district of Church, Lancashire; and whether he will now reconsider this request.
    Dr. Hill: There is already a kiosk within a quarter of a mile of the centre of this district, and it has been thought that the traffic would not justify another. I shall be glad to discuss the matter with the hon. Member.
    Mr. Hynd: I appreciate that offer and gladly accept it. May I ask the Minister to bear in mind that this matter has been in negotiation since December, 1953, when difficulties were made?
    Dr. Hill: I am aware of that. I have looked again at the papers and I deliberately designed my Answer so as to suggest that the matter is not closed. I shall be glad to see the hon. Gentleman.

  INDEPENDENT TELEVISION AUTHORITY

    News and Films (Presentation)
    Mr. Hobsonasked the Postmaster-General if he will withdraw the licence from the Independent Television Authority in view of repeated and calculated breaches of the Act in presentation of news and films.
    Dr. Hill: No, Sir. I do not accept the sweeping and unsubstantiated allegations in the second part of the Question.
    Mr. Hobson: Is the right hon. Gentleman aware that both the I.T.A. and the production companies are bringing the law into contempt? Secondly, is he

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    aware that the films shown are not predominantly British in accordance with the demands of the Act, and that there is further evidence that there has been alteration in the presentation and the timing of the news, and that this was one of the reasons why there was the trouble over the resignation, or threatened resignation, of the news editor? This is contrary to the spirit and terms of the Act, and the right hon. Gentleman cannot really take refuge in a pure negative.
    Dr. Hill: I submit, Mr. Speaker, that wide and general allegations of that sort serve no useful purpose. I shall be very happy to see that specific complaints or allegations are inquired into, but the hon. Gentleman has made so wide and sweeping a generalisation that I cannot usefully comment on it except to say that it is unjustified.
    Sir R. Grimston: Will my right hon. Friend make it clear that there will be no return to monopoly as implied by the Question?
    Mr. Ness Edwards: Will the Postmaster-General ensure that, while the House is making provision for the existence of commercial television, the companies and the I.T.A. conform with the provisions of the Act? Will he ensure that there is no repetition of what happened in Birmingham?
    Dr. Hill: The Act lays fairly and squarely on the Independent Television Authority the responsibility in the sphere which has been under question. If there are complaints as to how that responsibility is being carried out, I will see that the Authority looks into them. However, these generalities serve no useful purpose.
    Mr. Ness Edwards: I am sure that the right hon. Gentleman is aware that in the course of the opening at Birmingham the rules were absolutely left aside and there was a double amount of advertising. Was that with his approval?
    Dr. Hill: It is not my responsibility to monitor programmes. [HON. MEMBERS: "Oh."] Yes, that is so. If the right hon. Gentleman has specific complaints to make about what happened at Birmingham on a certain day and will give me details, I will see that they are conveyed to the I.T.A. for examination; but generalities serve no useful purpose.

    1954 Act (Section 11)
    Mr. Ness Edwardsasked the Postmaster-General what account he requires from the Independent Television Authority of moneys advanced to them under Section 11 of the 1954 Act; and to what extent he requires their detailed application to be submitted to him for approval.
    Dr. Hill: No question arises of the Independent Television Authority's accounting for moneys under Section II or its application of them, because no payment has been made to the Authority under that Section.
    Mr. Ness Edwards: In view of the information given to the House last week by the right hon. Gentleman in regard to the establishment of a separate news sergive run by the I.T.A. and the organisation of political programmes by the I.T.A., would any money expended in that way out of grants provided by Parliament require the approval of the Postmaster-General?
    Dr. Hill: Yes, Sir. There are two sets of grants or payments. The first is under Section 11 of the 1954 Act, which is the annual, or possibility of an annual, payment of £750,000 a year. Such payments can be made only on the decision of the Postmaster-General with the concurrence of the Treasury. They would be elements in an Estimate or Supplementary Estimate, and would come before the House in that form.
    Mr. Hobson: Are we to understand from the right hon. Gentleman's reply that the accounts in relation to the provision of £2 million capital for the I.T.A. are only to be seen within the accounts of the Consolidated Fund?
    Dr. Hill: I was referring particularly to grants under Section 11. Under Section 12, which deals with capital payments, those sums need to be accounted for within the ambit of Section 15 of the Act.

    Advertising Methods
    Mr. Ness Edwardsasked the Postmaster-General what consultations were held with the Independent Television Authority under Section 4 (5) of the 1954 Act in regard to the proposed method of advertising, whereby advertisers will be able to state the programme and the part

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    of the programme with which their products shall be associated; and what directions he has issued under Section 4 (5), in view of the fact that the proposal constitutes a breach of Rule 1 of the Second Schedule to the Act.
    Dr. Hill: None, Sir. There is nothing in the Act to prevent the fixed time booking of advertisements, so long as Section 4 (6) on sponsoring is observed. A proviso to Section 4 (6) recognises that advertisements may be included in programmes to which they are related in subject matter. The Independent Television Authority is bound under Section 4 (3) to ensure that programme companies comply with Rule 1 of the Second Schedule, and Section 4 (5) does not empower me to issue directions on this point.
    Mr. Ness Edwards: As the commercial companies are already announcing that they will permit thirteen weeks' block bookings, fixing the spot at which the plugs will occur, and in view of the obvious influence upon the type of programme which such block bookings have, will the right hon. Gentleman take steps to ensure that his advertising rules are tightened up, and that he himself accepts responsibility for sponsoring?
    Dr. Hill: The advertising rules to which the right hon. Gentleman refers are specifically stated in the Act. There is nothing in the Act to prohibit fixed-time booking or block booking. What is prohibited under Section 4 (6) of the Act is sponsoring. If the right hon. Gentleman or anyone else has complaints to make or allegations to put forward about the issue of sponsoring within the meaning of Section 4 (6), I will, of course, see that they are investigated, but the aspects of advertising to which the right hon. Gentleman refers are not of themselves precluded by the Act provided that there is no breach of Section 4 (6).
    Mr. Fell: Is my right hon. Friend aware that these Questions about the I.T.A. arise from the fact that the I.T.A. has so far been extraordinarily successful? Will he take courage from the fact that the people who can receive both programmes will back him all the way through in the support which he gives to I.T.A.?
    Dr. Hill: My rôle is not to support the I.T.A. or the B.B.C., but to see that the Act is fully carried out.
    Mr. Ness Edwards: Is the right hon. Gentleman aware that when advertising is associated over a long period with programmes which are known beforehand, that in itself is bound to affect the nature of the programme? [HON. MEMBERS: "No."] Unless the nature of the programme is disclosed thirteen weeks' beforehand, how can the advertiser select his spot? Is not the right hon. Gentleman in this case under an obligation to carry out the undertakings given by his predecessor that there shall be no sponsoring?
    Dr. Hill: I readily agree that it is conceivable that a prolonged association between a certain advertisement and a certain programme would be in conflict with that part of the definition of sponsoring which, to paraphrase it, refers to there appearing to be a relationship between the two. I am fully alive to that. The announcement or newspaper report which the right hon. Gentleman has in mind clearly indicated that the I.T.A. was also fully alive to that point.

  BRITISH BROADCASTING CORPORATION

    Welsh Service
    Mr. Watkinsasked the Postmaster-General, in view of the failure to have a meeting with the East German representatives, what further steps he is asking the British Broadcasting Corporation to take to avoid the interference on the Welsh Regional station.
    Dr. Hill: The B.B.C. has provided two V.H.F. stations in Wales and is now building another. Of the two planned for a later stage, one will replace the temporary station at Penmon. These transmissions offer to large numbers of listeners in Wales a positive means of avoiding the foreign interference with the Welsh Home Service.
    Apart from these V.H.F. plans the problem is being further considered, and I will write to the hon. Member.
    Mr. Probertasked the Postmaster-General what facilities will be made available to hon. Members who desire to give

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    evidence to the British Broadcasting Corporation Welsh Service Committee of Inquiry to obtain copies of scripts in which they allege bias has occurred.
    Dr. Hill: The National Broadcasting Council for Wales informs me that the scripts or notes of news bulletins, talks and discussions in the B.B.C. Welsh Service are available at B.B.C. Headquarters at Cardiff for hon. Members to consult or study. The volume of material is very large and spare copies of most scripts do not exist.
    Mr. G. Thomas: Does that mean that hon. Members will have to go to the regional headquarters of the B.B.C. to study these documents, or will they be available for hon. Members in the Library of the House?
    Dr. Hill: My information is that these documents are available in Cardiff. I have conveyed to the Welsh Broadcasting Council the suggestion that they ought to be more conveniently and widely available, including in London. This is not a matter upon which I can or would wish to direct the B.B.C., but I will, of course, bring to the notice of the Corporation any suggestions which hon. Members may make.
    Mr. Ness Edwards: Is not the right hon. Gentleman aware that this will cause very great difficulty? Will he use his influence with the B.B.C. to make available for Members copies of isolated scripts relating to particular dates on which bias is alleged to have been shown? In addition, will he arrange that copies of scripts shall be available in the Library or in some convenient part of the House, so that they may be consulted by hon. Members?
    Dr. Hill: I am glad to have the right hon. Gentleman's support. I shall, of course, seek to persuade the Corporation and the Welsh National Broadcasting Council to make this material available in the form most convenient to hon. Members.
    Mr. Watkins: Will the Postmaster-General make available in the Library or in London scripts of broadcasts made in the Welsh language.
    Dr. Hill: The Question and Answer cover not only the English language but the Welsh language.
    Mr. Probertasked the Postmaster-General whether the inquiry relating to bias on the British Broadcasting Corporation's Welsh service will be conducted in public or in private.
    Dr. Hill: The Committee will hear evidence in private.

  ROYAL AIR FORCE

    U.S.A.F. Married Quarters, Greenham Common
    Mr. Freethasked the Secretary of State for Air what recent representations he has made to United States Air Force authorities for them speedily to make adequate provision for married American military personnel, and their wives, who are stationed at Greenham Common, Newbury, in order to relieve the housing difficulties experienced by the local civilian population.
    The Secretary of State for Air (Mr. Nigel Birch): I understand that the United States authorities have plans for providing married quarters at this airfield when funds are available.
    Mr. Freeth: Is my right hon. Friend satisfied that he has made all possible representations regarding the speedier erection of married quarters, since the lack of them is causing a great housing shortage in the district and also ill-feeling between the civil population and the American airmen?
    Mr. Birch: I am very well aware of the situation. The United States Air Force is anxious to put up quarters, but Congress has to provide the money first.
    Mr. de Freitas: Surely the 1,500 houses which the Secretary of State spoke about will go some way to relieve the position here and elsewhere, in East Anglia and Lincolnshire?
    Mr. Birch: I was talking about houses for the Royal Air Force. This relates to houses for the American Air Force.

    Aircraft Refurbishing (Contract)
    Mr. Allaunasked the Secretary of State for Air the number of the contract under which York aircraft MW 232, MW 137 and MW 178 were refurbished.
    Mr. Birch: Number 6260.
    Mr. Allaun: Will the Minister investigate a 2,000-word report which I have here showing that these and other York planes were refurbished at Fairey's at Ringway, Manchester, in 1951; that there were eleven extremely serious and dangerous departures from the scheduled procedure, and that a telegram was sent to the Air Ministry reporting the fact? Have any of these York aircraft since crashed or suffered major mechanical breakdowns?
    Mr. Birch: None of the aircraft in this contract, of which there are twenty-four, has been involved in any accident in which fatal casualties were caused. If the hon. Gentleman will send the report to me, I will gladly study it. I hope he will recollect that an aircraft cannot fly after one of these refurbishing contracts without receiving a certificate of airworthiness.

    Civil Employees, Northern Ireland
    Captain Orrasked the Secretary of State for Air the total number of civilians at present employed by his Department in Northern Ireland.
    Mr. Birch: The number is 1,269.
    Captain Orr: Is my right hon. Friend satisfied with the security arrangements for the selection of these employees?
    Mr. Birch: That is a different question. Perhaps the hon. and gallant Gentleman will put it on the Order Paper.

  RAILWAYS

    Superannuitants and Pensioners
    Mr. Fenner Brockwayasked the Minister of Transport and Civil Aviation if he will take steps to increase the pensions of railway superannuitants and pensioners on a scale equivalent to the increases announced for other public servants.
    Mr. Farey-Jonesasked the Minister of Transport and Civil Aviation whether, in view of the broad principles embodied in the proposed Pensions Increase Bill, he will now use his powers under Section 98 of the Transport Act, 1947, to amend the pensions of railway employees who were retired prior to nationalisation.
    Mr. H. Hyndasked the Minister of Transport and Civil Aviation whether he can yet make a statement about his discussions with the British Transport Commission on the subject of railway superannuitants.
    The Minister of Transport and Civil Aviation (Mr. Harold Watkinson): My discussions with the Commission about further assistance to retired staff are not yet complete but I will make a statement as soon as I can.
    Mr. Brockway: I wish to express my appreciation of that Answer and the letter which I received earlier from the right hon. Gentleman. May I ask him whether he will do his best to speed up a decision on this matter, and to date any increase in pension from the time that public servants receive an increase, in view of the dire necessity of many of these people?
    Mr. Watkinson: I hope that we are getting nearer a solution of this very difficult problem.
    Mr. Hynd: Can the Minister say whether the talks he has mentioned cover members of the voluntary railway pension funds and people who were not members of pension funds as well as railway superannuitants?
    Mr. Watkinson: I could not answer that question without notice.
    Dr. D. Johnsonasked the Minister of Transport and Civil Aviation the total numbers of railway superannuitants; and what would be the annual cost of increasing their pensions to an extent commensurate with the increases given to other public servants by successive Acts since 1944.
    Mr. Watkinson: I am informed by the British Transport Commission that there are approximately 33,000 superannuitants of the main line railway, railway clearing system and London Transport salaried staff superannuation funds. I understand that the annual cost of applying the terms of the Pensions (Increases) Acts, 1944–52, as proposed to be amended by the Bill now before the House, would amount to about £2 million.

    COUNTERVAILING AND ANTI-DUMPING DUTIES
    Mr. Beresford Craddockasked the Prime Minister when it is proposed to introduce legislation to permit the imposition of countervailing and antidumping duties on imported goods.
    The Lord Privy Seal (Mr. R. A. Butler): I have been asked to reply.
    It had been hoped that it would be possible to introduce legislation to permit the imposition of countervailing and antidumping duties before now. I regret, however, that the legislative programme which confronts us during the rest of this Session will leave no opportunity for the consideration of what is necessarily a complicated and technical measure. It is intended that the appropriate legislation should be introduced early next Session, and I wish to make it clear that the Government have not altered their opinion about the importance of such legislation.

    ATOMIC ENERGY

      Staffing Policy (Salaries)
      Mr. K. Thompsonasked the Lord Privy Seal if his attention has been drawn to the salaries being offered by the Atomic Energy Authority for secretarial appointments at Risley, Lancashire; if he is aware that these salaries are substantially larger than those obtaining locally for comparable work; and if he will make a statement.
      Mr. R. A. Butler: The general lines to be followed by the Atomic Energy Authority in its staffing policy are laid down in the White Paper of November, 1953 (Cmd. 8986)—"The Future Organisation of the United Kingdom Atomic Energy Project." So far as my noble Friend is aware, the Authority is acting in strict accordance with these principles.
      Mr. Thompson: Is my right hon. Friend aware that there is great indignation on Merseyside over the extravagant and unnecessarily high salaries offered to secretarial assistants in Risley, Lancashire, including salaries amounting to £893 a year for typists who can do a hundred words a minute shorthand and forty words a minute typing, together with a five-day week, thirty days' annual leave
      2102
      and a pension scheme; and that this makes it extremely difficult for ordinary commercial houses to get staff?
      Mr. Butler: I am aware that certain representations have been made. I am also aware that the general policy follows paragraph 18 of the Appendix to the White Paper to which I have referred and to which I would draw the attention of hon. Members, as that is the policy with regard to salary scales which is being generally followed.
      Mr. Callaghan: Is the Lord Privy Seal aware that there is a growing volume of criticism about a certain looseness regarding both financial and staffing arrangements in these establishments? What check has he over the arrangements which are made?
      Mr. Butler: The check is exercised by the knowledge that it is brought to the attention of my noble Friend. Naturally, my noble Friend will pay attention to any points raised in this House in regard to matters connected with the payment of salaries and to the attitude adopted by hon. Members. Further than that I cannot go today.
      Mr. Callaghan: May I ask the right hon. Gentleman whether he can inquire into the administrative checks that take place regarding staffing arrangements, because I can assure him that there is a lot of criticism about them? It is important, is it not, that the House and the country should be satisfied that there is no looseness in these arrangements?
      Mr. Butler: There are various technical matters into which I could go in relation to the status of some of these private secretaries, and in relation to the comparison with the Civil Service grades to which they correspond, but I think it would be a pity to go into such detail in the course of question and answer. I think I should do better to give the general answer to the hon. Gentleman that I will take up the matter with my noble Friend.
      Mr. Usborne: Is it not also the fact that the Atomic Energy Authority is absorbing a far too high proportion of our young scientists, and in this way depriving industry of the services of these men?
      Mr. Butler: The race for scientists is pretty general. We notice it as between the schools and industry and as between industry and such authorities as the Atomic Energy Authority. Therefore I should not like to give a general answer to that question.
      Dr. Summerskill: Would not the right hon. Gentleman agree that there is a great shortage of workers of the kind which the hon. Gentleman described, and that today these women are not prepared to work for a low rate of pay?
      Mr. Butler: I do not think that any woman likes to work for anything less than she thinks she is worth.
      Mr. Thompson: In view of the importance of this matter, may I ask the Lord Privy Seal whether he would persuade his noble Friend to consult chambers of commerce and similar organisations in the area and find out what are the usual rates of pay for this kind of work?
      Mr. Butler: We have information as to the views of the bodies in the area, but I will certainly take the opportunity to draw the attention of my noble Friend to the views of the chambers of commerce.

      Atomic Weapons Research Establishment, Aldermaston
      Mr. Sparksasked the Lord Privy Seal the cost of the arrangements made by the Atomic Weapons Research Establishment, Aldermaston, for the reception and visit by the Prime Minister to that establishment last year.
      Mr. R A. Butler: This is a matter of day-to-day administration by the Authority, which is not the responsibility of my noble Friend. The Authority has informed him, however, that the total cost of the arrangements made in connection with the Prime Minister's visit was about £100.
      Mr. Sparks: Is the right hon. Gentleman aware that according to my information more than a hundred men were engaged for many days in moving a large quantity of stores out of a hangar which was then painted and decorated in order that the Prime Minister could speak there, and that afterwards the same number of men was employed for many days in putting all the stores back again? In
      2104
      view of the fact that a canteen was already in existence at the establishment, is not this expenditure—which is estimated to amount to £4,000—a waste of the taxpayers' money?
      Mr. Butler: The Government are not prepared to interfere with the actual detailed administration of the Authority, but as some very exaggerated figures have been given with regard to the costs of the Prime Minister's visit—one report referred to £5,000 being spent—I thought it wise to obtain from the Authority what, in its opinion, was the approximate cost—and I have given it to the House. I will go into the details given to me by the hon. Gentleman, but, as far as I know, I have given the best figure which can be obtained in relation to this matter.
      Mr. Sparks: Will the right hon. Gentleman look into the matter again, because on the same day the Prime Minister went to Harwell where not nearly the same amount of expenditure was involved.
      Mr. Butler: It all depends upon the administration of the Authority and the nature of the paint required for such an occasion.
      Mr. Sparksasked the Lord Privy Seal if he is aware that the Vine Hunt recently hired the canteen at the Atomic Weapons Research Establishment, Aldermaston, at a charge of £50; that 500 persons of mixed nationality attended the ball, the price of each ticket being £3; that the staff of the establishment were directed to make special and extraordinary arrangements for the ball, causing discontent among some sections of them; and if he will take steps, on security and other grounds, to prohibit the use of this canteen by outside bodies and persons who have no official connection with the research establishment.
      Mr. R. A. Butler: My noble Friend is satisfied that this and similar occasional lettings of the canteen at Aldermaston have involved no risk to security; the other matters raised concern the administration of the Authority, with which my noble Friend, as Lord President, is not, under the Act, normally concerned.
      Mr. Sparks: Do I understand that the right hon. Gentleman condones a situation in which an organisation of this kind can reap an income of £1,500 from the use of

      2105
      an establishment's canteen for which it pays £50 and also agrees that one of the head administrative officers should be charged with the duty of making arrangements for such a ball as this in official time? Cannot such a high official be found more useful work than organising arrangements for a hunt ball in the establishment?
      Mr. Butler: I think it is more important that the security arrangements should not be affected. I am satisfied that the arrangements for a security fence on an occasion such as this are such that security is not affected by the letting of the canteen for a function of this sort. I am also satisfied that it would be a mistake not to allow the Authority—or for the Authority not: to allow itself—to permit functions of this sort to be held. I can see nothing particularly vicious in a hunt ball.
      Mr. Sparks: Is the right hon. Gentleman aware that according to my information unauthorised persons have gained admittance to this establishment despite all the security arrangements about which he talks? Is he aware that this has been done as a result of wagers and bets?
      Mr. Butler: That is a very important supplementary question, and I think the hon. Member should give me notice of it so that the importance of it can be brought to the Authority's notice.
      Mr. Anthony Greenwood: Are we to take it from the right hon. Gentleman's answer that any organisation can book these premises? Can he say whether any additional expenditure is incurred in respect of making the security arrangements more effective upon occasions of this kind?
      Mr. Butler: I understand that the security fence, as it is called, is so arranged that by a system of gates the canteen can be shut off on such occasions, so I presume—although I do not know all the details of the matter—that no further expense is involved.

    TRANSPORT

      Dock Delays (Committee's Report)
      Mr. Awberyasked the Minister of Transport and Civil Aviation if he will now say when he expects to receive the
      2106
      report of the committee inquiring into delays at the docks.
      Mr. Watkinson: I understand that the Ports Efficiency Committee, which is inquiring into delays to road vehicles in docks, hopes to report next month.
      Mr. Awbery: Is the right hon. Gentleman aware that an allegation was made in this House a fortnight ago that the delays in the docks were caused by the alleged restrictive practices of the dockers? Can he state the number of days lost through the restrictive practices of the employers in not providing empty wagons, not removing full wagons and not providing berths for ships?
      Mr. Watkinson: I think that we had better wait for the report of this expert committee.
      Mr. Callaghan: While we are waiting for the report, may I ask the right hon. Gentleman if he has taken the advice which I gave him last time and notified shipowners that they will experience no delay at all in discharging their ships if they will go to the ports of Newport, Cardiff, Barry, Port Talbot or Swansea?
      Mr. Watkinson: I very much welcomed the advice which the hon. Gentleman gave me. It was a very good bit of private enterprise.

      Working Hours (Staggering)
      Mr. Ernest Daviesasked the Minister of Transport and Civil Aviation what steps he proposes to take to relieve traffic congestion at peak hours by instituting the staggering of working hours.
      Mr. Watkinson: The sub-committee of the London Transport Users' Consultative Committee has worked vigorously on this problem during the past year, but both it and I would like to see very much more and very much quicker progress. In the first instance I propose to discuss with the chairman of the sub-committee what further steps might be taken to assist it in the campaign and to secure more cooperation from the public.
      Mr. Davies: In view of the relief which this arrangement can give to traffic congestion at peak hours in London, has the right hon. Gentleman considered the advisability of a Government Department setting an example? As the congestion

      2107
      in Whitehall is very acute at the peak period, could not a very good example be set by Government offices?
      Mr. Watkinson: My own Ministry sets a good example, and I am glad to say that the Ministry of Works has also recently adopted the staggering principle. I hope that we may see some further progress in this direction.

      Southampton-Le Havre Boat Service
      Dr. Kingasked the Minister of Transport and Civil Aviation whether, now that the Transport Commission has considered the recommendations of the Transport Users' Consultative Committee, he will make a statement on the future of the Southampton-Le Havre boat service.
      Mr. Watkinson: I am informed that the British Transport Commission has not yet completed its consideration of this recommendation, and I have therefore nothing to add to the reply given by my hon. Friend the Joint Parliamentary Secretary on 25th January.
      Dr. King: Will the Minister bear in mind that this service is of great importance to the sister ports of Southampton and Le Havre, and that the temporary reprieve is welcome news to both cities? Will he see that this great service, which is of international importance, receives the enthusiastic support both of the Commission and himself?
      Mr. Watkinson: Yes, I agree—but in any case the service is going on at the moment.

      Children (Fares)
      Mr. Collinsasked the Minister of Transport and Civil Aviation if he will introduce legislation to raise to fifteen years the maximum age at which children are permitted to travel at half-price.
      Mr. Watkinson: No, Sir. This is a matter for the appropriate fare-fixing body in each case, except where a local authority already has the power to charge half fares for children up to fifteen years under the Public Service Vehicles (Travel Concessions) Act, 1955.
      Mr. Collins: Is the right hon. Gentleman aware that the authority which local authorities possess is strictly limited and
      2108
      is subject to many exceptions? Is he further aware that concessionary fares for school children were agreed to be both desirable and necessary a long time ago? Will he not take steps to bring these fare concessions into conformity with the present minimum school-leaving age?
      Mr. Watkinson: I will certainly look at the matter again, but it is a very complicated one.

      Driving Tests
      Mr. K. Thompsonasked the Minister of Transport and Civil Aviation in what circumstances arrangements are made for special driving tests at times and dates to suit the convenience of the learner-driver.
      Mr. Watkinson: Applicants for driving tests are asked to say on the application form what days are convenient to them. If possible, appointments are offered them on those days; if not, the earliest available appointment is offered.
      Mr. Thompson: Will my right hon. Friend impress upon his officials that this system of examination exists for the convenience of the customers and not of those who administer the scheme? Will he further impress upon them that, wherever possible, arrangements should be made—if necessary at great inconvenience to his officials—to meet the requirements of learner-drivers?
      Mr. Watkinson: I take my hon. Friend's point. The answer is to recruit more examiners, and that is what I am now doing.
      Captain Pilkington: Would my right hon. Friend consider it advisable for learned-drivers to wear anti-dazzle glasses when confronted with the right hon. Member for Ipswich (Mr. Stokes) wearing his yellow pullover?
      Mr. K. Thompsonasked the Minister of Transport and Civil Aviation what proposals he has for reducing the waiting lists for driving tests which have increased as a result of recent weather conditions.
      Mr. Watkinson: The present congestion, which has been aggravated by recent weather conditions, can only be removed by recruitment of new examiners, and this is already proceeding.
      Mr. Chetwynd: Can the right hon. Gentleman say what happens when the instructor is away through illness and when the people whom he should have tested go to the bottom of the list? Can other arrangements be made?
      Mr. Watkinson: That is one reason why we need more examiners and why I am conducting an active recruiting campaign.

      Otley Bridge
      Colonel Stoddart-Scottasked the Minister of Transport and Civil Aviation what plans have been submitted to him to prevent congestion and to improve both vehicular and pedestrian traffic over Otley bridge.
      Mr. Watkinson: No plans have so far been submitted to me, but I am aware that the highway authority have their preparation in hand.

BALLOT FOR NOTICES OF MOTION
  GREAT BRITAIN-NORTHERN IRELAND TUNNEL
  Mr. Hyde: I beg to give notice that on Friday, 23rd March, I shall call attention to the need for the construction of a channel tunnel connecting Great Britain with Northern Ireland, and move a Resolution.
  MACHINERY OF GOVERNMENT (REVIEW)
  Major Legge-Bourke: I beg to give notice that on Friday, 23rd March, I shall call attention to the need to keep under continuing review the machinery of Government, and move a Resolution.
  ROAD PROGRAMME (EXPANSION)
  Mr. Ernest Davies: I beg to give notice that on Friday, 23rd March, I shall call attention to the need for an expanded road programme, and move a Resolution.
BILL PRESENTED
  PAKISTAN (CONSEQUENTIAL PROVISION)
  Bill to make provision as to the operation of the law in relation to Pakistan and persons and things in any way belonging to or connected with Pakistan, in view of Pakistan's becoming a Republic while remaining a member of the Commonwealth, presented by Commander Noble; supported by Major Lloyd-George and the Attorney-General; read the First time; to be read a Second time Tomorrow and to be printed. [Bill 107.]
  ADJOURNMENT
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Heath.]

  MIDDLE EAST
  3.32 p.m.
  The Minister of State for Foreign Affairs (Mr. Anthony Nutting): I think it was clear on Monday last that the House heard with a sense of deep regret the statement by my right hon. Friend the Prime Minister about the dismissal of General Glubb and two other senior British officers of the Arab Legion.
  British officers have had a long, proud and happy association with the Arab Legion since it was founded by Peake Pasha in 1920 to preserve order in the newly created State of Transjordan. General Glubb himself has been with the Legion since 1930 and has commanded it since 1939, a record of 26 years of devoted service to the Arab cause. Under his command the Legion has expanded from a small body of about 1,500 men into a well-equipped and well-trained force of some 21,000, and, may I add, one of the most effective and efficient fighting forces in the whole of the Middle East.
  As the House well knows, this growth and development have been due very largely to the devoted and untiring service of General Glubb. As my right hon. Friend made plain on Monday, last General Glubb and his two fellow British officers deserved better of the country they had served than abrupt and discourteous dismissal at 24 hours notice. If I may say so with respect, it is right that the House should, at the earliest opportunity, debate the situation which has arisen, for not only are British officers involved, but very substantial sums of British money are voted yearly to support the Arab Legion, and the House will wish to consider these issues in the context of our future relations with Jordan and against the wider background of the situation in the Middle East.
  Her Majesty's Government have not only contributed British officers to the Legion in fulfilment of their obligations under the 1948 Anglo-Jordan Treaty, which was made by the previous Government; they have largely been responsible for its equipment and for giving it financial support amounting to more than £60 million during the last nine years. In addition, we are pledged under the Treaty to come to Jordan's aid if she is attacked. We have maintained air and ground forces
  2112
  in Jordan to provide for her defence. We have therefore fulfilled the spirit and the letter of our obligations to Jordan.
  I regret to say that the summary dismissal by the Jordan Government of General Glubb and the other British officers, without consultation with Her Majesty's Government, can hardly be said to fulfil the spirit of Jordan's obligations to us. The provisions of the Treaty cannot be fulfilled unless there is full and continuous consultation between Jordan and the United Kingdom on all matters essential to the effective defence of Jordan.
  However, in the event, the Jordan Government did not see fit to consult us and summarily dismissed General Glubb from his post as Chief of the General Staff together with Brigadier Hutton and Colonel Sir Patrick Coghill, respectively Chief of Staff and Director-General of Intelligence. In addition, they relieved of their command one British brigade commander and seven British unit commanders.
  The Jordan Government have, it is true, since stated that they wish to preserve their link with Britain under the Treaty and the presence of British officers in the Legion. Nevertheless, a state of uncertainty exists for the remaining British officers as a result of the treatment received by those who have been dismissed. As my right hon. Friend told the House, it would be wrong for those officers who held executive command to be left in the uncertain position where they hold responsibility without the authority to carry it out. I am sure, therefore, the House will feel that Her Majesty's Government acted correctly in asking that all those who were still in executive commands should be relieved of them.
  Meanwhile, it is no secret that one of the essential elements in our co-operation with Jordan has been the maintenance of the Arab Legion as an effective defence force. The effect upon the Legion's efficiency of these sudden changes in its command may well be serious. That is one of the most important factors which Her Majesty's Government must weigh in considering their future policy and relationship with Jordan. It has always been our purpose to train as many Arab officers as possible to take on positions of responsibility, but there are still few

  2113
  who have the necessary experience to take over the higher commands. For this reason we must have grave doubts about the effect of the recent changes in command on the effectiveness of the Legion as a fighting force.
  As my right hon. Friend made clear on Monday, the Government do not underestimate the gravity of the situation which has arisen. We are consulting with our Allies, and the House will not expect me to announce new decisions before these consultations have been completed. There are many grave issues which are thrown up by these changes in Jordan, issues which affect a wider situation than that of Jordan itself, and which must in consequence be judged against the wider background of the whole Middle East area.
  This is no doubt the setting in which the House will wish to discuss these matters.
  No one can deny that we are facing a difficult and troublesome phase in our relations with Arab national feeling. The causes of this lie partly in history but have been aggravated by the bitterness of Arab hostility towards Israel. We shall not find a quick remedy for these ills, more especially as there are third parties pouring poison into the wounds and doing their best to increase hostility against all that we stand for. In face of this, our best and wisest course is to show ourselves reliable, consistent, patient but yet firm in the policy—[Laughter.]—I repeat firm in the policy of seeking and extending co-operation with the Middle East States in the things that matter—the defence of their security and the development of their life and their resources.
  It has recently been suggested from the benches opposite that Her Majesty's Government should get themselves a new policy for the Middle East. What new policy have the Opposition in mind? Our policy is based on the Bagdad Pact and the Tripartite Declaration. In the debate on the Bagdad Pact in April of last year, the right hon. Member for Lewisham, South (Mr. H. Morrison), speaking then officially on behalf of the Opposition, made it quite clear to the House that the Bagdad Pact was the right policy in existing circumstances. He voiced no criticism of the Pact, and at the end of the debate there was on Division on the Motion
  2114
  which approved—I repeat approved—our accession to the Pact.
  Yet, speaking the other day from the Opposition Front Bench, the right hon. Member for Blyth (Mr. Robens) made it quite clear that, in his view, we should dismantle the Pact, which, he said, constituted a major danger to peace in the Middle East. This is a surprising change of front, and, what is far more important, I submit to the House, very dangerous doctrine indeed. I want to make it perfectly clear that we stand firm and four-square by the Bagdad Pact, and that we have no intention whatsoever of abandoning our friends who have joined in it with us. Our every interest and theirs—political, strategic and economic—make it imperative that we should stand together, as we do and as we shall continue to do, in the defence of the Middle East against aggression from without.
  At the same time, we intend to use the economic institutions of the Pact to promote trade, technical assistance and development. The Bagdad Pact countries have already embarked upon plans for development on which their Governments are spending over £300 million a year—plans which include communications, agriculture and land use, joint development projects, technical education and the peaceful uses of atomic energy. It is the declared intention of these countries to increase the efficiency of this development through economic co-operation, the sharing of technical knowledge and the improvement of technical education.
  We recognise that we have an important part to play in all this development, and this is fully understood and welcomed by our Middle Eastern Allies. [An HON. MEMBER: "Who are they?"] Our Allies under the Bagdad Pact. I noticed that the right hon. Member for Blyth, in the same speech the other day, said that the Bagdad Pact—and I quote his own words—
  "…provoked, as might have been expected, the equally mischievous and dangerous Soviet intervention in the Middle East."—[OFFICIAL REPORT, 27th February, 1956; Vol. 549. c. 853.]
  This, of course, is complete and arrant nonsense. [Interruption.] If the hon. Member will bide his time in patience, he will get the argument. If the right

  2115
  hon. Gentleman and his hon. Friend the Member for Nelson and Colne (Mr. S. Silverman) really think that Soviet policy, which is nothing if not long-term in its preparation and execution, is determined by reflex reactions of this kind, then they must think that Soviet politicians are much simpler and more nervous folk than we do.
  The fact of the matter is that this Soviet move was a calculated and carefully planned action to stir up trouble in the Middle East and to undermine Western influence. What is more, to those who say that the Bagdad Pact constitutes a major danger to peace in the Middle East, I must say categorically that the opposite is the truth. It is proving an effective instrument for the defence of the Middle East, and if hon. Members opposite do not believe that, let them spend a few hours each week listening to what Radio Moscow has to say on the subject.
  Having said that we stand by our friends in the Bagdad Pact, I want to make it equally clear that it is the intention of Her Majesty's Government to stand firm in the Persian Gulf, where a combination of old friendships and new resources imposes upon us a clear duty and responsibility. On that point, let there be no doubt that we shall take any steps that are necessary to sustain our position and our friends the Rulers of the Persian Gulf States.
  One of the most remarkable phenomena of the post-war world has been the expansion of oil production in the Middle-East. The importance of this to British industry and to full employment in this country cannot be exaggerated. In Kuwait alone, the output of oil has increased from 28 million tons in 1951 to 53 million tons in 1955, and the approximate value of this oil has risen from £110 million to £200 million in 1955. Across the Gulf in Iran, another impressive story of expansion has unfolded. Over the past twelve months, the quantity of crude oil produced for export has risen from 3 million tons to 15 million tons, and its total value from £15 million to £75 million. That in twelve months.
  But, of course, oil is not the whole of the story. We have granted a £10 million credit to Iran, and with the opening up of trade relations which followed the oil
  2116
  agreement in 1954, trade between our two countries has expanded very considerably indeed. In Iraq, oil production has increased over the last four years from 7 million tons to 33 million tons, and its total value from £35 million to £168 million. We are taking a large share in the development programme of that country, which will help to raise the standard of living and bring prosperity to Iraq and Britain alike.
  I think it well to portray this encouraging side of the picture, and the House will see from what I have said that not all the Middle Eastern scene is dark and gloomy and full of frustrated endeavour. It will also, not, however, have escaped the attention of the House that all those thriving and rapidly developing States of which I have spoken are allied to Britain by close ties of one form or another.
  Mr. E. Shinwell: That is what you said about Jordan.
  Mr. Nutting: I must now turn to the more difficult part of the area—the Arab-Israeli scene. Anybody standing in my place today would dearly like to have some encouraging news to give to Parliament about this, but I must frankly admit that, while our efforts continue to try to bring about an Arab-Israel settlement—and my right hon. and learned Friend the Foreign Secretary is in particular engaged in this search during his Middle Eastern tour—there is, alas, no progress that I can record.
  The Government are often urged by the Opposition to bring about peace between Jew and Arab, but whether it be a final peace settlement or whether it be just the maintenance of an uneasy peace on the existing borders, the House must realise that this is not a job which we can carry out alone. We are only one of the three Powers that signed the Tripartite Declaration, and we are only one of the United Nations on whom responsibility falls for keeping the peace. We have fulfilled, and we will continue to fulfil, our obligations under the Tripartite Declaration. We are consulting with the Secretary-General of the United Nations about whether the machinery for truce supervision can be improved and, if necessary, expanded.
  We have repeatedly said that we will support General Burns in any expansion of the Truce Supervisory Organisation

  2117
  that he considers necessary. My right hon. Friend, the House will recall, speaking in the debate on 24th January, threw out the idea of some additional measures to increase the preventive effect of the existing United Nations machinery. These ideas, too, are being examined by the Secretary-General in consultation with General Burns.
  We are sometimes told that the Tripartite Declaration is not enough and that we must give a treaty guarantee to Israel within her present borders. That proposition has come many times from the benches opposite. But I often wonder whether hon. Gentlemen, when they suggest this, have fully thought out the implications of such a step. It would be committing this country to the permanent recognition of a frontier which is not agreed—[HON. MEMBERS: "No."]—a frontier which results from an armistice and not from a peace treaty, a frontier which is bitterly opposed by all the Arab States.
  Mr. Anthony Greenwood: Jordan's frontier.
  Mr. Nutting: Jordan's frontier, precisely. The existing armistice—
  Mr. Alfred Robens: Absolute nonsense—the right hon. Gentleman needs a better brief.
  Mr. Nutting: The right hon. Gentleman might perhaps keep his more abusive comments for his own speech, which I understand is to follow. I shall, of course, listen to the right hon. Gentleman with the greatest courtesy and attention. I hope that he will extend to me the same courtesy. We are being asked by the Opposition to guarantee a frontier which is bitterly opposed by all the Arab States.
  Mr. R. H. S. Crossman: Do I understand that the right hon. Gentleman is telling us that an alliance with Israel would mean guaranteeing her frontiers?
  Mr. Nutting indicated assent.
  Mr. Crossman: But we have made an alliance with Western Germany in which we are not committed to treat the present partition line as her frontier. I cannot understand why the right hon. Gentleman should say that we cannot ally ourselves with Israel without committing ourselves to the armistice line as a final frontier.
  Mr. Nutting: I say that the Government cannot be expected to follow a course and to give a guarantee which would amount, in effect, to recognition in perpetuity to the existing armistice line. [HON. MEMBERS: "Why?"] In our opinion it would, in effect, be the biggest step we could take away from a peace settlement. It is one thing to say—and here I come to deal more fully with the point raised by the hon. Member for Coventry, East (Mr. Crossman)—that we would oppose the alteration of a truce line by force, because that would mean a fresh outbreak of war. It is quite another to say that we would recognise in perpetuity and undertake to maintain a frontier about which the parties are in violent disagreement—
  Mr. R. T. Paget rose—
  Mr. Nutting: Perhaps the hon. and learned Gentleman will let me finish. We have said, and I repeat, that we have always been ready to guarantee an agreed settlement, and the United States have taken exactly the same line. If the Opposition say they are not asking for recognition in perpetuity of the existing armistice line but want a guarantee of this existing armistice line, that is precisely what the Tripartite Declaration lays down, and that is precisely the obligation to which we are committed and which we have declared repeatedly we shall fulfil.
  Mr. Paget: What we on this side are wondering is this. Our Jordan Treaty guarantees this very line from one side—why should we not also guarantee it from the other.
  Mr. Sydney Silverman: What is the trouble?
  Mr. Nutting: The existing armistice lines are guaranteed by the Tripartite Declaration. The hon. Gentleman asked what is the trouble, and I ask him what is the trouble, because I am being continually asked to give further guarantees.
  Mr. Silverman rose—
  Mr. Shinwell: The right hon. Gentleman will forgive me, but I think that he is missing the point. There may be some confusion—I admit to being confused myself because of what he said. Earlier he said that we have the 1948 Treaty

  2119
  with Jordan, and that that Treaty provided, among other things, for protection for Jordan in the event of aggression. I am within the recollection of the House. Surely a similar treaty with Israel, affording Israel protection in the event of aggression, would not be going any further than do the provisions of the Treaty with Jordan.
  Mr. Nutting: The existing armistice lines, the existing boundaries—whatever the right hon. Gentleman likes to call them—are guaranteed, are upheld by the Tripartite Declaration, and we are bound to take action, both within and without the United Nations in fulfilment of the obligations under that Declaration. I cannot see what guarantee of the existing situation could be firmer.
  Mr. Herbert Morrison: What I cannot follow is this. If the Tripartite Declaration so to speak protects these frontiers, or whatever we may like to call them—including the frontier of Jordan, as I presume it does—why did we need the special Treaty with Jordan to supplement that guarantee? [HON. MEMBERS: "You did it."] I know we did it—I quite agree. Nevertheless the right hon. Gentleman is defending the position as it is, and if it be the case that it is right to have a separate Treaty and a specific guarantee in the case of Jordan, how can it be wrong to have a separate treaty and a specific guarantee in the case of Israel?
  Mr. Nutting: The right hon. Gentleman has asked me why we concluded the Anglo-Jordan Treaty in 1948—[HON. MEMBERS: "No."]—And why we did not conclude a treaty with Israel. He was in power in those days and not us. [HON. MEMBERS: "Answer the question."] If hon. Gentlemen opposite would give me half a chance I would try to answer.
  Mr. James Callaghan: Yes, answer the question and let us get on with it.
  Mr. Nutting: In any case, Mr. Speaker, I think that the right hon. Gentleman has his history a little wrong. The Anglo-Jordan Treaty was made in 1948—the Tripartite Declaration in 1950. But why is it suggested that the Tripartite Declaration is such an ineffective affair?
  2120
  I do not pretend that it pleases everyone, but the fact is that this Declaration—and the declared intention of its signatories to carry it out—has prevented the further outbreak of war between Jew and Arab. That is, after all, what the Tripartite Declaration was intended to do, and in that it has succeeded for the last six years. That is why the right hon. Gentleman's Government made it and why we uphold and fulfil it today.
  During the Washington visit my right hon. Friends the Prime Minister and the Foreign Secretary discussed the Middle East at considerable length with the President and Mr. Dulles. They agreed that there was now increased danger in the Palestine situation and, accordingly, made arrangements for immediate consultations between the Tripartite Powers on the nature of the action which we should take in the event of the use or threat of force to violate the present boundaries. These consultations are now taking place in Washington.
  I should not leave the Arab-Israel question without saying a word about arms deliveries. Our policy on this has been frequently stated in the House, and I can assure the House that, despite all the difficulties which have confronted the Tripartite Powers in keeping a check on deliveries, a balance of strength has been maintained up to date. We have never sought to deny that the recent Communist arms deal with Egypt may in due course upset this balance.
  But we do not believe that that situation has yet arrived and in any case, we and our allies are convinced that the safety and security of Israel does not lie in entering upon an arms race in the Middle East. This might well end up with Israel being surrounded by hostile neighbours, all of them armed to the teeth. The safety and security of Israel must be found in establishing normal relations with her neighbours. That is one of several reasons why we consider a settlement so imperative and why we shall continue to concentrate on that and refrain from doing anything liable to jeopardise or endanger the peace.
  I hope the House will accept from this account of what is being done that we and our American Allies are taking every step that is open to us to strengthen the inevitably uneasy peace which exists between Israel and her Arab neighbours. It

  2121
  would be idle to pretend that the events of the last few days may not have their effect upon our ability to discharge our manifold obligations, but I hope it will not go out from this House today that Her Majesty's Government have neither policy nor position in the Middle East. That would be a completely false picture. Our policy is based on the Bagdad Pact and the Tripartite Declaration. The first, apart from its economic values, is an effective shield against aggression from without. The second has proved an effective guardian of the peace within.
  We stand by our obligations. We offer genuine help, friendship and co-operation to all nations in that area. Wherever and whenever necessary, we shall strengthen and fortify our vital interests and build up those who are our true friends. Whatever the setbacks and whatever the disruptive forces which may be ranged against us, we shall continue with a policy of building on strength, confident that this will bring eventual stability and peace to the whole of the Middle East.
  4.3 p.m.
  Mr. Hugh Gaitskell: I am surprised and disappointed that the Prime Minister did not decide to open the debate himself. It seems to me that if he had something new to tell us it should have been told to us at the beginning of the debate. If, on the other hand, he has nothing new to say, all I can say is that many hon. Members on all sides of the House will be extremely disappointed that in this very difficult and dangerous situation Her Majesty's Government have still not decided what action they shall take.
  In the circumstances, the Prime Minister gave the Minister of State an almost impossible task. Of the right hon. Gentleman's speech, I think it might be said that it made up in emphasis what it lacked in substance. The only point of importance that he mentioned was the possibility of a pact with Israel, and on that, and on his remarks alongside it regarding the Tripartite Declaration, I can only say that he left most of us confused and failing to understand the logic of his argument. Perhaps I might pursue this matter a little further now.
  The right hon. Gentleman said that we could not have a pact or alliance with Israel because it would imply that we
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  were permanently guaranteeing the existing frontiers. Of course, as he has said—I am glad that he said it again—we are in fact guaranteeing the existing armistice lines against aggression from either side. That, I think, is not in dispute. Furthermore, we have at the moment with Jordan an alliance which binds us to go to her help if she is attacked—if she is attacked across those armistice lines. My right hon. and hon Friends have asked, very pertinently, why, if we have an alliance with Jordan which binds us to go to her assistance in the event of aggression against the existing frontiers, should we not equally have an alliance with Israel. To that the right hon. Gentleman gave, I am afraid, no satisfactory answer whatever.
  I will return a little later on to the question of Arab-Israel relations. There are many other things about the Middle Eastern situation to which I should also like to refer in my speech.
  I was glad that the Minister of State paid a tribute to General Glubb. Although the debate takes place as a result of his dismissal by the King of Jordan, I should like to say that in any remarks that we may make about the Government's policy we certainly do not wish in any sense to belittle his achievements. I had the pleasure of meeting him three years ago, and I was impressed by his moderation, wisdom and calmness. It certainly is no fault of his that he has found himself in this situation.
  One of the features of this situation which is rather remarkable is the degree of unanimity in the British Press about the significance and probable consequences of General Glubb's dismissal. Almost every newspaper has drawn attention to three consequences. First, it is agreed, I believe, that it increases the danger of war between the Arab States and Israel either because a planned operation against Israel may be more likely now or that frontier incidents will be less under control. The reason why there has been such general agreement on this is that we know—I would certainly bear this out—that General Glubb and his fellow officers have exercised a restraining influence upon the Arab Legion and upon the policy of Jordan. I can vouch for that because the Foreign Secretary of Israel himself told me that three years ago.

  2123
  Secondly, I do not think it is in dispute that for the past 18 months or so the Arab Legion has been actively engaged—very properly engaged—in trying to prevent infiltration and aggression from the Jordan side of the frontier, and has attempted, I think with some success, to exercise control over the Jordan National Guard.
  The third reason why I think we must recognise that it increases the danger of war between Jordan and the Arab States, on the one side, and Israel, on the other, is that it is evident from what has been said in Jordan that this was indeed one of the most important reasons for the public demand for the removal of General Glubb. I notice that since then a certain event has taken place. It was reported in The Times of 6th March that:
  "Members of the permanent bureau of Palestine refugees…were received in audience by King Hussein and asked him to conscribe in the Arab Legion all capable young men among the 900,000 refugees in Jordan to fight for the restoration of Palestine under his Majesty's banner and the banners of the newly reformed Arab Legion. The King promised to grant them their wish."
  In those circumstances, we must also agree that the prospect of a settlement between the Arab States and Israel, which in our opinion was always extremely remote, is now even gloomier and less probable.
  We must further recognise that if the Arab Legion was, as I would hold that it was, a restraining influence under General Glubb's command, the change in the situation must surely affect our whole attitude to the subsidy which maintains that Legion. There is now a very real danger if the subsidy continues that we shall find ourselves subsidising the maintenance of a force which might well go into action against Israel in circumstances in which we have to go to the defence and assistance of Israel. That is plainly a highly contradictory position.
  The fact of the matter is that, although in effect we spoke as though the Arab Legion was part of our defence against the danger of attack from the north-east, nevertheless I do not think anybody who knew the Legion—I had the pleasure of meeting some of its officers and seeing their encampments and so on—could possibly say that it was particularly interested in any possible aggression from
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  the north-east. The Arab officers have always looked to the west against Israel, and now, without the restraint of British officers, that must be enormously aggravated.
  The second consequence is that there has been a severe blow to our prestige in the Middle East, and, indeed, to the prestige of the whole of the Western Alliance. I do not say that prestige is necessarily important for its own sake, but there is no denying that it can be a very powerful ally to a policy. What one means when one says that the prestige of Britain and her Allies is lowered by this event is that a number of our enemies—or those who profess to call themselves our enemies—are heartened by it and our friends are discouraged. In that part of the world, as indeed in others, we cannot ignore the tendency which exists in many countries to go to the side which they think is going to win. If they think Britain is going to lose there will be many people who will be quick to get out of the British camp. That is the particular danger which follows the loss of prestige.
  The third consequence of these events in Jordan, to which I am surprised the Minister of State made no reference, is a very serious setback to the policy of the Bagdad Pact. The Bagdad Pact, about which I will say more in a moment, has undoubtedly become a big bone of contention in the Middle East. It has been opposed and attacked by Egypt, Saudi-Arabia and Syria. There is no doubt that a consequence of the dismissal of General Glubb is to make it extremely probable—to put it no higher that Jordan will now go into the anti-Bagdad Pact camp and line up with Egypt and Saudi-Arabia. Since the Government have rightly declared that they base their policy, firstly on the hope of an Arab-Israel settlement and, secondly, on the Bagdad Pact, it is undeniable, as I said the other day, that these events must be regarded as constituting a major setback to our policy—I mean the policy of Her Majesty's Government. Indeed, I think those words, if anything were an understatement.
  It accordingly becomes clear, surely, that we must have a reassessment of our whole policy in the Middle East. That I take to be the real purpose of this debate. Before considering exactly what we should

  2125
  do, I think it is as well to ask the question, why has this happened? Was it something which was fortuitous and could not have been anticipated or expected? We would say no. We would say that in our view the events which have taken place, whilst partly inherent in the situation, were nevertheless also the direct result of the policy of Her Majesty's Government in that part of the world.
  Why do I say they were partly inherent in the existing situation? It is for this reason. I think one must admit that the peculiar arrangement under which the Arab Legion was led by British officers, financed by Great Britain and wholly under British control—the subsidies being paid not to the Jordan Treasury but to the Arab Legion office—could certainly not continue very much longer. I would add that a situation in which the whole of the Jordan people in consequence regarded General Glubb virtually as the dictator of the country was also something which was wholly inconsistent with the rise of Arab nationalism and the resentment in those countries against foreign domination, direct or indirect.
  The fact is that the situation has now so changed in that part of the world that I do not think any of the Arab peoples are going any longer to tolerate a semi-colonial status. One must add in this case that the position was profoundly affected in Jordan itself when the rest of Palestine was transferred to Jordan and, in consequence, the population was more than doubled—doubled by an influx of refugees who are bitterly hostile to Israel and, rightly or wrongly, also hostile to Great Britain. But I do say that the termination of the arrangement—had the position been understood—could have been carried out very differently and without the loss of prestige which has occurred.
  As to the policy of Her Majesty's Government, I do not say that there was any single event which one could pick out as the sole cause which led to this pretty disastrous situation, but I think there were a number of things which led to it. In particular, I am bound to say—contrary to what the Minister of State said—that I think the Bagdad Pact, in a way which I shall explain, has itself contributed very materially to this development.
  2126
  The doctrine of the Northern Tier Alliance, if it were a voluntary agreement between Turkey, Iraq, Pakistan and Persia, is not one which I would oppose in principle. It is a defensive agreement, and we have defensive agreements in the West. Perhaps this will explain the misunderstanding which was evident in the mind of the right hon. Gentleman when he criticised my right hon. Friend. It is not the Northern Tier Agreement as such which we think has done harm. What we do think has done harm has been the attempt by Her Majesty's Government to convert this into a whole Middle Eastern policy.
  I need not quote from the Prime Minister or the Minister of State, because they have repeatedly said that this should be the foundation of Middle Eastern defence as a whole. The Minister of State repeated this afternoon that the economic aspects of the Bagdad Pact are enormously important. They will not deny that they have made this the whole pivot of their policy. Why has that been dangerous? It has been dangerous because by so doing they have, first, provoked violent opposition from other Arab States, from the States which we can describe in this situation as being neutral or neutralist.
  Secondly, it equally provoked very violent opposition from Jordan itself when an attempt was made—I will come to that in detail in a moment—to force her into the Pact. I think it was disastrous to pursue that policy of trying, as it were, to bring every Arab State in, particularly because that was done without the United States being a member of the Pact. As far as our relations with Saudi Arabia are concerned, that was an obvious gap in the whole policy.
  Whatever the Prime Minister may say about what the Egyptians ought to think about this, the fact is that they have opposed the Bagdad Pact from the start, because they regarded it as an attempt to maintain Britain's power in the whole Arab world, which they resented, and because they regarded it as an attempt to do this through the influence and power of Iraq, the chief rival to Egypt in the Arab League. Saudi Arabia, of course, has been opposed to the Pact as well, and, as I have tried to imply, has been free to make as much trouble as she liked; and she has made a good deal of

  2127
  trouble with the dollars which she earns from selling oil to America.
  Finally, the attempt to force Jordan in was doomed to failure. We have never had from the Government the full story of General Templer's visit and I hope that this evening, even if we are to have no new policy, some confusions and obscurities about the past may be cleared up by the Prime Minister. I should like to ask whether it is true, as my hon. Friend the Member for Coventry, East (Mr. Crossman) alleged in the last Middle East debate and as has been stated in the Press, that General Templer went out there with instructions to offer a very substantial increase in the Arab Legion, without any guarantee that it would be under British control, in return for Jordan joining the Bagdad Pact.
  What was, in fact, offered? What conditions, if any, were laid down? Who decided to send General Templer, the Chief of the Imperial General Staff and the highest ranking officer in the Army, to Jordan in circumstances which, if they had wanted to negotiate, were such that one would have supposed it wiser to send a less prominent personality? What was the Foreign Office advice on the probability or possibility that the Jordan Government would accept any such offer? All I can say is that whoever was advising the Government on this matter was advising extraordinarily badly.
  I dare say that hon. Members will recall the questions which were put to the Joint Under-Secretary of State for Foreign Affairs on 21st December. After the Joint Under-Secretary's statement, my right hon. Friend the Member for Blyth (Mr. Robens) said:
  "Does not this show the whole bankruptcy of the Middle East policy of the Government? Does it not show that the optimistic references made in the Middle East debate in this House only a few days ago were wide of the mark? Is it really the case that the Bagdad Pact and the arrangements by General Templar to get Jordan to accept the Bagdad Pact have gone so badly and the preparatory work done so wrongly, that instead of having a country that will support the Bagdad Pact we shall have a situation in which we are trying to thrust the Bagdad Pact down the throats of the Jordan people…"
  I think those were very pertinent questions, but the Joint Under-Secretary of State blustered and objected that this was all very unfair and, indeed, reckless and
  2128
  irresponsible. All I can say is that his own closing remark in that passage was perhaps a classic. He said:
  "…what is now happening in Jordan will pass over."—[OFFICIAL REPORT, 21st December, 1955; Vol. 547, cc. 2038–40.]
  If this ill-judged, ill-informed and badly carried out attempt to continue what was in essence a paternalistic policy, without the force and drive of unity with America to carry it through, has been one aspect of the Government's policy, then the other has been appeasement of Arab opinion over the Israel question.
  I do not wish to go over the whole ground of the last debate, but I must briefly remind the House of our point of view. We take the view that the Prime Minister's Guildhall speech, with its implication of substantial concessions by Israel and its encouragement, accordingly, of Arab hopes, was a grave error. We say, secondly, that the announcement of the then Foreign Secretary when he was in Bagdad that
  "Britain was not going to try to outbid the Russians in providing arms for Egypt nor would she try to balance deliveries by increasing the supply of arms to Israel ",—
  set alongside the Prime Minister's statement the following day,—
  "the right hon. Gentleman is perfectly right in saying that we should try to maintain a balance of arms",—
  was a contradiction giving the impression of utter confusion to the world as a whole.
  I say, thirdly, that the reliance on the arms race argument is one which we cannot accept, and it is one which frankly I regard as quite unworthy of the present Government. I will tell the right hon. Gentleman why. Nobody wants an arms race if it can be prevented by a general agreement to limit arms. That is what we are endeavouring to bring about; all of us would like to see it done internationally.
  If the Government had come along and said, "Now that the Russians are supplying arms to Egypt we will try to get a general agreement to limit arms everywhere in that part of the world," it would have been logical; but merely to say that we will deprive one side of the opportunity of purchasing arms when the other side is free to go on getting as much as it likes and to defend that on the ground that we do not want to participate in an

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  arms race reminds me of nothing else but the non-intervention agreement in Spain.
  The real reason of course—and I do not know why the Government do not say so—for which they have refused to allow Israel to purchase so far even the quantities of arms necessary for her defence is fear of Arab resentment. That is the real reason and I venture to say that that kind of weakness makes no impression upon the Arab peoples.
  Either we stand by the Tripartite Agreement—and in that case we are bound to allow Israel enough arms for self-defence, for that is laid down in the Agreement—or we do not. If we intend to stand by it, we must make our position abundantly plain to the Arab States and give up this policy of trying to appease them by our policy towards Israel.
  In the last debate I put forward some suggestions as to what might be done. I will only mention them briefly, because there are other aspects to the debate. We believe that the Tripartite Agreement must be upheld, and I was very glad to hear the right hon. Gentleman today specifically mention it. I must say that on the last three or four occasions we have had to drag out of the Government a declaration of that kind. [HON. MEMBERS: "No."] It is all in the columns of HANSARD, and hon. Members know that it is true.
  Secondly, we say that if we intend to carry out the Tripartite Agreement we must allow Israel the arms to balance those received by Egypt from Czechoslovakia. Today the right hon. Gentleman says he is not quite sure and that perhaps it might upset the balance. The Foreign Secretary has gone much further than that; he said that it will upset the balance and that there is no doubt about it. If we are to be told that it has not yet upset the balance, it makes us wonder when the right hon. Gentleman thinks it will upset the balance. How many more MiG. fighters have to be delivered to Egypt? Have we to wait for another year or two until Egypt has built up an overwhelming force before we try to maintain the balance?
  The third point which we repeat is, as my right hon. Friend the Member for Blyth stressed in his speech on the last occasion, that we believe that a more effective frontier force of some kind could
  2130
  be used, and we still hold fast absolutely by our proposals for long-term settlement, including the settling of the refugees, including compensation, including frontier adjustments, including the ending of the economic boycott.
  Finally, we repeat that we do not think this problem of the Middle East as a whole can be solved without bringing the Russians into it in some way. After all, this is already a United Nations affair and Russia is a member of the Security Council.
  The last chance, it seems to me, of retrieving the situation occurred in the talks at Washington just after the debate to which I have referred. At that stage, positive plans could and should have been made following the talks with General Eisenhower and Mr. Dulles. But, in fact, nothing whatever has emerged from the Washington talks. There is no agreement on the very difficult, but very vital issue of the conflicting, and, indeed, fierce opposition between the British and American oil companies in Saudi Arabia and the Protectorates.
  Secondly, not a word has come from the Prime Minister or anyone else about the balance of arms and what is to be done about it. Presumably, after the extraordinary contradictions to which I have referred, the right hon. Gentleman came to the conclusion that the least said about the subject the better.
  Thirdly, as to the Tripartite Declaration, all that we are told is that consultations are going on. There has been a need for consultations ever since the announcement of the Czechoslovak arms deal last September. In a clever reply, the Foreign Secretary was able to tell us that, of course, there was an immediate meeting of the Tripartite Powers. It is not enough to have meetings and consultations unless some decisions are taken, and we are still waiting for them. I should have thought that when the Prime Minister referred to the necessity of consulting our Allies about events in Jordan, he might perhaps have pointed out, or reminded us, that these consultations were already taking place in Washington. I should have thought that by now at least we could have heard something of the outcome.
  The fact is that the policy which led up to the present situation has, in our

  2131
  view, been ill-informed, ill-prepared and has managed, rather remarkably, to be both weak and yet provocative at the same time. It has landed us in discredit and danger.
  I now turn, as we must, to future policy. I should like to begin with some fairly general observations. There are some hon. Members opposite, I know, who, exasperated by what they regard as a series of retreats in the Middle East, wish to reimpose our will on that part of the world by force over the whole area. They are those who particularly regret our evacuation from Abadan and Suez and who are most insistent that we should in no circumstances give up Cyprus. I understand their feelings. But emotion in this matter is not a very good guide.
  I must say to them that although we ourselves are profoundly worried about the Middle Eastern situation, we cannot go their way for three reasons. First, because that kind of policy is not one for which we at present, even if we wanted to pursue it, have adequate forces. Certainly we have not without the U.S.A. and there is no hope, in my view, that the U.S.A. will join with us in a policy of this kind. Secondly, I think that this policy fails to recognise the tremendous force of nationalism and indeed anti-Westernism which is thrown up and has grown up in the Middle East and which, let us beware of it, will be driven directly into Communism, as it has been, for instance, in Indo-China, if we persist in trying to apply semi-colonial policies in that part of the world.
  Mr. Julian Amery: How does the right hon. Gentleman think that the obligation under the Tripartite Agreement on which he very rightly, in my view, puts general emphasis can be carried out if we are not in a position of strength in Cyprus and elsewhere?
  Mr. Gaitskell: It has always been our view and, so far as I know, the view of the Government that it was perfectly possible to meet the demands of the Cypriots for self-determination while retaining military bases in Cyprus. I should be very surprised indeed if the Colonial Secretary were to tell the House that he had been negotiating with Archbishop Makarios on any other basis.
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  The third reason why we cannot accept the views of the hon. Member for Preston, North (Mr. J. Amery) and others is that we feel that those views inevitably involve us in a conflict with international law and the United Nations. The plain fact of the matter is—and I am taking the case of Abadan now—that if we had put troops in Persia to maintain our hold in Abadan we should have been arraigned as aggressors before the United Nations. Of course, as my right hon. Friend the Member for Lewisham, South (Mr. H. Morrison) rightly pointed out the other day, the Government continued the policy, which we were driven to for that reason—if we like to put it that way—of waiting for an eventual agreement with Persia which we are all glad was reached without actualy taking military action against her. That is why, as I say, we cannot accept the view of the hon. Gentleman and his hon. Friends.
  In deciding policy, I suggest that we must first of all settle exactly what is our real interest in the Middle East and what our commitments are there. I would say that there were three things in particular which must be accepted as commitments or interests of an overriding character. The first is our commitment under the Tripartite Declaration which, I repeat in case there is any misunderstanding, is a declaration to go to the help of whichever side is attacked. It is an undertaking to guarantee those temporary armistice frontiers. Also, too, it carries with it the essential condition that we maintain the balance of arms to the two sides.
  Reference has already been made to the possibility of an alliance with Israel, and I must say that we do not see that there is anything inconsistent with that and the Tripartite Declaration. I think that this is something to which the Government should give serious consideration in the light of the latest development. I will not pursue it further.
  Our second interest—and it is an interest—is, of course, the supply of oil. It is no use denying the fact that we are very completely dependent on oil in that part of the world. This is a "must" so far as we are concerned. We cannot survive without it. But what precisely is the danger here? We get nearly 50 per cent. of our oil from Kuwait, some from Persia and some from Iraq. Oil is in these three

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  territories and in Saudi Arabia. I think that we make a mistake if we jump to the conclusion that the Arab States with these oil reserves will be so desperately anxious to sell them to anyone else. The whole of their apparatus, their pipelines, refineries and everything else, are directed to selling to the existing Western countries.
  I do not believe that, short of a big political change in that part of the world, the danger that we should be cut off from oil is nearly so great. That is why, when the hon. Gentleman talks as if we have to maintain military power in that part of the world to a greater extent than we do at the moment in order to safeguard the oil, I am afraid I cannot accept that conclusion.
  Mr. Amery: I am glad that the right hon. Gentleman has given me an opportunity of disagreeing, because the earlier part of what he said was so good. Is it not the case that if we had not had physical force in the region of Buraimi we should have had to pay dollars for any oil that was extracted?
  Mr. Gaitskell: Of course, if we have no Anglo-American understanding about the oil in that part of the world, that may be so. I go further and concede this to the hon. Gentleman. We are talking now about the sheikdoms of the Persian Gulf. I would say that the Government, in view of the situation that exists, had better look pretty hard to the position at Kuwait where we get nearly 50 per cent. of our oil.
  The third objective, which I think we must all accept, is that we cannot accept that these territories with their oil reserves, which are very important to us, should come under Russian control. I say that quite emphatically. This is a vital interest of ours. I do not believe, however, that the Arab Governments are in the least anxious to allow the Communists to come in and control their territories. For these reasons—the three which I have given—we certainly cannot clear out and wash our hands of the whole area. It is far too important for us, and we could not trust Russia to keep out of it if we disappeared. I concede that. But I would say to hon. Members opposite that, first of all, it would probably be agreed that the United States should have, and has, exactly the same three objectives that we have, and therefore it
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  should not be difficult to reach agreement with her on Middle Eastern policy.
  Secondly, and in a sense this is repeating what I said in answer to the hon. Member for Preston, North, I do not believe that to achieve these objectives we have to have military forces disposed everywhere and have to continue semi-colonial policies everywhere. The plain fact is that the attempt to do this is a handicap today. Finally, it is not necessary in order to achieve these objectives—precisely because we are in a stronger position than is sometimes suggested—to take sides or to intervene in the rivalries between the different Arab States. We would do best, while standing firm on the question of Israel, to concentrate as far as the rest of the Middle East is concerned, on economic aid rather than on military force.
  I come to the question which follows these basic considerations. What should our immediate policy be? Should we, for instance, re-inforce our troops in Jordan? I take the view that we should do that only if it is necessary to protect British lives. I strongly urge the Government not to attempt by military force to impose a policy on Jordan. If the Jordan Government wish to break their alliance with us and to link up with Egypt and the neutralist bloc, they should be allowed to do so.
  Secondly, we must have—and I hope that they have already begun—immediate talks with Jordan about the position under the Treaty. It would be unwise to repudiate the Treaty. It has not been broken technically by the dismissal of General Glubb, but it would be impossible to continue with the subsidy in the new situation. It may be that the money—and it is quite a substantial sum—could instead be made available for economic development and the settlement of Arab refugees as part of the general settlement.
  Mr. F. A. Burden rose—
  Mr. Gaitskell: I am sorry, but I do not want to go on for too long.
  A third essential, surely, is to settle the ridiculous and absurd dispute between the British and American oil companies. It is really so ridiculous, because we all know that they are interlocked. Therefore, the way in which they are playing against each other in that part of the world is quite absurd. In fact, I should

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  like to see a wider plan emerge from discussions between the companies under which both the Arab Governments concerned and the oil companies would subscribe to a large fund for the economic development of the whole area, and not only the oil-bearing territory.
  Fourthly, the ban on arms for Israel must now be lifted. The situation is really far too dangerous as the new development has occurred in Jordan. It does not mean any spectacular sale of arms, but it means, at any rate, that Israel should be allowed to buy the necessary weapons in terms of quality with which she can match, if need be, the new arms which Egypt is now obtaining. In plain fact, it means Centurion tanks, which she was never given although Egypt has had them from us, and also modern fighters.
  Fifthly, there is a lot to be said for Britain and America making a declaration of Middle Eastern policy on the lines which I have tried to indicate saying what our attitude is. We must be quite firm about Israel. Apart from that, we should say that we have no wish whatever to stifle or restrain Arab Nationalist sentiment, and are only too anxious to help the economic development of the area. We must not just make that declaration. We must do a great deal more about our propaganda, including our radio propaganda in that part of the world. I do not see why the station in Cyprus is not used for that purpose. I should have thought it quite effective. When Marshal Bulganin and Mr. Khrushchev come here in April, I hope that the Government will take the opportunity of talking about the Middle Eastern situation with them.
  Before the Prime Minister went to Washington, I warned him that we were genuinely critical of the Government's Middle Eastern policy and that we could not support him in this if that policy continued. We hoped that Washington would produce a change. It has not done so. There has been nothing—just in-action. What has happened in Jordan confirms our view that the Government's policies were wrong and dangerous, and for this reason I have not hesitated to criticise the Government today.
  I recognise that it is the duty of the Opposition to be constructive. I may not have carried all with me, but I have tried
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  to show what can be done and I ask the Prime Minister to take these proposals seriously. Looking at the state of the world, and in particular the condition of the Western alliance, one cannot today but feel anxious and gloomy. There are signs of division and separation and public arguments and a general loss of that unity which existed when N.A.T.O. was first created.
  It is never easy for democracies to work together with the same unity as totalitarian regimes, but that is a reason for trying very hard to achieve unity. There is a desperate need at the moment for a lead which will both rally the democratic forces and restore unity and yet at the same time give the reassurance which we must give to the uncommitted countries that our policies are progressive and peaceful. I hope that the Government will give that lead or else make way for one that can and will.
  4.49 p.m.
  Captain Charles Waterhouse: The right hon. Member for Leeds, South (Mr. Gaitskell) has made a detailed and, I think, in many ways, an admirable survey. He talked of the need for a reassessment of policy but on that I think that he gave the House, not a lead, but rather an addition to our confusion, because in the early part of his speech he said that it was desirable to bring the Russians into consultation, Yet, when he was challenged by my hon. Friend the Member for Preston, North (Mr. J. Amery), the right hon. Gentleman said quite certainly that Russia should never interfere in any way with the oil in the Middle East.
  Mr. Gaitskell: If I may interrupt the right hon. and gallant Gentleman, I said that we should talk to the Russians but we should make it plain that we cannot tolerate Russian or Communist control of these vital areas.
  Captain Waterhouse: What I understood the right hon. Gentleman to say was that he intended to keep them out of those areas. However, we shall see what he said when the OFFICIAL REPORT comes out. The fact remains that the right hon. Gentleman gave the House a confused view of that most important subject, which I shall refer to again later.
  I was sorry to hear the right hon. Gentleman say that he thought Britain

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  had not got adequate Forces to deal with her responsibilities. It is a great pity that anybody in the position of Leader of the Opposition, and an ex-Chancellor of the Exchequer, should make that remark. I believe that our Forces are adequate for our responsibilities if they are properly used. The right hon. Gentleman spoke about the revival of nationalism. I agree that there is a revival of nationalism, but most of us will agree, too, that nationalism is a force which can be greatly over-emphasised. [HON. MEMBERS: "No."] Hon. Gentlemen opposite say "No," but they are members of an international party, so how can they say that?
  Another point made by the right hon. Gentleman was that we would come into conflict with international law, but I do not think there is any question of that. Certainly there is no international law which states or implies that we should leave Cyprus.
  There are four long-term considerations which make our interest in the Middle East vital. The first is that through the Bagdad Pact it is a great crescent against Russian or Communist infiltration and aggression. Secondly, it is one of the most important oil districts in the world, and this has been mentioned. The third, which has not been referred to in this debate but which from our point of view is of tremendous importance, is that it is one of the highways of the world; that we must have access through the Mediterranean and through the Canal. The fourth is that it is to our mutual advantage to get the peaceful development of nations in that area. These objectives are complementary, not destructive. They stand together, they reinforce one another. I shall deal first with the question of Russian activities.
  Russia has been turning the heat on there, and turning it on with a vengeance. I do not think that a few months ago, certainly not a year ago, the right hon. Gentleman would have suggested that Russia should be brought into consultation on the Middle East. Now, however, Russia's propaganda, large Russian missions in several countries, the Russian supply of arms via Czechoslovakia, the Russian offers of money, have all brought Russia into the picture.
  The right hon. Gentleman referred to the forthcoming visit of Bulganin and
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  Khrushchev. I take this opportunity of saying that I personally regret that this invitation was ever given. It is peculiarly embarrassing in this present connection, because I think I am right in saying that Iraq has banned Communism in her country and it must be confusing to the Iraqi to find that we, the principal partners in the Bagdad Pact—
  Mr. Greenwood: We are a democratic country.
  Captain Waterhouse:—should be asking these people to come here as honoured guests. It is one thing not to ask people but it is another thing to cancel an invitation once given, so I do not advocate that we should concel the invitation, but I do advocate that we should give them a courteous but cautious reception. I advocate that we should give them precisely the same kind of treatment as they give us in Russia. We should give them the very best of wine, the very best of food—and we should put microphones under their pillows and their plates, and we should have a batch of detectives keeping a sharp eye on them during the whole of their visit.
  A great deal has been said, and properly said, about the Bagdad Pact. Whether the right hon. Gentleman the Leader of the Opposition condemned it or not was not clear. He condemned it in parts, he commended it in parts. Those who support it are definitely our friends and our allies. We have friends who do not support it but those who are definitely and actively against the Pact I class equally definitely as our enemies.
  Mr. Emrys Hughes: India?
  Captain Waterhouse: I believe that we need to take a firm line today, both about the Pact and about the Middle East as a whole. As soon as one mentions being firm, the accusation of warmongering is made, but I do not look upon that as a fair comment. I believe that a firm statement about a fair position is most likely to avoid future friction. Therefore, I welcomed the statement made by my right hon. Friend the Minister of State that we intend to take and to maintain a firm line in the Middle East. It is firmness for which I ask now.
  Let me make it clear that by firmness I do not mean that it is best to take the

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  smallest man and hit him hardest. We have to be extremely careful. Here I agree with what was said by the Leader of the Opposition about our handling of Transjordan. We do not know what the position is there. I do not think my right hon. Friend knows. We do not know what is the position of the King, whether he is a free agent or whether he is not, or whether possibly there is a military junta, as happened in the case of Farouk and which is now in power in Egypt.
  We cannot prejudge this issue but, speaking for myself, I can say that I should welcome and support any clear-cut decision that Her Majesty's Government think it proper to take on the subject when the time comes. I agree in general that if our garrisons are to be reinforced, they should be reinforced from the point of view of security and not in any way from the point of view of overawing this small people.
  This morning I read in the papers a suggestion that if any action were necessary in Transjordan four divisions might be needed. I recollect that when right hon. Gentlemen opposite were in power and we had trouble in Abadan some of us in this House suggested that we should use some force. A gun boat was, I think, sent there. It was said then that two divisions would be necessary in Abadan. However, when the smoke cleared away and we could see the position more clearly, it was decided that two battalions would have been sufficient.
  I believe that some of our leading soldiers have a touch of the horrors. They seem to think that they cannot go anywhere, and do anything, unless they have overwhelming force. That was not the way in which the greatness of Britain was built. It is not the way it was maintained either in 1914 or in 1940. I hope that a sterner and more healthy view of the power of British arms will be taken by those responsible for the handling of those arms.
  I was disappointed by the fact that in an otherwise excellent review, as I respectfully thought it, my right hon. Friend the Minister of State never once mentioned Egypt. I feel that to have this debate without discussing Egypt, and without discussing Egypt carefully, is fantastic. I do not think the right hon. Gentleman
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  opposite mentioned Egypt either but, to my mind, Egypt is the key to the whole position.
  I suggest to the House that for the past 100 years Egypt has been a trouble maker in the Middle East, and that only for 50 or so years when Lord Cromer and other great Englishmen were asserting their power upon the government was Egypt tranquil, prosperous or really happy. But that is by the way. I suggest that Egypt is the trouble maker and has been the trouble maker of the Middle East for a long time.
  Today she is using anti-Judaism not because she really is very anxious to support the Arab League in that direction but because she believes that by taking that direction she is most likely to get the support of the Arab League, which is a very different thing. Egypt is using her Arab friends. She is not acting even for her own good, and much less for their good. She is stirring up hatreds where no hatreds existed, and anybody or any country doing that is rendering a disservice to mankind.
  In Abadan, in the Sudan originally and in the Sudan in the last 12 months, Egypt has had a baneful influence. Nobody could possibly acquit her of her part in the mutinies in the South. To what extent her agents were stirring up trouble in the Kosti area I just do not pretend to know. In Libya, Syria and now Jordan, we see the hand of Egypt.
  Egypt herself is in breach of treaties. I will not go back to the old discussion, so the House need not be nervous about that, but I would remind the House that when right hon. Gentlemen opposite were in power they took the matter of the freedom of the Suez Canal to U.N.O. I found that on Resolution No. 558 of the Security Council there voted eight in favour of condemning Egypt and none against, with China, India and Russia abstaining. The resolution called upon Egypt to terminate the restrictions on commercial shipping through the Canal. Does that resolution mean nothing? That resolution having been passed, does it not mean that anybody who fails to obey it is breaking the rules of U.N.O.? Did not right hon. Gentlemen opposite take the trouble to find out what would be the position before they took the matter to U.N.O., or did they take it there because they wanted

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  to shelve it and take no action on it? Whatever the reason may be, the situation is a very grave misfortune.
  Egypt should be told, and told clearly, by somebody—if U.N.O. will not do it, I think the British Government must do it—that the Suez Canal is going to be free and that in future there will be no further interference with British shipping or any other shipping in the Suez Canal or the Persian Gulf.
  The Minister of State said that we have no intention of abandoning any of our friends. That is very good news indeed. I hope my right hon. Friend will repeat it and I believe that he will carry it out.
  I look upon Egypt as an enemy. I feel that the time for turning the other cheek to our enemies has passed. At some point we must have the courage to say that we disagree with a nation in an action that it has taken. Britain is still powerful, and on occasions our strength must be used.
  If I have carried any weight in the House in what I have said about Egypt, I urge Her Majesty's Government to make a statement as clearly as they can condemning Egypt's action in blocking the Canal, and her general conduct in the Middle East. I would remind the rulers of Egypt that Nahas Pasha has gone, King Farouk has gone, and in the not too distant future we may find that Colonel Nasser will not prove an exception to what has become the rule of quick departure in recent years.
  As the right hon. Gentleman said, the position in the Middle East as a whole is gloomy and difficult. I do not believe it is desperate, but I do believe that it is absolutely essential that Her Majesty's Government should make it clear just where they stand, and having decided the policy that they are going to adopt, should carry it through even in the face of unpopularity at home and at some cost abroad.
  5.7 p.m.
  Mr. Neil McLean: Mr. Speaker, it is extremely difficult to make a non-controversial speech about such a controversial part of the world as the Middle East. If I should stray and make some remarks that might be thought controversial, I hope the House will extend to me the indulgence which is usual when
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  hon. Members speak in the House for the first time.
  I thought that the Minister of State made clear the broad lines of our policy. I was especially glad to hear him say that we should support our friends in the Middle East.
  I feel, however, that there is still a certain amount of confusion about what is actually going on in Jordan today. Like many other hon. Members on both sides of the House, I was shocked by the abrupt and discourteous way in which General Glubb was dismissed by the King of Jordan after so many years of loyal service to the Hashemite kingdom, but I was not in the least surprised. I think that many of us saw some such event coming.
  We ought to ask ourselves whether the hand that removed General Glubb was the same hand that killed or organised the killing of King Abdullah in one of the most holy places of the Arab world. Was it perhaps the same hand that pushed out King Farouk and brought Nasser to power or, at least, was behind that coup d'etat? Even if it was not perhaps the same hand, it might well have been. And the same forces that brought Colonel Shishakli to power in Damascus at about that time. I wonder whether that hand belonged to the Mufti of Jerusalem or at least one of his henchmen.
  We do not yet know whether the young King of Jordan took the steps he did under compulsion from a group of free officers who delivered an ultimatum to him that he must act in this manner, or whether it was upon his own initiative that the King took this action to forestall such an ultimatum. Perhaps we shall know in a few weeks' time. We ought also to ask ourselves what have been the roles of Egypt and Colonel Nasser during these last few days in Amman. Colonel Nasser has openly said that he wishes to have a unified Arab command of which the Arab Legion will form part; and up his sleeve, he has in Cairo an extremely able, potential Arab Legion commander.
  In any event, these happenings in Jordan are a grave blow to British prestige. This blow to our prestige has been underlined by events that followed in the Bahrein area which we thought we had under complete control.

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  King Hussein and the Jordan Government have said that they desire to continue their friendship with us and to continue the Treaty and we should heartily welcome these statements. The reasons, however, that the King and the Jordan Government have given for their dismissal of Glubb Pasha give cause for grave disquiet and I fully agreed with the Leader of the Opposition when he voiced the anxiety that the policy of the Jordan armed forces and of the Jordan Government may become increasingly hostile to Israel.
  Indeed, they have already made their intentions towards Israel clear when they said that their reason for dismissing General Glubb was that he did not follow a policy sufficiently active or hostile to Israel. That was also one of the reasons why King Abdullah was killed. Now there is news that they want recruits for the Arab Legion from the West bank of the Jordan. One can imagine what would be the feelings of these new recruits from the West bank who, if they were in the Arab Legion, looked from their outposts across the frontier at their own villages and farms on the other side. One can imagine the temptation it would be for them to commit raids across the frontier. So I believe there is grave danger of increased hostilities along that frontier.
  More frontier incidents could lead to fighting between Israel and Jordan—two States of which this country is the parent. We founded Jordan, and in the founding of Israel my right hon. Friend the Member for Woodford (Sir W. Churchill) played a prominent part. How can we say that we are not responsible for what happens between those two countries when we created both? Indeed, in addition, should there be hostilities between those two countries I believe we shall have an extension of the conflict and that the great Powers will be dragged in too.
  I believe that we still have the power, the right and such great interests in the Middle East which allow us to play if not an overwhelming role, at least a decisive rôle in determining what will happen in that area. We have a base in Cyprus, a Colony at Aden and treaties with the sheikhs along the Persian Gulf. We also have air arrangements with Iraq, and the Bagdad Pact and so on. We still have tremendous power in the Middle East.
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  We certainly have the interest of our own future, staked in the Middle East through its oil, and strategic position lying across our communications with the Commonwealth.
  I feel that we have a moral duty as well as power to play the decisive, although not the unique rôle in the Middle East. The Prime Minister's speech at the Guildhall, which has been deeply misunderstood, was an effort by the Prime Minister to put vital questions to these people in the Middle East. It was an initiative to make them see what is happening in their own part of the world. That is the kind of courageous leadership which this country should give.
  The little country of Jordan, which is our ally, holds a strategic position in the Middle East, lying between Egypt and Iraq, the two great centres of the Arab world, and it also possesses the finest Arab military force in the world. The Daily Express wishes us to cut our losses in Jordan and withdraw the subsidy, but I believe that that would be a great error on our part. Jordan itself is not a viable country and Egypt or Saudi Arabia would get control of the Legion, or it might lead to the partition of Jordan. There are others who believe that we should have what is called a firm policy. But I believe it is possible to have a firm policy only if we have an Anglo-American policy; otherwise such a move might create trouble rather than anything else.
  The Leader of the Opposition put his finger on one of the main difficulties when he said that we must put a stop to the oil war which is now going on in the Middle East, and talk with the Americans to that end. At present, unless we can get a joint Anglo-American policy, the confusion will increase and also the Russian intervention will increase to such an extent that whether we ask the Russians to come into the Middle East at the conference table or not, they will in fact be in there. As my right hon. Friend the Minister of State said, we should stand squarely behind the Tripartite Declaration. I am glad that my right hon. Friend said that in Washington talks are going on to see what measures should he taken, and I hope that in those talks there will be discussions with the general staffs of Jordan and Israel about the military measures to be taken, if the situation makes them necessary. There

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  might also be discussions with the Egyptian Government about the possibility of reactivating the Suez base, if there is a further worsening of the position.
  I also very strongly support my right hon. Friend's view that we must stand squarely behind the Bagdad Pact. That is absolutely vital at this stage, and in the future, for both defensive and economic reasons. So it is with our commitments in the Persian Gulf. At the same time we should firmly ask our American friends—and the Prime Minister has great influence with the Americans—to advise the Saudi Arabian Government not to use the power and the money they get from their oil royalties in such an irresponsible way. We can point with a certain amount of satisfaction to the way we have advised the sheikhs in the Persian Gulf how to spend the money they get from oil royalties.
  I have already taken too much time in this debate and, as a maiden speaker, I do not wish to continue for too long. But, before concluding, I should like to say a few words about the Arab peoples. The Arabs are awakening. There is a tremendously strong force in Arab nationalism. In the development of this movement Egypt must undoubtedly play a great, perhaps the leading, role. But I feel that our Egyptian friends and the Egyptian Government must realise that admiration for Egypt is not the same thing as love for Egyptian imperialism.
  We should also point out to Colonel Nasser and other Arab nationalists, who feel so strongly on certain matters that they take arms from the Russians or make an alliance with the Communists, the dangers in this course, because the Soviets are only using them as an instrument of Soviet policy. It is very important that the Egyptian Government should not be confused about these two matters and we should tell them by all the means in our power including the Press and radio of the dangers for them of following these policies. I should also ask them to look round at the fate of the Crimean Tartars and the other Muslem minorities in the Soviet Union and ask them if they would like one day to share the same fate.
  The crux of the problem in the Middle East lies here in this country where the final decision still rests about what can
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  be done. We are perhaps not the most powerful nor the only country interested, but we are probably the only country which is at present really in the position to take a decision. One of the decisions we have to take is whether we wish to stay in the Middle East or not. To stay is unpopular, difficult and even dangerous. To go would I believe be disastrous both for this country and for the people of the Middle East.
  Perhaps I may quote an Arab story told about the last Arab Sultan of Granada. After he had lost the town to the Christians, he went with his mother up to a hill overlooking his capital and cried, and she said to him, "Well may you weep like a woman for what you could not defend like a man." Let that never be said of us in this country.
  5.20 p.m.
  Mr. E. Shinwell: The hon. Member for Inverness (Mr. N. McLean) has earned the high commendation of the House for his admirable speech. Both in substance—although we may not all agree with what he said—and in delivery he displayed a confidence and a considerable knowledge of his subject. I am sure I express a view which will be held in all quarters of the House when I say that he will be heard in the future with eager expectation.
  If there is anybody who can extract any satisfaction from recent events in the Middle East, or, for that matter, who wishes to make unnecessary party capital out of those events, that person is rendering no service to the United Kingdom. The position has been slowly deteriorating. Our prestige in that area has been gradually diminishing. I recall an observation made by the right hon. Member for Woodford (Sir W. Churchill) on one occasion during the lifetime of the Labour Government when he visited the United States and made the comment that this country had never sunk so low. It seems to me, certainly so far as the Middle East is concerned, that our prestige is about as low as it has ever been.
  I am bound to say that for myself, whatever others may say, I derive no satisfaction from that situation. I imagine that all of us are anxious to preserve the interests of the people of the United Kingdom. In whatever way we advance our views and claims, and despite differences, that is our avowed purpose—or

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  at any rate, it ought to be. So I first address myself to this subject by making the confession that I have become more confused than ever after listening even to this early part of the debate.
  Let me furnish an example. Demands are made, and I am fully associated with the demands, that we should utilise the provisions of the Tripartite Agreement in order to prevent anything in the nature of aggression as between the Arab States and Israel. But I am unable to understand that demand in association with the inhibition regarding the use of adequate forces in order to implement the provisions of that Agreement. It seems to me that there is some confusion of thought.
  If, when we speak of implementing the provisions of the Tripartite Agreement, we mean merely having talks and discussions and making our comments through diplomatic channels, it seems to me that we have had enough of that and, on the whole, such action has proved unsuccessful. But if we mean implementation in a realistic sense, then, clearly, at some time or other it may be necessary, whether we like it or not, to exercise the use of force. It is of course regrettable, costly, imposes vast burdens on the people of the United Kingdom, and in the end, may not prove successful. But it seems to be the logical sequence to the demand that we should use the Tripartite Agreement in order to deal with aggression.
  There has also been some talk about the need for injecting into the Arab countries more economic aid rather than military help. At first sight, that seems to be the right course to adopt. But we should reflect on the fact, which was established by the Minister of State in his speech this afternoon, that in the past ten years we have spent the round sum of £70 million in Jordan, to say nothing of vast sums which have been expended in other Arab countries over a long period of time. And when we ask ourselves what has been our reward, what has been gained financially, diplomatically, physically or even in the sphere of defence, it would appear, to put it quite bluntly and even vulgarly, that nearly all of that money has gone down the drain.
  It might have been far better had a substantial proportion of the sums expended in the Arab countries been
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  devoted to the development of the backward countries and, in particular, our Colonial Territories. However, the money has been spent and therefore we should exercise considerable caution before we inject further sums into the Middle East.
  It occurs to me that the Aswan Dam project, which I understand is to be financed substantially by the United Kingdom, is a matter which requires very careful examination, because we might find at the end of the day that we have imposed further financial burdens on the taxpayers of this country and that Egypt, having gained what she wishes, may "cock a snook," at us in precisely the same fashion that King Hussein and his advisers have done.
  Viscount Hinchingbrooke: Is the right hon. Gentleman really saying that the British taxpayers are going to provide the money for the Aswan Dam, because that is very serious? We have heard nothing of that kind.
  Mr. Shinwell: If a financial contribution is to be made by the United Kingdom, I do not understand how it can come out of any other pocket but that of the British taxpayer, even if it is in the form of a loan. If we have to provide credit for the purpose, we have in the long run to pay part of the bill. I stand to be corrected, though, if we are not to provide some form of financial assistance, I do not see how the Aswan Dam is ever to be completed. However, the Noble Lord the Member for Dorset, South (Lord Hinchingbrooke) has a much more profound knowledge of finance than I possess, and I shall be glad to hear his contribution on that subject. Or perhaps at the end of the debate the Prime Minister would advise us whether we are to be penalised in any form as a result of the construction of the dam. It is not completely relevant to the subject at issue, but it has a bearing on it.
  That leads me to the question whether we ought to withdraw our subvention from Jordan or continue to provide it. Before we do continue it we should have definite guarantees that Jordan will not play another trick of the kind which has just been perpetrated in the dismissal of General Glubb. In his statement the other day, the Prime Minister advised the House that matters were not quite so gloomy, because our relations with Jordan

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  would remain friendly; indeed King Hussein and his advisers had given a guarantee to that effect.
  The Prime Minister (Sir Anthony Eden): I referred to guarantees, but I said that I took a very serious view of the situation.
  Mr. Shinwell: At any rate, the Jordanians have themselves said that they are anxious to continue friendly relations. This reminds me of the old saying:
  "It is all very well to dissemble your love, but why did you kick me downstairs?"
  They seem to be saying, "We have the greatest feeling of friendship for the United Kingdom, but get out as fast as you possibly can." It is just not good enough.
  What conclusion do we reach from a consideration of the policy which has been continued over a long period of years? Surely it is that we have been at the mercy of the pro-Arab elements in the Foreign Office. I hope that this will cause no offence, but if it does it cannot be helped. The Prime Minister himself has been accused of being a party to this philosophy. I do not want to accuse him unduly, for, Heaven knows, he has been attacked by nearly everybody recently, and whenever anybody is being kicked around I feel that I want to come to his assistance.
  Mr. Kenneth Pickthorn: The right hon. Member and Lord Beaverbrook between them would be the end.
  Mr. Shinwell: I did not hear what the hon. Gentleman said.
  Mr. Pickthorn: I said that the right hon. Gentleman and Lord Beaverbrook between them would be the end.
  Mr. Shinwell: I do not know why I should be associated with Beaverbrook. It is bad enough being associated with some hon. and right hon. Members of this assembly. Lord Beaverbrook would be the last word.
  I repeat that the right hon. Gentleman has sometimes been accused of associating himself rather unwisely with pro-Arab elements. At any rate, one thing which is clear beyond a peradventure is that we have expended vast sums of money and have rendered considerable assistance to Arab countries, gaining very little in return.
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  On the other hand, so far as I am aware we have rendered no financial assistance to the State of Israel. Instead of helping them we have impeded their development. They have gained nothing from us at all. Now, when they are in a state of dire distress; when they have a feeling of insecurity, and when—as has been admitted by Government spokesmen, and is generally accepted; it has been said over and over again by Arab leaders—they are imperilled by their Arab neighbours, the United Kingdom Government, which bear the primary responsibility for the creation of the State of Israel—going back to the Balfour Declaration and the progress made throughout the years, culminating in the Mandate—refuse to render the essential needs which would give the people of Israel the sense of security which is so desirable in the circumstances. In my view that is the principal argument against Government policy in the past few years.
  Some time ago the right hon. Gentleman made a statement to the effect that he did not anticipate any trouble between the Arab countries and the State of Israel.
  The Prime Minister indicated dissent.
  Mr. Shinwell: That is my recollection. Indeed, I think it is on record that Members of the Government have said, "There is going to be no trouble, or, at any rate, if there is, we shall be able to deal with the situation. There is the Tripartite Agreement. We are ready to enter into consultation with Colonel Nasser. That admirable gentleman does not really mean to be bellicose, although he sometimes expresses himself in a belligerent fashion." All those statements have been made from time to time.
  I believe that the present situation as between the Arab States and Israel is worse than it has been since the end of the Palestine war. I am satisfied that the people of Israel hold that view. It has been expressed by Mr. Ben Gurion, the Prime Minister of Israel. In spite of the fact that he seeks to restrain the activists in the State of Israel—who wish to come to grips with the Arab countries now, when they believe there is a possibility of their gaining at any rate a temporary victory—he has himself said, in response to some of the bellicose statements uttered by Arab leaders, "They speak in

  2151
  terms of war; let them try." That is very dangerous indeed.
  The question is, what is to be done about it? I try as hard as I can to follow the various statements made by hon. and right hon. Members. It may be that I do not understand the situation, but I try to do so. The Minister of State said this afternoon that if we provided arms for Israel we should create an even more tense situation. That has been stated in another form by others. It has been repeated over and over again. It has been said that if we provided arms for Israel in addition to what they presently possess it would only mean that the Russians would provide more, and before very long—the right hon. Gentleman himself said this—the Arab countries would have an overwhelming military superiority and the State of Israel would be rendered helpless and hopeless.
  Mr. Nutting: I did not say that if we provided arms to Israel that situation would obtain. What I intended to convey to the House, at any rate, was that if we provided compensating deliveries on the scale which is sometimes demanded, the arms race would be started.
  Mr. Shinwell: I do not know what the right hon. Gentleman means by "compensating deliveries." Nor, I suppose, do any of my hon. Friends, or even hon. Members opposite. Perhaps the Prime Minister will tell us what is meant by that when he winds up the debate. Has anyone ever asked that the State of Israel should be provided with arms equivalent to those which are possessed by all the Arab countries? Nobody has ever asked for that; indeed, the State of Israel would never expect it. What is more, they never could pay for it. Let that be understood. They could not pay even for 50 per cent. of what is in the possession of the Arab countries. All that is asked for is a reasonable balance.
  The right hon. Gentleman said, and I was surprised at him, that they were in balance. Will the Prime Minister be good enough to tell us in the most specific and explicit terms how many Centurion tanks have been provided for Egypt, for Jordan, as well as for Iraq and, it may be, for Saudi Arabia? For all I know we should include Syria and the Lebanon. How many for the State
  2152
  of Israel? How many jet aircraft have been provided for each of the countries concerned, and how many naval vessels? I know there have been some naval vessels.
  If we had the figures we should feel more satisfied. I know the right hon. Gentleman will say that it is not customary to disclose figures of exports of arms to other countries. That is only a pretext; I know what the right hon. Gentleman has on his lips, before he says it. He is going to quote what I said when I was Minister of Defence in a quite different situation. This is an exceptional situation. If it were not, we should not be having constant debates and what is regarded by everybody as a tense situation. That is the difference.
  Why should the giving of this information impinge upon security? We should be told in clear and understandable language how many of the different types of arms have been sent to each of the countries concerned? It is only fair that we should ask, and it is only right that we should know.
  Mr. Gilbert Longden: Why is the right hon. Member for Easington (Mr. Shinwell) so interested in parity of arms for Israel? He and his party supported the Tripartite Declaration, the object of which is to guarantee the frontiers of Egypt by Britain and the Americans. Why parity for Israel?
  Mr. Shinwell: I am not asking for complete parity. I have never done so. We are not asking that Israel should have possession of the same number and types of arms as those which have been accumulated in all the Arab countries. I am asking for a reasonable proportion and, in particular, for a reasonable number of jet aircraft.
  Mr. S. Silverman: I hope that my right hon. Friend will not allow the hon. Member for Hertfordshire, South-West (Mr. Longden) to get away with the proposition that the Tripartite Declaration consisted only of a guarantee of frontiers. If I remember aright, it provided expressly for maintaining some sort of general balance of armaments.
  Mr. Shinwell: If anybody supposes that we are not acquainted with the provisions

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  of the Tripartite Agreement he is wrong. The Prime Minister must now address himself to these matters. Does he really believe that the Tripartite Agreement can enable us to prevent trouble in the Middle East? He ought to tell us now. Is it to be as the result of conversations with Colonel Nasser, Jordan, Iraq the United States and France? What will be the nature of the conversations? Were these matters not discussed at Washington? We have heard very little about them. We ought to know, because much depends upon them. We want to be reassured that the provisions of the Tripartite Agreement, if they are to be exercised in a diplomatic fashion will be exercised with the utmost expedition to prevent the tense situation becoming worse. That is the first point.
  The second point is that, if in the judgment of the right hon. Gentleman trouble is to occur or he apprehends trouble, and the provisions of the Tripartite Agreement have to be expressed in military terms, he ought to tell us how that military force is to be exercised. I am going to tell him what I think, and he may not like it. I do not pretend that it will be agreeable to everyone. I would speak in the clearest and most definite language to the Egyptians and the others concerned. I would say to them, "We are just about as tired of this affair as we can possibly be." All this tension may touch off a war which at any cost we must try to prevent. It might lead to the loss of our oil supply, at any rate temporarily, and it could put this country out of action for a considerable time. [HON. MEMBERS: "No."] I do not want to exaggerate, but there is just the possibility that through some intervention, interference or suspension of oil supplies we might find ourselves with about five million people unemployed. That is a very gloomy outlook indeed.
  The right hon. Gentleman must take note of this proposal, and I am sure he will. Let him say to the Egyptians and the Arabs, "We speak to you in the most friendly terms. The whole purpose of the Tripartite Agreement is to express our friendliness and desire for peace, and our desire to bring the countries in the Middle East together to work out a sensible and wise conclusion of the difficulty. If you are not going to be peaceful, if you contemplate taking action one against
  2154
  another"—I should say this to all the countries concerned, including Israel, because we must treat this matter objectively, whatever our personal inclinations, and there must be no more nonsense—"we shall take whatever course we think desirable in order to prevent the use of force by any of the Middle East countries." I do not believe that the Arab countries understand any other language.
  Arab hostility against Israel is largely the cause of the trouble, but how can we escape from that situation? Is it to go on for ever? That will not ease the tension in the Middle East or help the United Kingdom. It will not promote better understanding among the nations of the world to have an incurable disease. Something must be done about it.
  Suppose we take no action of this kind. What will happen? The Minister of State suggested that there must be talks with the United States and France. I am all in favour of this co-operation. Certainly I am not anti-American. Even with Anglo-American co-operation the world is in a bad enough state. We are in a sufficiently crazy and disordered state without throwing overboard Anglo-American co-operation. That does not mean that we are not occasionally a little suspicious of Americans, and certainly in the context of the Middle East oil position.
  Of course, we cannot blame them. They want to control the oil, and we want our share of it. I do not know whether the right hon. Gentleman is aware that in 1946 I negotiated an oil agreement with the late Mr. Harold Ickes, Secretary of the Interior in the United States Government. The United States never ratified it, though we were ready to do so. I do not say that it was as good an agreement as I should like to have had. The right hon. Gentleman can get it in the Library, or, if he wants to buy it, I think it costs 6d. Nevertheless, it provided the basis of a possible agreement about the use of oil resources, not only in the Middle East, but in other parts of the world. It seems to me that we must come to some conclusion on the oil situation.
  Next, I want to say a word about what seemed to me—I hope I am right in this assumption—to be the principal argument adduced by the Minister of State in support of Government policy. As I understood it, the right hon. Gentleman started

  2155
  off his speech by talking about the Bagdad Pact. He said that we must stand by the Bagdad Pact and concern ourselves, not merely with its defensive implications, but also with its economic implications. I do not know that those words were received too graciously by some hon. Members on this side of the House, but I reminded myself that we had accepted the Bagdad Pact. I hope that will not make me any more unpopular than I am, but there is nothing like having a good memory when taking part in debates. That does not mean that I regard the Bagdad Pact as being as unalterable as the laws of the Medes and Persians, nor that I regard it as perhaps the finest piece of diplomacy that has ever been undertaken by this or any other Government.
  All the same, I believe that, in the context of what is happening in the world, it is just as important to have a pact in the Mediterranean as it is in South-East Asia or in Europe. If we are to object to a pact in the Middle East, of whatever kind and no matter who may be associated with it, we ought to object to the North Atlantic Treaty Organisation, and, of course, some people do, though I do not.
  I should be only too pleased to throw all these pacts overboard if we could only be assured that everybody would play ball, but the trouble is that we cannot be sure about it. Therefore, I am not going to accept from the Minister of State this argument that it is the Bagdad Pact which is responsible for much of the trouble, or that Jordan was annoyed because General Templer said something he ought not to have said. With great respect to General Templer, he is the last man I would have sent out on a diplomatic mission. He is a very fine soldier indeed, and I knew him both at the War Office and at the Ministry of Defence, but I would have got somebody a little less brusque, a little less straightforward and a little more diplomatic than him.
  I do not believe that the Jordanians are annoyed because we tried to drive them into the Bagdad Pact, nor do I believe that the Egyptians are annoyed because we wanted to drive Jordan into the Bagdad Pact and because we have already got Iraq in it. I am convinced of the truth of what I am now going to
  2156
  say. If there had been no Bagdad Pact, there would still have been trouble. What is the use of pretending otherwise?
  Next, what about the proposal that the Russians should be brought in? It seems to me to be a superfluous question, because they seem to be in already. If I might repeat the proverb, it is no use locking the door after the horse has been stolen. I think hon. Members will understand what I mean. Of course, some day we shall have to come to some arrangement with the Russians, not only about the Middle East, but about Europe and South-East Asia because, otherwise, we are going to have an insane world.
  Mr. S. O. Davies: When?
  Mr. Shinwell: I say to my hon. Friend that some day we shall require to come to some arrangement with them. We shall go on talking, and eventually, as a result of much talking, they will be ready to come to a conclusion of a reasonable kind.
  At the moment, I am bound to say that all this talk of bringing Russia in—and I hope there will be no misunderstanding of what I mean—for a final settlement or a partial settlement of the Middle Eastern problem, all this talk about the oil situation in the Middle East and what we have got at Kuwait and Bahrein and other places, all this talk about the Bagdad Pact, seems to me 10 be quite irrelevant to the situation that has been thrust in our faces because of what has happened in Jordan. We have to deal with the immediate situation, and I ask what is to be done about that? As a result of what has happened in Jordan, instead of a disciplined Arab Legion, it may be converted into an anarchic, chaotic and undisciplined force, and that will be a very dangerous situation. It may mean immediate trouble on the borders of Israel and Jordan, and we must guard against that.
  So I beg the right hon. Gentleman to address himself to the immediate situation, and ask if he will again consider this question of a treaty with Israel. The Minister of State did not make a very good job of the case when he suggested that a treaty with Israel would prove to be a disadvantage and might create further trouble. Let us have a treaty with Israel, if Israel agrees, but let us

  2157
  be very careful, because if we carry on in this fashion, Israel some day may say, "Mind your own business." If our position continues to deteriorate, everybody will say to us, "Mind your own business," so we must be very careful. There may be trouble in Libya and Cyrenaica, though I hope that none of these things will happen.
  If we have a treaty with Jordan, why not a similar treaty with Israel, which would offer them some measure of security? That is one consideration. The next is that we should speak in the firmest possible language to the Arab countries and let them know what our intentions are. There must be no threats, because if we threaten we shall have to act in certain circumstances. Finally, let us consider the position of Israel in the military sphere and provide her with some modern arms so that, if things should come to the worst, she will be in a position to defend herself.
  In my judgment, if Israel is provided with adequate arms and if the Arab countries—who because of internal troubles may have no desire for a major conflict—as a result of Israel possessing these arms, lay off Israel, then there is a possibility of working out a solution of the Middle East problem, because then we shall have the breathing space in which to undertake that task.
  6.0 p.m.
  Major H. Legge-Bourke: I should first like to congratulate my hon. Friend the Member for Inverness (Mr. N. McLean) on his maiden speech. I am grateful to the right hon. Gentleman the Member for Easington (Mr. Shinwell) for the words he used about that speech, but I think that all hon. Members will expect someone on this side of the House to refer to it and to say how very helpful we found that contribution to our debate. Secondly, I should like to associate myself most wholeheartedly with what my right hon. Friend the Minister of State had to say about Glubb Pasha and the deep regret we all feel at the way he has been treated.
  The speech to which we have just listened has, I think, brought to a head one of the most important failings in the debate so far. When we are discussing this sort of subject we should first find out what on earth a foreign policy is for. If the foreign policy of any country is
  2158
  not designed first of all to protect the vital interests of that country I do not think that that foreign policy will prove to be a very good one.
  What is this country's vital interest in the Middle East? Without any doubt whatsoever—and leaving aside the ordinary considerations of humanity—surely the vital interest is oil. If we lose our oil we shall not be able to survive as a great industrial nation. If we lose our oil we shall not be able to fulfil our rôle under N.A.T.O. or any other treaties to which we are signatories. The paramount consideration, therefore, must be the effect of this policy, and these happenings in the Middle East on our oil interests.
  I do not know how many hon. Members realise that unless the capacity of the Suez Canal—or an alternative to it—is very greatly increased by, say, 1960, we shall not be able to get enough oil into this country from that part of the world. It is, therefore, not merely a question here of considering only the effect on the sources of the oil but also the effect on our getting the oil to this country. From that I think there automatically flows this conclusion. The Bagdad Pact must be one of the first parts of our policy in protecting our oil. Indeed, it was for that purpose, I understand, that it was designed—to ensure that our oil interests were properly protected in that part of the world.
  Whether or not that was the original idea, it certainly seems to me that that should be the Pact's main purpose now. As the right hon. Gentleman the Member for Easington quite rightly said—and I agree with him absolutely—it is not a question of bringing the Russian's in; they are now exercising their interests in the Middle East. The importance of the Bagdad Pact, therefore, becomes even greater—to ensure that the Russians do not interfere either with the sources of the oil or the lines of communication necessary to get it to this country.
  What has all this to do with the dismissal of Glubb Pasha? The first thing we have to face is that the Bagdad Pact will make no sense for very long if we do not have a considerable backing for it from Arab countries—not necessarily all the Arab countries but as many as possible. Criticism has been levelled against the Government from the other side to the

  2159
  effect that it was unwise to send General Templer to Jordan. I now happen to have as my own doctor the medical officer who treated General Templer when a piano fell on him during the war. I understand from my medical adviser that certainly the tones which flooded out of General Templer could hardly be called harmonious on that occasion.
  However, we all know that General Templer is a very fine soldier, and that he is deeply respected for his military knowledge and the work which he has done in the Far East since the war for this country. It can only be sniping with no good intent to suggest that sending General Templer anywhere is likely to make things more difficult. I deeply regret some of the things said about him today. It is most unfortunate to suggest that the Government were wrong in sending their head soldier, if one may put it that way, to consult with Jordan, to decide what Jordan's part should be, and what its relationship to the Bagdad Pact should be.
  The fact that all this other trouble has blown up at the same time I do not attribute to General Templer's visit. As I think my right hon. and gallant Friend the Member for Leicester, South-East (Captain Waterhouse) said earlier, this is a long chain, it goes back a long way—one might almost say that it goes back to the days of Lord Cromer. It is a process which has been going on in the Arab world—the Arab awakening has been taking place. What has happened, surely, is that certain undesirable forces—undesirable from this country's point of view—have tried to take charge of that awakening and of that movement.
  I have never regarded Egypt as an Arab country—it is a conglomeration of a good many races—but one of the things at which Egypt has always been extremely good is intrigue in high places. I do not suppose for a moment that Egypt has not had a good deal to do with what has recently happened in Jordan. I am quite prepared to believe, however, that she may not be the prime mover. It may well be that, as my hon. Friend the Member for Inverness has said, the Mufti in Jerusalem is behind this.
  A point important to realise is this. It is quite possible—and I believe likely—that King Hussein is not his own master
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  in what he is doing. I must not give away secrets, but I do happen to have some knowledge of the complications which are involved when the king of a foreign state has done something which has annoyed this country and about which this country feels obliged to take action. I have knowledge of that in this part of the world we are talking about. All I should like to impress upon the House is that I believe that the one thing we must avoid doing if we possibly can is to make it more difficult for this present King of Jordan to keep control of the affairs of his country.
  It is perfectly true that he has slighted this country, that he has slighted General Glubb and has slighted Her Majesty's Government. It is perfectly true that he has done all those things—and I certainly deeply deplore and regret that he has done them—but I still ask this question. If we take action which makes it impossible for that man to remain as ruler of Jordan are we quite certain that the alternative will be any better? It is equally possible that the alternative might be very much worse. Will it really be very helpful to our vital interests—and that surely should be our point of view—to take any action which is likely to throw the State of Jordan into chaos?
  I believe that the State of Jordan is in a very dangerous position at the moment It is subject to many pressures whch are thoroughly alien to Jordan's own interests and certainly damaging to Britain's vital interests Therefore, it seems to me that the one thing which Her Majesty's Government must avoid doing if they possibly can is anything which would make it more difficult for law and order to be maintained in Jordan. To do anything like that would not help the Bagdad Pact.
  Viscount Hinchingbrooke: Could my hon. and gallant Friend give an example or two of the sort of action that might throw Jordan into chaos? I agree that we must avoid that.
  Major Legge-Bourke: I will try to help my noble Friend on that. I would say that one thing that might very greatly embarrass King Hussein would be troop movements by this country which could be construed—which might not be intended to be but which could be construed—as an attempt by this country to

  2161
  protect King Hussein from his own people. There is that risk if we take the action suggested by some of my right hon. and hon. Friends with whom I have been associated in the past, and it would be a pity if that risk were to be taken.
  I assure the Prime Minister that I heartily welcome the righteous indignation of his statement in the House the other day and strongly recommend that he should be very firm in his dealings with these matters, but I hope he will realise where the real culprits are and will be most careful to ensure that undue action is not taken against a man who may be quite defenceless and may not be his own master.
  It is always unpleasant for this country to suffer insults, and hon. Members well know that on other occasions I have advocated taking more forceful action than that which the Government have taken. We are now, however, seeing how true is the quotation from Lord Cromer which I made at the time of the Suez evacuation and how accurate it has been about Egypt. Perhaps I may remind the House of it. [-le wrote, about 1908, about leaving Egypt:
  "All we have to do is to leave behind us a fairly good, strong and above all things stable Government, which will obviate anarchy and bankruptcy; and will thus prevent the Egyptian question from again becoming a serious cause of trouble to Europe…But it is essential that, subsequent to the evacuation, the Government should, broadly speaking, act on the principles which will be in conformity with the commonplace requirements of Western civilisation."
  The next is the most relevant part:
  "If England did not interfere some other Power would do so."
  Has not Russia interfered?—
  "Of the many delusions which at one time existed about Egypt, the greatest of all is the idea that England can shake herself free of the Egyptian question merely by withdrawing the British garrison and then declaring to the world that the Egyptians must get on as well as they can by themselves."
  The final words of the book are in Latin:
  "Quod regnas minus est quam quod regnare mereris."
  I take that to mean that it is infinitely more important to deserve to rule than it is to worry about what one is ruling.
  In our creation of Jordan as a State and our creation of the State of Israel, we have surely deserved better treatment than we have had from that area. Right hon. and hon. Gentlemen opposite seem
  2162
  badly divided today on what they want to happen in this area. When they say that the first on their list of priorities is what happens to the State of Israel, I think they are plumb wrong. I have tried to show today what I believe is our vital interest. If we are to worry about Israel first, before out own interests, we shall lose the most vital interest of all.
  I agree that we must stand by the Tripartite Declaration, but how many people in this country realise what that Declaration means? It means, if it is called into force, that British troops will have to fight on behalf of Israel against the Arab people.
  Mr. Arthur Henderson: Or vice versa.
  Major Legge-Bourke: I was dealing with the situation if Israel is attacked. I am grateful for the intervention, because I certainly support the view that it is equally possible that Israel may attack the Arabs; that risk exists, too. Do people realise what the Declaration means?
  Do we not deserve a little better understanding from the countries in that part of the world? Is it really in their interests and in the interests of right hon. and hon. Gentlemen opposite to state a case for Israel every time they can in the House and outside, forgetting what are our vital interests in this part of the world and forgetting that if we alienate the Arab world and our oil supplies are interrupted, and that if we undermine the Bagdad Pact, we may very well go down as an industrial nation and suffer miseries which will make anything which happened in the 1931 slump period pale by comparison?
  Those are the real issues involved. I fully understand why my right hon. Friend cannot make a full statement today, but I hope that in the studies which he is making he will bear this paramount issue in mind. Our vital interest must come first, however, much as we may be anxious to preserve other people's vital interests. Moreover, we cannot do everything. Secondly, the danger to our vital interests is not always the one which seems most obvious in the light of the news of the day.
  In this instance, the position of little Jordan and of that pathetic King of Jordan is one which ought to have our compassion rather than our wrath, and

  2163
  we should turn our attention to coping with those who are undermining the British position in the Middle East. Those people, I believe, are Saudi Arabia and Egypt, the Soviet Union and—I regret to say this, although I think we must say it—certain private individual interests emanating from America. I deeply deplore that. I do not believe that the White House has anything to do with it, for I believe that it arises from private commercial interests. It is a great pity that it is happening.
  I believe that the quickest solution to the problem in this part of the world is for the United States to join the Bagdad Pact; half our troubles would then be over, if not all of them. I therefore ask that very possible effort should be made to persuade the United States, if they want peace as we want it and if they want our vital interests in this part of the world, which are also theirs, to be protected, to play a far more substantial part in helping the Bagdad Pact on its way.
  6.19 p.m.
  Mr. Christopher Boyd: I agreed with some of the remarks which were made by the hon. and gallant Member for the Isle of Ely (Major Legge-Bourke) and disagreed with others, but today I am supposed to be non-controversial and I had better not refer to individual remarks or speeches by any other hon. Member. I share the feeling of another new Member who said that he had nothing uncontroversial to say in this House. If I succeed in avoiding provocation of hon. Members opposite, I suppose it is likely that I shall only provoke my hon. Friends instead.
  The first positive suggestion I wish to make is that we should be extra careful in this topic of the Middle East to keep in very close consultation with other member countries of the Commonwealth. We in this country and other Western countries have more opportunity to be acquainted with the Israeli point of view. India, Pakistan, and other countries with considerable numbers of Moslems living in them have more opportunity to hear the Arab case. It does appear to me that if our Commonwealth is in very close consultation together it might be in a position to evolve a very fairly balanced view as between the interests of both
  2164
  sides in this dispute between Israel and her neighbours.
  I think that has a relevance to the Bagdad Pact. Some members of the Commonwealth are outside the Pact and others are in it. I do not think that Pact is a conception to which we can legitimately object, but I do not think Britain is in a very good position to take a prominent initiative in trying to persuade other countries to join the Pact. That could be more appropriately done by and would be much easier for countries like Pakistan, Iraq, Turkey, and Persia—countries which are close to the spot and are in touch with modern trends of opinion and sentiment in that part of the world. It is more appropriate that they should take a lead in that sort of development and in any attempt to persuade other countries of the possibility of joining that Pact.
  I want also to suggest that we should try not only to keep in touch with the Commonwealth but also with a much wider circle of other nations. I think this is very much a subject into which we should try to draw the United Nations to a greater extent. I was glad to hear in the speech of the Foreign Secretary last week that he seems to be moving a little more in that direction. From the speech of the Minister of State this afternoon, it seemed that there are to be consultations with the Secretary-General in order to try to increase United Nations participation.
  I hope it will be possible for this country to take the initiative in persuading the Security Council to strengthen the observers along the frontier, irrespective of whether General Burns advises in favour or against. It is not really fair to impose on public servants—civil servants, or military servants—the burden of expressing a policy opinion on a political question such as whether it is desirable to strengthen those observers or not.
  I hope the suggestion will not be dropped but will be examined very thoroughly to see whether it is possible to establish a United Nations force in some suitable part of the district, perhaps near the border between Israel and Egypt, as has been suggested.
  In any strengthening of United Nations action in the Middle East, we have to remember that these problems are not going to be over in a month or two, or

  2165
  a year or two, but probably will last for a decade or two or more. We might as well look at the longer run solution as well as tackling the immediate problem. I hope that it will be possible to build United Nations participation, which itself would cover us against a great deal of criticism for whatever part we may have to take.
  If United Nations decisions require enforcement and military power in that part of the world., no doubt in the near future that would fall largely on Britain as it fell largely on America in Korea to provide the necessary forces. We would be in a much better position to provide that power in that part of the world if first we had the authority of the United Nations behind us in whatever was being done.
  It is worth looking back for a moment over the pre-war period of the League of Nations. During its first ten years the League of Nations was fairly well utilised and did a great deal of useful work. In its second decade the enthusiasm fell away and the idealism evaporated. The League was neglected and each nation fell back on policies more similar to those which have been advocated by the hon. and gallant Member for the Isle of Ely. Each nation felt that it was sufficient just to think of its own rather immediate national interests; and in the pursuit of policies based on that narrower consideration it could not of course get so much co-operation from other nations whose national interests might be different, so that gradually the world fell to pieces until we had the Second World War. That kind of realism was not quite so realistic as it was held out to be by its initiators. I hope that in this second decade of the United Nations we are not going to repeat that sorry story.
  6.25 p.m.
  Mr. F. M. Bennett: With the memory of my own maiden speech still sufficiently fresh in my mind, I listened with considerable sympathy to the hon. Member for Bristol, North West (Mr. Boyd) going through that ordeal. I must say that I admired the sang-froid, the confidence and debating power of the hon. Member. Oddly enough, some five years ago when I made my maiden speech it was also on the Middle East. That was just one of those coincidences which seem to occur. I wish I could look back and
  2166
  be confident that I spoke nearly so well as the hon. Member did this evening.
  I have some extremely happy recollections of a time I spent in Jordan just prior to the assassination of the late King Abdullah, one of the best friends this country has had in that part of the world. I had the useful experience of seeing the Arab Legion in the desert in its encampments. No one who had gone through those experiences could have done otherwise than form an intense admiration for Glubb Pasha and the officers and men he commanded. I will confess, however, looking back now on that romantic and exciting episode—it is always easy to be wise after the event—that I think I can truthfully record that at the time I had the feeling that, exciting and romantic though the Legion was in its formation and serving under British officers, with all the glamour and efficiency that went with it, there was a little something of a past age in the particular way in which the Arab Legion was run in Jordan.
  I am not altogether surprised that some modification of our military leadership in Jordan has had to come about. Like every other hon. Member, I deplore the way in which it has been brought about, but I share completely the sentiments of my hon. and gallant Friend the Member for the Isle of Ely (Major Legge-Bourke) that it would be a tragedy if, because we bad this rebuff, we tried to take it out on Jordan, either on the King or on the State as such. If we have suffered a severe rebuff, we in no way recover merely by adopting an attitude of being tough, as some call it, with Jordan. That could lead to nothing but the loss of our remaining rights and interests in that country, and certainly making impossible the continued rule of a family who, basically, are friendly to this country and their replacement by something which I not only think might be somewhat worse, as my hon. and gallant Friend said, but which could undoubtedly only be very much worse than the present régime there.
  From comments in Jordan so far, it would appear that they do not regard what they have done—they are right in a strict sense—to have in any way abrogated or interfered with their defence treaty with us and our right to maintain bases on their soil. Although I appreciate that it must be the Government who have all the knowledge, I would say that it would be a pity now deliberately to

  2167
  wreck what remains of British interests in that country in order to pay out Jordan for having got rid of Glubb Pasha in the admittedly deplorable way that it has been done.
  I believe that when we look at the cause of what has happened in Jordan now, it would indeed not only be foolish for British interests but entirely unjust to try to pin the main blame on the Jordan Government or the Jordan monarchy. There are other much more powerful interests. The real troublemaker in the Middle East primarily to blame is the Soviet Union, which by any and every means she can utilise does everything she can to undermine British interests in the Middle East, as in any other part of the world, if she can find a medium for so doing.
  Secondly, there is Egypt. Egypt, other than the interference by the Soviet Union, is to my mind the real nigger in the woodpile, and from there a number of our, troubles in the Middle East are arising. I for one deeply regret and deplore that fact, because I was one of those who supported the Government on the line they took about the evacuation of the Canal Zone. I do not go back on that now—I still think that the Government had no other course open to them—but I recall the promises and assurances that were given by Nasser and other Egyptian leaders, in words rather reminiscent of another dictator, that this was positively their last demand and that if we came to an agreement about the Sudan and evacuated our troops from the Canal Zone, we could look forward to decades of close Anglo-Egyptian friendship and partnership.
  Although I was readily prepared at the time to accept those promises, I confess that in common with, I believe, a large number of other people who put their faith in Egypt, I now feel utterly betrayed. Since then, the Egyptians have by broadcast deliberately tried to disturb British interests in Kenya, where they can have no conceivable interest themselves. They have done their best to upset our interests in Libya and throughout the Persian Gulf, and, more recently, they have undoubtedly been doing their best to upset our interests in Jordan and Iraq.
  Egypt does not have the excuse that she is a dependent territory under British
  2168
  domination struggling to be free. Egypt is now—I saw the term used in The Times, and I could not think of a better one—an ambitious power seeker in that part of the world. She is not struggling to free herself from British domination but is struggling to exert the power of Egypt and its present rulers throughout the Arab world.
  I do not suggest that there are any measures by way of military or economic sanction as such that we could carry out against Egypt at the present time, but as an alternative we can at least wake up to the realities and all of us face the fact—which I, at least, have faced—that Egypt under her present régime is not a friend of this country.
  While not imposing force or sanctions against Egypt, we have no need constantly to woo her. I would go so far as to say that when she tries to blackmail us by saying that if we do not do this or that she will go to the Soviet Union for help in building up her country, we should tell her to get on with it and see how she likes it when she has got all the Russian people and technicians there. There is a limit to how far we should go along the road of continuing to woo someone who shows herself so singularly unwilling to enter into any form of partnership at the end of the wooing.
  Having said that in criticism of Egypt and Russia, I must go on to say, not only of the little trouble that is now appearing in Jordan, grave though it could be in its implications, but of the whole Middle East, that we cannot get away from what The Times published in its leader yesterday and today, to which one of my hon. Friends earlier has referred, that the root trouble of what is happening in the Middle East today is the friction between Arab and Jew and the natural resentment of the Arab world for the State of Israel.
  Almost before I was born, let alone began a political career, the Balfour Declaration was made. It is no good now regretting it or saying that it should not have happened—that would be merely to cry over spilt milk—but whenever I have been to the Middle East, far more important than fear of Communism, far more important than anti-West or pro-West feeling among the Arabs, has been a deep and burning resentment that the State of Israel has been imposed upon

  2169
  them. Unless we accept that this feeling exists and do not pretend otherwise or seek other causes for the basic unrest in the Middle East, we should be blinding ourselves to the true state of affairs.
  That brings me to what we should do now. I agreed wholeheartedly with my right hon. Friend the Minister of State today when he laid down our two lines of policy in the Middle East and said that nothing that has happened now should be allowed to interfere with them. First, there is the Bagdad Pact. I have been surprised that certain right hon. and hon. Members opposite should have criticised the Bagdad Pact and yet shown their sympathies towards Israel.
  As an Englishman, I have important reasons why the Bagdad Pact is not only useful but essential for our own interests, which is what I am primarily concerned with. But for hon. Members who have strong Zionist sympathies and who are, rightly or wrongly, concerned with the future of Israel as such, quite apart from this country's interests, I would have thought that a pact which was deliberately directing the energies and thoughts, economic and military, of the Arab countries away from thoughts of aggression against Israel and towards where the real danger came from, would receive a welcome from those same people in this country.
  Far from blaming this country or anybody connected with it, including General Templer, who went out there recently, I would say that the more we can do to maintain and extend the Bagdad Pact will not only safeguard our own interests, but will reduce the danger of the full Arab energies being diverted towards settling what is, however one may regret it, their present main purpose in life; that is, the extinction of the State of Israel. Therefore, for those who want to protect Israel as well as British interests as such, I would have thought that the maintenance of the Bagdad Pact and its improvement and extension was an equally common purpose which should be pursued to the best of our ability.
  Mr. Crossman: Is the hon. Member suggesting that we should seek to persuade another Arab country to enter the Bagdad Pact? The present difficulty surely is that only one Arab country has been willing to join it. Does the hon. Member say that we should get the rest
  2170
  of them in? These efforts so far have been the major cause of our disaster.
  Mr. Bennett: The hon. Member has only just come into the Chamber and did not hear the main part of my speech. I was not dealing with whether we should persuade any particular country to join the Pact. I was saying that our whole basis should be the support and extension of the Bagdad Pact. If any opportunity arrives by which we can convince others that they should join the Pact, such opportunities should not be passed aside by this or any other Government which subscribes to the Bagdad Pact. Whether at this moment we could get any other Arab countries to join is another matter. The mere fact that today it may not be possible to extend the membership does not mean that our policy should not be aimed towards maintaining and extending the Bagdad Pact as and when opportunity offers. That is my position.
  Mr. Paget: Would the hon. Member include Israel among the countries we ought to persuade to join the Bagdad Pact?
  Mr. Bennett: That proves the hon. and learned Member's misunderstanding of the Middle East situation. If at a time when everybody is saying that the Bagdad Pact needs to be supported and maintained he suggests a contribution to its success by putting in the one country which would lead to its entire break-up, that is hardly a contribution to the maintenance of the Bagdad Pact.
  Mr. Paget: Then who are the candidates? That is what I want to know.
  Mr. Bennett: I have made my position perfectly clear to those who have listened to me. I repeat that no opportunity should be lost to permit and encourage any other Arab country to join the Bagdad Pact; and if in due course it became possible, I would have no objection to Israel going into it. It is simply not practical politics in the foreseeable future, as I am sure the hon. and learned Member would agree, to get Israel in with Arab countries.
  Mr. Paget: Nor anybody else.
  Mr. Bennett: My right hon. Friend the Minister of State said that our primary interest was the maintenance of the

  2171
  Bagdad Pact, and I am glad that he made this point. Once more I stress that it is British interests with which I am chiefly concerned. I think that British interests are best safeguarded by that arrangement until we can think of a better one.
  My right hon. Friend went on to speak of our determination to stick to the terms of the Tripartite Declaration. That is perfectly right. As I have said, we may all have many regrets and worries about the past concerning Israel, but Israel now exists. Under the Tripartite Declaration we have given our word to both sides, and I support the Government enthusiastically in standing by obligations that we have already entered into; but I do not think any hon. Member who speaks in this House is speaking for one-tenth of the country if he thinks that it wants those obligations that we have already entered into to be extended any further.
  I do not believe that half the people of this country yet understand the extent of our obligations under the Declaration. It is no good making declarations in a democracy unless we feel fairly certain that we can carry the greater number of our countrymen with us in carrying out those military obligations. I do not believe that any Government in this country today could be at all sure of carrying the people with them if they entered into any further extension of our existing obligations there, unless it was as part of our membership of the United Nations.
  My final suggestion is in that context, that we cannot "go it alone" in any further extension of our obligations under the Tripartite Declaration. At this moment I am not at all sure that we are not already pretty far out on the limb, because whatever declaration America might make, the fact remains that unless Congress in due course consents the Executive cannot go to war in that area.
  As regards the third partner in this—France—she is already starved of troops and having to drain her European reserves for North Africa. I do not think that anyone can take seriously the military contribution which France can make to restoring peace in that area. Already Britain, extended as she is all over the world by her commitments, seems to have gone dangerously far in taking on a commitment to stop or bring to an end any war that arises under which the terms
  2172
  of the Tripartite Declaration could be invoked. I would not support any Government which went any further in "going it alone" and extending our obligations, although I would support any Government in carrying out our obligations under a general United Nations move.
  My final suggestion about the Arab-Israel situation, about the frontiers, the armistice and the vexed question of refugees is that it would be a good idea to go back to the United Nations and let the General Assembly, look again at this problem. I believe that, alone, Britain, France and America have carried this burden, which has become increasingly dangerous and difficult to bear, long enough. and that it is time that all the other nations which had full responsibility in the creation of the State of Israel were brought into the dispute, so that in this dangerous situation which is being created it is not Britain—and Britain alone, except for two slightly doubtful partners—which now has to carry a burden for which we do not carry the main responsibility.
  6.43 p.m.
  Mr. Clement Davies: Like the right hon. Member for Leeds, South (Mr. Gaitskell), I also regret that this debate was not opened by the Prime Minister. A very serious situation is arising. Not only are we anxious to know what the Government's policy will be, and not only is the country anxious to know, but I believe that the whole world is anxious to know, for the reason that throughout the world his known what a very prominent part we have played in the Middle East for many generations and how much the various countries in the Middle East owe to us.
  In truth it can be said that every one of the Arab States owes its independence, its position today, its whole economic position, as well as its political position, to the sacrifices which have been made by the Governments and peoples of this country. Without a doubt we have received a serious slap in the face, which has resounded throughout the world. We are all wondering what is the next step and what will happen. I should have thought it is only right that this debate should have opened with a statement by the Prime Minister saying, in no doubtful terms, what is the attitude that is

  2173
  now to be adopted by Her Majesty's Government.
  It is not merely that General Glubb has been dismissed in this manner. I do not know, and I do not suppose anyone at the present moment does, who was actually responsible for securing General Glubb's dismissal after his having given such faithful service for so many years. It may be, as suggested by some hon. Members opposite, that it was not the act of the King of Jordan at all and that he was merely the tool that was being used by other people. Whoever it was, it has undoubtedly resounded throughout the Arab world and caused tremendous anxiety and consternation throughout Israel. As I have said, the whole world is waiting to know what is the next step.
  We realise that the restraining influence undoubtedly exercised by General Glubb and by his colleagues who have been with him has now been removed, and therefore we are asking: why? and what is the next step? The hon. and gallant Member for the Isle of Ely (Major Legge-Bourke) very rightly said that we must consider first our own vital interest, and he suggested that our most vital interest was the securing of a proper supply of oil. May I suggest that there is an even greater interest than that—the preservation of peace. If there is a danger, as undoubtedly we all feel that there is, that the peace may be broken in that part of the world, it will affect us more vitally than anything else. I am sure that is also in the mind of the hon. and gallant Member.
  Major Legge-Bourke: I do not think we could possibly hope to preserve peace very effectively if we were deprived of our main oil supply.
  Mr. Davies: We all realise where the danger point lies. We all realise how the advent of Israel into that part of the world and the rise of that State has made enemies of all the Arabs who surround it. We all know that they have been arming against it and that they made an attempt to drive the Israelis into the sea before the Israeli State was even established. We all know about the uneasy truce that still exists. Efforts have been made to try to turn that truce into a permanent peace. So far we have unfortunately failed.
  2174
  As I understand it, we relied on the Arab Legion because otherwise I cannot possibly understand why we went on financing the Arab Legion and why we made it the strongest force, in the whole of the Middle East, as was said by the Minister of State today, unless we felt that it was to be used in the interests of peace and not in the interests of aggression. If it is otherwise, then one of the matters which the right hon. Gentleman claimed as part of Her Majesty's Government policy of consistency has gone to the winds, because it cannot be consistent with maintaining the sanctity of those boundaries and trying to maintain an equal balance between them, all the time pouring money into one to make it stronger than anyone else, unless we felt that with the restraining influence of the British officers that force would not be misused. That has been the position.
  Now we all realise that the danger is far and away more acute than it was a few weeks ago, when for the first time we heard of Russian intervention and their having gone, if I may use the phrase, "haywire" over the Tripartite Agreement. Now what is to happen. That is what we are all waiting to hear from the Prime Minister today. Quite obviously the situation is much too dangerous for us to wait for a long-term policy. As I understood the right hon. Gentleman the Member for Leeds, South—and I absolutely agree—there are two things which are desired: first, immediate action, an immediate declaration of policy telling everyone quite plainly where we stand, and, secondly, what should be the general guide to our policy for the future, so that peace may be maintained not only in the Middle East but throughout the world.
  I should have thought that the right thing to have done was to make it absolutely clear beyond any peradventure of any kind that any action of aggression now against Israel would be regarded as an illegal Act, and that the aggressor would have to deal with the United Nations and appear before it. We feel that we owe it now to the Middle East, to the fact that we were mainly responsible for bringing Israel into existence and that we were mainly responsible for the Tripartite Agreement, that we should say: We now guarantee Israel.
  If that statement were made definitely, it would be bound to have the effect that

  2175
  no one would dare to say, "All right we will take the risk and the consequences, whatever they may be, and we will start our attack." Now that the restraining influence has been removed, what are we to do in order to prevent some action being taken? I do not think that it would avail us at the present moment to move troops or anything of that kind, but we should make it quite clear that we would regard an act of aggression as being an act taken against ourselves.
  It has been rightly said that the country which has really been the main cause of the trouble in the Middle East has been Egypt, yet Egypt owes more to us than does any one of the Arab countries. I agree also with the hon. and gallant Member for the Isle of Ely (Major Legge-Bourke) that she is the least Arab of the lot and is a conglomeration of goodness knows what.
  We have poured into Egypt not only money but assistance of every other kind. We have given our best brains towards helping Egypt. One of the finest administrators ever sent out by this country to assist another was Lord Cromer, who found Egypt a desolate, bankrupt land and left it a fair and flowering land, bringing it once again into a position of stability.
  Instead of showing any gratitude, all the time Egypt has been doing her utmost to undermine us. She did so in both wars. When we were fighting for our life we were betrayed. Even now, when we have given up the defence of the Canal, when we have sacrificed all that we have done, what does she still do? In spite of the declaration made by the United Nations, in spite of her original undertaking that the Canal would be a free highway and that nobody would interfere with the movement of ships, she still interferes. It is time we made it plain that there is a moment when we say, "You have gone too far."
  If I may say so to the Minister of State, that is where firmness is really required. I gathered from the right hon. Gentleman that we have gone no further yet than stating that our policy is the Bagdad Pact and that by the Bagdad Pact we stand. But Bagdad is to the east of the danger point and, as far as I know, there is no danger there at present. The danger is west of Bagdad.
  2176
  Therefore I feel that there ought to be an immediate declaration about the danger point.
  Mr. Nutting: If I may interrupt, I did say that our policy was twofold, not in the singular, as the right hon. and learned Gentleman has said. Our policy is based on the Bagdad Pact and on the Tripartite Declaration. I re-affirm once again—and the Leader of the Opposition seemed to find comfort in my reaffirmation—that we should fulfil our obligations under that Declaration.
  Mr. Davies: I agree, but I feel that a mere statement made under the Tripartite Declaration has not been enough to act as a restraining influence. Something much more definite has to be stated. As I have said before in the House, the trouble was that emphasis was placed upon the wrong matter. The Declaration begins by saying that it is desirable that all should have weapons of defence. It then goes on to say that the three Powers will do their best to see that no one gets more than anybody else—putting it roughly—and that a fair proportion should be maintained between them.
  Having said all that, we then say—almost as if we add something at the end—by the way, no one must cross the borders of anybody else. Why I have asked for a more definite statement is that this is the important point and that emphasis should be put upon it, not upon arms. It was impossible for us to ensure that arms were not supplied by any other Power. We had no right to interfere, but we had a right to say that we would not allow aggression to take place there and that therefore the acquisition of arms by any one group would be useless. That would have been far and away more effective than the ineffective Tripartite Declaration which has been thrown to the winds.
  Mr. Nutting: I am sorry to interrupt the right hon. and learned Gentleman again, and I hope he will not think me discourteous. He said that the accent in the Tripartite Declaration was on arms and not on the maintenance of the existing armistice lines. The accent is equal throughout the Tripartite Declaration. I was not responsible for drafting it, though my predecessor was, but I can assure the right hon. and learned Gentleman that the accent is equal throughout the Declaration.
  Mr. Gaitskell: If I may also intervene, may I say that I am delighted to hear the right hon. Gentleman say that, because there have been occasions when it has been denied by the Government Front Bench that there was any obligation to maintain the balance of arms.
  Mr. Davies: That is why I am asking that a much more definite statement should be made, putting all the emphasis upon the maintenance of the present boundary lines. We all agree that those are temporary, but they are sufficient for the moment to stop aggression. What we are hoping is that there will be a round table conference when the final settlement is made. I realise that President Eisenhower and the Prime Minister have said that this is how we will guarantee those new boundaries, but what we are anxious about is to stop aggression today, which would mean that we preserved the peace.
  As regards general policy, I have long felt that the old-fashioned defensive agreements are of no use whatever today. That was why we welcomed, first in the Brussels Treaty, then in N.A.T.O., now in the Bagdad Pact, the importance not of coming to the assistance of one another when war breaks out, but of coming to the assistance of one another now, and doing so socially and economically as well as politically. That is the important point. Unfortunately, so much emphasis has been placed upon the sharing of burdens should war break out that, instead of achieving the effect which I know was in the minds of all those who entered into these agreements, namely, to cooperate with one another, a sense of suspicion and jealousy has been created in those who are not partners.
  I ask that all these pacts should be reconsidered. It is far better that people should be brought together voluntarily to assist one another, not when difficulty arises, but today when we are living side by side, when we are so dependent upon one another and need closer voluntary co-operation upon economic and social lines. That is the way to maintain the peace which we all desire.
  7.0 p.m.
  Mr. Rupert Speir: It is very desirable at a dangerous time like this that we should try to derive the benefit of learning all the lessons that we possibly can from recent events. It seems to me
  2178
  that we are still in danger of not having learned the lesson that a cold war is very largely an intelligence war. The Leader of the Opposition, in his concluding remarks, referred to the importance of improving our propaganda services. It is in order to emphasise the importance of giving attention to intelligence in all its forms at this very dangerous moment that I intervene in the debate.
  At present we are spending about £1,500 million a year on the armed Services, yet the Estimates for our intelligence services of one kind and another show that only a fraction of that amount is spent on them. I cannot help feeling that we should get better dividends if we spent more of that money on providing better intelligence services. I should explain that by "intelligence services" I mean intelligence in its broadest sense—the offensive services of a secret nature and the defensive services, with all the ancillary and propaganda organisations which go along with them.
  It is generally admitted that our intelligence services during the last two wars—they were very largely built up during the periods of those wars—were extremely efficient and effective, but as soon as the war is over we disarm and dismantle the intelligence services which have played such a very large part in our ultimate victory. I believe that we have gone too far in dismantling our intelligence services since the end of the last war, especially in view of the cold war which has since developed.
  In wartime we have a Minister of Information, a political warfare executive, a secret intelligence service, a security service, and the Special Branch, and we have many other methods of putting our point of view over to the enemy—and not only to the enemy but to other countries too, and particularly to neutrals: we also have good methods of obtaining information about other countries.
  It seems to me that the countries belonging to the Soviet bloc are spending, millions of pounds on these very services, covering both offensive intelligence and, defensive intelligence. They are telling other countries what they are doing and what their aims and intentions are, and they are also getting very good information about what is going on in other countries.

  2179
  I do not, of course, suggest that in peace-time and even in times of cold war we should use the methods which are employed during a hot war, but I suggest that the time has come for us to reconsider the whole aspect of intelligence in its broadest sense. Again and again, not only in recent weeks but also in recent years, it seems that we in Britain have been taken unawares. That was so in Malaya, in Korea, in Kenya and, more recently, in Cyprus. Having been taken unawares, it has then taken us many years slowly and painfully to build up our intelligence organisations in those places. I believe that if we had had better information in advance in all the places I have mentioned we should have avoided some of the troubles that we have to meet today.
  Consequently, I ask the Government to make sure that at such a time as this when economy in Government services is obviously of very great importance, we should nevertheless not economise falsely by applying an economy axe to our information and intelligence services. Far from expenditure on these organisations being curtailed, I would urge that the time has come for us to expand these services in order to be certain that we are informed of what is going on in foreign countries and that they are properly informed regarding our aims and objectives.
  If these intelligence organisations are to play their part properly and have an effective rôle in winning the cold war, which we all desire, it is obvious that more money must be devoted to them. This may mean more money for the B.B.C. Overseas Services, more money for the British Council, more money for the Foreign Office information services and more money for our secret intelligence organisations. Although an expansion of these services now will require the expenditure of foreign currency, I believe the money will be money well spent. I hope, therefore, that the Government have learned the lesson that a cold war is very largely an intelligence war, and will act accordingly.
  7.6 p.m.
  Mr. Arthur Henderson: Like my right hon. Friend the Leader of the Opposition, I had the opportunity last year of visiting Jordan and, on several occasions, of meeting General Glubb. I endorse what has been
  2180
  said by a number of right hon. and hon. Gentlemen on both sides of the House about the capabilities of this distinguished soldier. His abrupt and ungracious dismissal by the Government of Jordan after he had served their country for thirty-six years is difficult to understand, and this no doubt explains the shock which it has given to public opinion here.
  I had the same thing said to me by other Israeli leaders as was said to my right hon. Friend by the Israeli Foreign Secretary, particularly by those who had to deal across the frontier with the Arab Legion. The local commanders' agreement, which has operated under great difficulty along the 300 miles of frontier separating Israel and Jordan, has encountered many problems, but I was told that the attitude of General Glubb and the officers serving under him towards the Israeli local commanders had prevented a great many difficulties arising and had enabled difficulties which had arisen to be dealt with satisfactorily.
  There is no doubt that the confidence created by the fact that the Arab Legion was commanded by General Glubb may be seriously threatened by his displacement. On the other hand, I think there would be agreement—I heard this from a number of sources when I was in Amman last year—that strong feeling has been evident among the Arab officers of the Legion that they should secure the highest posts in a force 100 per cent. Arab. No one in this House will object to those aspirations. That to which we object is the way in which General Glubb was dealt with personally.
  The Glubb incident, if I may so call it, in a sense is merely symptomatic of a highly dangerous situation which has been developing in the Middle East during the past years. It is a situation which constitutes a definite threat to world peace, and it is from that angle that many of us would approach the problems in that part of the world. The hon. and gallant Member for the Isle of Ely (Major Legge-Bourke), who is not in his place, suggested that the Opposition made its No. 1 priority the interests of Israel. He said that the prime test of any foreign policy should be the national interests of the country concerned. I should have thought that in these days the primary interests of any country in which sane people lived was the preservation of

  2181
  peace, and I should have thought that peace was a method, even of safeguarding the oil supplies on which our economy depends, far better than the alternative of war.
  I therefore believe that we can examine some of the measures which have been taken in past years purely from that point of view, the objective being the preservation of peace. I was glad that my right hon. Friend the Leader of the Opposition indicated that in his view it would be a mistake to abrogate, at any rate in present circumstances, the Anglo-Jordan Treaty. I do not for one moment suggest that that Treaty makes a considerable contribution to the preservation of world peace, but it is a rivet in the structure of world stability, even though it applies only to one small part of the world.
  Incidentally, I believe that that Treaty has been of far greater value to the people, Government and Royal family of Jordan than its provision of two bases for the Royal Air Force. If one studies the history of the matter, one knows that there has always been a feud between the Royal family of Saudi Arabia and the Hashemite family of Jordan, and the fact that the latter was receiving the protection of Britain in the difficult days of a few years ago has been of great advantage to Jordan itself.
  I hope, however, that it will be made clear to the Government of Jordan that if there is ever a clash between our commitments under the Anglo-Jordan Treaty and our commitments under the Tripartite Declaration, in the event of Jordan's associating itself with Saudi Arabia, Egypt and Syria in armed aggression against Israel, our commitments under the 1950 Tripartite Declaration will supersede any commitments we may have under the Anglo-Jordan Treaty, if it continues to exist.
  I should like to say a word about the Bagdad Pact. I agree with the view of the Government to this extent: a regional system of collective security, authorised as it is by the provisions of the United Nations Charter, is something which should receive the support of all those who believe in what is commonly called collective security. Where I have a doubt is that I feel that our country is accepting too many commitments. In that far distant part of the world, the other side of the Middle East, in what is called the
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  three tier defence system across the Taurus Mountains, we have accepted commitments, together with the four countries whose territories are situated in that part of the world. I should be much happier if the United States had also been an active member of that system of collective security, or, alternatively, if we had remained outside as observers, in the way that the United States have done.
  In these days, when we compare our resources with the resources and manpower of the United States and Russia, for us to accept much greater commitments in these international engagements than the all powerful United States of America is fraught with considerable danger to this country.
  The other measure that has been taken over the past few years to stabilise the positions in the Middle East is, of course, the Tripartite Declaration of 1950. I cannot understand why there has been so much doubt and fog about what is contained in the Declaration. It is very easy to have a look at it, and there is no doubt about what it covers. It covers not only aggression against the armistice lines, but also violation of the frontiers. It says:
  "The three Governments, should they find any of these States was preparing to violate frontiers or armistice lines would, consistently with their obligations as members of the United Nations, immediately take action…"
  That refers to the Arab States on the one hand and Israel on the other. It is quite clear that the Tripartite Declaration does commit the three Governments associated with it to go to the assistance of any one of the Arab States, on the one hand, or Israel on the other, not only if there is violation of the armistice lines under the 1948 Agreement, but of the present de facto frontiers. Therefore, provided the Tripartite Declaration is really to be implemented, it is a considerable safeguard against any aggressive action in that part of the world.
  The other point I should like to make about the Tripartite Declaration is on the topic of arms supplies. The Declaration says:
  "The three Governments recognise that the Arab States and Israel all need to maintain a certain level of armed forces…for their legitimate self-defence and…defence of the area…"
  It is not because many of us feel that Israel is always in the right and the Arab States always in the wrong; but as my

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  right hon. Friend said this afternoon, the Government of Egypt have received supplies—we are told 30 MiG 15's and 40 or so I1.28's, modern twin engine jet bombers from Russia, and Centurion tanks from this country—and while the Government of Israel have only more or less obsolescent fighter planes at their disposal, no modern bombers, not even obsolescent bombers. We feel it is wrong in the situation which today exists in that part of the world that this little nation should be deprived of reasonable means of defending itself. We do not say that arms are the solution; we only say that we should not expect Israel to use Meteors against MiG 15's and to have no means of countering the bomber attacks likely to come from the other side, if there is war.
  Viscount Hinchingbrooke: Supposing Israel took these supplies and used them to attack Egypt; would the right hon. and learned Gentleman then be prepared with his party to campaign for the resistance of Israeli aggression against Egypt and the landing of British troops in the Canal Zone on behalf of Egypt?
  Mr. Henderson: I do not believe that any hon. Members on either side of the House, if they support the Tripartite Declaration, can blow hot and cold at the same time about its consequences. I have said and I know that my right hon. Friends have said to those we have met in Israel as well as in Arab countries that we mean what we say in that Declaration. If it is Israel that commits aggression, we shall be on the other side; if it is the Arab States that commit aggression, we shall be on the other side. I can understand the noble Lord, if he does not agree with the Tripartite Declaration, saying that it will have this or that consequence.
  But if that is the accepted instrument of our national policy for the time being, if there is aggression from one side or the other, we have to intervene. We hope, as a result of the Tripartite Declaration, and if we can ensure that for the time being Israel is not deprived of or refused sufficient arms for the purpose of self-defence, following the entry of Russia into the Middle East, that another step will have been taken to prevent war and to maintain peace.
  On this problem of the maintenance of peace, which I think is the crux of the 'whole situation in the Middle East, as it
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  may be anywhere else, may I say that in a sense I agree with the right hon. and learned Member for Montgomery (Mr. C. Davies), that pacts alone will not solve these problems. I was glad to hear the Minister of State, and indeed my right hon. Friend the Leader of the Opposition, refer to what I think is a vitally important aspect of the problem in the Middle East where, of a population of 30 million Arabs, some 90 per cent. are living in conditions of abject misery and poverty. The more we can build up their standards of living and bring to them the advantages of decent living, the more difficult we shall make it for their present leaders to launch them into a suicidal adventure threatening the peace of the world.
  An hon. Member opposite referred to the attitude of the United States, or certain business interests there, regarding the question of oil. It would seem as though we have entered into a state of competitive co-existence with the United States so far as oil is concerned, and if that be so, I believe that it can lead only to disaster. It is vitally important for our own country and for the United States that we should not only have paper agreements as to the way the political problems of the Middle East should be handled, but that we must try to bring about real and effective economic cooperation instead of creating a state of competitive co-existence.
  Sir Robert Boothby: The right hon. and learned Gentleman realises that the oil companies which are actually conducting this ludicrous war have interlocking financial interests, which makes it even more ludicrous?
  Mr. Henderson: My right hon. Friend pointed that out this evening. It is not only ludicrous, but highly dangerous.
  At present, as we know, we have the extraordinary position that the American interests and the American Government are, for example, supplying Saudi-Arabia with American tanks, which may well be used against British soldiers in the Buraimi Oasis. That is a threat which may well develop and become a direct threat to co-operation between our country and America.
  I do not know whether the Prime Minister discussed these economic problems with President Eisenhower when they

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  met in Washington. I am sorry that the French Prime Minister was not present at that conference. I believe that there is a case for a meeting of the "Big Three"—President Eisenhower, our own Prime Minister, and the French Prime Minister—to discuss these Middle East problems. All three Governments are committed under the Tripartite Declaration. There was a suggestion that the United States Government were barred by their constitution from taking action, but, in any event, I should have thought that the sooner the leaders of the three countries which signed the Declaration met together to hammer out where exactly we stand regarding the dangers and possibilities in that part of the world, the better.
  I believe that, apart altogether from a meeting of the Big Three, the real solution, or an attempted solution, should be the responsibility of the United Nations. I know the difficulty there and that in 1950 the Security Council passed a resolution calling on Egypt to remove the ban on ships going through the Suez Canal to the ports of Israel; and that all through the following years the Government of Egypt have defied the authority of the Security Council, lowered its influence and, indeed, its prestige. I consider that a calamity.
  There may be some hon. Members who feel that to talk about the United Nations so often as I do is merely a sign of naïve idealism and a reluctance to face the realities of the international situation. I know of no alternative, at any rate—
  Mr. Anthony Fell: What about the Commonwealth?
  Mr. Henderson: I know about the Commonwealth. It may interest the hon. Gentleman to learn that every country in the Commonwealth is a member of the United Nations.
  Mr. Fell: The only difference between the Commonwealth and the United Nations is that the Commonwealth works and the United Nations does not.
  Hon. Members: Hear, hear.
  Mr. Henderson: There we have the issue, and the chorus of approval for the old approach to these international problems—no use for the United Nations, and attempting to divert us from the
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  issue by a reference to the Commonwealth. If I may interpolate a word about that, I would say that the party on these benches has done more to stabilise and maintain the Commonwealth than has the party opposite.
  I am not interested in what hon. Members below the Gangway opposite feel about the United Nations. I feel passionately about the United Nations. I believe it to be the only alternative to the system of power politics which, according to speeches made by hon. Members opposite—is bringing us right to the verge of war. If we are not to have the United Nations, what are we to have? Are we to rely only on the Bagdad Pact or the Tripartite Declaration, or on the armies and navies as in the good old days of the eighteenth and nineteenth centuries? Surely we have got away from that?
  I come back to my point that I believe we are drifting towards a very serious situation in the Middle East. I do not know whether the Joint Under-Secretary of State for Foreign Affairs would disagree with that. I gathered that it was the view of the Minister of State for Foreign Affairs. I am suggesting—though it may fail—that under Article 34 of the Charter, the Security Council again should seize itself of this problem of Israel and her Arab neighbours—[Interruption.] The noble Lord the Member for Dorset, South (Viscount Hinchingbrooke) is an old friend of mine, but I do not know what he is nattering about. If he wishes to ask me a question, I shall be glad to give way, but this is a very serious matter. It is certainly serious for the people of Israel and for those people in the neighbouring Arab countries, If war occurs, it will be their blood which will be spilled, and, therefore, I do not think that we can treat the matter lightly.
  The Joint Under-Secretary of State for Foreign Affairs (Lord John Hope): In order to get the record clear, may I ask the right hon. and learned Gentleman to help me about something which he said a moment ago? He seemed to contrast the United Nations with, for instance—because he mentioned it—the Bagdad Pact. Presumably, if he believes, as I do, in the United Nations, he believes in the Charter and the rules, and realises that regional arrangements can take place under the United Nations.
  Mr. Henderson: I am well aware of that and I think that I could recite the Charter from one end to the other. I am afraid that the noble Lord has not been listening to what I have been saying. I started off by saying that I supported the measures already taken. My only qualification was in regard to the Bagdad Pact, that I thought we were extending our commitments too much and that we should be in the same position as the United States—that either both of us should be in or both outside. Of course, I am not objecting to regional arrangements any more than I object to N.A.T.O. or the Western Union. What I am saying is that the Charter of the United Nations provides for the Security Council considering a situation which is a threat to world peace. If we believe—and I understand that this is the common view on both sides of the House—that there is a threat to world peace in the Middle East, it justifies our saying that it is the responsibility of the Security Council and, above that, the General Assembly of the United Nations, to try to find a solution to the problem.
  It may be said that the Soviet Union will exercise her power of veto. I have serious doubts about that, in spite of her intervention in the Middle East by supplying arms to Egypt. At any rate, it would be an acid test of the geniuneness and sincerity of the claim of the Soviet Union that she wants peace to be maintained. Even if this attempt failed, I would far rather have seen an attempt made to solve the problem peacefully than no attempt being made at all. If the attempt is made and it fails, the people of the world will at any rate know where to place the responsibility.
  7.31 p.m.
  Mr. Gilbert Longden: I hope that the right hon. and learned Member for Rowley Regis and Tipton (Mr. A. Henderson) will forgive me if I do not follow him into the subject of the United Nations beyond saying that I respect his idealism. The fact is that in the nearly four hours' debate that we have had so far there have been eleven speeches, six of which have been made by Privy Councillors and two by maiden speakers. I make no complaint about that because we have all enjoyed those speeches, especially that delivered by my hon. Friend the Member
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  for Inverness (Mr. N. McLean). I merely mention the fact because it is the reason why I shall try to take no more than ten minutes to make my speech.
  I am fully aware that when a backbencher, or any hon. Member who is not in the Government, speaks upon these matters he must be handicapped—and I hope that hon. Members will not misunderstand me—by a certain lack of intelligence. I speak of the kind of intelligence mentioned by my hon. Friend the Member for Hexham (Mr. Speir). There must always be a lack of that kind of intelligence among ordinary hon. Members and, therefore, the two proposals that I shall make to the Government tonight must be subject to that qualification.
  I agree with the right hon. and learned Member for Rowley Regis and Tipton that the Glubb Pasha incident is merely symptomatic of what is happening all over the Middle East. It is something which should not be happening, because by temperament, the Arab races and ourselves are mutually congenial. For more than a generation British influence has been exerted in that part of the world for the good of the Arab people and for the general good. There is absolutely no doubt about that. I do not consider it insular or arrogant to say that.
  It makes me sick to hear hon. Members laughing when the honoured name of Lord Cromer is mentioned. There is no doubt about the beneficial effect of our influence; nor is there any doubt that for various reasons—of which the establishment of the State of Israel is perhaps one—the Arab States are growing to resent our tutelage, and, however unwise or ungrateful that may appear to us, they are unquestionably fully entitled freely to decide their own destiny. The enthusiasm with which the rude and almost treacherous dismissal of Glubb Pasha has been greeted in Jordan makes it abundantly clear that we are no longer wanted there.
  There are three courses open to us, each of which has been advocated by hon. Members on both sides of the House. We could send troops to occupy Jordan, and rule her hereafter by force. I would oppose such a solution, not on the first ground advanced by the right hon. Gentleman the Leader of the Opposition,

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  namely, that we could not do it—I expect that we could take them all on and beat them—but on his second ground, that we should not have a moral leg to stand on. We must practise as we preach, and we preach the rule of law. I do not believe that any forcible solution would command support from the people of this or any other country. Nor would I recommend the middle course of compromise. If I were Her Majesty's Government I would remove every British officer and man and every penny from Jordan tomorrow. It is time people realised that they cannot always have their cake and eat it with the poor old British.
  Moreover, if Jordan is going to disintegrate anyway, let it be rather because we have gone than in spite of our having stayed. At any rate, the whole incident underlines one lesson, namely, that a base has no value without sovereignty. Let us take that lesson to heart and keep it there when thinking of Cyprus. Cyprus is not like Suez or Jordan; it is like Glasgow, because it belongs to us.
  It is very ironic that the natural sympathy which exists between Englishmen and Arabs is being or has been poisoned partly as a result of the existance of Israel, because that natural sympathy does not exist between Englishman and Jew. Winwood Reade, in his "Martyrdom of Man," says:
  "It is only in adversity that the Jew is to be admired."
  That is far too harsh a judgment, but if it is true Israel looks like being in for a lot of admiration pretty soon.
  That brings me to my second point which worries me far more than does Jordan, and which has worried hon. and right hon. Gentlemen on both sides of the House. I refer to the Tripartite Declaration. It may have been all that it was possible to reduce to paper at the time, but it is stuffed fuller of wool than is the sack upon which sits the noble Lord in another place. The right hon. and learned Member says that we must show that we mean what we say, but we do not say what we mean. That is my objection. I ask my right hon. Friend what would happen if Israel were to attack or be attacked tomorrow. Does anyone know? If he does, he should not keep the information to himself. I beg him to tell not only me, but the whole
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  world in the largest voice he can command. It is the one thing that might possibly allay the fear of war in the Middle East.
  Surely the United States and ourselves—let us leave France out because she has never been very much help to Western policy in that part of the world, and now it appears that she is beginning to doubt the wisdom of Western policy anyway—can agree now to declare that if anyone crosses the existing boundaries between Israel and her neighbours with aggressive intent he will meet with our combined opposition at once. That is what the United States has done in the case of Formosa, and in my view it has removed Formosa from any threat of war. One declaration by the United States was enough. That may be what the Tripartite Declaration means, but no one could be expected to know that from reading it.
  Assuming that we did that—I come back to the interjection which I made earlier in this debate—what does it then matter about arms for Israel? Israel wants arms. There is only one respectable reason for wanting arms in the modern world, and that is to defend one's frontiers. If those frontiers are to be defended for Israel by two stronger Powers, why is it necessary for her to have all these arms?
  I should like to say a word about Egypt. I have always thought that we were right to leave the Canal base when we did. We should have had to go anyway this year, and, even if a base is strategically well situated for another war, it must be a liability if the surrounding population is hostile. Moreover, I used to think—and I do not yet know that I was wrong—that Colonel Nasser was the best ruler available to Egypt today. I cannot believe that he is worse that King Farouk or than the Communists would be. But handsome is as handsome does and I am bound to say that Colonel Nasser has not been doing very well by us.
  Therefore, I strongly support the appeal made by my right hon. and gallant Friend the Member for Leicester, South-East (Captain Waterhouse) that the Government must take a different attitude towards Colonel Nasser unless and until he reforms and proves himself what he has sometimes said he is, a friend of this

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  country. He knows as well as we know that the Bagdad Pact is not a threat to Egypt, threatens no harm to anyone, and promises much economic good to all its members. For the first time in world history it links four Moslem independent States and one Western Power. For that reason alone it is of value.
  Let me sum up. There are two suggestions I make to my right hon. Friends. One is that they consider moving out of Jordan tomorrow and, the other, that they should try to persuade the United States to join with us in a clear declaration about what will happen if anyone violates the present frontiers of Israel. If my right hon. Friend the Prime Minister cannot do it no one in this House can. I hope they will persevere in their efforts.
  7.42 p.m.
  Mr. John Dugdale: I know that the hon. Member for Hertfordshire, South-West (Mr. G. Longden) will forgive me if I do not follow him either to Cyprus or to Glasgow. I intend to confine my remarks to Jordan.
  I had the pleasure only four weeks ago of talking to Glubb Pasha in his headquarters in Jordan, and I came away with a very deep feeling of admiration for all the work he has done. Everybody who has been there will know that the Arab Legion is not only a very fine force but is almost the only sane organisation in an insane country. I did not think it was possible until I went to Jordan to see a country so ill-governed, a country that was not a democracy or even a dictatorship, but a pure mobocracy, run entirely by the opinions of the refugees, who live in thousands in their camps. They live on us, on British and American money, and on money provided by U.N.R.R.A.
  Those refugees are provided day by day not only with food but with welfare services which compare favourably in many ways with our own. They have just sat there for seven years doing absolutely nothing, and waiting to go back to "Palestine," which is now Israel. It should be made clear to them that they are not going back to Israel unless there is a peace settlement between Israel and Jordan. If we are to give any money to Jordan it should not be to build up the armed forces but to settle those refugees.
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  We should insist that they are removed from those camps and so cease to be a danger to peace. They represent a most serious problem. It is they, if anyone, who will bring about war today.
  I offer one very strong criticism of Her Majesty's Government. The things I have been saying are known to many hon. Members; surely they must have been known to the Government. The Government acted exceedingly foolishly in trying to bring Jordan into the Bagdad Pact at this moment. I am not saying whether the Pact is right or wrong, but it was obviously wrong to try to bring Jordan into it then. It was particularly foolish to send General Templer there, of all people. I cannot conceive of a more foolish move. He is a very fine man as well as a fine general and a good negotiator but he has two great faults, so far as this operation is concerned. Firstly, he is a soldier, and secondly he has won his fame in putting down a rebellion in a colony, Malaya. That is something which people all over the Middle East know. They are particularly sensitive to what is called Colonialism.
  Surely the Government could have found one of their own number to go out and do this negotiating. It may have been difficult. The Government may have no competent negotiators, although the present Minister of Defence, when he was Minister of Labour, showed that he was a good negotiator. Imagine what the Russians would do if they were faced with this task. Would they have sent Marshal Zhukov there? They would not have done anything so foolish. They would have asked a member of the Bagdad Pact from another country to go. Why did we not ask Nuri Said to go there himself or send one of his Ministers to persuade Jordan, as one Arab country to another. They would behave in a way that no British general could possibly hope to do. We did not do that. Instead, we sent General Templer, with the disastrous results that we have now seen.
  My right hon. Friend the Leader of the Opposition reminded the House of the effect on the front line between Jordan and Israel. Some hon. Members have been there and seen it and have been deeply impressed with the spirit of tolerance and common sense with which the Arab Legion has conducted its affairs. It was under British officers and

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  was acting almost as an international force in stopping infiltration of Jews from Israel and of Arabs into Israel. It was performing a very fine service, under British officers.
  After the British officers have left, is it to be expected that the Arab Legion will show the same tolerance? I am extremely doubtful about it. A very dangerous situation will arise and that will to a very large extent be the responsibility of Her Majesty's Government for the foolish action they have taken in Jordan.
  How are we to remedy what has happened? First, we must look at the subsidy paid by the British taxpayers to Jordan and the Arab Legion. Is it to be continued? The only possible thing to do with the subsidy is to settle the refugees and thus ease the problem, but it should be paid only if the Jordan Government agree that the refugees should be settled. Otherwise, I hope the subsidy will be instantly withdrawn. We shall be able to use it for a better purpose than that.
  That is not all. The Arab Legion is not the only British or semi-British force, in Jordan. At the moment the Queen's Bays are there. They are to be replaced by another regiment. Are they to remain there permanently? Do the Government think of having one British regiment isolated in an out-of-the-way place in Jordan, liable to get involved in riots and disturbances? I hope that the regiment will shortly be removed.
  I hope we shall see whether it is wise to keep in Jordan as many civilians as are there now, and we might see in particular to the interests of the women who so bravely work in the refugee camps. Many British women are there, and they have been under the protection of the Arab Legion. If that protection goes, those women may be in very grave danger. I hope that Her Majesty's Government will do something to protect them.
  I would also add to the plea made by my hon. and right hon. Friends that, as this danger has been added to the danger that Israel already faces, she should be given the arms she needs. There was possibly a case to be made, though personally I do not agree with it, for the line taken by Mr. Foster Dulles in saying
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  that the moment had come to have a halt in the arms race. At any rate, it was a feasible line to take at that time, but the situation is entirely changed now.
  Today, instead of having a frontier with Jordan which was relatively safe, Israel faces a frontier which is exceedingly unsafe, and I hope therefore that something will be done at the earliest opportunity to see that Israel now receives some arms. I also hope that something will be done to strengthen the Tripartite Declaration. I know, because he has told me so himself, as he has no doubt told other hon. Members, that Mr. BenGurion is deeply disturbed at the idea that if Israel should be attacked, whatever the Tripartite Declaration may or may not say, the action will be so slow and there will be so many consultations and so many things will have to happen that there will be no chance of stopping the aggression. That would apply, of course, on the other side, I quite agree, if Israel was the aggressor. We want to be quite certain that we get a definite clear-cut decision that action will be taken and taken rapidly, and only when we do that will Mr. Ben-Gurion be satisfied.
  Mr. Fell: The right hon. Gentleman has said that action should be taken and taken quickly. Does not that presuppose that there will have to be strong forces, certainly of both Americans and British, and most certainly British, somewhere in the area of the frontier?
  Mr. Dugdale: I agree. I think it may have been the hon. Gentleman who asked one of my hon. Friends exactly the same question. He was referring to the Cyprus question. I do not propose to get involved in that question, because we have enough to discuss tonight without it.
  I think it is necessary to have troops available somewhere. [HON. MEMBERS: "Where?"] There are troops, apart from anywhere else, in Libya, but it is not mainly with troops that action will be taken., but with planes, and planes can fly quite long distances. I think that what Mr. Ben-Gurion wants to know is that action will be taken, whether with troops or planes, with sufficient speed to deter anybody from aggression. Only if we can do that can we in some small way mitigate the disaster which has overtaken Jordan—a disaster brought about largely by the incompetence of this Government.
  7.54 p.m.
  Mr. W. R. Rees-Davies: In the course of this debate we have had a number of extremely interesting and constructive speeches. Quite early in the debate, the right hon. Member for Easington (Mr. Shinwell), in a particularly cunning and persuasive speech, was trying to persuade the Prime Minister to his particular attitude towards Israel, but I thought that, none the less, his speech had a great deal of force.
  We had a very able maiden speech from my hon. Friend the Member for Inverness (Mr. N. McLean), which showed a genuine knowledge of the situation in Jordan, although perhaps one might not have expected to find a maiden speaker addressing the House with such fluency. We then had an extremely useful contribution by my hon. Friend the Member for Hexham (Mr. Speir) who spoke of the intelligence services and the necessity of improving both our propaganda and our intelligence throughout the Middle East, both in regard to the sources of information and the way in which we deployed our own information. We have had other speeches which have been valuable contributions, following the emphatic statement in the opening speech this afternoon by my right hon. Friend the Minister of State in his assertion that we should, and will, take firm action in this matter.
  What I want to deal with briefly tonight is this. It seems to me that whatever action is taken about future policy in the Middle East, it will require some re-assessment and will require the emphatic assertion of British authority, because our prestige and authority have never been at a lower ebb in the Middle East than they are today.
  What, therefore, are British interests? The premier interest undoubtedly was clearly and cogently stated by my hon. and gallant Friend the Member for the Isle of Ely (Major Legge-Bourke) as the protection of our oil interests, on which depends the whole future of this country. He was clearly right in drawing the attention of the House to the fact that, if we lose our oil interests, if mass unemployment and economic upheaval arise in this country, the question of our being able to maintain peace in the Middle East, or indeed in the world, simply will not arise, because it is upon our wealth and our capacity to protect our oil interests that employment in this country depends. The
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  second vital interest is to safeguard the peace of the Middle East, and the third one obviously is that we must keep open our communications in the Middle East.
  Having stated these three principles, which to my mind underlie our policy in the Middle East—the protection of the oil, the assurance of peace and of open communications—I come now to the first main question of the implications of recent events in Jordan. I go the whole way with my hon. Friend the Member for Inverness and my hon. and gallant Friend the Member for the Isle of Ely in what they said about the position of King Hussein. I am not under any particular bonds of secrecy in this matter, and I go so far as to say that it is no secret that in fact a band of officers in the area of Jordan are concerned with the overthrow of King Hussein. I see these things following a pattern which we could see in Egypt—the pattern which I remember speaking about in December, 1953, in this House, when I referred to the ten or eleven different putsches that have followed in Egypt right up to 1952 and 1953.
  Now, of course, it will be to Colonel Nasser's advantage if he can create in Jordan what he has created in Egypt—a military dictatorship under his own control. It is plain that this young King was influenced quite suddenly. My right hon. Friend the Prime Minister has already stated that, in fact, only the day before, our Ambassador had seen the King. King Hussein is a young boy only 20 years of age, brought up and educated at Harrow, and, following his education at that school, I understand that he is a boy of the highest integrity and reliability. Having been seen the day before, it appears that practically up to the time that this announcement was made, there was no indication whatever that Glubb Pasha was to be dismissed.
  Is it not clear that he was then and is at this time a prisoner of his own thoughts? Is it not clear that this young King may be in the position in the near future of finding himself removed either through abdication or assassination? Who influenced this? I think the finger points to the influence of Nasser and none other. How it was done I do not think we need debate in the short time we have tonight. All of us may have our own ideas which leader is the person

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  behind the actual movement; but what is more important is what is to happen in the future.
  If in a month's time we pick up our papers and read that this young King has been removed, that he has either abdicated or been assassinated, I am afraid that I for one would really have it on my conscience if I did not say what I feel we ought to do tonight to prevent that happening.
  For many years Jordan has been our friend and Ally and there is no reason for the young king or any of his friends to desire to offend this country. I cannot believe that he was influenced by the propaganda from Athens or from Cairo—and in particular the latter. Someone, therefore, must have influenced him, either personally or politically. Could the influence have been political? Could it have been the propaganda? Was it the statements which have been made to him to the effect that Saudi Arabia could afford to pay, and would pay for the Arab Legion and take it over? Would that be sufficient? I think not.
  What are we to do? Under the Anglo-Jordan Treaty we are empowered to send troops into Jordan. In fact, under that Treaty we could send in further troops at present, but supposing that this group of officers has really managed to obtain control of the Arab Legion the position might be that the Arab Legion would be in conflict with British troops in Jordan, and I cannot believe that that would be very wise. What I think the Government should do is to have further discussions with King Hussein in the near future and give him the most emphatic assurance that we will stand by him through thick and thin, and see that he is not influenced and upset by anyone else who seeks to overthrow his authority.
  To put it in another way, we should try to see that, with his consent—with his consent—we can return our officers and our troops. It may be that Glubb Pasha cannot go back—there are his feelings to consider and he might well not be capable of being restored—but that does not mean that another officer, suitable both to King Hussein and to ourselves, might not go back and restore the Arab Legion to its former position.
  Why do I say that? I say it because to my mind Jordan is the danger point
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  at the moment because it is on the boundaries of Israel. It is not that Jordan is a satisfactory base, and there is no oil there or anything of that kind and we have nothing to gain. It is because it is the immediate danger point that I believe we must reinforce Jordan with troops, but I do not want that to be done without Jordan's consent. I beg of the House to consider the past history of Egypt. The Egyptians are not as clever as Machiavelli but they are infinitely more dishonest than any other race living on this earth today.
  The extent of the bribery and corruption taking place at present in Jordan and Saudi Arabia—and flowing out also from the coffers of Syria and Damascus—is quite incredible. Baksheesh—all those who have been to the Middle East know what it means—is being liberally contributed. It originally came through the American oil companies in Saudi Arabia—that is where the money comes from.
  But I have not much time and I turn from that to ask the Government to take a very firm line in Jordan. Let us try hard to see if we cannot find out what I believe to be the truth, which is that King Hussein is still our friend but is afraid, mortally afraid, of the position which may arise with Saudi Arabia and Egypt—and if I were in his position I should be pretty frightened too.
  If that be anything approaching a correct assessment—and it may not be so at all—then obviously the failure of all Governments in the past ten years and more in the Middle East has been the failure to learn the lessons of psychological warfare which have been so ably alluded to by my hon. Friend the Member for Hexham. We really cannot continue with our present methods. In the last few days we have at last sought to jam the radio. We must pursue a policy which is first of all a determination to prevent what is not free speech, what is not free radio, but what is deliberate sedition, calling for the overthrow of constitutional authority—and frequently calling for pillage and for murder.
  Anyone who has impartially read accounts of the broadcasts from Athens and from Cairo cannot but say that that is treasonable material which we have every right to prevent reaching the peoples in those countries which are either our

  2199
  territories or under our protection. Therefore, I believe that there is not a conflict of law—as might impliedly have been suggested by the right hon. Gentleman the Leader of the Opposition. It is, in my view, upholding the rule of law to prevent the dissemination of propaganda broadcast in this fashion.
  We must extend the espionage and counter-espionage services of officers who have served in the Middle East and who understand it and who understand, if I may say so, the quite different moral code which exists out there. It is the failure of our Foreign Office officials over the past fifteen years to understand the totally different moral approach of the Middle East—the endless baksheesh, the desperate nepotism, the whole outlook on what, after all, existed in this country 200 ears ago—which has led to a wrong analysis and a wrong approach.
  For instance, in Lagos there is a list of how much it costs to bribe any person in that place, and it is readily available to businessmen in that part of the world. We all know that this situation exists throughout the Middle East, but somehow—and I hope that it will not be so any longer—people think it wrong to talk about it. I do not think that it is particularly surprising to find that state of affairs in a civilisation. It certainly existed in the England of 1760—one could buy practically anything then. Therefore, let us try to understand and meet that outlook. We cannot meet the Middle East propaganda at the moment, because the money is with the Saudi Arabians, who are prepared to pour it in, but we must understand the outlook.
  In conclusion I have to say this about Egypt. As I see it it is not for any back bencher—and I venture to say not even for any right hon. Gentleman on the Front Bench opposite—to determine what measures this Government shall take against Egypt. The Government alone can know the real facts of the position, and in so far as I throw out one or two ideas I do so purely by way of suggestions for consideration, and in all humility. First of all, we should try to secure agreement between America and ourselves on our future joint oil policy in the Middle East. In considering that oil policy let us make emphatic representations that the Egyptians shall get no benefit from it whatsoever.
  2200
  Secondly, we should consider whether we should not work to rule in the removal of our troops from the Suez Canal Zone. In the present circumstances those troops could be used as a local tactical force round Port Said. That could be done, not to show that we shall not remove from the Zone, but that we shall take due care in that matter, and bring home the fact that we have not yet left. Thirdly, if there is indication and sufficiently clear proof that the Egyptians really are trying to move in through Jordan in order to attack Israel then I think we should consider whether the sterling balances still owed should not continue to be held.
  Furthermore, I am told, although I do not know how right it is, that a good deal of economic sanction could be imposed upon Egypt, if need be, by careful consideration of her cotton trade. I am not experienced in this matter, but several merchants to whom I have spoken, including one of the best known in the country, have told me that a certain amount of effective sanction exists there, because, although the Egyptians are selling cotton behind the Iron Curtain, a great deal of dislocation of trade could be caused if we took a firm line.
  I could make many other suggestions, but I venture to submit that the two which should be carefully considered are these: first, that we should try to maintain our friendship with Jordan in order to prevent Arab action by Saudi Arabia or Egypt, leading to the development of war against Israel; and, secondly, that we should go full steam ahead for an agreement with America, particularly to try to knock together the heads of the oil companies in order to get a clear and emphatic policy for the joint protection of our oil interests, both American and British, in the Middle East. Those oil interests, curious though it may be, could determine the peace which we all wish to achieve in the Middle East.
  8.12 p.m.
  Mr. Barnett Janner: Many of the matters with which I had intended to deal have already been amply and fully covered in the debate. Therefore, I will confine my speech to a few remarks about the situation in the Middle East consequent upon the recent events in Jordan.

  2201
  Many times in the House I have endeavoured to bring home the message that if there is one people in the Middle East upon whom we can rely it is the inhabitants of Israel, amongst whom are those who had previously settled under the Mandate in Palestine. Many a time, long before this debate, I and many of my hon. Friends urged upon our Governments, irrespective of party, that we should accept the Mandated Territory as a Dominion in the British Commonwealth. I still believe that that would have avoided much, if not all, of the trouble occurring in the Middle East at present. We should have had men and women in that part of the world, Jew and Arab alike, who would have been loyal and in a position to help the Middle East in a situation of anxiety. Through the ability and experience of the settlers in that land, they would have led the rest of the Middle East to adopt policies for economic advancement rather than for aggressive military and blackmailing purposes.
  I deliberately say "blackmailing", because the truth is that what has been practised upon us is mainly blackmail. Of course oil is important to us; but we must not imagine that if a blackmailer is appeased to a certain extent he will be satisfied. Surely we have learned that lesson by this time. Expediency in these matters, and the handing out of largesse, whether in money or in grants of land, will not stop the demands. As has happened in Egypt and now in Jordan, once the initial demands have been met they will continue, but for larger and larger amounts. We ought to realise, even at this late stage, that we must say that we are not prepared any longer to be dealt with in that way; we and America and the other countries of the United Nations must say that.
  I ask, should we not be right to regard that small State of Israel as possibly of help in the circumstances? About a year ago something happened in Israel which, could not possibly have happened anywhere else in the world, except for some parts of the Commonwealth, certainly not in the Middle East. The tenth anniversary of the entry of the Jewish Brigade into the line in Italy was observed by a large parade through the streets of Tel Aviv. About 10,000 Jewish veterans of two world wars took part—those of the
  2202
  Trumpeldor Unit which fought at Gallipoli; the first and second Judean battalions of the First World War, with rows of decorations on their breasts; Commando units which fought in Africa; Pioneer units which were active in Africa and France; Port Labour units, engineers, technicians, members of the Medical Corps, as well as A.T.S. and W.A.A.F.S.; three battalions of the brigade commanded by Brigadier Benjamin; their auxiliary units, artillery and command units, all decorated with the Africa Star, the Italian Campaign Medal and other awards.
  These were men and women who had fought in the Allied cause. And who took the salute at the parade? It was taken by two ex-privates of the First World War—none other than Privates Ben Zvi, the President of the State of Israel, and Ben-Gurion, now the Prime Minister of the State of Israel. The parade was preceded by meetings of veterans of 31 Jewish units in the British Army. This took place in Israel, in the heart of the Middle East. Tributes were paid to them by the British Prime Minister. A message was received from him sending his cordial greetings to former members of the Jewish Brigade Group on the tenth anniversary of their entry into the line at Italy. He said,
  "We remember with gratitude their valuable contribution to the Allied cause."
  I could give many examples of this type of feeling which is to be found in Israel. Last time I was there I addressed a branch of the British Legion. There is enthusiasm and keenness shown towards this country, because their feelings and outlook are the same as ours. They are a democratic people prepared to work with the democracies, they are not anti-Arab. A mistake which is frequently made is the assumption that the State of Israel and the Israelis are anti-Arab. They want to be allowed to live and to carry on their work and to help with their neighbours in building up the Middle East economically and agriculturally.
  But what are they compelled to do today? I think we in this country will appreciate this: they have to spend about 20 million dollars in order to build air raid shelters. That is perhaps one of the most significant illustrations which I can give of the position. Clearly they are not building shelters in order to attack any

  2203
  one; they are building them for the same reason that we had to build shelters in this country during the war, and that is to defend the civil population against attack.
  Hon. Members have spoken about the Tripartite Declaration. I agree entirely that there is an obligation on us, on America and France, in the Tripartite Declaration. The Declaration is perfectly clear and says quite categorically that before providing arms to the parties concerned the full circumstances must be taken into consideration so that there shall be a balance. It is no good anyone insisting that because another State not a party to the Declaration is providing arms to Arab States the whole tripartite arrangement must be frustrated because we are not giving opportunity to Israel to defend itself. The Declaration does not say that we shall not supply arms. It says that we shall, and that arms must be supplied in order that the balance shall be maintained.
  I quite agree with my right hon. Friend the Leader of the Opposition who said today that it would be absurd if Israel were asking for as many arms in number as those which have been provided to the other State, but for Heaven's sake let us give her a chance to defend herself. That is the important thing. Israel has courageous people; that is undeniable; people who are prepared to defend themselves and to fight if attacked. Why on earth should we not give them an opportunity of doing so, instead of calling upon British soldiers or soldiers from any other country to do what they themselves can satisfactorily do if given the chance?
  I am not sure whether you, Mr. Deputy-Speaker, were present a few days ago at a luncheon given by the Parliamentary and Scientific Committee. I was present, and I think you were also present. On that occasion the Prime Minister said:
  "There is no country which would not prefer to help themselves than turn to others to help them."
  I think the Prime Minister meant it. In the defence debates we heard the same. Hon. Members opposite would heartily agree with that proposition in respect of our country and practically every country. Why not in respect of Israel? Why not give Israel the chance to defend itself? It is quite obvious that a necessity for
  2204
  defence is likely to arise, and the likelihood is that the threats which have been made by the surrounding enemy countries will be carried into effect, or attempted to be carried into effect.
  I remember many years ago in this House I raised the question of the statements which were made by Hitler in "Mein Kampf." I was told at that time, in this House, not to be worried about it, that it was all right, and that once he got into power he would not dream of doing to Jewish men and women what he said in "Mein Kampf" he would do, but it did not work out that way. As it worked out 6 million Jewish men and women and children were murdered in accordance with the design of Hitler. We had been wrong in imagining that once that man was given power he would not do what he had threatened to do. We know very well that at the moment Nasser, Saudi Arabia and others are talking in the same manner about attacking Israel. Now we get Jordan not only talking about it but acting as though—as I believe to be the case—it is her intention to attack soon.
  I say we have no right to expect Israel to stand back and wait to be wiped out, even whilst other forces are being brought from somewhere else, which may take only hours or longer. The country is providing itself with shelters because it believes it will be attacked.
  Some hon. Members are very keenly interested in agriculture. Whilst all this is going on it would be worthwhile asking what Israel is doing. Is it preparing to attack? Is it preparing the kind of thing which is alleged against it, as the Germans alleged against Jews in Germany? Precisely the same kind of thing was said then as is said today about Israel attacking. It was said by the Nazis about the Jewish people in Germany. We know it is utter-nonsense to suggest that a land of the size of Israel with its comparatively small population could possibly do the attacking, or would want to.
  We have been talking about frontiers. How many hon. Members know the consequences of the proposals which have been coming forward about the Negev, about handing parts of the Negev over to Egypt? Do they realise what a dangerous thing it would have been if Egypt and Jordan had been able to come together because part of the Negev had been given to Egypt and they could thus

  2205
  combine against us? I have said some of these things here before. I do not say them because I feel happy or proud about them, but because, unhappily, they are the facts.
  I hope the House will not mind me pointing out what is happening and has happened in Israel in the last six months. During the second half of 1955 two training centres and 20 villages were set up in the Lachish region of Israel and the first winter crops were sown. The majority of the settlers were recent immigrants from North Africa who go through an intensive training at the training centres. The transition from artisan to a farmer in modern farming is bewildering for those who step from the atmosphere of the Middle Ages in their countries into the twentieth century atmosphere of Israel, but the newcomers are eager to learn. I am quoting from a statement made by the Minister of Labour of Israel, who stated:
  "Lachish and the Northern Negev have been opened to immigration, to settlement, to planting and to harvest, by the establishment of the Yarkon-Negev pipeline. Water poured into the area for the first time"—
  that is, for the first time in the history of the Negev—
  "from this pipeline on July 19, 1955. It is the first of two parallel lines; the second is now under construction. The entire conduit will carry 50 billion gallons of water annually and make possible the irrigation of an additional 40,000 acres of semi-arid land. Eventually, the desert fed by the Yarkon-Negev line will produce food for some 160,000 persons."
  That has happened in the last half year, with all that has been going on around the borders. These are not the kind of people who want wars or who seek aggression.
  I appeal to the Government. Let us be firm at last. We will lose nothing by saying to those who want to be aggressors, "There is in the Middle East at the present time an element which desires to build. Israel is prepared to work with you." The people of Israel have appealed to the Arabs from every angle to arrive at a peace settlement and the Arab leaders know in their hearts that Israel means it genuinely.
  I met Arabs years ago in Israel—then Palestine—who were most friendly with the Jews. The Arabs in Israel today are most friendly with them. They get on extremely well with each other and they
  2206
  could get on well with the rest of the Arab world. If today we said that Israel would be supplied with defensive weapons, the Arab world would think a long time before it attacked.
  The Arabs realise that man for man the Israelis are better fighters—I do not say this boastfully—the people of Israel have reason to be more courageous and anxious about their position. They have reason to fight better. It is their last stand. It is the last stand of hundreds and thousands of people, who still carry the tattoo marks of the concentration camps. They cannot go back. Therefore, they are bound to fight. If the Arab world realised that Israel was not being left naked with nothing with which to protect itself, the situation would be helped instead of hindered. It would be realised that it was no longer a question of expediency prevailing, that we meant what we were about and that in order to build up the Middle East, we, Israel and everybody else concerned were prepared to work in harmony with each other.
  I hope that this last lesson which we have received in the incident relating to General Glubb will at least teach us that to give in to force or to threats of violence and all the rest that results from blackmail is not the way to carry on, but that if we make a just and proper stand by saying that those who build shall be helped, we shall not only teach a lesson to the world, but the Arab population will learn to respect us instead of treating us as it does at present.
  8.33 p.m.
  Viscount Hinchingbrooke: I have promised to make only a short contribution, and perhaps hon. Members will forgive me if some of my points are stated briefly and are not fully argued. First, with regard to France, our closest ally, geographically and in two wars. It is very satisfactory that M. Mollet is coming to London this weekend. I hope very much that in the conversations with the Prime Minister special emphasis will not be laid on the character of M. Pinaud's speeches about Europe, but rather that the opportunity will be seized to see what can be done to align British and French policy throughout the Mediterranean and the Middle East.

  2207
  The French have felt grieved with us that we have not shown more sympathy with them in their trials in North Africa, and we have suffered somewhat in the Middle East by the fact that since the war there has been the remains of Anglo-French antagonism in Syria and in Lebanon. Those two things, it seems to me, might be brought together.
  The Egyptians are intriguing in Libya as well as elsewhere, and the French have fears that Egyptian and Communist influence will pass through Libya into the territories of North Africa for which they are responsible. We have some fear of the action of the Saudi Arabians and the Egyptians with regard to matters in Syria. We know that Communist influence in Syria is quite strong. Cannot we and the French get together and swallow some of the differences and disputes of the past and see whether we cannot reinforce each other in our respective areas for the sake of stability and peace?
  The Government lay their policy on two foundations. One is the Bagdad Pact. I think we are very far from the situation where Syria can come anywhere near to the Bagdad Pact, but at least if we have the support of the French and their traditional friendship with Syria to manoeuvre Syria a little away from her evil associations towards the south, then perhaps Syria may also in due time join us in that Pact.
  It is essential to have either Syria or Jordan associated with the Bagdad Pact because of the air communications, to which my hon. Friends have referred, and because the oil pipeline goes across one or other of those territories. If we lose both Syria and Jordan, it will not be long before B.O.A.C. aircraft on their way to the far distant parts of the Commonwealth are "buzzed" by MiG fighters over the desert, and not long before the oil through the pipes is completely turned off instead of partially as now.
  That brings me straight to the support of those of my hon. Friends who have asked for the reinforcement of Jordan. I think that it is necessary to riposte. There has been a loss of British power and influence in the last week, and it is necessary to restore the position at once but without any kind of further provocation. I cannot believe that any country,
  2208
  and least of all Jordan, could regard it as a provocation if we were to send small reinforcements to our garrisons to Mafraq, Ma'au and Aqaba to make sure that the position of the existing troops is secure, not to speak of the wives and families involved.
  Mr. Emrys Hughes: And Cyprus.
  Viscount Hinchingbrooke: We have troops already in Cyprus. Those which were sent there in December and January were not for the purpose of keeping order in Cyprus but for these other operations in Jordan should they be required.
  Secondly, I think it is necessary very soon to start patrolling the Canal and the Gulf of Aqaba. Now that the Resolution has passed through the Security Council we can interpret it as freedom for us to send our ships of war where we like and, if necessary, convoy vessels where we like. If in the process of normal, legitimate movement on the high seas—I am not talking about Egyptian territorial waters—we are intercepted in any way or any of our ships or the ships of our Allies are fired on by the Egyptian batteries, I think that those batteries should be singled out and demolished with the appropriate weapons.
  Finally I come to the other main leg of the Government's policy in the Middle East, the Tripartite guarantee. I believe we shall have to give that one up. The nearer we get to the danger of war in the Middle East between Israel and the Arab States, the more closely we must look at who precisely will do the necessary policing operations. I have just asked that France should be brought in, but France is militarily weak and we look more to her diplomacy. I do not believe that the United States is desperately interested in anything that goes on beyond the shores of the Mediterranean. I cannot believe that the United States will be interested in the essential policing and diplomatic problems of those complex countries in the Middle East. Therefore it comes down to us.
  How precisely will British foreign policy develop? It should develop organically and historically, but how will it develop if we hold ourselves in readiness to jump with our forces at Beirut or Damascus, or Tel Aviv, Amman or Cairo, according to who is judged by somebody to be the aggressor?

  2209
  It is inconceivable when we think of the operation—of our own troops involved, the diplomatic forces behind, the supply organisation, not to speak of what follows in the way of military government—that we should act mechanically in that way at the will of some organisation, be it the United Nations or members of the Tripartite Declaration, and be prepared to go in, perhaps in the South, perhaps in the North or perhaps from the East. How could we act as a world Power responsible for decisions in the Middle East on historical and traditional lines, and yet be prepared to conduct that kind of operation. The Government must give serious consideration to this point.
  I do not know whether it can be said that the Tripartite guarantee has kept the peace so far. It may be that the Powers concerned have not been prepared for war—they may not be prepared for war now—because there are other guarantees and other arrangements apart from the Tripartite guarantee. All I can say is that this mechanistic device is of no use at all for the implementation and the development of British power and British opportunities, and the sooner we discard it the better we shall serve the interests of this country. As I said the other night, I have the firm conviction that the interests of this country are absolutely identifiable with the interests of the world and the interests of peace.
  8.42 p.m.
  Mr. William Warbey: I have often listened to the noble Lord, the Member for Dorset, South (Viscount Hinchingbrooke) with interest, sometimes even with admiration for his courage in disagreeing with hon. Members on his own side of the House. Tonight he has disappointed me, and perhaps my hon. Friends, because his speech seemed to be devoid of any shred of principle in the application of foreign policy. It was based on old-fashioned notions of British power and Imperialism and was lacking in any conception of the honouring of obligations which we have accepted and are bound to carry out in the modern world.
  In the situation that has developed recently in Jordan there are two or three different aspects which ought to be considered carefully and apart from one another, not muddled together. There is
  2210
  the question of an insult to British prestige. There is the question of the danger, particularly to Israel and also to general peace in the Middle East. Lastly, there is the question of our interest in the oil of the Middle East.
  As regards the first, because there has been an affront to British prestige by the abrupt dismissal of Glubb Pasha, hon. Members who think that the way to reply to that affront is by dealing a blow at the person who has insulted us are living very much in the past. The fact is that this is a symptom of the development of the feeling of national independence which has spread throughout Asia, Africa and the Middle East.
  This is the way the world is today, and if it means occasionally that nations will thumb their noses at former colonial Powers, it is no good imagining that we can now retort to that by the use of the big stick. It would be better for us to make up our minds sooner or later to adjust ourselves to this world, to understand it, and to try to help it than to talk in the language of gun-boats and troops, and the rest of it. If we do that, we may find ourselves involved in a new kind of Boer War. We do not want that. A Boer War in the modern world might not stay where the original Boer War stayed. It might involve loss of British prestige and moral authority in the world, it might also land us in a situation like that into which the French were landed at Dien Bien Phu in Indo-China, and it might even involve us in a world war. Therefore, the first thing about which we have to make up our minds is that if the people of Jordan do not want us in their country, if they no longer wish to a be a British Protectorate, then we had better come out and make the best of it.
  Then there is the position of Israel. It has been made amply clear by my right hon. Friend the Leader of the Opposition and other hon. Friends of mine that we are bound in honour by the special position which our country had taken with regard to the establishment of a Jewish Home in Palestine, by our attitude towards the decisions of the United Nations and by many other historical factors, to uphold the position of Israel as a viable State in the Middle East.
  That means that, temporarily, we may have to assume the rôle which the noble Lord wishes to reject, but which we must

  2211
  accept if no one else will do so for the moment, that of the world's policemen in defence of Israel if she is threatened. It is an unpleasant role, one which we ought not to have to accept, and one which cannot for long be sustained. Therefore, we must seek rapidly to replace it by other arrangements which will result in the world's policemen coming in and acting as the police force in that area.
  In the meantime, while the situation is urgent and while we are uncertain whether the other partners to the Tripartite Declaration are prepared to play their part or not—there is very grave doubts whether France would, and there is even some uncertainty whether America would—the British position must be made absolutely clear. If necessary, the Government should declare that we have forces in readiness to be used in the event of an act of aggression by either side in the Middle East.
  Mr. Ellis Smith: On our own?
  Mr. Warbey: If necessary, on our own. I am afraid that the Government are hedging very much on this question, but we cannot afford to wait until France and the United States have agreed on the measures to be taken in the event of aggression. If we are to stop aggression from taking place, I believe that we must supply balancing armed forces to Israel and declare unequivocally that we are prepared to act on the basis of our declarations and pledges whatever may be the position taken by the other countries involved.
  Having said that, we must immediately proceed to transfer the whole responsibility for the maintenance of peace in the Middle East to the shoulders which ought to bear it, and those are the shoulders not of this country alone, nor of France and the United States together with us, but of all the countries in the United Nations, and specifically the great Powers who are represented in the Security Council. In other words, as my right hon. and learned Friend the Member for Rowley Regis and Tipton (Mr. A. Henderson) suggested, we ought to lose no time in requesting that, under Article 34 of the United Nations Charter, the Security Council should be seized of the danger of a breach of the peace in that part of the world. We
  2212
  ought immediately to raise it in the Security Council and through the Security Council seek to bring into the preservation of peace in the Middle East all the great Powers represented on the Council.
  I should hope that that would lead to the creation of what many of us on this side of the House regard as the only way of introducing into the Middle East a pacifying element of a United Nations force, which need not be of any size, but which could create a buffer area between Israel and the Arab countries. This, of course, involves bringing the Soviet Union into consultation and into action in defence of security in the Middle East. This is where the point made by my right hon. Friend the Leader of the Opposition is absolutely inescapable, that if we want to avoid this country being left alone as the sole protector of the Middle East—
  Mr. Ellis Smith: We must not go in alone.
  Mr. Warbey:—we must be prepared to bring the Soviet Union into full partnership on all discussions affecting the security of the Middle East. That the Government have so far refused to do, and they are therefore responsible for the situation with which this country might well be faced as a result of their refusal to face political realities. Instead, they have chosen to rely upon this futile act of accession to the Bagdad Pact.
  The accession of this country and Persia to the Bagdad Pact created what was purely a local defensive alliance of certain countries in the Middle East into an act of provocation which was all the more provocative because it was futile. It added nothing to the defence of the real interests of this country. It was as provocative to the Soviet Union as if the Soviet Union had formed a military alliance with Mexico. The Minister of State sniggers. I do not know at what he is sniggering. He knows that the situation is exactly parallel. If a number of countries in Latin America had formed an alliance and, suddenly, that alliance had been joined on practically the same day by Mexico and the Soviet Union, the United States would have taken the same kind of action to upset the activities of the Soviet Union as the Soviet Union has taken to upset the activities of the Government in the Middle East. The situations are precisely parallel.

  2213
  Reaction was inevitable, and the right hon. Gentleman knows that the real difficulties and dangers in the Middle East started after we joined the Bagdad Pact and not before. All the really acute troubles have arisen since that time. The right hon. Gentleman has tried to suggest that the Russian intervention was long-planned interference. The Minister of State says "Hear, hear," but he has not produced a shred of evidence in support of that statement. He has made a general statement without a single piece of evidence to back it.
  The fact is that, so long as the Middle East was comparatively a power vacuum, there was no trouble and no Russian intervention. It is only since the right hon. Gentleman and his military friends rushed in to fill this dangerous power vacuum that we have had all the trouble which has occurred in the past year. I suggest to the right hon. Gentleman and to the Government that if they are serious about creating pacification in the Middle East, and if they recognise that, if we are to do that, we must inevitably bring in any great Power which has a legitimate security interest in the Middle East, they have got to be prepared to consider whether the Bagdad Pact is of any further use to this country.
  There has been a lot of talk about the oil in the Middle East being vital to the industries and standard of living of this country. I should have thought that right hon. and hon. Gentlemen opposite would have realised by now that oil cannot be maintained for this country by fighting for it. If there is one thing more certain than another, it is that if we use military force in the Middle East in an attempt to keep the oil, we shall lose it. We can keep the oil only if peace is maintained there. We had all this over Abadan and the present Government have had to endorse the policy of peace which we carried out over the Abadan incident. If we desire to keep the vital oil supplies which this country requires, we cannot do it, under conditions in a modern world, by fighting for it, by using military force. We can do it only by commercial methods, by diplomacy and by politics.
  The real trouble in the Middle East is the quarrel and rivalry of interests between the oil companies. We have to see that the political power of Governments is supreme over the racketeering
  2214
  of private oil companies in the Middle East. That is the job to which this Government should turn their attention. They should see that they have control over the British oil companies, and the American Government should have control over the American oil companies. Until the two Governments have control over the respective oil companies, it is futile to talk about British and American Governments getting together and solving the problem of oil in the Middle East.
  Finally, the way to deal with the oil problem and the other economic questions in the Middle East is to give a fair share to both Arab and Jew who, up to now, have not had a fair share of the world's goods. They will get that only when countries like Britain, the United States, France and others that have exploited them in the past are prepared to bring them into a great consortium in which they can benefit first and foremost from the oil which comes out of their soil.
  8.57 p.m.
  Mr. Alfred Robens: The Government have had an uneasy passage during these last few weeks. At home their economic policy has collapsed about their ears, causing grave anxiety to the people of this country. Abroad, their lack of policy over foreign affairs has necessitated this debate which has meant the changing of our business for the week, and therefore we regard the situation as serious for the Prime Minister. I should not mind very much if the inefficiency of the Government in their handling of affairs both home and abroad recoiled only on the Government and their supporters. But that is not the case. The failures of the Government react on us all, and therefore we are entitled to be critical and to make proposals.
  That, I think, is the answer to some hon. Gentlemen opposite who seemed to think that the job of the Opposition is merely to endorse all that the Government have done. Apparently they think that all the knowledge is possessed by the Government and that no one else can have any at all. It is perfectly true that the Government have sources of information at their disposal which no one else has. Nevertheless, I believe it to be our function, as Members of the Opposition, to supply ourselves with all the information we can and to use it when making our criticisms and our proposals.

  2215
  The first thing I say in criticism of the Government is that they are like an ostrich with its head buried in the sand. They have failed to see what is going on around them. I was astonished to learn from the Press that the dismissal of General Glubb—which, after all, gave rise to this debate—came as a surprise to the Government. Indeed, they have issued a statement saying that his dismissal came as a great shock. I did not understand that, until I thought back to some of the replies to Questions in this House, and especially to the reply given by the Joint Under-Secretary, to which my right hon. Friend referred today. In effect the Joint Under-Secretary said, "Do not worry; all this trouble in Jordan will come to nothing." That was an amazing thing for the Joint Under-Secretary to say on behalf of the Government.
  I do not understand why the Government, who are probably better informed than their Joint Under-Secretary, did not realise that British control over the Arab Legion was rapidly coming to an end. Every Arab in the Middle East knew about it; everybody who visited the area had been told time and time again that it was the policy to get rid of British influence in the Arab Legion, for reasons that I will give later.
  On 12th January, Syria, Egypt and Saudi Arabia offered the Jordan Government the financial aid they would need in order to do precisely what they have done, namely, to get rid of British control over the Arab Legion. What was the point of those three countries offering to provide Jordan with the amount of money we had been providing as a subsidy, unless it was to get rid of British control of the Arab Legion?
  On 15th January—only three days later—King Hussein, as head of the State, said in a broadcast that he looked forward to the glorious day when, with the help of the Jordan army, the whole Arab nation would recover its usurped rights in Palestine. That is pretty clear. Despite what one hon. Member said earlier, namely, that King Hussein may be the tool of his politicians, and may not be entirely responsible for the things he is saying, he has nevertheless said them, and said them as head of the State. If he were to be deposed tomorrow, whoever put those words into his mouth
  2216
  would probably be the next head of the State.
  On 17th January, the Jordan Foreign Minister welcomed the offer of financial aid and proposed a conference of the four Foreign Secretaries of Egypt, Syria, Saudi Arabia and Jordan, to discover just what financial aid should be given and how it should be used, and they no doubt discussed amongst themselves the best way completely to rid themselves of British influence. All those things happened in the first few weeks of this year, and the right hon. Gentleman must have known all about them.
  But suppose we assume that he had not been informed by his advisers that these things were going on, and that he had not had time to read the newspapers, whose correspondents were all saying this. In the debate on 24th January hon. Members on this side said—and I said it myself—that it was the intention of the Arab countries to get rid of British influence in the Arab Legion. I said that because I had just come back from the Middle East, where it had been said to me by some very influential Arab leaders.
  In the Daily Herald of 23rd January there was a dispatch from Basil Davidson, who had just left Amman and who sent his dispatch from Cairo. He said that there were four things which the Jordan people were determined to have: first, the release of all political prisoners; secondly, a general election, with polling free from military police and pressure; thirdly, an end to British control of the police and, fourthly, an end of Glubb's absolute control of the £9 million British subsidy paid for the upkeep of the Jordan Army. All I want to say after that recital is that I still am at a loss to understand how the Foreign Office could issue a statement that it came as a shock to it and a surprise to the Government that Glubb Pasha had to go.
  We have been criticising the Bagdad Pact, and were taken to task about this by the Minister of State when he opened the debate. He accused me of saying, in a debate a week ago, that I wanted to wind up the whole Bagdad Pact. I have read the report of that debate again this afternoon, and there was not a word which said that. I was a little cross with the Minister of State in my interjection,

  2217
  and I apologise if I seemed to be discourteous. I am very angry when a Minister merely takes a brief and relies upon someone taking a few words out of their context and putting them in his speech. If the right hon. Gentleman had done his own research he would not have said what he did this afternoon. It is quite untrue to say that I said something different in that speech from what had been laid down by my right hon. Friend the Member for Lewisham, South (Mr. H. Morrison) in dealing with the Bagdad Pact.
  What I said about the Bagdad Pact—and will go on saying, and what my hon. and right hon. Friends will say—is the fair criticism that we can lay against it. The Minister of State said that it was the centre of the Government's Middle East policy. Did one ever hear such nonsense as that? There is only one Arab State in the Bagdad Pact. Syria, the Lebanon, Egypt, Jordan and Saudi Arabia are outside the Pact. It is therefore nonsense to say, even though one emphasises words like "patience" and "fairness," that our whole Middle Eastern policy must be based upon the Pact, which ignores the existence of powerful Arab States. We can criticise the Pact but, as my right hon. Friend the Leader of the Opposition made clear today, we have not criticised the idea of a collective security pact in the northern tier.
  While the Minister of State claimed great credit for the economic development contained within the Bagdad Pact, we criticise the fact that in order to get economic aid a country must join a military alliance. I am not sure that that is the right way to deal with economic aid. A country cannot have economic aid within the terms of the treaty unless it is a member of the Bagdad Pact. We have virtually put other Arab nations outside the economic aid that we are prepared to give. That is wrong.
  I should have thought the Arab reaction to the Bagdad Pact was sufficient warning. Colonel Nasser was perfectly forthright in his declarations against the Pact. Let us not underestimate the power of Nasser. We may not like him and may object to military dictators, but Nasser is a powerful figure. He is ambitious and is pursuing a policy extremely popular in the Arab world, Arab unity. He is pursuing the idea that the Arab nation
  2218
  extends from the Atlantic Ocean to the Persian Gulf and that it should be free of foreign interference. He believes in strong Arab nationalism.
  I do not think we can quarrel with a country that wishes to be independent and free of foreign domination and wants to establish to itself the rights of its nationhood. We cannot quarrel with these aspirations of a nation. What we have to do is at least to try to make friends with these nations in the Middle East, because the effect of trying to force the Bagdad Pact upon Jordan made the situation in regard to Israel in the Middle East far more dangerous than it has ever been before.
  The Prime Minister, when he was dealing with the Pact, said:
  "It is based on the concept of co-operation between equal partners, which it has been our purpose to establish generally in our relations with Middle East countries."—[OFFICIAL. REPORT, 30th March, 1955; Vol. 539, c. 379.]
  Equal partners means that one must give up domination. It means that they are to be treated on the basis of equality, and if we are to give economic aid, it is a very dangerous thing to attach too many strings to it.
  Now we have lost control of the Arab Legion, which in my view was one of the safety factors in preserving something like peace along that very long Jordan border. There is no doubt that the people of Israel must feel very apprehensive indeed at present in their little State. If I were in the Israeli Government, I should be spending some sleepless nights worrying about what the next move might be, because I see that where on one long border there was an army controlled by British officers, which could in the main restrain the worst elements in Jordan, there is now an army, which the Minister of State told us today was composed of 21,000 men, well equipped and well trained and upon which the British Government have spent £60 million in the last nine years. It is now along the Israeli border, without the restraining influence of General Glubb.
  Therefore, the position of Israel is a very serious one. I say on behalf of my party that we shall go on pressing the Government for a treaty with Israel, which we regard as important. The Minister of State, when he had to leave his brief in order to answer a specific question about this matter, never gave

  2219
  us a direct answer, except to say that we could not have a treaty with a country the borders of which were not defined. Then, he was asked how it was that we could have a treaty with Jordan, the borders of which country were not defined in one particular area.
  I do not want to weary the House with a long quotation, but I should like to refer the Minister of State to a debate on 22nd April, 1950, in this House, when my right hon. Friend the Member for Grimsby (Mr. Younger) was Minister of State and dealt with that matter. He showed that we recognised the land which the Jordan people had taken in Palestine. We recognised that as part of the land to be covered by the existing Treaty, based only as an armistice line and subject to modification by agreement between the two parties at any subsequent time. Therefore, it is perfectly feasible and perfectly possible to have a treaty with Israel based on the same grounds as those on which the Treaty with Jordan was based.
  It is very interesting to note that only in tonight's Evening Standard there is an article by—I do not know whether one should mention the name or not in case the Prime Minister should get frightened, but it is an article written by Mr. Randolph Churchill. As he has written some peculiar things about the Prime Minister lately, I did not wish to mention his name in case it should frighten the Prime Minister. But Mr. Randolph Churchill writes in the Evening Standard, of an interview with Lord Killearn, who was for twelve years our representative in Cairo and an anti-Zionist, but who is now saying that the Government should have a treaty with Israel.
  Whether or not we should have a treaty, I say most emphatically that the Government must now face the need of supplying arms to Israel—and in my view they must supply quality arms. They must meet the threat of faster fighters, of higher-flying bombers and of the superior tanks which are now in the hands of the Egyptians. The Minister of State and others have said from time to time that this will lead to an arms race. Of course that is not true, because the limit of arms must be the absorptive capacity of the country accepting them.
  2220
  We have here Israel, with a population of about 1¾ million surrounded by the Arab States, which are anti-Israel, with a total population of 40 million. It is of no use saying, therefore, that in an arms race one merely piles up arms until they are a real menace. The fact is that there is an absolute limit to what the Israelis can take. That is much less than the quantities which the Arab States can take, but at the moment the Israelis have not got a fighter to match the MiG, they have not a tank to match the Centurion and the Stalin T, and defence against bombers is difficult because they have not a fighter which can attain the heights at which the new Ilyushin bombers can fly. The Israelis are being put into an extremely difficult position, and I beg the Prime Minister once again to consider whether or not he will raise the ban on arms to Israel and give serious consideration to Israel's requirements.
  Mr. Fell rose—
  Mr. Robens: If I give way it will only take from the time of the Prime Minister, and I do not think that that would be fair.
  After the Prime Minister had returned from Washington we hoped that we should be told something specific about the Middle East and particularly about the Tripartite Declaration. Whatever we may say about the Tripartite Declaration here, however many times we are able to drag from the Government the admission that they really do stand by it, the truth is that neither the Jews nor the Arabs really believe in it—they have not confidence in it. Nevertheless, to the Israelis the Tripartite Declaration is very important. Israel is a tiny country, and with these new weapons she could be cut in two in a matter of hours. It is, therefore, not just a pious declaration that Israel wants. Israel wants to know in what form and how quickly aid can be given. We had hoped, therefore, that the Prime Minister would have talked to Eisenhower about this and would at least have given some indication as to the way in which aid could be given to one side or other in accordance with the Tripartite Declaration in the event of aggression.
  We should also like to know what has happened to the suggestion, first made from these benches, about the international police force along strategic parts of the frontier and about which the Foreign Secretary later said he had talked

  2221
  eighteen months or two years previously with the Secretary-General of the United Nations. We were not aware, of course, that he had done that; it was only after we had asked questions about it that we learned he had had talks.
  What has happened? If full advantage is to be taken of the United Nations machinery, the Prime Minister and his colleagues in the Government should not answer us week after week in this House to the effect that they would support General Burns in any application he might make in relation to increasing his observer force. General Burns is a servant of the United Nations, and the decision whether or not to increase the force of observers or to use them as an international police force is not a matter for him. That is a political question for the United Nations Security Council to decide. It is passing the buck to say that we shall do it if and when General Burns says he would like more people for this task. The Government should long since have taken the initiative in proposing that it should be done.
  If peace is to be preserved on that frontier, nothing less than an international police force along certain strategic parts of it is required. Col. Nasser is prepared to accept such a force, and it was a great mistake to let all these weeks pass since he indicated his willingness to withdraw a kilometre from the frontier, to facilitate such a force, without taking some advantage of his offer.
  A problem of the Middle East which has been mentioned many times is our dependence, and the dependence of a good deal of the Western hemisphere, upon Middle East oil. We should be hypocrites if we did not acknowledge right away that the whole of our economy would come crashing around our ears if the oil were suddenly diverted from us; but we cannot have two policies about oil in the Middle East, an American policy and a British policy. The strange thing is that most, if not all, of the money which is causing the trouble, which is used for the bribery and the corruption and to organise demonstrations, and which has been used to get the British out of Jordan, comes from royalties paid by the American oil companies. It is a strange thing that the most anti-Communist country in the world should
  2222
  be allowing its money to be used to create a vacuum into which Communism can go.
  I am a little surprised that the Prime Minister did not seriously deal with this point when he had the opportunity of talking to President Eisenhower. He may have done so, but he has not told us. When he came back he said nothing.
  Altogether £360 million a year is going into the countries of the Middle East, but not to all of them; only to those which happen to have the oil. We, therefore, have abject and extreme poverty lying side by side with the most abnormal riches it is possible to see. If we want to preserve that oil in a friendly way for the Western Powers, we must always be prepared to pay a fair price for it; but there is no reason that, given a joint Anglo-American plan on oil, some of the surplus money should not be set on one side, not merely for the countries in which oil is found but as a fund for the economic development of the Middle East as a whole. I believe that money from royalties spent in that way would do very much better for the peace of the world than money spent in bribery and corruption and in unpinning all we have tried to do.
  I should like to say much more, but I must draw my remarks immediately to a conclusion as I understand that the Prime Minister wants thirty-five minutes in order to tell us what I am sorry he did not tell us at the beginning of the debate. I would say this to him: the Government have very heavy responsibilities. They must take action, and they must be firm in the action which they take. The Minister of State emphasised that the policy was to be based on reliability, consistency, patience and firmness; but about what?—tell us about all these things that are to be done.
  I want briefly to re-state our position. We say quite firmly that troops should not be used in Jordan in order to enforce a policy on Jordan, but troops should be used only in protection of British lives in that part of the world. The ban on arms for Israel should be lifted and she should be allowed to buy quality arms. We say the Government should not abrogate the Jordan Treaty, but should immediately open talks on the financial provisions of the Treaty in view of the changed circumstances. We say that the Government should try to get the oil

  2223
  companies of America and Britain to agree on a joint plan for the Middle East.
  We believe that the Government should declare quite plainly that they have no intention whatever of interfering with the natural aspirations of the Arab people for independence, their own way of life and their nationalism; but at the same time we stand firmly by the Tripartite Declaration, that Israel must be protected, that she is there to stay and, subject to the guaranteeing of the State of Israel, the Arabs are perfectly entitled to have their natural aspirations granted to them.
  Finally, I say to the Prime Minister that we have to decide whether we shall divide the House tonight. That will depend very largely on what the Prime Minister has to say, but I can assure him that we do not propose to go on giving carte blanche approval to the policy of the Prime Minister and the Government in foreign affairs until we are satisfied that what he is doing is good for the country and good for the world.
  9.27 p.m.
  The Prime Minister (Sir Anthony Eden): It is agreeable, before entering into the controversy which in some respects has arisen in this discussion, in my winding-up speech to be able to pay tributes which deserve perhaps rather fuller testimony than I can give tonight to my hon. Friend the Member for Inverness (Mr. N. McLean) on his maiden speech and to the hon. Member for Bristol, North-West (Mr. Boyd) for his contribution from the other side of the House. The House was not quite so full then as it is now, but those speeches were fully deserving of a very much wider audience. There also ran through them a certain substratum, I will not say of agreement, but of common thought which, quite naturally in a debate of this kind, others are instinctively tempted to conceal, but which in those maiden speeches appeared quite clearly. I am sure that the whole House will want to hear those two hon. Members again.
  I will pick up some of the points made by the right hon. Member for Blyth (Mr. Robens). He asked what we are doing about the United Nations observers. Why did we not get going and produce some results? Why did we only have thoughts which were produced by the Opposition
  2224
  long ago? If the right hon. Member and his colleagues want to have a monopoly of thoughts for increasing the United Nations observers, gladly I give it them with any other thoughts they like to produce. The right hon. Member complained—[An HON. MEMBER: "Get on."] I am going to get on and hon. Members opposite will not like some of what is coming to them. If hon. Members wish to claim the authorship, which belonged to the Foreign Secretary, for the increase in those numbers, of course, they can have it. It does not make the slightest difference to us so long as we get the results.
  Mr. Robens: We have not yet got the results.
  The Prime Minister: The right hon. Member is muttering now that we have not yet got the results.
  Mr. Robens: The right hon. Gentleman has challenged me. What I am saying is that he has not got results. That is what we are complaining about.
  The Prime Minister: The right hon. Gentleman was good enough to say that he would give me twenty-five minutes and I was to sit down at three minutes to ten. The House can judge how well he has fulfilled that part of his bargain. It does not shock me at all. It is a reasonable arrangement that when one asks for an amount of time, one likes to have it. The House knows perfectly well that I am always ready to give way if I possibly can—I have done it for thirty years in this House—but when one asks for a certain measure of time in winding up, one is entitled to get it. Therefore, I do not propose to give way to the right hon. Gentleman any more.
  I have told the right hon. Gentleman and I have told the House that we have made it quite plain that we are quite ready to make our contribution to an increase of the United Nations observers—and we have said more than that. We have said quite clearly that we consider that the United Nations observers should be increased in number. That is our view and our opinion. The decision for that does not rest with one member of the United Nations, but with the United Nations collectively. They are, all of them, fully aware of our view, which has been stated both publicly and privately.

  2225
  I still hold to the view that has been expressed, and I hope and trust that it will prevail among the majority of the United Nations so that that element, which must not be exaggerated, but which can be useful in ensuring that hostilities do not break out, can be made effective.
  The right hon. Gentleman was very indignant because my right hon. Friend had said that last time he spoke he was violent in denunciation of the Bagdad Pact. I shall remind the House of what he said. The right hon. Gentleman said:
  "What the Government did after that"—
  this is how he described our action—
  "…was to precipitate a major danger to peace in the Middle East by going ahead with the policy of a military alliance in the Bagdad Pact."
  If that is not denouncing the Bagdad Pact, I do not know what is.
  Mr. Robens rose—
  The Prime Minister: I wish to finish the golden words. The right hon. Gentleman must not interrupt me before I finish his quotation. He went on to say:
  "That provoked, as might have been expected, the equally mischievous and dangerous Soviet intervention in the Middle East."—[OFFICIAL REPORT, 27th February, 1956; Vol. 549, c. 853.]
  I would only say this to the right hon. Gentleman: Every single word of what was said by the right hon. Member for Easington (Mr. Shinwell) in tearing to pieces the folly of that statement was absolutely right at every point.
  Mr. Robens: I merely ask the Prime Minister to ask his right hon. and learned Friend the Foreign Secretary what Nasser told him when he went to see him about the Bagdad Pact and the Russian arms.
  The Prime Minister: I am not in the least concerned what Nasser may or may not have said. I am dealing with the right hon. Gentleman, who in his last speech violently attacked the Bagdad Pact in considerable contradiction to the right hon. Member for Leeds, South (Mr. Gaitskell) who opened the debate for the Opposition this afternoon and in even more marked contradiction to the right hon. Member for Easington, and, let me add, to those who supported the Pact
  2226
  when we first introduced it into this House. If this was such a wicked business, what a pity it is that the right hon. Gentleman, with the remarkable foresight about which he has told us this evening, did not think of voting against it when it was produced.
  I have quotations from a number of speeches that were made at the time, notably by—[HON. MEMBERS: "Make your own speech."]—Mr. T. Reid, who was the Member for Swindon in the last House, strongly and emphatically endorsing the Bagdad Pact. [Interruption.]
  Mr. Speaker: Order. I must ask hon. Members to listen to the Prime Minister. The right hon. Member for Blyth (Mr. Robens) was heard in perfect silence.
  The Prime Minister: I was only pointing out to the House, as I think I am entitled to do, that there has been a whole series of divergent statements from hon. and right hon. Gentlemen opposite. [HON. MEMBERS: "What is your view."] I am entitled to make these statements because the country should realise them. Right hon. Gentlemen opposite have alternated between supporting and attacking the Bagdad Pact. The right hon. Gentleman's attack last time was of the greatest benefit to the critics of this country. Today the right hon. Gentleman takes a different line. The right hon. Member for Lewisham, South (Mr. H. Morrison) took a different line. My policy is clear enough. I am one of the authors of the Bagdad Pact. I am proud to be so, and I stand by it in every line. Our complaint is that right hon. Gentlemen alternate in their criticism, one day saying that it is a bad thing and another day saying that it is a good thing.
  I was asked by the right hon. Gentleman the Leader of the Opposition, earlier in the debate, if I would give some account of what happened in negotiations with the Jordan Government over the entry of Jordan into the Bagdad Pact. He said that all this had been concealed and clothed in mystery and asked whether I would be good enough to tell the House something about it. I am sorry that the right hon. Gentleman—I do not complain because it is difficult for all of us—has not had the leisure to read HANSARD. An actual account of all this was given in HANSARD, and perhaps I had better read the Joint Under-Secretary's reply,

  2227
  which explains exactly what the negotiations were about and what we offered, which I hope the House will consider reasonable. This is what the Joint Under-Secretary said:
  "In response to an inquiry on their part the Jordan Government were recently informed that, in the event of the Jordan Government acceding to the Bagdad Pact and in recognition of Jordan's new responsibilities under it, Her Majesty's Government would be prepared:"—
  I hope that I can have the right hon. Gentleman's attention—

  "(a) to equip and maintain additional infantry units of the Arab Legion, together with an artillery unit;

  (b) to convert an armoured car regiment to tanks; and

  (c) to negotiate the replacement of the Anglo-Jordan Treaty of 1948 by a Special Agreement under Article 1 of the Pact."

  I think that gives a reasonable account of the offer which was made to the Jordan Government.
  Mr. Gaitskell: I am obliged to the Prime Minister for taking up my question, but he has not told us whether any conditions were laid down if, in fact, this were to be carried through, nor has he given us a clear indication of what the consequential increase in the strength of the Legion would be or what the additional subsidy would be.
  The Prime Minister: I can give the right hon. Gentleman further information if he desires, but I was dealing with the point he made that these negotiations have been carried through with some mystery. They have not. Nor were they carried through by any form of blackmail, as has been suggested, that is to say, by saying to Jordan, "If you do not join you will not continue to enjoy the privileges you now enjoy." I want the House to appreciate that. That was never said at any time.
  As for the choice of General Templer, which was also criticised, I would add that here was a military matter in the main, which the officer was to decide. I do not know what more distinguished officer we could have sent. He was well known to the King and to most of the Jordanian leaders at the time. So I make no apology for the choice of General Templer.
  Now I want to say a word about the recent developments in Jordan which,
  2228
  after all, apart from the other matters which have arisen, were the original cause of this debate. Last Monday I reported to the House immediately recent developments in Jordan, and I expressed our view as a Government of what had happened. I also informed the House of certain decisions we had taken in respect of officers in executive command. I think it is fair to say that the House as a whole thought that those were the inevitable decisions we had to take. They have been communicated to the Jordan Government by whom they have been received with, I think I ought to say, considerable distress.
  On Monday I also told the House the doubts which I felt as to whether we could, or should, immediately determine the lines of our future policy towards Jordan from this time, that is to say, I do not mean just the officers but the treaty, the subsidy and all the other things that go with it.
  We have had much advice in the same sense during this debate, and I think it is good advice. I must tonight tell the House bluntly that I am not in a position to announce tonight in respect of Jordan, though of other things I have more to say, immediate definite lines of policy which will inevitably be followed—I will tell the House why—because I am sure that to attempt to do so now, with such information as we have, would be not only premature, but probably dangerous to our own interests, more perhaps than to those of Jordan.
  During this debate a number of hon. Members from both sides of the House have counselled a certain caution. I think it is right that that caution should be pursued, but, as we do so, there is a factor which has been mentioned several times and which we cannot ignore in weighing up our present difficulties.
  The Leader of the Opposition and others referred in passing to Arab-Israel antagonism—so did some of my hon. Friends—and to its possible effect on the course of events in Jordan. It is certainly true that where there are very large refugee problems, the difficulties are infinitely greater in trying to get any kind of relaxation of tension or toleration of another point of view than anywhere else in the Middle East.
  That is perfectly true, and I have not the least doubt that though the House may try to weigh what were the factors

  2229
  which brought about this result, one of them beyond doubt was the number of people in Jordan today. Is it half a million, or is it more, who are exiles from Palestine, who look back, as the right hon. Gentleman said, across that frontier, and whose whole thoughts are bent in getting back across that frontier.
  Hon. Gentlemen who know this business well will perhaps know this too, that without doubt the most powerful factor militating against Jordan joining the Pact when General Templer was there was that they knew that one consequence of the Bagdad Pact was that its members might be thinking of other things as well as of getting back again to Israel, or a future conflict with Israel. I have not the slightest doubt that that factor played its part in the decision that was then taken. [An HON. MEMBER: "That is obvious."] It may be obvious to the hon. Gentleman, but perhaps he will not mind my repeating the obvious. It is an important factor which is not always understood.
  I want to say something on the subject of Egypt. For some time past, we know, the Egyptian broadcasts have kept up a stream of abuse against Glubb Pasha, and that has been distributed all over Jordan. To try to disrupt a treaty between Jordan and ourselves is utterly inconsistent with assurances of friendly relations. If the Egyptians generally want friendly relations with the Western Powers, they can be obtained, but not at any price One way of ensuring that Egypt does not get them is to pursue a policy which, on the one hand, professes friendship and, on the other, incites hostility.
  I also want to say something about a point which has arisen over and over again during the debate, first being raised by the Leader of the Opposition—the position of Jordan in relation to the 1950 Declaration and the position of Israel in relation to a treaty. Perhaps hon. Members do not recall—anyhow, nobody has mentioned it—that our treaty with Jordan was made before the hostilities broke out, As the right hon. Member for Blyth correctly mentioned just now, the right hon Member for Grimsby (Mr. Younger)—very properly, I think—entered a certain caveat when the Trans-Jordan Treaty became a treaty with Jordan. The right hon. Gentleman rightly pointed out that
  2230
  the frontiers had not been finally determined, and he went on to say:
  "Until, therefore, the frontier between Israel and Jordan is determined by a final settlement between them His Majesty's Government regard the territory to which the Anglo-Jordan Treaty is applicable as being bounded by the Armistice Line or any modification of it which may be agreed upon by the two parties."—[OFFICIAL REPORT, 27th April, 1950; Vol. 474, c. 1138.]
  The House will observe with interest—I think that what was said at that time was quite right—how close those words are to the later 1950 Declaration for which the Government of that day were also responsible—again rightly, I think—but I do not think it is an accident that the words have a certain parallel meaning.
  The position about treaties, therefore, is that there was a treaty with Jordan before the hostilities began, that after the hostilities had begun there was a statement in respect of that treaty which was very similar to the 1950 Declaration, and that since the Declaration of 1950 all the policies of successive Governments have been based on that Declaration and no further treaties have been made with any parties to the dispute in any part of that area. [Interruption.] Iraq is not a neighbour of Israel. That is the reason why the Labour Government did not make a Treaty with Israel at the time. It is the same reason as applies now. If that was not the Labour Government's reason, I do not know what it was; anyhow, they did not make a treaty with Israel.
  The point that I am establishing is that I think this country should keep, as the United States is keeping, this distinction clearly in mind. We have given various undertakings—very grave undertakings, as the right hon. Member for Easington (Mr. Shinwell) rightly said—in respect of the 1950 Declaration, but treaties must await a settlement where they can be offered to both sides, and so far both sides have not agreed upon their settlement. At any rate, I hope that what I have said clears up the difference between treaties and the 1950 Declaration, and that the House knows exactly what it is.
  Mr. Kenneth Younger: Does the Prime Minister not think that if the point of view which he is now putting forward were really the valid one, the right thing at the time of my statement in 1950

  2231
  would have been for us to say that our Treaty with Jordan did not apply to anything outside the original frontiers of Jordan? In fact, we did not say any such thing. We said that it covered the new territories of Jordan as a whole up to the armistice lines, and that is why we say there should be a similar treaty with Israel.
  The Prime Minister: If the right hon. Gentleman really felt that, I do not see why he did not make his treaty at the time. My belief is that his Government did not feel that, but felt that where the frontiers were still undetermined, treaties had better not be made.
  At any rate, we looked into this again at Washington and at Washington we deliberately chose a form of words in respect of the 1950 Declaration with which I must trouble the House again, because they are of the greatest importance. The words are:
  "The Tripartite Declaration of May 25, 1950,"
  right hon. Gentlemen say they always have to drag this out of me, but on this occasion they will not have to do so—
  "provides for action both inside and outside the United Nations in the event of the use of force or threat of force or of preparations to violate the frontier or armistice lines…"
  Let hon. Members notice how close this is to the Jordan language. It goes on:
  "We are bound to recognise that there is now increased danger."—
  and I endorse the view of the Leader of the Opposition that the danger has been further increased by the events in Jordan in the last few days; I entirely accept that. [Interruption.] I am reading this quotation, because of its relevance to that increased danger:
  "Accordingly we have made arrangements"—
  that is, ourselves and the United States—
  "for joint discussions as to the nature of the action which we should take in such an event."
  I ask the House whether it is conceivable, knowing the constitutions of the two countries, to imagine any statement of a graver character could be made by the United States and the United Kingdom, or one which has greatest significance for the action we may have to take.
  I do not consider—and I hope that the House including right hon. Gentlemen
  2232
  opposite will agree with me—that it is a light engagement which we have to carry under the 1950 Declaration. It is very serious indeed for the people of this country, perhaps more serious than many of them yet realise. It is of the greatest significance that we and the United States should be in complete agreement about it and have had discussions as to the nature of the action we should take in such an event.
  I would say—hon. Gentlemen opposite can judge—if I were in the position of Israel, that I should regard that undertaking, in view of the forces which are available in the area, as infinitely more valuable than agreement to be allowed to buy a certain number of tanks or aircraft. There is no question about it. If this country were in danger, a statement like that by the United States would be worth all the tanks we could get from anywhere, and infinitely better in the cause of peace than an arms race and all the consequences that would flow from it.
  If right hon. Gentlemen opposite prefer an arms race, they can always have it. The consequence, if we do not agree to accept the undertaking of the United States, this country and France, which has now joined us in this obligation, is, as the right hon. Gentleman rightly said, to pile in a certain number of arms with the result that in the end Israel could not hope to compete with the Arab States.
  Mr. Crossman: The arms are being piled in now.
  The Prime Minister: I want to say something about the criticisms of the Bagdad Pact, because it is a very important instrument, however much right hon. Gentlemen opposite may sneer at it. It is the only example yet created in the Middle East of a treaty engagement in which a number of countries have voluntarily come together for mutual help one with another, the only example of this kind that exists at all, both politically and economically. Moscow Radio calls it the "Colonial Pact." I hope that when the right hon. Gentleman the Leader of the Opposition was speaking earlier and talking about semi-colonial arrangements, ho was not a milder echo of Moscow Radio in that respect. [Interruption.] I said I was sure that he was not, that he did not refer to it in that context at all.

  2233
  By means of that Pact we are creating a unity in a wide area of the Middle East which has never existed before, a unity which is both political and economic and which has already brought far-reaching advantages to all the peoples in that area. We repeat to the House tonight that we intend to uphold the Bagdad Pact; to be loyal to all those who are its members; to uphold the 1950 Declaration, with all its possible ominous consequences for the people of this country; to be loyal to all those engagements. We think those make a foundation upon which Middle Eastern effort can be built, and we will pursue them, whatever the consequences, until the end of the road.
  Mr. Gaitskell rose—
  Hon. members:Sit down.
  Mr. Gaitskell: In view of the utterly unsatisfactory—
  Hon. Members: Oh.
  Mr. Speaker: Order. We have only a few moments left. Let us hear what the right hon. Gentleman has to say.
  Mr. Gaitskell: If I may have the leave of the House to speak, I was merely going to say that in view of the totally unsatisfactory nature of the Prime Minister's reply, we shall divide the House.
  Question put, That this House do now adjourn:—
  The House divided: Ayes 252, Noes 312.

  Division No. 117.]

  AYES

  [9.58 p.m.

  Ainsley, J. W.

  Davies, Stephen (Merthyr)

  Jeger George (Goole)

  Albu, A. H.

  Deer, G.

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

  Allaun, Frank (Salford, E.)

  de Freitas, Geoffrey

  Jenkins, Roy (Stechford)

  Allen, Arthur (Bosworth)

  Delargy, H. J.

  Johnson, James (Rugby)

  Allen, Scholefield (Crewe)

  Dodds, N. N.

  Jones, David (The Hartlepools)

  Anderson, Frank

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

  Jones, Jack (Rotherham)

  Awbery, S. S.

  Dye, S.

  Jones, J. Idwal (Wrexham)

  Bacon, Miss Alice

  Ede, Rt. Hon. J. C.

  Jones, T. W. (Merioneth)

  Baird, J.

  Edelman, M.

  Kenyon, C.

  Balfour, A.

  Edwards, Rt. Hon. John (Brighouse)

  Key, Rt. Hon. C. W.

  Bartley, P.

  Edwards, Rt. Hon. Ness (Caerphilly)

  King, Dr. H. M.

  Bellenger, Rt. Hon. F. J.

  Edwards, Robert (Bilston)

  Lawson, G. M.

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

  Evans, Albert (Islington, S.W.)

  Ledger, R. J.

  Benn, Hn. Wedgwood (Bristol, S.E.)

  Evans, Edward (Lowestoft)

  Lee, Frederick (Newton)

  Benson, G.

  Fernyhough, E.

  Lee, Miss Jennie (Cannock)

  Beswick, F.

  Fienburgh, W.

  Lever, Harold (Cheetham)

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

  Finch, H. J.

  Lever, Leslie (Ardwick)

  Blackburn, F.

  Fletcher, Eric

  Lewis, Arthur

  Blenkinsop, A.

  Forman, J. C.

  Lindgren, G. S.

  Blyton, W. R.

  Fraser, Thomas (Hamilton)

  Lipton, Lt.-Col. M.

  Boardman, H.

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

  Logan, D. G.

  Bottomley, Rt. Hon. A. G.

  Gibson, C. W.

  Mabon, Dr. J. Dickson

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

  Gordon Walker, Rt. Hon. P. C

  MacColl, J. E.

  Bowles, F. G.

  Greenwood, Anthony

  McGhee, H. G.

  Boyd, T. C.

  Grenfell, Rt. Hon. D. R.

  McGovern, J.

  Braddock, Mrs. Elizabeth

  Grey, C. F.

  McInnes, J.

  Brockway, A. F.

  Griffiths, David (Rother Valley)

  McKay, John (Wallsend)

  Broughton, Dr. A. D. D.

  Griffiths, Rt. Hon. James (Llanelly)

  McLeavy, Frank

  Brown, Rt. Hon. George (Belper)

  Hale, Leslie

  MacMillan, M. K. (Western Isles)

  Brown, Thomas (Ince)

  Hall, Rt. Hn. Glenvil (Colne Valley)

  MacPherson, Malcolm (Stirling)

  Burke, W. A.

  Hannan, W.

  Mahon, S.

  Butler, Herbert (Hackney, C.)

  Harrison, J. (Nottingham, N.)

  Mainwaring, W. H.

  Butler, Mrs. Joyce (Wood Green)

  Hastings, S.

  Mallalieu, E. L. (Brigg)

  Callaghan, L. J.

  Hayman, F. H.

  Mallalieu, J. P. W. (Huddersfd, E.)

  Carmichael, J.

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

  Mann, Mrs. Jean

  Castle, Mrs. B. A.

  Herbison, Miss M.

  Marquand, Rt. Hon. H. A.

  Champion, A. J.

  Hewitson, Capt. M.

  Mason, Roy

  Chapman, W. D.

  Hobson, C. R.

  Mayhew, C. P.

  Chetwynd, G. R.

  Holman, P.

  Mellish, R. J.

  Clunie, J.

  Holmes, Horace

  Messer, Sir F.

  Coldrick, W.

  Houghton, Douglas

  Mitchison, G. R.

  Collick, P. H. (Birkenhead)

  Howell, Charles (Perry Barr)

  Monslow, W.

  Collins, V. J.(Shoreditch & Finsbury)

  Howell, Denis (All Saints)

  Moody, A. S.

  Corbet, Mrs. Freda

  Hoy, J. H.

  Morris, Percy (Swansea, W.)

  Cove, W. G.

  Hughes, Cledwyn (Anglesey)

  Morrison, Rt. Hn. Herbert (Lewishm. S.)

  Craddock, George (Bradford, S.)

  Hughes, Emrys (S. Ayrshire)

  Mort, D. L.

  Cronin, J. D.

  Hughes, Hector (Aberdeen, N.)

  Moss, R.

  Crossman, R. H. S.

  Hunter, A. E.

  Moyle, A.

  Cullen, Mrs. A.

  Hynd, H. (Accrington)

  Mulley, F. W.

  Daines, P.

  Irvine, A. J. (Edge Hill)

  Neal, Harold (Bolsover)

  Dalton, Rt. Hon. H.

  Irving, S. (Dartford)

  Noel-Baker, Francis (Swindon)

  Darling, George (Hillsborough)

  Isaacs, Rt. Hon. G. A.

  O'Brien, Sir Thomas

  Davies, Ernest (Enfield, E.)

  Janner, B.

  Oliver, G. H.

  Davies, Harold (Leek)

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

  Oram, A. E.

  Orbach, M,

  Royle, C.

  Usborne, H. C.

  Oswald, T.

  Shinwell, Rt. Hon. E.

  Viant, S. P.

  Owen, W.J.

  Short, E. W.

  Warbey, W. N.

  Padley, W. E.

  Silverman, Julius (Aston)

  Watkins, T. E.

  Paget, R. T.

  Silverman, Sydney (Nelson)

  Weitzman, D.

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

  Simmons, C. J. (Brierley Hill)

  Wells, Percy (Faversham)

  Paling, Will T. (Dewsbury)

  Skeffington, A. M.

  Wells, William (Walsall, N.)

  Palmer, A. M. F.

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

  West, D. G.

  Pannell, Charles (Leeds, W.)

  Slater, J. (Sedgefield)

  Wheeldon, W. E.

  Pargiter, G. A.

  Smith, Ellis (Stoke, S.)

  White, Mrs. Eirene (E. Flint)

  Parker, J.

  Snow, J. W.

  White, Henry (Derbyshire, N.E.)

  Parkin, B. T.

  Sorensen, R. W.

  Wigg, George

  Paton, J.

  Sparks, J. A.

  Wilcock, Group Capt. C. A. B.

  Peart, T. F.

  Steele, T.

  Wilkins, W. A.

  Plummer, Sir Leslie

  Stewart, Michael (Fulham)

  Willey, Frederick

  Price, J. T. (Westhoughton)

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

  Williams, David (Neath)

  Price, Philips (Gloucestershire, W.)

  Stones, W. (Consett)

  Williams, Rev. Llywelyn (Ab'tillery)

  Probert, A. R.

  Strachey, Rt. Hon. J.

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

  Proctor, W. T.

  Strauss, Rt. Hon. George (Vauxhall)

  Williams, W. R. (Openshaw)

  Pursey, Cmdr. H.

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

  Williams, W. T. (Barons Court)

  Randall, H. E.

  Summerskill, Rt. Hon. E.

  Willis, Eustace (Edinburgh, E.)

  Rankin, John

  Swingler, S. T.

  Wilson, Rt. Hon. Harold (Huyton)

  Redhead, E. C.

  Sylvester, G. O.

  Winterbottom, Richard

  Reeves, J.

  Taylor, Bernard (Mansfield)

  Woodburn, Rt. Hon. A.

  Reid, William

  Taylor, John (West Lothian)

  Woof, R. E.

  Robens, Rt. Hon. A.

  Thomas, George (Cardiff)

  Yates, V. (Ladywood)

  Roberts, Albert (Normanton)

  Thomas, Iorwerth (Rhondda, W.)

  Younger, Rt. Hon. K.

  Roberts, Goronwy (Caernarvon)

  Thornton, E.

  Zilliacus, K.

  Robinson, Kenneth (St. Pancras, N.)

  Timmons, J.

  Rogers, George (Kensington, N.)

  Turner-Samuels, M.

  TELLERS FOR THE AYES:

  Ross, William

  Ungoed-Thomas, Sir Lynn

  Mr. Popplewell and Mr. Pearson.

  NOES

  Agnew, Cmdr. P. G-

  Conant, Maj. Sir Roger

  Grant, W. (Woodside)

  Aitken, W. T.

  Cooper, Sqn. Ldr. Albert

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

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

  Cooper-Key, E- M.

  Green, A.

  Alport, C. J. M.

  Cordeaux, Lt.-Col. J. K.

  Gresham Cooke, R.

  Amery, Julian (Preston, N.)

  Corfield, Capt. F. V.

  Grimston, Hon. John (St. Albans)

  Amory, Rt. Hn. Heathcoat (Tiverton)

  Craddock, Beresford (Spelthorne)

  Grimston, Sir Robert (Westbury)

  Anstruther-Gray, Major W. J.

  Crosthwaite-Eyre, Col. O. E.

  Gurden, Harold

  Armstrong, C. W.

  Crouch, R. F.

  Harris, Frederic (Croydon, N.W.)

  Aston, H.

  Crowder, Sir John (Finchley)

  Harris, Reader (Heston)

  Astor, Hon. J. J.

  Crowder, Petre (Ruislip—Northwood)

  Harrison, A. B. C. (Maldon)

  Atkins, H. E.

  Cunningham, Knox

  Harrison, Col. J. H. (Eye)

  Baldwin, A. E.

  Currie, G. B. H.

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

  Banks, Col. C.

  Dance, J. C. G.

  Harvey, Ian (Harrow, E.)

  Barber, Anthony

  Davidson, Viscountess

  Harvey, John (Walthamstow, E.)

  Barlow, Sir John

  D'Avigdor-Goldsmid, Sir Henry

  Harvie-Watt, Sir George

  Barter, John

  Deedes, W. F.

  Hay, John

  Baxter, Sir Beverley

  Digby, Simon Wingfield

  Heald, Rt. Hon. Sir Lionel

  Beamish, Maj. Tufton

  Dodds-Parker, A. D.

  Henderson, John (Cathcart)

  Bell, Philip (Bolton, E.)

  Donaldson, Cmdr. C. E. McA.

  Hicks-Beach, Maj. W. W.

  Bell, Ronald (Bucks, S.)

  Doughty, C. J. A.

  Hill, Rt. Hon. Charles (Luton)

  Bennett, F. M. (Torquay)

  Drayson, G. B.

  Hill, Mrs. E. (Wythenshawe)

  Bevins, J. R. (Toxteth)

  du Cann, E. D. L.

  Hill, John (S. Norfolk)

  Bidgood, J. C.

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

  Hinchingbrooke, Viscount

  Birch, Rt. Hon. Nigel

  Duncan, Capt. J. A. L.

  Hirst, Geoffrey

  Bishop, F. P.

  Duthie, W. S.

  Holland-Martin, C. J.

  Black, C. W.

  Eccles, Rt. Hon. Sir David

  Hope, Lord John

  Body, R. F.

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

  Hornsby-Smith, Miss M. P.

  Boothby, Sir Robert

  Eden, J. B (Bournemouth, West)

  Horobin, Sir Ian

  Bossom, Sir A. C.

  Emmet, Hon. Mrs. Evelyn

  Horsbrugh, Rt. Hon. Dame Florence

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

  Errington, Sir Eric

  Howard, Gerald (Cambridgeshire)

  Boyle, Sir Edward

  Erroll, F. J.

  Howard, Hon. Greville (St. Ives)

  Braithwaite, Sir Albert (Harrow, w.)

  Farey-Jones, F. W.

  Howard, John (Test)

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

  Fell, A.

  Hudson, Sir Austin (Lewisham, N.)

  Brooke, Rt. Hon. Henry

  Finlay, Graeme

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

  Brooman-White, R. C.

  Fisher, Nigel

  Hughes Hallett, Vice-Admiral J.

  Browne, J. Nixon (Craigton)

  Fleetwood-Hesketh, R. F.

  Hughes-Young, M. H. C.

  Bryan, P.

  Foster, John

  Hulbert, Sir Norman

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

  Fraser, Hon. Hugh (Stone)

  Hurd, A. R.

  Bullus, Wing Commander E. E.

  Fraser, Sir Ian (M'cmbe & Lonsdale)

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

  Burden, F. F. A.

  Freeth, D. K.

  Hutchison, Sir James (Scotstoun)

  Butcher, Sir Herbert

  Galbraith, Hon. T. G. D.

  Hyde, Montgomery

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

  Garner-Evans, E. H.

  Hylton-Foster, Sir H. B. H.

  Campbell, Sir David

  George, J. C. (Pollok)

  Iremonger, T. L.

  Carr, Robert

  Gibson-Watt, D.

  Irvine, Bryant Codman (Rye)

  Cary, Sir Robert

  Glover, D.

  Jenkins, Robert (Dulwich)

  Channon, H.

  Godber, J. B.

  Jennings, J. C. (Burton)

  Chichester-Clark, R.

  Gomme-Duncan, Col. Sir Alan

  Johnson, Dr. Donald (Carlisle)

  Clarke, Brig. Terence (Portsmth, W.)

  Gough, C. F. H.

  Johnson, Eric (Blackley)

  Cole, Norman

  Gower, H. R.

  Johnson, Howard (Kemptown)

  2236

  2237

  Jones, Rt. Hon. Aubrey (Hall Green)

  Monckton, Rt. Hon. Sir Walter

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

  Joseph, Sir Keith

  Moore, Sir Thomas

  Smithers, Peter (Winchester)

  Joynson-Hicks, Hon. Sir Lancelot

  Morrison, John (Salisbury)

  Smyth, Brig. Sir John (Norwood)

  Kaberry, D.

  Nabarro, G. D. N.

  Soames, Capt. C.

  Kegan, D.

  Nairn, D. L. S,

  Spearman, A. C. M.

  Kerby, Capt. H. B.

  Neave, Airey

  Speir, R. M.

  Kerr, H. W.

  Nicholls, Harmar

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

  Kershaw, J, A.

  Nicholson, Godfrey (Farnham)

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

  Kimball, M.

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

  Stanley, Capt. Hon. Richard

  Kirk, P. M.

  Nield, Basil (Chester)

  Stevens, Geoffrey

  Lagden, G. W.

  Noble, Comdr. A. H. P.

  Steward, Harold (Stockport, S.)

  Lambert, Hon. G.

  Nugent, G. R. H.

  Steward, Sir William (Woolwich, W.)

  Langford-Holt, J. A.

  Nutting, Rt. Hon. Anthony

  Stewart, Henderson (Fife, E.)

  Leather, E. H. C.

  Oakshott, H. D.

  Stoddart-Scott, Col. M.

  Leavey, J. A.

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

  Storey, S.

  Leburn, W. G.

  Ormsby-Gore, Hon. W. D.

  Stuart, Rt. Hon. James (Moray)

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

  Orr, Capt. L. P. S.

  Summers, G. S. (Aylesbury)

  Legh, Hon. Peter (Petersfield)

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

  Sumner, W. D. M. (Orpington)

  Lennox-Boyd, Rt. Hon. A. T.

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

  Taylor, William (Bradford, N.)

  Lindsay, Hon. James (Devon, N.)

  Osborne, C.

  Teeling, W.

  Lindsay, Martin (Solihull)

  Page, R. G.

  Thomas, Leslie (Canterbury)

  Linstead, Sir H. N.

  Pannell, N. A. (Kirkdale)

  Thomas, P. J. M. (Conway)

  Llewellyn, D. T.

  Partridge, E.

  Thompson, Kenneth (Walton)

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

  Peyton, J. W. W.

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

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

  Pickthorn, K. W. M.

  Thorneycroft, Rt. Hon. P.

  Longden, Gilbert

  Pilkington, Capt. R. A.

  Thornton-Kemsley, C. N.

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

  Pitman, I. J.

  Tiley, A. (Bradford, W.)

  Lucas, Sir Jocelyn (Portsmouth, S.)

  Pitt, Miss E. M.

  Tilney, John (Wavertee)

  Lucas, P. B. (Brentford & Chiswick)

  Pott, H. P.

  Touche, Sir Gordon

  Lucas-Tooth, Sir Hugh

  Powell, J. Enoch

  Turner, H. F. L.

  McAdden, S. J.

  Price, David (Eastleigh)

  Turton, Rt. Hon. R. H.

  Macdonald, Sir Peter

  Price, Henry (Lewisham, W.)

  Tweedsmuir, Lady

  McKibbin, A. J.

  Prior-Palmer, Brig. O. L.

  Vane, W. M. F.

  Mackie, J. H. (Galloway)

  Profumo, J. D.

  Vaughan-Morgan, J. K.

  McLaughlin, Mrs. P.

  Raikes, Sir Victor

  Vickers, Miss J. H.

  Maclay, Rt. Hon. John

  Ramsden, J. E.

  Vosper, D. F.

  Maclean, Fitzroy (Lancaster)

  Rawlinson, Peter

  Wakefield, Edward (Derbyshire, W.)

  McLean, Neil (Inverness)

  Redmayne, M,

  Wakefield, Sir Wavell (St. M'lebone)

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

  Rees-Davies, W. R.

  Walker-Smith, D. C.

  MacLeod, John (Ross & Cromarty)

  Remnant, Hon. P.

  Wall, Major Patrick

  Macmillan, Rt. Hn. Harold (Bromley)

  Renton, D. L. M.

  ward, Dame Irene (Tynemouth)

  Macpherson, Niall (Dumfries)

  Ridsdale, J. E.

  Waterhouse, Capt. Rt. Hon. C.

  Maddan, Martin

  Rippon, A. G. F.

  Watkinson, Rt. Hon. Harold

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

  Roberts, Sir Peter (Heeley)

  Webbe, Sir H.

  Maitland, Hon. Patrick (Lanark)

  Robertson, Sir David

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

  Manningham-Buller, Rt. Hn. Sir R.

  Markham, Major Sir Frank

  Robinson, Sir Roland (Blackpool, S.)

  Williams, Paul (Sunderland, S.)

  Marlowe, A. A. H.

  Robson-Brown, w.

  Williams, R. Dudley (Exeter)

  Marples, A. E.

  Rodgers, John (Sevenoaks)

  Wills, G. (Bridgwater)

  Marshall, Douglas

  Roper, Sir Harold

  Wilson, Geoffrey (Truro)

  Mathew, R.

  Ropner, Col. Sir Leonard

  Wood, Hon. R.

  Maudling, Rt. Hon. R.

  Russell, R. S.

  Woollam, John Victor

  Mawby, R. L.

  Sandys, Rt. Hon. D.

  Yates, William (The Wrekin)

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

  Schofield, Lt.-Col. W.

  Medlicott, Sir Frank

  Scott-Miller, Cmdr. R.

  TELLERS FOR THE NOES:

  Milligan, Rt. Hon. W. R.

  Sharples, R. C.

  Mr. Heath and Mr. Studholme.

  Molson, A. H. E.

  Shepherd, William

  BREAD (PRICES)
  10.9 p.m.
  Mr. Gordon Walker: I beg to move.
  That an humble Address be presented to Her Majesty, praying that the Bread (Amendment) Order, 1956 (S.I., 1956, No. 217), dated 20th February, 1956, a copy of which was laid before this House on 21st February, be annulled.
  The simple reason for our wanting to annul this Order is that the immediate effect of this reactionary and regressive Order will be to raise the price of bread in this country by £18 million a year, or £350,000 a week. A further reason is that there is every reason to believe that this will not be the end of this process. There is at present a remaining subsidy on the National loaf—which costs £22 million a year, after this Order comes into effect, but how long can we count on this subsidy continuing? The cut which is made in this Order is itself a part of a continuing process. The Government have already cut the subsidy on bread since 1951, and they have already, including the cut in the present Order, added 21d. to the cost of a 6d. loaf.
  The Chancellor of the Exchequer, when announcing this cut on 17th February, used very remarkable and sinister words, and I hope the hon. Gentleman will be able to explain exactly their meaning. When he talked about the cut in the subsidy, what he said—and this was in a written statement, with carefully chosen words—was this:
  "As a first step, the Government have decided to reduce the subsidy on bread by 1d. on the 7½d. loaf."—[OFFICIAL REPORT, 17th February, 1956; Vol. 548, c. 2680.]
  Does that phrase, "as a first step", mean what it appears to mean—that fairly soon, since it is already in the Government's mind, they are going on to introduce further cuts in the subsidy? What else can the carefully chosen words, "as a first step" possibly mean?
  When one thinks that the Chancellor, in carrying out this policy, is obviously under the influence of powerful private interests, who themselves want the subsidy to be totally abolished, one is all the more suspicious of the meaning of the words "as a first step." The Scottish
  2240
  Master Bakers' Association and the Bakers' National Association have come out for a total abolition of the subsidy. They have criticised the present Lord Privy Seal for his action when he was Chancellor in not, as they state, scrapping the bread subsidy, which leads me to the first question that I want to ask.
  Do these words, "as a first step" as used by him mean that it is the Government's intention to have second or third steps, and scrap the bread subsidy? In that case, of course, we are not really discussing an increase in the cost of living of £18 million a year, but a potential increase in the cost of living of £40 million a year, which would be the amount that would be involved if the entire bread subsidy were wiped out.
  I should like to deal with some of the arguments that have been used by the Chancellor and other Conservatives in support of this very reactionary Order. Their general case for it is that it is necessary for economy, because demand has to be cut, but it is not realised on the other side of the House—and I do not know how they answer this—that the increase in the Bank Rate, announced one day before this cut in the bread subsidy was announced, will cost the Government £50 million a year, which is more than the total saving by the bread and milk cuts. How, therefore, can we justify this action as being necessary for cutting demand when the Government themselves will be spending £50 million a year more through the increase in the Bank Rate?
  Another Conservative argument is that subsidies in general distort the economy, and that it is a good thing to get rid of all subsidies. Does not the Minister realise that this leads to a worse distortion of the economy than leaving the subsidy as it is now? Of course, it at once puts up wage demands. [HON. MEMBERS: "Why?"] Because the cost of bread is to go up by £18 million a year. I do not know in what world hon. Gentlemen opposite are living. If they think that when, by a direct act of the Government, the price of bread is to go up by £18 million a year, that is not going to be taken into account by the trade unions when advancing wage claims, I do not know in what world they are living.

  2241
  The final inflationary effect will be much greater than would have resulted from leaving the subsidy where it is today. This argument of distortion of the economy is topsy turvy. It works the other way round. It is less distorting to leave a subsidy like this than it is to take it away, and so add to the inflationary pressure which is bound to come from wage increases.
  Mr. Cyril Osborne: Does the right hon. Gentleman agree that Sir Stafford Cripps cut down food subsidies which had risen to a height of £560 million a year and said that he could not afford more than £400 million a year?
  Mr. Gordon Walker: Sir Stafford Cripps, of course, put on a ceiling on the food subsidies, but also fixed a floor for them; but the present Government's intention is to get rid of them altogether. The floor is to be the abolition of food subsidies. It is a totally different policy. Does the hon. Gentleman think that there should be a floor as well as a ceiling to subsidies?
  Mr. Osborne: Yes. This is a very important point. I certainly agree that there should be a floor, but if a cut which is to cost £18 million is wrong, was Sir Stafford Cripps right to cut the subsidies by £160 million a year in 1948?
  Mr. Gordon Walker: I do not want to pursue this argument too far, because it would take me beyond the rules of order, but there is a perfectly good answer in terms of the total costs of subsidies. I am very glad to hear that the hon. Gentleman believes that there should be a floor, in which case he will vote with us today, because the floor has practically disappeared. This is one of the last chances of keeping a floor, and I remind the hon. Gentleman that this is a last step towards the final abolition of the bread and milk subsidies.
  A trick which the Conservatives always use is to take each particular cut in the standard of living—or increase in the cost of living—each little bit by itself, and to say how small that bit is and that it is worth only so many cigarettes a week. The people are getting tired of that trick. Anything can be made to appear small if it is broken up and each little piece examined one by one. The Chancellor
  2242
  used this argument in, I thought, the most arrogant and supercilious way in which it has yet been used when, on 20th February last, he said:
  "Today, we are making a present of a few pennies on every loaf of bread, not only to Surtax payers, but to a great number of other people who enjoy a standard of life which is by no means dependent on this small weekly present from the Chancellor of the Exchequer."—[OFFICIAL REPORT, 20th February, 1956; Vol. 549, c. 56.]
  That is gratuitously adding insult to injury, and I hope that the Chancellor will stop talking like a rich man, giving or withholding tips to the footman—because that is the tone of voice in which he talks of something which matters very much indeed to very many millions of our people, namely, the cost of bread—and he was referring also to milk.
  This argument about Surtax payers is, of course, completely fallacious. If hon. and right hon. Gentlemen opposite are really worried because some pence a week should be given to Surtax payers they should really distribute that money to other people. It is no good stopping the Surtax payers getting it by making everyone else suffer. That is a most extraordinary argument. However trivial a few pence a week may appear to a haughty man like the Chancellor of the Exchequer, they are very important to those on small fixed incomes—old-age pensioners and many others. To these people a few pence a week is an important factor.
  In the case of this Order the Surtax argument is totally false, because it presupposes that there is an even spread of the consumption of National bread. In fact, the consumption of National bread is concentrated on the lower income groups in the country and I doubt whether any Surtax payers eat the National loaf. I doubt whether any right hon. Gentlemen opposite eat the National loaf, and this Order refers only to the National loaf. It will, therefore, affect the type of bread which is not eaten by Surtax payers but which, on the whole, is eaten by the poorer people.
  A bread subsidy is a highly valuable social instrument. There is great evidence that the poorer and larger the family, the greater the consumption of bread, and the richer and smaller the family the Less

  2243
  the consumption of bread. A bread subsidy is, therefore, of very high social importance, perhaps higher than any other food subsidy. There is considerable evidence that the poorer families eat much more bread than would be strictly their share if the bread consumption of the country were divided by the total population. This £18 million increase in the cost of living will thus fall on the lower income groups, and there is no case for suggesting that it will take even a few pence a week from Surtax payers. That was a false and misleading argument.
  As my right hon. Friend the Leader of the Opposition said in our earlier debate, this is a deliberate Government act and it is in its effect exactly like a tax on bread. A tax on bread of £18 million a year would have the same effect as cutting the subsidy by £18 million a year. This sort of tax is the most regressive of all, because it is a flat tax on something consumed in greater proportion by the poorer people. It is a deliberate, calculated and concentrated blow against the standard of living of the working class, with little effect on other classes in the country.
  Another argument used by the Chancellor was that the effect of reducing this subsidy will fall elsewhere in the field of consumption. First, let me say that it will only be the less well-off who have to find this place elsewhere. This is a much bigger matter for them than for those who are well off. I also hope that his argument means the end of the Conservative propaganda that expenditure on food has risen and that the country is very prosperous. We have often been told, "Look how much the country is spending on food. Therefore, the country must be prosperous."
  If that argument is used, then this Order directly increases the prosperity of the country. The effect of the cut in subsidies falling elsewhere is that the total subsidy cut will lead to an extra £18 million being spent on food. Expenditure on food will rise by £18 million and, according to the Conservatives, the people will be that amount more prosperous. The Conservatives' recipe for prosperity is to tax food. They say that the people must eat food and will stop spending an other things because the price of food has risen; therefore,
  2244
  according to their argument, the people will be prosperous.
  Every Conservative who intends to vote for the Order should recollect that this is a direct charge on the people's food—a charge which will be imposed by that vote, for if the Order were annulled the charge on food would not be made. This charge is concentrated on those least able to bear the burden, because they consume relatively more bread than anyone else. This burden will be imposed upon them after all the great benefits which have been conferred by the same right hon. and hon. Gentlemen opposite upon the Surtax payers and higher Income Tax payers. Let hon. Members who want to vote for this Order square that with their consciences if they can. We will certainly make sure that all their constituents know what they are doing if they carry this Order tonight.
  10.26 p.m.
  The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Harmar Nicholls): The right hon. Member for Smethwick (Mr. Gordon Walker) has made a particularly vigorous, but quite irrelevant speech on the Order. He did not make any reference at all to the terms of the Order against which he is praying and I think that in fairness to the people who look at the records I should give some information and make some reference to the Order itself.
  The price increases relate, as the right hon. Member said, to National bread, National brown bread and National milk bread and vary according to the weight of the loaf. The increases are 2d. on a 3½ lb. loaf, 1d. on a 1¾ lb. loaf and 1d. on a 1¾ oz. loaf. I think I ought to enlarge on one point about these increases. Hon. Members will note that the increase on the 14 oz. loaf is proportionately rather more than on the others. The reason is that the making of the 14 oz. loaf is more costly, and that this bears particularly harshly on the small baker. The extra tins, extra handling, extra replacements, all introduce a real difference in costs.
  For that reason the differential for the 14 oz. loaf has been increased to ¾d., whereas if the increase for this loaf were in direct proportion to all the others it would be only ½d. Those are the only comments I will make on the Order, as

  2245
  I think that apart from that it is perfectly clear and that no other explanation is necessary.
  I thought it right to make these comments upon the Order itself, but even before the speech of the right hon. Member we had no illusions at all about the reason for the Opposition praying against it.
  Mr. Hector Hughes: On a point of order, Mr. Deputy-Speaker. Is it not entirely wrong for the Minister to intervene at this stage without hearing arguments which would have been adduced by hon. Members? One speech has been made from this side of the House, but no speech from any hon. Member opposite. Surely it is quite out of order for a Minister to intervene at this stage?
  Mr. Deputy-Speaker (Sir Charles MacAndrew): After I put the Question, the only hon. Member to rise was the Parliamentary Secretary, and I therefore called him.
  Mr. Nicholls: I am sorry that the hon. and learned Member is so reluctant to hear me. On our long journeys across Canada together I listened to him for quite a long time and never made any protest at all.
  The reason why the Opposition are praying against this Order we knew even before the speech of the right hon. Member. It is because they wanted to have a knock at the Government. The Opposition wanted, on the pretext of this Order, to try to recapture some of that easy, careless rapture they used to have in their pioneering days. They wanted to say, in 1956, what hon. Members opposite used to say in the 1920s and to indulge in talk about Conservative Governments as hard-faced Tories who are not interested in ordinary folk.
  They, the Socialist Party, want to set themselves up as the only champions of the people. When they said this in the old days it was always a myth, and now it is an exploded myth, because today—[HON. MEMBERS: "Oh."] We on this side of the House listened with care to the right hon. Gentleman opposite, whose speech had nothing to do with the details of the Order. He dealt with the effects of it. I think it is perfectly proper that I should now reply to him, and deal
  2246
  with the same points. We on this side listened to the right hon. Gentleman without interrupting him continuously, and I think we are entitled to be heard by hon. and right hon. Gentlemen opposite.
  Mr. R. J. Mellish: On a point of order, Mr. Deputy-Speaker. Would you not have called my right hon. Friend the Member for Smethwick (Mr. Gordon Walker) to order if he had been irrelevant? If the hon. Gentleman is right in saying my right hon. Friend did not speak to the Order, is that not an indictment of you, Mr. Deputy-Speaker?
  Mr. Deputy-Speaker: I rather thought so myself.
  Mr. Nicholls rose—
  Hon. Members: Withdraw.
  Mr. Nicholls: Without urging from the benches opposite, Mr. Deputy-Speaker, I would withdraw any suggestion that you did not maintain the always high standard which you set when you occupy the Chair.
  It is only fair to everybody, in view of what the right hon. Gentleman said, that I should make this speech. The right hon. Gentleman tried to revive the myth of those past years. It is an exploded myth. In view of the fact that the Labour Party had six years of Government, with an overwhelming majority, and in view of its record then, I am surprised that right hon. and hon. Members opposite want to try to revive that old, hoary story. For them, bread is a particularly vulnerable subject.
  Mr. J. T. Price: What about the Tories and the 1d. on a bit of cheese?
  Mr. Nicholls: The Opposition Whips do not seem to enforce the rule of silence as they used to in the old days.
  Mr. Price: I am obliged to the hon. Gentleman for giving way, because I would much prefer to say standing what I wanted to say, than to saying it while sitting down, for that is a disorderly way to say it. He is talking of days gone by. I would remind him how his colleagues, in 1951, kept this House sitting night after night and all night while they argued trivialities such as putting a 1d. on the price of a piece of cheese, when the country's economic situation was worse than it is now.
  Mr. Nicholls: A note will be taken of the hon. Gentleman's point.
  He and his hon. and right hon. Friends are on a particularly vulnerable wicket, and I am surprised that they should give us this opportunity tonight of recalling their previous shortcomings. I should have thought that it was very much on their consciences that the only time in The history of this country that bread was rationed was in 1946 when—
  Mr. Harold Wilson: On a point of order.
  Mr. Deputy-Speaker: I was about to deal with it. I was about to say that that matter does not arise on this Order.
  Mr. Nicholls: I made the point, because the right hon. Gentleman said that the effect on the nation of bread—
  Mr. Wilson: On a point of order. When you have ruled, Mr. Deputy-Speaker, that something an hon. Member is saying is out of order, is it in order for the hon. Member to try to say why he made an illegitimate point? If the hon. Member is in order in saying what he is saying, we shall be delighted to answer him, if we shall be in order in doing so.
  Mr. Deputy-Speaker: I hope we shall keep to the Order. We shall get on quicker if we do.
  Mr. Nicholls: I would put this question to hon. and right hon. Gentlemen opposite. I should like to know why they did not debate the price of bread in 1949, when they had a majority of 186 in this House. In 1949, the price of bread went up by 1d., just as now. I want to know why they did not debate that then. In those days the price of bread was increased at a time when wages were not in any way keeping pace with rising costs generally, whereas the increase in earnings since their day has been infinitely greater than the rise in prices.
  Mr. Frederick Willey: Surely the hon. Gentleman knows that these Orders are subject to Prayer procedure, and that the only way in which debates can arise on them is by means of Prayers. Will he ask his hon. Friends why they did not put down a Prayer against the Order in 1949?
  Mr. Nicholls: If I have made the point that in 1949 the price of bread rose by 1d. per loaf and that the rise was accepted without a murmur by the right hon. Gentleman and his hon. Friends, I am quite satisfied.
  Mr. H. Wilson: Since the hon. Gentleman thinks that he has made a point, it is about time it was unmade. He should recognise that in 1949 world wheat prices were still rising. Thus, it was inevitable that our internal prices should to some extent rise.
  Mr. Nicholls: The increase was due to devaluation.
  Mr. Wilson: The increase in the price of bread occurred on about 6th April, 1949; devaluation took place on 18th September, 1949. How the hon. Gentleman can say that the second was the cause of the first I do not know. Will he recognise that world prices have been falling while his Government have been in power and yet internal prices have been rising?
  Mr. Nicholls: I should like to put the right hon. Gentleman—
  Mr. Hector Hughes: On a point of order, Mr. Deputy-Speaker. Might I ask how far and how wide the debate is to range? Are we entitled to go back to the inter-war years and compare the price of bread then with the price of bread today?
  Mr. Deputy-Speaker: I suppose such a comparison might be used in argument, but I would remind the House that the Order raises a very simple point and I hope that it will be dealt with as such.
  Mr. Nicholls: I think I ought to be allowed to deal with the point which the right hon. Member for Huyton has just made. The increase in the price of bread by 1d. in 1949 took place on 25th September, not when he said it did, and it was the result of devaluation. In April, 1951, the price rose by another ½d as a result of the bulk buying of wheat about which the right hon. Gentleman talks. Therefore, the price of bread rose twice in two years when the Labour Government were in power, by ld. as a result of devaluation and ½d. as a result of bulk purchase.
  I want to underline the point made by my hon. Friend the Member for Louth (Mr. Osborne). Following the stabilisation of subsidies by Sir Stafford Cripps,

  2249
  we saw the price of food rise, representing an increase in the cost of living of 4d. per head per week or two points on the index. The present Order represents an increase of 2d. per head per week, or 0·6 of a point on the index.
  The indignation which is being expressed tonight is synthetic. If it came from true conviction, we should have found the same feelings being expressed by hon. Gentlemen opposite when the policies of the Labour Government resulted in something infinitely worse. The great difference is that the increase which occurred during the term of office of the Labour Government came as a result of the continued failure of their economic policy, but our action is being taken to preserve our position so that we can return to the situation of continuing prosperity that we have enjoyed, prosperity which has been shared by the whole country.
  The right hon. Gentleman said that this action represented an increase of £18 million in the expenses of the ordinary people. At a time when we are spending £250 million on sweets and chocolates, it is foolish to say that £18 million spent on bread is oppressive. The fact that we are spending £1,700 million on drink and tobacco puts the figure of £18 million into proper perspective.
  This increase is one of a number of measures intended to re-establish the sound base of our economy at a time when we have real prosperity, and it is a prosperity which is being shared. The increase is being made at a time when wage levels and general earnings of the people have gone up more rapidly than increases in costs. It is being made in a twelve-month period when old-age pensioners have had a 25 per cent. increase, and at a time when there is power, under National Assistance, to more than make up for it.
  Mr. Tom Brown: Is the hon. Gentleman suggesting that the 4½ million old-age pensioners are living in prosperity? Is he suggesting that a large proportion of the £250 million which he claims is being spent on sweets is being spent by old-age pensioners, on a miserable basic pension of £2? If so, he had better think again.
  Mr. Nicholls: I will tell the hon. Gentleman what I am suggesting, if his hon. Friends will allow me.
  I am suggesting that the nation as a whole will have to meet this £18 million, and that a big proportion of our population are workers whose earnings have gone up considerably more than the cost of living. I recognise at once that the old-age pensioners and people living on fixed incomes are the one small section who should claim our thoughts. But I am saying that it would be a bad business, if, to help that one small section, we used the taxpayers' money so that people who do not need it may have this 2d. a week subsidy on the loaf. The small section of old-age pensioners claim the sympathy of hon. Members on this side of the House as well as those on the other side, and it is possible, if this increase becomes a hardship, for them to meat it through other agencies.
  Mr. Hector Hughes: The hon. Gentleman used the expression "the nation as a whole." Does not he agree that the nation as a whole includes the "10s. widows"? If so, what does he say about that?
  Mr. Brown: Is the hon. Gentleman suggesting that the old-age pensioners constitute only a small section of the population? They represent over one-ninth of the total population. By supporting this Order he is adding to the cost of living of old folk who have no chance of securing any increase in their pension, except through hon. Members on this side of the House—
  Mr. Gerald Nabarro: On a point of order, Mr. Deputy-Speaker. Is it in order that this debate should devolve into a detailed discussion on the level and value of old-age pensions?
  Mr. Deputy-Speaker: I thought that the hon. Member for Ince (Mr. T. Brown) was making a point, and the Minister gave way.
  Mr. Brown: The Parliamentary Secretary gave way, Sir, and I am much obliged to him for doing so.
  I am suggesting that the Parliamentary Secretary is not advancing a sincere and honest argument in relation to the effect which this Order will have on old-age pensioners. I am rather surprised, if I know him right, at the manner in which

  2251
  he is dealing with it. The old-age pensioners do not constitute a small section of the community. They are a very important section and should be protected through the medium of this House of Commons.
  Mr. Nicholls: If I may, I should like to make this appeal to the House. I shall not give way again, because this question is not being treated as seriously as it should. For hon. Members opposite to turn this into a semi-puppet show is not good enough. I will deal with the points made by the right hon. Member for Smethwick, whose point of view I always respect, then I will conclude my speech, and until 11.30 we can carry on the debate.
  As far as old-age pensioners are concerned—
  Mr. Deputy-Speaker: I do not think it is for the view of the House. It is a matter for the Chair. We are not going to have a debate on old-age pensioners.
  Mr. Nicholls: I was only going to make the point that the £l8 million will have its effect on the whole of the nation to the extent of ld. on the loaf, and that the average consumption is two loaves a week, or 2d. a person.
  As the hon. Member for Ince (Mr. T. Brown) has just said, the old-age pensioners are a vulnerable section of the community and we have to decide whether o: not the contribution to be made by that section will represent a real hardship. The hon. Member has said that the old-age pensioners constitute a ninth of the population. I am arguing that the other eight-ninths are people whose salary and wage increases will bear this extra burden in the interests of the nation. I am arguing that it is a contribution they can well afford, that the old-age pensioners will not be able to afford it so easily as the eight-ninths, but that they have other agencies to assist them if the increase constitutes a real hardship to them.
  My right hon. Friend the Chancellor of the Exchequer has made it perfectly clear that he recognised the adverse balance of payments to be one that has to be dealt with effectively. He said that it can only be dealt with if the whole country co-operates. The right hon. Gentleman referred to the increase in the
  2252
  Bank Rate. That increase was intended to see that industry and business generally made their contribution to getting back on an even keel. An extra burden has been put on local authorities, so that they can make their contribution—
  Mr. Speaker: I do not think that this Order is wide enough to support an argument on the whole economic situation. The Order is concerned with bread, and nothing else.
  Mr. Geoffrey Wilson: If a point has been made by an hon. Member on one side of the House, and has not been objected to, is it not in order to answer it from the other side, Sir?
  Mr. Speaker: Yes, but not at great length. I would not like the debate to stray into general economic considerations. The point of the debate is the price of bread. It is the staff of life, and it is very important.
  Mr. Nabarro: Before you returned to the Chair, Mr. Speaker, we had a lengthy dissertation from the hon. Member for Ince (Mr. T. Brown) upon the subject of old-age pensions. Would it be in order for me to make a speech later, if I catch your eye, upon the value of the old-age pension today?
  Mr. H. Wilson: Since the Parliamentary Secretary himself attempted to deal with the question of old-age pensions, and was ruled out of order by your predecessor in the Chair, Mr. Speaker, might I respectfully suggest that the intervention of the hon. Member for Kidderminster (Mr. Nabarro) is totally beside the point?
  Mr. Speaker: I am concerned only with trying to keep the debate within proper limits. There are occasions for economic debates, but this is not one of them. This is an Order about bread. I do not know what happened when I was out of the Chair, but I can imagine it being argued that the increased price of bread might increase the hardships of old-age pensioners. That is by the way. But we cannot go into the whole question of old-age pensioners now.
  Mr. Hector Hughes: Is it not obvious that, having regard to the present rate of old-age pension, the old-age pensioners are not able to buy bread, and that the price of bread is, therefore, in order in this debate?
  Mr. Speaker: Yes, but this is not a debate on old-age pensions. They may be mentioned, but the subject cannot be pursued.
  Mr. Nicholls: The whole nation is expected to—and must—make its contribution to meet the problem of the adverse balance, and this Order is part of the contribution that we are asking consumers to make. I am certain that they will recognise that it is right that they should and that, considering this contribution of 2d. per week in the context of all the spending that is going on, and of general level of earnings, they will not shirk their responsibility in this sense.
  I am sure, too, that the actual effect of this Order upon the population as a whole—wage earners, old-age pensioners, and everybody else—will not be beyond their means. When the Chancellor of the Exchequer announced this increase among his general proposals for keeping our trade balance upon an even keel he made it clear that his measures were distributed in a way which was fair to the whole nation. Every section or group of people is expected to make its contribution, and under this Order the ordinary consumer will make his.
  It is with confidence that I ask the House to accept the Order with the same restraint and common sense that the nation has accepted it. Its effect is being grossly exaggerated tonight. The right hon. Gentleman referred only to £18 million. He did not once refer to the fact that it worked out at only 2d. per week per person. I am certain that within the context of the great effort which the nation is being called upon to make this Order will be considered in its proper proportion.
  10.54 p.m.
  Mr. Frederick Willey: I protest, first, that we have had no intervention on behalf of the Treasury in this debate. If the Economic Secretary intervenes later on we shall welcome him.
  The Economic Secretary to the Treasury (Sir Edward Boyle) indicated dissent.
  Mr. Willey: I am not surprised that he will not have the courage to do so. After all, this is a perfect illustration of Boyle's
  2254
  Law. That was the purpose of this operation.
  I am sure that hon. Members on both sides of the House would have wished that somebody else had replied for the Government. As the hon. Member for Kidderminster (Mr. Nabarro) knows, the Parliamentary Secretary's reply was the most ineffective reply we have had for a very long time, and that is saying a lot in these days. The only relevant remark of the hon. Member, as I was able to follow his speech, was, "If you cannot afford bread, buy cake."
  If the hon. Member had wished to test public opinion upon this matter, the announcement could have been made before the Taunton by-election. The Parliamentary Secretary will remember that no one was more conscientious than he in raising matters in this House on behalf of the bakers. I want to repair an omission in his speech. The bakers, in their official journal The Baker and Confectioner, have expressed their point of view about this Order. Under the heading, "Untimely," this is what they say:
  "It is bewildering that one or two of the major steps taken, if one includes milk, should have the immediate effect of raising the cost of living when surely it should be the primary effort of the Government to reduce it. We can well imagine these two subsidy decisions defeating the whole programme of the Government, because they are certain to raise the ire of trade unionists, whose good will on wage restraint must be enlisted if the financial measures are to succeed. We doubt very much whether the £38 million, which is to be saved on the bread and milk subsidies, is really worth while when viewed against this threatening background of massive wage claims."
  That is the opinion of the trade which, we all know, has been campaigning for the abolition of the bread subsidy.
  We have heard arguments about the bread subsidy. The Parliamentary Secretary has intervened in them. When the Postmaster-General defended similar action taken by the Government on another occasion, he said that the Government were taking this action in crisis. Presumably, we are again in crisis. The hon. Gentleman puts a burden on everyone; as my right hon. Friend said, this increase is, in effect, a tax.
  When the Parliamentary Secretary intervened in the debate last time he pointed out that, of course, he conceded that the burden of the attack upon the

  2255
  bread subsidy fell upon the people with large families; "but", he said, "we are providing increased family allowances." What a callous thing; now there is no provision of family allowances. The hon. Gentleman knows and the Government know, because they said so last time, that this increase falls unfairly upon the large family unless some compensation is made.
  Large families proportionately eat more bread than small families, so they will contribute more. [Laughter.] It is all very well for hon. Gentlemen on the Government benches to laugh. If they are against the family man, let them say so. This is directed against the family man. That was conceded when we last debated the subject. In reply on that occasion we said that only a portion of that taken away was given back by way of family allowances. On this occasion, nothing is given back.
  This increase is iniquitous, because it puts the heaviest burden on the family man. The Chancellor conceded that this Order would not save in the consumption of bread, which is inelastic. Those with large families eat more bread per head than other people. The poorer a man is the more bread he eats. If he is made poorer by this increase in the price of bread he will eat more bread. [Laughter.] It is all very well for the Economic Secretary to the Treasury to laugh. What about the old-age pensioners? Why are they not to get compensation? They are on fixed incomes. [Laughter.] It is all very well to laugh about poor people with fixed incomes. [An HON. MEMBER: "No."] Hon. Members are not laughing now, because I have called attention to it. The Economic Secretary was laughing before. The largest burden falls on those with large families.
  Among people with different incomes, the largest burden falls on those with the least income. The Government's case before was that compensation was being given; none is given this time. Why not? What the Government are doing in crisis is what a Tory Government has always done. As, in 1931, they cut unemployment benefit—
  Mr. H. Nicholls: On a point of order. When I attempted to meet this point, which had been put by another hon. Member, I was ruled out of order. I feel that we ought to have some justice.
  Mr. Speaker: I think that the hon. Gentleman was properly ruled out of order. I ask the hon. Member who is addressing the House to try to keep to bread, which is an important subject.
  Mr. Willey: I was saying that as, in 1931—
  Mr. Osborne: And in 1949, too.
  Mr. Willey: We will come to 1956 in a moment, if the hon. Member will allow me.
  Mr. Hector Hughes: Before you resumed the Chair, Mr. Speaker, the Parliamentary Secretary referred to the interwar years. That included the period during which Lord Woolton referred to red meat, and promised more red meat for the people. Is it not therefore in order to refer to red meat in conjunction with bread?
  Mr. Speaker: I do not think that there was a reference to red meat in the years between the wars. Anyhow, two blacks do not make a white. I ask the hon. Member to keep to bread, if he can.
  Mr. Willey: If I said anything about red meat, it was an aberration for which I apologise, Sir. But I am not aware that I did so.
  As in 1952, so today the first step taken by a Tory Government in a crisis is to put up the price of bread, and, incidentally, by an unprecedented amount. To reply to the hon. Member for Louth (Mr. Osborne), at a time when grain prices have fallen we would be expecting, as most other countries have been able to enjoy, a fall in price.
  I will turn to the serious nature of what the Government have done. The trade has realised that this will have its effect upon trade union negotiations. It has already had that effect. Increased prices of bread have been called in aid. The price of white bread, which is unsubsidised, is going up. In some areas it has gone up. Other prices are related. If the price of bread goes up it tends to bring up the whole range of confectionery prices.
  What is going to happen is that when the nation as a whole would willingly have co-operated to obtain restraint the Government, driven by their doctrinaire Toryism, have sorted out the poorest of the poor, and those with large families,

  2257
  to suffer more than others merely to provide for a redistribution of wealth—because this has nothing to do with Government spending. If the subsidy had been abolished we could have saved the cost of the administration of it; but the subsidy remains. It is halved. The cost of the administration proportionately has doubled.
  All the Government are doing is redistributing income unfairly against people trying their hardest in difficult circumstances. That is why the Government have brought disaster upon the country. They are doing what they can not to hold the cost of living but to increase it, and to make it impossible for trade unionists to maintain stability in times which we recognise are difficult. For these reasons, I shall advise my hon. Friends to vote against the Order.
  11.5 p.m.
  Mr. Archer Baldwin: Things being as they are, I suppose it is only natural that the Opposition should take the opportunity of making this demonstration, but I wonder whether I might be allowed to give a little of my experience. I would say that 20 per cent. of the bread baked today is being fed to cats and dogs, or put into the dustbin.
  Mrs. Harriet Slater: On a point of order, Mr. Speaker. Is it in order for an hon. Member to cast a slur on thousands of working class housewives?
  Mr. Speaker: I heard nothing out of order.
  Mr. Baldwin: I am casting a slur on nobody. I am speaking from my experience.
  This summer, when I employed casual labour in my fields, picking peas and plums, instead of having to feed my dog I took him to the fields where he ate the food left lying about there. I went into my plum orchard one morning and asked one of the plum pickers, who begged me to give him a pair of gum boots, how much he spent on smoking. He said he spent 3s. 6d. a day. I said, "Give up smoking for two days and buy a pair of gum boots."
  2258
  That orchard was littered with waste food. If any hardship is caused to those on the lower ranges of income, let us give them some help from this £18 million saved from the bread subsidy. I wish the Chancellor had taken the subsidy away altogether and saved not only £18 million, but the administrative costs as well. It would be much better to get away from the fantastic idea of taking money from one pocket and putting it into another.
  The right hon. Member for Huyton (Mr. H. Wilson) said that bread ought to come down in price because wheat was cheaper than it had been, but wheat is dearer today. Bread-making wheat from the North American Continent is £30 a ton and English wheat is £3 or £4 dearer than it has been for the last three or four years. Not only did you raise the price of bread twice during your term of office, but on one occasion when you did not want to show what you were doing you reduced the 16 oz. loaf—
  Mr. Speaker: I am not guilty of any of these misdemeanours.
  Mr. Baldwin: This is not the first time that bread has been increased in cost. The 16 oz. loaf was reduced to 14 oz. by the Labour Government, which was a way of increasing the cost of bread to the old-age pensioner. I am glad that the Conservative Government are being more honest in this matter.
  11.10 p.m.
  Mr. Tom Brown: I was surprised that the hon. Member for Leominster (Mr. Baldwin) should suggest that 20 per cent. of the country's bread was wasted by the people. My experience is that 50 per cent. of the old-age pensioners are scraping bread together. I could take him tonight to many homes where pensioners have difficulty in getting bread.
  The Chinese have a saying, "If you have two loaves, sell one and buy a lily." I suggest that the Government ought to sell one of their loaves and buy the lily of justice and fair play. The hon. Member said that we were making a demonstration. It is not a demonstration, though it is true to say that there has been some hilarity and some joking, and that we appear to have left on one side the

  2259
  serious aspect of the situation. It is a serious situation, as the Parliamentary Secretary realises in his heart of hearts.
  The Parliamentary Secretary started off on the wrong foot. He aggravated one or two hon. Members on this side of the House, myself included, because when anyone seeks to make conditions harder for the old-age pensioners he meets with my condemnation. We have a duty to protect from the effect of the Order the one-ninth of the population who cannot afford to pay more. I grant that the remaining eight-ninths may be in a position to meet the increase but there is no justification, no righteousness, no honesty of purpose, in inflicting a penalty on the one-ninth just because the other eight-ninths may be able to meet the extra cost.
  I was surprised when the hon. Gentleman said that if these people had difficulty in meeting the extra cost they had recourse to the National Assistance Board. Have we reached the stage that we have to solve the country's economic problems by forcing old and sick people to go to the Assistance Board? If we have, then I suggest that we are bankrupt of ideas.
  I beg the hon. Gentleman to take back this Order and to submit something which contains more justice and righteousness and which is more in keeping with the Christian outlook upon life. Great play has been made about what I said about the initiation of increases for old-age pensioners. If hon. Members opposite are serious in the accusation against me, then let them go into the Division Lobby tonight and vote against this Order, because that is what they should do.
  11.15 p.m.
  Mr. W. R. A. Hudson: I had not intended to intervene in this debate, but, since the baking industry has been mentioned, and as I have some connection with that industry, I think that I might make a useful comment. The hon. Member for Sunderland, North (Mr. Willey) stated that the baking industry had been campaigning for the abolition of the bread subsidy. It is true that some sections of the industry favour its abolition, but others do not. As for campaigning, if there has been any, I have not heard of it.
  It is true that inquiries have been made on this topic just as inquiries were made
  2260
  on other topics when the Labour Government were in power. As I have said, the industry is divided on the subject, but those who favour abolition of the subsidy do so because of the highly complicated machinery that it involves and because of the cost to the nation in time and effort. I am one of those who believe it is high time that the bread subsidy was abolished.
  I would agree with the hon. Member for Sunderland, North and, perhaps, to this extent disagree with my hon. Friend, and say that I should have preferred to see the subsidy abolished altogether. It is rather a pity to take two bites at the cherry.
  Mr. Willey: On a point of order. The hon. Gentleman has quoted something which I did not say. I only said that the burden of the administrative expenses remained. I did not express an opinion that the subsidy should go. The tenor of my speech was quite to the contrary.
  Mr. Speaker: That is not a point of order.
  Mr. Hudson: I understood the hon. Gentleman to say that it would have been better to do away with the subsidy altogether.
  My hon. Friend the Parliamentary Secretary appealed for a sense of proportion in this matter. I am rather sorry that this debate tonight is taking place in the excitement and aftermath of our debate on the Middle East, because, quite frankly, I think that some hon. Members opposite are treating the matter with a levity which really it does not deserve.
  I will quote some figures in order to try to restore that sense of proportion which we all need to have. Between January and December, 1955, the cost of living rose by 6 per cent., wage rates by 7 per cent., and earnings by considerably more. About 1,820,000 workers were working overtime. Therefore, if it is suggested that the cost of the reduction of the bread subsidy justifies a demand for increased wages, that is just arrant nonsense.
  In November, 23,100,000 people were in civilian employment, and the cost to them of the reduction in the subsidy will be about £18 million, which is rather more than 15s. per year and a little more than 34d. per worker per week. To suggest that the burden of such a charge

  2261
  is so great as to involve a demand for increased wages is utterly ridiculous.
  During 1955, 11,889,500 workers received increases in wages to the extent of £5,138,700—
  Mr. Ellis Smith: Tell the whole story.
  Mr. Hudson:—a wage increase of nearly 10s. per week per worker. If those workers have received, during 1955, an average increase of nearly 10s. a week for a cost of 3½d. per week, then to suggest that this Order justifies a wage increase is arrant nonsense.
  11.20 p.m.
  Mr. George Chetwynd: I think that the Parliamentary Secretary treated us with levity. His speech was a disgraceful performance for a Minister trying to justify such an Order as this. The issue before us is simple, that the poorest of the poor and those with the largest families, will be paying much more than the 2½d. or 2d. a week which has been mentioned so often.
  The Government's attitude to the Order shows they are completely out of touch with normal life in this country and that they have no conception whatever of how this increase in the cost of living will make life increasingly intolerable in the months to come for many of the people. The only thing to do is to condemn the Government by voting now against the Order.
  11.21 p.m.
  Mr. Cyril Osborne: The Order increases the maximum retail price of bread by £18 million a year. The right hon. Gentleman the Member for Smethwick (Mr. Gordon Walker) said that was a direct charge on the people's food. In 1949, when, owing to the economic situation, the then Chancellor cut food subsidies by £160 million a year, hon. and right hon. Gentlemen opposite made no protest at all. Now that the subsidy is to be cut by £18 million a year they become self-righteous about it.
  Mrs. Jeger: I have looked at the Order carefully, but I cannot find any reference to 1949 in it, Mr. Speaker.
  Mr. Speaker: I was waiting for the hon. Gentleman to come to bread.
  Mr. Osborne: This Order puts up the price of bread by £18 million a year.
  2262
  Against that hon. Members opposite are praying. I am trying to show, I think quite fairly, that in 1949, when they had a majority of 200 in this House, when they could do as they liked, they put up the price by exactly the same amount, and they also increased the price of other foods by no less than £142 million a year. They made no protest whatever about that.
  Mr. William Ross: On a point of order. Shall we be in order, Mr. Speaker, in discussing now the milk Order that is to come later, as the hon. Member talks about the price of other foods.
  Mr. Speaker: I think not. But the hon. Member is in order.
  Mr. Osborne: I trust that the House will agree that I am in order. I am trying to show that the serious speech of the right hon. Gentleman the Member for Smethwick was based on this consideration: that the bread subsidy was a highly valuable part of social policy—we agree—and that, therefore, to take it away was to destroy part of social policy. That is a reasonable argument. He said taking this £18 million away would destroy the social well-being of the poorest of the poor. On that ground, he and his hon. Friends would vote against the Order.
  Therefore, I remind the Leader of the Opposition and his future Chancellor—[HON. MEMBERS: "Hear, hear."]—that is, if the right hon. Gentleman is not too old when the opportunity occurs—that they were in office together and were responsible for a policy in 1949 which cut into the social security and well-being of our people ten times more than this Order is supposed to, and yet they made no protest at all.
  We were asked why we did not pray against the 1949 Order. The answer is that the then Chancellor justified what he was doing by reason of the economic situation. The Prayer tonight has no real substance in it and no logic behind it. If the present Order represents a sin against the old-age pensioners, hon. Members opposite were sinners ten times over in 1949. I hope that hon. Gentlemen opposite will withdraw their Prayer.
  Mrs. Alice Cullen: Has the hon. Gentleman opposite any idea of the amount of bread eaten per day by large families? The amount in an

  2263
  ordinary working-class home may be eight or ten loaves per day. That being so, does not the Order represent a rise in the cost of living for ordinary working people?
  Mr. Osborne: I was one of a family of six who were maintained on a weekly wage.
  Mrs. Cullen: My question was addressed to the Joint Parliamentary Secretary. Perhaps he will answer it. Does it not represent a rise in the cost of living for the ordinary worker?
  Question put:—
  The House divided: Ayes 159, Noes 223.

  Division No. 118.]

  AYES

  [11.27 p.m.

  Ainsley, J. W.

  Herbison, Miss M.

  Pargiter, G. A.

  Allaun, Frank (Salford E.)

  Hobson, C. R.

  Parker, J.

  Allen, Arthur (Bosworth)

  Holman, P.

  Parkin, B. T.

  Allen, Scholefield (Crewe)

  Holmes, Horace

  Pearson, A.

  Awbery, S. S.

  Houghton, Douglas

  Peart, T. F.

  Baird, J.

  Howell, Denis (All Saints)

  Plummer, Sir Leslie

  Bartley, P.

  Hoy, J. H.

  Popplewell, E.

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

  Hughes, Emrys (S. Ayrshire)

  Price, Philips (Gloucestershire, W.)

  Benn, Hn. Wedgwood (Bristol, S.E.)

  Hughes, Hector (Aberdeen, N.)

  Probert, A. R.

  Benson, G.

  Hunter, A. E.

  Proctor, W. T.

  Beswick, F.

  Irving, S. (Dartford)

  Randall, H. E.

  Blackburn, F.

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

  Redhead, E. C.

  Blyton, W. R.

  Jeger, George (Goole)

  Robens, Rt. Hon. A.

  Boardman, H.

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

  Roberts, Albert (Normanton)

  Bottomley, Rt. Hon. A. G.

  Jenkins, Roy (Stechford)

  Roberts, Goronwy (Caernarvon)

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

  Jones, David (The Hartlepools)

  Robinson, Kenneth (St. Pancras, N.)

  Bowles, F. G.

  Jones, J. Idwal (Wrexham)

  Ross, William

  Braddock, Mrs. Elizabeth

  Jones, T. W. (Merioneth)

  Short, E. W.

  Brockway, A. F.

  Kenyon, C.

  Silverman, Julius (Aston)

  Broughton, Dr. A. D. D.

  King, Dr. H. M.

  Simmons, C. J. (Brierley Hill)

  Brown, Thomas (Ince)

  Lawson, G. M.

  Skeffington, A. M.

  Burke, W. A.

  Ledger, R. J.

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

  Butler, Herbert (Hackney, C.)

  Lee, Frederick (Newton)

  Slater, J. (Sedgefield)

  Callaghan, L. J.

  Lee, Miss Jennie (Cannock)

  Smith, Ellis (Stoke, S.)

  Champion, A. J.

  Lever, Leslie (Ardwick)

  Sorensen, R. W.

  Chetwynd, G. R.

  Lindgren, G. S.

  Steele, T.

  Coldrick, W.

  Logan, D. G.

  Stewart, Michael (Fulham)

  Collick, P. H. (Birkenhead)

  Mabon, Dr. J. Dickson

  Stones, W. (Consett)

  Corbet, Mrs. Freda

  MacColl, J. E.

  Summerskill, Rt. Hon. E.

  Craddock, George (Bradford, S.)

  McGhee, H. G.

  Sylvester, G. O.

  Cronin, J. D.

  McInnes, J.

  Taylor, Bernard (Mansfield)

  Cullen, Mrs. A.

  McKay, John (Wallsend)

  Taylor, John (West Lothian)

  Dalton, Rt. Hon. H.

  MacMillan, M. K. (Western Isles)

  Thomas, George (Cardiff)

  Davies, Harold (Leek)

  MacPherson, Malcolm (Stirling)

  Thornton, E.

  Deer, G.

  Mahon, S.

  Warbey, W. N.

  Delargy, H. J.

  Mallalieu, E. L. (Brigg)

  Watkins, T. E.

  Dodds, N. N.

  Marquand, Rt Hon. H. A.

  West, D. G.

  Edwards, Rt. Hon. John (Brighouse)

  Mason, Roy

  Wheeldon, W. E.

  Edwards, Rt. Hon. Ness (Caerphilly)

  Mellish, R. J.

  White, Mrs. Eirene (E. Flint)

  Fernyhough, E.

  Mitchison, G. R.

  White, Henry (Derbyshire, N.E.)

  Fienburgh, W.

  Monslow, W.

  Willey, Frederick

  Fraser, Thomas (Hamilton)

  Moody, A. S.

  Williams, Rev. Llwelyn (Ab'tilery)

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

  Morris, Percy (Swansea, W.)

  Williams, W. R. (Openshaw)

  Gibson, C. W.

  Moss, R.

  Williams, W. T. (Barons Court)

  Gordon Walker, Rt. Hon. P. C.

  Mulley, F. W.

  Willis, Eustace (Edinburgh, E.)

  Greenwood, Anthony

  Neal, Harold (Bolsover)

  Wilson, Rt. Hon. Harold (Huyton)

  Grey, C. F.

  O'Brien, Sir Thomas

  Winterbottom, Richard

  Griffiths, David (Rother Valley)

  Oliver, G. H.

  Woof, R. E.

  Griffiths, Rt. Hon. James (Llanelly)

  Oram, A. E.

  Yates, V. (Ladywood)

  Hale, Leslie

  Orbach, M.

  Younger, Rt. Hon. K.

  Hall, Rt. Hn. Glenvil (Colne Valley)

  Oswald, T.

  Zilliacus, K.

  Hannan, W.

  Paget, R. T.

  Harrison, J. (Nottingham, N.)

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

  TELLERS FOR THE AYES:

  Hayman, F. H.

  Palmer, A. M. F.

  Mr. Wilkins and Mr. J. T. Price.

  NOES

  Agnew, Cmdr. P. G.

  Banks, Col. C.

  Bishop, F. P.

  Aitken, W. T.

  Barber, Anthony

  Black, C. W.

  Alport, C. J. M.

  Barlow, Sir John

  Body, R. F.

  Amery, Julian (Preston, N.)

  Barter, John

  Boothby, Sir Robert

  Anstruther-Gray, Major W. J.

  Baxter, Sir Beverley

  Bossom, Sir A. C.

  Armstrong, C. W.

  Bell, Philip (Bolton, E.)

  Bowen, E. R. (Cardigan)

  Ashton, H.

  Bennett, F. M. (Torquay)

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

  Atkins, H. E.

  Bidgood, J. C.

  Boyle, Sir Edward

  Baldwin, A. E.

  Birch, Rt. Hon. Nigel

  Braithwaite, Sir Albert (Harrow, W.)

  Brooke, Rt. Hon. Henry

  Hudson, Sir Austin (Lewisham, N.)

  Page, R. G.

  Brooman-White, R. C.

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

  Pannell, N. A. (Kirkdale)

  Bryan, P.

  Hughes Hallett, Vice-Admiral J,

  Partridge, E.

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

  Hurd, A. R.

  Peyton, J. W. W.

  Burden, F. F. A.

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

  Pitt, Miss E. M.

  Butcher, Sir Herbert

  Hutchison, Sir James (Scotstoun)

  Pott, H. P.

  Cary, Sir Robert

  Hylton-Foster, Sir H. B. H.

  Powell, J. Enoch

  Channon, H.

  Irvine, Bryant Godman (Rye)

  Price, David (Eastleigh)

  Chichester-Clark, R.

  Jenkins, Robert (Dulwich)

  Price, Henry (Lewisham, W.)

  Clarke, Brig. Terence (Portsmth, W.)

  Jennings, J. C. (Burton)

  Profumo, J. D.

  Cole, Norman

  Johnson, Dr. Donald (Carlisle)

  Raikes, Sir Victor

  Conant, Maj. Sir Roger

  Johnson, Eric (Blackley)

  Ramsden, J. E.

  Cooper-Key, E. M.

  Joseph, Sir Keith

  Redmayne, M.

  Cordeaux, Lt.-Col. J. K.

  Joynson-Hicks, Hon. Sir Lancelot

  Remnant, Hon. P.

  Corfield, Capt. F. V.

  Kaberry, D.

  Renton, D. L. M.

  Craddock, Beresford (Spelthorne)

  Keegan, D.

  Ridsdale, J. E.

  Crosthwaite-Eyre, Col. O. E.

  Kerby, Capt. H. B.

  Rippon, A. G. F.

  Crouch, R. F.

  Kerr, H. W.

  Robinson, Sir Roland (Blackpool, S.)

  Cunningham, Knox

  Kershaw, J. A.

  Rodgers, John (Sevenoaks)

  Currie, G. B. H.

  Kimball, M.

  Roper, Sir Harold

  Dance, J. C. G.

  Kirk, P. M.

  Schofield, Lt.-Col. W.

  D'Avigdor-Goldsmid, Sir Henry

  Lagden, G. W.

  Sharples, R. C.

  Deedes, W. F.

  Lambert, Hon. G.

  Shepherd, William

  Donaldson, Cmdr. C. E. McA.

  Leather, E. H. C.

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

  du Cann, E. D. L.

  Leavey, J. A.

  Smithers, Peter (Winchester)

  Duncan, Capt. J. A. L.

  Leburn, W. G.

  Spier, R. M.

  Eden, J. B. (Bournemouth, West)

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

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

  Errington, Sir Eric

  Legh, Hon. Peter (Petersfield)

  Stanley, Capt. Hon. Richard

  Farey-Jones, F. W.

  Lindsay, Hon. James (Devon, N.)

  Steward, Harold (Stockport, S.)

  Fell, A.

  Lindsay, Martin (Solihull)

  Steward, Sir William (Woolwich, W.)

  Finlay, Graeme

  Linstead, Sir H. N.

  Stewart, Henderson (Fife, E.)

  Fisher, Nigel

  Llewellyn, D. T.

  Storey, S.

  Fleetwood-Hesketh, R. F.

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

  Studholme, H. G.

  Fraser, Sir Ian (M'cmbe & Lonsdale)

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

  Summers, G. S. (Aylesbury)

  Freeth, D. K.

  Lucas, P. B. (Brentford & Chiswick)

  Sumner, W. D. M. (Orpington)

  Galbraith, Hon. T. G. D.

  Lucas-Tooth, Sir Hugh

  Taylor, William (Bradford, N.)

  Garner-Evans, E. H.

  Macdonald, Sir Peter

  Teeling, W.

  George, J. C. (Pollok)

  McKibbin, A. J.

  Thomas, Leslie (Canterbury)

  Gibson-Watt, D.

  Mackie, J. H. (Galloway)

  Thomas, P. J. M. (Conway)

  Glover, D.

  McLean, Neil (Inverness)

  Thompson, Kenneth (Walton)

  Godber, J. B.

  Macmillan, Rt. Hn. Harold (Bromley)

  Thornton-Kemsley, C. N.

  Gomme-Duncan, Col. Sir Alan

  Macpherson, Niall (Dumfries)

  Tiley, A. (Bradford, W.)

  Gower, H. R.

  Maddan, Martin

  Touche, Sir Gordon

  Grant, W. (Woodside)

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

  Turner, H. F. L.

  Green, A,

  Maitland, Hon. Patrick (Lanark)

  Turton, Rt. Hon. R. H.

  Gresham Cooke, R.

  Manningham-Buller, Rt. Hn. Sir R.

  Tweedsmuir, Lady

  Grimond, J.

  Markham, Major Sir Frank

  Vane, W. M. F,

  Grimston, Hon. John (St. Albans)

  Marlowe, A. A. H.

  Vaughan-Morgan, J. K.

  Grimston, Sir Robert (Westbury)

  Marples, A. E.

  Vickers, Miss J. H.

  Gurden, Harold

  Mathew, R.

  Vosper, D. F.

  Harris, Frederic (Croydon, N.W.)

  Mawby, R. L.

  Wade, D. W.

  Harris, Reader (Heston)

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

  Wakefield, Sir Wavell (St. M'lebone)

  Harrison, A. B. C. (Maldon)

  Madlicott, Sir Frank

  Wall, Major Patrick

  Harrison, Col. J. H. (Eye)

  Milligan, Rt. Hon. W. R.

  Ward, Dame Irene (Tynemouth)

  Harvey, John (Walthamstow, E.)

  Molson, A. H. E.

  Waterhouse, Capt. Rt. Hon. C.

  Heald, Rt. Hon. Sir Lionel

  Nabarro, G. D. N.

  Webbe, Sir H.

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

  Nairn, D. L. S.

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

  Hill, Rt. Hon. Charles (Luton)

  Neave, Airey

  Williams, Paul (Sunderland, S.)

  Hill, Mrs. E. (Wythenshawe)

  Nicholls, Harmar

  Wills, G. (Bridgwater)

  Hinchingbrooke, Viscount

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

  Wilson, Geoffrey (Truro)

  Hirst, Geoffrey

  Nield, Basil (Chester)

  Woollam, John Victor

  Holt, A. F.

  Nugent, G. R. H.

  Yates, William (The Wrekin)

  Hope, Lord John

  Oakshott, H. D.

  Horobin, Sir Ian

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

  TELLERS FOR THE NOES:

  Howard, Gerald (Cambridgeshire)

  Orr, Capt. L. P. S.

  Lieut.-Commander Richard Thompson

  Howard, Hon. Greville (St. Ives)

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

  and Mr. Edward Wakefield.

  Howard, John (Test)

  Osborne, C.

  ORKNEY AND SHETLAND (DEPOPULATION)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Godber.]
  11.38 p.m.
  Mr. J. Grimond: I am going to speak tonight about some of the most romantic islands in Britain—places like Foula, the Edge of the World, and Fair Isle, which has given its name to a famous style of knitwear. But life in these islands is not always romantic—and the time has come to do more than pay lip service to their history and beauty.
  For a long time there has been a drift from all the outlying islands of Orkney and Shetland. The population of the North Isles of Orkney has fallen by about 40 per cent. since 1921. Although help in various forms has been given to them, no Government has faced up to their peculiar problems, even, if need be, by unorthodox methods. No one pretends that their problems can be solved by the Government acting alone. No one pretends that the solution will be easy, but the time is now approaching when a Government decision must be made.
  Either the Government must concede that such islands, and, indeed, other Island and Highland districts, differ radically from much of the rest of the country and require different treatment, or they must say frankly that they are prepared to see these islands gradually put down to grazing without further struggle. To go on as at present, pumping in the annual subsidies, paying lip service to the virtues of the islanders, but taking no adequate steps to create the basic conditions and inject the capital needed to enable them to lead a reasonable life, is fair neither to the islanders themselves nor to the country as a whole.
  Let me outline the position in the smallest of the islands. There are 47 Fair Islanders left, 29 of whom are over 40. There is only one unmarried girl between 15 and 40, and 9 children. I have here an extract from a recent letter to me from someone on the island. He says:
  "The outlook at present for the Isle is pretty grim…the majority of the people are all past middle life and the few young
  2268
  men are not willing to hang on much longer unless something can be started in the Isle to enable them to make a livelihood. We do not want to see the Isle evacuated if we can possibly stop it."
  Then there is Foula. There are 54 people on that island-16 fewer than a year ago, and two further families are talking of going. There is the same situation here as there is in Fair Isle; there is not sufficient livelihood to be made, no harbour or adequate pier. On both islands the boats have to be hauled up all winter, and there will soon be no crew for them. There is the same story at Papa Stour. There are 39 people who belong to the island; they have no harbour or pier. The missionary writes to me:
  "Last August, we received our annual supply of coal—somewhere around 40 tons. At the same time, 18 head of cattle were despatched with the coal boat. It was necessary for the boat to make three trips at £50 each time in freight on cattle and coal."
  The larger islands, too, are losing their people for lack of transport and the chances of a decent livelihood. Fetlar, a big and fertile island in Shetland, is down to a population of about 140. Skerries has no adequate steamer service, and Whalsay no harbour. The roads in Yell and Unst are a disgrace to this century. But it is on the smaller Shetland islands that the position has now nearly been reached of "develop or evacuate."
  Let us look at Orkney. As the Secretary of State knows, the North Isles have addressed a petition to him setting out their circumstances. They tell the same story of depopulation. I can supply the right hon. Member with a detailed census of the present position on many of these islands. They are not yet down to the level of Fair Isle, Foula or Papa Stour, but at North Ronaldsay there is no adequate pier; the cargo boat calls once a fortnight; the freight charges are crushing. There are still 182 people on the island, the majority being middle-aged or old. In the South Islands of Orkney, seven people are left on Fara, a handful at Rackwick, and very few on Hoy. Egilsay and many other islands tell the same story.
  What do these islands need? For one thing, they need employment, to hold the younger people and bring in new blood. If the population is to be kept on Fair Isle and Foula, for instance, some effort has to be made to organise better the

  2269
  knitting—hand or machine—and perhaps weaving. On many of the larger islands—Eday, for instance—agriculture could be much further developed. Perhaps fishing could be revived on some. Mr. Gear, from Foula, tells me that it is 60 years since the Congested Districts Board sent out an engineer to survey for a harbour—but nothing has been done. Secondly, transport must be improved and freights lowered. Foula is cut off for months at a time. Fair Isle has at best a weekly service of a small boat across one of the roughest bits of water in the world. To Papa Stour there is no regular cargo service.
  I have continually raised the question of freight charges and transport. Two years ago I warned the Government that the inter-island services must be improved, but that far from improving them the ship owners could not replace existing boats. All the facts were set out in a memorandum I sent to the Ministry of Transport in 1953.
  This question of transport and freight is reaching a critical stage. The Government can no longer shelve it. Messrs. Bremner, in Orkney, as the Secretary of State knows, are talking of giving up their service. The Orkney Steam Navigation cannot replace its ships, which are expensive and out of date let alone provide the third, faster ship which is urgently required. Even the North Company is being driven desperate by higher costs. Diesel oil cost £5 a ton before the war; now it costs £13 19s. a ton, and it goes up again this month. It costs the Orkney Steam Navigation £140 per day to run its ships.
  Wage rates, of course, are up. For a recent Sunday afternoon's work of four hours discharging fish at Aberdeen, the North Company had to pay £5 6s. 8d. per man. The charges for ship repairs and surveys are exorbitant. The North Company pays £100,000 a year, and it even costs £1,000 for the annual survey of the "Orcadia." As a result, freight charges are crippling. I have given the full schedules to the Scottish Office several times, but I will give one or two examples.
  A cargo for Papa Stour, as I have said, costs £50 from the mainland of Shetland. Though it can be argued that freight charges to Kirkwall or Lerwick are lower than to the Hebrides, the outlying islands
  2270
  have to pay further freight, harbour and lorry charges on top of these, which make the total much larger. To move cattle from the North Isles to Kirkwall costs about 23s. per animal. Potatoes cost 23s. 4d. per ton, and bricks, 36s. 8d. per ton.
  Look at the inadequate passenger services. It takes a full day to get to some of the outlying islands. When are we to take a step forward with the aeroplane services? I am glad to see a representative here of the Ministry of Transport and Civil Aviation. We learn of helicopters becoming commonplace throughout the world. Members of the Royal Family and generals fly to inspections in them; commercial firms use them. We, who had an internal air service before the war and who need them for the daily necessities of life and particularly for medical cases, get no help. Rockets to the moon, perhaps, but no aircraft for Fair Isle or Ronaldshay.
  Neither Fair Isle, Foula, Papa Stour, North Ronaldshay, Papa Westray, Elisay or Wyre has an adequate harbour or pier. Whalsay, one of the main fishing islands of Shetland, has, as I have said, no harbour. In spite of subsidies at the rate of millions a year for airports which, we might think, passengers themselves might well support, we cannot find £250,000 to supply these islands with piers.
  Then, thirdly, there is the question of education, medical services and marketing of products. There are many others which I cannot touch on tonight, but of which the Scottish Office must be well aware. Let me kill two red herrings: it is no use referring this question again to the Highland Panel or to some other advisory body. That has been done. Action is now imperative. Unless steps are taken, the situation on some of these islands will pass the point of no return this year. If Fair Isle or Foula are evacuated, the repercussions will be widespread.
  It is no good the Government saying that they have no powers. They took powers to give MacBrayne's £3¼ million and to spend a fortune on various projects which are no more necessary than some I have mentioned. The Development Commissioners and other agencies should be able to assist new industries by various methods of grants. The time has

  2271
  come when there must be a concentrated effort by all concerned to stop the downward trend on these islands and on many other islands all round the coasts of Britain.
  I ask the Government to consider action under three heads. First, will they give assistance over the basic needs of these islands? I am not laying down tonight exactly how it should be done, whether by rebate of taxation, grants or loans, but it must be particularly directed to the matter of transport and freight. [An HON. MEMBER: "Hear, hear."] I am glad to have support from other people and assistance must also be given for land development and the development of new sources of employment. I suggest that, at the same time, the Government should try to improve the medical services on some of the more remote islands, and the roads and amenities on all.
  Secondly, they should treat the situation on such islands as Fair Isle, Foula, and Papa Stour as a matter of real urgency. If there is evacuation, there will be an outcry all over Britain. It may be that a pilot scheme should be put into operation—I am not suggesting that this is the only thing which could be done—on one of the islands to see how far depopulation can be checked and, if possible, better prospects and new blood be brought to them. If these islands are not considered suitable for such a scheme, what about Fetlar or Eday? It is essential that some concentrated effort be made by all concerned to stop the rot and to create a confident outlook in the islands. They might take over a certain amount of land and get three or four families to work it at a guaranteed wage. That might be a constructive way of setting about a solution of the problem. It is, at least, a suggestion worth consideration.
  Thirdly, I would ask the Government to pay special attention to the future of the boat services which are an essential link between the mainlands of Orkney and Shetland and these outlying islands. As the Secretary of State knows, something must be decided soon about Messrs. Bremner, and it is difficult to see what future Fair Isle, Foula, Papa Stour, or Egilsay, Wyre and Rousay, can have
  2272
  unless transport services are greatly improved. Is there any chance of further help from the Post Office—I gladly acknowledge the help given—or from the Armed Services; for instance, in providing more frequent mail services to Fair Isle, or light on Hoy, where the Admiralty have a powerful electric plant?
  I do not expect detailed answers from the Government tonight, but I would like an assurance that they are determined to take the lead in tackling these problems. I can assure them that it will get the co-operation of all concerned. I have a large amount of information and many suggestions which I shall be happy to put at its disposal over and above those which I have made this evening, and have left with it on previous occasions. We must not, however, delude ourselves that the present policies, in spite of all that can be said for them, or the creation of new advisory services and bodies such as the Crofters' Commission, will stop depopulation and give us the full development of these islands, or, indeed, of the Highlands, and other islands round the coast of Britain.
  11.52 p.m.
  The Joint Under-Secretary of State for Scotland (Mr. J. Henderson Stewart): The depopulation of the remoter parts of the country, and particularly of the Highlands and islands, is a matter which has frequently concerned the House. I can remember many occasions when I took part in some debate on the matter, as the hon. Member for East Aberdeenshire (Sir R. Boothby) has done in the past. It is, in a way, perhaps unfortunate that, through pressure of business, opportunities for the House to examine this kind of problem appear to become fewer and fewer.
  That is why the House should welcome, as I do, the decision of the hon. Member for Orkney and Shetland (Mr. Grimond) to raise tonight the special problems of the small outlying islands of the far North. I am much obliged to him for his courtesy for advising me about the sort of matters he intended to raise.
  In a general sense, these problems are not peculiar to his constituency. They are to be found in some degree more or less severe in all distant areas. Living standards rise in other parts of the country; peoples' taste change; there is

  2273
  a ceaseless, inevitable, and natural desire in the younger people to seek wider opportunities for advancement, and to enjoy a larger share of the rapidly improving and diverse amenities to be found on the mainland. We cannot stop that movement of young people any more than King Canute could stop the tide.
  As I see it, the question tonight is whether, by some means, that movement can be slowed, if it cannot be stopped. There are few of us who would not like to slow it. Most of us, no doubt, would say that politically, socially, economically, even strategically, it would be of advantage to the nation if depopulation of the islands and glens of our country could be checked. The problem is how to do it. I do not think that this House is capable of answering that question; certainly, not without the fullest advice of those best qualified and specially appointed to offer advice.
  Although the hon. Member was, I thought, a little sceptical about the advantages we gain from various bodies, I feel, nevertheless, that we have to turn to them. In the case of Orkney and Shetland there are at least three public bodies upon whose advice this House must rely if it is to take any action at all. There are the elected county councils of the two groups of islands, whose knowledge in this matter must, of course, be most intimate. There is the Highland Panel, of which the hon. Member is a Member. It was set up eight years ago by the Labour Government and has done very good work. The Highland Panel has gained great experience and its knowledge of many of these matters must be quite unique.
  Recently, there has been the Crofters' Commission, which all of us think is an excellent creation. It has a very special concern with some of the problems which the hon. Member has raised. There is a fourth body concerned in the case of one of the islands, Fair Isle. That, of course, is the National Trust for Scotland in which the hon. Member I am sure has a very close interest because of his admirable service to that body in the past. As the hon. Member knows very well, the Chairman of the Highland Panel recently met representatives of the National Trust, which owns the island of Fair Isle now, and discussed the problems of the island.
  2274
  Those problems are twofold. First, there is the need for improved amenities as the hon. Member described, roads, boat services, houses, water, the possibility of electricity supply, and all that. Secondly, there is the possibility of introducing new industries or, as the hon. Member put it, injecting new capital. That is the crux of the matter here and elsewhere. Can this ancient and historic Fair Isle support a viable population today on twentieth century standards of living? That is the crux of the matter in these remote islands.
  I am told that the National Trust, the Highland Panel and the county council are all examining these matters at present. But the Highland Panel is doing more. It has also been considering similar problems of the group of North Isles of Orkney, to which the hon. Member referred. Next week, in fact, five days hence, it is setting out to consider the problems on the spot, a very proper thing to do. It is to meet the local people and local shipping companies to obtain their views and see for itself what can or should be done to improve the conditions and to develop the native economy of those northern islands.
  All the matters the hon. Member referred to, I agree, are of the utmost importance—new industries, piers, harbours, freight charges and, of course, the possibility of introducing an air service there and to Shetland. I think it would be true to say—although I am speaking subject to correction from the Ministry of Transport and Civil Aviation—that we are not likely to get very far with the development of air transport until the much looked for twin-Pioneer we are making in Scotland is in full production and active operation. I am not speaking at all officially, but I have the greatest possible confidence in that machine and hope it will help us in many of these problems.
  We must all welcome this sense of activity and congratulate these public concerns and those who are doing this work voluntarily on the initiative they have shown. The Government anxiously and eagerly await the result of their examination, but let us be clear that the task confronting these public bodies, as it confronts the Scottish Office now, is not an easy one.
  In the islands of Orkney and Shetland there is no single problem, and there is,

  2275
  similarly, no single solution. That, in- deed, is what the hon. Member has been telling us so eloquently tonight. According to the 1951 census, there were over 45 inhabited islands in Orkney and Shetland, varying considerably in size, in situation and in well-being. At one end of the scale, I might take the example the hon. Gentleman gave of Fair Isle, with a population of 65 and a native community of 47. At the other end of the scale, one might mention the other Orkney islands like South Ronaldsay and Westray which, though not without their difficulties I agree, have nevertheless attained a high degree of prosperity and whose future is not seriously in doubt at all.
  Other examples of islands in that group that are doing well are Out-Skerries and Hamnavoe and Whalsey. The present population of the Out-Skerries has not varied greatly over the past 100 years, but it just happens that all these communities draw a livelihood from a prosperous local fishing industry, which accounts for their prosperity as compared with the other parts of the islands.
  It is true, of course, that there has been a general fall in the population of the outer islands of Orkney and Shetland. Since 1911 it has declined by between 40 and 47 per cent. In some of the islands the decline has been even more steep. In Papa Stour, it has fallen by nearly 70 per cent. But in considering this matter there are two facts to be borne in mind. One is that to which I have referred—that this is not peculiar to Orkneys and Shetland. It is found every- where, in every part of Europe and in large parts of America. People are gradually moving from the more remote parts into the towns.
  There is a second fact. When we speak of depopulation it does not necessarily mean that all these islands are in a desperate state and facing evacuation. I know that the hon. Member did not say that, but he seemed to feel it. I should like to make it plain that they are not all in that position even where they show a fall in population. The population of the outer islands of Orkney fell by 20 per cent. between 1931 and 1951, but half of this fall was due to the reduction of the size of families. That is not confined to Orkney and Shetland; it is common all over the country. With the
  2276
  increasing agricultural efficiency, most notable in Orkney, as everybody knows who has visited those islands, this decline in population proceeds, yet is accompanied by a marked increase in agricultural output. That is particularly so in the North Isles of Orkney, as we know.
  Since 1931, for example, the number of poultry has gone up by 34 per cent., pigs have increased three-fold, cattle by one-third, and the only decline is in the number of sheep. Otherwise, there has been an all-round improvement. Taken overall the agricultural production of this island is substantially higher than it was 20 or 30 years ago, and it is obviously being maintained at a higher level today. We have the rather paradoxical situation of a combination of a small resident population with a higher agricultural output, leading inevitably to a higher standard of living for those who are there and that, after all, is what those people want.
  In Shetland—I have been dealing mostly with Orkney—the economy depends mainly upon crofting, agriculture, knitting and fishing. Each of these, as the hon. Gentleman rightly said, has been the subject of intensive examination in past years. We have the Crofters' Commission, and, personally, I attach great hopes to its operations. One of its very first jobs was to undertake a fresh examination of the Shetlands. I very much hope that it may be able to advise us and to take action which will be generally helpful.
  I know that there are 800 or so people unemployed in the Shetlands, but it is encouraging to find, in a recent issue of the Shetland News, headlines stating:
  "Shetlands record year in 1955. White fish, tweed, hosiery booming. Herring value nearly doubled. Splendid summer weather and good harvest. More tourists than ever before."
  That indicates that, by and large, the Shetlanders seem to be doing reasonably well.
  Before I conclude, I want to say a word about transport. The hon. Gentleman is quite right when he says that transport is a serious problem. The transport link with the mainland is, I think, good and efficient. The hon. Gentleman did not complain very much about it. His complaint was really with regard to the interisland services, about which I know there

  2277
  has been some criticism. The hon. Gentleman suggested that there ought to be some Government aid, and I know that that is being asked for.
  The Government are not persuaded, at any rate at present, that the facts as now presented establish by themselves a case for financial assistance. For one thing, the maintenance of the essential communications between the Orkney islands needs not depend solely on the maintenance of the services as they at present exist. This is essentially a matter that must be examined on the spot, and it is one of the main matters which the Highland Panel is to examine next week. I really am not able to go further than that.
  We are most sensible of the problem of freight charges, which are heavy, and
  2278
  of the inadequacy of the service. I quite understand that, because I have had a little experience of it. We should like to do what is right by these splendid men and women in the islands, but to recognise that is not automatically to say that we agree that there should be a subsidy, because we are not satisfied that it is necessary or is the right way of solving the problem. I am not able tonight to say what is the answer. Although we have had expert advice from these—
  The Question having been proposed after Ten o'clock on Wednesday evening, and the debate having continued for half an hour. Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at eight minutes past Twelve o'clock.

ROYAL NAVY
  H.M.S. "Truelove"
  H.M.S. "Truelove"
  Establishments, Londonderry
  Establishments, Londonderry
POST OFFICE
  Telephone Service, Rugby (Medical Practitioners)
  Telephone Service, Rugby (Medical Practitioners)
  Magazines (Postage Rates)
  Magazines (Postage Rates)
ROYAL AIR FORCE
  U.S.A.F. Married Quarters, Greenham Common
  U.S.A.F. Married Quarters, Greenham Common
  Recruits (Date of Birth)
  Recruits (Date of Birth)
TRANSPORT
  One-Way Traffic (Jermyn Street)
  One-Way Traffic (Jermyn Street)
  Road Improvements, Lincoln
  Road Improvements, Lincoln
RAILWAYS
  Electrification System
  Electrification System
  Programme
  Programme
  JORDAN (VAMPIRE FIGHTERS)
  JORDAN (VAMPIRE FIGHTERS)
BRITISH GUIANA
  Amerindians (Southern Rupununi Savannahs)
  Amerindians (Southern Rupununi Savannahs)
  Geological Survey
  Geological Survey
  Rice Cultivation
  Rice Cultivation
EAST AFRICA
  Kenya (Educational Expenditure)
  Kenya (Educational Expenditure)
  Tanganyika (African National Union)
  Tanganyika (African National Union)
  Somali Students (United Kingdom)
  Somali Students (United Kingdom)
SIERRA LEONE
  Imported Goods (Tariff)
  Imported Goods (Tariff)
  Mr. C. S. Duncan (Outfit Allowance)
  Mr. C. S. Duncan (Outfit Allowance)
  Fourah Bay College
  Fourah Bay College
  NIGERIA (COCOA-MARKETING SOCIETIES)
  NIGERIA (COCOA-MARKETING SOCIETIES)
CYPRUS
  Schools (Closure)
  Schools (Closure)
  Situation
  Situation
WEST INDIES
  Trinidad (General Election)
  Trinidad (General Election)
  Barbados (Aerodrome)
  Barbados (Aerodrome)
  British Honduras (Citrus Industry)
  British Honduras (Citrus Industry)
  Windward Islands (Compulsory Education)
  Windward Islands (Compulsory Education)
  Dominica (Employment)
  Dominica (Employment)
  MALTA (MINISTER'S VISIT)
  MALTA (MINISTER'S VISIT)
  SINGAPORE (MUI-TSAI)
  SINGAPORE (MUI-TSAI)
BRITISH ARMY
  Paint
  Paint
AGRICULTURE, FISHERIES AND FOOD
  Research, Wales
  Research, Wales
  Hedgerow and Farm Timber (Committee's Report)
  Hedgerow and Farm Timber (Committee's Report)
NATIONAL FINANCE
  Currency Areas
  Currency Areas
  Imperial College of Technology
  Imperial College of Technology
  Floating Debt
  Floating Debt
MINISTRY OF HEALTH
  Psychiatric Social Workers
  Psychiatric Social Workers
  National Health Service (Rimless Spectacles)
  National Health Service (Rimless Spectacles)
  Smallpox
  Smallpox
  Vaccination (Death)
  Vaccination (Death)
  Deceased Patients (Appliances)
  Deceased Patients (Appliances)
  Poliomyelitis Vaccine
  Poliomyelitis Vaccine
HOME DEPARTMENT
  Adoption of Children (Committee's Report)
  Adoption of Children (Committee's Report)
  West Indians (Residence, Scotland)
  West Indians (Residence, Scotland)
LOCAL GOVERNMENT
  New Towns, London Area (Development)
  New Towns, London Area (Development)
SCOTLAND
  Vaccination (Deaths)
  Vaccination (Deaths)
  Smallpox
  Smallpox
  Teachers' Dependants (Pension Scheme)
  Teachers' Dependants (Pension Scheme)
  Murders, East Kilbride and Dennistoun
  Murders, East Kilbride and Dennistoun
  Herrings
  Herrings

Preamble
The House met at half past two of the Clock, The LORD CHANCELLOR On the Woolsack.
Prayers
The Lord Grantley—Sat first in Parliament after the death of his father.

ELDER YARD CHAPEL CHESTERFIELD BILL [H.L.]
Read 3a, and passed, and sent to the Commons.
SION COLLEGE BILL [H.L.]
Read 3a, and passed, and sent to the Commons.

MILK (GUARANTEED PRICES) ORDER, 1956
2.35 p.m.
THE PARLIAMENTARY SECRETARY, MINISTRY OF DEFENCE (LORD CARRINGTON): My Lords, On behalf of my noble friend, Lord St. Aldwyn, I beg to move that this Order be approved. The purpose of this Order, the last in a series, is to provide Parliamentary authority under Section 4 of the Agriculture Act, 1947, for the method in which the Government are implementing the price guarantee for milk. In this case, the necessary payments from the Exchequer are made to the five milk marketing boards in the United Kingdom, and the arrangements for doing this have been in operation in their present form in Great Britain since April 1, 1954, and in Northern Ireland since the same date in 1955. The present Order makes no change either in the
128
method of paying the guarantees or in their amounts, both of which have been explained in White Papers following the Annual Reviews. I beg to move.
Moved, That the Milk (Guaranteed Prices) Order, 1956, reported from the Special Orders Committee on Wednesday last, be approved.—(Lord Carrington.)
On Question, Motion agreed to.

EGGS (GUARANTEED PRICES) ORDER, 1956
LORD CARRINGTON: My Lords, this does the same in regard to eggs as the first Order does for milk. I beg to move.
Moved, That the Eggs (Guaranteed Prices) Order, 1956, reported from the Special Orders Committee on Wednesday last, be approved.—(Lord Carrington.)
On Question, Motion agreed to.

SPECIAL ORDERS COMMITTEE
THE CHAIRMAN OF COMMITTEES (THE EARL OF DROGHEDA): My Lords, I beg to move that the Earl of Onslow and the Earl of Lucan be added to the Select Committee on Special Orders.
Moved, That the Earl of Onslow and the Earl of Lucan be added to the Select Committee.—(The Earl of Drogheda.)
On Question, Motion agreed to.

PROCEDURE OF THE HOUSE
THE EARL OF DROGHEDA: My Lords, I beg to move that the Earl of Onslow and Lord Silkin be added to the Select Committee on the Procedure of the House.
Moved, That the Earl of Onslow and the Lord Silkin be added to the Select Committee.—(The Earl of Drogheda.)
On Question, Motion agreed to.

THE ECONOMIC SITUATION
2.39 p.m.
LORD PETHICK-LAWRENCE LORD PETHICK-LAWRENCE rose to move, That there be laid before this House Papers in regard to the economic situation. The noble Lord said: My Lords, before I move the Motion which stands in my name to-day, I feel that a word of thanks should be given to the noble Lord, Lord Vansittart, who kindly allowed his Motion which stood on this day to be postponed in order that we might begin this debate at the opening of the Sitting—a great convenience not only to myself but to all those who are taking part. I now beg to move my Motion. I would remind your Lordships that we were last discussing this matter of inflation on the 20th December in reference to the Autumn Budget of Mr. Butler, and I remember that the noble Earl, Lord Selkirk, on that occasion was defending Mr. Butler's proposals and arguing that, even if unpopular, they were an answer to inflation. I ventured to interpolate a query as to whether they were an effective answer, and to this the noble Earl replied —and I quote from the OFFICIAL. REPORT for December 20 [Volume 195, col. 358]:
"I agree with the noble Lord in this: that, whatever happens, there is one test only, and that is whether these measures are successful or not."
Two and a half months have gone since then. Has the situation improved? Have Mr. Butler's remedies been successful? I could bring forward a good deal of indisputable evidence to show that they certainly have not been successful, but I have no intention of wasting your Lordships' time by doing anything of the kind, because the Government themselves have answered the question and saved me from the trouble of doing so. Quite recently in another place, in introducing Mr. Macmillan's proposals, they gave as their main reason for doing so the further deterioration in the country's financial position. When Mr. Butler first took office as Chancellor of the Exchequer in 1951, the country was entering on a pretty bad patch. Mr. Butler took certain action and, shortly afterwards, there was a great improvement. As a result Mr. Butler was idealised—"A financial wizard," cried the Tory Party; "How smoothly and painlessly Conservative policy restores stability!;", they said. But they are saying something very different
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to-day. The idol has tumbled down from its pedestal and abuse has been substituted for worship.
I travel through the country a great deal and in the course of doing so I meet a number of people belonging to all classes and of all political faiths; and I hear what Conservatives are saying to-day about Mr. Butler. I confess that I have been shocked at what they say. Indeed, as a humane and judicially-minded person I sometimes feel tempted to spring to his defence; but I am not quite sure whether my form of defence would he very welcome to Mr. Butler or to the Conservatives who are discussing him with me, for I would frankly admit his guilt but would plead that he had been led astray by bad advisers, among whom I should include those members of the Conservative Party who at the present time are running him down.
The real facts of the financial position during the last three years are still not generally recognised by the general public. It is always one of the essential necessities for a Government to maintain the stability of the currency; and particularly after a devastating war the greatest care must be taken to avoid the twin and opposite evils of inflation and deflation. After the First World War, in the years from 1919 onward, this country was taken into a policy of ruinous deflation, with the disastrous consequences of which all of us are aware. Since 1945 successive Governments of both Parties have had their work cut out to try to avoid runaway inflation, and we are still engaged in that task. In 1951, owing to the participation of ourselves and our allies in the Korean war, there was a terrible upset to our economy. Prices rocketed upwards and tile terms of trade went heavily against us. But at the close of the Korean war the terms of trade reverted to their former favourable condition, and Mr. Butler was presented with an unexpected windfall of the fabulous amount of some £500 million a year improvement. It was not his magic personality, still less his policy, but this windfall that enabled the country to get rid of its financial difficulties.
What did Mr. Butler do with that £500 million a year? Instead of using a large part of it to strengthen the foundations of our economy, instead of increasing the above-the-line balance in

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the Budget, he dissipated it in ways pleasing to his Conservative friends. He hastened prematurely to abolish all physical controls. He indulged in wasteful schemes of de-nationalisation and, in successive Budgets, notoriously in the April Budget of last year, he handed out largesse to the well-to-do. At the same time, in order to prevent his actions from leading to their natural inflationary result, he resorted to the old, rusty blunderbuss of dear money in the hope that the same results would follow in 1955 as followed (and I use the word "followed," not "resulted") in 1952. To the complete surprise of the public who trusted him this result has not actually taken place. The expectation has not been fulfilled. As your Lordships know, I have never shared the faith in this obsolete weapon in modern economic conditions, so I have not shared in this general surprise.
What, then, was the position when Mr. Butler handed over to the incoming Chancellor of the Exchequer a few weeks ago? In the first place, he left an unabated and, in some ways, a worsening inflation. In the second place, he left a high bank rate to bedevil further our economy. In the third place, he left a feeling of injustice and suspicion that, as a Conservative Chancellor of the Exchequer, he had not held the balance fairly between the classes in imposing taxation. All these have serious consequences, and I propose to take a few examples and in each case to try to assess to which of those causes the present troubles are due.
I suppose that the greatest sufferer from the policy of dear money is the State itself, which has to pay higher rates on Treasury Bills and on the Floating Debt generally, and which will have to pay a higher interest burden on any tranche of the National Debt whose date of redemption falls during a period in which dear money is still prevailing. The State's loss is, of course, the taxpayer's burden. It is not for me or for anyone outside official circles to attempt to give a reliable estimate of what this loss is. I have seen it placed as high as the equivalent of 1s. in the pound on income tax. That may be quite an excessive figure. But it is likely that it runs nearly up to six figures. Perhaps the best thing for me to do is to ask the noble Earl, Lord Selkirk—I
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understand he is making a speech this afternoon—to try to give us some figure of what the taxpayer has to find as the net result of the increased money rates that are paid today, since Mr. Macmillan's one point rise, as compared with what it would have been had they remained as they were when Mr. Butler came into office in 1951—that is, assuming that the present rates stand over for a whole year. But even when we have got that, it will not include the redemption in August next of the £840 million 2½ per cent. National War Bonds which will then have to be redeemed.
Passing from the State, we come to the next big loser, the municipality. It suffers from inflation since inflation has sent up the price of building and of everything else that the municipality has to buy. But it also suffers from dear money because municipalities are constantly going to the market to get money. Incidentally, I may remind your Lordships that Mr. Butler has sent them all to the general market instead of finding money for them. If they cannot get it out of the general market they have still to pay the equivalent rate to the Exchequer. And those additional burdens, taken together, amount to considerable suffering for the ratepayer or the tenant of the municipality.
I turn from those two national bodies—the State itself, the Exchequer, and the municipality—to the world overseas. First of all, I will take the British Colonies. A great many of them have schemes of development with which they want to proceed as soon as possible. They have to get loans from the home Government and they are standing at the present time in a queue waiting to be j served. The fact that we in the United Kingdom have a domestic trouble in the shape of inflation means, in the first place, that these Colonies will have to wait an unconscionably long time to get on with their developments. And Mr. Butler's dear money policy means, further, that if and when they get their loans they will have to pay an unconscionably long price for them.
When we come to the Commonwealth and to foreign countries we are presented with other grave features. We are committed to release annually sterling balances running into many millions of pounds, and the Government—the Prime Minister, in

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fact—have not long ago committed us (I am not expressing either support or opposition to the actual fact, but fact it is). to spend what may well prove to be over £60 million a year in keeping our Forces for the next fifty years on the Continent of Europe. We may get some payment out of Germany—that remains to be seen; but we are committed at the moment to that large expenditure which will add very much to our difficulties in the way of finance. I understand that a number of foreigners hold part of the Floating Debt. I have seen it suggested that several tens of millions of pounds more are going to foreign holders of Treasury Bills and Floating Debt generally than would have gone if we had not raised the money rates in this country. I should not like to specify any figures myself. If the noble Earl, Lord Selkirk, can supply any figures of that kind, I am sure your Lordships will be interested to have them. The problem of meeting all these liabilities to the Commonwealth and to foreign countries is considerable, and it is, as I have pointed out, gravely increased both by inflation and by the steps which Mr. Butler has taken with a view to remedying it. I am sure the Government must realise that it would be a grave injury to the national credit if all our promises were not carried out in the spirit as well as in the letter. I have no doubt that they will be; but we must bear in mind that it is going very gravely to add to our complications.
I do not propose to dwell on the hardship imposed on the business, trading and farming communities by the credit squeeze, great and serious though it is. Inflation cannot be cured except by the pruning back of industrial capital as well as of personal consumption, but, even so, the question is whether the Government's indiscriminate pruning is the right way to do it—and I shall have a word or two to say about that matter before I sit down. There are, however, a large number of persons who are grievously affected by dear money and whose sufferings contribute nothing whatever to removing inflation—I refer to those persons who are buying their own houses through building societies and who have, in consequence, incurred a mortgage liability to the society.
These persons are being called upon to pay higher and higher rates of interest as the bank rate goes up, and it is no
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exaggeration to say that as a result of the higher bank rate some of them are paying £10, £20, £30, and in some cases even £40 a year more. That is a serious matter for them. They are not rich people. A large proportion of them belong to the lower middle class, and even before this they were having a great struggle, in the face of rising prices, to make ends meet. It is a grave thing that these people have had this additional burden thrust upon them. I feel sure that this is a class of people who command the sympathy of us all, on which ever side of the House we sit, and I should have thought that they were particularly people whom the Conservative Government would have wished to help, because they are people who are trying to help themselves by initiative and effort of their own. There are more of these people than perhaps some noble Lords realise. I understand that there are nearly 2 million of them, and for every one point that the rate of interest goes up they have to find, in the aggregate, something like £17 million a year. As I said at the beginning, that does not help towards removing inflation at all; it has no direct good result of any kind.
Over and above these sections of the public who in some special way are affected by Mr. Butler's money squeeze, there are the whole of the people on whom, in various degrees, his taxes and restrictions fall. I am a great admirer of the way the vast majority of the British public have always faced taxation. The majority of them neither try to evade it nor complain about its magnitude, always provided that two conditions are fulfilled; that is to say, they mast approve of the purposes for which the taxes are imposed, and they must be satisfied that they are being asked to pay only a fair share of the total. In my view, Mr. Butler never convinced many of these people that they were being fairly treated. They were of the opinion that the scales were not being held evenly, and for that reason they have never given their full concurrence to these attempts to stop inflation.
That is more or less the position that Mr. Butler handed over to the incoming Chancellor of the Exchequer. We have wondered whether, when we had a new hand at the wheel, we should have a new policy at the same time. Do we find any substantial difference now that Mr. Macmillan has taken charge? I think

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in one respect we must say that we do. Mr. Macmillan, having enlarged on the magnitude of our peril, has not hesitated, as Mr. Butler invariably did, to take fairly strong action. But having said that in his favour, I can only add that in other respects I find little change in policy. Money is made still dearer; the nationalised industries are singled out for special restraint, and individual taxation is inequitably imposed. Thus all the ills produced by Mr. Butler's high bank rate are increased; and the people, as a whole, are not reconciled to the further burdens placed upon them. But Mr. Macmillan has still the Budget in front of him, little more than a month ahead; he has one more chance left to prove himself a national Chancellor of the Exchequer and not merely a Party politician. Will he take it, or will he let the opportunity go by? He alone can choose, but it is the nation that will suffer if he makes a wrong choice.
On that note of negative criticism of the Government, I could well bring my speech to an end, but I feel that, in face of the national crisis, it is incumbent upon every one of us to come forward and make some constructive suggestions. On the last occasion we discussed this subject, the noble Earl, Lord Selkirk pointed out that so far none of us had attempted to do that, so I will now try and meet that criticism. In trying to do so, I should like to make it clear that I am speaking for myself, and that, though I think most of what I have to say would be favourably viewed by my colleagues, I am not laying down Labour Party policy. Did the noble Marquess wish to say something?
THE LORD PRESIDENT OF THE COUNCIL (THE MARQUESS OF SALISBURY): I only wondered whether anyone from the Front Bench opposite would be laying down the official Labour Party policy.
LORD PETHICK-LAWRENCE: I do not think it is right for anyone, either here or elsewhere, to lay down the official Labour Party policy. As I have said, I think that, broadly speaking, what I am going to say will be the policy of the Labour Party, but I am not pronouncing ex cathedrâ upon it. That is all I am saying. In the second place, I must remind your Lordships that no Opposi-
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tion speaker has behind him the official knowledge to enable him to do more than make tentative proposals. With these two reservations, I will embark on my task.
The essence of inflation consists in the exercise by the people, as a whole, of the power to spend more money than, at existing prices, there are goods and services to satisfy. The best cure for this is for the people voluntarily to abstain from exercising that power to the full. When I was young the classes that had incomes with a margin were taught that it was a moral duty to save, but that view has not the same vogue to-day among the classes that have surplus cash. No doubt, too, inflation is in itself a disincentive to saving, so that monetary stability and the will to save are, in a sense, interdependent. I pay the highest tribute to the existing institutions for encouraging saving, but I think that the Chancellor of the Exchequer might do far more than he does to inculcate the patriotic duty in this respect. Further, in so far as he is not fully successful in doing this, he should himself come to the rescue by saving out of State revenue —by which I mean, in plain words, that he should budget for a much larger surplus above the line.
Secondly, in view of the close association of the whole banking system with the finance of this country, I think that the Chancellor of the Exchequer should make personal contact with the heads of the joint stock banks. I am aware, of course, that under the Bank of England Act, 1946, he has, through the Bank of England, powers of direction to the joint stock banks. The actual words in the Act, which for those noble Lords who have forgotten them I will read, are these:
"The Bank,"—
that means, the Bank of England—
"if they think it necessary in the public interest, may request information from and make recommendations to bankers, and may, if so authorised by the Treasury, issue directions to any banker for the purpose of securing that effect is given to any such request or recommendation:"
But what I am thinking of is something more intimate and less formal than this. This is no time for punctilio, whether it emanates from the Chancellor of the Exchequer, the chairmen of the joint stock banks or the Bank of England. In

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such talks the Chancellor of the Exchequer will be able to explain his ideas and receive suggestions from the bankers about the general line in which credit should be given or withheld. I noticed, as some of your Lordships must have done, that in the debate on the economic situation' in another place a suggestion was thrown out by one of my colleagues that perhaps the level of the liquidity ratio should be altered in times of stringency. This is one of the suggestions which might be ventilated during any such talks as I have suggested.
Thirdly, nowadays, when the wage claims of weekly wage earners have become a national issue, it would be well if the Chancellor of the Exchequer, before he announced major financial proposals, were to have talks with the principal people representing both sides in industry. I notice with approval that the Prime Minister—and I think the Chancellor of the Exchequer was present—was in consultation with the Trades Union Congress only a few days ago. I feel that it might have been better if the Chancellor of the Exchequer had seen them before he made this announcement; but better late than never— I do not know, from the meagre reports, what precisely took place—naturally not—but I hope they were proceeding along lines that will be worth while. But the point I am making is not that the Chancellor of the Exchequer should disclose his financial policy to the T.U.C. in advance, which would be wholly improper, but that he should pick up from them ideas as to how his policy could come into being and have the right psychological effect on those people for whom the T.U.C. speak. In these days, your Lordships will realise, finance has become largely a matter of psychology. May I give one example of what I mean? There is widespread opinion held in certain sections that what they call "the bosses" get away with far too much money for personal extravagance under cover of "expenses." This is one matter on which the Chancellor of the Exchequer should endeavour to take a reasonably impartial line.
But, of course, the most important thing of all, in my mind and in those of my colleagues, is that the Government should get out of their heads the idea that there is something wrong about national planning. It is true that, from the point of
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view of the reactionaries in the Conservative Party, it is new-fangled, in the sense that it was not heard of in the nineteenth century; but even Conservatives must move with the times. Planning is today recognised in many parts of the world. I would remind your Lordships of the Colombo Plan, which has been supported and continually pressed forward by successive Governments of this country, of both political Parties. No private employer, however large his business, no confederation of employers or association of employees, has the knowledge to plan the affairs of a nation as a whole. The only people who have the facts which will enable them to do so are the Government of the day; and sooner or later they will have to recognise where their duty lies. I shall be told, of course, that this means controls, and my answer to that is that without planning the Government do not escape controls. They are driven to use the monetary control to an altogether improper extent, and the monetary control can be as grinding and as punishing as any physical control that was ever devised. I say to the Government that they would serve the country better if they paid less attention to the ideologies of their Party and kept their eyes open to learn what is happening in other parts of the world and profit by the lesson that they there will learn. I beg to move for Papers.
3.20 p.m.
LORD BGEVERIDGE: My Lords, seven weeks ago, on Wednesday, January 18, the Prime Minister announced to us all that the battle against inflation was on. Two days ago, finding myself on my seventy-seventh birthday with a little time to spare, I spent all the hours of it happily, or unhappily, in the Library of your Lordships' House reading over the files of The Times from January 18 onwards, page by page—.I missed none—to see just what had been happening about wages and prices and salaries since the Prime Minister spoke. It was a saddening but, I hope, a salutary experience. It began with the announcement, the day after the Prime Minister had spoken, of £23 million more being given to the railwaymen for doing the same work. It went on to announce from £80 million to £100 million more for the engineers, and £34 million for electricians and miners. There were grants, disputes or

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proposals about farmers, builders, dockers, teachers, doctors, the Civil Service, local authority manuals, and so on. At a certain point the State came in to give more money for the same work to the Fighting Services, and to give more pensions to the same people for what they were not doing or were doing before. I am certain that both those last two payments by the State were absolutely necessary, but they still mean more money going out for no more goods coming in; and that, to me, is inflation. Of course, there were a lot of rather interesting small fry as well; the Canterbury choristers, the bishops, the headmasters, prison officers, waterworks men, Bristol pilots, and any number more—everybody getting more money for doing as much as before, or as little or less, if he could manage to do it. That, I suggest to your Lordships, is inflation.
That interesting study of The Times—and I hope that some of your Lordships will make a study of it for yourselves—ended with the slightly depressing account of the opening of the discussions between the Prime Minister and the T.U.C. I hope that the rather depressing account of those affairs given by The Times will prove to have been slightly mistaken. All this is, as I have said, on the basis of more money going out for the same output, with rather vague hopes of possibly getting more output in some way in some cases thereafter. That, I suggest, is inflation. May I say that I have been severely lectured by some of my economic correspondents for suggesting that anything that employers and workpeople do about wages can amount to inflation. They say that employers and workpeople are not in control of money but that it is the State which is in control; that the State alone can either cause inflation or stop it. I do not mind being lectured by these correspondents, because it seems to me that, in a sense, they are talking rather serious nonsense. Of course, it is true that the State alone controls money; it need not print enough money. If the State chose to make a prohibitive credit, it could stop inflation at the price of producing mass unemployment. The real problem is how can we get stable prices without unemployment. That is the really difficult problem to which all of us have to set ourselves. It cannot be done by the Government alone. It needs the co-
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operation of all the great forces in our economic life: the great forces represented by the magnificent trade union movement and by the mass of employers of this country and, finally, the Government. Let me say a word about each of those in turn.
I will begin with the trade unions, not because they are necessarily the most important in this field (although I think that what they can do is vital) but because, apart from my respect for what the trade unions have done for the people of this country, I have the most moving memories of negotiations with the trade unions on vital points and of the attitude I found in them. I remember, nearly fifty years ago, opening to them the subject of unemployment insurance by the State. In those days they were the only people who gave unemployment insurance to their members, and the problem might arise whether, if the State came in, it would not injure them in what they were doing. Let me say that the result of those negotiations was the most forthcoming co-operation from the trade unions. They were quite prepared to take the risk of damage to themselves if unemployment insurance could be extended. The fact that unemployment insurance did come in made it possible some thirty or forty years later to get the comprehensive social insurance scheme.
I had the same kind of discussions with them at the time of making the Beveridge Report, in 1941. I have always found them open to consider the interest of the people of the country as a whole, and not simply their particular organisation. But to-day it is important, and necessary, to make to the trade unions an appeal which many of them may find a little difficult to accept. The tremendously strong tradition of the trade union movement is the independence of every union and every industry of every other; the union for each industry is to settle with the employers its demands for wages for itself. From that we get, as we are getting to-day, a competitive bargaining, industry by industry. While that goes on it is difficult to see how something like inflation can be avoided.
I suggest that to-day this attitude of the industrial sovereignty of each union and employers' association for the wages in its industry needs reconsidering. In a way, we have here a curious parallel to

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what is really the greatest danger to all of us in the world. We all know that the claim to absolute national sovereignty, resulting in preparing and organising arms for making war upon other nations, is bringing upon us the risk of war. Equally, if every industry persists in settling its own wages for itself, in competition with others, and then, as others get more, tries itself to get more, I do not see how, under full employment, we shall ever get stable prices. I would appeal to all those who can influence the great trade union movement to see whether they can reconsider this claim which has been sacred to them in the past. I would ask the leaders of the trade union movement to consider on what terms of action by the employers and by the Government they would agree to bring to an end this competitive bargaining about money wages and confine themselves to advancing a standard of living on output and costs.
There is one odd piece of news about another country which I discovered in going through The Times. On February 6. it was announced that in Sweden a 4 per cent. uniform increase of all wages applying to every single person in the labour market, whatever his union, whatever his occupation, had been agreed upon between labour and the employers. I do not know that we can ever get as far as that; but it is possible, apparently, in a good, democratic country like Sweden, and I think we might do as well as, or even better than. Sweden. That is all I have to say about the trade unions.
We come to the employers, about whom there is little to say. I want to be short to-day, if I can, in view of the many speakers who ought to be heard and have the chance of contributing to this debate. The employers here must he prepared to reconsider restrictive practices of all kinds. If the unions are to be asked to adjust their higher wages, to higher output, I think that equally the employers should avoid restrictive practices of all kinds. Those who manage the big monopolies should avoid misusing their powers. We all know that the Government have a Restrictive Practices Bill passing through another place. I hope that, when it comes here, it will be examined with meticulous care to see that it really does something serious to get rid of harmful restrictive practices.
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Let me end with the Government. I am not going to deal with all that the Government should do on the money side or the control of imports. That aspect has already been covered by the noble Lord who opened this debate, and will be covered by others. I want to confine myself to only one point; that is, that I beg the Government to consider afresh the treatment of the nationalised industries. As I have told your Lordships, it was the railways which greeted the Prime Minister's appeal against inflation by beginning, on January 19, the scramble for putting up wages. If your Lordships will look at The Times, you will see that another of the nationalised industries, the electricity supply industry, went out of its way to blame the national awards in the nationalised industry for having put them in a position where they could not refuse to give an increase of wages, an increase which they had not wanted to give and which they thought was not justified by any of the facts. There is that argument of the electricity supply industry: that they had to give this 4d. an hour, which they did not want to give and which was not due, simply because of the competition of one of the nationalised industries. They went on to say that the whole cost of this increase—I forget how many millions it is going to be £34 millions—will fall straight upon the consumers of electricity.
I ask whether the Government will consider and reconsider the policy held by a former Government, a Labour Government, about the national boards. The Labour policy has been one of extreme freedom for the nationalised industries from control of any kind. There are occasional limited debates upon their activities, but there is a quite definite practice that Parliamentary Questions cannot be asked about the detailed working of any of these nationalised industries. When a question was raised that practice was defended expressly by Mr. Herbert Morrison, in words which appeared in Hansard of December 4, 1947. He said [OFFICIAL REPORT, Commons, Vol. 445, col. 566]:
"A large degree of independence for the boards of nationilised industries in matters of current administration is vital to their efficiency as commercial undertakings."
Why did he not go on to say that these were commercial undertakings which were

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absolute monopolies, which had the consumers entirely in their power? They are to be free. I suggest that something other than absolute independence of any kind of control is wanted by a monopoly, whether it is a monopoly of business or a monopoly of a nationalised industry. Something other than hasty inquiries by busy Members of Parliament with no means of gathering all the facts is required.
Let me say at once that there is more than one possible approach to this problem of how some kind of supervision and public criticism can be brought into the administration of the nationalised industries. My own plan—which, I may say, has been completely rejected up to now; I wished to see it applied to the great and famous monopoly of broadcasting—was to embody in the structure of every national monopoly an organ having adequate power to receive and examine criticisms and suggestions coming from the public and having sufficient power in the organisation to make certain that these criticisms were as seriously considered as they deserved to be. In fact, I wanted what I proposed for the B.B.C. And not only that: from the whole of the Committee over which I presided there was a unanimous proposal that an essential part of the Broadcasting Corporation should be a public representation service under an officer of equal rank to anyone else below the Director-General, able to examine every criticism and suggestion and to see that it was seriously considered. I listened quite a lot. If I thought there was anyone who would pay any attention to me. — should say "That man or that woman has gone on long enough. Do for heaven's sake stop this! Do for heaven's sake get people talking who know something about what they are saying!"
My criticism may be no good. It is no good my sending it in now, because what happened to my proposal for a public representation service in the B.B.C. was that the Governments of the day (I think it was first the Labour Government and then the Conservative Government) both agreed in saying, "Well, we will let the B.B.C. do what they think about it." Of course, all the other departments of the B.B.C. did not see why they should have anybody to criticise;
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they knew all about it themselves. That is the trouble with the administrators of monopolies. Anyhow, our proposal was not adopted. The principle would be equally applicable to all the other industries which are nationalised. It is particularly important for the B.B.C. because, on principle, there cannot be Parliamentary or ministerial control of what is broadcast—that would be contrary to the freedom of expression. But it would be equally valuable to have that same principle in every national board, and to see that there is an organ of internal criticism with adequate authority to see that public criticism is considered.
That is one plan. There is another plan which emerges from the Reports of the Committee of the House of Commons on Nationalised Industries, a Committee which sat under the chairmanship of Sir Ralph Assheton, as he then was, now Lord Clitheroe. I am happy to think that he is going to follow me in speaking. That Committee produced two most interesting Reports. In the first, they came to the conclusion that there should not and could not be any attempt to alter the rule which bars Parliamentary Questions of detail into the working of the nationalised industries; but, in their second Report, they went on to argue for the setting up of an effective Committee and staff for seeing that the House of Commons and its members were well and seriously informed of every criticism that ought to be made of a nationalised industry. They argued that some kind of Committee should be established.
I do not know whether Lord Clitheroe, when he follows me, will say that he thinks that what his Committee proposed has been carried out. I rather think it has not. I do not think that what the Government have, in fact, set up is nearly so strong a means of criticising the nationalised industries as that Committee proposed. I am not in a position to say whether what the Government have done or what they are proposing to do on that matter is adequate. I only beg of them to make sure that it is adequate, so that either a Select Committee of the House of Commons or possibly a Joint Committee—I am sure there are many Members of this House who might be useful on such a Committee—would, with adequate help from a permanent official, be able to study the working of the nationalised industries and be able to

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initiate debates and criticise the working of those industries. That is a suggestion alternative to my own proposal. I dare say it is better. I do not mind which is adopted, but something serious should be done.
This leads me to my final plea. If the nationalised industries go on leading a new round of inflation, we can only end in the disaster of general inflation, the real victims of which will be those who are not in these big organised industries.—those who are not protected by strong associations, and, above all, those who are past work, who have tried to make provision for their own old age by saving or by pensions of all sorts and kinds, and who will find that all that they have provided for their old age is made inadequate by the way in which the value of money is being destroyed.
3.45 p.m.
LORD CLITHEROE: My Lords, I know that your Lordships are always most indulgent to one who has not addressed the House before, and I hope that you will allow me to apologise in advance for any errors into which I may fall—and they are likely to be many, particularly as I spent a number of years en a tour of duty in another place, the customs of which are not exactly the same as those of your Lordships' House. I am honoured to be speaking immediately after the noble Lord, Lord Beveridge, and I thank him for the references he made to the Report of the Committee over which I presided. Perhaps a little later I may be allowed to say a word on the subject with which that Committee dealt. For the moment, I want to follow him on the first part of his speech and deal with the problem of inflation.
There was a striking leading article in The Times not long ago, headed "The Rule of Fear," in which the author said that since the end of the war a kind of madness had infected British politics where financial and economic matters have been concerned, and he concluded by suggesting that the rule of fear should be replaced by the leadership of courage. No one, I am sure, would doubt that it is high time that some firm action was taken, and. I believe that opinion in the country on the whole supports the proposals which the Chancellor of the Exchequer and the Government have recently made. I fully appreciate all the
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objections to those proposals which were so adequately catalogued and rehearsed by the noble Lord, Lord PethickLawrence, in his interesting opening speech. None the less, in spite of all their disadvantages—and they are obviously many—I think the Government's proposals should be supported, and I believe that the country as a whole does support them.
So far as I can see, the depreciation in the value of money is alarming even the most inflationary-minded people, and the attempt that has been made to meet the situation by constantly raising prices and wages has really put the inflationary movement at any rate into a fast trot, if not into a canter. Retail prices have risen by 50 per cent. since 1947 and, as Lord Beveridge has told us, almost every day we see new rises in wage rates recorded. It is not the slightest good looking back except for the purpose of learning lessons from our mistakes, but I think we must not forget—I am sure noble Lords will not forget—that the currency was debased by the action of the Labour Government in 1949 in devaluing the. £, and this was bound to be followed by the evil consequences from which we now suffer. I say that only in order to follow it by remarking: let us not forget it, and let us not do it again.
Of course, debasement of the currency is nothing new. Certainly, it is to be sharply distinguished from that rather slow rise in prices over the centuries to which we have become accustomed. In the old days, the currency was debased by the simple method of clipping the coins. Now it is done by the rather more elaborate method of printing paper in one form or another. In the time of Henry VIII the great historical debasement of the currency took place, and when Queen Elizabeth came to the Throne a small Commission was set up, of which Sir William Cecil was a member, which produced a report the result of which was that the reform of the currency was successfully undertaken. I only hope that the steps now being taken by Her Majesty's Government—the Government of Queen Elizabeth II which also has the advantage of the presence in it of a Cecil —will be as effective in its dealing with this problem.
I am sure it is over-simplifying matters to say, as certain financial leaders have

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said, that the inflation is caused by printing too much money and issuing too many Treasury Bills. That may be true, but it is much over-simplifying a difficult problem. But there is no doubt that far too little attention is paid by Parliament to the note issue. Parliament does not watch that nearly so closely as it should, though it is closely watched by foreign bankers all over the world. Then there has been, in recent years, an increase in the amount of Treasury Bills in issue, and that short-term money has been used for financing long-term projects. Everyone knows that that is a most dangerous practice which inevitably leads to inflation. That is nothing new; it always happens. I notice that between October, 1952, and October, 1955, the amount of Treasury Bills in issue increased by £900 million—a very substantial figure.
It is not difficult to see what the effect would be. I am certain it is not necessary to point out in your Lordships' House the evils of a depreciating currency and the hardship and cruelty it imposes upon all who receive contractual payments—much greater hardship, I would suggest to the noble Lord, Lord PethickLawrence—than an increase in the rate of interest, which may, we hope, be only temporary. It is a much greater hardship that people's savings should be permanently depreciated in that way. A very worthy section of the community is gratuitously impoverished for the benefit of another section; and many evils to the business community follow from that. It becomes, for example, almost impossible to place contracts on a reasonable basis, since there is no predictability with regard to future costs and prices. Again, as has been pointed out, savings become reduced and investment in fixed interest securities is turned from prudence almost into folly, which is a serious matter, because it means a diminution in capital investment just at a time when the prudent investment of capital is most important for this country.
We all know the problems which face us. I thought that the Chancellor of the Exchequer illustrated it admirably in his broadcast not long ago, when he said that we had produced in one way or another 25 per cent. more goods and services since the war but had paid ourselves 80 per cent. more money for doing so. He went on to say that we had to stop pump-
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ing money in, or to pump it in only at the same rate as the extra production we succeed in turning out. I am sure all noble Lords on all sides of the House will agree with that. There is no doubt that it can be done; but it can be done, and we can master our difficulties, only if we make up our minds that it has to be done. It is no good one section making up its mind; we have all to do so. I humbly suggest that it is the duty of all citizens in the country to help the Government at this time in making this effort, even if individuals do not themselves quite agree with every particular proposal that the Government put forward. I believe it is the duty of all of us to help the Government carry through their plans. I have detected a deplorable tendency recently for everybody to blame everybody else and I am sure that attitude will not carry us anywhere.
In the correspondence in The Times to which the noble Lord, Lord Beveridge, referred, I thought the nail was most accurately hit on the head by Professor Pigou, who said that he did not agree with the suggestion that the sole cause of the present inflationary movement is pressure for wage increases, but that uncontrolled wage increases and expenditure increases are the joint cause, each acting as a spur to the other. That brings me to the question of full employment, a phrase which I believe has been only partly understood; at any rate it is not fully understood. In many ways it is the root of the matter which we are discussing. It is not a true use of language to describe as full employment a situation in which everybody can get full wages. Full employment also must mean that everyone should do as much work as he can reasonably be expected to do. We do not want overstrain in management, and we certainly do not want sweated labour; but we want hard and conscientious work at all levels. We want fair, but not excessive, profits, and we want eight hours' work for eight hours' pay.
I am bound to say, from considerable experience of business, that in some other countries at the present time there is a greater proportion of people who are anxious to work hard than there is here. That is my opinion and others may contradict me; but, if it is so, it is rather a serious state of affairs for a country which depends so much on its export trade. It leads employers into difficul-

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ties, because, quite naturally, they tend to retain workers even when they have not enough work for them to do, because they are frightened that they will not be able to get hold of them again or replace them when they want them. There is also a tendency for employers to increase pay packets by increasing overtime, not to produce more output but as an excuse for increasing pay beyond standard rates. All those things are happening as the result of inflation and are having serious effects on our economy. Seeing all this, the Chancellor of the Exchequer, quite rightly, is determined to reduce expenditure. It is a pity that it has to be reduced more on the side of investment than on the side of consumption, but no doubt that is due to political reasons. I feel that the common sense of the public is, perhaps, somewhat underestimated and that a bolder approach is justified. It has to be made absolutely clear that the present policy of reduced expenditure is not designed to cause unemployment but to bring employment into equilibrium. If adequate steps are not taken to check inflation, unemployment will, in any case, follow, owing to the fact that the price of goods will become too high to find a market.
What are we doing to support the Chancellor of the Exchequer in his proposals? It is generally agreed among almost everybody—certainly among a large number of workers and members of trade unions—that a halt must be called, for the time being, to general increases in wage rates. I believe that is the general feeling all through the country. I do not mean necessarily that a halt should be called to the level of earnings, but to the level of wage rates. There must be a postponement of certain capital projects by private enterprise as well as by the State, and in certain cases it is necessary that there should be a reduction in profit margins; but I should guess that this will happen automatically as a result of the credit squeeze and the new monetary policy. Here I am referring to true profits and not profits as they so often appear to chartered accountants and members of the Board of Inland Revenue. There is a great difference of opinion as to what are true profits, and valuable study might well be given to the subject.
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Here I should like to interject that I believe it is a misconception to put too much stress on the increase in dividends as being a key factor. It is rather excess profits, no doubt caused by inflation, which must be watched. The pressure on the economy is just the same when a company retains its profits itself and spends it on new capital equipment as when the company distributes in dividends money which individuals spend. So the pressure on the economy is just the same, whether the dividends are distributed or not. There may be other reasons for not distributing so much by way of dividends, but I do not think it is a very sound argument related to this problem of inflation and the pressure on the economy.
The next thing which the State must do is to encourage saving, and for this purpose I think additional incentives are right and proper. The increase of interest rates is one of them. The noble Lord, Lord Pethick-Lawrence, I know will agree with me that a very low rate of interest is not encouraging for investment. Therefore there is the other side of the coin in that respect, because the increase of interest rates acts as an encouragement to saving, on the one hand, and checks spending, on the other. A reduction of excessive taxation is another important factor. Here we are on rather controversial ground. I am not supposed to be controversial in a maiden speech. I know, so I will endeavour to put it as uncontroversially as I can. In my opinion, in the present circumstances it would not be true to say that increased taxation would be deflationary. I am not going to argue that in no circumstances would that be true. I say that in present circumstances I do not believe that increased taxation would be deflationary. In fact, I believe the contrary to be true. One must remember that fiscal policy operates on human nature—on human hopes, on human fears and on human decisions, and the effects of it are not always predictable in advance. It is a matter which must be watched by the Chancellor of the Exchequer in the way he deals with the monetary situation, because the psychological consequences of fiscal policy may be quicker or slower in their effect than their authors think, and you have to watch very carefully all the time to see that you are getting it right.

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On current Government expenditure, I should like to say just a few words. A year or two ago, in another place, I had the temerity to suggest that there was a lack of control and that the Government machine seemed to be losing grip on expenditure. I appreciate that considerable efforts have been made by the Government to check this tendency in the last two years. While I have no doubt that there is still much to be done, I want now to pay tribute to what has been accomplished. I think it is now being more generally appreciated by the country at large that policy decisions are necessary, as well as close scrutiny, if you are going to reduce expenditure. Close scrutiny must go on, but policy decisions are necessary also. Total Government expenditure still takes a great deal too much of the country's income at the present time.
I should like now to come to the nationalised industries—a matter which Lord Beveridge has already raised. This seems to be a sector of the public economy which is certainly not yet under proper control—I do not think there is any doubt about that. The fact that the capital and overdrafts raised by these industries are guaranteed by the Treasury is in itself a very important fact to remember, because it gives these industries not only an advantage over the private sector which may very well be unfair (as, for example, when they engage in the hire purchase business, and so on) but also it has made it possible for them to give way to pressure for increased wage rates which, in its turn, has to be followed by the private sector of industry. So much has been said on this point recently that I am not going to add to it except to suggest—and I hope the suggestion will, at any rate, be examined—that it might be wiser if the Treasury insisted that the nationalised industries raised their money before they spent it, rather than afterwards. That is an important point and I hope it will be carefully considered.
The Achilles heel of our financial position is unquestionably that part of the State expenditure and national industry expenditure which does not come in the ordinary Budget above the line. We must remember what the Governor of the Bank of England said not very long ago: that the proportion of the economy affected
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by the credit policy through the banking system is much smaller than it was, and that it could be outweighed by the action of the Government, the nationalised industries and local government.
A Select Committee of the House of Commons, to which Lord Beveridge has referred, studied this problem of the control of nationalised industries for two years. It took evidence from many distinguished persons—the Party leaders, the Permanent Secretary to the Treasury and several distinguished Members of your Lordships' House who have connections with the nationalised boards. The Committee made a unanimous Report, which was surprising in view of its composition. Unfortunately, the Government were unwilling at that time to accept the Report in its entirety, and the Committee they set up, with modified terms of reference and without the vitally necessary independent officer, soon found itself frustrated, and abandoned its task. I am glad to read in The Times that the Government are now considering the question again and I hope they will deal with it in some way or other. If they deal with it by way of the Committee proposed, I hope they will give it strong terms of reference and also the independent officer who, like the Comptroller and Auditor General, could not be dismissed by the Government and would therefore not be in any way in the pocket of the Treasury.
One further consequence of the enormous rise in prices since the war, which I think has a direct and adverse effect on the economy, is the steadily worsening position of all those who carry, and have carried, the greatest burdens of responsibility. The deeply depressing effect of the failure to adjust taxation to take account of rising prices has so seriously affected this very worthy section of the community—a section which includes the work providers whom we are so apt to forget—that I think it is essential to remedy it without delay. The need for this appears to be more generally and more clearly recognised now, and there seems to be a growing demand to do something to help the middle classes. The middle class is what they are called, but I much prefer to say those sections of all classes of the community who bear heavy burdens of responsibility.
My final word is about our reserves and the need to increase them. I wonder

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how many people in the country appreciate—though I am sure it is well known to many of your Lordships—that the whole of the gold and dollar balances of the sterling area are less than the market value of the shares of the Ford Motor Car Company of America. This is very startling. And the Ford Motor Car Company is not the largest motor car company in America, by any means. These gold and dollar reserves, in view of the price position, are effectively only a quarter of what they were before the war, as The Times pointed out to-clay, so we are now working on a shoestring, as the saying goes.
The strengthening of these reserves depends, I believe, not only on prudent financial policy at home and on many of the matters to which I have referred this afternoon but also on something more intangible. I refer, of course, to the prestige of this country in the world, and to the prestige of our financial institutions. I want to be assured that we have considered sufficiently, for example, the effects of the new constitutional plans for Malaya upon our balance of payments. The dollars earned by our industries there make a most outstanding contribution to the balance of payments of the sterling area, and that is a matter of the highest consequence to every man and woman in this country. The same might be said to some extent about the constitutional developments in West Africa. Have we reflected sufficiently on the consequences of our policy in the Middle East in the last ten years as it affects the vital supply of oil in this country? I suggest that we must never forget that the strength of the country is indivisible and that our power and prestige in the world reflects, without fail, upon our whole financial and economic position.
4.11 p.m.
VISCOUNT BRUCE OF MELBOURNE: My Lords, it is my privilege to express to the noble Lord, Lord Clitheroe, our appreciation of the interesting and thoughtful speech which he has lust addressed to your Lordships. I am sure I shall he expressing the wishes of all your Lordships if I say that we hope he will give us the benefit of his wisdom and long experience on many future occasions. I am afraid that to-day I am going to say little that I have not said before, I offer every apology to your Lordships for this repetition, but long experience
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has taught me that if, by good fortune, one happens to be right, one has to go on saying the same thing lime and again until eventually something is done about it, generally too late.
In my view, the financial and economic situation of this country is as serious as it could possibly he. We are beginning to wake up to the fact now, but we ought to have woken up to it a long time ago. To-day the inflation bogy has caused alarm, and steps are being taken to cure it by means of increased interest rates, a credit squeeze, and other financial measures. I believe, however, that we have to go much further than that to cope with the situation we are facing. One fact has been completely overlooked—that is, that this is much more a psychological problem than a tactical, financial or monetary one. That has been much better expressed than I can express it by Sir James Turner, the President of the National Farmers' Union, when he said:
"In my view the problem of inflation will never he solved, and this national economic disease will never be cured, unless and until someone tells the patient its real seriousness and what is certain to happen to him if a major operation is not performed, and performed skilfully and quickly.
"It is my deep and sincere conviction that the truth, however unpalatable, needs to be laid hare to the people of the country. The war-time catch-phrase, 'Britain can take it,' remains true to-day—but only if her people are told what they must take, and why."
That is only another way of saying that we have to take drastic action to meet the circumstances we are up against; that the people have to understand the reasons for the taking of an action, and that the support of the people has to be obtained if that action is to be successful.
I propose to address myself to three questions. First, is there really a serious crisis? Secondly, if there is, can the general public be made to realise how serious it is? And thirdly, can their support be obtained for the drastic measures necessary to overcome it? As to whether there is a crisis, I do not think there is any division of opinion that if the nation is going to maintain employment, support its standard of living and carry on the social services we have established, we must have coming in, by way of exports and interest on investments, sufficient to pay for the necessary imports of food and raw materials. It is also agreed that we must have gold

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and dollar reserves adequate to meet our obligations and to tide us over any period of recession. These are the essentials.
We have to consider where we are to-day. Since the war, up to 1955, we have paid to other nations 9,850 million dollars more than we received. That the position is not so disastrous as it would have been is due to the fact that over the same period we received, by way of loans and aid from the United States of America and other sources, 9,500 million dollars—almost the same figure. That means, of course, that since the war we have not even begun to pay our way by our own efforts. If we had not received that 9,500 million dollars of loans and aid our gold and dollar reserves would have disappeared in a couple of years, and we should have been in a completely disastrous position some years ago. It is as well that we should get into our heads that that is what we have been doing. I saw in one journal the other day the comment, on the question of how we should have lived without aid, that we should have wiped out our gold and dollar reserves and had an overseas debt of some 4,000 million dollars. The only place where the article went wrong was in suggesting we could have borrowed that 4,000 million dollars if we had not got it from America, as we did, fortunately by way of grants as well as loans. The fact is that there was no other source from which we could possibly have got the money. That is the hard position we are up against.
We have to remember, also, that we have got into this disastrous position notwithstanding the fact that over that period our exports have gone up some 70 per cent. in volume, as against pre-war figures; and, after all, our exports are our greatest source of income. I do not think it would be our desire as a nation that we should go on living on American aid; and it is equally certain that America could not continue that measure of aid. So that in assessing our present situation, and in looking to the future, we must eliminate from our minds a continuance of this source of assistance which has helped us so much in the past; and we have to realise that we must by our own efforts earn enough to maintain our standards, our employment and our posi-
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tion in the world. In considering whether we can do that, it is necessary to examine the past few years, the present position and the future prospects.
Let me first take the past. I have said that by 1955 we had increased our exports by 70 per cent. in volume. But in the first part of the period immediately following the war we had a sellers' market while the world restocked, re-equipped and restored war devastation; and the going was pretty good. Just when that looked like ending we received a new stimulus from the expansion of armaments and stockpiling consequent on the Korea incident. Now that stimulus has gone, and we are up against a real buyers' market, with the competition increasing every day. Let me remind your Lordships of who are our greatest competitors: the United States of America, Western Germany and Japan—and possibly Western Germany is the best one to take as an example. Before the war, Britain and Germany each had, roughly, a 20 per cent. share in world exports of manufactured goods. In 1951, the United Kingdom's share was 22 per cent., and Germany had built up her share to 10 per cent. During 1955, the United Kingdom's share had declined to 20 per cent., and Germany's share had expanded to 15 per cent. In the years 1952 and 1953 our exports declined, and there is little doubt that that decline was due to the competition of Western Germany.
In 1955, which was a good export year, our position showed no signs of improving. In Germany retail prices rose much less during 1955 than they did in Britain, and Germany's industrial production went up 16 per cent., as against 5 per cent. in the United Kingdom. Our exports during that year went up by 7 per cent., those of the United States by 9 per cent., those of Germany by 17 per cent. and those of Japan by 27 per cent. I give those figures to impress on your Lordships that that is the world market as it is, and in which we have to secure not merely the exports we are producing to-day but an increasing volume, if we are to maintain our position; and that represents about as serious a position as any country could be facing. So that the answer to my first question is that there is a serious crisis; and I put it as high as to say that we are up against as serious a crisis as we have ever been in our history, except in time of war.

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I come now to my second question: can we make the people understand how serious the position is? There are a great many people—in fact, it is a widespread feeling—who feel that there is something so complicated and difficult about a nation's financial and economic position that the ordinary man and woman could not possibly understand it. That, to my mind, is a complete and absolute delusion. There is nothing different about the nation's affairs from yours or mine or from those of any other individual. The basic fact is that we must have certain things: the nation must have the food and raw materials on which it can keep going, while you and I must have houses, food and clothes. Then, if we—the nation, or you or I—are relatively prudent people, we try to put a little by so that we can meet the unforeseen vicissitudes of the future. In the case of the nation it is our gold and dollar reserves, and in the case of the individual it is his savings.
Then, when we have passed those two stages, if we have any surplus, whether as a nation or an individual, it is within our discretion to consider what we shall do with it. As individuals we are all different and we should all want to do different things, but we are governed by one inexorable rule—namely, that, of the things we want, we can have only those which our savings will allow us to purchase. There seems to be a delusion with regard to the affairs of the nation that we can have, for example, better housing, better schooling, better health services, greater social security and whatever we feel we should like merely by passing an Act of Parliament. Of course, that is not so; and the hard facts will soon teach us that it is not, unless we come down to earth and realise what we are up against. I am convinced that we can make the people understand that we cannot have these desirable and delightful things unless, as a nation, we earn them. If we are to bring this fact home to the people, we must have a nation-wide drive; and to this end the co-operation of all political Parties, employers, trade unions, Press, radio and television would be required. If we have such a drive then I think the people will understand. In telling the facts there need be no division amongst us, political or otherwise.
Then we come to the question: what can be done about it? I am certain that
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drastic action must be taken, and the Government must take the first action and bear the first responsibility. I was the head of a Government for a long time, and I can say that Governments are timid things. I should like to tell your Lordships out of my own experience what happened. In 1928, Australia was up against almost an identical situation as that which this country is up against now —in our smaller sphere, I agree. The world's economic and financial crash of 1929–32 was just coming on the horizon. In November, 1928, I was elected as Prime Minister for the third time, and in about July, 1929, these clouds and portents in the sky became so serious that, after my Government had reviewed the position, we went to Parliament and said that there were certain relatively mild measures that we insisted should be taken —they were quite innocuous in comparison with what had to be done in the end —and certain powers that we insisted on being given. Without those measures and powers we were not prepared to carry on. On the first of these measures, when we brought it down, we were defeated in the House by one vote. We declined to accept that setback, and I went to the Governor-General and demanded a Dissolution. He refused to give it to me at first, but in the end he agreed. We went to the country, and we were more disastrously beaten than any Government up to that date had ever been beaten in Australia.
The rest of the story is not uninteresting. The Opposition formed a Government and came into power, but were forced to another Election only two years later, in 1931. The troubles of Australia got worse and worse. I wish to indicate to your Lordships what they had to do in Australia, because it shows that, in the end, hard facts will determine the position, and it is no good relying upon specious promises by politicians of any Party or any colour. In the end the facts will determine the position.
What had to be done in Australia -was to impose a reduction of 20 per cent in all adjustable Government expenditure, as compared with the year ending June 30, 1930, including all emoluments, wages, salaries and pensions—even pensions were cut—paid by the Government, whether fixed by Statute or otherwise a conversion of the internal debts of the Govern-

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ment, on the basis of a 22½ per cent. reduction of interest; reduction of bank and savings bank rates on interest on deposits and advances, and relief in respect of private mortgages. All those things were implemented, not by the Commonwealth Government, but by the Commonwealth Government and six State Governments. Before the proposals were announced, the leaders of the Opposition in the Federal Parliament were brought into consultation. The matter was discussed with them, and they joined the Prime Minister and the Premier in an appeal to the country to take the medicine that was coming to it. One part of the appeal to which they all subscribed was addressed:
"to all sections of the people to recognise the position and in the interests of the nation to accept the sacrifices which are involved."
By these means the situation was brought home to the people of Australia; and they got down to work. The result was that, having taken more drastic action than anyone else, they recovered more rapidly and more effectively than any other country in the world.
What happened to those who had misled the people is not uninteresting. As I have told your Lordships, I lost my Election in 1929 more disastrously than anyone had managed to do. The Opposition came back with 50 seats in a House of 75. In the 1931 Election they were "massacred," and came back with 18 seats. Even what occurred among my own electorate affords a certain amount of humour, if nothing else. I won my first election by about 6,000 votes. Over five elections I built that up to 13,000. In 1929, I was defeated by 305 votes. In 1931, I was returned with a majority of 24,000. I am instancing that only to show that there is there, perhaps, something we could learn in this country, in what I believe are the most perilous circumstances. I am convinced that, if that fact were once understood by the people, they could be persuaded of the necessity to give of their best to the nation, in whatever walk they were operating. I believe that it would induce them to impose on themselves real self-discipline to do the things that are necessary for the country, including what we are trying to do by regulation, in the sense of bank controls and so on—namely, to restrict their
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spending and increase their saving. I believe that that would have an effect which few of us could calculate today. I hope, therefore, that the country will get that really strong lead which it needs to save it from the peril which, to my mind, is facing it at this moment.
4.35 p.m.
LORD JESSEL: My Lords, the economic situation must indeed be serious if the Government of the day find it necessary to adopt a policy of slowing down and discouraging investment in future production. Ever since the end of the war, we in industry have been continually exhorted to do exactly the opposite. We have been told—and I think quite rightly —that the only hope of salvation for us was to see that each workman had more power behind him, more organisation, more machine tools, better factories, better methods of handling et cetera; and now we are asked to call a halt. I feel sure that the Chancellor of the Exchequer realises that if he discourages capital investment in industry a minute longer than is absolutely necessary, it will be most damaging from the long-term point of view. I hope that the noble Earl, Lord Selkirk, when he comes to reply, will give us some assurance on this point. That should be one of the first relaxations the Government should give us.
May I turn for a moment to the problem of day-to-day consumption? Personally, I welcome the reduction in the bread and milk subsidies. A few days ago I was listening to a wireless discussion in which Mr. Crosland, who is a distinguished economist and was a Labour Member of Parliament in the last Parliament, took part. I thought that on the general aspect of subsidies he was pretty sound. He said that he thought people should pay the right prices for the goods they consume. But he went on to say that it was not worth saving the tiny sum of £70 million, because the action of the Chancellor would have a bad psychological effect on pending wage claims. Save that "tiny sum" three or four times in the year and you are really beginning to do something about Government expenditure. I suggest that the only "tiny sum" involved is the extra amount of money which each individual has to pay in respect of the withdrawal of the subsidy.
We have recently had many definitions of inflation. I particularly liked the one

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the noble Lord, Lord Beveridge, gave us a few weeks ago in this House, when we were discussing the question of officers' pay. He said that inflation was giving people more money for doing the same amount of work. As he pointed out to-day, there is plenty of that going on now, and I hope we are going to get more coal for the extra money the miners are getting. A phrase which is often used as an argument in support of a claim for higher wages is that the workers should share in the increased prosperity of the industry. I, personally, am not quite sure whether that is a valid argument. Surely they have already had their reward in the wages and overtime that they have received, if the trading year of the industry has been good. I would much rattler that the consumer benefited from the increased prosperity. I suggest that, if profits in a certain industry are high, it would be much better to lower selling prices so that all would benefit, and then the cost of living would certainly start in a small way to come down. But I am afraid that there will not be much increased prosperity for anybody in the future if wages are put up annually without any corresponding increase in production. I know that several noble Lords have said this before and several more will say it, but it is an inescapable fact. I really think that the leaders of the Party opposite understand it very well. I wish they would do more to explain it to their supporters.
Other noble Lords, including the noble Lord, Lord Clitheroe, in his extremely interesting and able maiden speech, have touched on the Government's monetary policy. I am not going to compete with bankers and ex-Financial Secretaries to the Treasury on that aspect of the problem, but I feel sure that actual Government spending can be cut down. Too much money is still being transferred from the pocket of one taxpayer to the pocket of another, and a high proportion of the money so dealt with gets lost in administrative expenses. The number of people who are on the receiving end only of this operation is very small, but nearly everybody contributes, either directly or indirectly, to this transfer of money via the tax collector. It is questionable whether they really get full value for it.
I know perfectly well that, if one argues on these lines, one is apt to be shot at with the question: "What are you
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going to start on? What do you suggest?" I have been looking at certain figures which have given me some ideas. For instance, the Ministry of Fuel and Power employ 3,000 people who seem to me to do more or less the same work as the Coal Board, the Central Electricity Authority and the Gas Council are already doing. The most striking example is the Foreign Office which before the war employed 846 people and now employ 4,649. The Ministry of Supply, which was created during the war for a special purpose, still employs 10,000 people. The Ministry of Agriculture before the war employed 2,600 people; now they employ 13,000. The Admiralty, when there were 133 major ships in full commission, had a staff of 8,000. Now, with only 73 ships, the staff has gone up to over 33,000. There may be very good reasons for this, but I must say that these few examples incline one to the opinion that there is a prima facie case for a possible reduction in Government spending.
I should like to see a team of efficiency experts appointed to make a report on the staffing of some of these Ministries. I believe it is possible that nearly £200 million could be saved annually. That would be a splendid start in helping to reduce taxation. Leaving a little more money in individual pockets might have surprising results, not necessarily inflationary, because, if the real value of money were to be enhanced, there would be much more inducement to save. Economics is not an exact science like mathematics. If it were the case, we should not have heard so many different but equally sincere views expressed as we have already heard this afternoon and shall hear further this evening and tomorrow.
4.46 p.m.
LORD PAKENHAM: My Lords, we have listened to a number of arresting speeches this afternoon, including that of the noble Lord who has just spoken. I venture to think that my noble friend Lord Pethick-Lawrence surpassed even his own very high standard. To me and to many others he becomes more and more one of the wonders of the world every time he addresses us on economics. No doubt, I shall be forgiven if I do not elect at this stage to reply to many points that have come up, because I wish to concentrate upon a single and important

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aspect of the struggle against inflation. The noble Lord, Lord Jessel, incidentally, mentioned the provision of various definitions of inflation by the noble Lord, Lord Beveridge, and others. There are, of course, other definitions. I know I was once asked for one quickly by the noble Lord, Lord Balfour of Burleigh, who will be speaking with great authority when I sit down, and I do not think I provided him with a very satisfactory definition. I may be forgiven for recalling, in a lighter vein, the late Mr. Ernest Bevin's definition of inflation. He said:
"It is the condition of a Cabinet Minister when he has made a successful speech at a public dinner; and 'deflation' is the condition of the same Minister when he goes home and wakes up his wife to tell her about it."
No doubt, there are alternative definitions, but that carries it far enough for a number of us in our discussions.
I speak only, as the noble Lord, Lord Pethick-Lawrence, said he did, for myself. If there is any doubt as to why that "constituency," so to speak, should be represented this afternoon, I can only say, in all humility, that I have had the honour of being chairman of one of the smaller clearing banks for a year and I have a few personal reflections to offer the House; but no one should hold my bank, let alone any other bank, responsible for what I may be saying on these difficult topics. I will just say, in passing, that I am not in any way ashamed of being a banker. Bankers are a much criticised race of men. I noticed the other day that someone left £5,000 to his bank manager. This was at once set aside on the ground that he was clearly of unsound mind, and the defence which I think was offered, that he had not met his bank manager, was not accepted. That is the public view which I think we can hastily reject, from our knowledge of the noble Lords, Lord Balfour of Burleigh and Lord Brand, and other banking pundits.
When we study this question of inflation, it seems to me that we can split up our thoughts under half-a-dozen different headings. I hasten to say that I shall be dealing with only one of them this afternoon. Some noble Lords will have something to say about harder and better directed work; others, like the noble Lord, Lord Beveridge, who was
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provocative though attractive this afternoon, will concentrate more on the need for greater restraint by the employers and the employed. Then various forms of control will be suggested, on imports, for example, or building, and we shall hear a great deal, as we have already heard from various speakers a great deal, about the necessary reduction, or the allegedly necessary reduction, of public expenditure, whether by the central Government, local government or the nationalised industries. The noble Lord, Lord Clitheroe, is not here, but I, as the first speaker from these Benches since he spoke, know that your Lordships would wish me to assure him that he is regarded as a genuine financial expert whose speeches will be followed most closely in this House, though he may find himself engaged in controversy as time passes and he casts away his own restraint. We all listened with great attention this afternoon, and will do likewise whenever he decides to address the House.
Another suggestion for combating inflation is that fiscal measures should be applied in the spheres of borrowing or taxation, for example. Finally, we come to the use of the monetary instrument as a disinflationary factor. Of course, we can think of it as an inflationary factor in certain circumstances, but in combating inflation there is this great issue of the proper use to be made of the monetary instrument. By that, I mean the combined effort of the Treasury, the Bank of England and the joint stock banks to reduce spending by checking the creation of bank money. I should, of course, say that I am on no account neglecting the need for much greater savings, as stressed by more than one speaker most effectively this afternoon; but that can be considered under another heading. I shall be concerned only with the last of these aspects of the struggle against inflation: the use of the monetary weapon.
I suggest that while some of us may prefer one or other of the other five methods listed, few of us suppose that the monetary weapon can to-day be entirely neglected in the battle against inflation; few of us would go to the other extreme, and say that the monetary weapon provides the answer all on its own; and, again, few of us would say that its use can be entirely distinguished in practice from the use of the other five

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methods—for example, the manner and extent of Government borrowing may have crucial effects on the amount of bank credit created. Moreover, we can probably agree that the monetary weapon, if wielded too strongly or clumsily—we have had important warnings about this to-day from Lord Pethick-Lawrence—may, quite obviously, do serious harm. I am assuming this afternoon that the use of the monetary weapon is not pressed to the point where real unemployment occurs.
I would suggest that the first point to notice is that the monetary weapon was being wielded throughout 1955 in a deliberate effort by the Government and the Bank, whom we may call the authorities, to check the inflation. The effort is now being made to use this weapon for that purpose for the first time. The Bank Rate was raised to 3½ per cent. on January 27 last year, and to 4½ per cent. on February 24; yet we find that, in spite of the use of the monetary weapon all through last year, the cost of living in our country rose by about 6 per cent. According to the Ministry of Labour Gazette, the cost of living to the last recorded date rose in the year by 2 points in Germany, 1·4 points in France and by less than half a point in the U.S.A.—the percentage increases being slightly less. It seems fair to conclude, therefore, that our own experience in our own country in respect of the cost of living last year, in spite of our monetary efforts, was worse than that of the leading foreign countries.
I do not want to get bogged down in an argument as to whether the facts which I have just mentioned prove the inherent limitation of the monetary weapon or the inadequacy of the manner in which it may have been wielded. It was used in 1955, and. I would submit that 1955 was inevitably an experimental period: that the authorities and the banks were operating in circumstances for which there have been no modern parallels, but which are likely to persist in the future. I would submit, further, that we have not yet clearly learnt the way in which the monetary weapon can he used most effectively to-day, but that in the light of the experience of 1955 we ought to be much nearer to finding the right answer than we were a year ago.
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To-day, I must pass over a question upon which the noble Lord, Lord Pethick-Lawrence, had some pertinent things to say—namely, how far closer co-operation and understanding can be, or should be, secured at the top level and at the high executive level between the Treasury, the Bank of England and the joint stock banks. I consider this question to be one of much relevance and importance, though I need hardly say that I am not referring to individuals or personal relationships; I am confining myself in these remarks to what might be called the mechanics of the thing, although when one is talking of the relationship between human beings the mechanical analogy is always somewhat dangerous. Surely, the truth is that the machinery of disinflation did not work as well as we could wish in 1955 and that no one has any special ground for supposing that it will work as well as we could wish in 1956.
In the first half of 1955, we saw the banks appearing to pursue a policy of expanding advances, in contradiction, so at least it seems in retrospect, of the deflationary policy which the authorities, it was said, were espousing. No doubt a number of explanations can be offered to account for this phenomenon, including, it may he thought (to put it as gently as possible), some uncertainty regarding the degree of determination with which the policy of deflation would be pressed. In particular, there is this which should be said in reply to any criticism of the joint stock banks. The difficulty of bringing about a sharp and immediate reduction in the total of advances in view of the loans already sanctioned before this new policy was introduced is probably a good deal greater to-day, as the noble Lord, Lord Beveridge, would agree, than it was in the good old days—whenever those good old days may be supposed to have been. Of course, there is the important school of thought, with whom I am not going to stop to argue, who hold that the trend of advances is, in any ease, a good deal less important than the trend of deposits—an issue which I must not stop to explore this afternoon.
Be that as it may, in the second half of last year we saw the banks being induced to carry out Government policy in respect of advances by what looked, to me at any rate, like a Governmental

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directive, though it was not a Governmental directive in the legal sense. It was certainly unwelcome, and it was associated with an equally unwelcome cessation of competition between the banks in certain vital respects. The conditions of the second half of 1955 are still in force in that connection, supplemented, but not altered, by the recent rise in the bank rate. The problem, not solved in 1955 or up to the present, is how to find a method of inducing the banks to adjust their policies to the credit policy of the Government applied through the Bank of England, while leaving them free to operate on commercial lines and to compete freely with one another. That seems to me to be the problem. It is perhaps easier to state it than to provide the answer. Surely, without such free competition the justification of the present commercial banks system would be very much weakened. It would be hard to justify as a long-term feature in financial arrangements the present self-denying ordinance under which, if one is refused a loan by Bank A. one cannot get it from Bank B. I do not think anybody, individualist or Socialist or whatever he may be, would justify that as a permanent feature of our arrangements.
Leaving out the first five headings I mentioned earlier, and still confining myself to the use of the monetary weapon, I believe there are four ways of restricting the amount of spending power which the banking system makes available. First of all, there is the raising of the bank rate and other rates, with the result—I am looking at this problem from the point of view of the banks and also of the country—that borrowers are "choked off"; they do not feel that they can pay the rate, they do not ask for the loan, and there is no special discrimination required by the banks. The grave disadvantages of raising the bank rate past a certain point are widely recognised —that was explained most carefully by my noble friend, Lord Pethick-Lawrence. I only mention now the interest burden on the British Exchequer. Still more dangerous in the last resort, from the national point of view, is the heavy interest burden to foreigners, or, to be more precise, to overseas holders. Various figures have been given and it may be that the noble Earl, Lord Selkirk, will answer Lord Pethick-Lawrence by telling
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the House what the changes in the bank rate mean to us in damage to the external balance.
In the Banking and Commercial Review of the Statist for March 3, 1956, the matter is, I think, put in quite a vivid way. According to the Statist, the general level of rates for investment in liquid items and short-dated gilt-edged securities is now about 3 per cent. beyond that ruling a year or so ago. So if the rise in United Kingdom rates endures long enough to affect half the bills, and add to the overseas interest, imbursement on this account will come out at no less than £60 million a year as a result of changes made during the period of lending on them for a year, and, as the Statist points out, that is the equivalent of the whole of the foreign exchange earned by the exports of one of the country's major industries. So the effort to correct the trade balance by raising the bank rate is a little like trying to roll a stone uphill; at any rate, it is an obviously grave disadvantage to which we all have to address our minds. That is one method.
Another method is some kind of directive from the Government instructing the banks to reduce either total lending or lending in certain directions below the point which they would regard as commercially desirable. We have something like a reduction of total lending under Government directive in operation to-day, and it seems likely, though not quite certain, that it leads actually to a self-denying ordinance of the kind I have mentioned, which eliminates competition. Most of us would hardly regard it as a satisfactory feature of our system for any great length of time. Certainly this method of legal directive is in direct conflict with the ordinary banker's conception of his free commercial role, as I am sure the noble Lord, Lord Brand, with his great experience, will agree; and it imposes a singularly unpleasant duty on bank managers.
Thirdly, there are various methods, sometimes called "open markets" or "special buyer." or some such technical name, by which the authorities can cut down the credit base and also the deposits of banks. This kind of intervention renders it impossible for banks to lend as much as previously they did so long as they preserve their traditional ideas of the right relationship between the two

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factors—advances and deposits. One disadvantage of these methods seems to me to lie in their obscurity. In an age when the Chancellor of the Exchequer is, in the last resort, held responsible for our financial policy, it seems difficult to rest a large part of that financial policy on a process which is hidden in darkness, both before and after the event. It also seems likely that the banks themselves must suffer under this method through not knowing in advance, or even at the time, exactly what is expected of them.
Fourthly, and finally, the Government, through the Bank of England, could impose some system of mandatory liquidity ratios which could be announced and adjusted as the situation demanded. By "liquidity ratio" I mean the proportion which the bank maintains of its liquid assets to its deposits; and by "liquid assets" I mean cash, or loans which can be recalled immediately or at very short notice, or holdings in bills whose maximum life, in any case, would be three months. Some of the difficulties under the third or open market policy could be avoided under this fourth policy of imposing mandatory liquidity ratios. Here, at any rate, all would be open and above board, and everybody would know what was going on. Under this policy, however, as under the open market policy, the banks would be faced with the difficulty of having to explain to marginal customers that loans previously made could not be renewed. They would have to exercise some discrimination themselves. On the other hand, I agree that under the policy of raising the bank rate, the disadvantages of which I have indicated, marginal customers would be "choked off" without the bank having to turn them down; so from that point of view it would be easier for the banks.
If we leave out the bank rate increase method and take other policies which require the banks themselves to take responsibility for refusing loans to people who are still coming forward, we can see that under this second policy, that of the squeeze, plus what amounts practically to a directive, responsibility would to some extent be transferred to the Chancellor of the Exchequer. The unfortunate bank manager can say, "It is not my bank's fault; it is the Chancellor of the Exchequer's order." No doubt a great deal of that goes on at present. That is where responsibility is most obviously
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placed at the present time. Under the open market and mandatory liquidity ratios policies, the banks would themselves have to take responsibility, and it would be for bank managers to explain that it was their bank which was refusing to accommodate marginal borrowers. I submit, however, that, taking all in all, the task of the banks would be a good deal easier under this policy of mandatory liquidity ratios, where the change would be publicly announced, than under the rather mysterious policy of open market operations, where they would find themselves suddenly and mysteriously weakened by the operation of some hidden hand. It would he much harder for them to justify refusal of loans to customers.
Trying to weigh up the matter from the point of view of the banks and the country, which matters a great deal to al' of us, rather than to any one section, I conclude by submitting three points to the House. First, the use of the monetary weapon, whilst it will not be the only weapon needed, will continue to be of the first importance. Secondly, we are still in an experimental stage. It is a fairly new phenomenon for the bank rate to be costing us so much in interest to be paid to overseas holders and damaging our foreign exchange position so seriously. Thirdly, I suggest that the method of liquidity ratios fixed by the Bank of England, in agreement with the Treasury, and adjusted (with as much warning and as much room for elasticity as possible) when the situation demands, is one to be studied with the utmost care and thoroughness by those who decide our financial destinies. I am not bringing before your Lordships some "bright idea" I have thought up myself: its adoption would not be a revolutionary innovation. It could be argued that it is foreshadowed in certain passages of the Macmillan Committee's Report. There are a good many parallels abroad, and noble Lords may have react a most learned article on the subject in the current number of the Economist, although I must not commit the, Economist to the precise point of view which I have put forward. I am sure that the more this method is studied, the more clearly it will emerge as time goes on—and the sooner the better—as a natural development of much significance and helpfulness.

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Before I sit down I venture to say a few words on a major and, in some respects, rather delicate subject—the possibility of removing some of the misunderstanding which now exists between the City and my own Party, the Labour Party, or, to adapt a phrase of Sir Winston Churchill, "the Labour slice of England." I am not talking only of a group of politicians. Noble Lords who follow a political and a financial profession will agree that the suspicion felt in the City towards politicians extends in considerable measure to politicians of all Parties—it is not confined to one group. Between the world of Whitehall-Westminster and that of Threadneedle Street-Throgmorton Street, a great gulf is fixed. I know that most noble Lords now always travel by Tube, and it is possible to make the journey between Westminster and the Mansion House, or vice versa, in less than ten minutes; but when one has done so either way, one feels one has been carried by Charon across the Styx—though it is not for me to say which is the upper and which is the nether region. Years ago, when I left Oxford and was thinking of a career in politics (in those days my politics were not Labour politics), I consulted a leading stockbroker of the day as to whether a period on the Stock Exchange was a good preparation for politics. His answer showed the City, rather than the political, angle. He said: "I should not think so. I once knew a fellow who went into politics. I believe he got into the Cabinet, but I never heard that it did his business any good."
Nevertheless, there is a difference, as we all know, between the degrees of suspicion entertained by the City towards Conservative and Labour politicians. Not long ago I sat next to one of the leading men on the Stock Exchange, a man of broad and liberal views and of much distinction. He remarked to me, in a friendly way, what a pity it was that Labour people were so hostile in their comments about the City. I listened to him with respect; his intention was obviously so good. I agreed that sometimes ill-informed remarks were made, but I begged him to ask himself whether it was not a two-way misconception. I think we all know the story of the foreigner who said after the 1945 Election: "I suppose the Conservative Opposition
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have taken to the hills," and was told in reply: "Oh, no, they have taken to the City." Certainly it is a surprise if a Conservative Minister, when he leaves office, does not receive a good position in the City, and a matter of astonishment if a Labour man does. I feel justified in making that comment as one of the few who have no cause for complaint.
I consider this a matter of real importance for the future. The Labour Party—whatever its merits or demerits —is likely to be alternately in office and the official Opposition for as far ahead as we can see, and without claiming perfection or immutability for the City (where I am still very much a "new boy") I think any honest man must agree that it is a national institution of great traditions, high standing abroad, and has a task to perform which is of the utmost national significance. It may well be that, in so far as there is ever a representative City view towards controversial political issues, it is not likely to resemble the representative Labour Party standpoint, and to that extent a divergence of outlook is likely to continue. But I do feel that much of the present suspicion is due to factors which are outmoded, to ignorance or, as I would rather say, innocence—but an innocence which is hardly bliss on either side. I would urge also, with great respect, that patriotic citizens—and as we all know there is no monopoly of patriotism in any one quarter of our country—must wonder whether some, at least, of the suspicion cannot be removed; and I submit with much earnestness that anyone who contributes to that end will deserve well of our people.
5.13 p.m.
LORD BALFOUR OF BURLEIGH: My Lords, I want at the outset of my remarks to establish two propositions which I hope will be accepted in every quarter of the House. The first is about full employment. Real prosperity for this country is impossible without the fullest possible measure of employment. That is common ground. What is the fullest possible measure of employment? I feel that anyone who ventures upon a definition is treading on dangerous ground. I noticed that Lord Pakenham, in the course of his excellent speech, referred to "the point where real un-

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employment occurs." I did not like to interrupt the noble Lord, but I should be interested to learn what is the point where real unemployment occurs. I hardly think it is capable of definition. I think that the fullest possible level of employment might fairly be defined as the highest level which can exist without inducing inflation and without a consequent fall in the purchasing power of the pound. I do not see why we should not all agree on that, and agree that that is the common object of all Parties.
At all events, of one thing I am quite sure—and I do not think it will be disputed: that a condition of employment where there is an excess of vacancies over applicants is hound to be inflationary and must, in the very nature of things, perpetuate the wage-price spiral and involve a reduction in the purchasing power of the pound. That is the first point I want to make: that the fullest possible level of employment is a common object of us all. Secondly, I want to lay down the rather obvious proposition that we can import only that which we can pay for by exports. A high standard of living requires a high level of imports. It follows, therefore, that the higher our standard of living the greater must be the volume of our exports.
Before I come to the point that I particularly want to emphasise—namely, what is the best way of checking undue excess of imports—I am going to permit myself to comment on the speech of the noble Lord, Lord Pethick-Lawrence, who, I will not say taunted us, but referred to the fact that the measures taken so fat by the Government to counter inflation have not been successful. I should be the first to admit that they have not been as successful as we could have wished, but I would say that the reason is that they were both too little and too late. I should also be quite prepared to admit, perhaps in an outburst of frankness, that the reduction of taxation in the first Budget of this Government did rot turn out in the way that was hoped.
Here I would refer to what was said by my noble friend Lord Clitheroe; and, with great respect, I must differ from him. He thought that because high taxation had an inflationary effect, therefore high taxation must be avoided. I would not deny for a moment that higher taxation might have a certain inflationary effect, but far more important is its effect
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on the current spending. What we are suffering from, we must all agree, is am excess of internal spending. I am rather afraid that higher taxation may be one of the weapons to deal with that. Lord Pethick-Lawrence said that the duty of maintaining the stability of the currency was one of the first obligations of every Government. How true! Loth as I am to inject the smallest note of Party controversy into this debate, I must say, I hope with good temper: what a comment on the Dalton cheap money inflation of 1946! The noble Lord, Lord Pethick-Lawrence, speaking about monetary weapons referred to indiscriminate pressure. My way of putting it would be "pervasive influence." I think that monetary pressure permeating all sections of the economy is effective in unseen ways—and that is one of its great merits. But monetary measures cannot do it alone. I am sure that what the noble Lord called our "old rusty blunderbuss" will still have to be used—I hope in conjunction with other things which perhaps we shall hear more about in the Budget. I would agree with the noble Lord—in contradistinction to the noble Lord, Lord Clitheroe—that a large Budget surplus is desirable.
I turn now for a moment to what Lord Pethick-Lawrence said about relations between the City and the Government. I will also comment on what Lord Pakenham said about possible variable ratios. I perhaps may do so because I am no longer in any position of great responsibility in the City, and speak entirely for myself. So far as contact is concerned, when I had the privilege of being chairman of the Clearing House I had close contact with the then Chancellor of the Exchequer, Sir Stafford Cripps, and on more than one occasion he expressed his appreciation of the cooperation of the banks. I think that the intimate co-operation which the noble Lord, Lord Pethick-Lawrence, advocated, is very much what exists. The noble Lord referred to the Bank of England Act, with its power of direction of the banks. That is a blunderbuss if you like. It has never been used; I hope that it never will be used; and I confidently believe that, with the informal and intimate consultations that exist between the Treasury, whatever the colour of the, Government, and the banks, it never will be necessary to use that weapon.

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I listened with great interest to what the noble Lord, Lord Pakenham, said, and I welcome from the bottom of my heart what he said about the need for better understanding between Labour and the City. If I may boast in a very minor way, I believe that I was able to do something towards that, when I helped to bring a prominent member of a trade union on to the board of a great bank of which at that time I was chairman. Nothing is more needed than better understanding between Labour and the City. I am afraid that I regard that ignorance as existing on the side of the trade unions much more than on the side of the City; but the noble Lord may be right in attributing it to the City. However that may be, the dissipation of that mutual ignorance can have only good consequences for all concerned.
I do not think it would be right to try to follow the noble Lord, Lord Pakenham, in his dissertation about the monetary mechanism. I know, of course, that the variable ratio method is in use in different parts of the Commonwealth—New Zealand is a notable example. The noble Lord will not have overlooked the fact that if the ratio of cash to liabilities were increased, it would amount to a compulsory funding by the banks of some of their Treasury Bills. With the small reflection I have given to the matter, I would only say that, though this idea is worth considering, it should be approached with caution. I think that, on the whole, the less we have of arbitrary and compulsory arrangements in that delicate sphere the better. If I may make one more comment on the noble Lord's speech, I think that the husband he spoke of was the rashest man I have ever heard of and the deflation he got was nothing more than he richly deserved.
We are facing difficulties, serious difficulties, in our balance of payments. Is it more than that? The word "crisis" has been used by the noble Lord, Lord Pethick-Lawrence, and by my noble friend Lord Bruce of Melbourne. I would say that at the moment the situation is serious —how serious the next few months will show. It will be disappointing if we do not achieve a surplus in our balance of payments of £300 million by the end of the year. In-saying that the situation is serious, I would agree that, unless it is rectified speedily, it may rapidly become
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dangerous. The main points to which I wish to direct your Lordships' attention are the necessity to reduce imports and how that can best be accomplished. There are two alternatives. One is by the application of direct physical controls. I had anticipated that the noble Lord, Lord Pethick-Lawrence, would have advocated that course, although I do not think he did. The second alternative, which I prefer, is a reduction in the amount of the available internal spending power.
The first alternative, to cut imports, can surely be done in practice only by a large percentage reduction on a fairly limited range of imports. Whitehall cannot possibly foresee the minute adjustments which millions of consumers will make in taking their own decisions. Import cuts do nothing except divert spending power to other resources which could be available for export. I am glad to see the noble Lord, Lord Winster, opposite assent. That means that there is a double reduction in international trade. There is an immediate drop in imports, a reduction in exports as a consequence and, therefore, the danger of the necessity of yet more drastic import cuts.
An interesting illustration is to be found in Australia. I listened with greatest interest to what my noble friend Lord Bruce of Melbourne said about the "great days of old" when he was courageous enough to reduce purchasing power by monetary methods. I think it would be greatly to the advantage of Australia if he were there to do the same thing to-day. Here is a report that I read in The Times of February 29 of a speech by Mr. MacEwen, the Australian Minister of Trade. He said:
"The problem of the balance of payments is really serious, and clearly the answer is to earn more by exporting more. Import controls were not far removed from a position where additional cuts could be made only at the expense of goods necessary to maintain the primary and secondary production."
I do not know how near we are to that point. If we are anywhere near it, then, of course, what is serious would immediately develop into a crisis. But having regard to the fact (which I do not think can be disputed) that excess internal spending power is the trouble, surely physical restriction of imports is about as useful as putting a dam in the middle of a river and having the water still flow all round and over it.

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Contrast this with the effect of reducing spending power. At once the consumer arranges his own expenditure so as to reduce his personal satisfactions as little as possible. In that connection I was deeply interested to see in The Socialist Case the following statement by Mr. Douglas jay:
"In the case of nutrition and health, just as in the case of education, the gentlemen in Whitehall really do know better what is good for people than people know themselves."
I do not know whether Mr. Jay was the author of that famous phrase, but there it is. Whether it is true about nutrition and health or not, I am sure that "the gentlemen in Whitehall" do not know how to teach us the proper way of spending the whole of our incomes. The great value of reducing purchasing power is that it makes the consumer concentrate on the essentials. May I draw your Lordships' special attention to the great merit of making the consumer spend more on milk and bread and rent? The more he spends on essentials, the less he will have to spend on unessentials, which may become available for export. Those resources are released for export, and that has the effect of making the home market less profitable to the manufacturer and of giving him an incentive to cater more for export. Surely, the second process, the cure by reducing spending power, is as self-perpetuating as the disease is self-perpetuating with physical control of imports. I repeat that full employment is our common objective, but it is a vain hope to think that it can be maintained indefinitely so long as internal purchasing power consumes an undue proportion of our production.
There are at least two wider considerations which support this view. If we start imposing protective duties or quotas, there is a real danger of retaliation. Our greatest interest in this country is an increase in world trade. Our earnings of dollars and of European currencies must be affected adversely by import cuts. I am sure I am right in saying that the only safeguard for full employment, in the long run, is the ability to be able to win our Share of increased world trade. There is also a perhaps somewhat more remote argument: that if we rely on consumer choice by checking spending, we encourage the dynamic nature of our industry. We must never forget that industry must be dynamic; that new things must go ahead and be able to
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attract their labour. If we encourage consumer choice by that means, new progressive industries will be able to get the labour they need, and will be justified in bidding up for it—which some of them are doing now, and which is a dangerous feature.
I suggest that, instead of talking about the battle against inflation, we ought to talk about the battle for preserving the purchasing power of the pound—and in that respect, I believe it was the noble Lord, Lord Pethick-Lawrence, who referred to the importance of savings. Here is a simple equation which is little appreciated but which I know is true: savings equal investment equals efficiency and employment. We must never lose sight of our ultimate objective which is the return to full convertibility of the pound, in the fullest sense of the word. I will not enlarge upon that aspect of the matter, but it is one which is very present to my mind. We can remain the financial centre of a great volume of world trade only if our pound is beyond reproach. Two things remain essential for that: larger reserves—which can be engendered only by a favourable balance of trade—and the maintenance of our competitive power.
I feel that I must deal with one objection which I know noble Lords opposite take to anything in the nature of disinflation by monetary mechanism. They feel that it may lead to a deflation and a slump. For this part of my argument I wish to refer to two authorities—one is Sir Stafford Cripps, and it is contained in a short paragraph from an article by Mr. Gaitskell. He says:
"When Sir Stafford Cripps warned the country that the great threat to employment was not economic depreision but inability to earn enough through exports to pay for the materials we needed to keep our factories going, he was absolutely right. If a balance of payments deficit is really chronic, and cannot be covered by borrowing, gifts, or using up foreign exchange reserves for other assets, then eventually the cuts in, imports might extend to materials for the factories."
That is a real danger. It would arise much more from a slump in world affairs than in any other way. The world situation at the moment is favourable. One does not see any likelihood of a general fall in demand for our exports in the national markets, provided always that they remain competitive. World trade is at a high level, and our problem at the moment is our internal situation.

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There is another point. The corrective measures which the Government are taking, of making spending power less, are unpopular and difficult, but if at any moment it seemed that they were going too far, the measures to reverse them would be the easiest thing in the world, and would be popular. At once you could restore hire purchase; you could pay up the post-war credits and you could reduce taxation. These measures are as easy and popular as the corrective measures are unpopular and difficult. Far greater danger of permanent damage exists to our high employment and prosperity in the situation of uncorrected over-full employment. To correct it by physical control is perhaps the easy way. I am quite certain that it would not only be ineffective, but dangerous; and it would be dangerous because it would be, and would be regarded as being, the first step to a further devaluation.
My noble friend Lord Clitheroe talked about psychology being important. A noble Lord opposite shakes his head. Let me refer him to the Manchester Guardian of to-day. This is a quotation from the financial correspondent of the Manchester Guardian, which says:
"A curiously unequal struggle is going on in the exchange market. On the one side are foreign speculators, a small but extremely powerful band of European financial interests. These are the little gnomes sitting over ticker tapes in Zurich.'…The little gnomes"—
noble Lords on this side of the House will be interested to hear this—
"are men of extremely conservative opinion. They long ago decided that the present British Government would be unable to maintain the exchange value of sterling. In their view, the Government's fear of creating unemployment will stop it from breaking the spiral in wages and prices, and sooner or later another devaluation of sterling will be inevitable. From time to time they decide that devaluation is imminent and a skirmish develops in the foreign exchange market."
I think that is most significant. I feel that our Party on this side have to take a share of the blame for the present state of affairs. Both Parties have drifted; lack of courage has been common to both. High employment is attainable by inflation; it is not maintainable by inflation. There comes a point when "Halt" must be called. I wonder if this is really the point. I think it may be. Distasteful medicine is needed. I hope
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that the Government will have the courage to give it to us and we the fortitude to swallow it.
5.40 p.m.
THE CHANCELLOR OF THE DUCHY OF LANCASTER (THE EARL OF SELKIRK): My Lords, I should like most warmly to congratulate the noble Lord, Lord Clitheroe, on the speech which he made to-day. His reputation, of course, has come well in advance of him as a man speaking with common sense and balanced judgment. I, who am connected with the great county of Lancashire in an official capacity, am particularly glad to have this opportunity of welcoming him. His family, I believe, have lived there for a thousand years. The noble Lord mentioned Malaya. I should like to stress that in the Report of the Conference—and I am sure the noble Lord has read it—the mutual character of the arrangements between London and Malaya are fully brought out. The Malayan delegation have said that they intend to remain in the sterling area; that they will restrain dollar expenditure; and that they will send a delegation to the future meetings of Commonwealth Finance Ministers; and the United Kingdom, on their side, have promised to give continued financial assistance and to allow Malaya access to the London market. I think the noble Lord's point is fairly well covered. No one can bind the future, but I think that arrangement is fairly satisfactory.
The noble Lord, Lord Pethick-Lawrence, was a little more polemical to-day than he is sometimes, and I would say this to him. I think it is a pity to hold it against Mr. Butler that he should have annoyed some of his friends. If any Minister who is Chancellor of the Exchequer should ever be afraid of annoying his friends, then this country has a pretty poor outlook. The noble Lord answered the question by pointing out that the problem was not recognised by the public. In those circumstances, it is hardly surprising that some of the Chancellor of the Exchequer's actions would be a little unpopular. The noble Lord went on to talk about unjust taxation. I wonder whether he thinks that all the taxation which was imposed while he was in Government was considered just by the people of this country.

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I would rather approach the problem with which we are faced, not so much from the angle of the noble Lord. Lord Pethick-Lawrence, as from the angle of the noble Viscount, Lord Bruce of Melbourne, who, I think, made a most powerful and important speech to-day. In giving a picture of our economic position I do not think it is possible to over-emphasise the narrow margin on which we stand. If I may cite some figures, they will tell very much the same story as the noble Viscount told us. For instance, since the war we have had a current balance of transactions overseas varying from a deficit of £400 million to a surplus of £300 million. On present figures, that is a swing of about 10 per cent. on our total turnover of overseas payments on current account, which again is about what our gold and dollar reserves are at the present time; while, of course, we have sterling liabilities to the extent of about £4,000 million. We never had much room to manœuvre, and, frankly, we have not a great deal to-day. It is perfectly clear that the building up of these reserves, the need for which the noble Lord, Lord Balfour of Burleigh, has so properly emphasised, will be a slow process, particularly as we are pursuing a policy of investment overseas because we consider this aspect important. But, inevitably, the process of building up reserves will take a long time.
We may ask ourselves: Did we enter into a world after the war with rather too big ideas? We knew that we had lost investments abroad; we knew it was urgent for us to rebuild our foreign trade; we knew the terms of trade were less favourable than before the war—and they have tended on the whole over the last ten years to he rather less favourable. That is in addition to the point about competition which the noble Viscount, Lord Bruce of Melbourne, mentioned, and which is not quite the same thing as terms of trade. Moreover, we are now a net importer of coal. The result is that to-day we are buying half our food and all our raw materials, we have virtually no primary products in this country at all to export, and we are directly dependent for our survival on the ability by hand and brain of the people who live here. I was glad to notice the emphasis from both sides of the House to-day on the need for common respect among different cate-
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gories of people in this country: among those who work by hand, those who work by brain and those who have to exercise responsibility and judgment in their particular functions. It is encouraging that this point should have been so clearly emphasised.
What did we do in this post-war world? We certainly launched out and succeeded in establishing a higher standard of living in this country than we have known before. In this respect I often think that sometimes we underestimate the substantial extension of the social services which has taken place. They do not appear in cost of living indices. They are not mentioned when people are comparing relative levels of wages and salaries, but they do constitute a heavy burden on the productive industries of this country. To many people this increase in the standard of living sounds a hollow jest, because there are substantial numbers of people in this country whose standards of living have steadily fallen over ten years. I think it is right and proper that we should recognise that fact. What I mean by saying that the general standard of living has increased is that the amount of consumption, speaking economically, is much greater than it has been before. To this we have added the considerable expenditure on defence which has diverted our activities from production to defence measures. We are keeping a lot of troops abroad which, of course, is a strain on our overseas payments, and we have continued an extended policy of investment in the Commonwealth. The Economic Survey last year showed that we were running at a net investment level of about £180 million a year abroad, in one form or another. This is an achievement of quite a considerable character in ten years, but at the same time it is an immense burden which none of us should misconceive.
How have we done this? We have done it substantially by three things. First of all, we have had more or less every year a steadily mounting rate of production. We have now increased from about £10½ billion as the gross national product to nearly £13 billion in terms of 1948 prices. That is about 25 per cent., which means that we have been running at the rate of something between £300 million and £400 million in real

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terms in recent years. Secondly, we have maintained full employment and, as the noble Lord, Lord Balfour of Burleigh, said, from an economic angle that is of real importance. Thirdly, we have increased capital investment inside this country. Admittedly we went a little slowly at first, but there is no doubt that in recent years it has gained impetus considerably. The price we have had to pay for this has been continuous inflation over ten years. In other words, while we have increased production we have paid ourselves a good deal more for doing so. The figures were quoted by the noble Lord, Lord Clitheroe, and I would only say that in ten years two-thirds of the rise in prices has been due to inflation.
May I turn from this general background? Towards the autumn of 1954, on to a position of buoyant level of consumer demand there was superimposed an upsurge of capital expenditure. Of course, that was urgently wanted. It was exactly what we required. But it was at a time when we had little reserves. That produced what may be described as the classic inflationary situation. May I read what Keynes says in his book on this matter, because it is exactly what happened:
"When full employment is reached, any attempt to increase investment still further will set up a tendency in money-prices to rise without limit, irrespective of the marginal propensity to consume; i.e., we shall have reached a state of true inflation. Up to this point, however, rising prices will be associated with increasing aggregate real income."
May I for one second say what that situation looks like from an entirely different angle? This is the industrial world as described in the industrial survey in the Manchester Guardian, which is a fairly independent paper. This is how it describes, from an entirely different angle, the same situation which Keynes envisaged:
"The Great Industrial Machine is thundering along at full speed. The factories are busy, the roads are crammed with goods transport, the ports are clogged with cargo. On all sides, industry is crying out for more space, more equipment and, above all, for more labour of all types and grades. People are prosperous and, on the whole, happy."
When we think of a situation like that—and the noble Viscount, Lord Bruce of Melbourne, tells us with his full authority that this is the most serious crisis we have had outside of war—can it be wondered
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at that people should find it a little difficult to understand and that it leads to such irritation at the measures of caution which the Government have taken?
Possibly we might have relieved the inflationary pressure last year by increased production. Frankly, we did not do too badly in production last year. We had full employment and, I think, ample materials. The only way we could have increased production last year was by increased capital equipment or the more efficient use of labour and materials available, but neither of these improvements was likely to take place quickly. In any case, our gap in visible trade remained high. Imports of coal and steel, which are comparatively new, became an important element in this situation. Moreover, there were last year two periods which, as the noble Lord, Lord Balfour of Burleigh, described, gave rise to periods of lack of confidence in sterling. The first was in February and the next was in September. To some extent, this tended to reduce a certain amount of our reserves. Up to the end of 1955, the Government had sought to check consumer spending and capital investment by raising the bank rate, restricting hire purchase and increasing the purchase tax and the companies tax. It is difficult to know what the net effects of these measures have been. As has been said, "What is done we justly can compute, but not what has been resisted."
When the new Chancellor of the Exchequer came to examine the situation, he found that, whatever those effects were, they were not, in his opinion, adequate to meet the situation, though in examining it, it was necessary to consider the steps which had already been taken and which, even if not showing results, might well be exercising considerable influence in the economy. As I see it, this is what the Chancellor of the Exchequer saw when he came to look at the position. He saw that the price of sterling had remained steady and firm for about four or five months and the fall of reserves appeared to have been checked and indeed to have improved slightly, though I do not think it would be right to place too much importance on this point unless there was a real improvement in the trade position. The January figures for visible trade did not show that.
Moreover, a recently published forecast of investment by private industry,

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which was shown in the Board of Trade Gazette, estimated a development in the private sector of at least the same rate of increase in 1956 as for last year. The demand for labour continued to be very high. There were nearly two vacancies for every man employed—and, indeed, in January and February the figures for unemployment were the lowest since the war. Both wages and prices have risen steadily over the past year. The noble Lord, Lord Beveridge, has written a couple of letters to the newspapers. If I may say so, I agree with much of what he says, particularly with the statement that this problem is profoundly complex.
LORD WILMOT OF SELMESTON: The noble Earl said that there were two vacancies for every man employed. Did he mean that?
THE EARL OF SELKIRK: I beg your Lordships' pardon. I am most grateful to the noble Lord. I meant "nearly two vacancies for every man unemployed."
VISCOUNT ALEXANDER OF HILLSBOROUGH: The noble Earl did say "employed."
THE EARL OF SELKIRK: I am going on now to the problem of what we should do. Obviously, there is the fear of controversy between tackling the symptoms and tackling the cause. A typical example of dealing with the symptoms is the imposition of import control and the stabilisation of prices by subsidy. These might ease temporarily our trading gap and might reduce our imports and stabilise certain retail prices: but, whilst giving a momentary impression of balance, they would only conceal inflation and might indeed increase its strength. Conversely, if we treat the cause and reduce demand either by making credit more difficult or by increasing prices through purchase tax, the result must be to make the symptoms of higher cost even more prominent. This, in turn, might give rise to increased pressure for higher wages, which would again set the spiral in motion.
However, the Government have decided to try to treat the cause rather than the symptoms because they do not believe that you can beat inflation simply by hiding the symptoms. The noble Lord, Lord Balfour of Burleigh, has brought
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out clearly that every single instrument which the Chancellor of the Exchequer has for increasing inflationary pressures is highly popular. One can think of a whole range of them. Everybody would be delighted if his post-war credits were put up or down, as the case may be.
Perhaps I may put it from a purely economic angle. I think it would be right to do what the noble Lord, Lord Clitheroe, says, and 'exercise pressure on the economy by reducing consumer demand alone, so that capital investment would be entirely unimpeded. We have not done so. In this, I am glad to find myself in agreement with the noble Lore, Lord Pethick-Lawrence. We are spreading it between the consumer and capital investment. We have done so because we think the burden should be as widely spread as possible and, secondly, for the practical reason that capital goods are of great importance in the export market. The noble Lord, Lord Jessel, I think possibly deliberately overstated the ease when he said that we were asking people to call a halt to capital expenditure. I think that, over the whole sphere and range, capital expenditure is likely to be considerably higher this year than it was last year. What we do not want to happen is that it should be so adjusted that one scheme world gel in the way of another. We hope to restrain home buying whilst leaving the salesmen overseas free to sell in the foreign market.
The other point on which we find ourselves in close agreement with the noble Lords, Lord Pethick-Lawrence and Lord Balfour of Burleigh, is on the question of savings. This is by far the most valuable way of relieving the inflationary situation to-day. It could be done by a compulsory increase in taxation, which is the view which the noble Lord, Lord Pethick-Lawrence, adopted. But this might have the effect of reducing private savings in other spheres because of high taxation. To some extent, we are already doing it. I think it would he a pity for that to take the place of genuine private savings—indeed, I do not think it can.
LORD PETHICK-LAWRENCE: If the noble Lord will allow me, I would point out that I said that the best way was to save; I thought it was altogether

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the best way. I said that I thought the Chancellor of the Exchequer might do more to encourage and exhort people to save. In so far as he failed in that effort, I said he ought himself to put in an oar and make a greater effort.
THE EARL OF SELKIRK: I am delighted to find that we are completely at one on that matter. All I would say to the noble Lord, with his great knowledge and inventive mind, is that perhaps he would suggest to the Chancellor of the Exchequer ways in which genuine savings can be increased. It is easy enough to produce an attractive bond of some kind, but you might well be diverting savings from one place to another and yet not improving the total volume. I can assure the noble Lord that any practical proposal would be much welcomed. I think he will agree that probably the most important thing in saving is a stable currency, and, as he pointed out, that, too, is interdependent, because a high level of savings plays an integral part in making a stable currency. The two things substantially act together.
The noble Lord, Lord Pakenham, mentioned a number of points, with some of which we find ourselves in agreement. There was the question of the liquidity ratio, which is a difficult point and one about which the noble Lord knows more than I do. It works very well in America, but the banking system there is rather different from what it is here and I do not think we can transpose it. I can assure him that the Chancellor has been considering this point, and I am sure that he will read and examine extremely carefully what the noble Lord has said. I hope he will not ask me to go further than that, because, frankly, I do not think that I can usefully do so.
The noble Lord, Lord Pethick-Lawrence, rather complained that some hardships were created. I do not know whether he thought that import controls or other licences would avoid hardship. Inevitably, they would have some effect. I was going to outline a list of import controls but the noble Lord, Lord Balfour of Burleigh, covered the point so well that I do not think I need do so. It would not help the inflationary position, because what has happened is that we have had ample materials and our inflation has gone overseas. What we
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want to do is to stop the inflation so that it will not go overseas but, even more important, is that it would be a reversal of our whole policy. Here we call them import controls, but in another country they become quotas, and there is nothing that people overseas object to more than quotas. They are basically obstructive to any form of import. I wonder what imports the noble Lord would consider we need. I have here figures of the imports we have to-day. Seventy-one per cent. goes to industry for processing, 25 per cent. goes to consumers without further processing—of course, that is overwhelmingly food—and 4 per cent. goes on capital equipment. Without bringing industry to a standstill, I do not think there is much that can be done.
LORD WILMOT OF SELMESTON: Before the noble Earl leaves that point, may I ask whether it is not true that a large slice of our import trade is still subject to the obtaining of permission in one form or another, either by licence or the necessary currency permits? It is not all free.
THE EARL OF SELKIRK: The noble Lord is perfectly correct. I should not like to give him a figure, but I know that to be true to some extent.
LORD WILMOT OF SELMESTON: A large proportion.
THE EARL OF SELKIRK: I should not like to use an adjective at all in that regard. The noble Lord, Lord Pakenham, dealt with a number of longer-term problems in regard to credit. What he said is of real importance. We cannot go on living on this narrow edge and falling over once in a while, one way or the other. If we can find a measure, even if it be by establishing a form of control which is sufficiently delicate to keep us on the rails, it would be of infinite importance.
The noble Lord, Lord Pethick-Lawrence, dealt at some length with the bank rate. I was under the impression that he thought that we almost liked putting up the bank rate. I can assure him that we do not like it. We recognise that it is a weapon which is used only for a specific purpose. The noble Lord dealt with the disadvantages, but he did not deal with the purposes and objects which we had in mind. I must admit

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that some of the disadvantages are exactly the purposes which the higher bank rate is intended to attain. The noble Lord knows that. For instance, if a person's bank rate goes up, he cannot spend on other matters. The noble Lord mentioned the subject of the Colonies. If we did not have a favourable balance of trade we should have nothing to invest in our Colonies overseas or anywhere else, so that the purpose of the higher bank rate here is to help make the currency favourable and to enable us, amongst other things, to invest abroad.
The noble Lord asked me whether I could say how many Treasury Bills are held by foreigners. I am afraid we have no figures, and I am fairly confident that no one could give an accurate figure on that matter. Naturally, there are quite a number of residents abroad who hold Treasury Bills as part of the sterling liabilities. The noble Lord asked me, too, what would be the cost, or the increased cost, of the higher bank rate on Treasury Bills since this Government came into office. I am not able to give him that figure, but I can say that during the last twelve months £133 million was spent on interest rate on Treasury Bills, and if that had been ½ per cent., which the noble Lord will remember was the case a good deal earlier, the figure would have been £17 million.
There has been a good deal of comment on the nationalised industries. The noble Lord, Lord Pethick-Lawrence, thought that they were being unfairly treated. All I can say is, that their capital expenditure in 1954 was 50 per cent. higher than it was in 1951; that last year it was higher than that, and that I am fairly confident that this year, taking it as a whole, it will be higher again. Lord Beveridge saw a danger in the nationalised industries and, with Lord Clitheroe, I think wanted a greater control, while Lord Jessel wished to abolish the Ministry of Fuel and Power. I rather think this would reduce the measure of control which could be exercised, but I would rather not go into that subject, because it is too big to attempt at the present time.
May I say this in ending: that what we hope to do is to reduce the home consumption so that we can satisfy a larger proportion of it from home production, which would reduce the need for
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imports. The home market itself would become less attractive and manufacturers and merchants would be compelled, or at least more attracted, to sell their products abroad. That is our object. We are aware that our steps are fairly severe. The position will certainly involve a measure of re-deployment of labour, and I hope will lead to a less urgent demand on our retail market. My Lords, if we think it is worth while to maintain the, stability of sterling—and without that we cannot remove inflationary pressure—then these burdens do not constitute anything at all untoward, because there is no country where the stability of money is more important. I think it is only by maintaining a stable currency that we can hope to maintain a balance in our overseas trade and payments.
We can only maintain full employment by earning it with our efforts. There can be little doubt that so far we have obtained it substantially at the cost of inflation, which simply means that we are eating up our reserves. If we are to avoid unemployment it is essential for everyone to refrain from taking full advantage of the bargaining strength which he may have from time to time. The result of increased efficiency and increased productivity should not be entirely absorbed, let alone more than absorbed, in the costs of manufacture. At least some proportion of it should be passed on to the consumer in the form of reduced prices, a point made earlier by the noble Lord, Lord Jessel. If we looked further ahead we probably should find education and training among the most important things for the people of this country. Your Lordships will have, noticed that they have been little touched by recent measures. We also look for a high rate of capital investment, which will be considerably higher this year than last year, and wide recognition of our common interest in resolving these, problems. If this is to become an internecine war in which sectional interests are a major consideration then we shall not be able to resolve it. We shall have, failed to understand the continuing interest we have in progressive development. I have not been able to answer all the questions put by noble Lords but have tried to answer those I can, and if I may write to some noble Lords afterwards I will do so.
6.11 p.m.
LORD WINSTER: My Lords, the noble Earl who has just resumed his seat put his finger exactly on the spot about savings. I am always very happy to speak on behalf of the Savings Movement if I am invited to do so, but I invariably come up against the man who says: "We are constantly told that the purchasing power of the pound is falling steadily and that means that if I put my money into savings, when I take it out it will buy less than it would have bought when I put it in." That is the reason why people hang back a little on this question of savings. I am not at all anxious to see any cuts in imports. What I want to see is the sale of a great many more exports, so that we can buy the imports which we need without throwing the balance of trade out of equilibrium and consequently causing yet more inflation.
I take part in this debate with considerable hesitancy because I am not an economist, nor do I understand economics. I am a little reassured on the latter point because I find so many economists do not understand economics. Such economists as I have met certainly seem to have very few fixed opinions. I was told that the late Lord Keynes used to begin his day with a prayer which ran:
"Give me this day my daily opinion
And forgive me my opinion of yesterday."
How true that may be I do not know, but it certainly seems that economics are not a fixed science. An economist who after an interval of twenty years went up to Cambridge to pay a call on his old tutor asked, out of curiosity, to see the last examination paper which had been set. Having looked through it he said, "But the questions are all just the same," to which his tutor replied, "Yes, but the answers are all different." My interest in economics has become increasingly practical because I have been trying to find out why I get steadily poorer and why I cannot have things like a new motor car, a new suit or a holiday which I seemed to be able to have in the days when my income was smaller than it is to-day. Mr. Butler's "largesse," which was referred to this afternoon, seems somehow to have passed me by.
So I have been reading and thinking about the endless articles and correspondence on economics with which newspapers
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and magazines are now filled. I am bound to say that articles and letters written by economists seem frequently to cancel each other out, but those written by laymen occasionally add up and seem to make sense. From them I get an impression of forces at work damaging our economic life and impairing our ability to compete in export markets; driving up the cost of living and producing chronic inflation which a speaker at the annual meeting of the Chamber of Shipping has just told us was likely to go on for many years yet, which is rather discomforting. I ask myself: if these forces continue at work unchecked and uncorrected, can we go on as we have been doing without coming an almighty smash? Many people talk as if, no matter what happens, there will always be Elisha's ravens to feed us. I do not get the impression that the world at large feels it owes us a living. I believe that we have to earn our living by our own efforts.
Warning voices are raised on these subjects: exhortation is not wanting, but perception seems lacking where it is much needed. A very prevalent mood is, "We have never had it so good." In a panel discussion on these subjects on the B.B.C. recently the speaker who represented the workers had been listening to what had been said along the lines I have previously indicated. But when it came to his turn to speak he said, "I have only one thing to sell, my labour; and I am going to sell it for as much as I can get for it. These things which you have been talking about do not interest me—they are not my concern." That outlook is not unnatural in people who have had hard times in the past, as they have, but I hope that soon a steady and better mood and better understanding will prevail on these matters. There are traces of tendencies which perhaps one must expect individually in a great industrial country like ours, but taken cumulatively they make one a little uneasy at times.
I do not like boasts about ability to flout the law; I do not like prolonged strikes over demarcation disputes or refusals to work new equipment unless employers agree to its being overmanned. I believe there are too many strikes without resort to conciliation machinery and too many strikes over trivial matters. I have seen it stated that in one motor establishment there has been an average of one small stoppage a day for six

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months. And, coupled with that, I must say that I do not like the all too common inability of successful, level-headed trade union leaders to prevent unofficial strikes with which they do not agree. I feel that these things which I have mentioned—and there are many more—are alien to the true spirit and purpose of the trade union movement. They are an excrescence on that movement which I am quite sure many trade union leaders deplore—in fact several of them have said so. If they were to spread and develop they would bring a great movement, which in the past has done great work for this country, into disrepute with the community.
In thinking over the causes of inflation (we have heard a great many discussed this afternoon, and, no doubt, much of what has been said has considerable validity and contributes to the result) I ask myself whether it is not the case that one cause of inflation is the fact that full value for money is not always given in return for the hundreds of millions of pounds a year which are paid out in wages. If it is the case that full value for that money is not always given, it means that labour is over-priced, and it therefore costs more than it should to produce a given article. That, of course, must impair our ability to compete against the foreigner in the export market, so that we tend to price ourselves out of those essential export markets. I know that one cannot have 100 per cent. perfection in this matter, and I am not suggesting that the situation is too bad. Yet I cannot help feeling that if all in receipt of wages gave—as I am sure great numbers do—a fair day's work in return, our troubles would melt away like snow off a roof during the recent thaw. I believe that the menace of inflation would begin to lift; I think we should then begin to be able to meet competition from any quarter; the export markets would lie open to us; the gold and dollar reserves would begin to fill up; the trade gap would close; the standard of living would go up, but upon a sound and secure basis and in a manner which did not involve inflation as it rose.
I have noticed—and I am sure your Lordships will have done so also—a recent series of articles in the Sunday Times with the title "Saboteurs of Prosperity." I did not like the choice of the word "Saboteurs" because that implies something very sinister—very
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evil things at work; and I feel that perhaps the word "Saboteurs" was not very happily chosen. Bat I thought these articles were well worth close attention. I believe that, on the whole, they were fairly written, and I did notice that the trade union leader who summed them up last Sunday, while he had criticisms to make, did not seem to find any fault with what had been said in them upon factual grounds. I think that the paper performed a service in initiating a reasonably impartial discussion of matters upon which our future depends.
More remarkable, to my mind, was The Times editorial to which the noble Lord, Lord Clitheroe, referred this afternoon in his admirable maiden speech. That editorial was headed "The Rule of Fear," and it said bluntly what a great many people in high places have been shirking saying. The leader writer was very impartial. He laid about him like Punch in a Punch and Judy show: everyone "caught it" in turn. Conservatives and Labour alike came under criticism. The leader said that
"A kind of madness has infected British politics where financial and economic matters have been concerned…. The merits of the case have had scant respect from either Party"
Going on to ask what has been to blame, the writer answered his own question in this way:
"The real lack is courage. Ministers have been expected to cut to the root of the cancer inexorably eating away what national wealth we have left. The story has been the same—half measures; too little too late."
And not only Ministers are found wanting by The Times. The editorial mentions boards of companies which submit to unjustifiable wage demands to avoid trouble. On that point, certainly, I can say something from my own experience.
Your Lordships will not recollect it, of course, but some time ago I moved a Motion in this House on the subject of conditions of work in the docks. Before doing that I made some inquiries—I wanted to be sure of my facts before I spoke. At that time I was told quite definitely that there were employers who would not thank me to speak about certain things that were going on because they preferred to pay rather than risk possibly unpleasant consequences. If that is true—and as I say I was told it on very good authority—it indicates a very grave neglect of duty. Again, I read

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a few lines from a speech made at the recent annual general meeting of the Chamber of Shipping. The speaker said:
"Delays in port vitally affect every member of the community because of the vast waste of money involved, which inevitably in the long run has to be added to the cost of every article bought throughout the country and so adds directly to the inflation through which we are passing."
So I feel that The Times was justified in saying that it is wrong to submit to unjustifiable demands and unjustifiable practices.
The trade unions, too, come in for their share of criticism, for The Times says that unjustifiable wage claims, framed and encouraged by trade unions, are a root cause of inflation. Those who grumble about rising prices do not always seem to know or be told that their cause is a combination of wage claims and low production. There are boards, says The Times (the companies are now coming up for their "caning") which
"give the inflationary spiral another vicious turn upwards with six, seven, eight or even ten per cent. wage increases in the dishonest and futile hope that 'this really will be the last time'."
We used to hear that from Hitler. Every time Hitler was given way to he always said, "My ambitions are now satisfied: I have no further demands to make." Then he would retire to Berchtesgaden to think out plans for his next aggression. The trade union leaders are further accused of showing lack of courage. The Times says that:
"They tolerate such a festering folly as the Cammell Laird strike"
over who should drill certain holes. They
"know perfectly well we are heading for the abyss and are yet willing to seize any crumb of excuse to allow their followers to push them yet more vigorously from behind."
Managements, it was said, manifest cowardice by bidding
"up and up to the point of bribery for scarce labour till some total earnings have reached fantastic levels."
This is a very serious editorial. I think we are all accustomed to regard The Times editorials with a certain amount of respect. We believe that they are written with the good of the country at heart, even if we cannot always agree with everything they say. When I read this leader I felt that it was the speech which
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the Prime Minister ought to have made at Bradford before he went to Washington. I do not commit myself to saying that it was not perhaps a little high-pitched and over-coloured here and there, but many things were said in that editorial which I should have been glad to hear the Prime Minister say at Bradford.
In the circumstances, I found that his speech was not an adequate speech. The Prime Minister seems to have been mostly concerned with announcing increases in Government expenditure, and many issues upon which I have touched were shirked. But I am bound to say that Prime Ministers before him have also shirked these issues, and if we are to blame the present Prime Minister, we must also allot some blame to others who have preceded him. I thought it, however, a disappointing speech. The Daily Telegraph said that
"The speech was no Philippic. Jove hurled no thunderbolts; he merely hinted that thunderbolts were in stock."
He nerved himself to say,
"You cannot fight inflation without pain."
The Times comment was that we have had "merely a twitch of discomfort" and no real pain.
The Prime Minister said that none of us "wants to go back to a period of unemployment". Who is there who says the contrary? I can remember visits which I paid to Rhondda, Jarrow and West Cumberland—to Maryport, in particular, during those terrible days of unemployment. Who is there who would get up and say that he would like to go back to those days of unemployment? The Prime Minister was uttering a truism. But surely employment depends to a large extent upon customers being willing to buy from us, and they will buy from us only if our prices are right. Unfortunately, we seem to be pricing ourselves out of the market. Shipbuilding is an example. In a word, I thought there was too much wishful thinking in the Prime Minister's speech, and I recalled the proverb:
"I never fared worse than when I wished for my slipper."
There were too many "ifs" in the speech—"if our balance of payments could be put right"; "if our reserves could be built up"; "if we are economically sound, we can continue to play our part in the

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world"; "if every citizen will help us …"
"I hate your 'ifs',"
said Tristram Shandy—and how right he was! How are those "ifs" to be translated into action? Every speaker has put forward his own proposals to that end this afternoon, all of them valuable, all of them deserving consideration in shaping the final course of action in these matters. My main suggestion to-day is that everybody concerned should be perfectly certain that value is being given for wages. I believe that that way lies one of the paths to salvation.
6.34 p.m.
LORD CONESFORD: My Lords, this debate has been made memorable for some of us by the maiden speech of my noble friend Lord Clitheroe, which impressed and delighted the House but did not surprise his friends in all Parties who knew him in another place. I should also like to thank the noble Lord, Lord Winster, for having the courage, which makes it easier for me, to break into a debate which has been conducted so ably and so largely by great bankers and former Treasury Ministers. I do not share any of those advantages of expert knowledge but, like the noble Lord, Lord Winster, I have had experience over many years of trying to explain these important matters in the country. Perhaps it is desirable that some laymen should intervene even among the experts who have made such admirable speeches this afternoon.
This debate has been mainly, and rightly, about inflation. I think the point could not have been put better than it was by my right honourable friend the Chancellor of the Exchequer, in his broadcast, when he said:
"We must beat the inflation or the inflation will beat us."
I believe that that is literally true, and I agree with my noble friend Lord Balfour of Burleigh that we have not an indefinite time in which to do it. The necessities for success in this task—and I believe we can be successful—are courage, intellectual clarity and the will to deal with the real world and not with illusions. May I give your Lordships my favourite quotation in politics? It is more than 200 years old and comes from Bishop Butler, the philosopher. It is very well known, but
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I think the lesson it contains should never be forgotten:
"Things and action; are what they are, and the consequences of them will be what they will be: why, then, should we desire to be deceived?"
It sounds fairly obvious that nobody would desire to be deceived. Unfortunately, a great many people do desire to be deceived, and are very willing to applaud politicians who are prepared to deceive them.
May I give a few examples of deception? We deceive ourselves whenever we speak of our standard of living or our level of employment as if they were things to be determined simply by our desires and had nothing to do with external possibilities having nothing whatever to do with our desires. We deceive ourselves again when we speak as if unemployment could result only from some Party's malevolence, and as if employment were not in tile least dependent on the quantity, quality and efficiency of the work which we were prepared to do. We deceive ourselves, a word, if we act on the assumption that the external world owes us a livelihood and is likely to honour the debt. I am glad that the noble Lord, Lord Winster, made that point.
In this connection, I should like to commend to the House two admirable statements by Sir Winston Churchill which, though made many years ago, are to-day as cogent as ever. In a speech at Edinburgh in April, 1946, he described both our glorious national achievements and our unique dependence on external trade for our raw materials and food and then used these words:
"There never was in all human history a community so numerous in a position at once so magnificent and so precarious…'
The other quotation from Sir Winston Churchill is more recent and many of your Lordships may have heard it. It is from the speech he broadcast when the Conservative Party won the General Election of 1951, and he again formed a Government. This is what he said in his broadcast speech of December 22, 1951:
"We are resolved to make this island solvent, able to earn its living and pay its way. Without this foundation not only do we lose our chance, and even our right, to play our pant in the defence of great causes, but we cannot keep our people alive. If we cannot

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earn our living by the intense exertions of our strength, our genius, our craftsmanship, our industry, there will not be time to emigrate the redundant millions for whom no food is grown at home; and we have no assurance that anyone else is going to keep the British lion as a pet."
LORD WILMOT OF SELMESTON: What was the date of that speech?
LORD CONESFORD: December 22, 1951. In the last few words which I cited that great master of English speech used a simile, and used it not to obscure his point but to drive it home. Few men can do that. The rest of us, I think, should avoid similes and metaphors and state the necessary truths as we see them, whether popular or unpopular, with accuracy and precision.
What is inflation? Various noble Lords have had a shot at defining it, and I do not think their attempts differed very much. Not being an economist, let me make my attempt. You cause inflation when you increase the amount of money or ability to pay without a corresponding increase in the amount of goods and services offered for payment. That, at any rate, is what I understand by inflation. The result of that process is a rise in prices or (and this is an alternative way of looking at the same thing) a depreciation in the currency. It is a complete error to speak of a rise in prices as causing inflation; on the contrary, inflation causes the rise in prices. If an inflationary round of wage increases does take place, not only will prices, in fact, rise but, as the Economist recently pointed out, an even worse injury would be done to our external balance of payments if prices did not rise.
The noble Lord, Lord Winster, mentioned the trade union leaders. I think that some of them have an extremely difficult problem. May I put the point in this way? It is often said that, if this inflationary round of wage increases takes place, the country and everybody will be the worse off. That is true. But the problem, as seen by the individual leader of a particular trade union, is not quite so simple, because, if he obtains a rise for his union early, it is not true that his members will not for a time benefit. On the other hand, if, being a far-sighted man, he persuades his union not to ask for that rise at that moment,
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he has no certainty that other unions will behave in a similar way. I believe that none of us who has studied the question would exaggerate the simplicity of his task. That does not mean that it is not overwhelmingly important that trade union leaders should make every attempt to drive the truth home, and it is only fair to acknowledge that many of them do.
LORD WINSTER: I fully agree. I recognise the difficulties of which the noble Lord has spoken, and I endeavoured to emphasise the point in my speech.
LORD CONESFORD: I was not for one moment meaning to criticise the noble Lord in what I have just said. The way to stop the rise in prices is to stop the inflationary increases in the supply of money. You merely risk making things worse, instead of better, if you try to stop the rise of prices after the supply of money has increased without a corresponding increase in the output of goods and services.
I should now like to say a word or two about profits and dividends, about which I believe much error is still prevalent. I do not wish to repeat what I said on this subject in the debate on November 1 last year. If we stop inflation, that fact will make, and rightly make, profits far harder to win. But that does not mean that profits have caused the inflation, or that the nominal profits of British industry, as measured in depreciated currency, are in general too high—and in this respect I would support what has been said by various noble Lords on the necessity to provide for depreciated assets. Does anyone, irrespective of his Party, really think that it would be a good thing for the country, or for our trade balance, if the earnings of our shipping and insurance companies or our engineering industry were less than in fact they are? I do not believe it.
But if companies' profits have not caused the inflation, it is still more absurd an error to suppose that the payment of dividends is inflationary. I was glad to hear what the noble Lord, Lord Clitheroe, said on that subject. The payment of a dividend by a company to its shareholders does not increase the means of payment or the supply of money at all; it makes literally no difference of any sort in the

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supply of money. Before the payment the company has it, and can spend it or save it as the company may choose; after the distribution the shareholders have it, less tax, and they can spend it or save it as they may choose. It can be disputed which of the two, the company or the shareholders, is likely to use it in the better way; but the one thing on which it has no effect whatever is the supply of money and inflation. If there is any noble Lord who thinks that that is not so, he will expound the error when the time comes.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: I am sure the trade unions will be interested to know the exact difference in the purchasing value of that money issued in dividends and the money issued to workers as wages. One is just as inflationary as the other.
LORD CONESFORD: I do net think the noble Viscount has quite followed my point. The inflationary round of wage increases, if it is inflationary, is inflationary because, in fact, it increases the supply of money.
LORD GREENHILL: Does it?
LORD CONESFORD: Yes, often. If a great industry does agree after a certain day to pay an increased wage, for the reasons demonstrated, among others, by the noble Lord, Lord Beveridge today, the actual volume of currency and credit, the means of payment, is increased. In the case of a profit already made by a company, I am saying merely that the distribution of that profit by that company to shareholders makes no difference whatsoever to the supply of money that can be offered in the purchase of goods and services. The only difference it makes is as to those who can exercise the right.
In present circumstances, let me say at once that it is quite obvious that a great many factors will prevent a company, and rightly, from distributing increased profits which it might otherwise be in a position to do—or indeed, in some cases, from distributing a dividend at all. The company may well need, for example, an increase in fund; for investment in plant or stocks, or for other purposes. They may need it in order to build up their own reserves. They will also no doubt take into consideration the fact that future profits are threatened by the credit restric-
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tion. All those matters, quite rightly, may influence it not to distribute a dividend, or not to distribute an increased dividend. I suggest to the House that there is only one wholly improper motive for refusing to distribute profit to shareholders, and that is that the board of directors should take it upon itself to think that dividends are not good for the shareholders. That is a wholly improper motive, in morals and law.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: I take it that it is just as good for the shareholders as wages are for the workers. But if you want to have a national policy and try to restrain people from spending money on objects not so necessary to them, or even necessary articles, so as to reduce inflation, then surely you should be just as careful how you distribute your profits: whether for capital investment and "digging in" of the company, or whether for free spending by shareholders on undesirable objects.
LORD CONESFORD: I completely agree with the noble Viscount that the company should not distribute the profits if it needs the money itself for a proper object. I have said that before. I beg the noble Viscount to take the trouble to read what I said on the subject on November 1, and what the Royal Commission, whom I also cited, said on the same subject. I beg him to read that, and he will see that what I am disputing is, first of all, the question of whether a distribution of a dividend can be inflationary—if I am right in my definition of "inflation" I say it cannot. Secondly, I believe it to be quite wrong to think that the public interest will be served if a company that does not need money for any of these purposes simply refuses to distribute it to the people entitled to the equity because it thinks it is not good for them. As I say, by all means let a company refrain from increasing a dividend for any of the reasons I have suggested.
I am bound to say that when I hear a Minister say, or read that a Minister has said, to a company or companies, "Exercise restraint in distributing dividends," I think that is on exactly the same intellectual and moral level as if he were to say to a crowd of debtors, "Exercise restraint in paying your creditors." It is neither good morals nor good sense. I pray in aid the pertinent remarks which

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I quoted on a previous occasion from the Report of the Royal Commission on the Taxation of Profits and Income. I realise that it may be asked. "Even though the amount of dividends, even before the payment of tax, is trivial compared with those great increases in the means of payment which have in fact been causing inflation, even if what you say is completely true that a payment of dividend is not and cannot be inflationary in the true sense, what harm do these mistaken statements do? May it not be useful always to group dividends with these other payments, if it gives pleasure to somebody who does not understand the position? "I hold most strongly that the right way to combat an intellectual error is to expose it and to tell the truth. I do not believe you do any good by paying lip service to the error.
There is, however, a far more important reason why this nonsense about dividends should cease, and that is for a purpose which has been mentioned by a great many noble Lords on both sides this afternoon. I refer to the need to encourage savings. That need, I hope, is common to noble Lords in every quarter of the House. If dividends are not to be increased in times of inflation and when the company is successful, what hope is there that people will continue to invest their savings in British industry? If an investor in 1938 had invested his money in a representative list of English ordinary shares, he would, of course, by now have lost a large part of the real value of his investment; but he would not have lost it all. He would not have done nearly so badly as if he had invested in Government securities. I hope that inflation will cease and that it may be safe to lend pounds to the Government. Many of us have done our best on many occasions to persuade audiences to lend their money on Government investments. I hope noble Lords will also agree that we want people prepared also to invest their money in British industry. Ought not the Government to desire that an investment in British industry should be some hedge against inflation? Does anybody, whatever his politics, desire that a man shall be able to preserve his savings, if he buys something like precious stones or gold, but that he shall lose it almost inevitably if he invests it in British industry? I do not believe that any
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noble Lord, to whatever Party he belongs, really thinks that that would be a good idea.
May I say a word to my own Party, and to the Liberals? The Liberals have often advocated profit-sharing. My Party has often advocated that there should increasingly exist a property-owning democracy. The difficulty of achieving either of those aims is the method. But one method is readily available, and that is to encourage people, friendly societies, trade unions, and every sort of society, to invest in equities. It has been done very largely—the Churches do it. It is not only the private person who is interested in dividends. I say that, if we really desire that ordinary shares should be increasingly held by the public, we ought to cease all these indiscriminate attacks on the distribution of dividends. I was interested to see that the present leader of the Opposition has suggested that one of the progressive measures that might be taken by his Party was for the State to take, by way of death duties or otherwise, an increasing number of ordinary shares or stock in a company. If I understand and have followed correctly what has been said by some of the Socialist Party, the two propositions seem to be these: "Do not let dividends grow," and "Let the State share the growing dividends." Not having learnt my logic at Winchester, I find difficulty in following the two-fold argument.
The importance of the inflation with which we are faced was admirably expressed by my right honourable friend the Chancellor of the Exchequer in his recent broadcast. I think, with my noble friend Lord Balfour of Burleigh, that it is important that the Government should persist in curbing purchasing power as they are now doing. I agree with the noble Lord that the steps that have been taken are formidable. I will also say that I hope they will persist in that course until they are quite certain that it has achieved its object. I agree, too, with the noble Lord, Lord Pet-hick-Lawrence, that we must consider not only the steps that have been taken but those that will be taken very soon in the Budget. I hope that my right honourable friend, when he comes to frame his Budget, will not overlook the importance of encouraging production. All these necessities for curbing increases of wages would vanish if productivity greatly increased.

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I agree with the noble Lord who made his maiden speech this afternoon on the importance, for this purpose as for many others, of the middle classes, the professional classes and those who are prepared to take responsibility. I beg the Government to stop saying: "We have all done too well for ourselves." I was glad that the noble Earl who spoke for the Government this afternoon was careful not to say that. It is emphatically not true of the middle classes or the professional classes or, above all, of those of them who are self-employed. For them, it is urgently necessary that provision should be made in the coming Budget so that they can at least provide for their own pensions in old age. Various reports of Commissions and Committees of Inquiry have given advice to Governments on this matter. I feel sure that my right honourable friend the Chancellor of the, Exchequer will not ignore that advice. I wonder really how many people think that the figure of £2,000 as the basic figure for surtax can be justified to-day when the value of money at the time that that limit was chosen is compared with its value to-day.
I did not mean to detain the House so long. I do not believe that we can easily exaggerate this problem of inflation. I do not believe that we shall solve it, or get people to understand it, if we ever indulge in intellectual fallacies merely because we think that those fallacies will be popular in some quarters. It is quite possible to analyse and make clear the position of this country, though I agree with what many noble Lords on both sides have said on the complexity of this matter. I thought that the noble Lord, Lord Pakenham, and others were careful not to over-simplify. I hope that I have not been guilty of doing so. If I have made one point which struck another noble Lord as a novelty, I agree it is a novelty in public speech. I have listened in silence to the repetition of a fallacy until I have become sick of it. I am glad that I have been able to state the fallacy and, I hope, to expose it this afternoon. If any noble Lord thinks I am wrong, I hope that either here or outside I shall hear the answer.
I remember that in another place, if I may mention it, in a general attack on companies, one honourable Member of the Party opposite constantly referred, in terms of depreciation, to "absentee
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shareholders"—meaning, apparently, shareholders who did not live above the works. But, of course, the whole object of the great invention of the joint stock company was to enable shareholders to be absentees; it was precisely to enable people, wherever they lived, to be "profit-sharers" (in the words of the Liberal Party) or to be "members of a property-owning democracy" (in words that corn-mended themselves to our present Prime Minister). That great instrument of the joint stock company is available for the purpose. Do not let us blunt its use by talking nonsense about it.
7.7 p.m.
THE EARL OF PERTH: My Lords, I want to begin with a quotation, which has already been given to your Lordships to-day and which came from a broadcast by the Chancellor of the Exchequer when he said that since the end of the war our production had increased by 25 per cent. but that, for that 25 per cent. increase in our production, we had paid ourselves 80 per cent. more. We all have an instinctive feeling that something here is wrong; and, indeed, it is wrong, for, since the end of the war, we have had a succession of economic crises. There seems to be no better example of inflation. We have had many definitions of "inflation." I will add to the list by saying that it has been defined as "Too much money chasing too few goods"—that is to say, too much pay (80 per cent.) and spending for toe little production (that is, only 25 per cent. more production since the end of the war); or, as the noble Lord, Lord Beveridge, pointed out, more money going out for no more production.
The cure, I think, is obvious: either less money or more goods, or a combination of the two. I intend, briefly, to examine these two approaches. First, let me take "too much money." Here, I believe that the 'various monetary measures which have been taken in the last few months by the Government to restrict the supply of money have been effective, but they have worked more slowly than we all expected. The reason for that is, as we have already heard, the very large amount of spending which is outside the ordinary monetary controls—I refer to all of the Government spending, which is not really strictly within the orbit. In the private sector, however, which is within this orbit, things have

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reached a critical stage. We have a position where many companies are short of money, so short that they are unable to meet new wage demands or are unable to keep up their activity. I believe that is good—not, I hasten to add, because I am against increase in wages or increased business activity at the right time, but because the spiral of wages and prices has to be stopped. We know that, in fact, everybody prefers a steady wage to an increase in prices.
At this critical stage, the Government must not relax in their monetary measures. Indeed, I should like to take up a technical point which the noble Lord, Lord Pakenham, has already made: that is, on the question of the liquidity ratio. With him and other noble Lords, I believe that this is something which needs watching carefully, and that the magic figure of 30 per cent., which is generally held to be the right ratio, should be maintained and not allowed to get out of hand. I think that the Government and the Bank of England should examine whether there are not some unorthodox measures which can be applied to this end. If the banks are kept tight in this way they will be unable to make advances or to help out industry. Frankly, at this time I think that is what we want. It sounds very hard, but what is the alternative? I think it is bankruptcy, great unemployment and general disaster.
Now I wish to turn to the second point, which is that too few goods are being produced. Here there appears to be something of a paradox in relation to what I have said before, because if you have a tight money policy people will not be able to buy so much, and what is the point of producing goods? I think the answer is that we want more of the right kind of goods at competitive prices. What is the right type of goods?—any goods which can be exported, any goods to save imports; for example, in the latter category, agricultural products or coal. We are an island with few natural resources, and to export or die remains true. When money is plentiful at home we are apt to neglect the markets abroad. When money is tight we try hard to sell abroad.
It is argued by many that tight money is not a selective weapon in its application. While this was broadly true in the past, I think it is far less true to-day. In
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practice the Government over a large field directly control what shall be produced—for example, by their agricultural policy. Here I would plead that the Government at this moment should do everything they can to increase agricultural production and thereby to save imports. Again, there is the purchase tax on certain consumer goods; there are the hire purchase regulations and the Government's control over the huge public sector of spending. As Lord Balfour of Burleigh pointed out, if at any moment deflation shows danger of becoming too strong, it is easy for the Government to reverse its various measures. It is further argued by various people—not today in the House—that at a time of crisis we should impose import restrictions and rationing, but, at best, that is only a palliative to, and not a cure for, our ills. I think the Government are to be congratulated on not having adopted any such measures, and, indeed, on continuing, whenever they have the opportunity, to liberalise overseas trade. It must be remembered that import restrictions can breed retaliation by other countries, which could lead us to real economic difficulties and a shrinking of our overseas markets.
So much for less money and more production. There remains one important short cut to various things that we have been discussing—namely, an increase in savings. This is something which cannot be emphasised too often, and we must all welcome the knowledge that the Government are examining ways and means to increase savings. I would only ask that they try as much as they can that which is enticing and novel. In that connection I would refer once more to a suggestion I threw out a little while ago in your Lordships' House—that where wage increases are to take place, some attempt should be made to take part of those wage increases, not in immediate cash to spend, but in some deferred payment which would go into a fund for the benefit of the workers of the company. This has been tried by the big motor unions in America, with considerable success. Over there they call it a guaranteed annual wage. I am not necessarily advocating that we should follow exactly their pattern, but I suggest that it is something well worth thinking about, to see whether there is not some way in which any increase, if there is to be such

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an increase, is not immediately spend-able and thereby adding to the general run of inflation.
Our foreign exchange reserves are, as your Lordships know, our buffer against bankruptcy, and it is encouraging to see that there has been a slight increase in the last month, to the amount of £20 million. But that is not enough. There must be no relaxation. Two hundred million pounds by the end of the year would still be not enough; we must reach a figure of total reserves of £2,000 million before we can consider ourselves safe, and that represents twice what we have at the present time. These figures show that it is going to be a long and hard pull before we can recover our economic strength. But let the Government hold fast to their present monetary policy and continue every measure they can to keep money short, even though this causes temporary hard-ship. Let the people forgo industrial unrest, and let us all play our part by saving and hard work; then the country will be able to play its proper rôle in the development of the great riches of the Commonwealth, and we shall again be a strong force in world affairs, able then to improve the true living standards of all our people—that is to say, more goods for the same money.
7.18 p.m.
VISCOUNT RIDLEY: My Lords, I was particularly interested in the comment made by the noble Lord, Lord Pakenham, which was referred to by my noble friend Lord Balfour of Burleigh—namely, the relationship between the City and one or other political Parties. I always thought that what he said was perfectly true, but l think that it is truer to say that if you take a ride from Westminster and go on a long-distance train to one of the main terminal stations, you arrive in some area of manufacturing industry and you will find, on all sides, that people are no more suspicious of the members of the noble Lord's Party opposite than they are of members of the Conservative Party. I believe there is a general cynicism at the inability of consecutive Governments since the war to appreciate what the economic problem really is. There has been so much talk in catch phrases—such as "Too much money chasing too few goods," "Dash for freedom," and things like that. There has
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been too much exhortation to people to restrain their demands for what they believe they are entitled to get and can get. There is too much persuasion and nothing sufficiently definite. After all, whatever the economist may say, people will react to their surroundings, in the way that, by nature, they do react to such surroundings, and it is that part of the problem which I think must always be considered in considering there matters.
If I may digress for a moment to the subject of dividend increases referred to by the noble Lord, Lord Conesford, I would not go all the way with him in saying that an increase of dividend was less inflationary than an increase in wages. In either case the increase in spending power and free speculating power seems to have a good deal of effect, at least on the laws of supply and demand. From practical experience, I would say that the continuing rounds of demands for wage increases have had a noticeable effect on increases in dividends. It must be common knowledge to most Members of your Lordships' House that many companies have felt shy about raising their dividends to the extent they thought they ought, for fear of provoking a further round of wage demands. I have not the figures with me, because until a noble Lord mentioned the point I had not thought of touching upon it; but such figures as can be found show that the percentage increases on dividends of (here I speak carefully) manufacturing companies in this country have not kept up with the percentage increases of wages in those industries. I believe that is an inevitable result of the policies which have been followed in this country. I am not saying it is a wrong thing but I believe it to be a fact. People who invest in these companies are often those with few resources themselves. They are what is known as "the small man," and if their cost of living goes up they are entitled to some increase from time to time. They put money in at risk and are entitled to some increase in return, along with the inflation in which they are falling behind.
The main problem is a longer and much more permanent one than at first sight would appear. It is a problem of balance of payments. The figures we have heard have shown that since the war we

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have increased our exports substantially but have not yet caught up with the quantity we need to import. The result is expressed at home in an excessive demand on various of our industries. There is the parallel problem of inflation of our currency in the world of building, civil engineering, contracting, engineering, machine tool-making and shipbuilding. There are delays, increases of prices and situations which make it almost impossible for business people to look far enough ahead. Many of those conditions are due to shortage of materials and labour and to the great length of companies' order books.
It is not surprising that in that atmosphere leaders of trade unions have felt themselves in a position to bargain for wage increases. I do not think they can be blamed for doing so, within reason. Costs of imports are rising all the time. At the same time, it is understandable that many employers have willingly agreed to increases which they felt were not always justified, because they knew that, without much trouble to themselves, they could increase their price to their customers. Though not all firms are like that, I believe that in any group in industry there are always one or two who, in a wage negotiation, will take that line; and the rest have to follow. Naturally wages would have had to rise to some extent in this country after the post-war devaluation, but I doubt whether the cost of wages and materials, and the cost of living resulting, would have risen so high had it not been driven up by the excessive demand from all sources.
Turning to the exchange problem, we find that we shall have to increase our exports as more than just a temporary expedient. It is the greatest mistake to think of trying to reduce imports at present. We in this country can survive commercially over a long period only as a trading nation. We must have customers to sell to and more customers than we now have; and I believe we must have customers in more countries. We must be willing to buy back from them and must not risk retaliation in the form of restrictions against our exports. Considered in relation to the whole position of the sterling area, our reserves are negligible. Figures quoted by noble Lords this afternoon show that we must
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do something urgently. Nor must we forget that over the next seven to ten years, so far from cutting them we shall require a great deal more imports. The announced programme means much more steel and coal—the coal not imported but taken from some other use. The plans of the Electricity Authority have been published and include a substantial contribution by atomic energy. There will be a large increase in the demand for coal which must be got from somewhere. Then we still have to get food for all our people and other raw materials as the basis of the exports we must make.
This is an extremely difficult and intractable problem, but one thing to be kept in mind is that somehow we must increase exports, almost at all costs. If we do that in a rational way, we shall find that internal inflation, the excessive demand on labour and materials, will drop off. The, manufacturing resources of this country, unfortunately, are limited and there is considerable competition for them. At the present time they are used for manufacturing exports and a large quantity of them are used for defence manufactures of all kinds. Apart from manufacturing there are the supply, building and other industries which are to-day using up resources for Government expenditure of all kinds, maintaining the social services and creating productive assets in the form of new factories and plant. A relatively small proportion may be used on products of personal expenditure. If we are to increase exports, as I believe we must almost immediately do, we must reduce the resources put into one or other of these forms of expenditure.
I do not believe it is right to reduce the amount of resources we are putting into the expansion of productive capacity. We should do more than we are doing. The noble Earl who spoke for Her Majesty's Government quoted the increase in new productive capacity last year. I hope to see more this year but I have a little doubt, and I feel that some of the measures proposed under the Government's policy may have an adverse effect on that activity. In general, we must not reduce the growth of our productive capacity. I do not believe that in the long run we should reduce consumption by private individuals. It is the avowed intention of everyone to increase the

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standard of living—that is, the real standard of living—of the people of this country as much as possible. And rather than reduce the resources available for the ordinary people for their ordinary needs, we must in the long run, I believe, increase them—probably by means of further imports for that purpose, which we must earn. For the moment, we cannot earn those imports and it is inevitable that the real standard of living will not be able to jump very quickly for a short time.
What else can we reduce to make more annual resources available for the manufacture of exports? I believe that we could save quite a lot of incidental Government expenditure, particularly in relation to capital development. I do not think that it would be desirable, nor do I see any virtue in attempting, to reduce the present scale of the running of any of our social services. But I think there should be a re-examination of all the standards which the various Government Departments, and local authorities as well, adopt in the construction of new building, equipment and so on. Many of us, no doubt, could give numerous cases with which we are familiar to illustrate the need for this. It was all very well when we were a large creditor nation and were earning money all over the world. In those days we set ourselves standards of excellence for everything that was built and made in this country. We always have had, and still have, that attitude of mind; but I think we must recognise that we can no longer afford it. We must make do with makeshift sorts of improvements.
Let me give one very small example. There are many rural village schools I know which, according to plans which have been drawn up, are to be pulled down and replaced with much bigger establishments. I am fairly sure that a large number of these could well be added to and improved, and made reasonably comfortable and effective for their purpose for a good deal less money than the cost of new schools to replace them. I know that the Ministry of Education some years ago reduced the standard of accommodation required, the numbers of classrooms and so on. I believe that in present circumstances we could go much further in the direction of compromise, and probably achieve a good deal better
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results by making a total slight improvement for a large number of children, rather than a big improvement for a very small number.
Here is another illustration. There has been a great deal of discussion about the Government's proposals for pulling down the Imperial Institute. I do not profess to judge in this matter, but on the ground of economy—economy in materials, labour and expenditure—it seems to me more than likely that a satisfactory compromise could be found in that case, possibly by leaving the present building, adapting it inside, and adding to it here and there. These are all very small examples of economies which I am suggesting, but many others could be given. Road repair work, for example, is done quite magnificently to a very high standard in this country. Our roads are made up superbly. Should we not do better now to have slight improvements to a large number of roads and smaller improvements on corners? Again, I know that the attitude has been that nothing must be done through the agency of the Government or a local authority unless it is done to the highest and most elaborate standards in finish and detail. I believe that that is a matter which could well be studied with profit.
There is another matter, about which I know very little, but which I believe ought to be thought about. We have seen published figures of the demands in terms of cash to meet this year's expenditure on defence. I suggest that we must consider just how much we can, in fact, afford. Are we trying to do too much in this connection? Are we trying to do too many things? Would it not be better if we were to try to do fewer things and perhaps manage to do them a bit better? Do not we need to think of where we should concentrate our defence efforts—whether on dollar-earning areas, or on export areas, or on areas to which we hope to be able to export? Have we not to do some "re-thinking" in the light of the power we actually possess? Is it not the fact that in a military effort of any kind the strength of any country is only the effort which it cart sustain and with which it can keep itself alive? What will be our position?
Let us for a moment compare the present situation with the situation at the beginning of the last war. At that time

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normal industries were running productively and well. There had been a fairly large expenditure on defence, but by the time the war began there was a good deal of slack to take up. The defence effort, when it got fully under way, had a reducing effect on consumption industries at home. At the present time there is much less slack to take up because defence production is occupying a much higher proportion of our industry than it was before the war. As to increasing exports, if we can make available capacity, whether from the defence effort, or from Government or public authority expenditure, or whatever it may be, I believe it ought to be made clear that the capacity which notionally is freed must, in fact, be used for exports.
Here I think the Government have a responsibility. Something more must be done than merely talking about the desirability of increasing exports. Could we not, perhaps, think in rather a different way about these things? Is there no possibility of having some form of differential tax to favour the people who carry on our export trade? It may be that that is impracticable. As we all know, companies' income tax and profits tax are already hideously complicated, and one hesitates to suggest any further complication. But I do feel that something definite must be done. There must be a lead in action more than in words.
Again, could we do more than we are doing, by Government activities in the form of trade missions, by participation in trade fairs abroad? I do not know. How can we ensure that we can not only sell our goods abroad but that they are sold at the right price? How can we make sure that they are the kind of things that will sell? We have seen something which bears on that aspect in recent weeks. We know what has happened recently with regard to the sale of British-made motor cars in the home market. At the same time, there has been difficulty in maintaining exports of cars because of foreign competition. One does not like to see anything like a recession in that industry, but the recent happenings may be doing some good if the people concerned are brought to look more carefully at their products to see whether they can produce something
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which has a better chance of competing in world markets. In many other industries, while tremendous strides have been made since the end of the war in the improvement of the design and quality of goods exported, there is still a long way to go.
One further point which must not be forgotten, and which also indicates the necessity for building up our export capacity, is that there is a substantial amount of engineering and constructional work being done and exported to foreign countries as capital goods. We are fortunate in being able to do that, but we cannot expect such goods to be demanded for ever by other countries. We must also expect, in the long run, that the machines, equipment and plant we are supplying will be capable of being used in competition with our own exports. Therefore, we must think farther ahead and take any competitive steps we can. Inevitably we are being forced by the circumstances around us to look closely at what is in front of us, at the problems of inflation and at the spiral of wage increases. It is much more difficult to think of the problems which are further away, like this continuing export problem, yet that is the problem which I think, in the end, will be the more difficult to surmount. It is one which we ought to be tackling much more seriously than we are doing now.
7.42 p.m.
THE EARL OF LUCAN: My Lords, on behalf of my noble friend Lord Wilmot of Selmeston, I beg to move that the debate be now adjourned.
Moved, That the debate be now adjourned.—(The Earl of Lucan.)
On Question, Motion agreed to, and debate adjourned accordingly.

RABBITS BILL [H.L.]
LORD MERTHYR: My Lords, I beg leave to introduce a Bill to make provision for preventing the spread of rabbits; and to move that the said Bill be now read a first time.
Moved, That the Bill be now read 1a.—(Lord Merthyr.)
On Question, Bill read 1a; and to be printed.

  REPORT OF COMMITTEE ON HEDGEROW AND FARM TIMBER
  REPORT OF COMMITTEE ON HEDGEROW AND FARM TIMBER