Sitting of 4 November 1958

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
ORAL ANSWERS TO QUESTIONS
  BAHAMAS

    Trade Unions (Legislation)
    Mr. Frank Allaunasked the Secretary of State for the Colonies what draft legislation has been introduced in the Bahamas House of Assembly regarding trade unions; and to what extent the support of the Bahamas Federation of Labour has been secured for such legislation.
    The Secretary of State for the Colonies (Mr. Alan Lennox-Boyd): A Trade Union and Industrial Conciliation Bill was introduced into the House of Assembly by the United Bahamian Party in July. It received the support of all parties and was enacted in August. The President of the Bahamas Federation of Labour, who is a member of the House, moved an Amendment to provide for the automatic registration of existing trade unions, but did not obtain a seconder.
    Mr. Allaun: Will the right hon. Gentleman say whether any modifications are likely to be made following the recent visit of the Federation President to London, and, in particular, will he say whether he accepts the clause dissolving all existing trade unions and compelling them to register at the discretion of the Government industrial officer?
    Mr. Lennox-Boyd: No changes will be made. The great reception given to the Bill in the Assembly is a happy augury that it is generally accepted. I regard it as very significant that from now on there will be, established for the first time under the Bill, a proper labour department in the Bahamas under a chief industrial officer.

  SIERRA LEONE

    Financial Assistance
    Mr. John Hallasked the Secretary of State for the Colonies what requests for financial assistance have been received from the Government of Sierra Leone in recent months; and to what extent it has been possible to meet them.
    The Under-Secretary of State for the Colonies (Mr. John Profumo): A Sierra Leone delegation visited the United Kingdom in August to discuss immediate and longer term finance for development and a settlement on military expenditure. On the second part of the Question, I would refer my hon. Friend to the Written Answer my right hon. Friend gave to the hon. Member for Eton and Slough (Mr. Brockway) on 23rd October.
    Mr. Hall: Can my hon. Friend say whether the Sierra Leone Government are satisfied with the financial aid which has been promised. or do they feel that perhaps some of the more troublesome and vocal territories, such as British Guiana, for instance, have had more generous assistance?
    Mr. Profumo: I understand that in all the circumstances the Sierra Leone Government are satisfied, particularly with the fact that discussions are to be continued early next year.

    Water Supply, Freetown
    Mr. John Hallasked the Secretary of State for the Colonies what steps are being taken to improve the water supply in Freetown, Sierra Leone.
    Mr. Profumo: The principal project for improving the Freetown water supply is the Guma Valley scheme, on which all the preliminary work has been completed. The Sierra Leone Government are now considering from what source the next stage of development should be financed.

    Professor Jack (Report)
    Colonel Beamishasked the Secretary of State for the Colonies when Professor Jack visited Sierra Leone to investigate the territory's economic problems; and when, and in what form, his report will be available in the United Kingdom.
    Mr. Profumo: Professor Jack visited Sierra Leone in March this year. He submitted his report in August to the Sierra Leone Government, who are considering it. As soon as it has been published locally. copies will be made available here.

  NIGERIA

    Constitutional Conference
    Mr. John Hallasked the Secretary of State for the Colonies if he will make a statement about the outcome of the Nigeria Constitutional Conference.
    Mr. Brockwayasked the Secretary of State for the Colonies what conclusions were reached at the conference on constitutional changes in Nigeria; and what date has been fixed for the institution of independence.
    Mr. Tilneyasked the Secretary of State for the Colonies whether he will make a statement on the results of the resumed Nigeria Constitutional Conference.
    Mr. Sorensenasked the Secretary of State for the Colonies what statement he has to make to the House in respect of the London Nigerian Conference.
    Mr. Lennox-Boyd: The Conference met from 29th September until 27th October. Its Report will be laid as a Command Paper in a few days' time. The Conference reached agreement on arrangements for the attainment by the North of Regional Self-Government on 15th March, 1959; on fiscal matters; police; the handling of many aspects of the problem of minorities and many other subjects.
    Following the excellent work done by all delegations in a spirit of compromise. I was glad to be able to give an under taking that if early in 1960 the newly elected Nigerian Legislature passes a resolution asking for independence, Her Majesty's Government will agree to that request, and will introduce a Bill in Parliament to enable Nigeria to become a fully independent country on 1st October, 1960. The Nigerian leaders were at one in expressing the wish that on independence Nigeria should become a member of the Commonwealth, and should continue close co-operation in all fields with the United Kingdom. The House will.
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    I am sure, wish to join with me in welcoming these developments, and in warmly reciprocating the friendship shown by the Nigerian leaders for this country.
    Mr. Hall: Is my right hon. Friend aware that not only will, I am sure, right hon. and hon. Members on both sides of the House wish to join him in welcoming the successful outcome of the Conference, but they will wish also, I am certain, to congratulate the Federal and Regional Prime Ministers on the restraint and statesmanship which they have shown in the discussions, and, in particular. my right hon. Friend, who, while steadily diminishing the powers and responsibilities of his own Office, has added so greatly to the strength of the Commonwealth?
    Mr. Brockway: Is the right hon. Gentleman aware that this is an occasion when all of us can sincerely congratulate him on the outcome of the conference? Is he also aware that all hon. Members desire to extend their congratulations to all the Nigerian delegates who showed such statesmanship? Is it not a decisive occasion when half of the non-self-governing part of the British Empire becomes part of the Commonwealth?
    Mr. Lennox-Boyd: I am grateful for what has been said, and I particularly thank my hon. Friend the Member for Wycombe (Mr. John Hall) for his very generous words about me.
    Mr. Tilney: While adding my congratulations to my right hon. Friend, is he fully satisfied that the future of minorities will he safeguarded?
    Mr. Lennox-Boyd: I am satisfied that the responsible leaders in Nigeria all recognise the very genuine fears felt by large numbers of minorities, and that they also recognise that by their handling of those fears and their efforts to put those fears to rest will turn whether what we arrived at a week or so ago will be justified. I am convinced that they recognise that, and on that I pin my hopes for the future.

    Fernando Po Workers (Treatment)
    Mr. E. L. Mallalieuasked the Secretary of State for the Colonies if he is now satisfied with the treatment received by Nigerian workers in Fernando Po.
    Mr. Profumo: Yes, Sir. The Acting Governor-General reports that, under the provisions of the revised Labour Agreement between the Nigerian and Spanish authorities, the great majority of the Nigerian workers are afforded satisfactory treatment, privileges and protection.
    Mr. Mallalieu: May we assume from that Answer that the Federal Government are satisfied?
    Mr. Profumo: Yes. After some time, I think there is now satisfaction everywhere about this problem.

  HONG KONG

    Working Hours
    Mr. Jayasked the Secretary of State for the Colonies what progress has been made in introducing legislation in Hong Kong for the limitation of working hours in factories.
    Mr. Lennox-Boyd: Conditions of industrial employment have been carefully reviewed by the Hong Kong Government during the past six months. As a first step in the Government's aim to raise minimum standards, the Commissioner of Labour is making new regulations to restrict the hours of work of women and young persons in industry The regulations will be laid before the Legislative Council tomorrow and, if approved, will come into force on 1st January, 1959

  CYPRUS

    Situation
    Mr. Brockwayasked the Secretary of State for the Colonies if he will make a statement on the situation in Cyprus.
    Mr. K. Robinsonasked the Secretary of State for the Colonies if he will make a statement on the present situation in Cyprus.
    Mr. Lennox-Boyd: Her Majesty's Government have made it clear that they will go ahead quietly and unprovocatively, of course, with the arrangements contemplated under their seven-year plan.
    E.O.K.A. terrorist acts continue. These have taken the form of road mines directed against Security Force patrols,
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    acts of sabotage, and murders of unarmed Greek Cypriot and United Kingdom civilians. In their campaign to rid the island of violence, the Security Forces have been successful in the capture of many terrorists and quantities of arms and explosives.
    Mr. Brockway: Is the right hon. Gentleman aware that we on this side of the House have denounced acts of terrorism directly to the Cypriot people just as strongly as have any hon. Members opposite? However, does he not realise that his plan for Cyprus is absolutely impossible? Will he make two declarations: first, that just as the Greek Cypriots have laid aside Enosis he will lay aside partition; and secondly, he will add to his proposals the election of a democratic national assembly for Cyprus?
    Mr. Lennox-Boyd: I do not recognise that the plan is unworkable, but there is a later Question to my right hon. Friend the Prime Minister on that matter.
    Mr. Robinson: Does not the right hon. Gentleman appreciate that the Government's failure to meet the concessions of Archbishop Makarios by any kind of concession of their own is simply throwing power, influence and initiative more and more into the hands of the extremists? Is that what he really wants in Cyprus?
    Mr. Lennox-Boyd: What the hon. Gentleman says is not quite accurate. The suggestion of Archbishop Makarios was rapidly overtaken by the discussion at N.A.T.O. for a conference. We then made it clear that we were ready, in addition to the discussion on the British seven-year plan, to discuss also long-term solutions. This long-term solution could certainly have been one of those discussed, and that was the forum in which it should properly have been discussed.
    Mr. Callaghan: That being so, why could not the Government have accepted M. Spaak's provisional plan as a basis for discussion, instead of insisting on the counter-discussion of their own plan? Did not the points contained in M. Spaak's plan meet the position put forward by the Government and later, as amended, by the Opposition? In those circumstances, what could be the basis for refusing it as an agenda?
    Mr. Lennox-Boyd: It is quite clear to those who have carefully studied the White Paper, which the hon. Gentleman has in his hand, that we were quite prepared to have our interim plan and long-term solutions discussed, including the effect on the latter of the short-term plan as well as the merits of the proposed long-term plans themselves. There was nothing whatever to prevent any of those plans being discussed—had a conference been held.
    Mr. Callaghan: That being so—and I do not know what opportunity we shall have of discussing it—what prevented the Government from accepting M. Spaak's proposals, which contained all the elements of the plan? Is the right hon. Gentleman aware that he will get no solution to this problem unless he is willing to yield on some of the procedural points which seem to some of us to be of little moment in comparison with the tragedy which is taking place at this moment?
    Mr. Lennox-Boyd: No fair-minded reader of that document would doubt that we were ready to acquiesce in procedural suggestions and changes. The proposals put forward by M. Spaak, and other proposals, should properly have been discussed at the conference.

    Mrs. Cutliffe (Murder)
    Mr. K. Robinsonasked the Secretary of State for the Colonies if he will make a statement on the incidents that followed the murder of Mrs. Cutliffe in Famagusta, indicating the extent of personal injury and damage to property suffered by the civilian population; and to what extent deaths of civilians were attributable to actions of British troops or security forces.
    Mr. Lennox-Boyd: As the Answer is necessarily rather long, I will, with permission, circulate it in the OFFICIAL REPORT.
    Mr. Robinson: Is the right hon. Gentleman aware that we all share the horror which has been expressed at the murder of Mrs. Cutliffe, but that some of us felt an equal horror and sense of shame when we read a report of the incidents which followed this murder? Can we be assured that the strict military discipline which we can properly expect
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    of British troops will be maintained in the future, even in the face of strong provocation?
    Mr. Lennox-Boyd: I think that the conduct of British troops over the years has been such that the whole House can be proud. I find it difficult to think that the phrase "equal horror" could properly be applied to our reactions to cruel murders and, on the other hand, to our reactions to the natural indignation and disgust of the Security Forces in Cyprus at the form which some of these recent murders have taken. Although I will not anticipate my long Answer—and this is so important a matter that the Answer is iong—I hope that none of us will forget that if there were to be any hope of arresting the assailants on that day, speedy and very rigorous action was necessary.
    Mr. Callaghan: I am very willing to wait to read the statement, but may I ask two questions? First, is it based upon the inquiry which was instigated by the military authorities after the report that these incidents had taken place? If that is so, it will be tantamount to giving us a view of the report which was made to the military authorities. Secondly, will the right hon. Gentleman bear in mind that, whatever the feelings of hon. Members on either side of the House, I trust that there is no one in the House who will defend any breakdown in discipline among the Services of this country which could lead to the death of innocent people in the course of fulfilling military duties? If it were thought that this House were giving way to that sentiment, it would be a very bad thing for all of us.
    Mr. Lennox-Boyd: I think the hon. Member will agree that there has been no breakdown of discipline. Under what, I think, must be almost unexampled provocation, our troops and Security Forces have behaved with exemplary patience and restraint. As to the form of my Answer, it is based on the information available to me. I do not intend to publish every report that the Governor may receive, and hon. Members must not expect me to do so. I am sure that if they were in my position they would do the same, The Answer is a very full Answer to the Question which I have been asked.
    Following is the Answer:
    On the afternoon of 3rd October gunmen attacked two English women leaving a shop in Varosha, killed one and wounded the other. The daughter of the murdered woman was able to give a description of the attackers.
    Standing Orders exist that whenever a murder takes place sirens are blown which inform the security forces that an immediate curfew is to be imposed in the particular area. This makes it possible to arrest all likely assailants for screening. If there were to be any hope of arresting the assailants in this instance quick and inevitably drastic action was essential. Orders were given to round up all youths, and road blocks were established, as well as cordons to prevent people leaving the town. About a thousand were arrested and taken to holding centres, from where they were released later that night after questioning. Many tried to escape and to resist arrest. In the course of this operation two Greek Cypriots died and a number were injured. Twenty-one were detained in hospital. All but one have now been discharged. The inquests on the two men who died are due to take place on 13th November. Damage was also done to a few motor vehicles and to some shops.
    I regret that injuries and damage resulted from this operation, but I am satisfied that in view of the speed with which it had to take place, the large numbers who had to be arrested in so short a time and the fact that many sought to resist or escape arrest, some use of force was inevitable
    The Governor and military commanders have repeatedly given the most explicit orders against any form of ill-treatment of the civilian population, but after this particularly horrible crime the Security Forces in Famagusta itself were disgusted and angered. This was hardly surprising and was, indeed, anticipated by the local military commander, who immediately gave orders against any form of retaliation. The Governor and Director of Operations, who both went to Famagusta after the attack on the women, at once confirmed these orders. As hon. Members will know, reports of ill-treatment on this and other occasions have been deliberately and systematically fabricated or exaggerated, and I repeat that the record of all Security Forces over the years of terrorism has been one of strict discipline and admirable restraint.
    Mr. Wallasked the Secretary of State for the Colonies whether the weapon that killed Mrs. Cutliffe in Cyprus has been identified; and to what extent tests have shown that this weapon has been used in other murders.
    Mr. Profumo: Investigations into the murder are still being made, and it would not be appropriate for me to give details at present, particularly as the inquest has not yet been held.

    Deaths (Post-Mortem Examinations)
    Mr. Wadeasked the Secretary of State for the Colonies what answer has been given to the proposal by the Human Rights Committee of the Cyprus Medical Association that one of its members should be present at the post-mortem of persons who die while in the hands of the Security Forces in Cyprus.
    Mr. Profumo: The Governor is considering the representations made to him on 23rd October.
    Mr. Wade: While recognising the extreme provocation with which our troops are faced, and for which the troops themselves are not to blame, may I ask the Minister whether it would not be wise to take any opportunity that presents itself to provide evidence to the people of Cyprus and the world that no unnecessary violence is used by the Security Forces, in spite of that provocation?
    Mr. Profumo: I am sure that the Governor will have all those matters in mind when he considers the representations.

    Pamphlets
    Mr. Wallasked the Secretary of State for the Colonies why the official pamphlets entitled, "Corruption of Youth in support of Terrorism in Cyprus," and, "Church and Terrorism in Cyprus," have not been distributed in that island.
    Mr. Profumo: Some thousands of both pamphlets were distributed last year in Cyprus.
    Mr. Wall: Is my hon. Friend aware that very few members of the British community have seen the pamphlets, and will he undertake to give them even wider circulation? Is he aware that this kind of incident gives the impression that the Security Forces are kept too much on the defensive?
    Mr. Profumo: I do not think any useful purpose would be served by circulating these documents at this stage, but if my hon. Friend or any other hon. Members would like a copy of the documents, I will certainly see that they get them.

  NORTHERN RHODESIA

    Constitution
    Mr. Brockwayasked the Secretary of State for the Colonies what provision he has made to amend his proposals for the Constitution of Northern Rhodesia in the light of the further representations he has agreed to receive from the United Federal Party members of the Executive Council, in view of the Order in Council already issued authorising electoral arrangements.
    Mr. Wadeasked the Secretary of State for the Colonies whether he will make a statement on the proposed new Constitution for Northern Rhodesia and the proposals which he has made for its modification.
    Mr. Creech Jonesasked the Secretary of State for the Colonies what reply has been made to the Federal Prime Minister regarding the proposed constitutional changes in Northern Rhodesia and his demand for further discussions on the matter; and what changes Her Majesty's Government propose to introduce in the light of Sir Roy Welensky's representations regarding the Secretary of State's proposals.
    Mr. Lennox-Boyd: My right hon. and noble friend the Commonwealth Secretary has informed the Federal Prime Minister that, if immediately after the Federal election, a Federal Minister wished to visit London to discuss further the representations which the Federal Government have made, Her Majesty's Government would be glad to receive him. I have also received other representations which I am considering. To a considerable extent, these various representations repeat different points of view which were before me when I reached the conclusions which I conveyed to the Governor in my despatch of the 10th September. But I think that it would be best to confine myself at present to giving an assurance that I would at once inform the House if I decided that it was right to make any changes.
    Mr. Brockway: Is the right hon. Gentleman aware that the objection appears to be that there are to be two African members of the Executive Council? In view of the decisive effect which this may have on race relations
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    in Northern Rhodesia and the impossibility of dealing with this matter by question and answer, will the right hon. Gentleman fulfil his promise, given before the Recess, that we shall have an an opportunity to debate the whole subject?
    Mr. Lennox-Boyd: Certainly, Sir.
    Mr. Creech Jones: What is the status of the Federal Government in respect of the constitution of what is really a British Protectorate? Secondly, did any representations come from the Federal Government before the Secretary of State announced his general plan?
    Mr. Lennox-Boyd: The right hon. Gentleman will remember that it was said at the time of the formation of the Federation that the Federal Government would be brought into the picture when constitutional changes for the Northern Territories were proposed. I certainly did receive representations from the Federal Government before I made my statement in the House.
    Mr. Wade: May I raise a matter which appears to be of over-riding importance? Does the right hon. Gentleman agree that the disappointing progress in the registration of African voters is due primarily not to apathy but to suspicion of the whole constitutional development in that Territory? Is he not aware that any step which appears to be weighing the scales against the Africans may do untold harm? Will he keep that in mind in proposals which he puts forward, or is asked to approve?
    Mr. Lennox-Boyd: I will certainly hear that very interesting thought very much in mind.

    Gwembe District (Disturbances)
    Mr. Sorensenasked the Secretary of State for the Colonies how many were killed and wounded in the Gwembe area of the Zambesi Valley in early September arising from the need of transferring tribesmen from that area; whether any further disturbances have taken place; and what action has been taken to ensure that the tribesmen in that area are fully acquainted with the reasons for the removal of population.
    Mr. Lennox-Boyd: The Governor has informed me that, when attempting to

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    enforce an order for villagers to move from an area to be flooded to new settlement areas provided for them in the Gwembe District, officials of the Native Authority and of the Provincial Administration met with armed resistance. Determined charges were made by men armed with spears against the official party supported by police re-inforcements.
    In the resulting police action, I am very sorry to say that eight villagers were killed and 22 injured. There were no subsequent disturbances and the move has now been completed. Extensive efforts had been made to prepare the villagers for the need to move over two and a half years. The Governor has appointed a Commission to inquire into the circumstances, and it is still sitting. The Report will be published.
    Mr. Sorensen: Was the resistance on the part of those who were to be transferred from the area? Were any killed or wounded on the side of the forces trying to effect the transference?
    Mr. Lennox-Boyd: It will be much better to wait until the Commission has reported.

  MALTA

    Dockyard (Commercial Use)
    Mr. Awberyasked the Secretary of State for the Colonies what progress has been made in the conversion of the five Admiralty docks at Malta for commercial use; when it is anticipated that they will be turned over; what will then be the estimate of the assets; and what proportion of the present employees is likely to be employed when the transfer is completed.
    Mr. Lennox-Boyd: Until the plans of Messrs. C. H. Bailey have reached a more advanced stage, I cannot give details of progress made in the conversion of the dockyard for commercial use. Nor is it practicable to give any estimate of the value of the assets to be handed over. As I told the House on 31st July, it is planned that the commercial company being formed for the purpose should assume responsibility some time in 1959. Considerable progress in planning the take-over has been made, and T hope shortly to make a further statement.
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    As regards the last part of the Question, I informed the House on 31st July of the grounds which Her Majesty's Government have for confidence that the prospects of continuing employment for the Dockyard's labour force are good. Since then a representative of Messrs. Bailey's has stated in Malta that when they take over none of the Dockyard workers will be discharged for redundancy.
    Mr. Awbery: When the agreement has been completed, will the Minister give the full details of it to the House and will he see that some clause is inserted in it to protect the present employees of the dockyard?
    Mr. Lennox-Boyd: I will certainly look into that.

    Future
    Mr. Rankinasked the Secretary of State for the Colonies whether he has any further statement to make on the future of Malta.
    Mr. Wallasked the Secretary of State for the Colonies what Maltese political parties will be represented at the forthcoming constitutional talks in London.
    Mr. Lennox-Boyd: I have recently invited delegations representing the Malta Labour Party, the Malta Nationalist Party and the Progressive Constitutional Party to come to London on 17th November for talks on future constitutional arrangements for Malta. Until these talks have taken place, I cannot say anything new about Her Majesty's Government's policy with regard to integration or any other constitutional course.
    Mr. Rankin: In view of the statement made by Mr. Mintoff, which is published in The Times today, will the right hon. Gentleman now reaffirm the promise which he made in reply to Mr. Mintoff's letter of 10th October that the question of the dockyard transfer will appear on the agenda at the conference on 17th November?
    Mr. Lennox-Boyd: We have announced a decision about the transfer of the dockyard to Messrs. Bailey, and steps are being taken to carry that out. I am absolutely convinced that it is in the best interests of the continuing employment of the people of Malta. But

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    Her Majesty's Government have no wish or desire to exclude economic discussions from the scope of the forthcoming talks.
    Mr. Wall: Will the other Nationalist Party, the newly formed Democratic Nationalist Party, also be included in the talks?
    Mr. Lennox-Boyd: That needs consideration.
    Mr. Callaghan: I want to follow up the question by my hon. Friend the Member for Govan (Mr. Rankin), because, as the Colonial Secretary knows, the dockyard is of overwhelming importance to the economy of Malta and it would be quite wrong in a conference of this sort if discussions about its future were excluded. If that were done, economic discussions would have no reality. Can the right hon. Gentleman therefore be more forthcoming and say that the question of its future and explanations of the use to which it is proposed that it shall be put, and other legitimate discussions. will take place at the conference?
    Mr. Lennox-Boyd: I should certainly have incurred the censure of the House if we had delayed taking action about the dockyard until a constitutional conference assembled in November. Much progress has been made in what will be the surest guarantee of continuing employment of the people of Malta. We are, of course, ready to discuss the working out of this plan with representative leaders. May I say how helpful it would be if the trade union concerned in Malta wore now in continuous touch with Messrs. Bailey.

  BRITISH SOMALILAND

    Constitution
    Mr. Rankinasked the Secretary of State for the Colonies if he will make a statement on the result of his discussions with the Governor on the constitutional future of the British Somaliland Protectorate.
    Mr. Lennox-Boyd: My discussions with the Governor are not complete, and I cannot therefore make a statement yet.
    Mr. Rankin: Will the right hon. Gentleman bear in mind the urgency of coming to a conclusion quickly and putting the proposals into operation as soon
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    as he can? Can he now say whether it is intended to have Somalis on the Executive Council?
    Mr. Lennox-Boyd: Even in small ways —as the hon. Gentleman ingeniously tries to make me do—I cannot anticipate my discussions with the Governor, who does not arrive in London until tomorrow morning.

    Commission on Somalisation of Public Services
    Mr. Albuasked the Secretary of State for the Colonies if he will state the names of the Chairman and members of the Commission on the Somalisation of the Public Services in the Somaliland Protectorate.
    Mr. Profumo: The Chairman of the Commission is Mr. R. J. C. Howes, M.B.E. The members have not yet been appointed.

    Unofficial Membership of Legislative Council (Report)
    Mr. Albuasked the Secretary of State for the Colonies whether he has now received the comments of the Governor of the Somaliland Protectorate on the Report of the Commission on Unofficial Membership of the Legislative Council; and whether he will make a statement.
    Mr. Lennox-Boyd: I have received and am considering the Governor's recommendations. He is returning to London for further discussions this week—to morrow, actually—and I am therefore unable to make any further statement now.
    Mr. Albu: While we all welcome the announcement made by the Chancellor of the Duchy of Lancaster of an increase in propaganda and information services, will the right hon. Gentleman recognise that speed in actual Somalisation and constitutional advance is likely to have a more impressive effect upon the inhabitants?
    Mr. Lennox-Boyd: I think that is very important when coupled with efficiency.

  UGANDA

    Mr. Allimadi
    Mr. S. O. Daviesasked the Secretary of State for the Colonies why Otema Allimadi, the Permanent Secretary of the

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    Uganda National Congress, was arrested by the Colonial authorities upon his arrival in Uganda from Sudan; and what were the specific charges made against him.
    Mr. Profumo: Mr. Allimadi was arrested on entering Uganda after Customs authorities found prohibited publications in his baggage which he had not declared. He was charged with importing into Uganda certain publications of the International Union of Students.
    Mr. Davies: Is it not surprising that the hon. Member has not given a list of the prohibited publications which have justified this charge? Is it not true that the prohibited publications amounted to scholarship forms of the International Union of Students and pamphlets dealing with conditions of entry for tuberculosis patients to the Afro-Asian Students' Sanatorium? Are not those the charges which were made, and is that the reason why the hon. Member has concealed them from the House?
    Mr. Profumo: I do not think I have concealed anything. I have just been rereading the Question and I think that I have answered it very fully. The hon. Member is right that among the papers which were seized were forty-six scholarship application forms for the International Union of Students, which is a Communist Front organisation.

    Mr. Engur
    Mr. S. O. Daviesasked the Secretary of State for the Colonies what was the nature of the forbidden publications found on, and what were the grounds for the charge of sedition made against, Mr. Engur, Vice-President of the Uganda National Congress, who was sentenced to two years' imprisonment.
    Mr. Profumo: Mr. Engur was charged in October, 1957, with uttering words with seditious intent—at a meeting in the Lango District of Uganda and with possessing a proscribed publication, namely, a copy of Forum ", Vol. 10, No. 34.
    Mr. Davies: Will the hon. Member please enlighten the House and tell us what is in that copy of "Forum" which has made it necessary to arrest this innocent man?
    Mr. Profumo: I did not want to take too long in giving the full details, but I will certainly write to the hon. Member or circulate in the OFFICIAL REPORT what were the seditious utterances which gave rise to this charge.
    Mr. Stonehouse: Is the Minister aware that there have been many pointless seditious cases pursued in Uganda in the last years which have had only the effect of bringing the authorities into disrepute?
    Mr. Profumo: I certainly do not accept that.

  NYASALAND

    Chief Kuntaja
    Mr. Stonehouseasked the Secretary of State for the Colonies whether recognition has now been withdrawn from Chief Kuntaja of Nyasaland; and for what reasons.
    Mr. Lennox-Boyd: No, Sir.
    Mr. Stonehouse: What action has been taken against Chief Kuntaja in the last few months, in view of his opposition to federation?
    Mr. Lennox-Boyd: The Chief has been warned that if he continues his present activities his position as Chief will have to be reviewed. The House should remember that the combined rôle of Nyasaland chiefs is both that of traditional heads of the local instrument of government and the statutory duty as heads of native authorities to preserve law and order and maintain good government. That is not a difficult double normally, but I am determined that it shall be preserved.
    Mr. Stonehouse: If it is the policy to depose chiefs opposed to the Federation, how are replacements to be found?
    Mr. Lennox-Boyd: Of course, that is not the case. There are very many ways in which chiefs can make their views known without necessarily indulging in some of the activities in question.

  KENYA

    Lokitaung Prison
    Mr. Stonehouseasked the Secretary of State for the Colonies how many prisoners are detained at Lokitaung

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    Prison, Kenya; what is the number of warders at this prison; and what is the number of unofficial visitors the prisoners have received.
    Mr. Profumo: There are live convicts serving prison sentences and one detainee at Lokitaung. The prison staff consists of one sergeant, one lance corporal and six warders. Four unofficial visitors have visited the prisoners.
    Mr. Stonehouse: Why is it considered essential to keep these six men in such an isolated place, to all intents and purposes without contact with the outside world?
    Mr. Profumo: That is a very much wider question. Perhaps the hon. Gentleman would put it down.

  CENTRAL AFRICAN TERRITORIES

    Federal General Election (Voters)
    Mr. Callaghanasked the Secretary of State for the Colonies how many ordinary and special voters are now registered in each of the Central African Territories for the second Federal General Election; and how this compares with the estimates given in this House on 25th November, 1957, and 18th February, 1958, of those entitled to vote.
    Mr. Stonehouseasked the Secretary of State for the Colonies how many Africans are registered on the ordinary and special rolls, respectively, in Northern Rhodesia and in Nyasaland; what is the proportion of such voters to the total adult African population in each territory; and how this compares with the estimates given in this House on 25th November, 1957 and 18th February, 1958.
    Mr. Lennox-Boyd: The information sought in the first part of the Questions relates to a matter within the sole responsibility of the Federal Government. The second part of the Questions does not therefore arise.
    Mr. Callaghan: The second part of the Question deals with the estimates originally given by the Colonial Secretary. Are we now to be told that the estimates cannot be either proven or dis-proven, because he refuses to give us
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    the figure on which he relied when he placed this matter before the House? Is it not the case for the African representatives that there will be 85,000 European electors and less than 1,000 African electors, and does not this make a mockery of all he told us and a farce of the election?
    Mr. Lennox-Boyd: No, Sir. I think the hon. Gentleman knows me well enough to know that I would gladly give the figures and open myself to any necessary criticism, but constitutional proprieties must be observed. Her Majesty's Ministers were responsible for advising Her Majesty to make a change in the Constitution and are still convinced that provision was made to give an opportunity for all Africans to participate to an adequate extent in the government of the Federation, but we are not responsible for the use made by the Africans of the opportunities provided for them.
    Mr. Stonehouse: Will the right hon. Gentleman look again at Question No. 31? Cannot he now give the numbers of those registered on the ordinary and special rolls in Northern Rhodesia and Nyasaland for the forthcoming territorial elections? Surely he should give that information to this House.
    Mr. Lennox-Boyd: Territorial elections are, of course, another matter and are my responsibility. I will certainly answer any Question that falls within my responsibility, but the Federal answer must rest on the answer I have given.
    Mr. Callaghan: Is not this election one which Her Majesty's Government recommended to this House should take place, and is not it the case that the British Government are a party to the Federal Constitution? How can the Colonial Secretary shield behind a procedural issue of this sort? Ought he not to be more willing to examine the reality of the situation, and does not he realise the tension building up in Central Africa at the present time?
    Mr. Lennox-Boyd: The numbers can be conveyed to the hon. Gentleman, as he knows very well, but I cannot assume responsibility in this House for something which constitutionally I should not do.
    Mr. Stonehouse: On a point of order, Mr. Speaker. May I ask for your

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    guidance? Question No. 31 is a Question which is clearly within the responsibility of the Colonial Secretary and of this House. May I, therefore, ask if a Question like this will have a reply in this House?
    Mr. Speaker: That is not a point for me. The Colonial Secretary is the judge of his own responsibilities, and he said that this is not his responsibility. I must accept his word for that.
    Mr. Brockway: Further to that point of order, Mr. Speaker. The right hon. Gentleman has admitted that he is responsible for the ordinary and special rolls in the territories of Northern Rhodesia and Nyasaland. A Question is put to him upon that matter and he has failed to answer it. I understand that my hon. Friend is asking if, in view of this failure, he puts the Question down again he may have an answer on an issue for which the right hon. Gentleman has accepted responsibility.
    Mr. Lennox-Boyd: In answer to that and on a point of explanation, may I say that I am responsible for answering Questions on the Northern Territories of Northern Rhodesia and Nyasaland, and I will certainly answer Questions on them. I understood that these two Questions related to the Federal roll. [HON. MEMBERS: "No."] If I am in error, I apologise to the hon. Gentleman, and I will certainly give him the information on that, but I cannot give the information asked for by the hon. Gentleman the Member for Cardiff, South-East (Mr. Callaghan), for reasons which I have explained. On the other hand, I will certainly give the information as soon as it is available.

  COLONIAL TERRITORIES

    Technical Assistance
    Colonel Beamishasked the Secretary of State for the Colonies what fresh plans are being made by Her Majesty's Government to set up an organisation on the general lines of the Colombo Plan, in view of the Canadian offer of an initial sum of $500,000 for technical help to Commonwealth countries in Africa; which countries and territories are likely to be recipients of aid; what form it will take; and how, by whom, and on what scale it will be financed.
    Mr. Lennox-Boyd: The Canadian Government's generous offer is, as we understand it, independent of the question of any new formal organisation. A new international technical assistance scheme, the Foundation for Mutual Assistance in Africa South of the Sahara, was established in February this year. The United Kingdom Government have no present plans to set up a further organisation.
    Colonel Beamish: Since technical aid for these territories in Africa is of first importance, and since some of us think that progress for its provision has been disappointing, may I ask my right hon. Friend to apply his usual energy and imagination to this development and also ask him which Government Department is responsible for co-ordinating this?
    Mr. Lennox-Boyd: I will certainly apply all the imagination and energy I have to this most important matter, which affects both myself and my noble Friend the Secretary of State for Commonwealth Relations.
    Mr. Dugdale: Is the right hon. Gentleman saying that the Government do not intend to follow the lead set by the Canadian Government and do not intend to set up any new organisation giving any technical help to either Africa or any of the other Colonial Territories?
    Mr. Lennox-Boyd: I do wish the right hon. Member had listened to the Answer which I gave. Canada's generous offer was independent of the question of another formal organisation, but if in their view and in our view another formal organisation is necessary, it will be set up. What matters is getting on with the job and not duplicating agencies.

  ADEN PROTECTORATE

    Situation
    Mr. Sorensenasked the Secretary of State for the Colonies to what extent subversion continues in the Aden Protectorate; who has been appointed to replace the Sultan of Lahej; what progress has been made in respect of the proposed Federation of Protectorate territories; and how far consideration has been given to the proposal to ask a

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    United Nations or other independent body to make inquiries on the extent of a desire of the tribes in the Protectorate for union with the Yemen.
    Mr. Lennox-Boyd: Subversion of Aden Protectorate tribesmen by the Yemeni authorities still continues, but has recently been less successful. Indeed, a number of dissidents, particularly those of Lahej, have recently returned to their allegiance
    The electoral college of Lahej have not yet proceeded to the election of a new Sultan.
    Progress has been made in the preparatory work for the Federation, and the rulers will shortly be discussing with the Governor details of the constitution and other practical arrangements.
    No desire for union with the Yemen has been expressed by any Protectorate tribes; the kind of inquiry suggested by the hon. Member would serve no useful purpose, and be strongly resisted by the Rulers and people of the Protectorate.
    Mr. Sorensen: May I ask the right hon. Gentleman. first, whether there is lighting still taking place along the frontier, and secondly, is it not true that in fact there is subversion in the Protectorate, which is an indication that some, maybe a minority, in the Protectorate desire some kind of union with the Yemen? In those circumstances, would not it be better to try to publicise the facts of that request? In view of incidents in Aden in the last two or three days, there is evidence of subversion in Aden itself, and would he, therefore, say a word on that?
    Mr. Lennox-Boyd: There is no desire whatever among the people of the Protectorate for union with the Yemen. No inquiry is necessary to establish that fact. In regard to the situation in Aden, I answered a Question yesterday. A good deal of the trouble in Aden comes from immigrant Yemeni workers. I am glad to say that considerable numbers of them have been expelled yesterday to the Yemen.
    Mr. Sorensen: Has not the right hon. Gentleman forgotten to answer my first supplementary question about fighting along the frontier?
    Mr. Lennox-Boyd: I am sorry. I am glad to say that the frontier is comparatively tranquil at the moment.

  BRITISH GUIANA

    Coconut Industry
    Sir R. Robinsonasked the Secretary of State for the Colonies when it is proposed to establish a coconut nursery in the north-west area of British Guiana; and what plans there are generally for developing coconut cultivation in the Colony.
    Mr. Profumo: A coconut nursery was recently established in the Moruca area in the North West District, from which it is hoped to provide, in 1959, some 20,000 seedlings to be distributed to farmers in the area. Other nurseries have been established on the coast to produce in 1958–59, some 70,000 seedlings from selected high yielding parents. Other plans for the development of coconut cultivation include increased loans to producers to stimulate production; special attention by the Agricultural Department to the control of pests; the use of fertilizers, and the general rehabilitation of existing plantations.

    Coir Products
    Sir R. Robinsonasked the Secretary of State for the Colonies what plans are being made for the production of coir products on a cottage industry basis in British Guiana; and what assistance is being given by the Government of British Guiana to the project.
    Mr. Profumo: As the answer is rather detailed, I will, with permission, circulate it in the OFFICIAL REPORT.
    Following is the Answer:
    Plans for the production of coir yarn on a cottage industry basis were made in December, 1957, and experimental work was begun in February this year by the Minor Industry Unit of the Ministry of Trade and Industry in British Guiana. Two primary school teachers, who received training in India in coir techniques during 1957, were seconded to the Unit, and are training family groups in the production of coir and coir yarn. These groups will he provided with spinning wheels on a credit basis and yarn which they produce will be purchased by the British Guiana Government at a guaranteed price. If successful, the scheme will be extended to other rural areas and the industry developed on a co-operative basis.
    The Minority Industry Unit has also been experimenting with the use of coir in the production of brooms and brushes, and favourable reports have been received on samples of bristle seen by manufacturers in the United Kingdom.

  BARBADOS

    General Hospital
    Mr. Blenkinsopasked the Secretary of State for the Colonies when a start is to be made with the building of a new general hospital in Barbados, in view of the overcrowded and dilapidated conditions in the existing buildings.
    Mr. Profumo: The planning of the new general hospital is now largely completed. I understand that the Barbados Government intend to begin construction as soon as possible.
    Mr. Blenkinsop: While welcoming that statement, may I ask the hon. Gentleman to do all he can to speed up the actual beginning of construction because of the appalling situation of beds being shared by two or three patients, and the almost impossible conditions for those who work in the hospitals?
    Mr. Profumo: I appreciate the hon. Gentleman's observations. When the matter is addressed to my right hon. Friend he will examine it very urgently.

  SOLOMON ISLANDS

    Ships (Losses)
    Mr. Peelasked the Secretary of State for the Colonies whether he has yet considered the report from the commission of inquiry into the loss of the m.v. "Melanesian" with 60 people on board on 10th July between Malaita and Sikaiana in the Solomon Islands Protectorate; whether anything is now known as to the cause of the disaster; and why three days were allowed to elapse between the expected date of arrival at Sikaiana and the institution of a search.
    Mr. Profumo: No, Sir. I am expecting to receive the report shortly from the High Commissioner, Western Pacific with his comments. I understand that the Commission of Inquiry found no evidence to show the cause of the disaster. I am sure the House will join
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    Her Majesty's Government in expressing their profound sympathy with the relatives of all those lost.
    Mr. Peelasked the Secretary of State for the Colonies whether he will make a statement on the loss, in July last, of the medical vessel "Betua" at Manawai in the Solomon Islands Protectorate; and, in view of the fact that the loss of this ship, as well as that of the m.v. "Melanesian" in the same month, has left the Protectorate with an inadequate patrol fleet, what steps are being taken to meet the inter-island transport needs of the British Solomons.
    Mr. Profumo: Yes, Sir. The "Betua" struck a reef whilst proceeding to the rendezvous for the search of the missing "Melanesian". Several attempts to refloat the vessel had to be abandoned but most of the equipment, including the engines, was salvaged. Fortunately there was no loss of life.
    The loss of the two vessels has been a very serious blow to the Protectorate fleet, but every effort is being made to meet their needs. It is hoped that one second-hand vessel may shortly be purchased and a search for a replacement for the "Melanesian" is continuing. Approval in principle has been given by Her Majesty's Government for the necessary funds.

  JAMAICA

    Banana Industry (Discussions)
    Mr. Royleasked the Secretary of State for the Colonies what decisions were reached as a result of the recent discussions between Her Majesty's Government and the delegation from Jamaica on the prospects of increasing the import of Jamaica's winter banana crop.
    Mr. Profumo: The discussions to which the hon. Member refers were not with Her Majesty's Government. The purpose of the delegation's visit was, I understand, to discuss certain questions with the distributors of Jamaican bananas in this country.
    Mr. Royle: Would not the hon. Gentleman agree that anything that could be done to improve the economy of Jamaica would greatly assist in the solution of some of the immigration problems which face us at the present

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    moment? Will the Government do all they can to aid matters of this kind?
    Mr. Profumo: Though I agree with the hen. Gentleman, he has now raised a slightly different question. These meetings have nothing to do with Her Majesty's Government, and no representations have been made to us.

    NUCLEAR TESTS
    Mr. Frank Allaunasked the Prime Minister if, in order to reach agreement with the two other nuclear Powers, and for other reasons, he will permanently stop all British test explosions of atom and hydrogen bombs forthwith.
    The Prime Minister (Mr. Harold Macmillan): We hope that the Geneva Conference will lead in due course to the final termination of all nuclear explosions.
    Mr. Allaun: Just as yesterday a welcome compromise was successfully reached, will the Prime Minister now consider a compromise offer of three or four years' halt and thus avoid the suspicion attached to the present one-year offer?
    The Prime Minister: The conference is now sitting. I do not think it would be right for me to say anything which might prejudice negotiations in any way. I can only reaffirm what Her Majesty's Government made clear in their note to the Soviet Government on 20th October, which was:
    "It is the sincere wish and earnest hope of Her Majesty's Government that the Geneva Conference will make sufficient progress to justify expectations that the final termination of nuclear test explosions may in due course be achieved".
    Mr. Masonasked the Prime Minister how many nuclear and thermonuclear tests have been conducted by this country since the standstill was made and operated by the Union of Soviet Socialist Republics.
    The Prime Minister: I cannot add to the information which has been published on this matter.
    Mr. Mason: Is it not a disgraceful reflection on Her Majesty's Government, and on the Government of the United States, that following the Geneva Conference of scientists, which proved that
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    tests cannot go on undetected, we should race ahead with a heavy firing programme? Does not the right hon. Gentleman think that that action alone will have jeopardised the success of the present talks?
    The Prime Minister: No, Sir.

    CYPRUS (PARTNERSHIP PLAN)
    Mr. K. Robinsonasked the Prime Minister to what extent he intends to proceed in present circumstances with the partnership plan for Cyprus.
    The Prime Minister: I have already made it clear that we shall proceed quietly and unprovocatively with the arrangements contemplated under our policy for Cyprus as announced on 19th June and modified on 15th August.
    Mr. Robinson: Was not the Prime Minister's stubborn insistence that this plan must go forward largely responsible for the failure of M. Spaak's efforts at conciliation? Would the Prime Minister, who is skilled in the use of words, tell us how one imposes a partnership plan?
    The Prime Minister: If, in regard to the first part of the supplementary question, that is the hon. Gentleman's honest judgment of the efforts which I and my colleagues have made in recent weeks, I am afraid I shall not be able to convince him. I do not believe it is the judgment of the majority of the House, of this country or, certainly, of our allies in N.A.T.O. In regard to the second part, of course one cannot impose an opportunity. One can only offer it.
    Major Legge-Bourke: In view of the fact that the 15th August statement was made during the Recess, and in view also of the two important structural changes that were made in the seven-year plan, would my right hon. Friend the Prime Minister consider having the statement published in the OFFICIAL REPORT?
    The Prime Minister: Yes, Sir, I will arrange that.
    Mr. Callaghan: May I come back to the White Paper which the Government issued? As I read it, there seems to be little difference between it and the proposals put forward procedurally by M. Spaak, and later by other members.

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    Has the Prime Minister any intention or hope of coming back to a N.A.T.O. conference here in order that we may make further progress?
    The Prime Minister: Yes, Sir. It was a very great disappointment to me and to Her Majesty's Government that the conference was not agreed. As I think was made clear, there was agreement on what was to be the substance, and there was very practical agreement about the composition and the procedure of the conference. For reasons which I appreciate, the Greek Government did not feel able to enter into the conference at that time, but I look upon this proposal as adjourned, and I hope that it may be taken up again at a convenient moment.
    Following is the statement:
    On 19th June, 1958, the Prime Minister presented to Parliament a statement of the policy which Her Majesty's Government intend to pursue in regard to the Cyprus problem for a period of seven years. This policy was explained by the Prime Minister to the House of Commons in broad terms and its outline and main practical features were described in the Parliamentary Statement of Policy of 19th June, 1958 (Command Paper 455). As Parliament was informed, the policy has been the subject of friendly and confidential consultation and discussion within the North Atlantic Treaty Organisation. In the last few days the Prime Minister has had the opportunity of personal meetings in Athens and Ankara with the Prime Ministers of Greece and Turkey, which have enabled him to acquaint himself at first hand with the views of their respective Governments.
    After the most careful consideration of the views expressed to him by the Prime Ministers of Greece and Turkey, and in the light of the advice tendered by the Governor of Cyprus regarding the situation in the Island, Her Majesty's Government have decided to proceed to give effect to the policy as announced to Parliament in the following manner:
    An Order in Council has already been approved authorising the preparation of electoral rolls in the Island. This is expected to take two or three months. Meanwhile, in accordance with the spirit of the decision whereby the communities are encouraged to order their own communal affairs, the Governor will where local circumstances make this desirable authorise the establishment of separate Greek and Turkish Cypriot Municipal Councils. When the electoral rolls are complete it will be possible to hold elections for the two Houses of Representatives. The preparations for the elections should involve consultations between the Governor and leaders of the two communities. If, as Her Majesty's Government earnestly hope, violence ceases, this will make possible the return of those at present excluded from the Island in order that they may play their part in these electoral processes and in consultations on the
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    details of the system of representative government and communal autonomy set out in the statement of policy. As soon as the Houses of Representatives have been elected, they will be asked to elect their representatives to the Governor's Council, which will then become the authoritative body to deal with all matters not specifically devolved upon the Houses of Representatives or reserved to the Governor at his discretion.
    With regard to the representatives of the Greek and Turkish Governments as proposed in the statement of policy, Her Majesty's Government feel on reflection that the representatives of other sovereign powers could not suitably sit as members of the Council under the chairmanship of the Governor. It would be more correct to regard them as specially appointed representatives of their countries with direct access to the Governor and such other facilities as they need to carry out their functions. Accordingly Her Majesty's Government invite the Governments of Greece and Turkey to appoint their representatives with effect from 1st October.
    The establishment of this system of communal assemblies charged with certain specific functions and of the Governor's Council charged with other more general duties does not exclude and should, with general good will, facilitate the development of some form of representative institution serving the interests of the Island as a whole.
    As regards the proposal for dual nationality, it does not appear that there is need for urgent action on this matter. Further inquiries have revealed that any special provision of this kind would require carefully devised legislation in view of the complexities of international law. It is, therefore, wiser to defer action pending the consideration of the legal and other aspects.
    Finally, Her Majesty's Government appeal with confidence for support from all concerned for the two major concepts which underlie their policy. The first is a period of calm and the cessation of violence in the Island. The second is the deferring for a period of seven years of any final solution without prejudice to the future or to the views and aspirations of any parties concerned. At the same time such a period cannot be a period of stagnation. Her Majesty's Government feel that the form of growth and development which they propose is one suited to the needs of the moment, and in conformity with the two principles which appear to be generally accepted by all concerned.

    UNEMPLOYMENT
    Mr. Swinglerasked the Prime Minister if he will call a conference of Ministers, industrial managers, and trade union leaders to discuss the causes of rising unemployment and the ways and means of restoring full employment in the economy of the United Kingdom.
    The Prime Minister: The existing arrangements for such discussions seem to me adequate.
    Mr. Swingler: As it is the worker who suffers from unemployment, and as an increasing number of workers are suffering from grievous unemployment and the loss which this entails, may I ask whether the Prime Minister is aware that unemployment is becoming a serious fear and is spreading throughout the country, and whether he should not take the step of at any rate consulting the leaders of workers' organisations and asking them whether they can make proposals which would make up for the deficiencies in Government policy?
    The Prime Minister: Informal discussions take place from time to time, of course, between Ministers and industrial leaders. In addition, as the hon. Gentleman no doubt knows, there are regular meetings of the National Production Advisory Council, which is just such a body as he envisages, of the National Joint Advisory Council and of the Economic Planning Board.
    Mr. Woodburn: Would the right hon. Gentleman keep in mind the need to try to keep the economy going at a steady pace and not have the Government putting their foot on the accelerator at one minute and on the brake the next?
    The Prime Minister: If the right hon. Gentleman had ever driven a car he would k now that that is just what one sometimes has to do.

    NEW STEEL STRIP MILL
    Mr. Malcolm MacPhersonasked the Prime Minister whether he will make a statement on the proposed new steel strip mill.
    The Prime Minister: The Government are not yet in a position to make a statement on the proposed new mill.
    Mr. MacPherson: In view of the statements and rumours that have been going about within the last ten days, can the Prime Minister give the House information on one or two points? Has a reassessment of the need been made and the project scaled down from the original conception? Will it be split between South Wales and Scotland, and if so, in what proportion? Finally, can he say anything about sites, either in Wales or in Scotland?
    The Prime Minister: No, Sir. If I were in a position to answer all those questions I could now make the statement. I am afraid I shall have to ask the hon. Gentleman to wait a little longer; I hope not very long.

    UNITED NATIONS REPORT (ATOMIC RADIATION EFFECTS)
    Mr. Rankinasked the Prime Minister to what extent he has studied the Report of the Scientific Committee of the General Assembly of the United Nations on the dangers of radiation; if he has noted their warning that even a slow rise in environmental radioactivity can cause appreciable damage to populations; and what is the policy of Her Majesty's Government in this regard.
    The Prime Minister: I have given careful study to the Report of the Scientific Committee and also to the statement on the Report by the Medical Research Council which was presented to Parliament in August by my noble Friend the Lord President of the Council. In their consideration of all questions relating to the effects of radiation, the Government will take the conclusions of the Report into account.
    Mr. Rankin: Does the Prime Minister realise that now we have this Report from the Scientific Committee of the General Assembly of the United Nations pointing out the dangers of atomic radiation and the Special Committee of the Medical Research Council has expressed general agreement with the findings of that Committee? Is not the right hon. Gentleman prepared to say that it is not merely his hope but also his view—-and that of the Government—that nuclear tests should be stopped for ever?
    The Prime Minister: Regarding the wider question to which the hon. Gentleman refers, the Scientific Committee's Report made clear that the radiation dose to be expected from the fall-out of tests was minute compared with other causes both natural and man-made. Some of these natural causes are due to the geological formation and radioactivity of rocks, and so forth, which are matters for further study. The man-made causes include luminous watches, clocks, television receivers and the shoe-fitting fluorescope

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    Regarding the latter, action has been taken by the Home Secretary. Concerning the question of diagnostic radiology, a committee, under the chairmanship of Lord Adrian, is inquiring into this matter, and that, perhaps, is one of the most important aspects of it.
    There is also the question of occupational exposure among certain industrial, medical and atomic energy research workers. There very careful and minute medical procedure is carried out, but if it is necessary to tighten up that procedure we shall examine that matter, too.
    Mr. Rankin: Admitting all that the Prime Minister has said, in view of the dangers that arise from these causes, is it wise that we should add to them by political decisions?
    The Prime Minister: No, Sir, but it is right that we should look at the matter as a whole.
    Mr. P. Noel-Baker: Has the Prime Minister observed that last week the new Chairman of the United States Atomic Energy Commission admitted that the number of test explosions made last year by the United States was 32 and not 16, as had been previously declared? Does this mean that the studies made by the United Nations Committee and the Medical Research Council were based on incomplete information about the amount of radiation released by tests?
    The Prime Minister: No, Sir, but I think it is generally agreed that, apart from the radiation side of the question, there are other aspects. From natural and other man-made causes there are far greater dangers than from the tests. Of course, I hope that we shall reach agreement on abolishing the tests, but I think that the matter should be held in proportion.
    Mr. Noel-Baker: Has the Prime Minister seen the evidence given by a very distinguished scientist. Dr. Linus Pauling, about the results of the tests themselves? If he has not, will he read it if I send it to him?
    The Prime Minister: I shall be glad to read the evidence if the right hon. Gentleman sends it to me. But in the original Question to which the right hon. Gentleman's question is a supplementary, I was asked about the Report of the
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    Scientific Committee, and I must rely—I believe I am right in relying—on the views of the Medical Research Council on that Report.

    NORTH ATLANTIC TREATY ORGANISATION
    Mr. Emrys Hughesasked the Prime Minister, in view of the fact that the organisation of the North Atlantic Treaty Organsiation has become overstaffed and that a large amount of money and effort is being wasted in its operations, if he will set up an all-party committee of inquiry to consider how United Kingdom expenditure on the North Atlantic Treaty Organisation can be reduced.
    The Prime Minister: No, Sir. We shall continue, as in the past, to do everything possible to promote the efficiency of the Organisation.
    Mr. Hughes: Is the Prime Minister aware that certain criticisms of N.A.T.O. alleging waste of public money have been made by Field Marshal Montgomery? If the right hon. Gentleman has not seen them, I will send them to him. Does not he think that these charges need to be thoroughly investigated? Will he assure us that he is not prejudiced against Field Marshal Montgomery, who seems to have been fomenting unofficial strikes?
    The Prime Minister: No, but I do not think that an all-party committee of inquiry would be a very good method of dealing with this problem, which affects all the allied countries. However, if some ad hoc committee between the hon. Gentleman and the Field Marshal could be formed, I should be very happy.
    Mr. Bellenger: I do not ask the Prime Minister to accept in their entirety all the criticisms of the late Deputy Supreme Commander. But may I ask the right hon. Gentleman whether any representations at all have been made to the Government, either by the Field Marshal or by other prominent authorities, on the construction and operation of N.A.T.O.: because some of these statements have caused concern in the minds of many people who have nothing but the best interests of N.A.T.O. at heart?
    The Prime Minister: I quite understand the concern expressed by the right hon. Gentleman. We are all anxious to

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    try to make this Organisation as efficient as possible. Everyone who knows the history of alliances knows that there is difficulty and complexity in an alliance of 15 nations, such as never existed for such a purpose before, compared with the rather simpler problem of operating one or two Allied Forces. But we will do everything we can, and I hope that the December meeting will prove a constructive one in every respect.

    EURATOM
    Mr. Masonasked the Prime Minister if he will make a statement on the progress made between Her Majesty's Government and Euratom to secure a technical collaboration agreement.
    The Prime Minister: I have nothing to add at present to the reply I gave to the hon. Member for Bolsover (Mr. Neal) on 23rd October.
    Mr. Mason: Have not the Government been rather lackadaisical about this matter? Are they not aware of the growing influence of America inside Euratom; that the American Congress has voted 110 million dollars to Euratom projects and is providing fuel credits for the next ten years? Is not the right hon. Gentleman concerned about getting markets in Euratom?
    The Prime Minister: Yes, but if the hon. Gentleman will refer to the Answer which I mentioned, he will see that I stated that
    "Discussions between Her Majesty's Government and the Euratom Commission have made good progress, and I hope an agreement will he reached for signature before the end of the year."—[OFFICIAL REPORT, 23rd October. 1958; Vol. 592, c. 265.]

  MINISTRY OF WORKS

    Stonehenge
    Mr. Parkerasked the Minister of Works whether he will issue a White Paper on the recent work at Stonehenge and any resultant findings.
    The Minister of Works (Mr. Hugh Molson): I do not think a special White Paper would be appropriate. I will, however, consider with the Ancient Monuments Board, on whose advice the work was carried out, in what
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    form a report should be made available. It may be that the Board's Annual Report will cover the matter adequately.

    Birdcage Walk (Trees)
    Mr. Parkerasked the Minister of Works whether he will thin the inside row of trees along Birdcage Walk during the winter.
    Mr. Molson: I am considering what treatment should be adopted for these trees, and I hope to come to a decision shortly.

    National Gallery (Adjacent Site)
    Mr. Parkerasked the Minister of Works what progress has taken place in the acquisition of the Hampton site for the extension of the National Gallery.
    Mr. Molson: The Canadian Government have reconsidered the decision to build offices as an extension of Canada House on the site between the National Gallery and Whitcomb Street. Her Majesty's Government are convinced that in due course the National Gallery will have to be extended and this site would be useful when that is done. They also feel it to be undesirable that normal commercial development should take place on this site which is so vital to the preservation of the character of the National Gallery and of Trafalgar Square. They therefore decided that they would try to buy it and my right hon. Friend the Chancellor of the Exchequer agreed to the necessary provision as part of his policy for supporting the Arts.
    The Canadian Government have made a most generous response. They have offered to sell their interest in the site to the British Government for the purposes I have indicated at the cost which they have incurred in connection with the site. This has not been exactly calculated, but is likely to be about £1m. An estimate will be presented in due course. I am sure the whole House will associate itself with the Government in thanking the Canadian Government for their interest in the future of the National Gallery and of Trafalgar Square and for their generous co-operation.
    Mr. Parker: I am sure the whole House will thank the Chancellor of the Exchequer and the Minister of Works for the action taken in this matter. I should

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    like to say on behalf of all hon. Members that we thank the Canadian Government for their action.
    Mr. Robert Cooke: While thanking my right hon. Friend for the encouraging nature of his reply, may I ask if he can inform the House when extensions to the National Gallery are likely to take place and what is at present being done to improve the National Gallery?
    Mr. Molson: We have at present two extensive programmes. One is a programme of reconstruction as a result of war damage. It is likely to involve about £300,000 and will take a number of years. At the same time we are extending the air conditioning, at a cost of about £400,000, and that again will take a considerable time. I am therefore not able to forecast when there will be any extension, as we have these two large programmes to be completed before there is any question of enlarging the Gallery.

ORDERS OF THE DAY
  QUEEN'S SPEECH

    DEBATE ON THE ADDRESS
    [SIXTH DAY]
    Order read for resuming adjourned debate on Amendment [3rd November] to Question [28th October]:
    That an humble Address be presented to Her Majesty, as follows:—
    Most Gracious Sovereign,
    We, Your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Northern Ireland, in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament.—[Mr. P. Thomas.]
    Which Amendment was, at the end of the Question, to add:
    "but noting with concern that the policies of Your Majesty's Government have led to a fall in industrial production, a continuing increase in unemployment and a failure to make full use of our industrial capacity, humbly regret the omission from the Gracious Speech of any measures directed towards the expansion of production and employment while maintaining stable prices ".—[Mr. H. Wilson.]
    Question again proposed, That those words be there added.
    3.33 p.m.
    The President of the Board of Trade (Sir David Eccles): We expect a debate on economic policy to bring out some sharp differences between both sides of the House, but it is satisfactory that our basic aims remain the same. We both want expansion and we both want a high and stable level of employment, but we differ about how to achieve those objects. My hon. Friends believe that the right priority in employment policy for this country, with its dense population and its few raw materials, is to be outward-looking and export-minded. The other side believe that if only the Government were to behave as complete masters of the economy they need not pay so much attention to the outside world.
    We have always known that those were deep differences in approach between us, but this debate has shown something new. That is a very remarkable divergence in the opinion upon the prospects for trade and employment, not between the two sides of the House, but between the

    777
    Labour Party and the general public outside. Right hon. and hon. Members opposite who have spoken so far have been very gloomy. I hope the right hon. Member for Blyth (Mr. Robens), when he speaks, will be less gloomy and remember his prophecy about 1 million unemployed sometime ago.
    Mr. Alfred Robens: Will the right hon. Gentleman give the direct quotation from HANSARD?
    Sir D. Eccles: Certainly, if the right hon. Member will give me the column number.
    Mr. Robens: Is the right hon. Gentleman telling me that he makes a statement in this House without checking it?
    Sir D. Eccles: We all know about it.
    Mr. Robens: Why does the right hon. Gentleman not quote it in full?
    Sir D. Eccles: I have not got the quotation with me. One and all the right hon. and hon. Members opposite, if I may use the language of the stock market, have been "bears to a man" of British industry, but anyone who has read the newspapers during the last month or two must have observed the growing confidence in the outlook of trade. The Stock Exchange itself, which is not a bad guide because it reflects hundreds of thousands of independent judgments, takes the opposite view to the Labour Party. Both cannot be right. Either right hon. Members opposite or the general investing public will have to be proved wrong. Investors usually look some way ahead. They are less interested in what is happening this autumn than what they think is likely to happen next spring.
    Those who study these matters tell us that the confidence shown in the future of British industry is a compound of relief that the American recession appears to be over and confidence that the Conservative Party will be re-elected for a third time. Be that as it may, in the Board of Trade we try to assess the state of the economy without taking Gallup Polls into our calculations and I should like to compare our view of production with that of the right hon. Member for Huyton (Mr. H. Wilson) and his hon. Friends.
    They say the Government are responsible for the fall in output and that it
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    could have been avoided. Well, it is true [HON. MEMBERS: "Hear, hear."]—that a modern Government have the means, for a time at least, to nourish continuing expansion within their own borders. However, it is well to remember that their ability to do that is in direct proportion to the dependence of the economy upon exports.
    The right hon. Member was quite justified in saying that a year ago my right hon. Friends deliberately decided that it was against the national interest to keep the inflationary boom going in this country; but, supposing inflation had not been checked, what then would have happened to the balance of payments? Sterling was under severe pressure and, unless confidence had been quickly and completely restored, that attack would have succeeded and, as in 1949, the £ would have had to be devalued,
    Hon. Members opposite may think that that forecast is a platform bogy. If so, I would ask them to look at what happened in the European country which disregarded the recession in world trade and continued its domestic expansion. France went on with the boom, and, in spite of help from lower import prices and credits from abroad, her gold reserves seeped away, import restrictions were multiplied and, finally, the franc had to be devalued by 20 per cent. Fortunately, France is now under new management.
    Mr. Harold Wilson: In fact, the devaluation of the franc occurred, for all practical purposes, before the September crisis. The right hon. Gentleman missed out the whole cost of the Algerian war. Further, since he began this passage with reference to sterling and the balance of payments, will he agree that the Government's figures show that there was a surplus balance of payments at the very time when they took their restrictive measures?
    Sir D. Eccles: The balance of payments is valuable in respect of the question whether the £ is healthy or weak. We have to have a confidence in sterling, and that means that we have to be sure that more people want to buy sterling than want to sell it. That was not the case at the time of that attack. In this country we chose to put first the maintenance of the value of our currency,

    779
    and in our case we had external obligations to think about, because sterling is the money of the sterling area, and the sterling balances, whose purchasing value we have a duty to protect, are owned mainly by the poorer members of the Commonwealth. Therefore, stiff monetary discipline was the honourable course, and we say that events have shown that it was also the right course.
    Hon. Members on this side of the House are familiar with the Labour Party's view that another policy would have served the country better. They say that no matter what was happening in the rest of the world, the expansion could have been continued here, provided the Government had reintroduced Socialist planning and controls. That is what the hon. Member for Hamilton (Mr. T. Fraser) said last night. The essence of his speech was that Scotland would be far better off if all its industry were controlled and planned by the Government —and that means controlled and planned by London, which some of his constituents may not like. [Interruption.] We ought to give the hon. Gentleman's argument the fullest weight, and his argument was that Scottish industry liked planning and ought to have planning. If we could get 5 per cent. or 10 per cent. more output it would be well worth doing some odd things.
    But it seems inevitable that if expansion had not been checked exports would have been more difficult to sell and imports would have been stimulated. Then the Government of the day, against the background of difficult conditions in world trade, would have been faced with the choice either of letting the extra imports come in and see the balance of payments go wrong, or cutting the total of imports by controls and restraining the holders of sterling from exchanging their pounds into other currencies.
    The second choice—manifestly the Socialist choice—takes no account of the effect of a return to controls upon British credit in the outside world. Confidence in sterling would have weakened in proportion as we resorted to restrictions upon imports and the transfer of sterling; experience has amply proved that if a Government cannot trust its own people with their money, foreigners will not trust that money either.
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    There would have been another serious consequence of trying to combine expansion with physical control. Such a policy would have destroyed British influence at the Commonwealth and Economic Conference, for this reason: At a time when commodity prices have fallen, and when international trade is declining, many members of the Commonwealth feel that they may have to take restrictive action to prevent their balance of payments from growing worse.
    If the United Kingdom had appeared at Montreal as the leader of the retreat from freeing the channels of trade; if we, the bankers of the sterling area, had, for reasons of our own internal policy, put fresh restrictions on the transfer of sterling, what advice could we have offered to the other members of the Commonwealth? We could have given them no lead towards the new expansion in world trade, and very little help, if any, towards the development programmes of the under-developed countries.
    Again, I invite the House to look at the example of France. Why is it that France finds it so difficult to join a Free Trade Area? It can hardly be doubted that the French hesitate because they feel that their economy is not in good shape to take the plunge into such a wide area of free trade. We ought to sympathise with our friends across the Channel, because if we had had an expansionat-any-cost Government some of our industries would not be fit to venture into this great market, with all its risks and all its prizes.
    As my hon. Friend the Member for Weston-super-Mare (Mr. Webster) said in his admirable maiden speech, the Free Trade Area negotiations are being conducted with great patience and skill by my right hon. Friend the Paymaster-General. Time is running short, and Europe's need is urgent to see before the end of the year what will happen when the European Economic Community comes into operation. If the Six begin what will, in effect, be tariff discrimination against the rest of Europe serious divisions must occur, and outside Europe —as we learned at G.A.T.T., in Geneva last month—there will be strong misgivings, and strong pressure for counter action.
    We in this country have always believed that a Free Trade Area would stimulate

    781
    a strong expansion in Western Europe and be good for the rest of the world's trade, including the trade of the Commonwealth—and the Commonwealth also hold that view. We shall, therefore, continue to urge all our friends to bring these long and difficult negotiations to a successful conclusion.
    Returning to the domestic affairs, British industry has used the past year to advantage and, partly as a result of previous heavy investment, is well prepared to share in any advance towards freer trade and world expansion. A healthy and new feature is the ease with which deliveries can now be made. This has been an essential help to our exports, and I do not see how we could have maintained our overseas sales last year if we had not had shorter deliveries, which were the result of reducing the internal pressure of demand. Another healthy feature is the changed attitude towards the level of stocks.
    I take steel as an example, because it is so important a product. For twenty years steel has been scarce, and every move in price has been upwards. Twenty years is a long time, and half the men in the steel industry who buy steel have never known an easy market. As I expect the House will remember, rationing and rising prices always lead to hoarding, so it has happened in steel. Over these twenty years users have contrived to accumulate abnormal stocks.
    Recently, however, when, almost for the first time since 1939, most steel products could be more or less bought off the peg, and the credit squeeze increased the cost of carrying materials, users very naturally dug into their stocks. It is not easy to get comprehensive figures for stocks in the hands of users, but it is generally accepted that at the beginning of this year the stocks of steel products, over and above what industry might be expected to carry in normal times, amounted to at least 14 million tons. Much of these stocks—in fact, I am informed, most of these excess stocks — have already been used up, and as prices do not look like coming down, before long buyers will be back in the market.
    The end of destocking, which, of course, applies to some other products as well as steel, will have its effect quite soon
    782
    on the level of production, but far the most important factor will be the demand for exports. My right hon. Friend the Chancellor dealt with exports yesterday, and I have only a little to add to what he said.
    Some changes are likely inside the total of our exports. We must expect some further falls in deliveries to the countries that have been worst hit by the decline in their earnings from primary products. On the other hand, if the Motor Show' is any guide—and I believe that it is—our sales to the highly-industrialised countries should show an increase. We should, therefore, see only a small further fall in the total of exports. As a matter of fact, the outlook for exports in North America, and in countries like Germany is extremely good.
    The return to better trade will, as the House knows, leave us with certain difficult problems in our economy, to which we are giving close attention. Last evening, my right hon. Friend the Minister of Labour dealt with the areas of local unemployment. The House has already shown, when the Distribution of Industry (Industrial Finance) Act was going through Parliament, that the Government have the support of all sides for action in these areas.
    My right hon. Friend and I administer this Act together, and, while the Board of Trade is very sorry to have lost my hon. Friend the Member for Altrincham and Sale (Mr. Erroll), who was our general manager in this campaign, he is now, and I hope that he will remember, strategically placed to be kind to his old friends in the front line.
    Yesterday, the hon. Member for Hamilton invited me to tell the House something more about how the distribution of industry policy works in areas like London. I hope that I have not got it wrong, but I thought that he had drawn a false conclusion from two facts. The first is that, of course, it is true that nearly all new development is an extension to old industry. Nobody has ever bothered to deny that.
    Secondly, the Board of Trade allows Industrial Development Certificates in areas like London and the South-East only when the application is for an extension. It does not follow, however, that

    783
    we grant all applications for all extensions of industry in the areas of high employment. British Nylon Spinners have not gone to Havant; Pressed Steel have gone to Swansea. Both schemes are extensions of industry.
    On the other hand, when I get an application like this from Ford Motors, at Dagenham, for 180,000 square feet, which is an extension to its existing very large plant, I have to grant it, because it would be wholly inefficient to request that firm to separate this extension from the rest of its plant.
    We have to strike a balance between social needs and economic efficiency, and as the social needs grow greater with the emergence of these local areas of unemployment so they are given a greater weight in the balance that we strike. I have the figures—which, I think, may interest the hon. Member for Hamilton—of Industrial Development Certificates for the last three months for the London and South-Eastern area.
    In those three months—August, September and October—certificates were approved for 2,480,000 square feet, and they were refused for 1,219,000 square feet. It may seem that 2,000,000 square feet is a very large figure, but about 40 per cent. of all the applications are far service industries which one could not move elsewhere—depôts for tyres, laundries, and so on. Therefore, the present policy—as, I think those figures show—-bears quite hardly on people who would have liked to have come to London and the South-East.
    Amongst the industries that are undergoing a difficult time, there are two, aircraft and cotton, that give us special concern. Hon. Members will recall that, in his Budget speech, the Chancellor said that if we found that other countries were providing credit for the export of goods on terms that left our manufacturers at a disadvantage, we should take action. This is now the case in respect of large civil aircraft produced in the United States and financed through the Export-Import Bank.
    Accordingly, with the agreement of my right hon. Friend, I have given discretion to the Export Credits Guarantee Department to match the American terms by insuring up to seven years' credit on large British airliners, and on the engines used in such aircraft. These guarantees will
    784
    be given under Section 2 of the Export Credits Guarantees Act. I should emphasise that it is an exceptional step, and that we are as unwilling as ever to start a credit race in respect of any particular exports—
    Mr. Frank Beswick: Would the right hon. Gentleman clarify that? Does he refer to the rate at which the money is lent, or to the amount that is lent?
    Sir D. Eccles: It is a complex matter of the rate and the amount for which one insures. I can assure the hon. Member that I have asked the Export Credits Guarantee Department to see, within its own capacity to act, that our manufacturers are no longer at a disadvantage.
    I now turn to the cotton industry. Most interesting speeches on this industry were made by my hon. Friends the Members for Heywood and Royton (Mr. Leavey) and for Clitheroe (Mr. Fort), and by the hon. Members for Ince (Mr. T. Brown), Accrington (Mr. H. Hynd), Farnworth (Mr. Thornton), and Nelson and Colne (Mr. S. Silverman).
    We have not yet had any news from Hong Kong about the Hong Kong industry's response to the offer made by Lancashire, about which the Prime Minister spoke last Tuesday, but I understand that the Hong Kong committee is due to meet today, and we are hopeful that at last we shall come to a settlement. The Government would like to be associated with the tribute paid by the hon. Member for Farnworth to Lord Rochdale, who has ably and devotedly led the Lancashire spokesmen through so many weary months of negotiation.
    If agreement is reached with the three Asian industries it will be in the best interests of all concerned, and it will give a period of stability in which to take a new look at the cotton industry.
    It might be of interest if I said a word or two about this new look in textiles. The difficulties, which beset the cotton industry throughout the world, are too deep to be ascribed to a temporary recession in demand. The addition in so many countries of so many new mills has raised the world's capacity to an unbalanced and uneconomic size, and it is this excess capacity that is the cause of the universal lack of confidence and of Lancashire's particular difficulties.

    785
    Times have changed. The United Kingdom was once the only significant exporter of cotton textiles. This near-monopoly, of course, could not last. We lost markets—we lost many of our best markets—through the setting up of mills inside those very markets. Then these new cotton industries themselves began to export. This second growth of cotton exporters is today challenged by a third growth, by Communist China. Thus, cotton is in real trouble all round the world. We have to ask ourselves what will be Lancashire's place in the future. What business will there be for Lancashire, and what will be the best structure of the industry to do that business?
    My hon. Friend the Member for Clitheroe rightly drew our attention to a speech given at the recent Harrogate Conference by Mr. W. T. Winterbottom. That was a speech in which he gave his answers to those vital questions which I have just asked. It was a very brave speech, and, although one could hardly agree with all of it, I think that everyone must have admired the forthright approach of that Lancashire mill owner. If one has the courage, it is easier to do business with people who speak their minds, and certainly he spoke his mind.
    Speaking of Lancashire, he said:
    "There is no redundancy problem in the sense that there is no surplus of the type of machinery which is needed to meet the challenge of the future. But there is a considerable degree of obsolescence, and not only in the United Kingdom. Much pruning needs to be done, and until it is complete we shall have an untidy, unbalanced and unhealthy industry."
    There is a big job to be done there, and we on this side of the House think that the initiative in that job must come from the industry if a really successful solution is to be found.
    But, having said that, the Government will be ready to discuss with Lancashire any proposals for bringing about a balanced and efficient structure. We need this period of stability which the Eastern negotiations are designed to bring about. We are also very well aware of the human problems that arise out of structural change. My right hon. Friend the Minister of Labour described last evening what his Ministry can do and has done so successfully in placing men and women in new jobs. The Board of Trade has also got a part to play; we will try to diversify industry in
    786
    the cotton area, and we have one or two hopeful approaches from industry now.
    I am not an expert in this industry, but I have seen enough of world trade to believe that there is a new lease of life coming for British textiles. As personal incomes rise throughout the industrialised nations, the demand is sure to expand for the kind of textiles which we make better than anybody. Whether one looks at fabrics for clothing—men's, women's or children's—or for household textiles, there is no doubt that standards are rising and, in spite of the competition of motor cars, refrigerators and washing machines, people will want to have better clothes and better textiles with which to equip their homes.
    Any regular visitor—and I have tried to be a regular visitor—to textile exhibitions over the past year or two must have been struck with the steady improvement in the design and range of fabrics and with the outstanding success of the British exhibits. There is no doubt that the best we do is the best in the world. That was proved the other day in a very famous exhibition in the United States where we won more awards than any other country.
    Therefore, I am convinced that for these high quality and well-designed fabrics our industry has an expanding market at home, and a splendid chance to sell more in the United States and in the Commonwealth. Some of the cities in the United States have hardly been touched yet. Of course, if we get a Free Trade Area, Europe will be a very large and competitive market, but I feed sure that we will hold our own there and in some lines we will do very well.
    This new lease of life will come quicker if Lancashire uses well the period of stability which we hope will come as a reward of success in the negotiations with India, Pakistan and Hong Kong. These inter-industry agreements, if they are made, will have a very wide significance because the essence of a voluntary quota is that the exporter and the importer agree how to conduct orderly trade and the Government concerned are not compelled to resort to unilateral restrictions upon imports.
    Many Governments, I regret to say, are now threatening to increase such restrictions on goods manufactured in underdeveloped countries and so the stand that we are taking is watched all

    787
    the way round the world. We discovered that at the Commonwealth Conference. When we met at Montreal under the very able chairmanship of Mr. Donald Fleming, Canada's Finance Minister, we soon found that the essential problem in Commonwealth relations is the widely different rate of economic progress between the highly industrialised and the underdeveloped countries.
    That a very large gap exists between, say, the standard of life in Asia and the standard of life in North America or Europe is well known, but what is not so well known, and what is extremely dangerous, is the fact that this gap is growing wider every year. It is this sense of falling further behind that threatens the stability of the poorer nations in the free world.
    The comparisons are made not only with the Western democracies but with the Sino-Soviet bloc. At Montreal we asked what would happen if the living standards in China rose appreciably faster than the living standards in India and Pakistan. It is not an exaggeration to say that this is one of the most serious questions in the world today. The Commonwealth Conference was a success precisely because we accepted the challenge of the widening gap and we devoted our best endeavours to considering how the underdeveloped countries may be further helped to increase their rate of progress.
    The essence of their problem is this. Even if they can count on us and on the other creditor countries in the free world to give them all the aid we can, there is little prospect that the total of those loans and gifts will be anything like sufficient to finance a tolerable rate of development. The underdeveloped countries must. therefore, look somewhere else also for increasing resources and they can only look to an increase in their export earnings.
    All the experts told us that this expansion cannot be adequate in terms of primary products. The Haberler Report, for instance, a most remarkable document which has just been presented to G.A.T.T. at Geneva, dealing with this very problem, shows beyond any doubt that the exports of underdeveloped countries will have to contain an increasing
    788
    quantity of manufactured goods if their development programmes are to be sufficient by any standards.
    It is here that Lancashire's proposals for Asian textiles become so significant. The policy, of which these negotiations are a practical application, is not unregulated free trade. That would disrupt to an intolerable degree an old and established industry like our textile industry. The right course is to work towards orderly and voluntary adjustments that take account of the crying needs of the Commonwealth and of the established industries in the older countries.
    Thus it was that our willingness to import an increased quantity of Asian textiles stood out as an example to the rest of the Western world. For unless the United States and Europe can be persuaded to buy more goods from the underdeveloped countries, it is hard to see how those countries can respect and adhere to the Western economic system.
    This is one of the biggest issues today. At Montreal we took certain practical steps which prove the willingness of the Commonwealth countries to help each other and, in particular, the willingness of the United Kingdom to make the major contribution to Commonwealth development. We agreed to keep the British market open. We agreed to lend more money. We offered to convene meetings to discuss fluctuations in commodity prices. We strongly supported a new drive for Commonwealth aid for education.
    But in every analysis we made, and in every constructive proposal we put forward, we were brought back to the fact that no group of nations in the free world can either resist the Communist challenge from without or achieve balanced progress within its own ranks unless the United States plays a major and consistent rôle in maintaining economic activity and in opening its markets to the goods of the free world. And not only the United States: Western Europe has a great responsibility likewise.
    At Montreal we said this clearly and wholeheartedly for the first time in economic history. We declared that the old and the new nations of the Commonwealth understood each other's economic problems and were determined to seek common solutions to them, doing all we

    789
    could to help each other and calling on the rest of the free world to reinforce and complete our tasks.
    In all this, I venture to say, the United Kingdom delegation took a leading part. Why were our delegation able to be outward-looking and to offer concrete help in so many directions? Simply because sterling was strong and because our balance of payments was favourable. If we had followed the economic and financial policies recommended to us by the Labour Party, we know what would have happened. Sterling would have been weak, our balance of payments would have been in deficit and the results of the Montreal Conference would have been very different; and for the same reasons, because sterling is strong and because the business outlook is now good, the Socialist attack upon our policy is ill-judged and will command no support in the country.
    4.13 p.m.
    Mr. Alfred Robens: The speech to which we have just listened was probably the President of the Board of Trade at his scintillating best—as good as his famous speech in which he referred to a royal personage as his leading lady. He said that we had our eyes on the spring, presumably a reference to a General Election. I do not know whether he is advising us that a General Election will take place after the usual give-away Budget, but, certainly, what we have had to say and what we shall say today on the economic situation has no relation to an Election in the spring but has relation to the Government's conduct and to our own views on the way in which the economic situation should be handled.
    The right hon. Gentleman is quite wrong when he says that there are no sharp differences between us. There are very many sharp differences, and it would be a great mistake if the public were to get the impression that there were not sharp differences between the parties, particularly on these matters of the economic control of the country.
    After reviewing the position of the textile industry and the Montreal Conference—and we shall read what he said with great care—the right hon. Gentleman told the House that there will not be a slump in this country. He is a couple
    790
    of weeks too late. Two weeks ago, at Cambridge, my right hon. Friend the Leader of the Opposition said that he himself did not expect that there would be a slump. Reference was made to that from the Government benches yesterday. Nothing that the right hon. Gentleman has said today, therefore, makes any difference to what my right hon. Friend said a fortnight ago.
    The right hon. Gentleman talked about the European Free Trade Area. We all know that the difficulty here is with the French. As he seemed to think that France, under the new management, was better than France under the old management, it seems that most of his remarks might properly have been addressed to the French rather than to the United Kingdom House of Commons. That is where the problem lies—with the present French Government, and not with the other members of the European Community; and certainly not with Her Majesty's Opposition.
    One of the points which the right hon. Gentleman made which interested us, and with which we heartily agree, was that for twenty years we have always been short of steel. That is exactly what we have been saying for a long time. Of course we have been short of steel. There has been a deliberate restrictionist policy on the part of those who have conducted the operations of the steel industry on the basis of monopolistic practices, and it was one of our great complaints that the steel industry had not played its part in the economic development of the country. It was not until about 1957 that the steel industry was in a position to supply the bulk of the needs of the nation. We always had to import steel because the steel industry had refused to carry out the sort of expansionist programme which was essential for a nation like ours. We therefore entirely agree with the right hon. Gentleman.
    Sir Toby Low: I am sorry that the right hon. Gentleman is incorrect about these things. I am sure that he does not want to be incorrect. If he will turn his mind back to the one period when there was a nationalised steel industry, and if he will look up the statements of requirements made at that time by the nationalised industry, he will realise that since then the privately-owned steel industry has

    791
    exceeded both the capacity and the production figures forecast as necessary by the nationalised industry.
    Mr. Robens: I think that what I said was a perfectly accurate description of the situation. For twenty years, as the right hon. Gentleman himself said, the steel industry bas never produced the amount of steel that the country needs. We agree with him. I repeat that it was not until 1957 that the industry was able to produce the steel that the country needed. Although it is working below capacity today, if, as a result of what the Government do, there is a sharp increase in productivity and production overall, we shall find that the steel industry will again be short of capacity. It is not the case that the steel industry has met the economic situation as the country required it to be met, and we are grateful to the right hon. Gentleman for confirming what we have been saying for so long.
    At the Conservative Party Conference Lord Hailsham displayed the way in which he had improved his studies of campanology by a further bout of bell ringing. I understand that it is an extremely difficult musical instrument to play. He was, therefore, once again delighted to indulge in this childish practice in front of a very enthusiastic audience. But before he began that display he issued a very grave warning. He said that the Opposition, both in the House of Commons and in the country, would once again raise the unemployment scare. Presumably he meant that they would do so with a view to playing on the anxieties of the people in connection with a General Election, which may or may not be forthcoming in the spring.
    Whether he thought that it was an Opposition scare about unemployment or not, if one reads the report of the Conservative Party Conference, it is clear that the Conference itself was very concerned about unemployment, and it is perfectly clear, by reason of the time taken up by the Minister of Labour, by the Prime Minister and by other Ministers on that occasion, that they, too, regarded unemployment as a matter of very great and serious concern.
    Indeed, it was the hon. Member for Louth (Mr. Osborne) who was reported in the Manchester Guardian as saying that he warned the conference that it was
    792
    impossible to guarantee full employment in a free society and he begged the Conservative Party not to go out at the next Election under the false pretence that the reverse was true. We have always taken the view that full employment is not possible in a free enterprise system. The hon. Member for Louth apparently took this view and told the Conservative Party Conference just that. It was not we, however, who were raising the scare, but the hon. Member for Louth.
    What does an editorial of the Financial Times of 7th October say?
    "The fact is that the decline in industrial production has not yet been fully reflected in the demand for labour. For example, in the manufacturing industry output is now running about 5 per cent. below last year. But the decline in the manufacturing labour force over the same period has been only a little over 2 per cent."
    The Prime Minister is quoted by the Manchester Guardian of 7th October as saying this:
    "There was bound to be some increase in unemployment. There is now 2·2 per cent. and it may go a bit higher during the winter."
    The Economist of 18th October says:
    "Ordinary seasonable influences alone would probably take the number of people unemployed up to 600,000 by January and the slow continued decline in activity envisaged above could bring the percentage close to 3 per cent. which would mean much higher figures."
    Yesterday, the Minister of Labour, with his customary frankness. told us that he thought the peak would be about 2·8 per cent., which is roughly 600,000 people unemployed. Neither the newspapers nor the people that I have quoted are members of the Labour Party. It is the party opposite which is concentrating the people's gaze upon unemployment. We should be completely neglecting our duty as an Opposition and as members of a very responsible political party if we pretended that the problem of unemployment does not now exist, and will become much larger in the immediate future.
    We are not, therefore, dealing with a scare in discussing unemployment. We are not dealing with a bogey in our Amendment but with a grim reality. This reality is the Minister's estimate of 600,000 people unemployed. However, the Minister will agree with me that 600,000 is a deflated figure. For example, the latest figure of dock workers who

    793
    are registered but for whom there is no work at 25th October is no less than 11,230 These 11,230 dock workers do not appear on the unemployment count. The figure should be deflated by that much because it is hidden unemployment.
    If we consider the situation in the coal mines, there are about 60,000 people in employment who, if the mines were today under private ownership, would certainly he signing on at the right hon. Gentleman's employment exchanges. The facts to prove this are self-evident. Today, there are about 35½ million tons of distributed and undistributed stocks of coal. Of that amount, nearly 19 million tons were distributed and presumably paid for, but undistributed and lying on the ground, in wagons, in colliery yards and elsewhere there are nearly 17 million tons of coal at the cost of the National Coal Board. If one takes the rough average of the cost of production, that must represent about £60 million of capital invested in those stocks which has been the means of maintaining at the very least 60,000 miners in employment.
    I ask the Minister: what privately-owned industry would invest £60 million in maintaining the employment of their workers? There is not one. The Government can be very pleased with the fact that they have inherited a number of nationalised industries which have, by their operations, saved them from the worst effects of their economic policy. I will go further and say that if the Coal Board had acted as a private enterprise company it would not have, as it has clone, supplied British industry throughout the years of nationalisation with the cheapest coal in the whole of Europe. The Coal Board has, in fact, provided to British industry, and quite properly, a hidden subsidy which it would never have received if the mines had been privately owned.
    If the mines had been privately owned during the years when it was possible to get a £1 or £2 premium on coal sold abroad, it would have been possible to have built up enormous profits and enormous reserves, but, instead, the Board recognises, as it must, and as most other employers of labour one day will have to recognise, that, quite apart from being a business enterprise, social responsibilities lie on the shoulders of large employers of labour, whether
    794
    privately or publicly owned. But the Coal Board, recognising its social responsibilities, has chosen this way, at some cost. That is something which private enterprise could not possibly have done the system would not have permitted it.
    The Government have been saved from a considerable increase in unemployment because of the operations of the nationalised industries. The Coal Board will presumably, perhaps in the not too distant future, require additional borrowing powers from Parliament. This amount of stock has to be sustained presumably as long as it is physically possible to stock and until the upturn comes in production which would soon make these stocks disappear. We on this side would certainly support a Bill which permitted fresh borrowing for this and other purposes. However, I think that the Government will have more trouble with some of their supporters on the benches opposite.
    The Government's policies overall have now brought us to a situation in which the Minister of Labour is able to tell us that we shall possibly have a peak of about 600,000 people unemployed. There will also be many thousands more people whose unemployment will be masked, like the dockers and others, who are on unemployment arrangements under which they do not sign on at the employment exchange. Is that figure excessively low, or extremely low? Is it the Government's view that this is the sort of level of unemployment, provided it is taken in comparison with other countries, that should be tolerated, or do they feel that they must make a substantial effort to reduce this figure? At what figure do the Government think unemployment should be?
    This is not a country-wide problem of 600,000 people likely to be unemployed. We have the very difficult problem of the black spots of unemployment, which were mentioned yesterday. My hon. Friend the Member for Hamilton (Mr. T. Fraser) made a very telling point yesterday when he drew attention to the fact that it is not sufficient to apply remedies uniformly, as the Government did with devices such as the Bank Rate. Things like that do not assist the black spots, which must be treated separately and in detail.

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    The President of the Board of Trade said that under the new arrangements it was important not to underestimate the size of the problem. Those who live in the black spots know perfectly well what that size is and what it means. I shall not weary the House with too many figures, but there are many areas where unemployment is more than 5 per cent., and that is very serious. In the constituency of my right hon. Friend the Member for Llanelly (Mr. J. Griffiths), the Deputy Leader of the Opposition, there is about 9 per cent. unemployment. Any man in Llanelly who is out of a job has the same trouble in finding a job as if the total national unemployment were 1,900,000. That is the sort of problem facing every man who is unemployed in a black spot.
    Measures must be based on the peculiarities of the areas themselves. The treatment for the textile area of Lancashire will have to be very different from that for areas of shipbuilding. Each area will have to be taken by itself and its unemployment position ascertained—whether it is short-term or long-term—and then into that area will have to be poured the kind of assistance required to remedy the situation.
    Mr. Sydney Silverman: Does my right hon. Friend realise that under the steps so far taken under the latest distribution of industry legislation Lancashire was expressly excluded?
    Mr. Robens: Yes. I intended to say a Good deal about textiles, but my hon. Friend the Member for Nelson and Colne expressed our feelings about the textile industry perfectly well when he spoke last night. My only point in referring to that industry was to show that its problems had to be tackled differently from those of the shipbuilding industry.
    The figures given by the Shipbuilding Conference are disconcerting, to say the least. On 30th September, there were 167 ships totalling 638,684 gross tons on order, as compared with new orders of 350 ships of 2,708,147 gross tons a year ago. With new shipbuilding at that low level, it is clear that special arrangements will have to be made for the shipbuilding areas if the growth of unemployment is not to proceed at a much more rapid pace than any of us want to see.
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    Unemployment cannot be relegated to a mere figure, to the idea that 3 per cent. or 2 per cent. unemployment does not matter and is something which we have to accept. I admit at once that brim-full, or over-full, or even full employment brings great problems in its wake, but it is better to face the overall problems of full unemployment than to have some people suffer because we are prepared to accept some figure of unemployment.
    Unemployment is both a human and an economic problem. It cannot be measured in human terms except by those unfortunate people who are out of work. They know what it means in terms of their domestic life, and all that goes with that. Employers have to recognise that in a modern society they must accept certain social responsibilities which go with the tremendous economic power which they wield.
    The economic problem is simply stated. It is that it is a gross waste of human resources to have out of work people who can do a job. One of the sharp differences to which the right hon. Gentleman referred occur in this respect. We in the Labour Party do not regard employment merely as something for a man to do, something by which he can earn a living. We regard a job as an absolute necessity for every able-bodied man who wants work and who is able to do it. We also regard a job as a man's right. We do not regard the handing out of jobs, by anybody, as a generous gesture to workers.
    We say that in modern industrial society, when the tools of work are no longer in the hands of the individual, the right of a worker to a job is a right to which he is entitled from the moment he enters industrial society. That is why, when we of the Labour Party talk about full employment, we are not merely paying lip-service to full employment. We mean what we say and we believe that it is impossible to make progress socially, in the proper treatment for the aged and for young people, in education and in the Welfare State, and so on, unless not only all material and physical, but all human resources are used.
    Lip-service to full employment is not enough and I suspect that hon. Members opposite merely pay lip-service. That is like saying that one believes in marriage while one continues to live in sin. We also believe that we cannot have full

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    employment without planning for it. We cannot have full employment on the hit-or-miss principles which the Government seem to be adopting.
    Who would have believed that less than twelve months ago we were hell-bent on deflationary policies of a very drastic character, and that a Chancellor of the Exchequer resigned because a further £50 million of spending was not cut, and that only yesterday another Chancellor of the Exchequer was able to say that he was about to add to the spending of the nationalised industries between £125 million and £150 million to provide 150,000 jobs? What kind of planning is it when in a few months a Government can go from one extreme, a deflationary policy, to the other, when large sums of money have to be spent in the public and nationalised industries?
    Another interesting feature is that the Government have turned not to private industry to get them out of this deflationary mess, but to public investment and to the nationalised industries. In fact, when the Chancellor said yesterday that £125 million to £150 million were to be spent to provide 150,000 jobs, he said that that would take up the slack created by the non-investment of the private enterprise sector of industry.
    If the railways and the electricity industry had not been nationalised, which private companies would have been prepared to pay the money to maintain jobs in those industries and to give the British economy this new injection, this "shot in the arm"? This Government, whether they like it or not, are having to use the instruments of a Labour Government to save them from the mess of their own making into which they have got. The truth is that if steel had been left as a nationalised industry they would have been in a far stronger position than they are today to deal with the problem of unemployment in that industry.
    I have said that the Labour Party believes in planning. When we embarked on a programme of public ownership one of the strongest reasons made out for it was that in such a situation as this it could be used as an instrument for maintaining the economy in a buoyant state. That was one of the reasons, among others; a reason which has never had much prominence because up to now
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    the instrument has not been required; but since the need has arisen, even right hon. Gentlemen opposite see that here is a ready instrument which they can use —and I am glad that they have used it.
    But we go further than that. We say that it is quite wrong, if we really believe in full employment, to accept that the private sector of our economy should escape scot free from its obligations to maintain the economy in a healthy state. It cannot be good for any country, it cannot be good for any business—which is, perhaps, something which right hon. and hon. Gentlemen opposite understand better—to have the sort of stops and starts which have happened over the past three years in the country's economy. A businessman cannot be successful unless he plans in continuity his production, knowing in advance what he is going to do about investment, about sales, about markets and everything else. What is good for good business is good for a well-managed country. Therefore, we would say that the private sector cannot escape its obligations.
    I say this quite plainly: it would be part of the economic policy of a Labour Government that the largest firms in the country, the few hundred which dominate the field of investment upon which full employment depends, would be required to give us far more details than they do at present about their investment policy, the quality of it and the timing of it, so that we could take such measures over the private sector as the present Government are taking over the public sector, to maintain full employment within this country.
    We ought to be in a position to time investment, to regulate its size, and so on. The Government have taken only these half measures, because they are only half measures—for example, the release of all restrictions on hire purchase, which is hound to stimulate the purchase of consumer goods. Of course it is bound to stimulate it. Refrigerators and things of that kind, motor cars, will be bought, I have no doubt, more extensively, and that will certainly stimulate the manufacturing industry. But that can go too far.
    If, as a result of stimulation in one direction, there is tremendous factory expansion and demand for building we may find, unless we know what exactly is happening, that we have overloaded, say, the building industry, and if we overload

    799
    the building industry, in which there are more projects planned, more orders given, than the building industry, either by reason of its human resources or materials, can take, we start merrily on another round of inflation. That will do it. As an hon. Member said the other day, the building industry is a barometer.
    It is essential that there should be some control not only over the public sector of industry, but over the private sector as well. That is one of the things we mean when we talk about planning the economy. It means using the nation's resources in the very best possible way. By this method of planning it will be possible to maintain full employment, to get some stability into prices, and to increase wages by reason of increasing production and productivity in industry. The Chancellor issued a warning again yesterday about wages. He gave the impression that everything was going very well, but that if there were any increase in wages things might go badly again.
    I think myself that the Government have started off now another race for increased wages, and that they have done it by taking off 100 per cent. the hire-purchase restrictions. I am not averse to that for the moment as a way of stimulating manufacturing industry, but something else must go with it.
    Obviously, the relaxation of hire-purchase restrictions over, say, the purchase of motor cars, the reducing of the deposit to 5 per cent. or 10 per cent. with three years to pay the balance, is of advantage only to those with modest means, and not to people who can afford to pay cash at once, for paying in that other way is the most expensive way of buying a motor car one can possibly think of.
    If a man or woman of modest means is impelled to buy more today, as my right hon. Friend the Member for Huyton (Mr. H. Wilson) said yesterday, there is nothing more inflationary than to spend next year's wages this year. All sorts of things can happen in the two or three years of the hire purchase. There may be more babies in the house; there may be severe sickness. All sorts of things can happen which demand more money. If a man or woman has virtually spent or pledged all his or her earnings for the next two or three years and there is a real need for more money in that household, then,
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    make no mistake about it, pressure for more wages will be there.
    That does not matter if production is increased at the same time. Increased wages can be given from increased production—but the Government have not done that. They have not increased production. They have kept it stagnant. Therefore, they create a situation in which there will be pressure for more wages, but give no real evidence so far that they are doing anything to increase production on such a scale as to enable increased earnings to be paid out of increased production.
    Believe me, it will not be long before the Government are again saying, "The whole trouble with the country is because the workers want more money. It has nothing to do with us as a Government. It is all because the workers want more money."
    There sits the Lord Privy Seal, who made a promise to the workers that they could double the standard of living in twenty-five years. There is a long way to go before that happens, and they have not started on the job yet. If the right hon. Gentleman cares to interview the 600,000 unemployed, they will tell him how far the Government have gone along the road to doubling the standard of living.
    One would have thought that as the Government are now stimulating the economy, as they are, with the instruments which the Labour Government left for them, they would see the problem about wages and that they would do everything that they could to obtain the sort of human relations in industry without which we shall never get increased productivity. Increased production overall is one thing; increased productivity is also highly important and is quite a different thing.
    Increased productivity means new techniques. It means new machinery, and to get new techniques and new machinery into industry we have, first, to have very good relations, so that the workers understand what it is all about. Secondly, we must not have a large army of unemployed, for the workers will not help over the introduction of new machinery which leads to a number of their colleagues working themselves out of jobs. Therefore, it is important to reduce unemployment, and to get good relations in industry.

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    Just at the time when we want to do that, the Minister of Labour decides that he will get rid of the Industrial Disputes Order. Why? Because some employers do not like it. I regard this as the strangest thing that I have ever heard from the Minister. I do not quarrel at all with getting rid of the Defence Regulations under which it was made. What I do not understand is why the Minister did not enshrine what I think has been a very valuable addition to our arbitration machinery—I ought to think that, because introduced it—in an Act of Parliament. Why dispense with it altogether?
    In the seven years in which this Order has been in operation, I think that there have been over 1,100 cases before the Industrial Disputes Tribunal, and in only four cases did the unions resist having their case taken before it. Therefore, there has been a settlement of what might conceivably have been about 1,100 disputes in factories or workshops. They may have been big ones or only small ones.
    What is the complaint about the Order? The T.U.C. have said that they ought to have had much better consultation, and the Minister of Labour yesterday had second thoughts. He said that it is advisable not to permit employers to undercut other employers who observe decent wages and conditions. He ought to tell us where is this body of opinion from outside that wanted to be rid of this Order, which, he is bound to admit, has played some part in and made some contribution to the settlement of disputes in industry. I must say that I think it is a remarkable thing that the Minister of Labour should, at this stage, wipe out this piece of arbitration machinery at a time when I believe that he will want it more than ever before.
    All I want to say in conclusion is this. Yesterday, the Chancellor of the Exchequer reeled off a whole series of what I think he called the Government's achievements. Personally, I do not think that the public at large will interest itself very much in the list of achievements which the right hon. Gentleman gave. There is another chronicle of the achievements of the Government, and, after all, this is a Government which was elected on a pledge to reduce the cost of living—I think that the phrase was "mending
    802
    the hole in the housewife's purse." The other pledge was "Eden for peace." There, of course, they had the picture of Sir Anthony Eden in six-sheet posters posted throughout the country. These were the pledges upon which the Government were elected, and this is their record, as I see it.
    Since the last General Election they have led us into an abortive war in Suez, which, apart from the loss of prestige, cost the country about £400 million. They succeeded in reducing the value of the £ from 20s. to 15s. 6d. They pushed up the prices of consumer goods in a falling world market, pushed up the price of food by 40 per cent., and the cost of living by 30 per cent., stagnating the economy and creating the largest army of unemployed in the post-war era. It is for these reasons that we ask the House to vote for the Amendment.
    4.54 p.m.
    Mr. Alan McKibbin: The right hon. Member for Blyth (Mr. Robens) dealt with the unemployment situation, as did my hon. Friend the Member for Belfast, South (Sir D. Campbell) yesterday, and there is nothing very much that I can add to what my hon. Friend said. There is, however, one point on which I should like to support him, and that concerns the safeguarding of the future of Messrs. Short and Harland's, the aircraft manufacturers. I do so not only because this firm's principal works are in my constituency, at Queen's Island, Belfast, but also because of its importance in the economy of Northern Ireland.
    The layout of this factory is very up-to-date, and, with its skilled workers and its own designing team, this firm has facilities for manufacturing and repairing aero-planes and making guided missiles second to none in the United Kingdom. To my mind, it is absolutely essential that, for strategic reasons, it should be maintained as part of Britain's line of defence, since it is well away from the mainland. I hope that my right hon. Friend the Minister of Defence will bear this in mind.
    There have been rumours in the Press and in various other places that Britain's air chiefs are trying to get the Government to buy a fleet of Lockheed or Douglas aircraft for Transport Command. I hope that they will never be anything

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    else but rumours, for, whatever the superficial attractions of purchasing aircraft from the United States may be, I trust that the Government and the Ministries concerned will think very hard indeed before dealing such a blow below the belt to the British aircraft industry and to Messrs. Short and Harland's in particular, who are at present developing a freighter version of the Bristol Britannia. I hope that my right hon. Friend the Lord Privy Seal, who is to wind up the debate for the Government, will give us a definite assurance on this matter, because there is very real anxiety about it.
    The recent successful proving flight of Short's S.C.1 vertical take-off and landing plane must have been heartening news to my right hon. Friend the Minister of Supply, who is sponsoring this research, and also to the British aircraft industry, which will benefit from the research. My right hon. Friend has been very helpful in the past in understanding our difficulties and our unemployment situation in Northern Ireland, for which I am very grateful. I hope he will do everything in his power to see that shortage of money does not prevent further progress in the development of this project, which may well make our airliners superior to any others in the world.
    I also hope that something will come out of the project that will give increased employment to the workers at Short and Harland's and in Northern Ireland, because any redundancy there is a very serious matter. In Great Britain other doors are open, but in Northern Ireland, in the case of men leaving Short and Harland's, there is practically no alternative employment available for skilled aircraft workers and designers.
    I have a great deal of sympathy with my right hon. Friend the Minister of Supply in the difficult position in which he finds himself in this matter in regard to this aircraft factory, but I would suggest to him that in the special circumstances that exist in Northern Ireland, which are not common to any other part of the United Kingdom, he would be fully justified in giving specially favourable treatment to Short and Harland's in the placing of orders for both civil and military aircraft.
    4.59 p.m.
    Mr. Herbert Morrison: I am glad that one of the hon.
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    Members from Northern Ireland has spoken. Undoubtedly, Northern Ireland is one of the most seriously affected areas in the United Kingdom in regard to unemployment, if, indeed, it is not the most seriously affected. That has been the case for some time, and my right hon. Friend the Member for Blyth (Mr. Robens), whom I congratulate upon his speech, says that the figure is 10 per cent. That is a very serious figure, and I hope very much that the appeal of the hon. Gentleman opposite will be given—
    Mr. McKibbin: It is only 8 per cent. at the moment.
    Mr. Morrison: The hon. Member for Belfast, East (Mr. McKibbin) says it is only 8 per cent., and, therefore, there is some dispute about the figure. I am not going to dispute what he says, except that I would not use the word "only" if I were him when speaking in Northern Ireland. However, I hope very much that something will be able to be done.
    One of the things I have always regretted is that Northern Ireland does not elect to this House two or three Labour Members. I think that they would be doing Northern Ireland's economic position more good than any other single thing, because that would make a Government pay more attention to Northern Ireland than the Government pay at present. Therefore, if anything could be done in that direction, it would be a very good thing for Ulster.
    My complaint about the Government's economic policy since 1951 is that it has been a sort of on-and-off evolution. There has been no systematic outlook about it and for the greater part of the period it has been dominated by electoral tactical considerations. Indeed, probably one of the biggest personal factors in the economic upsets through which we have been going was the period of office at the Treasury of the Lord Privy Seal. He deliberately preached a free-for-all. That was his philosophy and his outlook. He was such an all-out anti-planner that he went to extremes the other way and preached a free-for-all with everybody doing as they liked.
    The food subsidies were slashed, in specific conflict with the promise which the right hon. Gentleman made at the election a few weeks earlier and which Lord Woolton made too. Price controls

    805
    were withdrawn, bulk purchasing was stopped, and some controls which had relevance to the cost of living were also stopped. All this in one way or another had some effect upon the cost of living. Indeed, in some ways deliberately of their own action and with knowledge aforethought, the Government put up the cost of living. That must have been so. When they slashed the food subsidies they knew that they were putting up the cost of living, and they did it deliberately. The same was true when they removed a number of price controls.
    The cost of living went up, but the present Lord Privy Seal, who was then the Chancellor, was not worried. He allowed it to go on, with a lightness of heart that was utterly irresponsible. The inevitable consequence was that there were claims by trade unions, pushed on by their members and, let me add, by the members' wives, for more wages. It was a great pity, because the Labour Party, the Labour leaders and the Labour Government had impressed upon the trade unions the desirability of restraint in applications for wages. It was not a freeze but a restraint, and that was in return for a genuine effort on the part of the Labour Government to keep the cost of living as steady as we could in more difficult circumstances than have been faced by the present Government.
    The claims came. It is commonly assumed that the only people who claimed better incomes were trade unionists, but it must he faced that there were business and professional people who wanted more money and got it. The higher Civil Service received substantially increased incomes. Dividends went up and bonus shares were issued, and even Ministers and Members of Parliament and the judges received more money. We were all in it. That demand, at any rate in part, was deliberately created by Her Majesty's Government at that time.
    This was the result of the anarchist philosophy and outlook of free-for-all. In comparison, I say that the Labour Government's record in economic affairs was very much superior to the record of the present Government. I am certainly not claiming that everything in the garden, or even out of the garden, was lovely. There were some troubles and we had some nasty surprises, but the House should
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    remember that we were facing the transition from the economics of a great world war into those of a period of peace. We had to face that period of six years which inevitably was an exceedingly difficult period.
    We planned and we controlled where controls were necessary and desirable, and not merely for the fun of the thing. We were faced with a substantial increase in the cost of imported commodities, including food, whereas this Government have faced a decreasing level of prices for imports. Notwithstanding that increase in import prices, the Labour Government really steadied the cost of living, although the cost did increase. When the record is compared with what has happened under the present Government, when import prices have been falling, and when we take into account the fact that import prices went up through no fault of the Labour Government's, just as they have been falling through no virtue of the present Government, I say that we made a better job of economic affairs than this Government have done.
    Let us take another test of Labour and Conservative economic government. Let hon. Members recall the period of the First World War with a predominantly Conservative Government in power.
    Mr. John Mackie: A Liberal Government.
    Mr. Morrison: No it was not a Liberal Government. It was a predominantly Conservative Government. Let the hon. Member remember the advantage that was taken of the 1918 Election to get a predominantly Conservative Government.
    Mr. Mackie: Lloyd George.
    Mr. Morrison: Lloyd George was Prime Minister for a short time after, while it suited the Conservative Party. Directly he had done his part and had worked his passage, the Conservatives threw him overboard. Why people join the Conservative Party from another political party I do not know. The Conservatives treat their recruits very badly indeed. Out Lloyd George went. They dropped him. That Government announced their intention to do some economic control and planning. I believe that an announcement to that effect was made by the right hon. Gentleman

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    the Member for Woodford (Sir W. Churchill) at that time, but within a matter of days they threw the plan over. The cry of "Business as usual," like "Conservative freedom pays," was taken up, and that predominantly Conservative Government, with a very big majority, made an absolute mess of the post-war economic situation after the First World War. Prices went up. Wages did their best to go up after them, but not with a great deal of success. In due course there was unemployment which we never got rid of until there was another war. It was a miserable transition from war to peace.
    I say, therefore, that in a comparison of our record with that of a predominantly Conservative Government after the First World War, the Labour Government after the Second World War come out with flying colours. Indeed, there would not have been the degree of full employment that we have today if there had not been a Labour Government following the Second World War, because hon. and right hon. Members opposite would have gone in for a free-for-all earlier than they had the chance to do and they would have made a mess of it.
    The Labour Government had a more difficult task but, nevertheless, they came through it pretty well. But the vicious circle which had been created by the present Lord Privy Seal when he was Chancellor of the Exchequer went on, and the Conservative Party played politics at the expense of the nation. It is doing it now. The Conservative Party now is subordinating the interests of the nation to what it thinks will be its electoral advantage. That, and nothing else, is what the Conservatives are doing.
    They brought out their poster, "Conservative freedom pays"; and they issued other posters asserting or implying that they would reduce the cost of living, and they did not do so. They really are a shockingly untruthful lot of people, these Conservatives. They relied not upon economic planning and economic controls, but upon monetary controls. I do not know why, but I suppose they thought these were the least socialistic of the systems of control. There were monetary controls, although these were not proved to be sufficiently adequate for the work in hand.
    808
    They neglected selective productivity. I want both sides of the House to give credit to prominent Labour Party people and prominent trade union people for two things we did in the post-war period in educating the nation. One was to show that wage increases alone were not enough, that the workpeople had to keep their eyes on the cost of living as well as on the level of wages; that if wages went up and took up the cost of living as well, they could be no better off and maybe they would be worse off at the end of the day; that what mattered to the housewife was not so much the actual amount of money but what the money would buy. We convinced millions of people that this was so, and it should be remembered that that was not an easy thing to do because the people had many years of experience of the employers trying to keep wages down and of efforts by the unions to get them to a reasonable level.
    The other thing we taught the work-people was not to be afraid of production and productivity. That took a bit of doing. If hon. Members will take their minds back to the 1930s they will remember that what everybody was afraid of, whether workpeople or employers, was more production. They were both in a way trying to resist more production because of the fear of a consequent growth in unemployment. We had to break all this down at a time when it was tempting for working people to take another point of view, and I say, with all due modesty, that this country will owe a great debt to the really brave Labour Party and trade union leaders of that period for the efforts made to educate our fellow working people in the direction desired.
    We did a lot to the good in that way, starting with the Margate Conference of the Labour Party in 1946, when I myself made a speech on economic affairs and similar things were said by Sir Stafford Cripps and others in the Labour Government. We taught the working people that production was not an enemy of working class well-being but a friend and an aid, and they have come to accept it. But do not let the House think it was an easy task to get this idea across in the light of experience.
    The consequence of the lack of productivity, of this lack of efficiency in

    809
    production and in keeping prices down, is that it has had a bad effect upon costs and upon exports. There are not enough priorities economically in the policy of the Government. There were cuts in capital investment in the socialised industries, for at that time the Government were tempted to cut the socialised industries more than anything else. There were cuts, and there are still cuts, in the local authority services. It is not much good Ministers making speeches on the importance of the development of technical education for the well-being of our industries and then refusing permission to local authorities to develop technical education.
    So much for the period of the first Conservative Chancellor of the Exchequer after the war. We then come to the period of the right hon. Gentleman the Member for Monmouth (Mr. P. Thorneycroft), who we are sorry to see is not taking part in this debate. He decided to take a much stiffer line. He reimposed a number of controls. He materially raised the Bank Rate. He imposed restrictions on 'hire purchase and upon bank advances. All of these actions were supported by the Cabinet of which he was a member and of which most of the right hon. Gentlemen on the Front Bench today were members too. Then the trouble came about he expenditure which the right hon. Gentleman was trying to hold, and as a result of the stand he made for Conservative policy, and for all the promises the party had made to keep public expenditure down, he had to resign from office.
    Now we have another Chancellor of the Exchequer. Everybody feels he is a sort of uncle, and I gather he is not discouraging that feeling about himself. We heard the right hon. Gentleman yesterday in a speech which did not answer in the least the speech of my right hon. Friend the Member for Huyton (Mr. H. Wilson). It was a steady effort of exposition with no attempt to answer the very powerful speech made by my right hon. Friend.
    What is happening under the right hon. Gentleman? We are now moving towards the election and the election experience comes in again. The Government are afraid of people being a bit controlled in their expenditure in the interests of the public economy and in the national interest. So now the
    810
    Government, having condemned inflation, the right hon. Gentleman the Member for Monmouth having taken steps to check inflation, the Government having boasted that they have stopped inflation, are now letting things rip again. We are once more in the period of a free-for-all. The Midland Bank starts bank loans on the nod, so it is implied—and this is a respectable bank. Yet, after all, if the Midland Bank is doing a thing like this it must have an inflationary effect.
    There is a reverse on hire purchase and everybody is almost encouraged to get things on the never-never principle. Indeed, the poor motor car people have almost had to lock their doors because too many people have been coming to order motor cars. The I.T.A. is making a lot of money and is now claiming another channel so that it can develop still further. This will mean more inflation. Incidentally, I hope the Government will be careful about swamping the country with commercial television. which is itself inflationary in its influence.
    Although this loosening up of spending has taken place, although these deliberately inflationary policies in consumption have been adopted, in the meantime the amount of industrial investment has been slowed down. But now the Government think they should have some industrial investment—again keeping their eyes on the election and on the unemployment figures. They told us yesterday that, although they will sanction some, it will take one, two, or possibly three years before the investment can fructify. The Government ought to have been ready, and the industries for which they are responsible ought to have been ready, to press a button and get this capital expenditure going. The plans, the estimates and the schemes ought to have been there. They are not there. and they are not there precisely because the Government wobble all over the show, one minute being irresponsibly expansionist in consumption and another minute being irresponsibly restrictive in industrial development. The consequence is that they are late in being ready for capital expenditure and investment, and they are unprepared. That is a very serious and bad thing.
    Yesterday the Chancellor dropped a phrase about which he will hear more. I do not want to be unjust to the right

    811
    hon. Gentleman because I know it is possible innocently to use a false phrase, but a lot of people will take a bit of convincing that what he said did not really represent at any rate his subconscious, if not his conscious, mind. It fits in with the Conservative ideals and philosophy, and it fits in with a lot of what some papers who support the Government have said. The right hon. Gentleman said:
    "The level of the unemployment at about 2·2 or 2·3 per cent. is by any standards still a low figure and, relatively to most other industrial countries today, an excessively low figure."
    He said it, and it is on the record. Of course, hon. Members said "Excessively low?" and the right hon. Gentleman laid:
    "Certainly, it is an extremely low figure".
    Then hon. Members said "Extremely low?" and the right hon. Gentleman went on to say:
    "relatively to other industrial countries."—[OFFICIAL REPORT, 3rd November, 1958; Vol. 594, c. 634.]
    As I say, I do not want to be unjust, and I hope that it really was nothing more than a slip of the tongue, but I find it a little difficult not to feel that there was something of the subconscious about the matter which caused the words to slip out. I can assure the Chancellor that there will be a lot of working-class people who will feel that that is so.
    There are—do not underestimate it—real and grave fears among the working people about unemployment. They have long memories and, even if they had not, their forebears, their mothers and fathers, have long memories about the period in the 1930s. It is very important to keep full employment a real factor. If it begins to go we shall have breaking out again the disease of restrictive practices and more than ever a desire that production shall not increase and a desire to go slow. I do not want that. I want a healthy working class that is proud of its country, and particularly of its publicly-owned industries, and one which is giving energetic service to the nation.
    If unemployment arises and the people feel that the Government are indifferent to the growth of unemployment, then there will be difficulty so far as those things are concerned. I do not want that.
    812
    I would say that perhaps the major trouble is that right through their life the Government have been electioneering. They were electioneering under the Lord Privy Seal who, I admit, is not exactly a fool
    The Gracious Speech, for which, of course, the Government are responsible, is an electioneering document. The Blackpool Party Conference was an electioneering conference. As far as I can remember, it is about the first time that a Conservative Party Conference has been taken seriously by a Conservative Government. The Government are carrying out the decisions of that conference almost line by line, which is a most extraordinary thing for the Conservative Party to do. All of this is politics. [HON. MEMBERS: "Motor cars."] Yes, motor cars. Almost within a matter of days the Bill is ready to go through. As I say, all of this is politics.
    I ask the Government, where does the nation come in? Are the Government thinking only of the Conservative Party? Is not it time that they thought of John Bull? Let me freely admit, before it is alleged against me, that I, too, have taken part in elections. If I may follow the Prime Minister—perhaps I am wrong —he said that he made a speech which was a very good one. I have taken part in elections not altogether unsuccessfully. Of course, it is better to take part in a successful election than in an unsuccessful one, even though one may gain a moral return.
    I believe that in conducting its election campaign the Labour Party has always been predominantly concerned with the well-being of the country and of the world, just as I believe that the Conservative Party, historically, has been more concerned about the capitalists and land owners than about the well-being of the country, and that it is now more concerned with its political and electoral prospects and is subordinating national interests to electoral considerations. I say that a Government of that sort, a Government with such a low public spirit, is one that does not deserve the confidence of the House of Commons.
    5.26 p.m.
    Sir John Barlow: I am very pleased to have

    813
    the opportunity of addressing the House after the right hon. Member for Lewis ham, South (Mr. H. Morrison) who, I am sure, will forgive me if I do not follow him very far in his arguments. [HON. MEMBERS: "Why not?"] If the Opposition want me to give one or two answers to the right hon. Gentleman's arguments, I will certainly devote a few minutes of my time to his speech.
    The right hon. Gentleman began by deploring the fact that there were not two or three Labour Members representing Northern Ireland constituencies in this Parliament. The people of Northern Ireland know much too much to return Labour Members, and the right hon. Gentleman is not likely to see any in the near future.
    The theme of the right hon. Gentleman's speech was the criticism of the abolition of controls by the present Government since it came to office in 1951. Does anyone mean to tell me that the people would wish to return to all the controls to which they were subjected under the Labour Government of that time, when they had ration books and pieces of paper and were 'flowed to buy only certain restricted amounts of clothes and food? I do not think so for a moment.
    The right hon. Gentleman went on to make other criticisms of the work of the present Government. Among other things, he criticised the general increase not only in wages and salaries, but also in Members' salaries. I do not remember that the right hon. Gentleman or any other hon. Member opposite voted against the increase in Members' salaries. The right hon. Gentleman went on to say that the record of the Labour Government was far superior to our record. In fact, it seemed to me that what he was saying was the beginning of an election speech. I hope that when the General Election comes the right lion. Gentleman will improve somewhat on that speech.
    The conditions prevailing at the time of the 1951 General Election—and I think that I remember them correctly—were those of rampant inflation and a serious shortage of houses. The shortage of houses was the gravest difficulty. The Labour Government had been unable to provide the houses which the people required. That, I think, was the greatest
    814
    single election issue. That problem has since been substantially solved. We hear very little now about a shortage of houses. There may be pockets of such a shortage, but as a national issue it is dead and gone.
    Similarly, at the General Election in 1951 there was the question of inflation. The Labour Party left us with a heritage of rapidly mounting inflation which might easily have been disastrous to the country. The votes at that General Election showed that the country did not want increased inflation, and the Conservative Party has, in the course of time, put that matter right.
    On numerous occasions I have been critical of my own Government for not tackling the question of inflation sooner, and I am on record in HANSARD of 26th July, 1955, as saying that in my opinion the then Chancellor of the Exchequer was not sufficiently tough, that he should put up the Bank Rate very substantially and curb the tremendous scourge of inflation. As the House knows, that matter was not seriously and severely tackled until thirteen months ago. At that time the Government proposed a 2 per cent. increase in the Bank Rate which I would like to have seen imposed very much sooner. That was one of the Socialist remedies which the right hon. Member for Blyth (Mr. Robens) said we had adopted on the lines of what the Labour Party had done. I assure the House that the remedy of increasing and decreasing the Bank Rate was in existence long before the Labour Party and long before the right hon. Gentleman.
    The right hon. Member for Lewisham, South seemed to criticise the Government for taking action to increase or decrease the cost of living and inflation and in regard to the stabilisation of prices. It would seem to me that he disliked using brakes or accelerators in any way. We like using them very much less than the Labour Party. The party opposite likes a policy of complete controls. We like to use the minimum of controls. The right hon. Gentleman talked about cars. I assure him that if he goes on a car ride and does not use either the brakes or the accelerator he will have a very poor run indeed. [An HON. MEMBER: "What about the steering?"] That must be used too.

    815
    The right hon. Gentleman repeatedly accused the Lord Privy Seal of electioneering, and said that the Lord Privy Seal was not exactly a fool at the game. I might return that to the right hon. Gentleman; he has a great reputation at elections and he is not exactly a fool at the game either. However, I would urge him to refurbish his speech a little before the General Election if he hopes to get substantial support at the polls.
    As I come from Lancashire, I should, naturally, like to refer briefly to the all-important Lancashire cotton industry.
    Mr. E. Fernyhough: What are the Government doing about it?
    Sir J. Barlow: I will tell the hon. Member in a moment. The Prime Minister paid considerable attention to this very important industry. We in Lancashire are delighted that the Prime Minister is taking such a personal part in this very important issue. It was only a fortnight ago that he came up to the cotton conference, at Harrogate, and made a very important speech in which he expounded the policy of the Government and showed the responsibility that we have as a great Commonwealth nation towards the smaller Commonwealth countries and colonial countries. The Prime Minister put it across to Lancashire far better than it has ever been done before. We in Lancashire welcomed very much indeed the fact that he came himself and that his mastery of the details of the matter was so evident.
    As the Government and the country as a whole undoubtedly have a great responsibility towards the Commonwealth, and as the cotton industry is the first large industry to suffer from such competition as this—when we get a comparatively young Colony with cheap, efficient labour, competing against one of our greatest natural industries—I suggest that it is a new issue which we shall have to face. It is a difficult problem. There have been smaller examples. The glove and umbrella industries have had a bad time in the past, but those small industries suffered nothing compared with the knock which the textile industry has had from not only Hong Kong, but other countries as well. Because Lancashire cotton has to bear the brunt of the new issue, I think that the Government should try to be a little kinder and more sym-
    816
    pathetic towards us in our troubles. I was delighted to hear the President of the Board of Trade today; I thought that he was much more forthcoming towards our industry than I have heard him before.
    The House knows only too well the story of the diminution of the cotton textile industry, how it is less than one-fifth of what it was forty years ago, and its various recurring troubles. I was told during the last few days that even subsidised cloth is being offered from the East, not from Hong Kong, but from a country which is very short of sterling exchange. That country is definitely prepared to subsidise cloth to get exchange at any price. I hope that the Government will keep an eye on that and stop it immediately, because that is, in every sense of the term, very unfair competition.
    Naturally, we are all watching the negotiations with Hong Kong with very anxious eyes. The negotiations have been going on all too long. The increase in imports of grey cloth from Hong Kong have been rapidly growing, and the figures which are suggested by them as a ceiling are very much larger than the present imports. In a matter of this kind it needs good will and understanding on both sides to arrive at a suitable conclusion. It would be no service to Lancashire if too large a ceiling were allowed in Hong Kong, and in the long run it would probably be a disservice to Hong Kong also.
    Undoubtedly, understanding and good feeling are of the utmost necessity in this case. There are a number of very responsible European leaders in Hong Kong and I hope that they will use their influence to do what they can, because they have far greater experience than some of the newer mill owners there. If we are to play the Commonwealth game, to which I attach great importance, it is in such a case as this that a new country in a difficult position, obviously wanting to get all it can, must try to take a farsighted view and be reasonable.
    There is no doubt that the textile industry in Lancashire must diminish even further. I do not know how much. But it is of the utmost importance that there should be an ordered reduction and that we should not let the weakest go to the wall, for that could do a tremendous amount of damage to the whole industry if it were allowed to happen. I should

    817
    like to see each section of the cotton industry —the spinning, weaving and finishing sections—put forward proposals for redundancy schemes, and I should like the Government to approve them and give assistance.
    In the past there have been redundancy schemes, some of which have been successful and others unsuccessful. In 1948, the printers put forward a redundancy scheme which had the approval of the Board of Trade at that time, but after a few years it was condemned by the Monopolies Commission as more or less antisocial and was abolished. That sort of thing is no good.
    We shall have other industries in the future which for one reason or another through the general evolution of industry will grow and also diminish. If one has a declining industry, it is of the utmost importance for it to be reduced in an orderly way. It is most difficult for the industry to achieve this itself, especially a Lancashire industry which has so much traditional individualism. I think that most of the leaders in Lancashire recognise that a lot of waste will have to be cut out, but, again, it needs good will on both sides for a conclusion to be reached.
    We do not want to waste vast sums of money modernising mills and then, in a few years' time, destroy them. It is infinitely better to decide quickly what should be cut out and what should be modernised and then get to work. It does not need control. It needs redundancy schemes which are agreed by both sides, which is not impossible. I hope that the Government will do all they can in that direction.
    Lancashire has some of the most modern mills in the world, but they are not all modern. When we get the industry as a whole modernised, I hope that labour will play its part, too. Some very interesting figures emerged from the Harrogate conference, where it was shown that the average number of hours worked in Lancashire cotton mills was just over 2,000 per annum, whereas in Germany the figure was double this number, in the United States it was about 6,000 hours and in Hong Kong, it was over 8,000 hours a year. These figures should be changed.
    Incidentally, concerning the Hong Kong figures. it was pointed out a few
    818
    months ago by the hon. Member for Farnworth (Mr. Thornton) that female labour in Hong Kong was working 12 hours a day, some of the women working two shifts with only four or five days' holiday a year. I feel that the House would not tolerate such conditions continuing very long in a Colony like Hong Kong and I hope that my right hon. Friend the Lord Privy Seal will tell us what is being done in this direction.
    I am delighted with the action that my right hon. Friend the Chancellor of the Exchequer has taken in remedying the difficulty of our economic position. The party opposite wants complete controls. We want the minimum of controls. I think that the Chancellor is doing a verb fine job of work.
    5.43 p.m.
    Mr. G. M. Thomson: I he hon. Member for Middleton and Prestwich (Sir J. Barlow) began his speech by asking, in tones of incredulity, whether it was possible that anyone would like to see the return of a Labour Government with their controls. It seemed a rather odd question for the hon. Member to ask in view of the rest of his speech.
    Mr. John Hynd: What the hon. Member asked was whether the people really wanted the return of all the controls they had under the Labour Government just after the war.
    Mr. Thomson: It seemed an odd question, because the hon. Member went on to discuss with some erudition the problems of the textile industry and to make a plea, as I understood him, for a controlled and planned decline in the cotton textile industry.
    Sir J. Barlow: I hoped I had made it clear that it should be partially self-imposed with the help of Government
    Mr. Thomson: Yes, with the help of the Government. I can only say that if the hon. Member cares to come to my constituency, and talk to some of the jute employers there, he will find that in the privacy of their offices they will confess to him that they, at least, are longing for the day when a Labour Government will return and give the jute industry some security. They may well go into the polling booths and cast their Conservative votes, as they have done traditionally, but in their hearts they hope that there will

    819
    be a return of a Labour Government, for it is only in that way that there can be any security for the future of the jute industry.
    It has been widely said in this debate that there is no question of anybody, on either side of the House, foreseeing a return to the mass unemployment of the 'thirties and I am sure that, taking the country as a whole, that is true. We ought, however, to be aware that the one thing that prevents mass unemployment on the scale of the 'thirties in Dundee today is the existence of State trading in imported jute goods. Recent unemployment from which we have been suffering in Dundee has been primarily due to the interference by the Government in that form of State trading. The best calculations that the non-political experts make is that if this State trading were to be removed—and the President of the Board of Trade has not tried to conceal his hostility to this State trading machinery—it would mean unemployment in Dundee of the order of 20 per cent.
    I ask the Government once again whether, even at this stage, they will not at least give a definite assurance to the jute industry that there will be no further reduction in the level of protection provided by the State trading machinery. I ask this question with little hope of getting a favourable answer, but the Government ought to be given yet another chance to try to give the industry in Dundee some sort of certainty for the future.
    I want particularly to refer briefly to the special problems that afflict an area like Dundee. I take Dundee as a typical example as one of the black spots of unemployment. It is not always realised that so-called black spots are not merely areas of higher than average unemployment. They are areas which, besides having been affected by the national level of unemployment due to Government policy, have a distinctive unemployment problem of their own. My right hon. Friend the Member for Blyth (Mr. Robens), who opened the debate from this side of the House, made some mention of this.
    Dundee is a typical example of a traditional industry—jute—which dominates an area facing fundamental changes in
    820
    the kind of markets with which it deals, facing fundamental changes in its technology and facing the problem that, as it modernises itself, as it has done effectively since the war, it creates more unemployment by employing fewer people. This is the same sort of situation that the hon. Member for Middleton and Prestwich finds in the cotton textile industry and as is to be found in certain parts of the steel industry and in mining and elsewhere. It must be appreciated that the only way in which the problems of that kind of industry can be tackled is by decisive Government intervention.
    The basic decision has to be taken that the social cost of allowing that kind of community to be killed through the industry dying is much greater than the economic cost of attracting new industry to the area. I am sure that this would be true if it could be calculated in simple financial terms. I am certain that it is true if calculated in any kind of human terms and in terms of a decent and healthy distribution of industry and of urban conditions of life throughout the community. This requires fairly drastic Government intervention and real decisiveness on the part of the Government in adopting the kind of policies that flow from this decision.
    I can only say that during the years of the present Government, we have had no kind of evidence that they are willing to take that kind of action either in intervening to control the decline of unemployment in the traditional industries, or to provide new jobs.
    My second point about the special problems of the black spots is this. The choice that faces the country nationally is between the present cycle of inflation and recession as practised by the Government and the steady expansion through economic planning as advocated from this side of the House. This cycle of inflation and recession is catastrophically wasteful for the country as a whole, but for areas where the basic traditional industries are facing a decline, that kind of fluctuation is disastrous. The new industries can only be attracted into places like Dundee, Lanarkshire, or Wales if there is a national economic climate of steady expansion.
    For example, during a period of credit squeeze, such as we have been experiencing,

    821
    it is almost impossible to persuade new industries to take the plunge in order to find the finance to go to one of these black spots. Then, when the other side of the cycle comes, when we get the next Butler boom, the companies which are thinking about going to one of the black spots are bound to say to themselves that by the time they get their factories built and move into them, we will be back in a. recession again. It really is impossible to achieve a steady expansion with new industry unless one does it against that sort of national background.
    I was much interested to notice certain comments made by the President of the Society of Motor Manufacturers at the Motor Show the other day. He is quoted in The Times of 27th October as saying that he is strongly opposed to a policy of expansion by fits and starts, that
    "It must be steady expansion, not a surge followed by restraint."
    If that is true of the motor industry, how much more is it true of those industries which we are trying to attract into areas like Dundee and other places in Scotland which have high unemployment.
    The third point I wish to make about unemployment is more general. There ought to be a greater awareness in the country of the kind of move which Her Majesty's Government are making. I am convinced that they are trying to go through a series of operations designed to bring about the end that public opinion in the country will be accustomed to a new higher level of unemployment and accept that as being the normal level of full employment. They want them to become used to the idea that full employment means a level of unemployment in the country substantially higher than what the nation was accustomed to during the period of the Labour Government.
    I notice that it has been reported in the Press recently that the Leader of the House spent his Recess studying the ancient Greek political philosophers. I do not know what the Prime Minister studies. I rather suspect that he studies one of the Italian medieval political philosophers. I sometimes feel that he is not so much a spiritual descendant of Macmillan of Arran as of Machiavelli of Florence.
    When one looks at Conservative policy on a number of matters during the last
    822
    year or two, since the Prime Minister came to office, one finds a certain consistent pattern. I sometimes feel rather concerned for the ordinary, conscientious citizen who tries to follow what the Conservative Party is doing with regard to any particular subject. He is rather like somebody who plunges into a very thick wood and is so busy trying to find his way through the labyrinth of trees that it is not until he gets out the other side that he finds that his pockets have been picked.
    We may take as an example the general grant legislation. This was an extremely complicated financial Measure, quite baffling to the ordinary layman, but the simple effect of it was to cut down the Government contribution share in educational expenditure. If we take the quite virtuoso performance we had from the Minister of Pensions and National Insurance earlier in this debate—somewhat shattered by my hon. Friend the Member for Coventry, East (Mr. Crossman)—there was an immensely complicated exposition of all the financial intricacies of superannuation, there was a facade of a national pension scheme, all designed to obscure the fact that the Government are trying to transfer from the Exchequer and the wealthy taxpayer ultimately about £400 million to the ordinary contributor.
    The Government are going through these complicated manoeuvres and trying to do the same kind of thing in regard to unemployment. I take as my example the experience in my own constituency. In June this year. there was 7 per cent. unemployment in Dundee. At present, we are all very glad to see that unemployment is now running at 4·5 per cent. It is a good deal lower than it was in June, though it is still twice the national average. The point is that we are now being told by Conservatives in Dundee that, since it has dropped from 7 per cent. to 4·5 per cent., everything is really all right; that things are getting better. In fact, of course, unemployment today is about three times what it was when the Labour Government left office in 1951. It was then running at 1·6 per cent.
    I believe that what has been happening in Dundee in the last few months is the sort of thing which the Government will try on the country in the next few months. Unemployment will go up during the winter and it will come down again in

    823
    the spring. The Government will go to the people in an Election in the spring, asking them to notice how the unemployment figures have improved from the height they were in February, about which the Minister of Labour prophesied last night. They hope that people's memories will be sufficiently short not to compare the new Tory level of full employment with the old Labour level of full employment.
    The Conservative Party consistently under-estimates the intelligence of ordinary people. When they put forward their hire-purchase relaxations, for instance, they greatly misjudge the kind of effect it has. I know the effect that it has on the people in my part of Scotland. They are not interested in five years' assurance of being able to pay for what they cannot afford anyway. What they want is five years' assurance of steady employment. I have heard of some Gilbertian Governments in my time, but I think that this Government ought to be called the Gulbenkian Government, with the Chancellor of the Exchequer cast in the rôle of "Mr. Five Per Cent."—a society in which anything can be had for 5 per cent. down with five years to pay at 5 per cent., the price of it being 5 per cent. unemployment.
    5.56 p.m.
    The Secretary of State for Scotland (Mr. John Maclay): The hon. Member for Dundee, East (Mr. G. M. Thomson) has made—
    Mr. John Diamond: A very good speech.
    Mr. Maclay: —a speech which the hon. Member for Gloucester (Mr. Diamond) might think is a very good speech, but which, I suggest, is in some respects rather unfair and not the sort of speech one would really expect from him. I will come to what he said point by point.
    Mr. William Ross: Can the right hon. Gentleman assure us that, when he does come to it, some Scottish Tory will join the assembled multitude on the benches opposite? I am sure that the hon. Lady the Member for Belfast, West (Mrs. McLaughlin) is very lonely sitting there by herself.
    Mr. Maclay: The hon. Member for Kilmarnock (Mr. Ross) has been a Member of this House long enough to know
    824
    that it is a very dangerous game to start pointing out a lack of people on the other side. I have seen it done by both sides of the House ever since I have been a Member, and I have always thought it a most unwise and foolish thing to do.
    Mr. Ross: One Tory Member to listen to the Secretary of State for Scotland.
    Mr. Maclay: As the hon. Gentleman knows, it is a little difficult, in looking at the business of the House, to guess exactly when certain things will happen, and a great deal of very important work goes on outside the Chamber, apart from the great deal of very important work which goes on inside the Chamber. Anyway, far be it from me to wish to occupy these few moments in arguing the subject too fiercely with the hon. Gentleman; I will devote another occasion to it, perhaps.
    To return to the speech of the hon. Member for Dundee, East, where I began, he was trying to establish what I would at once suggest is a most unfair deduction from events which have happened in saying that what he believed this Government were trying to do was to get the country accustomed to higher figures of unemployment than it was accustomed to under the Labour Government. The hon. Gentleman chose a rather dangerous year for his comparison. I think, in speaking of 1951. He has forgotten the Korean War. That can work either way, I know, but he chose a bad year, and if he will look up the figures he will find that throughout the period during which the party on this side has been in power the figures compare very favourably indeed with those during the years of the Labour Government, until we run into the recent figures, to which I will come in due course.
    What lurks behind the deduction which the hon. Member for Dundee, East attempted to draw is that the party opposite is in great difficulty in finding anything on which to attack the Government. [Laughter.] Of course that is so. Let us consider for a moment the speech of the right hon. Member for Lewisham, South (Mr. H. Morrison). In his speech a short time ago he seized on what was quite clearly a slip of the tongue, and explained as such by my right hon. Friend the Chancellor of the Exchequer. The

    825
    right hon. Gentleman knows very well that the fact was stated correctly, that, relatively, compared with a great many other countries, our unemployment figure has remained low.
    The right hon. Member for Lewisham. South was, however, very useful to us in serving notice of what the party opposite intends to do. With great candour, he explained that this is the thing which Transport House intends to run between now and the General Election. When the right hon. Gentleman reads what he said he will realise that he has given us, with some frankness, the line which the Labour Party will run. It is a poor line, but, as I say, hon. and right hon. Gentlemen opposite have to take it because they have great difficulty in finding any material on which they can either agree among themselves or on which they can possibly attack us.
    Miss Margaret Herbison: And this is the Secretary of State for Scotland, where unemployment is so high.
    Mr. Maclay: I am coming to that in one moment. I hope that the hon. Lady will wait until then.
    I do not propose to try to cover the full range of the Scottish points raised throughout the debate since it started last week. I think that it would be more appropriate if I tried to confine myself to the peculiarly Scottish points raised in the last two-days' debate. I should like, however, to finish with one narrow point raised by the hon. Member for Dundee, East before going slightly wider.
    The hon. Member for Dundee, East gave a fact, which gives great satisfaction to all of us, that the unemployment figure in Dundee is down. In fact, the latest one is not 4·5 per cent., but 4:3 per cent. This is the very latest figure and it is a source of satisfaction to all of us. I am not pretending for one moment that this is ground for complacency of any kind whatsoever. I think that it was unfair of the hon. Member for Dundee, East to say that explicitly, without recognising the immense amount of work that has been done by the Scottish Office and by my right hon. Friend the President of the Board of Trade and the Ministry of Labour, who took action to find new jobs in Dundee during a difficult period.
    826
    I think that the hon. Gentleman's words were, "Failure to take action to provide new jobs." I think that eight new factories in the last fifteen months. which should produce when they are built between 2,500 and 3,000 new jobs, is not failure to take action. It is the inducement that is working. I am convinced myself that it is of great importance to continue our work, and I admit that the party opposite did work on this, too.
    Mr. Thomas Fraser: Good gracious, the work it did in Dundee.
    Mr. Maclay: Why is the hon. Member saying "Good gracious"? I am stating a fact. We carried on that work.
    Mr. T. Fraser: Stopped it.
    Mr. Maclay: We have not stopped it. I have given figures for the last 15 months and I do not think that even the hon. Member for Dundee, East would say that that is taking no action, because these are Government-financed factories.
    Mr. G. M. Thomson: I gladly accept what the Government have done in this way. That was one of the parts which I cut out of my speech to save time. But they are, of course, extensions, and I was, dealing with the problem of actually bringing new firms into the black spots of unemployment.
    Mr. Maclay: I think I am right in saying that they are not all extensions we can look into that in due course. The hon. Gentleman has conceded my point. He loft in the attack, but he took out of his speech the part which stated what has actually happened, and that is of importance. I admit that we are in great difficulty in introducing industries and getting immediate results in Greenock. I wish that we could get them in Greenock. I must confess—I have a local interest—that if we could get some of the factories such as are coming to Dundee into Greenock, I should be a happier person.
    The hon. Lady the Member for Lanark shire, North (Miss Herbison)—I think it was she—told the House on the question of the Scottish Industrial Estates that it was really the Labour Party which started this and that it was the Labour Party's policy. It may not have been the hon. Lady who said that; I think that, in fact, it was the hon. Member for Hamilton (Mr. T. Fraser).

    827
    Let us get this right about the Scottish Industrial Estates. They were not a Labour Party invention. They started before the war. Nor was the Distribution of Industry Act a Labour Party invention. It was prepared in the days of the Coalition Government and was actually passed through the House during the short period of the Caretaker Government. It was not passed by the Labour Party, but was worked out by the right hon. Gentleman the Member for Bishop Auckland (Mr. Dalton), working with his colleagues in the Coalition Government.
    Mr. T. Fraser: And weakened by Lord Chandos.
    Mr. Maclay: No, not a bit. I do not want to go into that history. If the hon. Gentleman looks at my maiden speech in the House of Commons, he will learn a lot about that Bill, because I made my speech on it.
    Mr. Fraser: The right hon. Gentleman made his speech five years after he was elected, and I was Parliamentary Private Secretary to the President of the Board of Trade when be made that speech.
    Mr. Maclay: I think that the hon. Gentleman agreed with a good deal of it. If he agreed with what I said at that time, it was surely desirable not to confine the application of that Act only to the distressed areas, but to widen it so that it could be applied to some of the smaller industrial towns which could themselves build up very quickly. If he had listened to that then, the position would be happier in Scotland today.
    Mr. Fraser: By not listening to the right hon. Gentleman and carrying on the policy that we had in mind at that time, Dundee was converted from a distressed town to a boom town in six years. It is under six years of Tory Government that Dundee is back again to a distressed area. These are the facts.
    Mr. Maclay: I will go back to what I said about the Scottish Industrial Estates. It is a pity that we have to argue about this, but we cannot avoid it. The hon. Gentleman said it was started by hon. Members opposite, and I am not going to let it go by without an answer.
    Of course, we all have the same objective in this matter. I am talking about Scottish Members at the moment. There is, as every one of us concedes, the need
    828
    for further diversification of indsutry in Scotland. We are all worried by the fact—I think that I have made this clear myself time after time in public—that our unemployment level, no matter what the basic figure is for the United Kingdom, runs higher than the Great Britain figures, and I have myself expressed the view fairly often that I believe that the long-term cure for this—we cannot reach it overnight—is increased diversification of industry.
    This point was raised by the hon. Gentleman the Member for Hamilton last night, and I think that I had better deal with it. In the OFFICIAL REPORT, col. 722, he referred to a meeting in January, when the present Economic Secretary to the Treasury met the Scottish T.U.C. I am informed that what was said at that time was this, as distinct from the words that were used by the Nan. Member for Hamilton. His words were these:
    "The Parliamentary Secretary to the Board of Trade at that time, now the Economic Secretary to the Treasury, disagreed with the T.U.C. that more diversification was needed and said that Scotland would be wise to continue to concentrate on the heavy and traditional industries."
    I am advised that what was said was this. My hon. Friend the Economic Secretary is not here, but I have discussed with him what happened. He sent his apologies if he could not be here before I spoke. The Parliamentary Secretary, I understand, pointed out that the experience of the ten year period since 1945 showed that the new light industries which were much in demand after the depression in the heavy industries between the wars had fluctuated much more than the heavy and medium industries. which had proved to be very stable. That was at that time, because there was a heavy recession in the Midlands, which did not extend to Scotland. What the Parliamentary Secretary said was that some new thinking was required on the relative need for light industries. He suggested, generally speaking, that it would be to Scotland's advantage not to neglect the heavy and medium industries in which her workers were already skilled. That is the version which I have been given of what happened.
    He went on to say that there was also much to be said for not attempting to develop too wide a range of light industries. There may be sense in that. He was discussing a grave problem with responsible people. His point was that

    829
    in our search for light industries it would be folly to kill the heavy industries. No one is suggesting that we should do that, or would dream of doing it. The interpretation which the hon. Member for Hamilton put on that last night is not correct, particularly as it is not borne out by what the Government have done since they came to power, or in recent months. If the hon. Member for Hamilton wants to intervene—
    Mr. T. Fraser: But I saw the typescript of the meeting. The Parliamentary Secretary to the Board of Trade called the attention of the T.U.C. General Council to unemployment in the motor car industry during January, 1957, and asked, "Is that what you want for Scotland? If so, you had better forget about light industries." The Scottish T.U.C. never said it would neglect the heavy industries, and it was advised that it should continue to rest on the basic, traditional industries, mentioning coal, steel and shipbuilding. It was because of what it said at that time that I went on last night to show what had happened in coal, steel and shipbuilding since it was given that advice.
    Mr. Maclay: I have a version of what happened. I do not know to what typescript the hon. Member for Hamilton was referring. but there was no typescript available to me and to him. This version is the only one available to me of what was said, and that it is reliable is borne out completely by what our policy has been. I will develop that as I go on.
    I make no apology for concentrating my remarks upon Scottish industrial and economic problems. That is what I am here for. If other hon. Members are not interested in what is happening it is nevertheless very important to Scotland. Further, what is important to Scotland is very important to the whole United Kingdom. I have to follow up some of the things that have been said in the debate. I would remind the hon. Member for Hamilton that figures are dangerous, because they can be wrong and can be used selectively. He made a fair point in the middle of his speech in regard to the 1–25 proportion. He said that for every twenty-five new jobs in England there was only one in Scotland. Is that not right? He also reached the point of one in a hundred.
    830
    These are selected years. I can select a year in which the proportion was one to fourteen, and that quite recently. There must always be a proportion adverse to Scotland in the short run and even in the medium run. The figures that the hon. Gentleman worked on are total figures. The development of employment of all kinds must be very closely affected by the volume of industrial building in an area. Compared with existing building, the amount of new building is very small and its influence upon the growth of unemployment will be slow to take effect. It would take half a century to move, on the figures to which the hon. Member for Hamilton referred. and it might take more.
    Let me put an extreme example. It we have a steady inflow of people working in hotels in Brighton, Bournemouth and other South coast towns, we cannot suddenly transfer them to Scotland. It is thus most misleading to talk of what is happening in the whole of the country.
    Mr. T. Fraser: Has not the ratio of jobs in Scotland to those in England got worse every year since the Tories took over in 1951?
    Mr. Maclay: I have not the figures against which to check that statement, and I am not proposing to go into a statistical argument without having the same figures in front of both of us. I am pointing out the fallacy of the 1–25 proportion, or 1–100, which was used in the country and in this House. [HON. MEMBERS: "No."] Hon. Members must not shy off now that this point is being put to them. [Interruption.] They are trying to make me shy off. I put emphasis on this 1–25 and 1–100 argument because it is a fallacious way of stating the matter. I shall put figures to hon. Gentlemen opposite. and I shall need to do it very slowly if they are to understand them. Before they use that argument in the country I commend them to read very carefully the points which I shall produce this evening. I do not normally commend my speeches to a wider audience, but on this occasion I would appreciate some wider consideration. I will deal with factory buildings.
    We can approach the matter from a great many different statistical angles. If, after I have spoken, the hon. Member for Hamilton wants to inquire into the

    831
    precise series of calculations to arrive at the figures I shall be only too glad to give it to him. It would be very boring for me to give it to the House. I take the years from 1952 to 1957, and the test must be of building by organisations, whatever they may be, where the Government are involved. [Interruption.]
    Miss Herbison: No.
    Mr. Maclay: Wait a minute. There are two points here, refusal of I.D.C.s, and private building. I will deal with the point which interests the hon. Lady the Member for Lanarkshire, North (Miss Herbison) in due course, if she will wait. I want to deal with a point which hon. Gentlemen opposite do not like, the cases in which direct Government action is possible in the scheme of things and in which there is inducement.
    Direction of industry is not possible in this country or in any other free democratic country, and so we come to inducement. How do the figures stand for the results of the inducement policy in those years? On the basis on which these figures have been worked out, which is primarily on the capital cost of construction translated into jobs, Scotland had nearly 11 per cent. of the jobs created in all new factories between 1951 and 1957, and more than 40 per cent. of those created in Government factories. That answers both points. It is 11 per cent. of all new jobs, in spite of the point I was making a short time ago about the 1–25 argument.
    I have a few more figures. We ought to get this matter as clear as we can. I have before me the percentage figures of capital expenditure. I assure hon. Members that there is no cheating in that switchover, because it is the simplest way of seeing the matter. We go right back to 1946–47 to see how, during that period when the party opposite was in power, this test applied to their organisation. I admit that 1946–47 was very early after the war. The percentage of factories built in Scotland in one form or another under the Distribution of Industries Act in that year was 27. In 1947–48 it was 38, their best year, and in 1948–49, the percentage was 36. In 1951–52 it was 39 per cent., in 1952–53, 42 per cent., in 1955–56, 30 per cent. and in 1956–57, 41 per cent. The figures for 1957–58 are not complete and cannot be quoted.
    832
    A spot check is not a fair check on either side. On any test, the performance of the present Government, where inducement is practicable and possible for Scotland, shows that we stand up very well indeed compared to anything that happened during the time when hon. Gentlemen opposite were in power.
    Dr. J. Dickson Mabon: Since the right hon. Gentleman is in this constructive frame of mind, will he tell us the basis of this argument? I am trying not to take sides but to get the facts. The percentages which the right hon. Gentleman has given relate to Government work, but the fact is that we can contract the area of Government work in Britain and still the balance of percentage can run in favour of Scotland. Surely the point is, how many jobs have been provided on the basis of how many are needed? That surely is the test.
    Mr. Maclay: The hon. Member is now getting into trouble with an argument produced last night that there ought to be selective and not comprehensive use —I am not sure that it was not the hon. Member's own argument—
    Dr. Dickson Mabon: If it was my argument, it was a good one.
    Mr. Maclay: He is now contradicting that.
    One must admit that recently there has been cause for anxiety, but when there is a period of booming trade and good employment figures, during a period when the figures are pretty good it is the more necessary to try to get industries to areas which really need it.
    Mr. T. Fraser: That is what has not been happening.
    Mr. Maclay: It has, and the figures I have given have proved it. One of the interesting things that one learns during a debate of this kind is that the same set of facts means something completely different to hon. Members on opposite sides of the House.
    I repeat that in saying all this I am not being complacent in any way. I am making clear my belief that this process of the diversification of industry should go on in the best possible way. My right hon. Friend the President of the Board of Trade is extremely understanding about the Scottish problem, as is my right hon. Friend the Minister of Labour and

    833
    National Service. We work closely together and we agree about the solution to be applied to what is both a long-term and a short-term problem of great importance in Scotland.
    Mr. George Lawson: To put this matter into summary form, would the right hon. Gentleman say whether Scotland has maintained its industrial position vis-à-vis the rest of Great Britain, or has that position declined?
    Mr. Maclay: One would have to go into all sorts of selective tests to prove that.
    I come now to the point at which the hon. Member for Hamilton regretted that I disliked his talking "woe, woe, woe." I do not believe that Scotland is going downhill. I commend to the attention of hon. Members opposite what has happened at Grangemouth; the chemical industry developments; the new factories which we have in Scotland and the new American factories which have come to Scotland —
    Mr. Lawson: What is happening south of the Border?
    Mr. Maclay: —and the happenings on the Clyde—
    Mr. Lawson: The lack of steel—
    Mr. Maclay: —and—
    Mr. Lawson: Ten per cent.—
    Mr. Speaker: Order.
    Mr. Maclay: The position regarding steel in Scotland is a matter of particular concern. The hon. Member for Motherwell (Mr. Lawson) must realise that Scotland cannot expect to avoid the effects on the steel industry which are apparent all over the world in every steelmaking country. It would be remarkable if, at a time when there is a recession in all the steel producing countries. the same thing did not occur in Scotland.
    Mr. Lawson: It is always worse in Scotland than in the rest of the country.
    Mr. Maclay: I have said that if one is worried about the fact that we are over-concentrating on heavy industries, as am, one should endeavour to explain how we are trying to balance the position and
    834
    that we are meeting with a certain amount of success.
    Last night the hon. Member for Hamilton complained that areas where unemployment is high are dealt with in the same way as areas where it is low. I have tried to explain what we are doing by means of the Distribution of Industry Act and the Distribution of Industry (Industrial Finance) Act, which was passed before the House rose for the Summer Recess. I have figures here which would support my argument, but I have taken longer with my speech than I intended to, and so I will not go into details about the application of this legislation percentagewise to the population throughout the country. I hope that this legislation will produce effective results. It is too early to say what those results may be, but a lot of work has been done in preparing ideas for the D.A.T.A.C. Committee. The Committee is studying such proposals as have come forward. There are only about fifty so far, and a lot of work has been done in deciding what is the best practicable solution.
    There is another side of the selective work which I ought to mention, and the quickest and easiest way to do so is to refer back to what the Chancellor of the Exchequer said when he spoke about the decision of the Government to
    "…put into operation a series of specific but limited relaxations designed to stimulate employment during this coming winter…—[OFFICIAL REPORT. 3rd November, 1958: Vol. 594, c. 641.]
    There are several different stages in this operation. We have been able to bring forward projects which will benefit such places as Greenock, Dundee, Airdrie, Coatbridge and Motherwell. This includes the provision of new community halls and other useful things which, in a period of inflation, have to be deferred. We have been bringing them forward selectively in areas where they are needed.
    Mr. John Rankin: Before the right hon. Gentleman sits down—
    Mr. Ross: He has not started yet, he has not told us anything.
    Mr. Rankin: —will he reply to a point which I raised during the debate last Tuesday? In view of the need for teachers in Scottish schools—
    Mr. Maclay: I have not yet finished my speech and I shall come to that. [HON. MEMBERS: "Take you time."] We who represent Scotland take our full share of time, as well as of other things, but I must not occupy the time of the House too long on Scottish affairs.
    I wish to clear up two points of detail relating particularly to Greenock. A question was asked by the hon. Member for Hamilton, but I am sure that the hon. Member for Greenock (Dr. Dickson Mabon) had it in mind as well. The hon. Member for Hamilton referred to the proposal for a graving dock on the Clyde, and suggested that there might have been some obstruction from the shipbuilding interests. My information is that there is no question of obstruction. The shipbuilding interests concerned are giving intense study to the details of such a project. It is a big undertaking and involves much consideration. I cannot forecast the outcome, but there is no question of obstruction. I can assure the hon. Member for Hamilton and the hon. Member for Greenock that the Government will give careful consideration to any proposals which may be made in this connection. I wanted to clear up that point because the hon. Member for Hamilton made a grave charge against Scottish industrial interests.
    One other point, about which the hon. Member for Greenock was anxious, should also be cleared up. It refers to certain factories in Greenock. Regarding the I.B.M. factory there has been considerable amount of negotiation with the Scottish Industrial Estates. Agreement has been reached on the proposed development. Some planning work remains to be done, but it is expected that building will start in the next few months as the weather permits. The hon. Member knows the position with regard to the Playtex factory, which is much the same.
    The hon. Member for Govan (Mr. Rankin) wished me to deal with the question of—
    Mr. T. Fraser: I want the right hon. Gentleman to deal with the question of Lanark.
    Mr. Maclay: I can never remember how many counties there are in Scotland—
    Mr. Fraser: But Lanarkshire happens to be the industrial heart of Scotland
    836
    where last month there was 7·2 per cent. of unemployment. What is the position now?
    Mr. Ross: The right hon. Gentleman should forget his rabble-rousing tactics.
    Mr. Maclay: When the hon. Member for Kilmarnock (Mr. Ross) interrupts me, I am convinced that I am making a good speech. I admit that I do not think that normally, but an interruption from the hon. Gentleman leads me to believe it.
    Mr. Ross: May I assure the right hon. Gentleman that this is one of his best speeches?
    Mr. Ellis Smith: The Minister has made a well-prepared statement and has provided us with many statistics. In order that we may get those statistics into correct perspective, will he be good enough to tell us approximately the population figure for the whole of Scotland?
    Mr. Maclay: The hon. Member for Stoke-on-Trent, South (Mr. Ellis Smith), for whom I have great respect and whom I have known a long time, has probably heard all the speeches made in this debate which I am now trying to answer. We Scots go into detail when we are engaged in an argument That may be a deplorable thing, but it is true, and I am bound to deal with the questions which I have been asked—
    Mr. Ellis Smith: Give us the approximate figure.
    Mr. Maclay: I am not going into those sort of details—
    Mr. Ellis Smith: Is it about 10 million?
    Mr. Maclay: I really cannot be draw n aside in that way.
    I turn for a moment, before I conclude, to the question about teachers' pay. I am very anxious to deal with that because the hon. Member for Govan raised it last week. Those who have followed this matter will know that, after a failure to reach agreement between the representatives of the local authorities and the teachers in the National Joint Council, the question was remitted, in accordance with the constitution of the Council, to a panel of three arbiters. The arbiters found that in view of the

    837
    material change of circumstances brought about by the rise in the cost of living since the existing salaries came into force, on 1st November, 1956, there should be an increase of 5 per cent. in the basic salary of teachers.
    That finding came to me and I received it on 7th August. I have now made provisional Regulations giving effect to it as from 1st November. In terms of the Statute I have to have regard to the Council's recommendations. In this case hon. Members, including the hon. Member for Govan, will, I am sure, realise that although the arbiters had to pronounce on a relatively narrow issue —namely. what salary increase should be awarded as a result of an increase in the cost of living—it was necessary for me to consider much wider issues. In particular. the recommendation had to be viewed in the context of the general rise in wages and salaries. I am sorry if the teachers received the impression that there was unjustifiable delay, but I can assure the hon. Member and them that that was not the case.
    The hon. Member raised the question of retrospection. As he knows, and as the House is aware, I am prevented by Statute from making any award retrospective.
    Mr. Rankin: Would the right hon. Gentleman deal briefly with the other point I raised? Why was he able to introduce retrospective legislation in the case of policemen in Scotland, but not in the case of teachers?
    Mr. Maclay: I think it would be quite wrong to try to widen the debate. I have already widened it sufficiently. This is not an education debate, but the point was so important that I felt I should deal with it.
    We have been argumentative in this debate. I think that is inevitable and proper, but I feel it must be realised, in spite of what has been implied by hon. Members opposite, that this Government have done a great deal towards what we all want—the improving diversification of industry throughout Scotland. If the figures I have given are studied—they were obtained from various documents —hon. Members will realise that what I have said is correct.
    6.34 p.m.
    Mr. Ernest Davies: We have had a very lively Scottish interlude; in fact, we have had a capital bonus from the Front Bench this afternoon. That is understandable and was necessary. The Secretary of State for Scotland said that what was important for Scotland was important to the United Kingdom. I think that the reverse holds true, that what is important to the United Kingdom is equally of importance to Scotland. What I have to say this evening, which mainly concerns the transport industry, applies very considerably to Scotland—more so than to England—but equally to Wales.
    I rise to draw attention to the critical condition of the transport industry, and particularly to the financial crisis that faces the British Transport Commission. I do so during this debate on the Opposition Amendment because I consider that the parlous state of the transport industry is due to Government economic policy; and this is a debate on economic policy. I consider that the Government's economic policy has aggravated the difficult position of the transport industry which has been developing over recent years and which now has reached crisis point. The fall in production has affected the Transport Commission to a very serious degree and for this economic stagnation the Government must take the blame.
    It is no exaggeration to say that the public transport industry today, in certain sections, is fighting for survival and that the Commission is fighting against bankruptcy. For this, Government policy is responsible. The consequence is that the maintenance of adequate public services is becoming increasingly difficult. As costs rose during the period of inflation, fares and charges went up and the traffics of the public transport services diminished so that their position became worse. Consequently, there has been a widespread curtailment of the public services which again worsened the position for the public. Both the passenger and worker in the industry suffered as a consequence.
    The main cause of these difficulties has been Government policy, which has aggravated the situation which was already developing. The result is that private transport has increased to a great extent. The increased numbers of private

    839
    motorists driving their own cars and industrialists carrying goods in their own vehicles have taken traffic away from the public services. This great increase in private transport has been stimulated. first, by the large increase in cost by higher fares and charges, and, secondly, by the natural growth of private transport—which no one wishes to retard, but which means that today the public is getting worse public services at higher cost. I fear that this situation is likely to deteriorate further because there will be a further increase in private transport.
    With the relaxation of hire-purchase restrictions I do not think there is any doubt that we shall have a private car boom. Where all those cars are to be parked and how they are to travel along the roads at any speed, I do not know. Already there is one car for every 12 persons in the country, which is roughly one for every five families. I see that the Home Secretary, when opening the Motor Show, said he saw no reason why there should not be one car for every two families. If that is to be so, I cannot comprehend what is to happen on the roads unless the road system is revolutionised. It may be that this is what happens when we travel "Onward in freedom" in a "Property-owning democracy."
    My concern is not at the increase in private transport—which must be welcomed as a sign of an increasing standard of living in the country—but at the effect on public transport which results and the need to provide for it, particularly roads. Some protection must be given to the public services to ensure that the essential services are provided and that is not the case at present. So far, rural services have suffered most.
    My hon. Friend the Member for Morpeth (Mr. Owen) recently pointed out that certain services in his constituency had been entirely withdrawn, and that no transport facilities were available in certain rural areas. That is true in other parts of the country. Unfortunately, public deprivation of essential services is now spreading to the urban areas, and its latest manifestation is to be found in London Transport.
    The London Area Transport Users' Consultative Committee, which has been inquiring into the proposed cuts in the
    840
    bus services and curtailment of the Underground services, has recommended that the proposals in the case of the Underground should be withdrawn. It has stated that it considers that if the services were withdrawn it would have "very serious repercussions on the industrial and social life of London as a capital city." In my view, that is an indication that the Committee considers that if these services were withdrawn London Transport would not be fulfilling-its obligation to provide adequate services in the London area.
    It seems to me that certain transport operators are taking advantage of the rise in costs to cut out the unremunerative services to an unnecessary degree. The road passenger transport industry is protected by a licensing system, either through monopolies granted to operators in certain urban cases, or through the restriction of competition in other cases. If that is so, since they receive this measure of protection and have certain privileges, there is an implication that they have a responsibility to provide adequate essential services.
    Up till now the remunerative services have paid for the unremunerative ones, and that should continue to be the case so long as these operators receive protection. Unfortunately, however, they have seized upon the present situation to reduce their unremunerative services and to maintain all their remunerative ones. They are shirking their responsibilities to some extent.
    Under the 1947 Act the British Transport Commission, among its many other duties, had an obligation to provide adequate public transport services. The Conservative Government repealed the relevant Section of the Act, and the Commission no longer has that responsibility. We are suffering today from that change in the law. The Commission has been compelled by the deterioration in its finances to cut its services considerably, largely as a result of Government policy. If the 1947 Act had stood as it was passed by this House the Commission would be under an obligation to continue some of those services which are now being cut out.
    The recession—for which the Government must take responsibility owing to their policy of stagnation—the retardation of industry, or whatever one calls it,

    841
    coming on top of the growth of private 'transport, following the earlier wrecking policy of the Government, has had, as far as the Commission was concerned, disastrous effects. It is only necessary to turn to the figures of freight traffics of British Railways to see what a startling fall has taken place, both in traffics and in revenue. This fall is directly traceable to the fall in production, especially of steel, and the fact that coal is being stocked to a much larger extent than normally—and that the coal which is stocked is not transported.
    I will take merely the minerals traffic, which reflects the fall in the production of steel, because it is iron ore, scrap and the other raw materials used in the production of steel which largely comprise this minerals traffic. During the first 36 weeks of this year, to 7th September, the minerals traffic fell from 45 million tons in 1957 to 37 million tons in 1958. That is a fall of 8 million tons, or 17½ per cent. During the same period the production of steel fell by 16 per cent. The fall of 16 per cent in the production of steel is related to the fall of 17½ per cent. in the carriage of minerals traffic. The Government must take the blame for the fall in production and for the consequent fall in the traffics of the Commission.
    If one takes the most recent period—the last four weeks published—the position is even worse. Minerals traffic is down by 25 per cent., with steel production down by about 16 per cent., and all freight carried is down also by 16 per cent. This fall in production is well shown by the fall in general merchandise, which was about 15 per cent. As a consequence, the financial outlook of the Commission is appalling. In the first 40 weeks of this year freight revenue alone fell by about £20 million and total revenue by about £28 million.
    This means that the Commission may make a loss of between £80 million and £100 million this year—a tremendous figure to contemplate. It means that the £250 million which the House voted for deficit financing for the period 1956–62 will be more than exhausted by next year. Already, £140 million of that £250 million has been drawn upon for 1956–57, and if between £80 million and £100 million is drawn on for 1958 only £20 million or £30 million will be left for the deficit for the whole of 1959. That indicates that
    842
    before next year is up the Commission will have no funds to draw upon to finance its deficit, which is certain to be higher than that.
    In these circumstances I should have thought that the Government would seek additional finance to tide the Commission over this period. This money was supposed to last until 1962, when it was estimated that the Commission would break even. Those estimates, which appeared in the White Paper proposals for the railways, were based upon conditions that were far better than those existing today, and they were also based upon far better prospects. There is no question but that the estimates of that White Paper cannot now be fulfilled, and the Commission is, therefore, very unlikely to be in a position to pay its way during the period estimated by the White Paper, notwithstanding the optimism displayed by the Minister earlier this year. So far, the Government have adopted a negative and inactive attitude to the current position of the Commission, and. in the face of that, we are entitled to ask what their policy really is.
    It is necessary for the Government to review, with the Commission, the estimates that were put forward in the White Paper; to consider what additional finance is required, and in the next few months to ask the House, quite frankly, for further assistance. It is due to the House that the Minister should inform us of the changed position of the Commission, and take us into his confidence. We voted this money on estimates that no longer hold good.
    Yesterday, the Chancellor announced that there was to be an increase in the public capital investment programme of £170 million. He did not, however, tell us how much of that sum is to be available to the Commission, and how much to British Railways, but we may be able to elicit those figures through Questions. Meanwhile, vie are in the dark, and as the increase in the total figure for public investment is not very great, I cannot feel that it will make a great deal of difference to the Commission.
    Essential as it is, capital investment for modernisation is long-term investment. It takes several years for the fruits of that investment to be fully reaped. The Corn-mission's passenger traffic is already benefiting from modernisation, but there ought to be a review of the whole programme.

    843
    That programme, excellent as it is, was drawn up on certain assumptions. Several of those assumptions have not been fulfilled, and some of the traffics that were anticipated have, of course, been irrevocably lost in the changed circumstances. While maximum capital investment is necessary, there may be certain conditions in which it would be desirable to switch its direction from that originally shown in the White Paper.
    Why cannot the Commission now be left free as regards the amount of its capital investment? Today, the private sector of industry is permitted to spend at will. Why is it that this nationalised transport industry, which is in such dire need of modernisation, and whose expenditure helps our employment situation, cannot now have the restriction lifted from it, and be allowed to go full steam ahead with its modernisation programme as far as it can within the resources of material and manpower?
    Though I should have liked to have talked somewhat about the road programme, I shall only say that here, again, the Chancellor stated yesterday that there was to be increased expenditure on the roads. He did not say how much, but, again, it is important, in view of the great increases in traffic and the large loss of life on the roads, that that expenditure should be as great as possible.
    If the road system is to continue to develop it is important that the pipeline should remain full. At present in the pipeline there is a programme of £240 million, but unless more money is poured in to keep construction going there will be a run-down, and in a few years' time we shall suffer as a result.
    The Government lack a co-ordinated road and rail capital investment policy. They seem to be proceeding on an ad hoc basis, with the railways on the one hand and the roads on the other. On the roads much has been done in bits and pieces. Instead of there being a large number of overall schemes, such as the London-Birmingham motorway—the construction of which, at speed, shows what can be done on a grand scale—the Government are proceeding with a little here and a little there—very often in marginal constituencies.
    The Government's economic policy is, to a large extent, responsible for the present very serious position of the transport
    844
    industry. As a direct consequence of their policy, the public services will deteriorate still further, and their costs and charges rise higher, unless the Government's negative transport policy is replaced by a constructive policy aimed at establishing a planned transport system. Such a constructive policy remains the policy of the Labour Party, and it will not be long before we are in a position to carry it out.
    6.57 p.m.
    Mrs. Patricia McLaughlin: The Secretary of State for Scotland said a few minutes ago that what was important to Scotland was important to the United Kingdom. I believe that what is important to Northern Ireland is also of importance to the United Kingdom, and I want to draw attention to some statistics and factors that are of vital importance to us.
    This afternoon, the right hon. Member for Lewisham, South (Mr. H. Morrison) spoke about Northern Ireland. I am sorry that he is not now in his place, because his figures and facts about Northern Ireland and our unemployment situation were not entirely accurate. With us, as with many other parts of Great Britain, this is a long-term problem. My hon. Friend the Member for Bodmin (Mr. D. Marshall) has stated that even during the war there had been as much as 8 per cent. unemployment in his area, and that it was very much higher today. The same thing has occurred, and is even now occurring, in Northern Ireland. In 1942, it reached 5·7 per cent. It was the same in 1945. In 1946, it was 8·4 per cent., and in 1951 it was 8·5 per cent. Even today, our unemployment level, about which we are by no means proud, is 8 per cent.
    Much has been said in this debate about what should or should not be done. Hon. Members opposite have today made tremendous play of the fact that only by means of the projects in which 'they believe, only by nationalisation of big concerns, only by general controls, is it possible to maintain a very low level of unemployment. That being so, I merely draw their attention to the figures I have quoted. We are very anxious that our unemployment percentage should be firmly and steadily reduced—it must be done.

    845
    Since the new Distribution of Industry Act became law, all other parts of the United Kingdom similarly affected are in the same position as Northern Ireland in regard to attracting new industries. Indeed, we are now at a slight disadvantage, because our geographical position puts us further from the rest of the United Kingdom than even the remotest part of Scotland or Wales—or any other part of what we often refer to as "the mainland."
    It is for that reason that I hope that the Government will energetically look for some way to promote special interest in and give special help to Northern Ireland in order to make up for the slight disadvantage from which we are now suffering, because we are not now able to offer some particular and special inducement to industry. We have already achieved much, and I think that today we have been almost too negative about it. We have talked about what has not been done, but much has been done all over the United Kingdom, and it is bad if we, in this House, give the impression that we are not interested in what has been done, and in the good that has resulted. Certainly in Northern Ireland we have had a very wide variety of new industries. There have been British and American industries, overseas firms and local ones. We have been proud and happy to welcome them all, and they are settling down happily and making a useful contribution not only to employment in our part of the world, but also to the output of the United Kingdom as a whole.
    We are now faced with this problem of where we are to look further. Our own Government in Northern Ireland are very anxious and determined to leave no stone unturned, but it is to Her Majesty's Government here that we must finally look for measures to meet the situation. The Free Trade Area brings all sorts of new possibilities. In the textile industry alone in Northern Ireland it brings both advantages and disadvantages. By and large, I believe that the advantages will outweigh the disadvantages.
    The linen indsutry, in particular, feels that on balance it will be a help. The industry is certain that a quality article such as it produces will always find a good market and that it will be able to compete in Europe without the restrictions which have existed heretofore, hoping anxiously that the negotiations
    846
    which are now going on will soon come to fruition.
    Quality goods are important. I was interested to hear my right hon. Friend the President of the Board of Trade say that he thought there was plenty of room yet in the United States for more of our goods. Indeed, there are large areas as yet untouched. In the short time that I was in the United States I had an opportunity of discovering that there were many areas where, as yet, our linen industry had not been able to send its salesmen to make more connections and to make more output possible. This is not always easy for a small industry, and there must be many other small industries in the United Kingdom in the same position. It is not always easy to send people out all the time, to pay their expenses and the cost of travelling throughout countries for possible orders for an industry which is working on a small margin and which, because of past difficulties, is not in a very healthy state financially.
    There has been much criticism of our linen industry. It has spent a long time trying to modernise its ideas and designs and, indeed, the industry in general. Today, in design, colour and texture and all the other modern requirements. it is in the forefront. I hope that the President of the Board of Trade will say whether he can help to publicise the textile industry of Great Britain as a whole, and the linen industry in particular, so that it is possible for some small firms and small industries to get their goods known throughout all the free markets of the world.
    There has been a change of demand in world trade, and the decline in trade in some markets has affected us in Northern Ireland very badly. The search for new markets is expensive, as anyone engaged in business will confirm. It is difficult to get new markets when one is unable to use one's money as widely as possible and compete against the big firms which can spend vast sums of money. This is particularly applicable in the United States of America where the cost of advertising is almost prohibitive
    Northern Ireland has often been mentioned on both sides of the House, and I must say that we in Northern Ireland have always felt that the measure of

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    sympathy we get is extremely good. We feel that hon. Members from Scotland and Wales join with us in appreciating that we are all out to tackle a common problem. I refer to the problem of unemployment. I very much dislike hearing expressions indicating that things are being dealt with in an overall way. Even the expression "taking up the slack" is not very pleasant when we are dealing with men's hearts and lives. One cannot take up the slack in a person's life. One cannot just use some term to express what is a person's entire attitude and way of living.
    When we discuss these matters—and the House is always sympathetic—we in Northern Ireland realise that our problems cannot be solved only by us. The remedies that we can put forward are only local suggestions, because Her Majesty's Government have to look at the picture as a whole.
    I am prepared for the Treasury representative to smile rather cynically at my next suggestion. I believe that one of the main difficulties in Northern Ireland is that we are short of capital. We are a community of people in small family firms. The bulk of the large concerns come to Ireland from outside. We need more of our own capital in Northern Ireland. If it were possible somehow to give help to the smaller firms which are Northern Ireland owned and directed, to enable them to make a reasonable trading profit, if those firms could be given encouragement and help through being able to get together and share their profits tax-free so that those profits could be put into developing other small industries in Northern Ireland, perhaps where there are pockets of unemployment, we would feel that was a worthwhile effort to help to increase our capital gains.
    I know that this will produce great criticism, but all measures must be considered and we have reached the stage where we feel that we must ask for every possible suggestion to be investigated in this battle to obtain work for those who need it so badly.
    We have a large development plan. Time and again it is only our problems that are heard of in this country. We are in many senses a thriving community,
    848
    by no means sitting and waiting for other people to help us all the time. There are road developments. We are pushing ahead with slum clearance, and those projects are now coming to fruition. The local authorities and the Government are doing all they can to use as many hands as possible.
    But all these are merely temporary measures. We must all surely realise that unemployment has not just happened in the last few years. Whatever Government has been in control, conditions do not reflect anything of which we can be particularly proud. This certainly applies to the period since the war. It is not true to say that at any particular time any given circumstance has caused a job to disappear. We in this island are tied to what happens in world affairs.
    Only recently, there has been a great deal of talk about members of the Commonwealth coming to this country and taking work from our people. A great deal of controversy arose. It is widely known that our responsibility is to help the Commonwealth countries to grow and improve their standards, and to enable their people to learn and then return to their countries to become leaders in the development of those countries. But we also have a responsibility to help our own people at home, particularly in the areas of unemployment of which we have heard so much. This has been an economic debate which has concentrated mainly on this one particularly human factor.
    I know my own city very well, having been brought up there. The people there know that the problem is not going to be easy to solve. They do not expect us to produce a miracle. What they do look for is an economic background which makes it possible for firms to wish to come to our part of the world, to expand there, to thrive there and to make a profit there. They look to the British Government to create that economic expansion and that background which is so essential for a thriving economy.
    This is surely what is being done at the present time, and what must be done. Unless we adapt ourselves freely and quickly as the financial needs arise, we shall stagnate. I cannot see how the present Government's policy is failing to do that very thing. As demand has increased and as more goods are required,

    849
    both at home and abroad, work for these idle hands will surely become more easily available.
    Our debates will pass on to other subjects in the months ahead, but I hope sincerely that, throughout the country, there will be no pressure put on people to feel insecure. We are here to see that something practical is done. Northern Ireland has always respected and appreciated what is done by Her Majesty's Government, and Her Majesty's Government have a great and abiding interest in Northern Ireland. They have taken practical steps to prove that interest. I ask that, in the months ahead, the Government prove this interest in an active fashion and, in every Department concerned, look anxiously and with real concern at every proposition put forward, doing everything possible to help us. We hope that we shall receive that help, just as we are anxious to see the Government help every other part of the United Kingdom, for, in Ulster, we believe that this is our country and we know that this is a national problem.
    7.12 p.m.
    Mr. John Diamond: I hope that the hon. Lady the Member for Belfast, West (Mrs. McLaughlin) will not feel embarrassed if I congratulate her on her speech. After all, it is much more agreeable for a male Member for the House to take that attitude, and I think that every one of us on this side must recognise that the hon. Lady was speaking with real understanding of the impact of unemployment, the human impact of unemployment, and that she tried very hard to steer between the Scylla of complaining on behalf of her constituents and the Charybdis of, at the same time, criticising her own Front Bench. I understand, of course, that she is in a special difficulty, which few others of us suffer from, in that she lives under not one but two Tory Governments. This, indeed, must be a burden.
    If I may add one further word of praise, the hon. Lady is the third or, perhaps, the fourth Member to speak during the last two days and fight for his or her constituents in Northern Ireland. I, who have listened to most of the debate, have been astounded, as an ordinary Sassenach, at the lack of interest taken in the debate by Scottish Members opposite, having regard to the
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    very sorry state of Scotland today. I apologise for saying it, but the comparison has been most marked, and it is a further tribute to the gallantry of the hon. Lady the Member for Belfast, West.
    The President of the Board of Trade, this afternoon, started by calling us on this side bears. With his great ability in choosing just the right word to make an impact on every working class family in the country, he called us "bears" for criticising the Government's policy and their lack of success. I think I am right in saying that a "bear" is. in Stock Exchange parlance, a person who contributes very practically and productively to the wealth of the country by selling what he has not got and then buying it back at a profit—selling "short". No doubt the right hon. Gentleman will correct me if I am wrong.
    When he said that, I wondered to which Socialist Member of Parliament he could be referring. To make quite sure, I refreshed my memory by turning up a letter which I thought might possibly be in his mind. It is a quite famous letter, date 16th September, 1957. It begins:
    "My dear Hugh "—
    This obviously was an appellation which might have misled the President of the Board of Trade into thinking that it was a Socialist Member of Parliament addressing his leader in familiar terms.
    "I have just returned from Scotland, where we had a wonderful time, record shooting and good fun all round…It seems a heads-I-win-tails-you-lose bet for the sellers of Sterling short".
    That, I take it, is a "bear". I am giving extracts from the letter.
    "I must say I can see no reason why Gilts should go up. My advice, therefore, all round is to sell…This is anti-British and derogatory to Sterling, but, on balance, if one is free to do so, it makes sense to me".
    This letter, of course, we referred to many times during the debate on the Bank Rate Tribunal. It illustrates, no doubt, what the right hon. Gentleman the President of the Board of Trade had in mind when talking about "bears". It was very appropriate for him to mention it, of course, because we are discussing unemployment in relation to the difficulties which have resulted from the actions the Government took, or refrained from taking, at the time of the Tribunal referred to—the increase in Bank Rate

    851
    to 7 per cent. a year ago, and all the other things done by the Government at that time.
    The President of the Board of Trade asked us to bear in mind what the Stock Exchange was thinking. The Stock Exchange, he said, was a better guide to the opinion of most people as to the welfare of our countrymen than the views of Labour Members of Parliament. The President of the Board of Trade was quite right in taking some credit for the increase in values on the Stock Exchange. It is this Government which, by their action on Profits Tax, have encouraged the enormous increase in the payment of dividends. It is this Government which, by their removal of all restraint on bank advances, have enabled companies, which would otherwise have to retain their dividends and plough them back, to distribute them, knowing that they could replenish their resources from the bank. It is for these reasons, as has been wisely pointed out by that wild revolutionary, the City Editor of The Times, among other subsidiary reasons across the waters, that the Stock Exchange valuations have risen so substantially.
    I wonder whether the President of the Board of Trade really thought, in saying that, that he was helping the Chancellor of the Exchequer in his appeal for restraint on wages. The Chancellor made a long speech yesterday, carefully excluding from his appeal for restraint anyone other than wage earners. He referred to the problem of wages and any increase in wages. We could not afford increased wages under this Government because production was not going up. could never go up, and would probably continue to go down. He referred to the lack of ability to pay increased wages and said that, if there was a 4 per cent. increase in wages next year, as there has been this year, we should be in great trouble.
    The Chancellor appealed for restraint in wages, but, as his right hon. Friend has pointed out, we have, at the same time, a vast increase in dividends and in share values as a result of what the Government have done. How do the Government think that the 4,000 aircraft workers in Gloucester, who are facing the sack, will be encouraged to feel that they have the sympathy of a Government which draws
    852
    attention to the fact that, while they, the workers, are about to be sacked, the shareholders in the very factory which employs them have their share values increased by £8 million in this one year as a result of what the President of the Board of Trade referred to?
    There has been that increase of £8 million in this one year resulting, in large measure, from the very actions which the Government have deliberately taken in the last Finance Act and more recently. This is no way to encourage wage earners to exercise the restraint which the Government are asking for. I appeal to the Chancellor to think again. Can he not say something about restraint in other directions, apart from restraint purely in wages?
    To put the matter simply, I like increased production because it brings down prices and stabilises the cost of living The real way to bring down prices is to increase production. I like increased production because it produces the strong economy which we need to have a strong £. I like increased production because it enables us to play our part in the world, in maintaining peace, in helping the underdeveloped countries, and what is possibly of even greater importance at this time, in putting before those countries which are looking with hungry eyes at the great economic development in the Communist countries, an alternative of prosperity and plenty with freedom through democracy.
    Let us compare the increase in Russian production at 10 per cent. per annum with our decrease of 4 per cent. and, at the same time consider the figures in Communist China, where it is not easy to be precise but it is probably true to say that the increase in production is about four or five times as great as the increase in the Russian economy at the same stage of development. If one looks at either of those two figures and then at the increase in production in this country, is it surprising that countries which can look either way, such as India and Burma, make their comparison? Is not the best contribution that can be made to the fight for liberty and democracy in the world to increase our production here so as to demonstrate to the countries which are undecided and on the borderline which way their real interests lie?

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    I like increased production because it raises the standard of living in the widest sense. I refer not only to physical wellbeing, but to the possibility, also, of increased money becoming available for the arts, not excluding opera. I like increased production because it solves the problem of wage increases. There is no problem of wage increases if production is increasing. This is a problem which arises only through the Government's deliberate policy of holding down production. It is impossible to expect the average wage earner to look forward to no increase in remuneration over the years, irrespective of the cost of living. When the cost of living rises the Government ask him to accept a reduction in his standard of living. But it is impossible to do that, and it is such an unsatisfactory attitude to adopt to say, "We, the Government who are responsible for the holding back of production, say to you, the wage earners, ' You shall not have an increase in wages because production has not gone up and the country cannot afford it.'"
    That being the case, increased production being what is required—and although it was, I should have thought, implicit in everything that the Chancellor said yesterday that he is not expecting or looking forward to increased production —why did the Government take steps a year ago which admittedly have had the result, and it was known at the time would have the result, of holding back production? They will claim that the reason they took the steps was for the wider purpose of increasing the reserves and having a satisfactory balance of payments. They claim, of course, that they have succeeded in their efforts.
    These claims are as reasonable as the claim that I now make, that it was the Labour Government which won the war in the Far East. One has only to look at the dates to see that the Labour Government came to power before the war in the Far East was won. We have only to look at the dates to see the same claim here. The argument post hoc propter hoc that that is the case is an argument which should be denied time and again. There is no justification whatsoever in the Government's claim that they maintained and improved the well-being of this country by taking the action that they took last November.
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    Certainly, it is true that action had to be taken. It is true that we were in what the Economic Secretary then described as the worst crisis ever, when reserves were running at such a rate that they would have disappeared completely in five months. In the worst crisis ever, after six years of Conservative Government, the Government felt disposed to take some action. But they took the wrong action, they fought the wrong battle and, as we now know, they sent the troops in approximately two weeks after the speculative forces had withdrawn. Of course, we never caught up.
    It is the sheerest nonsense to try to pretend that merely because "Joe Doakes" has been refused a small overdraft by his bank manager to help him in his small business or because the local authorities have had to pay through the nose for money that they need for vital community services, the Government have succeeded in achieving a record current account balance —a record balance of payments figure. Obviously, the very size of it demonstrates to anybody that one cannot pretend a few weeks after one takes action of this kind to achieve a for-all-time record surplus.
    Sir Robert Cary: With a bit of luck.
    Mr. Diamond: Of course. That is what I am saying. But, of course, there is a more serious point underneath. The fact that the current account surplus was so large demonstrates that it could not have been, as indeed it was not, because of our difficulties at the time. The cause of our difficulties at the time was the speculative selling.
    It is not for me to repeat what has been said many times and a good deal better by my own Front Bench as to how the situation should have been handled. The Government will, naturally, say, "We are Conservatives, not Socialists. and we do not govern in that way." What I would criticise the Government for is not governing according to their own philosophy, for their negligence and complacency. Under their own philosophy it was right at that time to protect the Government by an increase in Bank Rate as we had no safeguards at that time.
    Viscount Hinchingbrooke: Hear, hear.
    Mr. Diamond: The noble Lord says, "Hear, hear." May I refresh his memory as to the way in which the Government tackled this problem? I think that the House will agree that it arose in its acute form in the middle of August, when the French took action to devalue the franc. That is what started off the wave of speculative selling. What happened from the middle of August onwards? We must not forget that the increase in the Bank Rate took place on 19th September, a date which is not too difficult to remember, being exactly seven days after the Gloucester by-election.
    During that period continual pressure was put upon the Deputy Governor of the Bank of England—it could not be put on the Governor because he was on holiday—by, among others, Lord Kindersley—who came back especially from Canada to demonstrate his anxiety about the feeling of businessmen in Canada in relation to the £—to consider the matter. We know from the Bank Tribunal's Report that it was considered by the Court of the Bank of England and we know that there was no lack of access to the Chancellor. En fact, we know that during this period the Deputy Governor went to see the Chancellor twice.
    The first time he went to see him, it is stated in the evidence, the question of Bank Rate was not discussed at all. The second time he came to see him, it was made clear that it was discussed merely to be postponed and that any definite discussions on Bank Rate should await the Governor's return. This second interview was as late as 13th September. Then, on 14th September—the Saturday —the Governor returned and things started to move. He saw the Chancellor over the weekend. The Chancellor saw the Prime Minister and during the course of the short few days between that Saturday, when he returned, and the following Thursday, the Bank Rate was increased by the extraordinary and most unprecedented figure of 2 per cent.
    In short, there was that enormous delay between the middle of August and the middle of September, a delay of practically one month, in taking any action about the Bank Rate. I say this in terms of the Conservatives' own philosophy and that their view must have been that this was the one direction in which they were entitled to take action.
    856
    The country was bleeding to death, but the Chancellor had to wait for the Bank of England and the Bank had to wait for the end of the holiday season. That is a valid and serious criticism. Had action been taken much earlier, there would have been no need for anything like the 2 per cent. One-half of 1 per cent. might have been adequate if it had been taken at the time. As we know, when the action was taken it was too late. Therefore, all that we have suffered has been suffered unnecessarily. As a result of what was suffered and what was deliberately planned, production has fallen and unemployment has risen.
    Unemployment has risen to a figure which I put at around one million. I gather that my right hon. Friend the Member for Blyth (Mr. Robens) must have referred to this figure on some other occasion-1 do not know the circumstances—and he was being twitted with it by the Government Front Bench today. I would call the figure at least 1 million, half of whom are drawing the dole and the other half are drawing wages and salaries. The only way of accounting for the low production figures and, at the same time, the figures of unemployment, together with the problem of this concealment, is to put down a figure of at least half a million for concealed unemployment and, therefore, a total of about one million.
    Viscount Hinchingbrooke: Does the hon. Member recall that his right hon. Friend the Member for Blyth (Mr. Robens), in his speech only this afternoon, gloried in the fact that the Coal Board was keeping on its books a substantial number of miners who were doing virtually no work?
    Mr. Diamond: I heard exactly what my right hon. Friend said. I was watching the noble Lord while he said it and I could see that the noble Lord was uncomfortable and anxious about it. Of course, it is possible to have it both ways and that is what is happening. The noble Lord is criticising the Coal Board. Implicit in everything he is saying is a criticism of the Coal Board. I am not criticising the Coal Board. I am making the simple statement of fact that there are about half a million people who are on the salary and wage rolls, but who are not producing fully or producing at all.
    Mr. H. Wilson: Would my hon. Friend not agree that the difference is that the miners who are working for the Coal Board and are producing something are producing for stock, whereas a large part of the half million to whom my hon. Friend is referring are not being fully employed because many factories are producing at about 80 per cent. of capacity?
    Mr. Diamond: I am grateful to my right hon. Friend. My point is that when looking at the total production figures, one inevitably must come to the conclusion that there is a large figure of concealed unemployment as well as the open unemployment and that by adding these two figures together, we reach a figure of about 1 million.
    There is no need for me to repeat how we on this side feel about the unemployed. I know that I shall be excused in referring to my own constituency, where there is a serious problem in relation to the aircraft industry, which affects not only my constituency but those who work in these aircraft factories and who are drawn from the neighbouring constituencies of Stroud, Cheltenham and Cirencester. Indeed, there is a similar problem at Bristol.
    The problem in Gloucester has clarified itself considerably. As a result of the coincidence of the lack of foresight by the Government in running down the defence programme at the same time as they run down economic activity as a whole, it is quite impossible for those employed in the aircraft industry at Gloucester—they account for one in three of the male workers and about one in four all told—to be maintained in full employment.
    It is quite imposible for the firms concerned, mainly the Hawker Siddeley Group, to maintain all their factories fully occupied. The Group has, therefore, given notice to determine its lease of the Ministry of Supply factory which is known as Armstrong Siddeley Motors and which makes the engines for a number of aircraft. As a result, 4,000 men will be thrown out of work between now and June unless the Government find a new tenant for the factory.
    This is a matter of specific, and not general, Government responsibility. It is specifically the Government's responsibility to ensure that this factory, which occupies 1 million sq. ft. and is capable
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    of employing more than 5,000 workers, is tenanted by somebody who is capable of providing employment on that scale. I hope that the Government will take immediate action to ensure that that is done, because there is likely to be the added difficulty of the closing down of the factory in stages and its occupation by a new tenant. It will be no satisfaction to all of us in Gloucester, who depend entirely on the welfare of the aircraft industry, that 4,000 or 5,000 people should be thrown out of work with the knowledge that when the new tenant comes in, after the old one has left and after a period of building up, they will in the course of four or five years be reemployed.
    Some arrangement must be made whereby the factory is vacated and the incoming tenant takes over in stages. This is a matter about which we are anxious, not only for my constituency, but for neighbouring constituencies. It is a specific Government responsibility. I expect them to pay me the courtesy, during the later stages of this debate, of saying what they propose to do about it.
    7.37 p.m.
    Mr. Maurice Macmillan: The hon. Member for Gloucester (Mr. Diamond) will, I hope, forgive me if I do not follow him, especially down some of the Stock Exchange and financial by-paths with which his familiarity is greater than mine. I did not intend to intervene in this debate since, unfortunately, I was not able to be present yesterday and, therefore, missed a great deal of some of the more important things that were said. I am, however, grateful for this opportunity to make two points.
    The right hon. Member for Blyth (Mr. Robens) seemed rather surprised that the Conservative Party, at its Conference at Blackpool, expressed concern over the unemployment situation. Later, he reproached the previous Conservative Government for their frivolity in dealing with this subject in earlier years. It seems that if we try to deal with matters before they become too serious, we are wrong, and that we are equally wrong it we wait until the crisis is almost incurable. Had the right hon. Member followed the Blackpool proceedings closely, he would have been impressed by the practical suggestions that were made and which contrasted favourably with some of

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    his somewhat vague notions about finding out the special problems of different areas and pouring in suitable resources.
    I am fortunate enough to represent a constituency where unemployment is falling. There are several reasons for this, the chief one being the diversity of the work that is done there. I am glad that the Government are taking steps to make this situation arise more easily in other parts of the country.
    Halifax is a very flexible place. It reacts very quickly to situations and to measures which are taken. It is a town of apparently small businesses. Despite what has been said from the benches opposite, I can assure the House that the credit squeeze was indeed effective in preventing some of the unnecessary and uneconomic production which was taking place there, and now I am glad that the situation is returning to normal.
    Now I should say how much I and, I am sure, all of us on these benches agree with the right hon. Member for Blyth in what he said about the right of people to work, but I hope he was not implying that it is the responsibility of the Government to provide a specific job in a specific place for a specific number of people for an indefinite amount of time, because if he was implying that he was committing his colleagues—at some distant date, possibly—to an impossible programme.
    The Government have done a considerable amount, but there are one or two more things which I should like them to do. There is one extra measure which they could take which I think would help that part of the West Riding, and Halifax too, which is still in difficulties, and that part is the textile industry as a whole. In the Gracious Speech the provision of finances for colonial development and welfare was mentioned, and I hope that the welfare side will not be neglected.
    Of course, it is right that we should devote sums to developing the backward countries' own industries. Of course, it is necessary that we should accept the fact that this will involve their production of manufactured goods and that we shall have to face competition from them, but these are long-term projects. I am sure that welfare projects could be a method of helping some industries in this country immediately, in so far as such projects
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    could help backward people to procure consumer goods, which, particularly if the goods were textiles, could and should be of great assistance in the North. The sum involved in any such scheme is tiny compared with the amount which would be involved in development.
    Of course, development will make it harder to keep the balance between inflation and deflation and to maintain full employment in some ways, and I am only sorry that the negotiations for a Free Trade Area show such unfortunate developments, because I am sure, as many of us on both sides of the House have said, that there is there a great opportunity which we can with profit exploit; but I am equally certain that we cannot exploit this or any other field for the benefit of the country if we are to operate under the sort of controls which hon. and right hon. Gentlemen opposite appear to want and appear to feel absolutely necessary to help us to deal with our economic problems.
    I do not altogether agree with some of my colleagues on this side of the House about controls. They are in some ways very agreeable, particularly to industrialists. In some cases it is a great deal easier when one's competitors cannot obtain any more raw material than one can oneself, when one can sell everything one can produce, when there is no risk in one's business, and one's profits are assured by Government controls and Government action. Unfortunately, agreeable though it may be to individual firms, it protects the country from the harsh reality of the world.
    I think that one of the answers to the hon. Gentleman the Member for Gloucester in his post hoc propter hoc argument is that it is a pity that he could not convince his own Front Bench of that in 1951, because however ineffective he may think the measures taken by the Conservative Government were, surely he must agree that it is better to take measures of some sort than to go away and leave the problem to somebody else.
    I must say that I think there is one more thing where, not so much in the short term as in the long term, the Government can help, and that is in investment. I believe we could do a great deal more, to encourage the stability of industry and against inflation, by encouraging small investors to hold equity capital in

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    industry. I think the point about the difficulties and dangers of hire purchase is relevant here. I should like to see measures developed which would, so to speak, compete with regard to the small savers' money, with the more attractive hire-purchase terms for consumer goods.
    The Government are already taking steps to make the purchase of homes more attractive, but expenditure on homes, although capital expenditure, is not expenditure of productive capital, and there are still some things that could be done about that.
    Perhaps the House will forgive my saying that I mentioned this at Blackpool. I refer to that fact only in case the hon. Gentleman the Member for Orkney and Shetland (Mr. Grimond) and his friends accuse me of having pinched the clothes of their Amendment to the Motion.
    I think there is a strong case for considering fiscal policy in regard to helping the ordinary man and woman to become shareholders in industry. It is a non inflationary method of giving tax concessions, if tax concessions are necessary, for all the money so left in the hands of the spender would be by definition saved. A small saver who has invested in ordinary industrial shares is to some extent protected against inflation, because a rise in the price of those shares would normally match the fall in the value of money, and, as I said before, it is a method of providing not only capital but productive capital.
    Perhaps, if such a scheme could be brought into effective action, not the least of its importance would be in allaying the fears of Members opposite. They always seem most concerned that industry is owned by so few people. I feel it is more effective to encourage more individuals to share personally in the ownership of industry than to increase their scope for becoming the neglected beneficiaries of even more nationalised concerns. Although it is not mentioned in the Gracious Speech, I hope that it is not being neglected by the Government, and I once more express the hope that when the Government consider practical schemes for colonial development and welfare they will not neglect the opportunity which such schemes may give to help not only industry in the Colonies but some of our industries at home.
    7.50 p.m.
    Lady Megan Lloyd George: I am very glad to have the opportunity of following the hon. Member for Halifax (Mr. Maurice Macmillan). If I may say so, he and I have at any rate rate one thing in common. We have been in this House under the parental eye. though for my part I have never been quite sure whether it was more difficult to be in the House as my father's daughter or as my brother's sister. At any rate, the hon. Gentleman has so far been denied that particular dilemma.
    I am also very glad, after a day and a half of debate, to be the first Welsh Member who has been able to say a word for Wales, where the rate of unemployment is twice the national average, and where unemployment is still rising. The speeches which we have had from the Front Bench opposite have done absolutely nothing to dispel the feeling that the Government are dangerously complacent about the present situation. A few weeks ago, the Prime Minister said that we were at the beginning of a new period of expansion, and today the President of the Board of Trade has spoken of growing confidence among industrialists. This is hardly borne out by the facts. May I quote one piece of evidence which may carry some conviction with hon. Members opposite?
    A short time ago, the Federation of British Industries started making inquiries among its members, and, four months ago, it reported that there was a marked decline in trade conditions. Only a few weeks ago, it reported a further decline in trade conditions measured in terms of unemployment, hours of work, output and deliveries. Out of 500 firms consulted, just over three-quarters reported that they were working below capacity. That does not look to me like the beginning of a new period of expansion.
    There are other disturbing new features. For the first time for nearly twenty years we are beginning to hear two ominous words again—coal and unemployment. For years, the National Coal Board has been urged to produce coal at any price, and miners have been urged to increase production. Now we have millions of tons of coal in stock, due mainly to the fall in production, but due partly also to the competition of fuel oil.

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    No one is ready today to prophesy the proportions of light, heat and power that this country will get from coal, oil or atomic energy in fifteen, twenty or twenty-five years' time. The only thing that is absolutely certain is that the proportion of coal will be progressively on the decline.
    In face of this, and many other facts which have been raised by hon. Members on both sides of the House, we have had complacency—smug complacency—in speeches from the Government Front Bench, and I would not exclude from that description the speech of the Minister of Labour last night. The right hon. Gentleman was not wholly free from it, but I do say that in all these debates, when we are discussing unemployment, there is an air of far greater reality about him than there is about any of his colleagues on the Front Bench.
    What did the right hon. Gentleman say? The one thing he was confident about was that there was not going to be any catastrophic decline; those were his words. The figure of 600,000 unemployed was his estimate for the peak at the beginning of the new year. I have no doubt that the Chancellor would call that not excessive when compared with other countries, but I should like to say that there are areas in this country today where unemployment is excessive, I hope, even by the standard of the Chancellor of the Exchequer.
    The Financial Secretary to the Treasury (Mr. J. E. S. Simon): I am sure that the hon. Lady would not wish to be unfair to the Chancellor, who made it quite plain that that was a slip of the tongue, and that what he was doing was comparing the rate of unemployment in this country with the rates of unemployment in many industrial countries abroad. He made it quite plain that what he was saying was that it was extremely low in that comparison.
    Lady Megan Lloyd George: I think that, unfortunately, colour has been given to that slip of the tongue by many of the declarations made at various times by hon. Members opposite, and by their general philosophy, of which at times we are more than suspicious, and of which we have grounds for suspicion today.
    I was saying that there are areas where unemployment is certainly excessive by
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    any standard. They are areas where the unemployment is not temporary in character, areas where the level of unemployment has remained high and stable, such as Lancashire, Scotland, Wales, Cornwall and Northern Ireland. These are what the Government call "pockets of unemployment", places where the rate is as high as 8, 9, 10 or 11 per cent., and where these high percentages do not by any means tell the whole of the story. There is also hidden unemployment, there is migration and, in addition, the whole of the school leavers have to be taken into account. A neighbour of mine said to a schoolboy the other day in South-West Wales, "What work are you going to do when you leave school?" His answer was, "There will not be any work when I leave school."
    In these areas, many of the old signs, all too well known in the valleys, are coming back—all those signs that were so dreaded in the old days—anxious, drawn faces, queues at the employment exchanges, groups of people at the street corners. We have had little information about these areas in speeches from the Government Front Bench. We have heard from the hon. Member for Halifax about practical proposals put forward at the Conservative Party Conference. But during the whole course of this debate, in the speech of the Minister of Labour last night and that of the President of the Board of Trade today, only a small proportion of time was devoted to telling us what action the Government propose to take in these areas. We have been told today and in successive debates in this House that the Government will do all they can to assist new industries going into these areas of chronic unemployment. The progress is hardly perceptible.
    I want to give one example, that of Llanelly, one of the blackest towns in the whole of Great Britain in regard to unemployment. In the past eighteen months, five tinplate and steel mills have closed down there, involving 1,700 people. Only one new industry is actually working in Llanelly now, and the employment which it is giving is for twenty-four men and seven women. That is so far the actual practical result in the provision of employment in one of the blackest towns in the whole country. There is another industry to come, and which, we are told, in five years' time

    865
    will give employment to 500 men, but what is to happen in the meantime?
    I want to ask the Lord Privy Seal, who is, I understand, to reply to the debate, what has happened to the two Distribution of Industry Acts. Last night, the hon. Member for Hamilton (Mr. T. Fraser) pointed out that while the President of the Board of Trade was saying in this House that he would not issue development certificates to applicants in the London area, there was two-and-a-half times as much factory building going on in London as there was in Scotland.
    This afternoon that was qualified. The President of the Board of Trade gave us some figures for the last three months and said that the trends were reversed. I hope that trend will continue, but we have not seen the results of it yet. The right hon. Gentleman also reminded us this afternoon of the fact that he has refused an industrial development certificate to British Nylon Spinners to build a factory in Portsmouth because, and I use the Prime Minister's words in reply to a deputation,
    "Their problems were not as serious as in some other parts of the country…In these circumstances it was right that permission should be refused to this project."
    I hope that the Government will continue to carry out that policy.
    In this context I should like to ask about another important project. British Nylon Spinners is a large concern. It involves a capital of about £10 million, but I want to ask the Government about the largest industrial project which is planned at this moment for the whole country, namely, the new integrated steel mill of Richard Thomas and Baldwins which will cost about £200 million. Will the Government apply the principle enunciated by the President of the Board of Trade and the Prime Minister to this project, or will they throw the principle overboard and send the project to an area of low unemployment?
    If they decide to do the latter, they will have to produce overwhelming economic evidence for that decision. It will not be enough to say to the House that Richard Thomas and Baldwins think that a particular site is a good one or that the Steel Federation thinks it is a good site or that the Steel Board
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    in its wisdom thinks so. The workers in these areas, who have served Richard Thomas and Baldwins well for years and have given of their skill and labour and who may now as far as steel is concerned be thrown on the scrap-heap are entitled to know precisely the extent of the economic margin as between one competitor and another. They will not be satisfied with vague generalisations. To give a very kindly word of warning, if the Government are unable or unwilling to do this, and if they come to the wrong decision they will be providing the best reason yet for the renationalisation of steel.
    Wales, of course, does not want to be dependent in the main, or for the production of raw materials. The lack of factories engaged in finishing processes is a very dangerous weakness in the Welsh as it is in the Scottish economy. Therefore, we agree that diversification of industries is absolutely vital in this important area. The Government are committed to that and to the report of the four-man panel. and we hope very shortly that they will be able to announce in the House new projects of a diversified kind that they intend to introduce into South-West Wales.
    Ministers continually tell us of the difficulty of bringing new industries not only into West Wales but into North Wales as well. They say that one of the main reasons is bad communications. Yet when we ask the Government to go in for a substantial programme of road improvement we have Ministers saying to us, as one Minister said the other day, "Of course it is a great mistake to advocate road improvement as a sort of relief work just to absorb the unemployed." And this is in a country where less is spent per head of population on the roads than in any other great industrial country in Western Europe, and where the congestion of traffic is costing industry millions in delays.
    This argument, like so many that we have heard in this debate, is to me terrifyingly reminiscent of arguments advanced from that side of the House and from Tory benches in the years before the war. In those days many of us supported policies for great programmes of national development, for the re-equipment of the country, for the

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    building of great roads, for the electrifying of railways, for improving transport, building docks, building houses and clearing the slums. If that great policy had been carried out then, how much better equipped this country would have been to compete in the markets of the world today.
    I remember that in those days the father of the hon. Member for Halifax, the present Prime Minister, played a respected part in prodding—though not over-strenuously—the Government of his day. We all respected him for doing it. I hope very much that the poacher has not turned gamekeeper. Then the right hon. Gentleman was on the back benches. Then he was complaining that he did not find the ringing lead for which the nation was asking. Now he is in authority; now he is the master. I beg him to give the ringing lead for which he was asking in those days.
    8.7 p.m.
    Sir Henry d'Avigdor-Goldsmid: It is a very rare pleasure for me to be able to congratulate with absolutely complete sincerity the hon. Lady the Member for Carmarthen (Lady Megan Lloyd George). This famous hereditary virtue which inspires her, as it does my hon. Friend the Member for Halifax (Mr. Maurice Macmillan), is something of which we in the House may well be proud.
    I have spent a little time this summer reading accounts of events in the House fifty years ago in which the hon. Lady's famous father played a famous part. I understand that in the Session of 1909 the House did not adjourn until the beginning of October, and I believe that it was treated to a very large number of speeches from the hon. Lady's famous father. Heaven forbid that such a fate should come to us and that we should have to sit here until October, but if it should I hope that our lives will be enlivened, as indeed this debate has been enlivened today, by a great many speeches from the hon. Lady.
    I cannot follow the hon. Lady, in her remarks, to the hills of Wales with which she is more familiar than I am, but I should like to refer to the speech of the hon. and "learned" Member for Gloucester (Mr. Diamond), for he is indeed a learned Member. He is not
    868
    naïve or ignorant of financial matters, but I feel that somehow or other in his speech he took credit for an unawareness of which I am sure his many clients would not accuse him.
    The hon. Member took advantage of his speech to read again to the House a letter which has had very liberal circulation and of which great use has been made by his party. It has been printed in White Papers and has had the fullest circulation. It was written more than a year ago by somebody who is not a Member of the House to his business partner. I cannot feel in my heart of hearts that such a letter is particularly germane to arguments between political parties, such as have taken place in this debate. Whatever blame attaches to the writer of that letter, it has been amply ventilated in open court and in the proceedings of the Bank Rate Tribunal. I cannot see that at this late stage there is any particular use in bringing it up again, since it makes no additional point.
    The hon. Gentleman made considerable play over the increase in Stock Exchange values. This increase is due to only one thing, and that is to the general view of the investing public that the party to which the hon. Gentleman belongs is not likely to be returned at the next General Election. Whether that is satisfactory or not, I can assure him that the explanation is as simple as that.
    Mr. Austen Albu: May I remind the hon. Gentleman that when our party was in office Stock Exchange values went up continuously.
    Sir H. d'Avigdor-Goldsmid: I cannot embark on that argument, but I am sure I can convince the hon. Gentleman, when I can get hold of the statistics, that his statement is not 100 per cent. correct. However, if he takes credit for the rises in Stock Exchange values which occurred when his party was in office, it is not a reproach to our party that a similar event should have taken place.
    Mr. Albu: I was not taking credit for it. I was simply denying the validity of the argument.
    Sir H. d'Avigdor-Goldsmid: Hon. Gentlemen opposite cannot have it both ways. They are always accusing us of not increasing production to the same extent as two kinds of countries. The

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    first are countries where freedom is tremendously curtailed, such as Russia and China. The second are the countries with the most laissez faire economies of any in the Western world, the United States and Germany.
    In the people's democracies of Russia and China production can be increased by the simplest methods. I do not think it is necessary for me to go into those now. In Western Germany and in the United States the population is wedded to a very tough philosophy. It is one which I do not think we share entirely. t remember very well being in Germany in 1950 and being horrified by the conditions under which the great mass of the people were then living. The interesting thing was that at that time the German Government had drawn on credit to its fullest extent. Germany had the maximum permissible debit balance at the E.P.U., and a casual observer might have said that its Government was heading for bankruptcy and ruin. In fact the economic policy of the German Government on that occasion paid off in terms of considerable sacrifice by the people of that country.
    Last year in America we saw the remarkable fact that at one stage there were 7 million unemployed. Seven million unemployed in the American population represents an unemployment figure here of over 2 million. That is a figure which we could not tolerate and which the population would not tolerate. I am mentioning this fact because it hears out my argument that we are being asked to have our cake and eat it. In other words, we are being asked to avoid unemployment entirely and at the same lime to produce a dynamic economy, a combination which simply cannot be achieved.
    Mr. Diamond: Yes, it can.
    Sir H. d'Avigdor-Goldsmid: As the hon. Gentleman very well knows, there is a level of unemployment which represents those people who, because of physical defects or for some other reason, are not capable of full employment. I think 1 represent an average industrial constituency. In Walsall there is an insured population of 56,000 and a normal unemployment figure of about 500. Before I was elected I made a study of those 500 people. I found that, although all the factories were wanting more
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    workmen, there was continually this 1 per cent. of the population who could not keep a job. I should not like that to be interpreted as a reflection on them, because no doubt they had physical difficulties which made it impossible for them to keep a job. My point is that this makes nonsense of the argument that 100 per cent, employment is possible in a free society.
    Unemployment occurs in phases. In my constituency the unemployment figures did not rise appreciably last year. This was because labour has always been in short supply in the Midlands and labour was hoarded; so last year. although industrial activity was rather dull, there was no increase in unemployment. There was first a stoppage of overtime working. Then there was the point where there was also a certain amount of paid idleness; that is to say, good workers were kept on without much to do and they were encouraged not to work too hard. After this we get to the positive stage of redundancy, and redundancy has been unknown In the industrial Midlands since before the war. That is the point we have now reached.
    Here again, we learn from America. America hit this sharp industrial recession last year and accepted a large figure of unemployment. She has produced also a state of considerable industrial efficiency; that is to say, when business has been easy, expenses have piled up, so the first effort was made to cut expenses and the Americans were, in fact, extremely successful in doing this. We therefore got the extraordinary fact that the American steel industry as a whole was able to work profitably on only 60 per cent. of capacity, which is a tribute to the skill of industrial management.
    During her speech the hon. Lady the Member for Carmarthen referred to the position in the steel industry in Llanelly. It is unfortunate in the steel industry that where there are great companies shaping, where there are these major developments, the smaller companies are in danger. I do not know of any system in which small and relatively inefficient companies can be kept going except by a subsidy at the expense of the more efficient producers. I am sure that even if the hon. Lady approves of such a thing, her distinguished father would not have approved of it.
    Lady Megan Lloyd George: I am sorry to interrupt the hon. Gentleman, but that was not my point. I was simply saying that these old hand mills had closed down. I was not complaining of that; I was saying that if there was to be a new integrated steel mill, it should be put in the same area where there are the steel workers with skill.
    Sir H. d'Avigdor-Goldsmid: I am obliged for that correction. The hon. Lady's speech was not altogether favourable to the Government. Most of the points she made were at the Government's expense. If this was one which was not at the expense of the Government, I am glad to have attention called to it.
    The fact is—I see it, too, in Walsall—that the older firms of smaller capacity are finding competition very severe. There is, therefore, a constant movement of labour and we should not be surprised at this. If we live in a dynamic economy these situations are bound to continue, and unless we accept a state of having our affairs completely directed for us, we must accept this fact. In their heart of hearts I do not think that hon. Gentlemen opposite want all industrial and economic affairs directed officially and centrally, and so I will not labour that point. There has to be this change from one form of work to another.
    The point I wish to make is that in the United States, now that there has been a recovery of the economy from the difficulties of last year, industry is working more efficiently. I have seen the same thing in Walsall. Although there has been an increase in unemployment, there has also been an increase in industrial efficiency. Industry has felt the upturn. It is closely connected with the motor trade, and, having felt the upturn, at the same time it has not found it necessary to increase the labour force. People having been kept in work longer than they were wanted, advantage is now being taken of the more efficient working methods which have been introduced without more people being taken on. I am quite sure, therefore, that we shall see the upturn in trade which is now taking place reflected in full in the unemployment figures, but we shall not see that for another three months or so.
    The problem of unemployment is a huge one and there are many hon. Mem-
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    bers on this side of the House—I can count myself among them—
    Mr. Sidney Dye: One cannot see them present now.
    Sir H. d'Avigdor-Goldsmid: May I remind the hon. Member for Norfolk, South-West (Mr. Dye) that, particularly in agricultural debates, there are often not many hon. Members present on his side of the House.
    Mr. Dye: But it is never like the present situation opposite. That is like a barren field.
    Sir H. d'Avigdor-Goldsmid: To revert to what I was saying—
    Mr. James Callaghan: The hon. Gentleman was saying that there are not so many hon. Members present on his side of the House.
    Sir H. d'Avigdor-Goldsmid: There are not many hon. Members on this side of the House who would fail to agree with me that they would not be in politics if they did not believe that unemployment was the greatest weakness of the industrial system; and if they did not feel also that they could make some contribution to mending its misery by their presence in Parliament. I feel that most deeply. My constituents would not keep me as their Member were I to say to them that it was proper that any large percentage of them should be permanently out of a job—
    Mr. Percy Shurmer: But, of course, the hon. Member would not say that.
    Sir H. d'Avigdor-Goldsmid: —and they would be quite right. Unemployment is a national problem and the evil and misery it causes is also a national problem, so that I cannot see that any major advantage is obtained by bandying accusations which have no particular substance in fact.
    Those of us who have read the Sunday Times recently may have noticed that there are always two ways of winning a battle. One wins a battle on the ground and then one has to win it afterwards in the newspapers and in debate. The substance of the complaint against the Government voiced by the hon. Member for Gloucester was that they won the battle, but that they won it in the wrong way. I advise the hon. Gentleman—I see that he is not present in the Chamber at the

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    moment, but if be reads HANSARD tomorrow he will have the benefit of my advice —to make sure of his place in the Sunday Times. Then he will be able to prove that his way of winning battles would have been the best, if he had been in command at the time.
    The battle last year may have been won in the worst way. But it was won, and, because of that, we are able today to enjoy the luxury of discussing in our debate on the Gracious Speech the measures we propose to take to increase the prosperity of this country; so that what was said a few years ago by my right bon. Friend the Lord Privy Seal may perfectly true. The investment in success which this country was asked to make in 1955 has proved a good investment, and no doubt we shall shortly he asked to renew it.
    8.25 p.m.
    Mr. Cledwyn Hughes: My hon. Friend the Member for Carmarthen (Lady Megan Lloyd George) has drawn attention with eloquence and force to the acute and often intractable problems existing in Wales at the present time. It remains for me merely to underline and reinforce what she has said.
    The position is that the average unemployment figure in Wales is 3·8 per cent. of the insured population. In my own constituency the figure is about 11·5 per cent., the highest for any county in Great Britain. The evil which is now causing general concern has, therefore, been with us for a very long time and during the last few years we have been drawing attention to it in this House by means of Questions and in debate after debate.
    We have asked the Government to apply the Distribution of Industry Acts and to operate the industrial development certificates. We have asked for an expansion of public works in order to absorb our unemployed. We in Wales badly need new roads, piped water supplies, rural electrification and sewerage works. As hon. Members will know, progress in all these matters has been slowed down during the last two or three years as a result of Government policy.
    I was glad to hear the Chancellor of the Exchequer say yesterday that public investment is to go up by £125 million to £150 million in 1959–60. He made it sound as if he was bringing something new out of the bag, whereas, in fact, he
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    is really doing no more than relaxing restrictions the Government themselves imposed on the public sector two or three years ago. Nevertheless, this will help us and I suppose that we should be thankful for small mercies.
    In his speech yesterday, the Minister of Labour spoke of the new Distribution of Industry (Industrial Finance) Act and said that 191 applications for grants or loans had been received by the Treasury. am glad that the Economic Secretary to the Treasury is in his place, because he was closely involved when that Act was going through its various stages in this House. As he knows, Anglesey is scheduled under the Act and we are anxious to derive the maximum benefit from it.
    I should like to have some clarification of how the Act is to operate. The position in Anglesey and elsewhere before the Act came into force was that if we wished to induce industrialists to come to our area we could say we would apply for a factory to be built out of moneys from the Development Commissioners; an application would be made to the Development Commissioners, the factory built, and let to the industrialist concerned. But this no longer applies and a new situation arises.
    I feel we should have been told of this when the Act was passing through the House, for now we are told that the Development Commissioners will no longer operate in areas scheduled under the 1958 Act. Consequently, we are no longer able to offer this inducement to potential industrialists. We are no longer able to offer factory premises to let and to that extent it seems that we are in a somewhat worse position than we were before the Act came into force. I should like to know whether it is the intention of the Government that that should be the position.
    The Economic Secretary to the Treasury (Mr. F. J. Erroll)indicated dissent.
    Mr. Hughes: The hon. Gentleman shakes his head, but what should be our reply if a reputable industrialist comes along and asks, "Can I have a factory which is to let if I enter Anglesey?" or Caernarvonshire, Greenock or any other area scheduled under the Act? I am afraid that we are not now

    875
    in a position to say that he will have a factory. That was a really substantial inducement we could offer before. Furthermore, does the grant or loan available under the new Act cover money for building factory premises if an industrialist prefers to build his own factory? Can he borrow money from D.A.T.A.C. to do so?
    There is a second point about the new Act on which I should like to have clarification. An industrialist applying for a grant or loan is required to fill in a very detailed questionnaire. One question in that questionnaire, which I have seen, is starred as being of primary importance. It asks the applicant whether he can produce evidence that he has tried to obtain money from other sources—presumably banks or financial corporations —before coming to D.A.T.A.C. and has failed to obtain it. If he is an industrialist with a certain amount of financial backing he may say that he has applied to a bank or finance corporation and has been assured that the money is available to him. Will D.A.T.A.C. then say, "If you can get the money from a private source you will not be able to get it from us?"
    If that is the position, it is very serious, because the only sort of industrialist we are likely get coming to our areas is the industrialist who lacks financial backing. I do not want to decry the industrialist who is starting out and has not got financial backing. We want them as well, but we also want to be in a position to invite the industrialist who has experience and is also an industrialist of substance. We all want this Act to be effective. I think that it will help us a great deal, but I should like the Government to look carefully at the points I have mentioned as they may prove to be serious limitations upon its effective operation.
    My main fear on this general question of unemployment is that the Government do not really know where their own policies are taking them and, consequently, they have insufficient control over the serious situation which is now developing. I submit that there is ample evidence of this. For example, on 24th February the President of the Board of Trade said that there was no national unemployment and he could not see national unemployment arising as a result of the Government's internal measures.
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    On 30th April the Minister of Labour, speaking in the Second Reading debate on the Distribution of Industry (Industrial Finance) Act, said:
    "I will say we feel that the major problem of unemployment today is not a lack of demand in the economy as a whole, but some areas of high persistent unemployment which cause a great deal of concern."—[OFFICIAL. REPORT. 30th April, 1958; Vol. 587, c. 391.]
    In his Budget statement, in April, the Chancellor of the Exchequer was a little obscure about the future. He did not seem to know what was going to happen, but one felt that he foresaw that unemployment would increase as a result of the Government's policy.
    If the words of the President of the Board of Trade, in February, and the Minister of Labour, early in April, mean anything, they mean that those right hon. Gentlemen did not realise what lay ahead. My complaint against the Chancellor of the Exchequer is that he did not make the position abundantly clear. He should have said, "We can think of only one way to combat inflation, and that is to cut down production. This means that a large number of people will lose their jobs." I cannot believe that anyone really wants unemployment in this country; it is bad for the nation, it is demoralising to the individual, and it creates uncertainty and unhappiness in the community.
    My great anxiety now is that the Government are neither able nor sufficiently determined to eradicate this evil.
    8.40 p.m.
    Mr. Douglas Glover: We have had an interesting debate on the Gracious Speech during the last week, and in particular the last two days, when we have been discussing the economic situation. I apologise to hon. Members for the fact that I have not been here during the last two or three hours, but I have been to the Albert Hall, to a great Commonwealth meeting, which I am sure everybody there must have found most inspiring and encouraging for the future of the Commonwealth.
    I take this opportunity of congratulating my hon. Friend the Member for Altrincham and Sale (Mr. Erroll) on his preferment to the Treasury. We now have a businessman connected with the economic affairs of the nation. That is a very good thing, and it is all to the good of our economy.

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    One thing that I have never been able to understand is that, according to all the graphs and figures, during recent years the nation has increased its productivity at a very low rate and yet, using the evidence of my own eyes, I can see plainly the increasing prosperity of the nation.
    I shall deal in a moment with the unemployment problem, but I am now taking the picture as a whole. In 1951, the country was short of most of the benefits of civilised life—I am not blaming the present Opposition for that—but during the intervening years the production of all the appliances that make life easier, together with our exports, has been maintained in a most extraordinary manner, bearing in mind the fact that in the last seven years we have had to compete against a revived Germany and a revived Japan, neither of whom existed as a competitor in the years when the Socialist Party was in office. Therefore, I do not think that some of these statistics are very much to go on.
    They remind me of the situation in relation to my own business. During the last few years we appear to have been very successful, yet all the statistics that come out show us at the bottom of the league. All our competitors would day that we were doing better than they. Somewhere along the line many of these figures become twisted, and they do not produce the correct result at the end of the day.
    I want now to deal with the question of unemployment. All hon. Members are disturbed about it; none of us wants to see people out of work. The increase in unemployment that has occurred in the last twelve months has by no means been caused entirely by Government action, or by action taken in this country, and since both parties have to deal with the economy we should be very foolish if we closed our eyes to the fact that a considerable proportion of that unemployment has come from outside sources. I represent a Lancashire constituency, and the whole of my business life has been Tent in that county. I am very proud to be a Lancastrian. We are suffering from considerable unemployment in the textile industry. The facile answer is, That is because of Hong Kong imports." That is a contributory factor, but it is by no means the whole story.
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    The textile industry, throughout the world, is going through a recession, but we must remember all the new developments of modern science, and all the new fabrics that are produced. People do not increase their consumption of textiles at anything like the rate they increase their consumption of other goods, in a prosperous economy and with a rising standard of living. For instance, many people now wear nylon shirts. It takes no longer to weave the nylon yarn than to weave the cotton yarn, but the person wearing the nylon shirt requires fewer of them than he did of cotton shirts. The same thing applies in many other ways.
    Again, let us take the coal industry. I am perfectly certain that it is not the slack in the economy that has caused the growth of stocks of coal in the last twelve months. What has happened is that there has been a gradual change-over to other forms of power, with the result that the demand for coal does not rise as fast as we should all like to see. This problem exists not only in this country. but in every other coal-producing country, and I am sure that it is right that this House should firmly face some of these issues. The issues are not so much concerned with the type of economic policy that one party or other has followed. They are world forces, and both sides of the House must recognise it.
    Reference is often made to the recurrent crises in our economy. When we consider the amount of trade that is done in sterling, and the fact that we finance half the world's credit, the miracle, to me, is that our economy runs so smoothly. The miracle is not that we occasionally have a crisis, but that our management of our affairs is so good that, by and large, with very small reserves, we develop the Commonwealth, we develop the resources of the under-developed countries, and we finance a growing volume of trade.
    Both parties might as well face the fact that if the international economic climate turns against us it will not be fiscal controls, physical controls or any other controls that will insulate this country from the effect of those economic forces. What we have to do all the time is to try to keep our economy tight, virile, prepared to accept change and, therefore, always to the forefront.
    I should like to refer to a problem that arises in a lot of constituencies, and

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    which exists in my constituency at present. Because of the changed pattern of our defence forces, the War Office has decided to close one of its Command workshops, situated in my constituency. Of course, unless we are very careful, this will create some redundancy. Although everyone in the constituency intends to fight for the retention of that Command workshop—make no mistake about that; everyone in the House would do the same—if, at the end of the day, we lose the fight, we do accept that if we are to change the pattern of our defence forces some of these places will be bound to close down.
    The result of that may be some decline in employment in the district, but we have an old naval station. The local authority wants to develop it as an industrial site, but it is in the green belt. What I should like my right hon. Friend to consider is that when these problems crop up in particular areas each Department must not stand on its own rights. I believe that in normal circumstances the Ministry of Housing and Local Government is quite right to protect the countryside, and the green belt. But when there is a site already half prepared for industrial development, it seems to me to be standing on the letter of the law to say that at vast expense it should be converted back to agricultural land. Surely it is better, in those circumstances, to ensure that the area is allowed to be used for industrial development.
    I want to refer to the speech of the right hon. Member for Huyton (Mr. H. Wilson) yesterday. When the dust and heat of the debate have died down, I think that right hon. and hon. Gentlemen opposite will be very sorry that the right hon. Member for Huyton spoke as he did. Whether he intended it or not, it will appear throughout the length and breadth of Britain as though he was treating the problem of Britain's economy with levity and irrelevance and was turning what is, in fact, the problem of every man's livelihood, the level of prosperity and standard of living of this country, into something about which one should make cheap and nasty jokes. That speech will be far more valuable to us on this side of the House than to hon. Members opposite.
    I am sure that the sound and statesmanlike speech made by my right hon. Friend
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    the Chancellor of the Exchequer is much more in accordance with the way in which people expect the problems of our future and our economy to be dealt with. Even I had a lot of fun; I laughed a lot at the right hon. Gentleman's speech, but I do not think that it was the right speech for the day. It was not the right speech for the subject, and I do not think that history will think that it was very clever.
    I wish to refer to the Bill that the Government propose to introduce to help the small farmer. I welcome it warmly. That Bill is definitely necessary to help the small farmers to become viable, efficient and to have the machinery that they require to do a good job in this modern age. I am sure that the Minister is right to exclude those farms which are not viable, and I hope that some provision might be made to help such farmers off the land altogether.
    The average small farm comprises an area of land which a team of horses could manage in the horse age. It is what one man with a team of horses could plough himself. With the introduction of machinery, such farm units today need to be bigger if they are to be efficient. Therefore, where we have one unit which can be made viable, and a smaller unit alongside it which cannot be made viable, in the national interest we should encourage the one that can be made viable and try to persuade the other farmer to remove himself from the land so that we should have a slightly bigger unit which is right for the economy at the present time.
    This is the closing stage of the debate on the Gracious Speech. During these last few days, I have listened to what I think have been some first-class, thoughtful speeches from both sides of the House. I believe that, although there has been some criticism, the programme put forward in the Gracious Speech is a programme which will do the nation a great deal of good. It is a programme which I have no difficulty in supporting with enthusiasm, and I shall watch with interest the passage of the various Measures to which the Speech referred.
    I should like to take this opportunity, if I may, to congratulate my right hon. Friend and his colleagues in the Cabinet for, at this time, producing such a forward-looking programme for us to

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    deal with in the months ahead. I am quite certain that we on this side of the House have shown that we are far more prepared to face the future and look ahead, without turning our minds back to the past, than is the party opposite. As our Measures are brought to fruition we shall gain the increasing support of the electorate for the efforts that we have made. I look forward to the future with confidence.
    8.52 p.m.
    Mr. Hugh Gaitskell: The President of the Board of Trade, in the not very felicitous opening passages of his speech today, complained about the gloom of speakers on this side of the House. He said that hon. Members on this side were out of touch with opinion in the country. He described us, indeed, as "bears to a man." The only evidence which he produced in support of this contention that the country was cheerful was, as one might expect from him, evidence from the Stock Exchange.
    The right hon. Gentleman is often out of touch with sentiment in this House and in the country, but I am bound to say that I thought that he was unusually insensitive to the general tone of the debate. The fact is that the speeches during the course of the debate have not been gloomy in the sense that many gloomy prophecies have been made. What has happened has been that a great many hon. Members have been gravely concerned at the present employment situation in their constituencies.
    This concern has not manifested itself on this side of the House alone. To my mind, the interesting feature of the debate is that, when we have not been arguing out, as we are bound to do, issues of general policy, when hon. Members have been describing the facts as they see them, there has been a remarkable degree of agreement. Almost every hon. Member who spoke about the situation in his constituency complained of the difficulties.
    It is true that on our side of the House there have been many speeches about the position in Scotland and in Lancashire, but, on the Government side, there was. for instance, the hon. Member for Clitheroe (Mr. Fort), who spoke about the situation in the cotton industry. The hon. Member for Bodmin (Mr. D. Marshall) expressed
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    concern about unemployment in his area. The hon. Member for St. Ives (Mr. G. R. Howard) asked that the Government should do something about employment in West Cornwall. The hon. Member for Sunderland, South (Mr. P. Williams) described the plight and worries of the shipping and shipbuilding industry. He spoke of the troubled times ahead for British ship owners and shipbuilders.
    Mr. Paul Williams: I should like to apologise to the right hon. Gentleman for interrupting him, but, having painted one side of the picture, I think he will agree that I painted the other side, which was that in some cases there are five years' orders on the books.
    Mr. Gaitskell: The hon. Member put both sides very fairly, but the phrase that I quoted from him, I think he will agree, was his summing-up phrase—that there were troubled times ahead for British ship owners and builders.
    There is no need for us to get excited about this matter. It is a good thing that hon. Members should honestly say what they find in their constituencies. I am drawing no conclusions, except to say that there is a good deal of concern in the country, as there is bound to be, about the present employment situation. That does not mean that everybody is frightfully gloomy, but the people do have anxieties which they want allayed.
    It is not surprising that so many speeches have been made about the position in Scotland and in Lancashire. I myself have recently had the opportunity of visiting both these parts of Britain and it is impossible to go to them without encountering a degree of anxiety and gloom which certainly far exceeds, let me say at once, any that I feel myself. It is possible to go from one part of Lancashire to another, from one cotton town to another, and find it hard to meet any manufacturer or trade union leader who takes anything but the gloomiest view of the situation. One can travel about Scotland, particularly in the area on both sides of Glasgow, in the Clyde area and in Lanarkshire, and again one will find that people are extremely gloomy.
    I had a talk with the members of the Scottish Board for Industry. Both sides

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    were represented. It was a private conversation and, of course, I cannot disclose the content of it. But, there again, I found a great deal more gloom than i felt. I think that we must admit, and it is well that we should, the degree of concern that exists. On short tours of this kind one cannot hope to assimilate the amount of information which I know many hon. Members have. I should, however, like to make three comments on my impression of the position in Scotland.
    First, there can be no doubt whatever that in Scotland the recession, which, of course, is a great deal worse than it is in England, is chiefly the result of the investment cuts and the credit squeeze applied a year ago. It is not, in my experience, nearly so much the result of a fall in exports. The reason for that has been implied in a number of speeches, which is, of course, that Scotland is peculiarly dependent on heavy industry which has been so greatly affected by the Government's policies.
    Illustrations of this are not difficult to find. There is the steel position in Scotland. I believe that over the country as a whole the steel industry is working at somewhere between 20 and 25 per cent. below full capacity. When I was in Scotland it was working at 60 per cent. of full capacity. Even the most modern steel works in the country, the Ravenscraig works—a wonderful factory which was only recently completed—was working at two-thirds of its capacity. In the neighbouring districts in Lanarkshire, where there are, unfortunately, a great many old steel mills, virtually all of them were on short time, and the general feeling was that they simply could not survive in existing circumstances.
    I visited a firm in the Clyde area which produces mining machinery. I had rather an interest in it, because it so happens that I opened the factory when I was Chancellor of the Exchequer some years ago. It is a firm of first-class reputation. It has an American subsidiary and it is well known to many hon. Members. It is producing a wide range of different mechanical units. The situation I found was that, for the most part, this firm was simply making to stock. The fall in its orders, almost all of which came from the National Coal Board, was, frankly, catastrophic. It was running, I
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    suppose, at about 20 per cent. of the orders that it has normally expected and received in previous years. I was told, "We can go on like this for about six months. We will try to develop other lines, but unless the position improves we shall have to close down." That fairly broad hint was frankly given. This was in one of the worst areas in Scotland.
    Again, I draw attention to the fact that that was the direct result of Government policy. Either it was because the Coal Board had been obliged, as it was, to cut back its investment programme, or it was because, owing to the glut in coal and the large amount of stocks that are accumulating—itself the result of the industrial recession—the Coal Board had, naturally, held back further orders for mining machinery.
    My second point is perhaps an obvious one, but it is worth making. Let us not overlook the local repercussions which inevitably follow when this sort of thing gets under way. I am not thinking so much of the fact that if one talks to the managers of employment exchanges one finds unemployment in distribution or in building, or that, as I was told in the Glasgow area, about one clothing factory is closing down every month.
    I came across what was, in a way, a more interesting case. I went to see a large factory in Glasgow—it will be known to my hon. Friends from Scotland —which is owned by British Railways and is concerned with the maintenance of locomotives. One would have supposed that the job of keeping locomotives in proper condition, of stripping and rebuilding them, and so on, was a fairly steady affair. About 2,000 people are employed at the works, but it was facing redundancy. The reason for this is the fall in the amount of traffic carried on the railways, which means that the locomotives were coming in less frequently for repair and maintenance. That is the kind of consequence which, perhaps, we do not often think about, but the workers in that workshop were thinking about it.
    Mr. Geoffrey Wilson: Is the right hon. Gentleman satisfied that the diminution in work in the maintenance of locomotives has nothing to do with dieselisation?
    Mr. Gaitskell: I was quite satisfied about that. I discussed it with the manager of the works. There is not the

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    slightest doubt that, although the point made by the hon. Member may arise later, the railways are carrying less freight because of the decline in the heavy industries; and because of this, the mileage which each locomotive has to cover before coming in for repair takes longer. It was not a very serious redundancy problem, but everywhere I went in that factory people came up to me and said, "What are you going to do"—they all seemed to think that I was able to do something about it—"about the redundancy here?" All I can do is to pass this on to the Government and make them aware of it.
    Another point, which has not been mentioned in the course of the debate, is the repercussion on the finances of the Transport Commission. There has been a good deal of criticism of the Commission from the Government and we are extremely critical of the way in which the Government have handled their relations with the Commission over the last few years. It is inevitable that the Commission's financial position is greatly affected by the fall in freight. We are not taking it from the Government that this is in any way the responsibility of the Commission. The responsibility for this financial situation rests fairly and squarely on the Government benches.
    The third and more obvious point is that although, I believe, local action is desirable and certainly should be taken on a much larger scale by way of bringing lighter industries into Scotland, nevertheless I am convinced that the solution for Scotland, as, indeed, for other similar areas, must be dependent upon general recovery and general expansion. We can induce firms, by giving them special terms, by building factories for them, to go into the special areas. That has been done under, let me say at once, both Governments. There was an argument earlier today as to who had done the most. However, if we want to carry out that policy effectively we have also to apply the policy of steering firms into those areas, which means saying to them, "You must not stop here, or there, but you must go somewhere else," and for that to be said effectively firms must want to set up somewhere else, and that means that there must be industrial expansion.
    As to the Lancashire situation, a great deal has been said on that, and I should
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    like only briefly to comment on it. The thing which impressed me most, touring those Lancashire towns, was the speed of the decline of the industry. One felt that the people themselves were simply amazed by this. Once again, of course, general recovery is related to the problem, because as the President of the Board of Trade quite rightly said, as expansion takes place there will be greater demand for clothing, and so on, but, as he himself rightly admitted today, matters really cannot be left like that. Unless we are prepared to sit back and see this industry virtually disappear Government action is essential.
    I was glad to hear the President of the Board of Trade declare that he was against unregulated free trade. That is something of an advance, but I notice that he relies wholly on voluntary agreement. That is all right for a start, but suppose we cannot get voluntary agreement. Do we sit back and let the industry decay? Or are the Government then prepared, as we are, to use Government action to give it the necessary breathing space? It is the same in regard to the organisation of the industry. [An HON. MEMBER: "What action?"] Our policy has been made clear, and I do not want to spend too much time on it now. That is the only reason why I will not repeat it.
    The President of the Board of Trade referred to the need for pruning in the industry, the need for rationalisation. We do not disagree, but once again he says the Government will not do anything but must wait for the industry to proceed. The experience we have had of the cotton industry does not make us very hopeful about that. I do not believe it is good enough to leave it to the industry. Government initiative is essential, too.
    I return to the general situation, and the first question is: how seriously should we take it? It is partly a matter of standards, and here I must refer to my own statement in 1951, which has again been brought up in this debate, to clear up the matter. I hope once for all. In announcing what was called the "3 per cent. full employment standard" I said this:
    "It must he stressed that the choice of this standard does not mean that the Government would allow unemployment to reach 3 per cent, before taking vigorous counter-action. It

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    will be a continuing objective of the Government's policy to counter any unfavourable trend in employment and to take special measures to deal with those areas in which unemployment has persisted at a comparatively high level."—[OFFICIAL REPORT, 22nd March, 1951; Vol. 485, c. 320.]
    Mr. Cyril Osborne: That is true today.
    Mr. Gaitskell: I am dealing with the allegation constantly flung across the Floor of the House, and put out in all the Tory propaganda papers, that I am content with 3 per cent. unemployment. It is simply not true. The figure of 3 per cent. Was chosen—remember it well—because we were anxious at that time to try to get internationally agreed action against unemployment if it came, and we knew perfectly well that if we put too low a figure, the figure of 2 per cent., which would have been more appropriate, or even less than that, in the light of our experience, there would have been no hope of getting any co-operation from the American Government. I hope that we shall hear no more about that, and I will leave it at that.
    What about the prospects? The Minister of Labour referred last night to what I said recently in a speech at Cambridge, and I repeat it. I have never supposed that there was going to be a major slump, and, in my opinion, there is no likelihood of that. Such a major slump is likely only if it is on a world scale, and there is really no sign of that at present. Secondly, I have said that I think there will be some recovery in the course of the next year, and I adhere to that as well. I am not going to prophesy exactly, but, nevertheless, I will make these comments on the speech of the Minister of Labour.
    Despite, in a way, the relatively optimistic flavour that he gave it, we cannot ignore the fact that, except for July and August, for a long time now the gap between last year's unemployment figures and this year's unemployment figures has become larger by 30,000 more unemployed each month. In other words, quite apart from the seasonal factors, unemployment is increasing at that rate, and exactly the same applies to the October figures which he gave. There is, therefore, no change, as far as we can see, in the general trend as yet.
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    Secondly, I would say that there is undoubtedly a very great deal of underemployment in this country. This is clear from the fact that production has, in fact, fallen more than employment, and that means that it is much more likely that we shall get a recovery in production before we get any recovery in employment. Thirdly, I would underline what my right hon. Friend the Member for Blyth (Mr. Robens) said this afternoon. I beg the House not to overlook the human and psychological consequences of unemployment, even on this scale. It can be extremely bad for industrial relations, it can hamper considerably the efforts which have been made by so many people to try to get people more productivity-minded, it can lead to monopolistic tendencies, and, therefore, in all these ways, can hamper our recovery if it goes on much longer.
    Finally, I would say that, however we may judge the present situation, the fact is undeniable that we are now in the middle of the most severe industrial recession in employment and production since the war. That cannot be denied. It cannot be denied, either, that this recession follows a period of industrial stagnation running over about two and a half years. This is a matter to which I will return later.
    The second question, a more controversial one, is: was this unemployment necessary? The Government's case is that they had to apply restrictions because they could not allow the inflationary boom to go on, because, otherwise, there would either have been what the Minister of Labour calls a major slump, or, as the President of the Board of Trade says, there would have been a devaluation.
    My first point about that is this. If, indeed, this allegation is correct, and we had to have a recession because we were in an inflationary boom which could not be allowed to continue, who was responsible for that? There they are, two of them sitting there, two previous Chancellors, while another one who usually sits on a back bench is not there—the "right hon. unmentionable," as my right hon. Friend the Member for Huyton (Mr. H. Wilson) called him yesterday. The guilty men might, perhaps, have been calling themselves to repentance, but there has not been much sign of that.

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    I must say that it is very tempting for us in the Opposition to leave it at that, and to say, "You have a recession, and you were responsible for it, because of the inflationary boom which you encouraged." But I cannot do that, because I do not believe that the evidence supports the view expressed by the Minister of Labour, the President of the Board of Trade and the present Chancellor of the Exchequer. Yes, the right hon. Gentlemen were guilty all right, but they were guilty of other crimes. They have accused themselves of the wrong ones, that is all. The crimes of which they are guilty were holding the country back from expansion, not creating inflation, arid if hon. Members doubt my words on this let them consider, for instance, the balance of payments position. It was quite favourable last summer. Was there any sign of a boom as far as production was concerned? None whatever.
    If hon. Members doubt my views on this, I would refer them to that eminent Conservative economist, Mr. Harrod, who has, I think, very recently been trying to secure a seat in the House to sit on the benches opposite, and who, indeed, I am bound to say, would be a great reinforcement to the benches opposite on economic affairs. [An HON. MEMBER: "Who is he?"] He is a member of the hon. Member's party. Let me just recall what he has recently said about this matter:
    "It ought not to have been possible, for instance, for anyone supposed to be knowledgeable and sensible, to have said in September, 1957, that inflation was rampant in England."
    He described the policy as an
    "utterly untimely one of restriction far more severe than anything adopted, when it was really needed, in 1955."
    As to the action of authorities now praised to the skies by hon. Members opposite he describes that as "an appalling shemozzle", and the verbiage which accompanied it as
    "an outburst of gloom and nonsense".
    Right hon. Gentlemen opposite can choose what they like, either accept their own allegations against their past or admit that the policy in 1957 was totally unnecessary.
    There is, of course, another possibility and that is to accept what seems to be implied in the speech of the President of the Board of Trade, and that is
    890
    that whether or not the balance of payments was favourable there was speculative movement against sterling and in those circumstances we had to take action. Are we to accept that whenever the Zurich bankers, the new-found friends of the noble Lord the Member for Dorset, South (Viscount Hinchingbrooke) take a gloomy view of sterling, for what may be quite irrelevant reasons, we in this country are obliged to cut back our production and employment for a year? I should be surprised that any party in this country would really adopt an attitude of that kind. Yet it was what, fundamentally, the President of the Board of Trade was saying this afternoon.
    It may be said, "Never mind about exactly what happened in 1957. Look at the results." Well, was the deflationary policy responsible for an improvement in the balance of payments? I would not deny for a moment that, if one wishes, one can apply the most stringent deflationary policies, one can create hundreds of thousands, even millions, of unemployed and, very probably, having done all this and screwed down production and employment here, we should have a record surplus on the balance of payments. Of course, it is true that we can cut down imports and push up exports if we want to deflate that way. It is fine for everybody except the unemployed. But it means cutting down imports and pushing up exports, and that is not what happened in 1957–58.
    We all know perfectly well why the balance of payments has been so favourable. It is overwhelmingly due to the fall in import prices. Whatever the Chancellor may say, that is nine-tenths of the explanation, and it would have happened in any case whatever we would have done here. But I say to the House that it should remember that this fall in commodity prices, which has been such a help to the country, was at the expense of a good many millions of extremely poor people in Asia and in Africa.
    The President of the Board of Trade referred today to the growing gap between the richer and the poorer nations. I am glad that he has made that discovery. We made it some time ago, but what happened last year has increased that gap. The right hon. Gentleman referred also to the race in living standards between

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    the Communist countries and the free countries in Asia and Africa. Let us face it. What has happened has certainly meant that in that race the free countries have fallen behind. So please let us have a little less boasting about the "little bit of luck." To secure some rise in. consumption despite lower production, for that certainly has happened, at the expense of the unemployed here and at the cost of millions of people much poorer than ourselves, is not a policy which anybody should recommend.
    Therefore, we do not believe that the unemployment which we are now suffering from was in the least necessary. We do not believe that a credit squeeze was called for. We think that it should have been called off long ago, and when the Chancellor says that measures of the kind he announced took time to operate our comment is, "Why on earth did he not operate them earlier?"
    This needless loss is not only for last year. It is not, I repeat, just a reaction from a boom. Hon. Members must not forget the salient fact about the present situation, which is that British industry is today producing less—2 or 3 per cent. less—than it was three years ago, in 1955. I repeat something which I said the other day. The record since 1951 is this: an average expansion of industrial production up to 1955 of about 3 per cent.; since 1955 to the beginning of this year, no increase at all; since the beginning of this year, a decline in production. That is the record of the Tory Government since they came into power in 1951.
    It is all very well to speak in general terms—[HON. MEMBERS: "Oh."] All right, then hon. Members would like to be reminded perhaps that we are now producing less china, less glass, fewer bricks, fewer non-ferrous metals, fewer commercial vehicles, fewer metal goods, fewer precision instruments, fewer textiles, fewer leather goods than we were in June, 1955.
    Mr. Osborne rose—
    Mr. Gaitskell: If the hon. Gentleman wants to have it in concrete terms, he can have it.
    Mr. Osborne: What about 1951?
    Mr. Gaitskell: Now we hear that we are poised for expansion. We have heard a good deal about being poised
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    for expansion in the course of the last three years. Almost every Chancellor —and there have been several of them—who has spoken, has talked about being poised for expansion. The right hon. Gentleman the Member for Monmouth (Mr. P. Thorneycroft) talked about 1956 when he made his Budget Speech in 1957. He described 1956 in these terms:
    "A picture not of industrial apathy but of a nation girding itself for renewed and greater effort."
    Well, did we get the greater effort? No, indeed we did not. We had a further period of stagnation and then a downturn.
    We are told that thanks to what was done last year we can now expand. Does this mean that, having gone down the hill, we simply march up again? Does it mean that we stop production at the level at which it was in 1957? Why should it be supposed that unless the Chancellor takes special steps to stop them, the very evils of which he is so frightened will not recur as soon as he lets up?
    The Chancellor speaks of aiming at "the highest level compatible with price stability." Supposing the Government fail to prevent a rise in retail prices in the next few months, do we have another credit squeeze? [An HON. MEMBER: "A General Election."] We will come to that later. After all, such stability as there has been is, as the Chancellor himself admits, solely due to falling import prices. Will import prices go on falling? Almost certainly not. Supposing world prices rise. Does the Chancellor mean by this phrase that we are to have more unemployment here?
    No doubt, as an hon. Gentleman has said, the nearness of the Election will decide. We shall go on until the next crisis. The tactics of 1955 will be applied again. But I do not myself believe that the electors will be deceived twice.
    Our opposition to the Government is not against the fact that very belatedly they are now pursuing expansionist policies. It is that they have no plan, except a further damping down of production, to prevent this expansion from developing into inflation. Apart from a vague appeal for wage restraint, nothing said from the Government benches has any bearing on this vital problem. All we hear today

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    is further talk about more decontrol, and convertibility, and freedom to residents here to export their own capital. All we hear from the President of the Board of Trade is a boast about allowing in more dollar imports.
    Our view is quite plain. We believe that the country should aim at the most rapid expansion which is technically feasible, given the limits placed on our resources. We believe that industrial production should continually he rising and could continually be rising at, say, 4 per cent. a year, and not be lower than three years ago as it is now. Of course, we must have a level of demand which is not positively driving up prices. But we believe it is possible to have this expansion without inflation, given two conditions.
    The first condition is that we are not afraid to use controls to check inflation. We say, for instance, that it is more important that we have expansion and full employment than to give freedom to British residents to send their money abroad. We say that there is no fundamental reason why, if it be necessary, we should not check imports which are less essential so that we can go on buying the materials we need to sustain the expansion. The vast majority of the Commonwealth countries have such controls today and there is really no reason in principle why, if it be necessary, we should not use them ourselves.
    We believe it better to keep some control over industrial building rather than to have either the slack in the building industry which we have, or a raging, tearing inflation in that industry. We believe that instead of trying to hold down wages and cutting back production and employment, it is wiser to encourage such a rise in productivity as will balance a rise in wages. We are far more likely to get stable labour costs—about which the Chancellor said nothing at all, and which is the heart of this problem—if we expand industry than if we go in for a policy of restriction. But we know, and I fully agree, that a successful anti inflation policy also involves, and must involve, close co-operation between the Government and the unions. It must further involve policies of social justice and measures taken by the Government which make that co-operation possible.
    894
    During these last few days we have been discussing what is, I believe, the greatest issue of economic and social policy confronting not only our nation, but the whole of the Western world. It is the fact, whether we like it or not, that the Soviet and Communist bloc, Russia and China, are marching ahead, that their industries are expanding rapidly year by year. They may have occasional checks, but of the speed of that expansion there really can he no doubt. We abhor their political systems, but we have to see that here in our democracy we can go ahead just as fast. Because, if we cannot do this. we have lost the cold war—it is as serious as that.
    We say that we shall never win this race, we shall never keep up with the speed of expansion in the Communist dictatorships, if production is continually checked, as it has been in this country in the last few years and, to some extent. in other Western countries. This means that we must have a Government who will use the powers at their disposal to check any tendency to inflation while stimulating expansion, and who will, by their social policies, secure the necessary co-operation in the community.
    The plain fact is—the facts are undeniable on the basis of the last three years—that we have now had a period of stagnation—we have not even had stable prices—and we have a Government with a policy which is completely unfitted to deal with the problem of inflation which will come next upon us. In the circumstances there is only one thing to be done. That is to get rid of a Government which base themselves on a policy of laissez faire and to put into office a Government which can carry out the only policy which can guarantee expansion without inflation.
    9.30 p.m.
    The Secretary of State for the Home Department and Lord Privy Seal (Mr. R. A. Butler): It is customary for the Leader of the House to wind up, as it is called, the debate on the Address. It is usual on this occasion to make some reference to the general debate which has taken place over six days. If I may be excused, I shall concentrate chiefly upon the issues to which the right hon. Member the Leader of the Opposition devoted his speech, as not only do I think that would be courteous but I think that

    895
    would interest the House this evening. There are, however, one or two other matters to which I must make reference before coming to that main issue.
    First, I should like to refer to two notable maiden speeches made by my hon. Friends the hon. Member for Argyll (Mr. M. Noble) and the hon. Member for Weston-super-Mare (Mr. Webster). I should like to congratulate them on their speeches and upon their brevity, which will endear them in future to the House. We hope that on many occasions we shall hear them in speeches so short and sweet.
    The right hon. Member the Leader of the Opposition referred to tours he has made in Scotland and Lancashire and, if I may, in the short scope of the speech I have before me I shall make some reference to some of the points he has made. I should like to refer in particular to the situation in Northern Ireland, to which the right hon. Member did not refer, but which I feel sure he has also had in mind and which was referred to by the right hon. Member for Blyth (Mr. Robens). I think we should pay attention to the speeches made by my hon. Friend the hon. Member for Belfast, West (Mrs. McLaughlin) and my hon. Friend the hon. Member for Belfast, East (Mr. McKibbin). I know, from my responsibility as Home Secretary and my recent visit to Northern Ireland, how very severe the incidence of unemployment is in that area.
    This is a particularly difficult problem. The area depends upon Government orders. I feel that in a small respect the statement made by the President of the Board of Trade today about extra Export Credits Guarantee Department credits for the Britannias in particular will do something to help one of the industries in Northern Ireland. If it does, I am sure all will be well satisfied. It is a subject which occupied my mind as Chancellor of the Exchequer and now, as Home Secretary, I should like to tell the hon. Members from Northern Ireland that their problem, a very intractable and difficult one, is always very much present in our minds and the mind of the whole House.
    A variety of subjects have been discussed in the debate on the Address. On Friday I had to make what I am
    896
    sure the House must have found a very long speech on crime. When I turn again to my old love, economics, I wonder which is the more difficult, morals and ethics or the sphere of economics. I find it very hard to say. I saw a letter in The Times today which suggested that by legislation the Government could bring in a better moral and religious situation. That I very much doubt. I think there are other agencies besides the Government and the House of Commons which could improve morals and the religious life of the public. Similarly, in economics we do not depend on legislation but on such actions as I shall describe shortly to the House.
    This is an occasion when we have had a Gracious Speech to both Houses of Parliament, delivered on Tuesday, 28th October, and televised for the first time. I do not wish to make any final observations on that at this moment, but I should like to say, not only on behalf of those on this side of the House but I hope on behalf of those on the other, that we shall want to consider very carefully the various reactions to this event and to consider its future. I hope that in doing so we may have the collaboration and co-operation of the right hon. Member the Leader of the Opposition and his hon. and right hon. Friends. I do not think we can draw any further conclusions at this moment.
    We can be very well satisfied that the Socialist fears—which are typical of the many fears and apprehensions they have put forward over the years, and on which they were so vocal four years ago—that the American, J. Fred Muggs, the chimpanzee, or one of his relatives, would be appearing during the televising of State ceremonies, have proved unfounded. That fear seems strange today. We have avoided such terrible dangers, and the problems that we shall have to discuss are rather different from that.
    I shall be dealing with the speeches of the Leader of the Opposition and of the right hon. Member for Blyth, but I want, first, to gay a word about the speech of the right hon. Member for Huyton (Mr. H. Wilson). His speech has been criticised, and it was very well described by my right hon. Friend the Chancellor of the Exchequer as "a comedy of errors". I do not object to a little bit of 19th century invective—in fact, I enjoy

    897
    it very much and I think that it is very valuable to our debates—but I am wondering where the right hon. Gentleman's "fighting policy for Labour" is. There was no reference to a positive policy on the part of the Labour Party in any speeches that we heard from hon. Members opposite. The right hon. Gentleman kept off this because he has nothing constructive to state.
    It would appear as a result of our debate that right hon. and hon. Members opposite are waiting for something — and I have discovered what it is. I have discovered that the Daily Mirror, and what it refers to so felicitously as the "Left Wing weekly", Tribune, are issuing a £500 prize for an essay in a competition for precisely this subject "A Fighting Policy for Labour". I have searched all back versions of this newspaper, of which I am a daily reader, and I find that Members of Parliament are prohibited from applying or sending in contributions.
    That is perhaps not surprising, judging by the speeches that we have heard from hon. Members opposite. It is also the case that practising journalists—and this affects the hon. Member for Coventry, East (Mr. Crossman)—will not be allowed to go in for the competition. The judges are to be Mr. Frank Cousins, Mr. Michael Foot, Mr. Malcolm Muggeridge, and Mr. Sydney Jacobson. I hope that as a result of this competition, when we next have a debate upon the affairs of the nation, such as used to grace the affairs of Parliament in the 19th and the early part of the 20th centuries, we shall have something more constructive from this source than we had from the right hon. Gentleman.
    The Opposition have raised many of the old hares, but there is no old hare which can be taken—if I may mix my metaphors —more seriously than the one of destroying the social services and bringing back unemployment. The right hon. Member for Blyth said that the Conservative Government did not believe in full employment; he said that we believed in living in sin, and not in honourable marriage. I think he intended to convey by those observations that we had never had a low and reasonable level of unemployment, or a high or stable level of employment, and that we had in fact been living in sin. What is the truth of the matter?
    898
    Taking the average over our seven years of Government, the level of unemployment has been universally low—much lower than at any time in the period of office of hon. Members opposite. There is no doubt that our policy in this respect is absolutely respectable.
    Looking back over past Amendments, I find one in 1952 which refers to our policies as being those which threaten a return to the social conditions of the inter-war years. That reminded me of the speech of the right hon. Member for Llanelly (Mr. J. Griffiths) in the course of our debate. I remember the right hon. Gentleman's speeches when things were really bad, in the 1930s, and I do him the justice of saying that no hon. Member was more sincere in putting before the House the views of Wales in those hard and stricken years. I was Parliamentary Secretary to the Ministry of Labour at the time. My job was to go round the labour exchanges, whether in South Wales, in West Cumberland. on the East Coast or anywhere else, and there is deeply imprinted on my mind, as there must be on the mind of any sane and humane Member of this House, the determination that we must not again return to such conditions. That is the determination of the Government.
    The right hon. Gentleman the Member for Llanelly, referring to the constituency of the hon. Member for Nelson and Colne (Mr. S. Silverman)—who has an Amendment on the Paper, to which I, therefore, wish to pay attention—spoke of the position in Lancashire, to which the Leader of the Opposition also referred. He referred to this position in the most moving terms. He said that whole communities were destroyed. He was harking back to the language he used in the 'thirties.
    Nevertheless, while I believe that the position in Nelson and Colne is particularly difficult, the position in Lancashire has been supplemented by the change of industry, and alleviated. That, of course, does not mean that it is not still serious. Cotton, despite the fact that it represents a very small percentage of the total labour force in Lancashire, still remains the most important single industry in Lancashire, and it is the Government's intention, as was said by my right hon. Friend the President of the Board of Trade, to do the utmost they can to achieve agreement with those nations which are dumping their produce in Lancashire.

    899
    We believe that that is the first step We believe that we should take that step successfully before contemplating any other, and on behalf of Her Majesty's Government I say to hon. and right hon. Members that directly we have any news about the Hong Kong negotiations we shall give it to the House. We are sorry that that news is not available this evening.
    Coming to this claim that we are attacking the social services, I noticed that the right hon. Gentleman the Member for Blyth was particularly sensitive, earlier in this debate, about a quotation from a speech he made on 10th November, 1952, about the possibility of there being a million extra unemployed. For the purpose of greater accuracy, I obtained a copy of HANSARD, and I have the statement here.
    I do not wish to pursue that—it is history—but I remember that, in the same debate, he used an expression which seems to me still to be prevalent in the minds of the Labour Opposition, and is one reason why the country think that they are totally and absolutely out of date.
    The right hon. Gentleman said:
    "…the back-benchers on the Government side…have taken off the sheep's clothing which they donned during the General Election and they now stand as the wolves with their teeth bared and with the axe in their hands ready to cry out…"
    I was not surprised that when I examined this report in HANSARD I found in that familiar bracket—as I find in so many of my speeches— especially when I am winding up—the word "Interruption"—which means that there was total chaos. After that, the right hon. Gentleman was heard to say, as recorded in the OFFICIAL REPORT:
    "I should have thought it was possible for them to have their teeth bared and to carry an axe at the same time."—[OFFICIAL REPORT, 10th November, 1952; Vol. 507, c. 706.]
    If that is the description of my right hon. and hon. Friends, I should imagine that we have new aspects of crimes of violence to which I, as Home Secretary. should turn my attention at once.
    When we turn to the realities of the social services, what do we find? We find the right hon. Gentleman the Member for Huyton writing in his Election address in 1951:
    "The Tory Party, representing the financial interests of profiteers, high finance and big business "—
    900
    this is the old-fashioned stuff upon which the party opposite is still living:
    "would destroy the social services in order to reduce taxation on the rich."
    What, in fact, is our record? It is that we have not only reduced taxation to the tune of some £900 million a year—about which I, in all modesty, may say that in my five Budgets I managed to reduce it by £800 million—but we have also managed to improve the social services. We have raised pensions three times, and we now propose to develop a substantive and, I hope, a humane scheme as a result of the publication of our White Paper. I should like to say, in answer to requests made during the debate, that it is our intention to provide a very early day for a debate on the White Paper on Pensions. It is our intention to pay attention to the criticisms made by the House before we finally draft legislation on this vital subject.
    Not only have we had success with that, but we have also made headway with the first hospital building programme since the war. We now propose a major Bill, which I think I can honestly say we have no possibility of producing before Christmas owing to its size and the extent of consultations with local authorities, in the field of mental health, a subject which I do not think will be politically controversial, but it will represent a major move forward in the social field.
    We have already built five times as many schools as right hon. Members opposite have, and we now propose in a White Paper to indicate further developments in the scope and quality of secondary education. I always said that it would take a generation to bring in an education Bill in full, and I hope that in our generation we may make a great deal more progress on reorganisation and making secondary education for all a reality.
    There was no mention of housing in the debate on the Address, and that was the subject of intense discussion last year on the basis of an Amendment moved by the hon. and learned Member for Kettering (Mr. Mitchison). I would refer only to two matters—to house purchase and the question of further expansion. On both these we shall be issuing a White Paper tomorrow and, therefore, I will not refer to it further now, but I would say, in answer to questions asked during

    901
    the course of the six days' debate, that it is proposed that advances should be made not only by building societies of 100 per cent. but also by the local authorities to the tune of 100 per cent. to those who propose to purchase houses.
    Mr. H. Morrison: I am glad to hear that, but can the right hon. Gentleman say whether, as finances are being made available to the building societies, similar facilities will be made available to the local authorities?
    Mr. Butler: The important thing is to await the White Paper which will be ready tomorrow.
    The right hon. Member for Huyton referred to my right hon. Friend the Prime Minister, and I would only say this in connection with this subject of housing. The right hon. Gentleman referred to him as having an amnesia about the years 1951 to 1957. Those were the years in which my right hon. Friend made a unique contribution to social investment by building 300,000 houses and more. That is something which I think indicates not only his belief in social expansion but also his contribution to this vital subject.
    Mr. A. Blenkinsop (Newcastle-upon-Tyne, East)rose—
    Mr. Butler: We must await the White Paper which is being published tomorrow.
    There has been very little reference to agriculture in this debate, but while we are referring to production I should like to say that in agriculture the value of gross output from farms has increased from £1,159 million in 1952–53 to £1,472 million in 1957–58. We are now 63 per cent. above pre-war production, and I hope that when we get the Bills on the small farmer and on the Agricultural Mortgage Corporation we shall be able, through them, to pay some tribute to the work of farmers and farm workers in this exceptionally bad and disastrous harvest year.
    The Amendment calls attention to
    "measures directed towards the expansion of production and employment…"
    and stability of prices. I think the right hon. Gentleman did less than justice to the question of stability of prices. They have been virtually stable for the best part of ten months since last September.
    902
    The measures which the right hon. Gentleman asked about in his speech and which he mentioned in a recent party political broadcast—very much the same as he mentioned in his party political broadcast—were brought in, in fact, before he made the broadcast. There has been, for example, the reduction in interest rates. There is now the relaxation on hire purchase. There has been the removal of the credit squeeze. There has been the speeding up of investment in the publicly-owned industries. There has been hospital building and house building. Road building has advanced by 30 per cent. more than we anticipated during the course of the past year. There have been relaxations on restrictions of investment. We have steered industry to areas where it is most needed, and we propose to continue to do so.
    Moreover, in reply to the right hon. Gentleman the Member for Blyth who spoke about investment, I can say that fixed investment, which is the true source of wealth, is at a record figure today. In the first half of this year, it was still growing, and was then 3 per cent. above last year. This represents double the rate in 1951, and is 60 per cent. above it in real terms.
    The right hon. Gentleman the Leader of the Opposition referred to private investment. The Chancellor of the Exchequer in his speech in this debate said:
    "I must say I have been impressed by the resilience which it has shown so far "—
    that is, private investment—
    "which seems to me to illustrate a fundamental confidence in the future—an effective answer to those who may feel that our springs of resource, of initiative and invention are dying out."—[OFFICIAL REPORT, 3rd November, 1958; Vol. 594, c. 642.]
    My right hon. Friend said in the same speech that he had been warned that private investment might go down, but that is by no means certain. In view of the uncertainty, he has looked ahead.
    The right hon. Gentleman asked me specifically why we had not taken steps earlier. I can reply to him, as my right hon. Friend did in general terms in his speech, that, during the summer, in early August, the Chancellor of the Exchequer thought that further short-term measures were essential. He therefore authorised the spending of about £30 million in high unemployment areas. I had to

    903
    deal with the depression in 1952, which we survived, the unemployment in which we conquered. I had only £20 million to spend voted by this House, for the purpose of housing allocations, the maintenance of hospitals, the maintenance of Government buildings, telephones. and many other expenses, chiefly in areas of high unemployment.
    These things were foreseen as early as August last, and those measures have been followed up with the undertaking by my right hon. Friend that investment in 1959–60 will be at a level between £125 million and £150 million additional to the total in 1957–58. This, I think, indicates that we have foreseen in time the necessity to take the right steps to deal with a possible deflation in the economy.
    It would be wrong to imagine that we have stagnation. Electricity generation, for example, is up by 10 per cent. between 1957 and 1958. Petroleum deliveries on the home market are up between 1957 and 1958 by no less than 20 per cent. If we take the example of motor cars, for the first eight months of this year they are up by 26 per cent. as compared with the same months of 1957.
    I believe that, if we take the figure of consumption, which is now running, for the first half of 1958, 2½ per cent. above the level for the first half of 1957, we see that we are not approaching anything like a major slump. In fact, if we proceed at an annual rate of increase in consumption of 2½ per cent., we shall double our standard of living before twenty-five years have passed, instead of in twenty-five years, as I have suggested.
    I have not time tonight to develop the overseas opportunities which have been arranged by the skill of my right hon. Friend the Chancellor of the Exchequer. The fact is, that, with increased liquidity and the ending of the American recession —in 1949, it was less severe, yet, as the right hon. Member for Huyton said, it knocked away the whole of our prosperity and led to devaluation—there is genuine hope for our exports combined with this expansion at home.
    We have, therefore, to decide which policy is best for us—that of Her Majesty's Government or that of the Opposition. The Labour Party is very
    904
    prone to tell us about the increase in production whilst it was in office. It tells us, and this was repeated in the debate, how many schemes, both overseas and at home, it could have financed if that rate of progress had been maintained.
    It does not, however, tell us what happened. How many schemes could a Labour Government have financed if the gold and dollar reserves had continued to fall, as they were falling in 1951, at the rate of 200 million dollars a month? What would have been the result if prices had continued to rise, as they were doing in 1951, at the rate of 12 per cent., or even, taking an average of the Labour Party's whole period of office, at the rate of 6½ per cent. per annum? What would have happened if the £ had been devalued every three years by 30 per cent. —as it was in 1949? Finally, what would be the result if, in the words of the right hon. Member for Huyton, the party opposite adds to these uncertainties a programme which might well cost, in its entirety, £1,000 million of public indebtedness per year, which is the Labour programme? This I give as a conservative estimate, conservative in every way.
    I will, with permission, circulate in the OFFICIAL REPORT the companies, 512 of them, which evidently are to be either taken over, messed about or in some way interfered with by the Socialist Party, as appears from its pamphlets entitled "Industry and Society" and "Plan for Progress". Does the House, and do right hon. Gentlemen opposite, really think that that sort of programme, imposed on a record such as hon. Members opposite have, would be likely to create confidence or increase production? It would be quite disastrous for our economy at the present time, and it is because hon. Members and the country as a whole feel that we have the only—
    Mr. Frank Bowles: May I ask whether it is in order for the right hon. Gentleman to seek to circulate in the OFFICIAL REPORT a list of companies to which he has not referred in his speech?
    Mr. Speaker: Perhaps the hon. Member can arrange to table a Question.
    Mr. Butler: I would say, in conclusion, that when the country has to choose between the threats and dangers—
    Mr. Roy Mason rose —
    Mr. Butler: —that it sees in the Socialist Party it will undoubtedly choose in favour of the policy that we recommend.
    Question put, That those words be there added: —
    The House divided: Ayes 255. Noes 324.

    Division No. 1]

    AYES

    [9.59 p.m.

    Ainsley, J. W.

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

    Mellish, R. J.

    Albu, A. H.

    George, Lady Megan Lloyd(Car'then)

    Messer, Sir F.

    Allaun, Frank (Salford, E.)

    Gooch, E. G.

    Mikardo, Ian

    Allen, Arthur (Bosworth)

    Gordon Walker, Rt. Hon. P. C.

    Mitchison, G. R.

    Allen, Scholefield (Crewe)

    Greenwood, Anthony

    Monslow, W.

    Awbery, S. S.

    Grenfell, At. Hon. D. R.

    Moody, A. S.

    Bacon, Miss Alice

    Grey, C. F.

    Morris, Percy (Swansea, W.)

    Baird, J.

    Griffiths, David (Rother Valley)

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

    Balfour, A.

    Griffiths, Rt. Hon. James (Llanelly)

    Mort, D. L.

    Bellenger, Rt. Hon. F. J.

    Griffiths, William (Exchange)

    Moss, R.

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

    Hale, Leslie

    Moyle, A.

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

    Hall, At. Hn. Glenvil (Colne Valley)

    Mulley, F. W.

    Benson, Sir George

    Hamilton, W. W.

    Neal, Harold (Bolsover)

    Beswick, Frank

    Hannan, W.

    Noel-Baker, Francis (Swindon)

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

    Harrison, J. (Nottingham, N.)

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

    Blackburn, F.

    Hastings, S.

    O'Brien, Sir Thomas

    Blenkinsop, A.

    Hayman, F. H.

    Oliver, G. H.

    Blyton, W. R.

    Healey, Denis

    Oram, A. E.

    Boardman, H.

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

    Orbach, M.

    Bottomley, At. Hon. A. G

    Herbison, Miss M.

    Oswald, T.

    Bowles, F. G.

    Hewitson, Capt. M.

    Owen, W. J.

    Boyd, T. C.

    Holman, P.

    Padley, W. E.

    Braddock, Mrs. Elizabeth

    Holmes, Horace

    Paget, R. T.

    Brockway, A. F.

    Howell, Charles (Perry Barr)

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

    Broughton, Dr. A. D. D.

    Howell, Denis (All Saints)

    Paling, Will T. (Dewsbury)

    Brown, Rt. Hon. George (Belper)

    Hoy, J. H.

    Palmer, A. M. F.

    Brown, Thomas (Ince.)

    Hughes, Cledwyn (Anglesey)

    Pannell, Charles (Leeds, W.)

    Burke, W. A.

    Hughes, Emrys (S. Ayrshire)

    Pargiter, G. A.

    Burton, Miss F. E.

    Hunter, A. E.

    Parker, J.

    Butler, Herbert (Hackney, C.)

    Hynd, J. B. (Attercllffe)

    Parkin, B. T.

    Butler, Mrs. Joyce (Wood Green)

    Irvine, A. J. (Edge Hill)

    Paton, John

    Callaghan, L. J.

    Isaacs, Rt. Hon. G. A.

    Peart, T. F.

    Carmichael, J.

    Janner, B.

    Pentland, N.

    Castle, Mrs. B. A.

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

    Popplewell, E.

    Champion, A. J.

    Jeger, George (Goole)

    Prentice, R. E.

    Chapman, W. D.

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

    price, J. T. (Westhoughton)

    Chetwynd, G. R.

    Jenkins, Roy (Stechford)

    Price, Philips (Gloucestershire, W.)

    Clunie, J.

    Johnson, James (Rugby)

    Probert, A. R.

    Coldrick, W.

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

    proctor. W. T.

    Collick, P. H. (Birkenhead)

    Jones, David (The Hartlepools)

    Pursey, Cmdr. H.

    Corbet, Mrs. Freda

    Jones, Jack (Rotherham)

    Randall, H. E.

    Cove, W. G.

    Jones, J. Idwal (Wrexham)

    Rankin, John

    Craddock, George (Bradford, S.)

    Jones, T. W. (Merioneth)

    Redhead, E. C.

    Cronin, J. D.

    Kenyon, C.

    Reeves, J.

    Crossman, R. H. S.

    Key, Rt. Hon. C. W.

    Reid, William

    Cullen, Mr. A.

    King, Dr. H. M.

    Robens, At. Hon. A.

    Dalton, Rt. Hon. H.

    Lawson, G. M.

    Roberts, Albert (Normanton)

    Darling, George (Hillsborough)

    Ledger, R. J.

    Roberts, Goronwy (Caernarvon)

    Davies, Ernest (Enfield, E.)

    Lee, Frederick (Newton)

    Robinson, Kenneth (St. Pancras, N.)

    Davies, Harold (Leek)

    Lee, Miss Jennie (Cannock)

    Rogers, George (Kensington, N.)

    Davies, Stephen (Merthyr)

    Lever, Harold (Cheetham)

    Ross, William

    Deer, G.

    Lever, Leslie (Ardwick)

    Royle, C.

    de Freitas, Geoffrey

    Lewis, Arthur

    Shinwell, Rt. Hon. E.

    Delargy, H. J.

    Lindgren, G. S.

    Short, E. W.

    Diamond, John

    Lipton, Marcus

    Shurmer, P. L. E.

    Dodds, N. N.

    Logan, D. G.

    Silverman, Julius (Aston)

    Donnelly, D. L.

    Mabon, Dr. J. Dickson

    Silverman, Sydney (Nelson)

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

    McAlister, Mrs. Mary

    Simmons, C. J. (Brierley Hill)

    Dye, S.

    MacColl, J. E.

    Skeffington, A. M.

    Ede, Rt. Hon. J. C.

    MacDermot, Niall

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

    Edelman, M.

    McGhee, H. G.

    Slater, J. (Sedgefield)

    Edwards, Rt. Hon. John (Brighouse)

    McInnes, J.

    Smith, Ellis (Stoke, S.)

    Edwards, Rt. Hon. Ness (Caerphilly)

    McKay, John (Wallsend)

    Snow, J. W.

    Edwards, Robert (Bilston)

    McLeavy, Frank

    Sorensen, R. W.

    Edwards, W. J. (Stepney)

    MacMillan, M. K. (Western Isles)

    Soskice, Rt. Hon. Sir Frank

    Evans, Albert (Islington, S.W.)

    MacPherson, Malcolm (Stirling)

    Sparks, J. A.

    Evans, Edward (Lowestoft)

    Mahon, Simon

    Spriggs, Leslie

    Fernyhough, E.

    Mainwaring, W. H.

    Stewart, Michael (Fulham)

    Finch, H. J.

    Mallalieu, E. L. (Brigg)

    Stonehouse, John

    Fitch, Alan

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

    Stones, W. (Consett)

    Fletcher, Eric

    Mann, Mrs. Jean

    Strachey, Rt. Hon. J.

    Foot, D. M.

    Marquand, Rt. Hon. H. A.

    Strauss, Rt. Hon. George (Vauxhall)

    Forman, J. C.

    Mason, Roy

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

    Fraser, Thomas (Hamilton)

    Mayhew, C. P.

    Summerskill, Rt. Hon. E.

    Swingler, S. T.

    Watkins, T. E.

    Williams, W. R. (Openshaw)

    Sylvester, G. O.

    Weitzman, D.

    Williams, W. T. (Barons Court)

    Taylor, Bernard (Mansfield)

    Wells, Percy (Faversham)

    Wilson, Rt. Hon. Harold (Huyton)

    Taylor, John (West Lothian)

    Wells, William (Walsall, N.)

    Winterbottom, Richard

    Thomas, lorwerth (Rhondda, W.)

    Wheeldon, W. E.

    Woodburn, Rt. Hon. A.

    Thomson, George (Dundee, E.)

    White, Henry (Derbyshire, N.E.)

    Woof, R. E.

    Timmons, J.

    Wigg, George

    Yates, V. (Ladywood)

    Tomney, F.

    Wilcock, Group Capt. C. A. B.

    Younger, Rt. Hon. K.

    Ungoed-Thomas, Sir Lynn

    Wilkins, W. A.

    Zilliacus, K.

    Usborne, H. C.

    Willey, Frederick

    Viant, S. P.

    Williams, David (Neath)

    TELLERS FOR THE AYES:

    Warbey, W. N.

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

    Mr. Bowden and Mr. Pearson

    NOES

    Agnew, Sir Peter

    D'Avigdor-Goldsmid, Sir Henry

    Hope, Lord John

    Aitken, W. T.

    Deedes, W. F.

    Hornby, R. P.

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

    Digby, Simon Wingfield

    Horobin, Sir Ian

    Alport, C. J. M.

    Dodds-Parker, A. D.

    Horsbrugh, Rt. Hon. Dame Florence

    Amery, Julian (Preston, N.)

    Donaldson, Cmdr. C. E. McA.

    Howards, Gerald (Cambridgeshire)

    Amory, Rt. Hn. Heathcoat (Tiverton)

    Doughty, C. J. A.

    Howard, Hon. Greville (St. Ives)

    Anstruther-Gray, Major Sir William

    Drayson, G. B.

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

    Arbuthnot, John

    du Cann, E. D. L.

    Hughes Hallett, Vice-Admiral J.

    Armstrong, C. W.

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

    Hughes-Young, M. H. C.

    Ashton, H.

    Duncan, Sir James

    Hulbert, Sir Norman

    Astor, Hon. J. J.

    Duthie, W. S.

    Hurd, A. R.

    Atkins, H. E.

    Eccles, Rt. Hon. Sir David

    Hutchison, Michael Clark(E'b'gh, S.)

    Baldock, Lt.-Cmdr, J. M.

    Eden, J. B. (Bournemouth, West)

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

    Baldwin, Sir Archer

    Elliott,R.W.(Ne'castle-upon-Tyne,N.)

    Hutchison, Sir James (Scotstoun)

    Balniel, Lord

    Emmet, Hon. Mrs. Evelyn

    Hyde, Montgomery

    Barber, Anthony

    Errington, Sir Eric

    Hylton-Foster, Rt. Hon. Sir Harry

    Barlow, Sir John

    Erroll, F. J.

    Iremonger, T. L.

    Barter, John

    Farey-Jones, F. W.

    Irvine, Bryant Godman (Rye)

    Batsford, Brian

    Fell, A.

    Jenkins, Robert (Dulwich)

    Baxter, Sir Beverley

    Finlay, Graeme

    Jennings, J. C. (Burton)

    Beamish, Col. Tufton

    Fisher, Nigel

    Jennings, Sir Roland (Hallam)

    Bell, Philip (Bolton, E.)

    Fletcher-Cooke, C.

    Johnson, Dr. Donald (Carlisle)

    Bell, Ronald (Bucks, S.)

    Forrest, G.

    Johnson, Eric (Blackley)

    Bennett, F. M. (Torquay)

    Fort, R.

    Johnson, Howard (Kemptown)

    Bennett, Dr. Reginald

    Foster, John

    Jones, Rt. Hon. Aubrey (Hall Green)

    Bevins, J. R. (Toxteth)

    Fraser, Hon. Hugh (Stone)

    Joseph, Sir Keith

    Bidgood, J. C.

    Freeth, Denzil

    Kaberry, D.

    Biggs-Davison, J. A.

    Galbraith, Hon. T. G. D.

    Keegan, D.

    Bingham, R. M.

    Gammons, Lady

    Kerby, Capt. H. B.

    Birch, Rt. Hon. Nigel

    Garner-Evans, E. H.

    Kerr, Sir Hamilton

    Bishop, F. P.

    George, J. C. (Pollok)

    Kershaw, J. A.

    Black, C. W.

    Gibson-Watt, D.

    Kimball, M.

    Body, R. F.

    Glover, D.

    Kirk, P. M.

    Bonham Carter, Mark

    Glyn, Col. Richard H.

    Lagden, G. W.

    Bossom, Sir Alfred

    Godber, J. B.

    Lambton, Viscount

    Bowen, E. R. (Cardigan)

    Goodhart, Philip

    Lancaster, Col. C. G.

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

    Gough, C. F. H.

    Langford-Holt, J. A.

    Boyle, Sir Edward

    Gower, H. R.

    Leavey, J. A.

    Braine, B. R.

    Graham, Sir Fergus

    Leburn, W. G.

    Braithwaite, Sir Albert (Harrow, W.)

    Grant, Rt. Hon. W. (Woodside)

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

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

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

    Legh, Hon. Peter (Petersfield)

    Brooke, Rt. Hon. Henry

    Gresham Cooke, R.

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

    Brooman-White, R. C.

    Grimond, J.

    Lindsay, Hon. James (Devon, N.)

    Browne, J. Nixon (Craigton)

    Grimston, Hon. John (St. Albans)

    Lindsay, Martin (Solihull)

    Bryan, P.

    Grimston, Sir Robert (Westbury)

    Linstead, Sir H. N.

    Bullus, Wing Commander E. E.

    Grosvenor, Lt.-Col. R. G.

    Llewellyn, D. T.

    Burden, F. F. A.

    Gurden, Harold

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

    Butcher, Sir Herbert

    Hall, John (Wycombe)

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

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

    Hare, Rt. Hon. J. H.

    Lloyd, Rt. Hon. Selwyn (Wirral)

    Campbell, Sir David

    Harris, Frederic (Croydon, N.W.)

    Low, Rt. Hon. Sir Toby

    Carr, Robert

    Harris, Reader (Heston)

    Lucas, Sir Jocelyn (Portsmouth, S.)

    Cary, Sir Robert

    Harrison, A. B. C. (Maldon)

    Lucas, P. B. (Brentford & Chiswick)

    Chichester-Clark, R.

    Harrison, Col. J. H. (Eye)

    Lucas-Tooth, Sir Hugh

    Clarke, Brig. Terence (Portsmth, W.)

    Harvey, Sir Arthur Vere (Macclesf'd)

    McAdden, S. J.

    Cole, Norman

    Harvey, Ian (Harrow, E.)

    Macdonald, Sir Peter

    Conant, Maj. Sir Roger

    Harvey, John (Walthamstow, E.)

    Mackeson, Brig. Sir Harry

    Cooke, Robert

    Harvie-Watt, Sir George

    McKibbin, Alan

    Cooper, A. E.

    Hay, John

    Mackie, J. H. (Galloway)

    Cooper-Key, E. M.

    Head, Rt. Hon. A. H.

    McLaughlin, Mrs. P.

    Cordeaux, Lt.-Col. J. K.

    Heald, Rt. Hon. Sir Lionel

    Maclay, Rt. Hon. John

    Corfield, Capt. F. V.

    Henderson, John (Cathcart)

    Maclean, Sir Fitzroy (Lancaster)

    Craddock, Beresford (Spelthorne)

    Hesketh, R. F.

    McLean, Neil (Inverness)

    Crosthwaite-Eyre, Col. O. E.

    Hicks-Beach, Maj. W. W.

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

    Crowder, Sir John (Finchley)

    Hill, Mrs. E. (Wythenshawe)

    MacLeod, John (Ross & Cromarty)

    Crowder, Petre (Ruislip—Northwood)

    Hill, John (S. Norfolk)

    Macmillan,Rt.Hn.Harold(Bromley)

    Cunningham, Knox

    Hinchingbrooke, Viscount

    Macmillan, Maurice (Halifax)

    Currie, G. B. H.

    Hirst, Geoffrey

    Macpherson, Niall (Dumfries)

    Dance, J. C. G.

    Hobson, John(Warwick & Leam'gt'n)

    Maddan, Martin

    Davidson, Viscountess

    Holland-Martin, C. J.

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

    Davies,Rt.Hon.Clement(Montgomery)

    Holt, A. F.

    Maitland, Hon. Patrick (Lanark)

    908

    909

    Manningham-Buller, Rt. Hn. Sir R.

    Price, David (Eastleigh)

    Sumner, W. D. M. (Orpington)

    Markham, Major Sir Frank

    Price, Henry (Lewisham, W.)

    Taylor, Sir Charles (Eastbourne)

    Marlowe, A. A. H.

    Prior-Palmer, Brig. O. L.

    Taylor, William (Bradford, N.)

    Marples, Rt. Hon. A. E.

    Profumo, J. D.

    Teeling, W.

    Marshall, Douglas

    Ramsden, J. E.

    Temple, John M.

    Mathew, R.

    Rawlinson, Peter

    Thomas, Leslie (Canterbury)

    Maudling, Rt. Hon. R.

    Redmayne, M.

    Thomas, P. J. M. (Conway)

    Mawby, R. L.

    Rees-Davies, W. R.

    Thompson, Kenneth (Walton)

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

    Renton, D. L. M.

    Thompson, R. (Croydon, S.)

    Medlicott, Sir Frank

    Ridsdale, J. E.

    Thornton-Kemsley, Sir Colin

    Milligan, Rt. Hon. W. R.

    Rippon, A. G. F.

    Tiley, A. (Bradford, W.)

    Molson, Rt. Hon. Hugh

    Roberts, Sir Peter (Heeley)

    Tilney, John (Wavertree)

    Moore, Sir Thomas

    Robertson, Sir David

    Turner, H. F. L.

    Morrison, John (Salisbury)

    Robinson, Sir Roland (Blackpool, S.)

    Tweedsmuir, Lady

    Mott-Radclyffe, Sir Charles

    Robson Brown, Sir William

    Vane, W. M. F.

    Nabarro, G. D. N.

    Rodgers, John (Sevenoaks)

    Vaughan-Morgan, J. K.

    Nairn, D. L. S.

    Roper, Sir Harold

    Vickers, Miss Joan

    Neave, Airey

    Ropner, Col. Sir Leonard

    Vosper, Rt. Hon. D. F.

    Nicholls, Harmar

    Russell, R. S.

    Wade, D. W.

    Nicholson, Sir Godfrey (Farnham)

    Sandys, Rt. Hon. D.

    Wakefield, Edward (Derbyshire, W.)

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

    Scott-Miller, Cmdr. R.

    Wakefield, Sir Wavell (St. M'lebone)

    Noble, Michael (Argyll)

    Sharples, R. C.

    Walker-Smith, Rt. Hon. Derek

    Nugent, G. R. H.

    Shepherd, William

    Wall, Patrick

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

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

    Ward, Rt. Hon. G. R. (Worcester)

    Orr, Capt. L. P. S.

    Smyth, Brig. Sir John (Norwood)

    Ward, Dame Irene (Tynemouth)

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

    Soames, Rt. Hon. Christopher

    Watkinson, Rt. Hon. Harold

    Osborne, C.

    Spearman, Sir Alexander

    Webbe, Sir H.

    Page, R. G.

    Speir, R. M.

    Webster, David

    Pannell, N. A. (Kirkdale)

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

    Whitelaw, W. S. I.

    Partridge, E.

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

    Williams, Paul (Sunderland, S.)

    Peel, W. J.

    Stanley, Capt. Hon. Richard

    Williams, R. Dudley (Exeter)

    Peyton, J. W. W.

    Stevens, Geoffrey

    Wills, Sir Gerald (Bridgwater)

    Pickthorn, K. W. M.

    Steward, Harold (Stockport, S.)

    Wilson, Geoffrey (Truro)

    Pike, Miss Mervyn

    Steward, Sir William(Woolwich, W.)

    Wood, Hon. R.

    Pilkington, Capt. R. A.

    Stoddart-Scott, Col. Sir Malcolm

    Woollam, John Victor

    Pitman, I. J.

    Storey, S.

    Yates, William (The Wrekin)

    Pitt, Miss E. M.

    Stuart, Rt. Hon. James (Moray)

    Pott, H. P.

    Studholme, Sir Henry

    TELLERS FOR THE NOES:

    Powell, J. Enoch

    Summers, Sir Spencer

    Mr. Heath and Mr. Oakshott

    Main Question put and agreed to.
    Resolved
    That an humble Address be presented to Her Majesty, as follows:—
    Most Gracious Sovereign,
    We, Your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Northern Ireland, in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament.
    To be presented by Privy Councillors op Members of Her Majesty's Household.

    Committee to consider the Supply to be granted to Her Majesty, Tomorrow. —[Mr. Heath.]
    Committee to consider of the Ways and Means for raising the Supply to be granted to Her Majesty, Tomorrow.—[Mr. Heath.]
    PROCEDURE
    Mr. John Tilney discharged from the Select Committee Mr. Tiley added.—[Mr. Oakshott.]

    THE TRIAL OF WILLIAM JORDAN
    Motion made, and Question proposed, That this House do now adjourn.—[Colonel J. H. Harrison.]
    10.12 p.m.
    Mr. Douglas L. S. Nairn: I will be careful in what I have to say, because I realise that it will be extremely easy on this subject to get out of order, and therefore I will have to leave unsaid something which it might have been helpful for me to say. I am raising the case of William Jordan, because the action on which I seek clarification was action taken by a Crown counsel for which my right hon. and learned Friend the Lord Advocate is answerable. Very briefly, the facts of the case are as follows.
    A rent collector named Daniel Wyllie, in the course of his duties, went to Jordan's house to collect the rent. William Jordan, who was known to be heavily in debt and in arrears with his rent, killed Wyllie while he was there, trussed up his body and hid it in his house, where it was later found by the police. Jordan was charged with the murder of Wyllie and also with robbing him of a sum of

    911
    money. Prior to the trial, Crown counsel accepted a plea of guilty to culpable homicide, and Mr. Skae, on behalf of the Crown, said that this decision had been come to because there was evidence of diminished responsibility. He also mentioned that there was a suggestion that Jordan's wife had told Jordan some two weeks earlier that Wyllie had put his arm round her waist in an unduly familiar way. The decision to accept this plea of guilty to culpable homicide has caused considerable concern amongst responsible people in my constituency.
    There are, I think, two main reasons for this. The first is that, because the Crown accepted a plea of guilty to culpable homicide, the medical evidence regarding Jordan was not divulged at the trial. The second reason is that the suggestion that Wyllie might have behaved in an unduly familiar way towards Mrs. Jordan went unchallenged, and it was not possible to call evidence about Wyllie's character, which is known to have been exemplary.
    It is not only necessary that justice should be done and be seen to be done, but it is also necessary that justice should be seen to be done to innocent parties as well as to the accused. My first question to my right hon. and learned Friend the Lord Advocate is whether Crown counsel could not have avoided this situation in which it was possible to put a slur on the name of the deceased man, Daniel Wyllie, when in the circumstances there can be no possible opportunity for his name to be cleared.
    In reply to a Parliamentary Question. my right hon. and learned Friend said:
    "A plea of guilty to culpable homicide was accepted because Crown counsel were satisfied on the evidence in their possession, in particular the medical evidence regarding the mental condition of the accused, that at the time of the offence he was suffering from diminished responsibility."—[OFFICIAL REPORT, 22nd July, 1958; Vol. 592, c. 23.]
    The medical evidence has now come into my possession. Two of the three doctors who examined Jordan indicated that in their opinion he was suffering from some weakness of mind, but all three agreed that he was sane and fit to plead
    My second question, therefore, is whether it would not have been more satisfactory to have allowed this case to have been tried before a jury. My right
    912
    hon. and learned Friend will have noticed that in his reply to me he used the words "in particular the medical evidence". I should like to ask whether in fact it was on the medical evidence alone that the decision was taken.
    In raising the subject tonight I most sincerely hope that this will enable my right hon. and learned Friend to give answers which will entirely reassure the public. But, first and foremost, I sincerely hope that it will enable him absolutely and completely to clear the good name of the deceased man, Daniel Wyllie.
    10.17 p.m.
    The Lord Advocate (Mr. W. R. Milligan): My hon. Friend the Member for Central Ayrshire (Mr. Nairn) has stated that there is in his constituency considerable concern, which I think was the exact phrase he used, about the case to which he has referred. He has also asked me several questions. I hope that I may be able, in answering those questions, to dispel any doubt that may still exist in the constituency and in the neighbourhood about the proceedings in this case.
    I think that the House will have noted that underlying all my hon. Friend's questions, and, I Think, inherent in his whole speech, was the suggestion that the accused's plea should not have been accepted and that the case should have gone for trial. That plea was accepted because Crown counsel, after full consideration of all the evidence in the case and, in particular, the Crown medical evidence, were satisfied that on that evidence they would not be entitled to ask a jury to convict of any crime higher than that of culpable homicide, the reason being that they were satisfied that that evidence disclosed that the accused was suffering from diminished responsibility. The acceptance of a plea, just like a question of whether proceedings should be taken or should not be taken in any particular case, involves the exercise of a discretion by Crown counsel, and I did not understand my hon. Friend to challenge that position.
    The first question which my hon. Friend posed related to what was said by the learned advocate depute and by counsel for the defence at the time that the accused came up for sentence in regard to certain alleged familiarities between the deceased and the wife of the

    913
    accused. Both learned counsel made it quite clear that the only evidence of any such familiarities came from the accused or his wife. The matter was mentioned by Crown counsel with a view to bringing before the judge any possible mitigating circumstance which he understood might be there.
    I propose, Mr. Deputy-Speaker, with your permission and that of the House, to read certain extracts which were not fully published in the Press about exactly what did take place at this trial. Before I read them, may I add that the learned advocate depute further stated to the court that the character of the deceased was unexceptionable. I stress these words because they did not appear in the report of the proceedings.
    I now come to the exact proceedings. The relevant passages are as follows:
    "THE ADVOCATE DEPUTE: There is no information in my possession stemming from any other source than from the accused himself that there was any provocation at all in the case. There is a suggestion, as I understand it, that the accused's wife told the accused that some two weeks before the killing the rent collector had put an arm round her waist in an unduly familiar manner. I do not think there is anything more that I can say at this stage to assist Your Lordship."
    Lord Russell, the presiding judge, then said:
    "There is no doubt he is sane and fit to plead?"
    Mr. Irvine Smith, who was counsel for the accused, then said:
    "There is no doubt about that. It is against that background that comes the statement, according to him, by his wife, that this rent collector had made an approach to her. That would upset a normal man, in my submission, but to a man with the mental background and the mental attitude towards his wife, obsessed by jealousy, of this man, it drove him to breaking point. He waited in for that rent collector to call and he challenged him, he tells me. The rent collector denied it and thereafter a quarrel ensued which ended in the stabbing of this unfortunate man."
    Counsel then went on to deal with matters not connected with this particular issue, and then Lord Russell said:
    "Mr. Advocate Depute, there is nothing in that that you are in a position to contradict:
    914
    at the same time, you are not able to confirm them except that they emanated from the accused himself?
    THE ADVOCATE DEPUTE: No. At any rate in view of the character of the rent collector, I cannot accept or deny it."
    Then he said this, which is very important, and I hope it will allay any misapprehensions in the minds of those in my hon. Friend's constituency:
    "His character is unexceptionable, or was "—
    that is the man who is now dead—
    "…and that is why I say that the provocation, if there was, stems entirely from the accused or from the accused's side…"
    I am glad to have this opportunity of again saying that, to the best of my belief, the character of the deceased was unexceptionable.
    The next question asked was in connection with the statement in the medical reports to which my hon. Friend has referred, that the accused was sane and fit to plead. My hon. Friend poses this question: why, if he was sane and fit to plead, was the plea accepted? It has never been suggested in this case at any time that the accused was not sane and that he was not fit to plead. Had he not been fit to plead then, of course, no plea could have been tendered on his part. What was clear on the evidence to which I have already referred is that he was suffering from diminished responsibility, and that is a different thing.
    Finally, my hon. Friend asks whether the plea of the accused was accepted on the medical evidence alone. I must not answer that question. For reasons which I feel sure the hon. Member and the House will appreciate, it is not the practice to disclose what evidence is in the possession of the Crown authorities. I trust that what I have said has helped to remove any misapprehensions which may still exist in the minds of my hon. Friend's constituents.
    Question put and agreed to.
    Adjourned accordingly at twenty-five minutes past Ten o'clock.

NYASALAND
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  Oldham
  Short-time Workers (Unemployment Benefit)
  Short-time Workers (Unemployment Benefit)
  Research Scientists
  Research Scientists
  Unemployed and Short-time Workers
  Unemployed and Short-time Workers
  Resettlement and Temporary Transfer Schemes (Changes)
  Resettlement and Temporary Transfer Schemes (Changes)
ROYAL NAVY
  H.M.S. "Dreadnought"
  H.M.S. "Dreadnought"
  Merchant Shipping (Nuclear Propulsion)
  Merchant Shipping (Nuclear Propulsion)
MEDICAL RESEARCH
  United Nations Report (Atomic Radiation Effects)
  United Nations Report (Atomic Radiation Effects)
  Milk Teeth (Radiation Census)
  Milk Teeth (Radiation Census)
MINISTRY OF HEALTH
  Poliomyelitis (Vaccine Distribution)
  Poliomyelitis (Vaccine Distribution)
ROYAL AIR FORCE
  Low Flying, Lincoln
  Low Flying, Lincoln
  V-bombers, Waddington
  V-bombers, Waddington
  London Chest Hospital
  London Chest Hospital
COMMONWEALTH RELATIONS
  Second Deputy Under-Secretary of State (Functions)
  Second Deputy Under-Secretary of State (Functions)
MINISTRY OF DEFENCE
  Thor Rockets
  Thor Rockets
EDUCATION
  Girls' Technical School, Stroud
  Girls' Technical School, Stroud
HOME DEPARTMENT
  Mobile Shops
  Mobile Shops
MINISTRY OF SUPPLY
  Aircraft Development
  Aircraft Development
ROADS
  Schemes
  Schemes
BRITISH ARMY
  Meritorious Service Medal
  Meritorious Service Medal

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

B.B.C. AND BETTING NEWS
2.35 p.m.
LORD AMMON: My Lords, I beg to ask the first Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether their attention has been drawn to the action of the B.B.C. on Saturday, August 23, which, without previous notice, gave the starting prices of horse races over the British Broadcasting services; and whether this meets with their approval.]
LORD CHESHAM: My Lords, the matter to which the noble Lord refers is one of programme content. It is the policy of Her Majesty's Government, as it has been of successive Governments in the past, to give the B.B.C. independence in the conduct of its day-to-day affairs, which of course includes its programmes.
LORD AMMON: My Lords, is it not usual, when a new feature is being introduced, that notice should be given? It was not given in this case, and certain members of the Press called attention to that fact the very next day.
LORD CHESHAM: It is not the usual practice, so far as I am aware. It strikes me personally as merely an extension of news reporting.
LORD AMMON: Exactly. Is this not another case of Gresham's Law applying in morals and public conduct, as in economics?
LORD CHESHAM: My Lords, I will stick to my point that, apart from the matter being one of the B.B.C.'s own responsibility, it seems to me to be a question purely of news reporting of something which is happening.
LORD AMMON: But surely Parliament has some control over a matter of
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such public importance and over an institution which is under the control of Parliament? Not long ago, when we debated in this House the setting up of a rival organisation, it was suggested that it would be likely to cause the B.B.C. to deteriorate, and that was regarded as a danger in itself.
LORD CHESHAM: My Lords, it seems to me, if I may say so to the noble Lord with all respect, that the B.B.C. have done something which he personally thinks is wrong; and if I may with further respect say so to the noble Lord, he should address himself to the B.B.C. on this matter.
VISCOUNT ELIBANK: My Lords, may I ask the noble Lord this supplementary with reference to the subject matter of this Question? Is he aware that many people in this country can see no difference at all between backing a horse or a greyhound, on the one hand, and trying to win a fortune on football pools or gambling upon a rise on the Stock Exchange, on the other? Is it not perfectly clear that many people in this country congratulate the B.B.C. on having adopted the sensible practice of quoting the odds as well as announcing the results?

ALCOHOL AND ROAD ACCIDENTS
2.38 p.m.
LORD AMMON: My Lords, I beg to ask the second Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether the possible date of the publication of the Report from the Medical Research Council on the relation of drink and road accidents can now be announced.]
THE LORD PRESIDENT OF THE COUNCIL (VISCOUNT HAILSHAM): My Lords, a paper giving the results of the experimental work conducted under the auspices of the Medical Research Council on the effect of alcohol upon the skill of drivers of motor vehicles has already been published in the British Medical Journal on October 25, 1958. A more detailed presentation of the methods used, and the data upon which the conclusions are based, will be published by the Council in due course.
LORD AMMON: My Lords, may I ask what is the reason for the continual delay arid procrastination in regard to the publication of this Report; and is it usual to publish a Report to this House in a journal before Parliament receives it?
VISCOUNT HAILSHAM: My Lords, with regard to the first part of the question, the reason for the delay in the publication of the full Report is that those concerned have not yet completed the draft. The answer to the second part of the question is that it was thought desirable to give the findings to the public as soon as possible. When the full Report comes I understand that it will add nothing of importance, so far as the general public are concerned. It will, however, be of interest to other research workers in that it will give full experimental details.
LORD AMMON: But does the Minister not know that on October 28 last an ex tract from the Report was published in the British Medical Journal and an indication that they had the full Report and, in fact, had had it for some time?
VISCOUNT HAILSHAM: The British Medical Journal has not the full Report because it is not ready. What was published on October 25, and not on October 28, was a paper giving the results of the experimental work.
LORD MATHERS: My Lords, may I ask the Minister whether he is aware that on several occasions publication of the Report referred to has been promised by the Government? What purpose is intended to be served by withholding that Report from publication? If it is not possible for the Government to make up their minds about it, does he not realise that by publishing the Report he might be aiding the Government in making up their minds by their seeing the reception that the Report receives when it is published?
VISCOUNT HAILSHAM: I am very glad to see the noble Lord back in his place again but I must tell him, in answer to his question, that the Government are not withholding publication of the Report. They will publish it as soon as they have it. What is holding up the publication of the Report is the fact that the author or principal draftsman of it, as a University
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professor of psychology, is an independent worker who has undertaken this work with the aid of a grant from the Medical Research Council. He has been asked to produce the Report as soon as possible, but there must be some limit to the amount of pressure put on a person in that position. There is no question of the Government's not making up its mind. It is a scientific Report, and it is not ready yet.

ADOPTION BILL [H.L.]
THE LORD CHANCELLOR (VISCOUNT KILMUIR): My Lords, I beg leave to introduce a Bill to consolidate certain enactments relating to the adoption of children. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read 1a.—(The Lord Chancellor.)
On Question, Bill read 1a, and to be printed.

MANŒUVRES BILL [H.L.]
THE LORD CHANCELLOR: My Lords, I beg leave to introduce a Bill to consolidate certain enactments relating to defence manœuvres. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read 1a.—(The Lord Chancellor.)
On Question. Bill read 1a; and to be printed.

NATIONAL DEBT BILL [H.L.]
THE LORD CHANCELLOR: My Lords, I beg leave to introduce a Bill to consolidate certain enactments relating to the National Debt, and to move that the Bill be now read a first time.
Moved, That the Bill be now read 1a—(The Lord Chancellor.)
On Question, Bill read 1a; and to be printed.

SLAUGHTER OF ANIMALS BILL [H.L.]
THE LORD CHANCELLOR: My Lords, I beg leave to introduce a Bill to consolidate certain enactments relating to the slaughter of animals, and to move that the Bill be now read a first time.
Moved, That the Bill be now read 1a.—(The Lord Chancellor.)
On Question, Bill read 1a; and to be printed.

ADDRESS IN REPLY TO HER MAJESTY'S MOST GRACIOUS SPEECH
2.44 p.m.
Debate resumed (according to Order) on the Motion moved on Tuesday last by Earl Jellicoe—namely, That an humble Address be presented to Her Majesty as follows:—
" Most Gracious Sovereign—We, Your Majesty's most dutiful and loyal subjects, the Lords Spiritual and Temporal, in Parliament assembled, beg leave to thank Your Majesty for the most gracious Speech which Your Majesty has addressed to both Houses of Parliament."
LORD OGMORE: My Lords, it is my duty and my pleasure to open to-day's debate on what we all feel is a highly important subject. The gracious Speech refers in some detail to the Commonwealth. It starts with a reference to the Royal visits to new Commonwealth countries, and I, for one—and I think this feeling will be shared very widely in your Lordships' House—welcome the fact that Ghana is to have the honour of a visit from Her Majesty the Queen. I was pleased that Her Majesty said that she also intended to visit Sierra Leone and Gambia, particularly Gambia, because I imagine that this is one country which is probably as little visited as any. It is not easy to get there and, as your Lordships know, it is an extraordinary shape when one does get there, as it lies some 200 miles along the River Gambia. In fact, some years ago, so little was it known, that when we had the first aerial survey we found that all the Admiralty charts were wrong and that the main town of Gambia was some miles away from where it was placed on the charts, so that presumably Her Majesty's Ships and merchant ships had been pursuing their ways up the main street of the main town of the Colony. The gracious Speech also referred to Malta and Cyprus.
I congratulate the Government on thus focusing the attention of Parliament and of the people of this country on the Commonwealth. The first words heard by millions of people from Her Majesty in Parliament were on the subject of the Commonwealth; and our position in the Commonwealth is such an important one,
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part mystique and part common sense, that this was all to the good.
The total value of our trade with the Commonwealth is significant. One half of the trade of the Commonwealth is exchanged within itself. I had the opportunity of discussing with Ministers and officials on their return from the Montreal Conference some of the matters which were discussed there, and I am happy to say that all those with whom I spoke appeared to be well satisfied with what had happened there. I like the concept of an expanding Commonwealth in an expanding world, which was the main theme of the discussions at Montreal. We cannot expect dramatic results from such conferences and it would be a pity if we did, but I think that one of the results, which was dramatic, has been overlooked by the Press, radio and television and by the public—that was the decision to have arrangements consolidated by a Commonwealth Economic Consultative Council. As your Lordships, particularly noble Lords who have been concerned with these matters, will know, in the past great objection has been raised to any attempt to create a central organisation, in London or elsewhere, and I think it is a triumph on the part of the Government that they have been able to achieve this. I presume that they took the lead in doing it. I should like to congratulate the noble Earl the Secretary of State personally on this achievement. After all, Ministers have to take the kicks when kicks are going round, and I do not see why they should not get a few of the ha'pence when these are being handed out.
VISCOUNT ALEXANDER OF HILLSBOROUGH: And the poundsߞ
LORD OGMORE: And the pounds, too. I should like to congratulate the noble Earl on achieving what I think is a significant step in Commonwealth consolidation.
The Government have generously offered to provide a Commonwealth House in London for the Economic Consultative Council and for any other Commonwealth bodies who may need the facilities. Where is it to be? Have the Government thought about a possible site? It is suggested that it should be next to the National Gallery in Trafalgar Square,

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with the pepper pots on it, as they were called when the National Gallery was first erected. My own opinion is that that is not a satisfactory site. I think it would be found to be not big enough and it is not imposing enough. I would ask the Secretary of State whether he has considered the Colonial Office site in Westminster, opposite the Abbey. That would he a fine, central and imposing site upon which to place a suitable building for Commonwealth House. Perhaps we shall hear something about that to-day from the noble Earl. I also welcome the Commonwealth scholarships and fellowships which were decided upon at Montreal.
Just lately we have had some news which is confusing and, to some extent, disturbing. The hope of setting up a European Free Trade Area by January I has gone and the whole project seems to be in jeopardy. Indeed, there is talk in some quarters of setting up a second European Free Trade Area in competition with the first; but one hopes that this will not materialise. Only a day or two ago Mr. Maudling commented on this issue of the jeopardy of the project and said that
"there would be grave danger of a division in Europe both economically and politically"
if there were no Free Trade Area agreement. It is a matter of considerable concern, not only to us but to the other members of the Commonwealth, O.E.E.C. and N.A.'T.O. If the Secretary of State could say a word on that subject to-day, I am sure it would be helpful.
From the Report of the proceedings at Montreal, which has been published by the Government as a White Paper, it becomes apparent that one of the main problems affecting the Commonwealth is the instability in commodity prices. This has long been the case. For several years after the war it was hidden by reason of the fact that the prices of raw materials were high, because there was a great demand for them, and also because during the war the Government had set up marketing boards and arranged long-term contracts which the Labour Government continued and, indeed, expanded. Now the full blast of uninhibited enterprise, private and public, falls on the undeveloped countries of the Commonwealth, as, indeed, it does on undeveloped countries outside. The problem is that usually they produce
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only two or three main products, and those products are raw materials. When the demand grows less, then the prices fall, and the under-developed country is exposed to the severe economic recession which then follows.
But there is more to it than that. There is one aspect of this problem that I did not see touched upon in the Report, although it may have been, and, if so, the Secretary of State will be able to inform us, and that is the tendency to-day of the developed countries to compete with the under-developed countries by making artificially those very products upon which the under-developed countries depend. This seems to me to be insane folly and I really do not understand how so-called sensible, civilised people in the Western world can go on doing it. What is going to happen to the underdeveloped countries if their only products are under severe competition from us? Only the other day I saw on the television a programme, which was put out with all the bland assurance of the television commentator, showing an artificial rubber factory in this country which was going (I think it was said) to provide half the rubber that we need. What will happen to Malaya and Ceylon? It really is humbug to talk about Colonial and Commonwealth development if we are to compete with them in the only things they produce.
The second problem which arose is the lack of capital; and this was also discussed at length in the meetings of the International Fund and the International Bank at Delhi. This is the main issue, so far as the under-developed countries are concerned, and here Communism and Parliamentary democracy meet head on. Communist countries can finance development by ruthless exploitation and appropriation of assets; they can do it by large-scale planning, regardless of the individual rights of the people, and by wholesale dumping. But they get results. In China, industrial output in the third quarter of this year is said almost to have doubled as compared with the similar quarter last year. Only this morning I received a circular (perhaps other noble Lords had it, too) which said that there has been a grain crop increase of 70 per cent. in one year. This seems to me absolutely staggering, but it has been said by French scientists who investigated the matter that this is the true position.

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What has democracy to offer—because I can assure your Lordships that this is one of the main problems of our times—which is going to off-set that which Communism can do in this field? I regret to say that in this field the proposals in the Report from Montreal and in the gracious Speech are both vague and meagre. It needs sacrifice. Are we—and when I say that I do not mean only the Government, but we as Parliamentarians, and the public, of whatever political complexion they may be—ready to make the necessary sacrifices in this field? If not, it is better for us to say so, and whatever we may be accused of we shall not be accused of being humbugs.
Let me take a few tests. The Colonial Development Corporation—and this is one of the main instruments of the United Kingdom in colonial development—in their last Report showed a further increase in profits for the third successive year; and I should like to congratulate the noble Lord, Lord Reith, his colleagues on the Board and the devoted staff of the Corporation on this happy result. There are seventy-six projects, from the Caribbean to the China seas. The Corporation develops resources and provides finance and technical skills.
How is it treated by Her Majesty's Government? First of all, £8 million incurred in the early and necessarily experimental days still hangs like a millstone around the Corporation's neck; secondly, it has no risk or equity capital, although required to operate on a commercial basis; thirdly, it still has to pay interest to the Treasury on its long-term advances of 5¾ per cent., and this, with administrative expenses and fees added, means that it is too expensive for many Colonial projects; fourthly, it cannot operate in Commonwealth independent countries, and no other body has been set up for this purpose by Her Majesty's Government; fifthly, at Montreal no proposals appear to have been advanced by Her Majesty's Government to extend or expand the Colonial Development Corporation or to create a similar body as an instrument of colonial development; and lastly, at Blackpool, in the rare intervals between ejecting interrupters and listening to the Lord President of the Council ("The docile old soul ", as he called himself, The midwife of the next General Elec-
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tion"—although that is not how we who know him so well would describe him), Her Majesty's Government, through Mr. Lennox-Boyd, said on October 9 that the Government intended
"to seek an enlargement of the resources of the C.D.F.C."
The C.D.F.C. is the Colonial Development Finance Company. This is a miserable little city mouse of a company, with very little organisation and no record of colonial development. No mention at all was made by Mr. Lennox-Boyd, the Colonial Secretary, speaking to the assembled hordes at Blackpool, of the Government's own instrument, the Colonial Development Corporation. What did Mr. Lennox-Boyd mean by saying that they are going "to seek an enlargement of the resources of the C.D.F.C."? The C.D.F.C. is a private company; it is nothing to do with the Government. If the Government want to extend the resources of anything they should extend the resources of the C.D.C. by giving them some risk capital.
Let us take the second test—Hong Kong and the cotton trade. As soon as Hong Kong started to compete with the cotton trade in this country there was a howl, and one of the Members of your Lordships' House has been leading a deputation to Hong Kong to try to persuade them not to send cotton goods here, or, at least, to send fewer of them. I am glad that the Prime Minister stood firm on this matter—though he did not stand quite so firm the second time he spoke as he did the first. Last week he seemed to wobble or shuffle a little, and he had not quite a resolute face. You see what happens. Once the United Kingdom tried to prevent goods from the Colonies coming in, France announced that she is cutting down by half imports from Hong Kong. Now the United States lobbies are getting busy, and they are said to be considering bringing pressure to bear on the United States Government.
Let us look for one second at the situation in Hong Kong. In the last ten years Hong Kong has has to reshape its economy, and has had to cater for an influx of more than 100 per cent. of its population. There, 2·5 million people live at 6,400 to the square mile, and many of them are in abject poverty. How can we say here that we are not going to allow their goods to come into

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this country? It may be—and I have had a good deal of experience of Chinese book-keeping—that many Chinese merchants do not pay taxes. It may also be—and I should not be surprised—that many of the labour regulations are quite inadequate. But there is no self-government in Hong Kong. Noble Lords opposite and their colleagues in another place govern Hong Kong. If they want more efficient collection of taxes, and if they want better labour conditions, they must say so and tell the people in Hong Kong to provide them.
Take the third and last test—that of immigrants from the Commonwealth. So long as poverty, hunger and malnutrition were 8,000 miles away from this country, people could forget it. But when some of it gets into our towns and villages it is not at all easy to overlook. To my way of thinking it has been a good thing that a number of immigrants from overseas—from the West Indies and so on—should have come to this country. They would not come here if they had work in their own country. People would all rather stay and work in their own country than come thousands of miles to what they regard as an inhospitable climate, and certainly is rather a trying one, even to us who are its natives.
Look at the other Commonwealth territories. Take Malaya. When you talk about the few hundred thousand Commonwealth citizens we have here, what about Malaya? In the first year of independence Malaya accepted more than 900,000 of the immigrant population into citizenship. The total population of Malaya is 6,300,000. Of the 900,000 immigrants, most were Chinese, and many of them could speak neither English nor Malay. We have heard a great deal here about these people impinging upon our Health Service. In Malaya the same thing is happening. Only the other day eighteen lepers suddenly turned up at Sungei Buloh, near Kuala Lumpur from Indonesia. They had come over on rafts or in leaky boats and got a lift to Kuala Lumpur, some of them in a most advanced state of disease and without papers or money. They said: "Here we are. We have heard that this is a wonderful hospital you have here. We are dying of leprosy—cure us." Malaya took them in, and they are now being treated at Sungei Buloh. This is happen-
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ing all the time. Malaya has such a high standard all over the East that illegal immigrants are attracted to its services. Malaya is not turning them away, although, naturally, she is not welcoming them. There is, I am told, an illegal organisation which is trying to get these poor people in. So we need not think that we are the only ones who have these problems. Many other countries in the Commonwealth have them, and many other countries are tackling them in the same way as, or even in a more generous way than, we are.
I should like now for a moment to touch on two or three matters of constitutional importance which impinge upon the economic factors that we have been considering. In the last few years Parliamentary democracy has been under fire, and according to my reckoning no less than eight democracies have surrendered to military or semi-military dictatorships—only one, I am glad to say, in the Commonwealth. This is a disturbing factor, and one of which at some time I suppose we shall have to consider the implications. I am glad to say that in many countries in the Commonwealth—the new countries—democracy seems to be a thriving plant, though not without its difficulties, because, after all, in many ways, as we know, it is the most difficult of all processes to work. Take Nigeria. I am pleased that Her Majesty's Government have agreed to her independence within the Commonwealth in 1960. There is every chance that this great country, which will be the fourth largest in population in the Commonwealth, including the United Kingdom, will be a tower of strength, and that it will forge ahead to be the leading African State in Africa.
As to Malta, the Conference relating to this country opens this month, and we wish it well. I would ask those at the Conference to consider the Constitution of Singapore, which may be of assistance, and I should like to know from the noble Earl, Lord Perth, when he comes to reply to the debate, what is the news of the dockyard and of Messrs. Baileys, who agreed to undertake the running of the commercial part of it.
Then we come to Cyprus. We are all unhappy about Cyprus. One feature which is disturbing to me at the moment

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is that in some aspects the security measures seem to be extraordinarily lax. Three R.A.F. aircraft have been attacked. Two of them were damaged and last week one of them was attacked, though, fortunately, it was not damaged because it was ninety minutes late: instead of the bomb going off in the aircraft it went off in an aircraftman's kitbag. The aircraft was outside the security zone when it was being loaded. I understand that officers' uniforms were stolen from the cleaners—that is what we were told. Why officers have to send their uniforms to be cleaned in Cyprus one cannot understand. Another extreme story came from the Press—I hope it is not true—that automatics have actually been sent by post from Greece to Cyprus. If that is true, it seems most odd, in the circumstances.
There is a lot of misunderstanding about our position in Cyprus, both in the Commonwealth and outside. I think it should be clearly understood that our aim is to bring Cyprus to self-government, and perhaps ultimately to independence within the Commonwealth, like all the rest. I cannot see why we have to treat Cyprus in any different way from any other country. They all vary, and I think some difficulty and doubt has been caused by treating Cyprus as a separate case. Just before the Federation of Malaya became independent it set up a constitutional Commission, on which no single Malayan sat, from the members of the Commonwealth. As your Lordships will remember, the noble and learned Lord, Lord Reid, was a member of that Commission. It sat: it proposed a Constitution which, by and large, was accepted, almost entirely accepted, by everyone in Malaya. There has been no trouble at all, and they were very happy indeed with the work of this Commonwealth constitutional Commission. Why cannot we have something like that for Cyprus? Is it possible to set up a constitutional Commission for Cyprus, with some other members of the Commonwealth, on which no British, Greek, Turkish or Cypriot would sit, just as was done in the case of Malaya? At least such a body would be independent; at least, it would remove a great many misunderstandings which now obtain. Anyway, we must break the deadlock; it cannot go on like this. It seems to me that would be a step ahead. I cannot believe that taking this matter
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to the United Nations is going to do any good.
Finally, there is the question of communications within the Commonwealth. At Montreal the Conference stressed the need for telecommunications, and it was agreed in practice that a round-the-world Commonwealth co-axial telephone system should be constructed. In these circumstances a leader in The Times last Friday is inexplicable and, on the face of it, gives cause for alarm. It starts off by saying something which is a truism:
"Communication is the life-blood of the modern Commonwealth."
Then it goes on a little later to say that there has been a system called the "penny press rate", a system by which—
and I quote:
"messages intended for newspaper publication, whether the sender is a British subject or a foreign journalist, are transmitted between any two Commonwealth countries at the cheap rate of one penny a word.
"Now, on the motion of a Pakistani delegate, a committee of the International Telecommunications Conference at Geneva has voted by a majority of one to end the concession, and limit the reduction on Press messages to a maximum of two-thirds of the standard rate. … The British delegation at Geneva, which appears to have given no more than lukewarm support to the case for the Press, has presumably looked at this issue only in terms of figures. … The battle is not yet lost; the adverse vote was only in committee, and a direction to the British delegation to take a strong line in plenary session might well cause the situation to be retrieved."
I should like to ask the noble Earl, Lord Home, Secretary of State for Commonwealth Relations, whether he will agree to do that, because it seems rather disturbing, at this particular time, when telecommunications are regarded as so important, that the British delegation should have taken this very unhelpful line. He may, of course, have a satisfactory answer. We shall look forward to a stimulating debate and I hope to an informative reply.
3.15 p.m.
THE EARL OF SWINTON: My Lords, as, I think, the sole survivor of the Ottawa Conference, I feel rather like a ghost revisiting old scenes in taking a part in this debate, but I am very glad to do so because I think a debate to-day on this subject is timely and valuable. It is both timely and valuable for two reasons: in the first place, the Montreal Conference was a very important Conference, and in the second place we are debating these

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matters to-day at a moment when the negotiations about the Free Trade Area, as the noble Lord who opened has said, have, to put it mildly, run into very heavy weather.
I think the whole Commonwealth should be grateful to the Prime Minister of Canada for his initiative and his vision in, some nine months or more ago, proposing this Conference and inviting it to take place in Canada. I am glad the noble Lord paid a tribute to its success and cited a number of Commonwealth Ministers with whom he had talked. I think it was a successful Conference. It was able to cover a great deal of ground in a fortnight; we were at Ottawa for six or seven weeks. The Imperial Economic Conference of 1923, over which I had the honour to preside, produced quite a lot, but it took a couple of months, I think, in which to do it. The fact that this Conference covered so much ground in a fortnight is evidence of very thorough preparation.
The Report, which is unanimous, shows a wide measure of agreement, and a measure of agreement not just on the lowest common denominator of platitude or compromise, although it is very easy to class as platitudes fundamental truths which it is most desirable that the Commonwealth should profess and practise. But I think there is a good deal of agreement on important, practical and immediate matters. We are all glad that the value of Preference was unanimously reaffirmed by the Conference, and I certainly am glad that the United Kingdom confirmed its intention to retain the free entry of Commonwealth goods.
As was natural—and the noble Lord who opened referred to this—a good deal of attention was paid to commodity problems. They are really at the root of the whole economc stability of the Commonwealth; and it is almost as much, if not quite as much, the interest of the great manufacturing countries which export or seek to export their manufactured goods that the primary producers should be prosperous and successful as it is for the primary producers themselves. I do not carry statistics in my head to-day, but I remember that when I was dealing with these things something like 50 per cent. of the manufactured articles exported in the world were taken by the countries which were predominantly primary producers. It is platitudinous, if you like,
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but fundamentally true and important, that unless those primary producers can get a fair, decent price for what they produce they cannot buy the manufactured articles, and we all go into a slump or a recession together. And let me add this. These commodity problems are of vital importance to every country in the sterling area, because the primary producers in the Commonwealth acquire a great deal of hard currency for what they sell.
It so happens that it fell to me to negotiate, on behalf of both the United Kingdom Government and the Colonial Empire, the agreements on tin, rubber and sugar a great many years ago. Drawing on that experience, I would say that I am sure that the approach of the Conference to these commodity problems is sound and practical and right. In the first place, I am sure it was right to deal with each commodity separately. Each commodity, or very nearly each commodity, requires a different kind of treatment. Some are more tractable than others. Different countries are involved, and it is much better to deal with each commodity separately at a time and try to get an agreement on that. Very likely agreement will be reached, and that may encourage and stimulate agreement when it comes to dealing with another commodity.
The second thing on which I am sure the Conference was right is that if an agreement is made, all the countries who produce these commodities must come into it. I well remember that when we were negotiating the rubber agreement we in the British Government felt that we could not possibly go into it unless the Dutch were prepared to control the Dutch native rubber, of which there was a large actual production and an almost unlimited potential production in the Dutch Indies. The Dutch civil servants on the spot said it was impossible, but Mr. Colijn, who was the Dutch Prime Minister—and no one ever had a better colleague to negotiate with—said to me, "I quite agree with you; but, believe me, it will be all right. I have been Governor-General of the Dutch Indies, and I know." I said, "How are you going to manage it?". and he said, "It is quite simple. I am going to say to the civil servants in the Dutch Indies, 'I see all your difficulties, and of course if you are unable to control the native production of rubber then I am afraid that, with the price of rubber as it is, we shall

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be able to pay only half the number of civil servants we have at present in the Dutch Indies'." He said, "You will see, it will work"; and it did work perfectly well during the whole currency of the agreement.
Another matter that again I think the Conference agreed upon is this. It is most important to bring in the consumers and to get them to co-operate, as well as the producers, in these agreements. That ought not to be too difficult. Industrial consumers using raw materials do not like great variations in price in regard to tin, lead or whatever it may be. They do not like prices moving like a fever chart, because it affects manufacturing costs a difficult way all the time. They like a steady price. Of course, it must not be too high a price, and it is most important, when entering into these schemes, not to seek to establish a price at which any incompetent producer can make money—I am not at all sure that this does not apply to certain production in this country as well, but I am not going into that matter to-day—but to set a price at which at any rate a reasonably efficient producer can break level and make a little profit. If that is done, I do not believe that we shall find it too difficult to get the consumers or the users to come in, unless they have changed a great deal. Again I am speaking from experience.
The Americans, who are the largest consumers both of rubber and of tin, came into the agreements we made, sat on the boards and co-operated most thoroughly. Indeed, some of the manufacturers in America joined in the tin scheme and carried a large part of the buffer stock of tin which we held over in the United States as an insurance that the price would not fluctuate. They themselves carried quite a large proportion of that stock. So the consumers and the producers are not really on opposite sides of the table; their interests are very much the same. If you bring in the consumers it may have another advantage: that they may influence their Governments to see that their domestic producers of raw materials are not too greedy and do not stand out and lobby for too generous treatment.
There is one problem connected with these commodities which is touched on,
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but not, I think, elaborated in the Report. As I said, you have to get all the producers in if the scheme is to be effective. The Communist countries are producers of many of these commodities and raw materials. What are you going to do if the Communists will not come in? I see it is said that we hope that they will, and that they will be invited to negotiate. Well, I am all for trying to bring them in; but I would not be too hopeful, because, after all, the cold war to-day is intensifying all the time on the economic front. The old threat of a fighting war I think has greatly receded, but at the same time the economic war, like the subversive war, is intensifying the whole time; and even if they entered into an agreement, frankly. I would not trust the Communist countries not to use an escape clause, or to interpret it in a particular way and to break it. Very likely they will not come in at all.
If we can get agreement among the producers and, if possible, among the producers and the consumers as well in the free world, we must not let these vital arrangements break down and be sabotaged by the Communists. We should join together in making it possible—certainly G.A.T.T. does not prevent it; at least I hope not—for the free world, if the Communists will not play over these things, to exclude their commodities from the free world's markets except on such terms as would be consistent with the success of the agreement. The whole free world is equally interested in this matter, which is an additional reason why the producers and consumers should be together.
I am not going to follow the noble Lord opposite into all that he said about Hong Kong cotton. Cotton was not a subject I was proposing to deal with. But as he so violently attacked the Government and my noble friend Lord Rochdale—I am not sure whether he is in the House—
LORD OGMORE: My Lords, I did not attack the Government. I praised the Prime Minister for the stand he had taken. I think the Prime Minister is still in the Government. Therefore, the one must include the other.
THE EARL OF SWINTON: I am much obliged for the correction. The noble Lord praised the Prime Minister, but

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delivered a violent attack upon Lancashire and a violent or sustained attack upon my noble friend Lord Rochdale. I am not going to argue the merits of this case to-day. I should have thought—I do not think I dissent here from the Prime Minister, for whom I have a profound regard—that my noble friend Lord Rochdale, in trying to get an agreement in Hong Kong about the amount of exports which should take place, following upon a successful agreement which he has made in India and Pakistan, was doing a really good job of work. But I should like to know whether, in saying that never in any circumstances could there be any limitation upon imports of cotton goods from Hong Kong, the noble Lord was speaking for his Party.
LORD OGMORE: My Lords, I did not say anything of the kind. I said, that in these circumstances, in view of the conditions in Hong Kong, it was humbug to talk about colonial development and to send a party out to Hong Kong to cut down the imports here of the few things that they can export to this country. I pointed out the dangers of so doing in other parts of the world.
THE EARL OF SWINTON: I am much obliged. Let me certainly accept the noble Lord's phrase. He said that any such demand to limit was humbug and likely to lead to disaster. That is quite clear. I still ask: was the noble Lord speaking for his Party on that matter? Because I think I am right in saying that only a few weeks ago I read in the newspapers that one of the other Leaders of his Party—I think it was Mr. Gaitskell himself, or Mr. Wilson, who speaks with almost equal authority—said that what Her Majesty's Government were doing was pretty feeble and that if a Labour Government came in they would limit the imports, either by setting up a board which would do the importation or by some other process. I am fairly sure I am right and that that is exactly what was said by either the Leader of the Labour Party or the Shadow Chancellor of the Exchequer. Perhaps I might ask the noble Lord, Lord Faringdon, who I see is to speak in this debate and who I understand is a member of the Labour Shadow Cabinet, whether, when he comes to speak, the will give us an authoritative view.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, the noble Earl. Lord Swinton, is making quite a point of this. I have no complaints at all to make about the speech of my noble friend; in fact, he was speaking about Hong Kong especially and also about other Colonies especially. We in a Labour Government would have no hesitation, I believe, about having a general system of economic controls which would balance our imports from all overseas markets exporting to us, according to the requirements of Britain first and the Commonwealth always next.
THE EARL OF SWINTON: My Lords, that is very interesting. So we are to have set up a board which will be the sole importer. That would probably put up the price of imports a good deal, and control by Government probably would be pretty unpopular with all exporting countries; but that is what we are going to have. I am struck, as always, by the many-sidedness of the policy of the Party opposite and I think we can leave it comfortably—
LORD OGMORE: No, my Lords, we cannot leave it comfortably. I was not making a Party point. Your Lordships will remember that I was saying that this is one of the tests of British sincerity in this field—I did not say the Government, or Conservative or Labour sincerity, but the sincerity of all of us. I mentioned the words "Parliamentarians and public alike" and gave three tests as to our sincerity. The first was regarding the Colonial Development Corporation and the second was regarding Hong Kong. So far as I am concerned—and the record of the first Labour Government stands and I am very proud of what we did for the Colonies—I am certain that the next Labour Government will have an equally good record. But if it is going to sacrifice the Colonies for the selfish interests of this country then I, for one, even if asked—and there is no certainty of that—shall not be a member of it.
THE EARL OF SWINTON: My Lords. I am delighted to leave it on that and to let any further questions be addressed by Lancashire to the different Members on those Benches.
I come now to a subject on which I can certainly agree with the noble Lord, and that is all that is said in the Report

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about consultation. It is said, and said unanimously, that any body which is set up must be a consultative body and not an executive body. Obviously that is almost platitudinous. On the other hand, one often hears people say that we ought to be able to set up some combined Executive within the Commonwealth—a suggestion to which no country in the Commonwealth could possibly agree, because all decisions of policy have to be taken by each Government round their own Cabinet table. I believe it is a good thing to have it said unanimously and put on record that this body must be consultative; but it is even better when all countries testify to the thoroughness, closeness and continuity of the consultation which has taken place; and the report stresses the importance of consultation not only about the facts but on "the thinking underlying each other's policies." It is so important that we should each know what is moving in the others' minds. I believe that the coordination which is proposed at paragraph 84 of the Report will be helpful—and none the less helpful and useful because it largely confirms what is the existing practice. I am sure that a Commonwealth House will be convenient and symbolic.
I said at the beginning that I felt it was very opportune that the Montreal Conference should have met before the beginning of the critical discussions on the Free Trade Area, and I would commend paragraph 40 of the Report to every Member of this House. I feel that that is enormously important. I would respectfully agree with what appears to be the unanimous opinion of the Conference that
"an outward-looking Free Trade Area in which trade would be increased rather than merely rechannelled would contribute to their common objective of an enlarging world economy."
I accept that; but it is essential that the Free Trade Area should have that outward looking and expansionist character, and I am sure we all welcome the clear reaffirmation of the undertakings of the United Kingdom Government about safeguarding Commonwealth interests in the United Kingdom market. If we were driven to choose between the Commonwealth and Europe there could be no doubt where our choice would lie; but that dilemma need not, and should
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not, be posed. Surely it is at least as important to Europe as it is to the Commonwealth that co-operation should be economic as well as defensive. Indeed, I do not think it is too much to say that the two are inseparable.
Every member, or nearly every member, of N.A.T.O., and certainly those persons who are in most responsible positions in N.A.T.O. and in the Governments which support it, have emphasised strongly over the last year or eighteen months the vital importance for economic co-operation to go hand-in-hand with cooperation on defence and security. I do not believe we could separate Europe economically into two separate and ultimately opposing camps in the economic world without grave damage to the defensive alliance which sustains us all. I hope most sincerely that no such dilemma will confront us. I am sure that it ought not to, and that every effort will be made by Her Majesty's Government and by all the Governments of the Commonwealth to avoid it. We all wish the right honourable gentleman the Paymaster General well in the difficult negotiations which he is conducting with skill and energy; and I am sure he will be strengthened and encouraged by the unanimity and resolution of Montreal. We all hope that he will be successful and that a wider partnership in trade will be established and developed.
I must add this, however: there is one thing which would be intolerable. It would be intolerable if half a dozen countries in Europe should be able to form themselves into a protective customs union and, so to speak, "gang up" against the United Kingdom, and that we in the United Kingdom and the Commonwealth should be precluded by G.A.T.T. from defending ourselves and developing our own policy and our own co-operation. I sincerely trust that we shall not be faced with these questions. But I am quite certain that, if it came to that, no one in this country would tolerate such a situation. It would not need an agonising reappraisement, and people in this country would say with one voice, "G.A.T.T. must go."
3.40 p.m.
BARONESS ELLIOT OF HARWOOD: My Lords, it was with great trepidationI that I put down my name on the list

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of speakers for the debate this afternoon. It is only a week since the new Life Peers were introduced into this House and it might seem presumptuous on my part to speak so early in this august Assembly. But I have always found in life that if there is something difficult to do it does not get any easier when you do not do it but put it off. I am very conscious of the importance of the first speech to be made by one of the Life Peers, but I was anxious to add my humble words to the debate on the Address which was so brilliantly moved by the noble Earl, Lord Jellicoe, and the noble Viscount, Lord Goschen.
This is a maiden speech, my Lords, and I would crave your indulgence. I would ask you to follow the suggestion of Matthew Prior, a Member of the other place in 1701:
"Be to her virtues very kind,
Be to her faults a little blind."
In case your Lordships should be nervous at all, I have been studying the Standing Orders of the House of Lords, of which I am sure everybody here is very cognisant, and No. 29, passed in 1626, and No. 30, passed in 1641, are well in my mind at the moment. Indeed, I am very conscious that, except for Her Majesty's gracious Opening of Parliament, probably this is the first occasion in 900 years that the voice of a woman has been heard in the deliberations of this House. I shall try to set a precedent and be short and to the point.
Before I say any more, however, I should like to respond to the very kind remarks of the noble Viscount, the Leader of the Opposition, and also of the noble Earl, the Leader of the House, in opening this debate, and thank them for the generous welcome which they gave to the Life Peers. I think I can say that all of us who so recently joined the House would wish to express our gratitude for the welcome which has been accorded to us. This Assembly has the reputation of being the greatest debating Chamber in the world; but what has not been said is that this Assembly is also the friendliest assembly in the world. It is, indeed, a great honour to have been chosen to sit with your Lordships and take part in the work of the House, and I hope that we shall not disappoint you too much in the con
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tributions which we shall endeavour to make from time to time.
To-day we are discussing that part of the gracious Speech which refers in particular to Commonwealth and Colonial affairs. I have listened with immense interest to the most eloquent speeches that have come from the noble Lord, Lord Ogmore, and the noble Earl, Lord Swinton. My experience of these matters is not comparable to theirs. The noble Earl, Lord Swinton, is a veritable architect of the Commonwealth, and the noble Viscount, Lord Soulbury, who sits in this House, was a most successful and had a most splendid period as Governor General of Ceylon. I can make no claim of that kind, but I have an experience which is, I think, of some interest in the question of representing the Commonwealth. I have been on three separate occasions a member of the United Kingdom delegation in New York to the meetings of the General Assembly of the United Nations, and as such I have taken part in the team which represents the Commonwealth both in committee and in the General Assembly.
There is just one other point I should like to make later in my speech, and that is to make some comment on the section of the White Paper on the Montreal Conference, dealing with education in the countries of the Commonwealth, and the suggestion of increasing the number of exchange fellowships and scholarships. However, let me first deal with the Commonwealth and the United Nations.
In New York, in taking part in deliberations in the General Assembly, one is immediately conscious of the growing importance of the great underdeveloped areas of Asia and Africa. Europe and its problems, which are very important and great, seem from that side of the Atlantic to belong more to the past, and the eyes of the world are focused much more on the many millions of struggling people in the Middle East and the Far East and in Africa rather than on the European scene. I am not saying that that is right or wrong, but it is just a fact. In the under-developed countries the enemies are poverty, hunger and disease, and in many parts of the world the people are searching for help against these enemies. That help comes to some extent from the United Nations and from us in the assistance which we give through the United Nations Agencies.

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The questions of government of these new and emerging States in Asia and in Africa are very difficult. Delegates speak glibly about democracy and about establishing Parliamentary government, when one knows that some of their countries are continually in the throes of Parliamentary difficulties and even civil war. Nationalism seems to be a disease of the 20th century. Many times I have listened to speeches from the rostrum of the General Assembly when the older democracies have been, as it were, lectured about self-government, and one knew perfectly well that the countries these delegates represented were far behind us in experience and in governmental skill. Nevertheless, one has to realise that in most circumstances imitation is the sincerest form of flattery.
With the speed with which our 20th-century scientific discoveries take place and the change that can be brought about by the industrial revolution of this century, let alone the now familiar pattern of that of the 19th century, we must look forward to rapid developments in the under-developed areas in the world. In the past coal would have been an essential to the provision of power. To-day it is oil, and to-morrow it will be atomic power. These elements are much easier to move about the world's surface than were the products of the coal pits, upon which much of the wealth of the world was founded in the past. Underdeveloped countries to-day may be rushing into production to-morrow. But, given the machinery and the power of grappling with modern problems, there still remains the most difficult skill of all: the skill required in government. It is in this sphere that the Commonwealth undoubtedly has much to give the world.
In the gracious Speech we read:
"My Government will neglect no opportunity to promote the advance of the Colonial territories and the increasing association of their peoples with the management of their own affairs."
This is a principle which wins for us great support in the councils of the world. I was present in the General Assembly when Ghana took her seat as an independent country, and the Federation of Malaya, and even the most caustic critics of the colonial system stayed to praise on that occasion. All the world is searching for a way to govern in free-
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dom. We have all seen authoritarian methods, both of the Right and of the Left. Never have I been more conscious of the differences that stand between the free world and the Communist world than in New York, sitting there, as we do, in alphabetical order, with the U.S.S.R. on one side and the U.S.A. on the other, and around the Assembly the representatives of the Commonwealth—free, independent, voting as they wish, steeped in the traditions of democratic government, while the Soviet satellites all vote as they are instructed by the U.S.S.R. and no one dares raise a voice in dissent.
In this world search for the art of government I believe that the Commonwealth countries can play a great part. They stretch all round the world. The Far East for us is the Near North for Australia; and everywhere, all over the world, there are centres which are linked to the Commonwealth. The leaders of our Commonwealth countries have, in many cases, been educated in our universities. They value their independence and they develop their own traditions, but they are wedded to the free world and not to the Communist world. Wherever Mr. Speaker takes the Chair, whether he be African, Indian, Malay, Ceylonese, Canadian, Australian or New Zealander, he presides over a free Parliament where the rights of the Opposition to object are as rigorously safeguarded as the rights of the Government to govern. What is more, in many of these assemblies the words of the great Elizabethan prayer, which we listen to every day in Parliament, here, are heard in the language of the country before the Parliament begins its deliberations.
Here is the pattern for which so many countries of the world are searching. It is, in the words of the noble Lord who opened this debate, Lord Ogmore, a mystique—a mystique which is also full of common sense; and it is the countries of the Commonwealth which can demonstrate to the world the art of free democratic government. Of course, it is not easy. We all know that it is not easy. It will take time for these things to work through, and there will be mistakes. People may well say, "It would have been better done by us". But that is not the point. The point is that they are learning and that it is a form which many nations are anxious to copy; and they are looking to us for that lead.

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Now, my Lords, if I may turn for one moment to the Report which has already been so eloquently discussed from the economic aspect by the two noble Lords who preceded me, I should like just to say one word about the section dealing with education and training. It is tremendously encouraging to read in the Report that there are more than 50,000 overseas students being educated in Commonwealth countries, and that it is the Government's intention to increase the facilities for scholarships and exchanges between the students of Commonwealth countries in all the varied types of education—technical, scientific and the humanities. I hope that it will be possible to make such scholarships available to all types of boys and girls, not only the intellectuals and those who may become professors and teachers, and that some exchanges may be made on the lines, for instance, of those organised very successfully here by the National Federation of Young Farmers' Clubs and by the English Speaking Union, the results of which provide for all types of people in all walks of life interest in the Commonwealth and in world affairs. It is essential, as noble Lords have said, to look forward and outward to an expanding Commonwealth and to growing new communities in the world, and not to be too much engrossed in our own family affairs.
May I stress again the speed with which these developments may happen? When the Comet brings the Equator within six hours of London (considerably faster than I travelled from Scotland last night in a sleeper) it may well be that the rapidity with which developments are going to take place is even greater than we anticipate. I well remember how in 1943 the Colonial Secretary of the day, the right honourable gentleman Mr. Oliver Stanley, appointed a Commission to report on Higher Education in West Africa and invited my husband to be Chairman of that Commission. I have the Report here in my hand. In 1945 the Elliot Commission reported that there was need for three universities in West Africa, but the Colonial Office, rather "doubting Thomases" in those days, would not believe in the possibility of three universities: they said that there would not be enough African students, and that there would not be sufficient staff to warrant such a tremendous expense on higher
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education. So they sent out another Commission to report on the first Commission, to see whether, in fact, it was the right thing to do. The second Commission reported that it was essential to have the three universities. After a little delay the universities were started; and to-day in Nigeria the University College of Ibadan is growing rapidly, and the University Colleges of Ghana and Fourah Bay, in Sierra Leone, are having their doors hammered in by African students wanting to get the new education and to learn the new way to deal with the power that is coming into their hands through the 20th century revolution.
My Lords, this question of education is essential to support the principle I quoted from the gracious Speech,
"the increasing association of … peoples with the management of their own affairs".
It is essential to the successful working of free democracy. It is essential if we are to play a leading part in the 20th century world. Other nations may be richer and more powerful than we are, but I believe that we have a greater "know-how ", as the Americans would say, in the art of government, and that at the end of the day this may be as valuable as great material riches. In the great division which separates the free world and the Communist world the nations of the Commonwealth are on the side of the free world. There are many nations, both old and new—and one sees them and meets them in New York—in the category of "uncommitted" as between this great issue which faces the 20th century world. I am convinced that we must try, through the Commonwealth countries, through our experience, and through our "know-how", to lead those countries into the free world, and not allow them to slip into the Communist world. We can do much to lead the world in the future as we have done in the past.
My Lords, I thank you for the kind and courteous manner in which you have received what I fear is a rather inadequate contribution to this important debate. I suppose that in some way, poor though it he, it has made history as the first speech made by a woman from the Benches of your Lordships' House. I hope, however, that we who are women may be regarded as having come here not because we are women

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but rather because women are now admitted, and because, like others of your Lordships of first creation, Her Majesty has been graciously pleased to confer Life Peerages upon us in the same way as upon the distinguished gentlemen who are in this House to-day. I beg to support the Motion.
3.59 p.m.
THE SECRETARY OF STATE FOR COMMONWEALTH RELATIONS (THE EARL OF HOME): My Lords, the noble Lord, Lord Ogmore, when he opened this debate upon Commonwealth affairs, did so, as is always the case, with his customary knowledge and moderation and interest in everything that affects the Commonwealth. He called attention to the fact that Commonwealth affairs are given a prominent place in the gracious Speech, and I agree with him that that is as it should be. I should like to express my gratitude to him for the agreeable compliments which he has paid me and my colleagues who were at the Montreal Conference. If this debate had a traditional opening, and an opening which we expected, it has been made memorable—indeed, historic—by the intervention of the noble Baroness, Lady Elliot of Harwood. We had all eagerly anticipated a speech from her. We had some idea of the quality we might expect, but all our expectations have been exceeded to-day, and it is impossible to imagine a more appropriate or happier opening to the intervention of the new Life Peers in the debates in your Lordships' House than the speech by the noble Baroness. At the beginning of her remarks she said something which is so typical of her that I must record it again She said that a difficulty was not to be met by postponing it; and that, we know, is true of the noble Lady, of the courage which she has shown throughout her life: courage tempered by an acute mind and practical common sense, which she renews every day as she goes about her affairs in daily contact with every thought and kind of life in our country.
More than this, the noble Lady has wide international experience on which she has drawn to-day. I know something of her work in the United Nations Organisation, where for many years she has been doing valuable work among the
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Commonwealth representatives. It is largely her inexhaustible championship of the British conception of Commonwealth and of British Colonial policy that has led to the situation to-day, in which I think we are finding fewer bricks thrown at British Colonial policy than we did before; and those that are thrown are wider of the mark. I notice that the noble and gallant Earl, Lord Glasgow, is not in his place to-day. I do not know whether this is chance or whether he did not dare expose himself to the ordeal; but at any rate I am certain that the noble and gallant Earl, if he had been here, would have been completely disarmed by the speech of the noble Baroness.
The debate has been remarkable, too, because of the intervention of the noble Earl, Lord Swinton. My noble friend, as he recalled modestly to the House, is one of the few surviving architects of the Ottawa Agreements. The noble Earl said that he was a ghost. Well, if he is, we shall have to revise all our ideas of things spiritual and material. But he must be deriving legitimate satisfaction to-day from the fact that the Ottawa Agreements have lasted practically in their entirety for twenty-six years. That is a long time in the modern world. And he will gain every satisfaction from the fact that at Montreal it was specifically reaffirmed by all the Commonwealth countries that the practice and principle of Imperial Preference should be sustained. I think that to-day your Lordships' House should recognise the part which the noble Earl played in that most valuable foundation of Commonwealth economic and trade activities twenty-six years ago.
I am greatly indebted to the House for setting aside one day of the debate on the Address for discussing Commonwealth affairs. The Montreal Conference itself deserves Parliamentary attention by reason of its achievements, and it so happens that to-day the Prime Minister of Canada, Mr. Diefenbaker, the author of the idea of the Conference and its host in Montreal, is here in this country and about to set out on an extensive Commonwealth tour. I know, that it would be the wish of the whole House to send to him and to Mrs. Diefenbaker our good wishes and our hope that this will be a happy and rewarding journey, knowing, as we do, that intimacy and understanding between the leading statesmen

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of the Commonwealth is of the very essence of Commonwealth relations.
Time has sufficiently removed me from the Commonwealth Conference in Montreal to be able to select the main impressions which stay with me. The first was that of Canada emerging as a leading partner in the Commonwealth association. Canada made it clear at Montreal that she was willing to lift her sights beyond her own domestic and economic horizons. She has always taken an interest in the West Indies. This was reaffirmed, and Canadian Ministers further made it clear that they were willing to see what they could do to help Ghana and Nigeria in West Africa and to assist under the Colombo Plan the Asian members of the Commonwealth with their technical development. One of the things which struck the delegates most forcibly was that Canada has not only a window on to the Atlantic, but also one on to the Pacific; and, as the noble Baroness reminded us just now, when technology is so radically reducing distance, Canada will soon find herself in the closest association with the teeming millions of the Commonwealth countries of Asia.
Too much, of course, cannot be expected of Canada at the present time. She is a large importer of capital and she has urgent projects of her own to which capital must be applied. Nevertheless, the knowledge that she is willing to spare some of her wealth and share some of her prospects to help other Commonwealth partners gave confidence to the whole association represented by the assembly in Montreal. That emerging strength of Canada as a leading partner in the Commonwealth was my first impression.
The second was the strength of Britain and the recovery of the status and value of the pound sterling. The effect of that in the Conference was electric. It was not only that we were able, perhaps for the first time since the war, to lead from strength, and therefore to offer to Canada the liberalisation of dollar imports at an early stage of the Conference; not only that we were able to follow that up at a later stage by the new Commonwealth assistance loans, but also, on the evidence before the delegates—and they were delegates who knew how to assess evidence, are used to doing so and are
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pretty hard-headed—that Britain's industrial future and British financial prospects were thought to be good. The lesson which I brought away from Montreal, and which has been impressed on me on every visit I have made to the Commonwealth overseas, until it is indelible, is of the overriding importance in our domestic policy in the United Kingdom of pursuing policies which keep this country solvent and of the absolute duty of any British Government to pursue policies which will keep the pound sterling strong. The fortunes of so many depend upon our strength to-day that if inflation were seriously to impair our competitive power, the Commonwealth itself would not survive.
I sometimes think that we are too diffident. When one attends a Conference of the kind held in Montreal, one sees that we are still the political focus of the Commonwealth and its leading economic power. Nothing can lift these responsibilities from our shoulders. We must, therefore, do all that we can to live up to and act up to our responsibilities. We have much to do for the Commonwealth from our own economic strength.
My third impression was of the transfer of emphasis from independence to interdependence. Naturally, when countries are transferred from the direct rule of the United Kingdom there is a strong feeling of nationhood; and that is quite right. But it was evident from our discussions over that fortnight in Montreal how quickly the emerging Commonwealth countries have seen that independence is inadequate and that interdependence between the Commonwealth countries should be the aim of all of us. If there must be interdependence, then every one of the delegates there insisted that the grouping of nations of which they wanted to be a member was the Commonwealth Association; and all of them expressed their passionate belief in the principles and practices of the free world. Then there was evident also—and I think the noble Baroness, Lady Elliot of Harwood, referred to this—an extraordinary degree of common thinking and common purpose among people drawn from every continent and of every variety. Finally, there was the scale of the problems before us (on which I should like to say a word) which we have jointly to solve, because

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when we looked at the scale of the problems it became clear that Montreal was not the end, but only the beginning of a new and constructive period of economic co-operation.
The theme of the Conference—and this rightly received the approval of the noble Lord, Lord Ogmore—was "an expanding Commonwealth in an expanding world". This embodies two basic ideas: first, that expansion of trade and the economic growth of the world are vitally important to all Commonwealth countries, and that we cannot solve our problems in isolation: and secondly, that interdependence of the Commonwealth with the world outside is not a sign of weakness but of the strength and maturity of the Commonwealth. Commonwealth production has grown to a point where the Commonwealth countries must seek out markets outside their own boundaries, and the pace of Commonwealth development is now such that the Commonwealth must attract capital from without, as well as from within, the Commonwealth. Indeed, the Commonwealth can exert the full effort of which it is capable only within a framework of expanding world trade and production. That led us to the conclusion that there should be a reinforcement of the International Bank and the International Monetary Fund. So the theme of" an expanding Commonwealth in an expanding world "was one that was adopted by the Conference, after much consideration, and quite deliberately.
Within the Commonwealth circle, we did, as I have said, reaffirm the principle of Preference, and we decided that by all ways and means we should increase trade with each other. I do not know that it is always realised how much discussion upon trade goes on all the time. In the last six months, for instance, there has been the Canadian Trade Mission to this country. That was quickly followed by the visit of the Dollar Export Council Group, under Sir William Rootes; and I was able to see for myself in Canada the effect which this tour of highly placed business executives has had in interesting Canadians in additional trade with the United Kingdom. At Montreal, Canada announced certain preferential rates which will be of assistance to us in the United Kingdom, and the Canadian Minister of Finance was able to allow individual
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Canadians to bring back 300 dollars worth of United Kingdom goods to Canada, where before the figure had been 100 dollars.
So far as Australia is concerned, last year we made a new trade agreement replacing the old Ottawa Agreement; and we have just completed in the last few weeks an Agreement guaranteeing the prices of beef and mutton for the years ahead. So far as New Zealand is concerned, we are hoping shortly to announce another trade agreement on similar lines to that made with Australia last year; and Mr. Skinner, the Deputy Prime Minister is coming here—he will be here for some months—to talk about butter and other agricultural products. So that all the time, perhaps unknown to your Lordships and to the country, we are carrying on discussions bilaterally with our Commonwealth friends with the object of increasing trade between us.
The noble Lord, Lord Ogmore, and my noble friend Lord Swinton both called attention to the importance of the Free Trade Area; and that matter was, of course, discussed at Montreal. We, and, it is true to say, the rest of the Commonwealth countries, too, have felt that a Free Trade Area is desirable, because the lowering of tariffs over a wide area in Europe would be completely in line with the expansionist policies that we all want to pursue; and apart from that, it would make a great contribution to the political and economic cohesion of the European continent. We have felt, too, that the Common Market by itself would be restrictive and, therefore, a setback for our hopes unless a Free Trade Area was brought into operation as a complement to it. The Commonwealth has been kept in touch, stage by stage, with these negotiations and has approved the objectives. I do not think I will say more about this subject to-day except to tell my noble friend Lord Swinton that the Paymaster General returns to his Committee on November 13. Her Majesty's Government are now considering the situation which has arisen, but we shall not lightly give up this objective, which we think so very well worth while from every point of view.
One other point on this question of trade and increased activity between the Commonwealth countries was raised by the noble Lord, Lord Ogmore, when he referred to what is known as the "Penny

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Press Rate." I have no doubt that, like him, other noble Lords noticed the suggestion in some quarters that a resolution taken by a Committee of the International Telecommunications Union in Geneva could mean the end of the Commonwealth "Penny Press Rate." Although a Press statement has been issued by the Post Office, the position does not yet seem to be clearly understood, and perhaps it may be convenient if I make it so.
The resolution which caused this confusion would have limited the concession which can be made to Press correspondents under the regulations of the International Telecommunications Union. This resolution was passed by a Committee of the Conference on October 23. On the same day the United Kingdom delegation gave notice that they would oppose the resolution in plenary session. But this resolution, as a matter of fact, did not refer at all to the Commonwealth "Penny Press Rate." This rate is not even determined by the Union's international regulations. Thus, nothing said or done so far at Geneva has affected the question of the Commonwealth "Penny Press Rate" one way or the other.
The Commonwealth Governments at Montreal recognised the importance of reliable communications in strengthening the Commonwealth, and we shall take most careful counsel before altering in any way the existing arrangements, which have applied for seventeen years, under which inter-Commonwealth messages are exchanged at special rates. Obviously, not merely the United Kingdom but the whole Commonwealth is concerned in this matter, and I want to say, for my part, that a Commonwealth Press rate cheaper than the ordinary rate is a cornerstone of Commonwealth communications. It has been a powerful factor in strengthening Commonwealth unity, and I trust that it will continue so. I hope that that explanation will remove any misunderstanding that there may have been.
But the central question at Montreal turned out to be this: How can Commonwealth countries maintain the momentum of their expansion so that trade need not be disrupted at long intervals, as it has been in the last few years? By keeping their developments steady they may themselves increase the volume of inter-Commonwealth trade. My noble friend
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Lord Swinton said that there loomed very large at Montreal the question of commodity prices. He echoed what we heard many times round the Conference table. The delegates from the under-developed and less developed Commonwealth countries said that capital assistance is all very well—indeed an excellent thing—but the effect of it may be lost, in fact the capital itself may be lost, unless the recipient countries can receive a steady income from the sale of one or two of their basic commodities on which they rely. They made the point that if violent disruptions could be avoided, then not only could they provide more finance for their own development but, of course, they would be much better buyers for other people's goods.
One must not underrate the difficulties. On the face of it, in any commodity agreement the interests of the producers and the consumers conflict—but only on the face of it. The noble Earl, I thought, gave a very interesting account of some of the commodity agreements which he was able himself to fashion, and when we look below the face and under the surface it is perfectly possible, and indeed likely, that consumers and producers will find that their interests are really identical and that they can arrive at agreement.
Of course, as my noble friend Lord Swinton said, there is no comprehensive solution and each commodity presents its own problem of supply and demand. Therefore, at Montreal we agreed—and the noble Earl confirmed that in his opinion this was the right course—to look at each commodity separately. Then again, as he reminded us, there are two great producers and consumers outside the Commonwealth—the United States and the Union of Soviet Socialist Republics. If there are to be commodity agreements, we should prefer to have in them both the United States and the Soviet Union. But I would strongly agree with him that should the Communists try to stymie these agreements, or, indeed, come into them and then seek to wreck them from inside, we must not be deflected from our purpose.
Again, for the United Kingdom there are special difficulties. The United Kingdom has a strong interest in steady prices, but it would be very dangerous for us if we were to fix the price of any commodity too high. We import half our food. I

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suppose that our future prosperity rests largely on importing raw materials at reasonable prices and converting them into goods of very high quality and very high value. Nevertheless, the case which was made at Montreal by the countries interested in one or two basic commodities was so strong that we accepted that there should be studies, commodity by commodity, with the intention, wherever possible, and wherever it can be justified, of working out schemes of stabilisation acceptable both to the producer and to the consumer.
There were also searching debates on finance for development. The scale of development plans revealed showed that colossal sums would be required from outside if the plans were to be brought to fruition. Therefore there was agreement that, if it was at all possible, the International Monetary Fund and the World Bank resources should be strengthened as an indispensable prelude to expansion. This was later agreed at New Delhi; and so New Delhi fulfilled the hopes of the delegates at Montreal. Secondly, it was agreed that at the present time new cash was of considerably greater importance than new machinery for the distribution of cash. In the third place, under this heading of development, this dilemma became plain: that if the less developed countries were to finance their basic development—that is, such schemes as irrigation, transport and power—they could not do so from their own resources or, indeed, from monies which, on their credit, they could raise from the world's markets. Private capital in these days is not much attracted into these great schemes of transport, irrigation and power—in some cases, yes; but, by and large, not. Unless these countries can be helped to surmount this first hurdle of basic development, they cannot begin to raise their standards of living, and therefore, in the words of the representative of the most influential of the less developed countries, would be an economic drag on, rather than an asset to, their Commonwealth partners.
There are economic and political risks in this type of investment in places like Asia and Africa, and when there is a situation, as there is in the world to-day, where capital is in great demand for enterprises which would show a quicker, a higher and a more certain
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reward, a case might have been made out for shelving this question of how the basic finance for the less developed countries could be found. But Montreal recognised, and particularly the most advanced and industrialised countries realised, that for reasons of common humanity, political stability and economic interest, the more developed countries must stretch themselves to the limit to try to make the maximum capital contribution to the basic development of the less developed countries.
The delegates saw that a Commonwealth containing such extremes that highly developed countries find it difficult even to hold their own, so far as their standard of living is concerned, is something which we have to deal with and that every effort must be made to reduce the gap between these extremes. So to our new and raised subscriptions to the International Bank and the International Monetary Fund we added the new Commonwealth Assistance Loans. Of such loans, £50 million is now already on offer or under negotiation with various Commonwealth countries. We agreed—because, in answer to the noble Lord, Lord Ogmore, private capital must still play the largest part in Commonwealth development—that the strengthening of the C.D.F.C. is necessary and desirable. So far as the Colonial Development Corporation is concerned, my noble friend Lord Perth will deal with that matter, but I would agree with the noble Lord that it has done excellent work, and the colonial field offers it great opportunity to do more. In fact, its resources in the last year have been increased from £100 million to £150 million.
LORD SILKIN: My Lords, I hope the noble Earl will forgive my interrupting his most interesting statement. Would he explain in what way the C.D.F.C. is to be assisted to make advances?
THE EARL OF HOME: The noble Lord will find it in the account of the Montreal Conference—that is to say, it is open to Commonwealth Banks or Commonwealth countries, which of course, includes ourselves, if they think fit, to reinforce the C.D.F.C. with contributions or lines of credit. I will ask my noble friend Lord Perth to deal more specifically with the C.D.C. and the C.D.F.C., but those are ways in which the C.D.F.C. could be

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helped, and one or two Governments at Montreal indicated that they would wish to help it in this way. Of course, all this extra assistance which we were able to offer to Commonwealth development depends upon our sustaining in this country the buoyancy of our own economy and, let me add, the willingness of countries overseas, the less developed countries, to treat capital well.
Lastly, and perhaps a little unexpectedly, there was the most intense interest at Montreal, as the noble Lady said, in education. The less developed Commonwealth countries and the colonial representatives who were there made it quite clear that the best ways in which the more advanced countries could assist them were the provision of technical assistance and the provision of higher education. The scale of the effort needed is again daunting—for instance, I think it was the delegate of Sierra Leone who told us that they were able to find only 6 per cent. of the places they needed for their children of school age. There are enormous problems of education; and here again the advanced countries decided to stretch themselves as far as they possibly could to assist. Therefore the proposal for 1,000 extra scholarships, of which we said that we would provide at least a half, was welcomed as being imaginative and helpful. But there was also the insistent plea from all the delegates there that we should pay attention to the educational needs of the schools, and particularly to the shortage of teachers. Again that challenge was accepted, and there will assemble here next year an educational conference of the Commonwealth. That conference will study the best methods of helping Commonwealth education within the resources which can be set aside for that purpose, and will also deal with the details of the new scholarship scheme.
So, my Lords, when one considers these broad themes which I have been able only to sketch to-day—it took us a fortnight to discuss them at Montreal—it will be understood why I said that the Montreal Conference, although it had great achievements which resulted immediately, was, nevertheless, a beginning and not an end. The modern Commonwealth, sitting together in council, recognised itself at Montreal as a powerful influence which could assist
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world expansion and as having a positive rôle to play. It deliberately focused attention on continuity, because it was clear to all of us, as we sat talking of affairs of mutual concern, that we should want not less consultation in future but more. The Commonwealth is growing in numbers and its economic problems become ever more complex. Therefore we decided to set up the Commonwealth Economic Consultative Council, which has been welcomed to-day, and a Commonwealth House in London which would house the Council whenever it meets here.
A regular pattern is emerging in the field of economic consultation. There is the Commonwealth Economic Committee which assembles and provides statistics of Commonwealth raw materials and the progress of Commonwealth development, not only for the Commonwealth as a whole but for each country separately. These will serve as a statistical basis on which officials and Ministers can draw. Then the officials of the Commonwealth countries meet in the Spring and the finance Ministers in the Autumn. So there is really a round-the-clock consultation taking form, and the Commonwealth Economic Consultative Council, housed in London, will focus the public's attention on the continuing activities of the Commonwealth in this economic field. We set up this Council and we offered the Commonwealth House so that it would be a witness to our daily practice and to the intention of the United Kingdom to play its full part in this working economic partnership, a partnership which, as the noble Lord said, has much more to it than economics, a philosophy which embraces all those things common to us: the belief in the common law and in justice and in tolerance—those things which bind the heart as well as the head. It was at Montreal that we were able to see for the first lime for a number of years the modern Commonwealth sitting down in conference and taking measures which will have a great effect over the months and years to come. This Commonwealth means everything to us in the United Kingdom. We shall do everything we can for its welfare because we dare to believe that, much as it means to us, it means as much to all mankind.
4.35 p.m.
LORD BARNBY: My Lords, in finding myself in the happy position of following my noble Leader. I naturally take the opportunity of first echoing those felicitous compliments which the noble Lord, Lord Ogmore, expressed when he opened this debate. This statement by the noble Earl the Leader of the House has been looked forward to widely. Naturally, this important Conference has received much reference in the Press, but it is indeed fortunate that we have been able this afternoon to receive from the noble Earl, Lord Home, the more detailed and generously full review to which we have just listened. May I add, too, my own compliments to the noble Earl, Lord Home, on the achievement there. He, as Secretary of State for Commonwealth Relations, had the leading burden, and from all sides there have been complimentary tributes to the part he played. Indeed, not only did his visit to North America deal with the Conference but there was much else which he dealt with, and having been there myself at the time I realise how much those gatherings in Canada which were fortunate enough to hear his addresses appreciated them.
I would also add, gas the noble Earl, Lord Home, has said, that a tribute is due to the noble Earl, Lord Swinton, who has taken part in this debate, because of the prominent part he took in the Ottawa Conference. I realise it because I was fortunate enough myself, representing an industrial body, to be in Ottawa for most of the time of the Ottawa Conference, and going round the corridors I was well aware of the contribution that the noble Earl, Lord Swinton, made. Incidentally, it is interesting to-day, when the Prime Minister of Canada, Mr. Diefenbaker, is going, I am confident, to meet a tremendous reception in the Albert Hall, that we should remember that the Ottawa Conference was the result of Mr. R. B. Bennett's return as Prime Minister of Canada with what then seemed a very large majority of the seats in Quebec. Mr. Diefenbaker, in this last election, captured a still greater number of seats in Quebec—indeed, I think the largest number of seats in French Canada that any Prime Minister has recorded for a very long time.
The noble Lord, Lord Ogmore, in opening the debate, naturally reviewed the
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various headings under which this Conference was reported to have achieved success. There were high hopes. In some quarters there has been disappointment that perhaps less was accomplished than the rosily optimistic communiqués conveyed. Underlying it there was concern that some subjects had received less agreement than was hoped for. At any rate, there is a general spirit of happiness on what the Conference achieved, and we take comfort to our hopes from what Lord Home has told us to-day.
There is no purpose in going through the catalogue of subjects to which Lord Ogmore referred. I would just comment, however, that there is indeed ground to be happy that Preferences have been so clearly confirmed at this moment. As my noble friend Lord Swinton said, in spite of the rough weather and the almost ditching of the European Free Trade Area, there will no longer be concern such as is held by many, that the European Free Trade Area might involve some jettisoning of Preferences.
But may I hope that the noble Earl, Lord Perth, will in reply be able to make greater reference to the use to be made of export credits? There have been references in the Press just lately to some large amounts already being earmarked under this heading. I will not quote those amounts, but they seem quite substantial in relation to the announced maximum of availability of, I think, £200 million for investment in the Commonwealth. Perhaps the noble Earl could elucidate that point. Certainly, that public bodies are now to be able to go direct to the London market for finance is interesting; and a tribute has been paid to the increased facilities in regard to the Colonial Development Finance Company, and the expectations that will follow from them. May I join in the compliments paid to the noble Lord, Lord Reith, as head of the Colonial Development Corporation, for the achievements in that particular sphere?
My Lords, I would turn to the proposal for an additional Commonwealth agency for finance. That appears virtually to have been shelved. Before the Conference The Times said that a Commonwealth institution would be justifiable if it could raise any significant amount of funds outside the usual Commonwealth lending sources. Apparently, there has

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been agreement to postpone further consideration of that matter until after the meeting of the International Monetary Fund at Delhi. I hope it may be possible for the noble Earl, Lord Perth, to make some report, which the noble Earl the Leader of the House was not able to do, of what followed in Delhi from the promised discussions with regard to a Commonwealth Bank. There are those who feel that an additional agency is desirable but who cannot accept that all additional resources should come automatically to Commonwealth Development. They feel that another organisation with the backing of the whole sterling area would attract new sources of capital in various ways from all parts of the world outside the Commonwealth. In this way there would be additional funds for Commonwealth development.
It appears—indeed the noble Earl the Leader of the House emphasised it—that all the representatives at Montreal, particularly those of the more developed countries, agreed that everyone must bend over backwards to support the emergent countries. That is a political more than a financial question, and I must accept the view taken by that gathering. But there are many who believe—this is certainly true of both Houses of Parliament, and particularly of the other place—that there is room for another agency and that it would make available for the Commonwealth funds from outside the sterling area. I would remind your Lordships of the European Investment Bank which was set up by the European Common Market countries in the Rome Treaty. Again, there is the Development Bank which has recently been set up in South America. Then, I would more particularly refer to the Merchant Bank of Central Africa, which, in conjunction with the International Finance Corporation at Washington, gives an effective illustration of the initiative of bringing dollar investment into the sterling area. It may be a frivolous thought, but would not an institution of Commonwealth prestige perhaps "mop up" some of the hoardings which, historically, we have always understood are in India at the present moment, and which probably would be less readily lent to the Indian Government than they would be to a Commonwealth institution?
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When mentioning India, one cannot but help be concerned about the high pressure methods followed by India which seem to have resulted in her getting advances from the taxpayers in England. Reckless use of finance and over-optimistic planning has got the country into severe financial difficulty, and then the "sugar daddy British taxpayer bails them out. All that must be at the expense of the other Dominions. My Lords, I am among those who believe that it is of great importance that there should be the most generous finance for Australia and Rhodesia. One would have thought that the better credit of those countries and their higher purchasing capacity would give them high priority on the list.
In some quarters there has been disappointment that there was no reference to migration in the reports of the Conference. I realise that in a Conference representing more non-whites than whites, that is a difficult subject to bring up. But that is no reason why it should not be referred to. I mention it because I believe that a constant and adequate proportion of people of British origin in emigration into the older white Dominions is of continuing importance and therefore deserves the highest sympathy and express consideration of Her Majesty's Government. It is the British content of the population which contributes to the purchasing of imports of British origin, and it is on those grounds of self-interest that I never lose a chance personally to raise this matter. I have recently spent some time in Ontario—in fact, I got back last week—and there, in the welter of languages one hears in a city like Toronto and from what one sees in scanning the figures and seeing the diminishing proportion of British content of the inflow, one realises more and more the danger which exists that in two more generations there will be a declining influence of those Commonwealth angles which support the Crown.
Overriding all in importance, there was the agreement on the proposal of the United States of America that the International Monetary Fund should be increased. That received the approval of the Conference. It was to be explored at Delhi and I repeat the hope that the noble Earl who is to reply can say something about that.

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Before I sit down I cannot help referring again to the speech of the noble Lord, Lord Ogmore, and first of all to his reference to commodity prices. The noble Lord showed great sympathy for doing something, commodity by commodity. The noble Earl, Lord Swinton, referred to that matter and my noble Leader emphasised it most strongly as a very live issue at the Conference. Certainly it is to be hoped that in some way some means may be found of dealing with this thorny problem, even though we have to exclude the powerful and ever-increasing power of the Soviet market.
But there was an interesting angle to what was said by the noble Lord, Lord Ogmore. He derided a course whereby we and the developed Dominions should be spending capital to produce synthetic substitutes for the primary products of the Commonwealth. We should all sympathise with that view; but, short of control of industry. I do not see how that practice can be suppressed. It brings quickly to mind that in addition to rubber, to which the noble Lord referred, there is leather. In North America, the major part of the male population walks on synthetic soles instead of leather soles. Equally there springs to mind the position of wool, which is so important to the prosperity of Australia, New Zealand and South Africa, and which has just suffered a fall of some 35 per cent. to 40 per cent. in value, to the extreme disadvantage of the sterling balances of those countries. That fall has to some degree been assisted by the impact of synthetic products, to the development of which the public in this country has largely subscribed.
Another point emphasised by the noble Lord, Lord Ogmore, was that of Soviet competition—or I should say Communist competition, for it includes competition from China. When the Communist countries get organised the impact on the higher wages of other countries is going to be great; but I cannot, for the life of me, see how the noble Lord, Lord Ogmore, can criticise Her Majesty's Government for not intensifying tax collection in Hong Kong or improving labour regulations. Does the noble Lord suggest that Her Majesty's Government can immediately raise wages in Hong Kong,
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which is in close proximity to Communist China, to the level of wages in Britain, so that we in this country should not feel the competition of products produced with a wage content as low as one gets in these Asiatic countries?
I am glad the noble Lord, Lord Ogmore, has raised this question of imports from Asiatic countries because it is of the highest importance and has caused some dismay in parts of the country where textile industries are located, in that Her Majesty's Government, through their spokesman in another place on cotton and in this House on jute, in the last Session virtually regarded both industries as expendable. Surely that cannot be a policy which can be inflicted on that part of our industrial population.
4.56 p.m.
VISCOUNT SOULBURY: My Lords, I rise to offer to your Lordships some observations upon Section IV of the Report of the Montreal Conference on education, to which the noble Lady who sits behind me has already referred in her most remarkable maiden speech to which we all listened with intense interest, pleasure and admiration. I believe that in the long run this section will prove to have foreshadowed the most remarkable contribution that the older Commonwealth countries can make to the younger Commonwealth countries in the sphere of politics and economics.
I will deal first with politics. The newer independent countries—those which have become independent in the last ten years—have all, of their own choice and free will, determined to frame their Constitutions on the model of the British Constitution and have chosen as their form of government the Parliamentary democratic form—the fairest form of government yet devised but unquestionably the most difficult, because it demands a very high degree of knowledge and intelligence from the electorate, and also tolerance, good will and a spirit of give and take. But, synchronising with their constitution, they have also enacted universal adult suffrage, which means, of course, that their electorate are now the ultimate repository of political power in their respective countries.
It has been well said that power without knowledge can be dangerous. As we all know, vast numbers of these newly enfranchised electors are ill-educated and

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illiterate. At election time thousands, perhaps millions, of them are unable to read the names of candidates on the ballot papers, and each candidate has to be represented by a symbol disclosing his identity. The Governments concerned are, of course, well aware of the handicap that that is to Parliamentary government among the many other handicaps which illiteracy produces, and are making most strenuous efforts to overcome these difficulties and to enable their present electors and those of the future, now in the schools, to fulfil the duties that the responsibility of universal suffrage imposes upon them.
Perhaps I may illustrate the present position with a few figures. In India to-day, for example, about 23 per cent. of the adult population can read and write. That is not a very large percentage, but ten years ago it was only 14 per cent., so there has been a remarkable increase in that short time. The enrolment in India's elementary schools has increased in the same period from 11 million to 23 million; but, even so, 50 per cent. of her children still have no schooling whatever. Secondary school education is, of course, far rarer still; nevertheless, in that period it has trebled. In Pakistan there is a much wider level of illiteracy, as we all know; but enrolment in her elementary schools has gone up by one-third and in the secondary schools by a quarter. But in both those countries it will probably take at least a generation before there is elementary education for every child.
Ceylon, I believe, has probably the highest literacy level in the East. According to their official figures, 80 out of 100 men can read and write, and 30 out of 100 women. Even so, there are to-day hundreds of thousands of children not yet in school, either because schools have not yet been built or because the attendance laws are not properly administered. The West Indians are most progressive, and I believe 90 per cent. of the children are in elementary schools.
I turn now to African territories. A good deal has been said of Ghana. The African territories represent about 66 out of the 83 millions of our strictly Colonial commitments. Ghana has made a remarkable advance. Her population is 4 million. In the case of 3 million there is elementary education for all the children, and 1 child
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in 3 completes a ten years' course in the primary and middle schools; of the remaining 1 million, in the Northern Territory of Ghana, the figure is 1 in a 100. But, taking East and West and Central Africa together, out of some 12½ million children of the elementary-school age, barely 4 million are in school, and those not continuously. That is, 30 per cent. are in elementary schools and 70 per cent. outside. The figures vary from territory to territory and are in Northern Nigeria as low as 5 per cent.
Therefore, my Lords, it is not at all surprising that the White Paper, in paragraph 71, states that:
"In some countries the most pressing need at present is for primary education, for more teachers and for help in training them."
Yes, but there is a more pressing need than that. The White Paper refers to primary education. The most pressing need is secondary education. No worthwhile advance can be made in primary education without sufficiently qualified teachers, and they should not come from primary schools but from secondary schools, if they are going to be qualified to teach. The teachers are the heart of an educational system and the secondary schools are its backbone. But secondary education in these new States is in its infancy.
Consider again the African territories. Out of 6¼ million children of secondary-school age, 65,000 children—these figures are, of course, approximate—are in secondary schools of the grammar-school type. I know of no other type but that in those areas. That is 1 per cent.; and from this has to be drawn not only the teachers but also the other professional classes, doctors, architects, lawyers and so forth. In Ghana, relatively advanced amongst the territories, of 470,000 children of secondary-school age, 10,000 are in secondary schools: 2 per cent. By way of estimating standards, contrast that with the position in England and Wales. Our population is ten times that of Ghana. We have three-quarters of a million children in secondary schools of the grammar-school type—75 times the number there are in Ghana.
The secondary school should be the only source, or the main source, of teachers, and of course the training college. I want to emphasise that, because when this White Paper says that

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the most pressing need is for primary schools, I differ. As regards training colleges, they are few and far between. In Pakistan, for example, there are ten training institutions for a population of 76 million. The teacher requirements now in the African territories, at a pupil-teacher ratio of 40 to 1 in the elementary schools, if all the children were at school is well over 200,000. The annual output—and I think that this figure may well be very optimistic—is 10,000 trained teachers. It will take twenty years to provide the teachers of children in the primary schools.
But the appalling magnitude of this task should not discourage these territories, nor discourage us. It is not so very long ago that we in this country were in a somewhat analogous position. Shortly after 1867, when Disraeli carried through the first substantial extension of the franchise since the Reform Bill, adding a million voters, mostly artisans, to the electorate, the then Chancellor of the Exchequer, Robert Lowe, stated in another place:
"We have really no public education at all",
and he was perfectly right. The actual amount of money subscribed from public sources in that year was just under £1 million. To-day, in less than a century, it has grown to over £550 million. But at the same time—and this is very largely due to the missionary bodies, the Church of England and other religious bodies, the Mechanics Institute and hosts of well-disposed people—we had from private means established a substantial basis of education upon which eventually public education could build. In 1867 Robert Lowe coined the well-known phrase. "Now we must educate our masters," and British Governments have been engaged in that task ever since, and perhaps not yet with complete success. But if Parliamentary government is to survive in these new Commonwealth countries and if their democracies are not mere screens for dictators and camouflages for autocracy, then they must be enabled to carry out this task of educating their masters; and it is a colossal task.
My Lords, as a general principle, I have said that the best way of improving the government of a democratic country
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is to improve the education of its masters. And I point this out too: all these new countries now have, simultaneously with independence, universal adult suffrage. It was a hundred years from the Reform Bill before Great Britain got universal suffrage in 1928. At the same time, I think your Lordships will agree that it would be unwise to confuse knowledge with wisdom. It is not uncommon to find scholars with considerably less common sense than shepherds. A villager may not be able to read, but he can hear and listen to the advice and guidance of his village headman, and a man of considerable experience and wisdom he may be.
But, my Lords, to-day the radio is tending to take the place of the village headman. All these little countries have their radio. Everybody who can listen does listen; and it is a happy hunting field, as we know to our cost, for glib and unscrupulous agitators to prey upon the credulity of the listener and to influence the inexperienced, uneducated elector who is, in Mr. Neville Chamberlain's words:
"ready to walk into any trap provided it is baited with a familiar catchword".
Therefore, the aim of all Governments in these undeveloped countries should be to provide their electorates with some facilities for discrimination and criticism to enable them to separate the sense from the nonsense. The White Paper says:
"Already much is being done by Commonwealth countries to help one another."
That is no doubt true, but in the sphere of formal education, and especially secondary education, what has been done is fractional compared with the need. I know that the main responsibility of a new Government of an independent country is of course its social services, which are its own responsibility and not ours. None the less, the older countries like ourselves must help. We have in some ways a very special moral responsibility, because, although we are no longer the racial parents of all the Commonwealth countries, we are the political parents of every one of them.
So what can we do to help in this sphere of education? There is the direct way, what I will call the impersonal way: by the provision of money. The Colonial Development and Welfare grants on capital works, schools, training colleges, and

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so forth, amounted up to last year to about £36 million. That is a very generous amount, but, as your Lordships know, the Commonwealth countries are no longer eligible, and in any event the responsibility, as I have said, rests upon those Governments for their own capital outlay. Furthermore, our own capital resources are severely limited. But there is an indirect way, a personal way, in which we can help—by providing men and women rather than money. We can provide the teachers; and of course a good teacher is more important than a good school. Therefore, I think that we and all the Commonwealth countries who can help should, so far as we can, concentrate on the adequate provision of sufficiently qualified teachers. We can, first of all, provide the services of trained men and women to teach overseas. In this respect we have been doing something for some time already. There is a department of the Colonial Office which recruited, I think, 350 teachers last year—permanent, pensionable posts. But, my Lords, better still than that, I think, is that teachers, preferably graduates, should go out from our own schools, seconded by the local education authorities for limited periods of from three to five years, who would then return enriched by their experience abroad.
Here again, it has for a long time been the policy of the Minister of Education to encourage local authorities to second teachers for these limited periods, but it has not been easy work. That is quite understandable. The co-operation of the local authorities is not entirely enthusiastic. At the same time, I believe that it is one of the best ways in which we can help. I must make this qualification, from the point of view of the local authorities, and judging by past experience: that when teachers, men and women, do go out to the Colonies or to the Commonwealth, they find on return difficulty in getting suitable posts. Whilst they should find, after the public spirit they have shown in going out, that it has increased their professional prospects, they have found, on the contrary, that very often it has hindered them. I hope that local authorities will see that that sort of thing ceases to occur. A man who has the courage and spirit to go abroad to teach should reap the reward of his courage and spirit when he comes home. This country
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owes an immense debt to missionaries, as I have said. They have been the pioneers in the past. We also owe an immense debt to our teachers at present. If we do not send teachers abroad, other countries will, and they may not he quite so helpful.
Even better than sending our own teachers abroad, I hope that there will be a two-way traffic. We should encourage more teachers overseas to come here and to share in the work of our schools and training colleges. Then, after a course here, having learned the "know-how," they will return to their own countries, and perhaps to their own secondary schools or training colleges, and will pass on to their own nationals what they have learned from us. I believe that in that way we shall do more good than in any other.
The White Paper says:
"More than 50,000 overseas students are receiving instruction in Commonwealth countries, the majority of whom are from other Commonwealth countries. There is also a substantial flow of teachers and experts within the Commonwealth."
I should like some figures on that statement. How substantial is the flow? The only figure I know is that every year 150 students from the Colonies are admitted to our training colleges. That is a very useful figure, but whether that is regarded as substantial or not, I am not sure. Then the White Paper goes on to say:
"It was expected that within a few years after its inception the programme would cover some thousand Commonwealth scholars and fellows."
There again, is there any idea how many of those will become teachers? I know that we ourselves are extremely short of teachers. None the less, taking the Commonwealth as a whole, here is a challenge—a challenge to which we must respond and which we must do our best to meet, to help them satisfy the needs with which they are confronted. There is at the moment, as distinct from a few years ago, a passionate—even a pathetic—demand in the undeveloped countries for education; and if the Government fail to satisfy it that can lead eventually only to political trouble and discontent. The hungry sheep will look tip and will not be fed.
May I say just a brief word on the economic aspect of the educational help we can give, because no man can live

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by politics alone? The White Paper says, quite rightly:
"There is a need for accelerated programmes to train foremen and technicians.…"
Illiteracy, as I said just now, may not be vital to some political decisions, although it is probably a severe handicap. But literacy is absolutely vital to any progress in technical occupations requiring knowledge of calculations, measurements, and so forth. I should like to make this point: in most Commonwealth countries the principal economy is still based upon agriculture. I know that many countries—certainly all those of which I have had any experience—would like to diversify their economy; but agriculture naturally remains, and will for a long time remain, the basis of their principal economy because of the need to provide food for their rapidly increasing population. When people talk of technical education, some think of it as meaning only engineering, electricity, and so forth, yet in agriculture there is just as large a field for technicians as in any other sphere. In this country we had an agricultural revolution before we had an industrial revolution, and in the newer countries they need a new agricultural revolution. The methods of agriculture are far too primitive to produce the food they need for their own people. I know that we send our experts, and that experts are sent out by our manufacturers selling machinery abroad, to teach the people how to work and use it. Even so, they must have some rudimentary knowledge, some foundation of education, to enable them to operate machines. to read gauges and directions.
I hope that I have already convinced your Lordships that this is an immense task, though I know that the House does not require convincing of that. The figures and the prospective figures are astronomical. The problem itself is extremely complex and difficult to focus and co-ordinate. That is why I was so pleased to see in the White Paper that it is the intention of the Government to arrange for a meeting of the educational authorities of the Commonwealth in this country next year to formulate new programmes of Commonwealth fellowships and scholarships. I hope that from this step may evolve a permanent Common-
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wealth Council of Education to take the place of the Imperial Education Committee which for some reason or another lapsed in about 1930. Such a Council permanently in session could review needs day by day, tie up loose ends and unite the various excellent bodies at present dealing with Commonwealth education in its various aspects. The importance of this task transcends any other in regard to the Commonwealth. If that unique institution is to go from strength to strength it will be if, and only if, all those members of the Commonwealth who can lead are prepared to lead to the utmost of their ability and to lend a helping hand. If they do that, then in the next few years we shall have something of which to be proud.
5.22 p.m.
LORD HASTINGS: My Lords, in his opening speech, the noble Lord, Lord Ogmore, referred to his pleasure in the fact that the Commonwealth was first to be mentioned in the gracious Speech. I entirely agree that that is the place it ought to take. At the same time, I felt that the most encouraging thing about the gracious Speech this year was the unusual emphasis put upon the Commonwealth and the use of language deliberately chosen to emphasise its importance, which was quite different from the language used on other occasions. I feel that at long last the noble efforts of Her Majesty The Queen and of Members of the Royal Family all over the Commonwealth are about to reap their just reward. I feel that it is no coincidence that this should follow so soon after the tour of our own Prime Minister through the major part of the Commonwealth, the first visit, I believe, of a Prime Minister in office.
At the same time, this coincides with the emergence not only of Canada as a potential great Power but also of a leader in the person of Mr. John Diefenbaker deeply imbued with the Commonwealth idea. It is to Mr. Diefenbaker that we owe the Trade and Economic Conference of Montreal and it is to the inspiration of our own Prime Minister that we owe the fact that our own delegation went there with sufficient strength to make it the success it so evidently has been.
I would refer briefly to the European Free Trade Area, because in his closing remarks on that subject the noble Earl the

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Leader of the House said that the Government would not lightly give up the objective—I believe that those were his precise words. I would only seek an assurance from the noble Earl, Lord Perth, if it is our position, that the pursuit of that objective will not delay the implementation of any of the plans set out so hopefully in the Report of the Montreal Conference, because if that were to be the case I believe that there would be grave disquiet among many people in this country.
I would make a brief reference also to G.A.T.T., a subject which was dealt with very fully by the noble Earl, Lord Swinton, and I have no doubt also by the noble Lord, Lord Barnby, to whom, unfortunately, I was not able to listen. We had at the end of last Session a useful and interesting debate on international trade, when G.A.T.T. was severely attacked. On re-reading the Report of the debate the other day, I found that the speech by the noble Earl, Lord Perth, was a most effective defence of G.A.T.T. To tell the truth, for the first time I really began to understand what G.A.T.T. was and what it had, in fact, done. I would add only this: I have been in a good many British Colonies and I have never heard a single complimentary reference to G.A.T.T. In the West Indies, for instance, they obviously detest it. As your Lordships know, Jamaica chose to remain outside it altogther and as a result has built up its prosperity on its own, much better than it could otherwise have done. Therein lies one of the great difficulties in bringing about the necessary customs union within the Federation of the West Indies between Jamaica and the other Islands.
The noble Lord, Lord Ogmore, said that an important aspect of the Montreal Conference was the intended formation of the Economic Consultative Council. If I were to choose the outstanding result of the Conference, I would pick on the sentence which I would describe as a declaration of collective responsibility, and which reads:
"It—
that is to say, the Conference—
"recognised that the rates of economic development in the Commonwealth vary widely and that the Commonwealth has a collective responsibility to do what it can to pro mote development in the less developed areas."
Later on it speaks of
"a joint broad effort to that end."
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Surely that is a declaration as important as the first Colonial Development and Welfare Act, 1940, when for the first time the United Kingdom recognised that we had a responsibility to the Colonies which went beyond their mere administration, and that we were bound to develop them economically as well. Now we have a similar declaration from the entire Commonwealth. If we see something emerging from that conception over the next twenty years, we shall indeed have gone a very long way to solving the desperate problems found to-day within the Commonwealth, especially in the Colonies and undeveloped territories.
I should like to put one or two questions to the noble Earl, Lord Perth, about the proposed Exchequer loans and extension of the Colonial Development and Welfare Acts. It has already been conceded that the Colonial Development and Welfare Acts, 1940 to 1955, will be allowed to be extended beyond the closing date of 1960, but does the reference in the gracious Speech to new legislation for the maintenance of financial provision refer merely to the fact that territories which have not used up their quota of Commonwealth Development and Welfare Funds by 1960 are to have their opportunity of doing so extended, or does it refer to a completely new extension of capital funds to be made available for Commonwealth development and welfare?
Another point which is pertinent is the exact shape that the Exchequer loans are going to take. Are they the alternative about which the noble Lord, Lord Ogmore, spoke to Commonwealth Development and Welfare Funds when a country becomes independent? Are they then going to be able to rely on Exchequer loans?—because I believe it is right to assume that the Colonial Development and Welfare Funds do come to an end on the granting of independence at the same time as the Colonial Development Corporation funds. It will be interesting to know if these Exchequer loans are designed specifically to take the place of Colonial Development and Welfare Funds on the attainment of independence.
This is of particular importance, I think, when one refers to the West Indies. I had the honour and privilege of going to the West Indies earlier this

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year as a member of a Parliamentary delegation. There we were very concerned to discover whether the Islands which received grants in aid, which are seven of the eight Windward and Leeward Islands, would aft the end of the ten years for which those grants in aid are guaranteed be able to meet their own expenses on the ordinary annual budget, and we came to the conclusion that they should be able to. But when it came to a consideration of Colonial Development and Welfare Funds, which since 1946 have amounted to no less than £37½ million for the West Indies alone, we were quite convinced that it would be utterly impossible for those islands to do without Colonial Development and Welfare Funds in the future, as far ahead as one can see—and that is for one or two generations, to put it mildly.
Are the West Indies going to be able to rely on funds from the Colonial Development and Welfare Fund, or are they going to be able to rely upon them from the Exchequer loans? Because there they are looking towards their independence not at the end of ten years, which might be presupposed by the fact that we have guaranteed grants in aid for that time, but in five years, which is quite freely spoken of among their leading politicians as the sort of time at which they are aiming. I think that is of special importance in the case of the West Indies, for although economically they are not yet viable, politically, I am bound to say, I should be happier to see the West Indies attain full independence within the Commonwealth of Nations compared to other Colonies which I know so well in parts of Africa, because, politically speaking, the West Indies, in my humble opinion, are a long way ahead in experience and education in that field. It would be a great pity if because of lack of funds they were prevented from attaining that independence in as reasonably short a time as possible.
As I am referring to the West Indies, and as this is a Motion for presenting a humble Address to Her Majesty on the most gracious Speech, and in view of the expressions of opinion which have occurred over the last few days, I think it is appropriate to make some reference to the visit of Her Royal Highness, Princess Margaret. I was in the fortunate position of being the only Member of your
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Lordships' House who was there to witness the occasion of the opening of the Federal Parliament in Trinidad. I should like to say (I am sure it will interest your Lordships) that on all informal occasions the Princess Margaret was the very personification of beauty and grace and becoming charm. On the grand and formal ceremony, when she opened the Federal Parliament in Trinidad, she performed her onerous duties (and they were indeed onerous, for packed into a small legislative council chamber, built for 200 people, there were more than 600 people, with batteries of cameras, are lights and lamps increasing the heat, and the noonday heat, at that, at the end of April in a tropical island) with a wonderful dignity and grace; and when it came to reading her Speech from the Throne, I can assure your Lordships that the calm and precise way in which she did it, and the enunciation and tone of her speech, were such that it might well be an object lesson to all noble Lords in this House.
I should like to say a word or two about the Colonial Development Corporation. I would add my voice to that of the noble Lord, Lord Ogmore, in one respect: that is, in reference to the capital reorganisation of the Colonial Development Corporation, which I believe is basic to its future wellbeing. This subject was brought up in a debate on the C.D.C. last year, and again when we were discussing the Overseas Resources Development Bill earlier this year, when it was said that negotiations were going on between the Government and the Colonial Development Corporation about the Corporation's financial structure. I feel it is time, perhaps, that we should be told how those negotiations are proceeding, because what is involved is this question of risk capital; and one of the main purposes of the C.D.C. is to open up developments in the Colonies which would not be opened up by normal commercial businesses or private people.
I must say in this connection that in the West Indies I visited many C.D.C. propositions, and I came to the quite clear conclusion that there were projects there which could be opened up if it were not for the extreme caution now being exercised by the directorate of the Colonial Development Corporation, owing to the fact that it is bound to operate commercially and yet its structure of interest and capital does not allow it to do so.

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If the noble Earl, Lord Perth, could enlarge on that subject, I should be grateful.
Finally, I would mention a part of the world which has not figured very much, if at all, in any of the speeches this afternoon and to speak for a few moments about Northern Rhodesia. In the gracious Speech there is mention, of course, of peoples having management of their own affairs as soon as possible, and on that paint I should like to remind your Lordships that the noble and gallant Earl, Lord Jellicoe, suggested that we should not overlook the fact that although we have a perfect constitutional process here, our type of Parliamentary government is not necessarily suited to all countries at all stages of their constitutional development. New constitutional proposals for Northern Rhodesia are to come before Parliament shortly, and I should like to echo once more what I said on a similar occasion a year ago in connection with legislation coming forward for the Federation of Rhodesia and Nyasaland; that is, for as calm and non-partisan an approach to the subject as possible. Unfortunately, on that occasion we did not have the opportunity of discussing the matter in your Lordships' House. However, I should like to put in a plea to the Government on this occasion, in view of the great importance of the proposals for a new constitution of Northern Rhodesia, greater, in my humble opinion, than were the enactments for the Federation itself last year, that an opportunity should be given to discuss these proposals in this House, as well as in another place. I am sure that, if we have that opportunity, your Lordships will be able to demonstrate what care and attention and what knowledge we can bring to bear on the subject, to the benefit, we hope, of Parliament and of Northern Rhodesia itself.
5.40 p.m.
LORD FARINGDON: My Lords, I should like first of all to echo the satisfaction expressed by the noble Lord, Lord Hastings, at the prominent position in the gracious Speech of the references to Commonwealth affairs, and to hope, as he hopes, that this prominence denotes an ever livelier interest on the part of Her Majesty's Government.
Having said that, I hope it will not be thought that I am looking a gift-horse in the mouth if I am somewhat
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critical of the proposals which Her Majesty's Government have made. A Colonial policy of giving grants and the proposed system of rather cheaper loans will be completely nullified by the disastrous effects on the terms of trade and income of the Colonies as a result of the policy of liberalisation, combined with restriction and relatively high levels of unemployment in this country necessitated by the balance of payments difficulties which have been caused themselves by the policy of liberalisation. Since 1952, Commonwealth trade has shrunk in relation to the trade with non-Commonwealth countries. Long-term bulk purchase agreements have been given up, and discrimination against countries in E.P.U. and the dollar area has been reduced. All this has been done unilaterally without obtaining countervailing concessions from either America or Continental Europe. This must, I feel, have been a source of difficulty and embarrassment to those engaged in negotiations in connection with the Common Market and the Free Trade Area.
It is worth noting that the French brought their overseas territories into the Common Market scheme, and one cannot help suspecting that the surprisingly high vote obtained by General de Gaulle in the French territories may have been related to the prospects which those territories saw of increased trade within the Common Market. The fall in the value of exports of the primary producing countries of the sterling area, as a result of the sharp fall in prices, represents between the first quarter of 1957 and the second quarter of 1958 a matter of 2,000 million dollars—that is at annual rates. This represents several times the amount of any grants or aid which have been flowing into the sterling area, either from Britain or from other sources. It is against this background that the continuation of aid must be viewed and its effectiveness and adequacy judged.
The misguided policy of attacking what is certainly a cost and not a demand inflation by a policy of dear money has another and equally serious result on Commonwealth territories, especially on the dependent or only recently independent territories. Colonial sterling balances have increased enormously over the last

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ten years, and most of them have been invested in rather long-term securities. As a result of dear money these balances depreciated in terms of sterling. The continued cost of inflation has reduced the real value of sterling holdings very considerably. Thus, the combined effect of dear money and cost inflation has been a dramatic fall in the real market value of the sterling holdings accumulated by the Colonies.
That is not the only loss which has befallen these countries. As a result of the banking system and the absence of an elastic central banking arrangement—and I think this was one of the points of which the noble Lord, Lord Barnby, spoke, and he spoke in favour of it—a large part of the savings of the sterling area has been siphoned off to London. Thus, the rate of development in the Commonwealth, and more especially in the dependent areas, has been slowed down. The proposals of the Bank of England to the newly independent areas about the sterling banking arrangements are likely to perpetuate this hindrance to economic progress, and it is to be feared that they may lead to exacerbated feelings in the newly independent areas.
The policy of liberalisation, coincident with the trend towards independence, must necessarily result in a Balkanisation of the Empire. The cohesion of the sterling area is gone: investment is no longer co-ordinated, and each small area becomes a new economic unit planning for itself. Most of the Colonies, however, are much too small to be viable and to be able to support a balanced industrial structure. In West Africa their shape has been entirely determined by the mercantile Imperialism of the early 19th century which established trading posts, to which has been added the territorial expansion inland. Each of the French and British territories is a mixture of the coastal trading area with tribalised sectors towards the north and east without much cohesion. If a co-ordinated policy is not pursued, the outlook for the single small Colonies is sombre indeed. What ought to be aimed at here is either a strengthening of the sterling area cohesion by conscious co-operative planning, or a West African common market in co-operation between the franc and the sterling areas. It is to be noted here that of course the European Common Market
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would severely interfere with any such plans as these.
From these considerations, it is to be concluded that grants or loans for development and welfare purposes might well be offset, as they have been offset since 1952, by a sharp deterioration in the terms of trade of the poorer Commonwealth countries. Moreover, the financial arrangements have resulted in falls in the real value of the accumulated London reserves of Commonwealth territories, probably far in excess of the total amount of the grants. In this, the mistaken policy of Her Majesty's Government of decontrol, the abolition of subsidies, et cetera, plays a decisive rôle. The increase of prices in Britain was far greater than elsewhere. The consequences of this internal decontrol were further responsible for dear money, which, in its turn, has reacted both on the terms of trade and on the value of reserves.
Finally, the banking system partly prevented the real transfer of such grants as were made to the Colonies—that is, it resulted in an increase in their sterling balances rather than an increase in exports to them, and also slowed down internal investment in the sterling area. If this analysis is correct, then your Lordships will perhaps understand that I greet the present proposals with hope but without very much enthusiasm.
5.48 p.m.
THE MINISTER OF STATE FOR COLONIAL AFFAIRS (THE EARL OF PERTH): My Lords, before I reply to the speeches we have heard to-day I have been asked by my noble Leader to apologise for his not being present during the debate. He has gone, as I know several other noble Lords have, to listen very appropriately to the Prime Minister and Mr. Diefenbaker at the Albert Hall, and I am sure you will agree that that is as good a cause to the Commonwealth as anything else.
I am fortunate to be winding up to-day, because I am therefore placed in a position to add my congratulations to others of your Lordships on the really remarkable maiden speech of the first Life Peer who spoke in this House. I think we all know that not only has she herself particular qualifications, but also that her husband Walter Elliot, would have been particularly happy that this subject and

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the subject of education was one on which she chose first to speak.
The noble Lord, Lord Ogmore, made the point that in the gracious Speech the central theme was that of the Commonwealth. The noble Lords, Lord Hastings and Lord Faringdon, have also both referred to this emphasis, and I would only say that in drawing attention to it they are all very right. It is something of which we are always aware and something to which we attach the greatest importance; namely, the Commonwealth. Nothing comes before that. Many nice things have been said by the noble Lord, Lord Ogmore, and others about the Conference. But then, as is very right, there has been a certain measure of attack, and indeed such attack, such criticism, is valuable, for it prevents us from being complacent and keeps us on our toes. I will deal with the various specific points which the noble Lord, Lord Ogmore, raised on such items as Hong Kong, rubber and the Colonial Development Corporation, during the course of my speech, rather than deal with them now individually.
Before coming to the Montreal Conference, I should like to take this opportunity to pay my tribute to Canada for all the initiative they took to make the Conference possible. They were most generous hosts at Montreal. They, as we know, started the business. Without their continuing interest—it is often more difficult to continue to be interested than to start something—we could not have achieved what we have. Our chairman, their Minister of Finance, Mr. Donald Fleming, was all that a chairman could be. The Canadian Secretariat was absolutely first class, and the smooth running of the Conference, thanks to its help, was really outstanding. The noble Lord has already said how much they have, as it were, put into the pool of Commonwealth development.
l think it may be useful if I try to look at the Montreal Conference not so much through our eyes but rather through the eyes of the other Commonwealth countries who took part in it, to try to see whether from their point of view it has been a help and a success. I think the Commonwealth countries economically can be divided into two categories: those which have made considerable industrial and economic progress already,
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such as Australia and Canada, and those which are still in the early stages of economic development, such as India and Ghana. The question is how we have helped them and helped the Colonies, and I think that they might say of the Conference that they have been helped in three ways: first, by financial aid; secondly, in relation to commodity prices; and thirdly, and most important, by what we have said in relation to taking their goods, the general exchange of manufactured goods between members of the Commonwealth.
Turning first of all to financial aid, I would say that we have heard of the Commonwealth assistance loans which will be made available to Commonwealth countries in special circumstances. These will come under Section 3 of the Export Credits Guarantee Department Act. The noble Lord, Lord Barnby, raised the question of whether the export credits were not going to run out of money in giving all this help. I can only say that I feel sure that if there is any danger of that, the Government will come to Parliament for further sanction, and, knowing the interest of the country in the Commonwealth, I have little doubt that the sanction will be forthcoming.
The noble Lord, Lord Hastings, raised the question of Commonwealth Development and Welfare Funds after 1960, and also referred to Exchequer loans. I think, if I may say so, there was some confusion, and I am happy to try to clear up the point. So far as the Colonial Development and Welfare Funds are concerned, the old Acts will expire in 1960. Money which might still he spent from the Votes beforehand will be allowed to run on, but the purpose of our new legislation will be for new funds, new money altogether, something over and above what has been voted up to 1960. So far as the Exchequer loans are concerned, they will be available only to the Colonies. The Exchequer loans are, as it were, an assistance of last resort. Very simply, it is hoped that the Colonies, with their fine credit, will be able to raise their money requirements in the City or elsewhere, but if at some time this proves impossible then we have said that we will consider a system of Exchequer loans to help them out, to tide them over, or, in fact, as a substitute if the other is not possible. That is something for the Colonies and not for the Commonwealth

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countries. The Commonwealth countries will depend on the Commonwealth assistance loans.
Reference has been made to the encouragement given to the C.D.F.C. I think that the answer was well provided by the noble Earl, the Leader of the House, when he pointed out that the main burden of development of the Commonwealth still lies with private enterprise, and what Her Majesty's Government, or rather what the Commonwealth, said at the Conference was that they were anxious to give encouragement to the C.D.F.C. by one means or another. That is for each Commonwealth country to decide. So far as we are concerned, it might be that the Bank of England would increase its subscription; but the other Commonwealth countries might wish to act otherwise. It might be, for example, that in Canada some of the industrial concerns or the central bank would put up some capital.
LORD OGMORE: My Lords, I thank the noble Earl for that explanation. But is it proposed that the capital that is put up should be equity capital, or will the C.D.F.C. have the same burden that the C.D.C. has of having to pay interest on all capital at a fixed rate?
THE EARL OF PERTH: That will be a matter for the C.D.F.C. to negotiate with whomever it may borrow from, wherever it may go to get the money; it is for them to say how the money shall come from private enterprise and how they will negotiate that, and not for the Governments.
LORD OGMORE: May I ask the noble Earl whether he will answer this question? I agree that it is a reasonable suggestion to make with regard to the C.D.F.C.; but will he extend the same facilities to the C.D.C. and allow them to borrow risk capital?
THE EARL OF PERTH: I will come to the C.D.C. later on, and it is better that I should give the answer at that time. With regard to this financial aid, I must make one caveat, and that is that the amount we can do is always subject to one overriding factor, and that is the safeguarding of sterling. That is something which is recognised by all Commonwealth countries. At the moment things
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are looking pretty good, so we can con, template the idea of financial aid happily. But there can be other times. Let us take our chances while we have them.
The second point was that of commodity prices. I agree with the noble Lord, Lord Faringdon, on their great importance for the Commonwealth countries. I will not try to answer the interesting arguments that Lord Faringdon advanced in what was broadly his attack on what we have set out to do. I think perhaps the best answer I can give at this time is that the members of the Commonwealth Conference and those colonial territories who were there—and there were six of them, all represented by their Ministers of Finance or other high officials or ministers—showed no sign of fear of Balkanisation, which is what Lord Faringdon fears. It may be that they are quite wrong and that he is quite right. But I am encouraged to think that the enthusiasm which they showed about vi hat is proposed is probably the right enthusiasm, rather than the fears which Lord Faringdon advances.
May I come back to the question of commodity prices? This is a subject which is, of course, particularly close to the interests of all Commonwealth countries. We cannot, as it were, attempt to buck the trend in any particular commodity. That would be disastrous. What perhaps we can do, and what we want to try to do, is, as it were, to top and tail the fluctuations in the prices; to prevent the very severe drop or the very high prices which sometimes arise for quite artificial and wrong reasons. To be successful in that will depend greatly on the position of each commodity and also upon collaboration with other countries: we cannot do it by ourselves.
LORD LATHAM: If I may interrupt the noble Earl, does that not mean bulk purchasing?
THE EARL OF PERTH: I see no reason why it should mean bulk purchasing. What one has to do is to study the situation in regard to each commodity and decide, in the light of the study of that particular commodity, what is the best method of achieving anything, if anything can be achieved. But to have a doctrinaire belief that bulk purchase, and nothing else, is the solution would, I think, be a great mistake. That is why

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we have said that we have to examine each class of commodity on its own merits, taking each one by one.
LORD LATHAM: And, having examined, you plan; and in order to plan you must control.
THE EARL OF PERTH: I am afraid that I do not accept that as the result of examination you have to plan; nor do I accept that you have in a plan to control. We shall have to see, if and when any particular commodity scheme is looked at, or the commodity position is examined.
LORD FARINGDON: Would the noble Earl at least accept that bulk purchase is one possible way of dealing with the situation?
THE EARL OF PERTH: Clearly it is a way which is advocated on the opposite side. But if I am asked whether I accept is as a solution, then I say, No.
THE EARL OF SWINTON: Would the noble Lord, Lord Faringdon, and the other noble Lord reflect that for many years tin, rubber and tea were kept perfectly stable without any bulk purchase at all—indeed, that bulk purchase would have ruined the whole thing?
LORD LATHAM: In that connection, is it not the case that that was so because there was a monopoly?
THE EARL OF SWINTON: Oh, no. The noble Lord really must go and learn the elements of the thing. There was no monopoly at all.
THE EARL OF PERTH: Anyhow, I think that the important feature, which we all recognise, is that the price of commodities is of enormous importance in the development programmes of the Commonwealth countries, and it is something to which we are determined to give all the help that we can in furthering a smoothing out, should that be necessary.
I have talked about financial aid and I have talked about the commodities or commodity prices. We come now to the third category, manufactured goods. This is a particularly difficult subject because it is one that especially affects this country. I think it is appropriate that here I should quote from what was said at the Conference in relation to these manufactured goods, because the wording was
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most carefully chosen. I hope that it largely answers the points raised if we are able in fact, as we are determined to do, to carry out what is put down. I quote from paragraph 36 of the White Paper, which says:
"The Conference recognised how important it is that obstacles should not be placed in the way of export of manufactured goods from these countries"
that is, undeveloped countries—
"and agreed that the Commonwealth Governments would give full weight to this consideration whenever decisions are necessary concerning the terms of access of such goods to their markets. Whenever problems arise because sharp increases in these exports threaten to disrupt an established industry in the importing country, solutions should be sought through consultations between the industries concerned in order to agree upon the orderly evolution of the trade."
That, my Lords, is exactly what we are trying to do to-day on this very difficult issue of Hong Kong and the textile imports. It is something that we intend to follow through, so far as we can.
The noble Lord, Lord Ogmore, raised the question of what France has just announced, but here I would make a small correction, because France has not announced this import quota for herself, but for the French Colonies overseas. It is also true that the United States of America have raised the question of Hong Kong imports of textiles. These are serious matters, and I can only say that, so far as Her Majesty's Government are concerned, we are, if I may put it this way, fully on the side of Hong Kong; and the proof of that is our action at the present time in relation to textiles.
Lord Ogmore also raised the question of why we were going into the manufacture of goods which we could also get from Commonwealth countries—he instanced the case of rubber. I think that rubber is an example all its own. Synthetic rubber has certain qualities in which it has an advantage over natural rubber. I do not think that any of the rubber-growing countries objects to our putting up a factory for the purpose of making synthetic rubber: what they would object to would be if we made it in such large quantities that it was damaging to the imports from them. That is not our intention. Our intention is to manufacture only a small amount. That small amount is important for certain necessary industrial processes.
LORD SILKIN: May I ask the noble Earl how he is going to control the amount of synthetic rubber that is produced?
THE EARL OF PERTH: I think it is relatively easy. The putting up of the plant is a very expensive business, and only those large companies who are particularly concerned with the resultant process of manufacturing rubber will go into it. That is what will happen in the first place.
LORD SILKIN: That does mean, of course, that the noble Earl is proposing to control the amount of synthetic rubber produced.
THE EARL OF PERTH: I certainly do not say that we are proposing to control that, but I believe that the people who buy rubber have the same interest in their minds as we have—namely, that it is a good thing to see primary production of rubber in the Commonwealth encouraged and going ahead as far as it can. It is not always necessary to have controls to ensure that the public interest is followed.
This question of manufactured goods is a very difficult one, and I can only say that we have subscribed wholeheartedly to the statement, and that it will mean that at times the shoe pinches in one place or another in this country. We must try to find ways to ensure that it does not pinch too severely, and rely rather on our skill in other processes—atomic power, electronics or whatever it may be—fields in which it is natural for us to export, with all the skill and brains we may have. Generally we have found the Commonwealth countries most appreciative of our stand on these questions of manufactured goods and commodities, the more so because they do not want to have charity or financial aid given all the time and would much rather stand on their own feet. As I have already said, we cannot do it alone.
On financial aid, we had the New Delhi meeting and the promise of an increase in the finances of the International Bank and the International Monetary Fund. The noble Lord, Lord Barnby, asked: What about the new financial institution which was discussed? And he said: After New Delhi cannot an answer be given? If the noble Lord will look carefully at paragraph 69 of the Report he will see that it was said there
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that no decision would be come to until after the increase in the capital of those two bodies had been sanctioned; and that still has not happened. Only then is that to be further re-examined. It is a very difficult subject.
On commodity prices and manufactured goods, only a week or two ago we took up the issue most strongly at G.A.T.T., at Geneva, and found a great response, particularly from the United States of America, whose help in such matter is absolutely essential if we are to get on with it. Generally, the conference was outward-looking, whereas the Ottawa Conference of 1932 was inward-looking. That is no criticism of the Ottawa Conference of 1932 and I am most happy to hear from the noble Earl, Lord Swinton, that he fully supports what was decided at the Montreal Conference which, in a sense, is very different in its whole attitude from the position which existed in 1932.
Much has been made by many noble Lords about a Free Trade Area. We discussed that subject at the Conference, and it was quite surprising to me to find the Commonwealth countries almost enthusiastic towards a Free Trade Area—partly, I must admit, because they were alarmed, as indeed we are all alarmed, by the alternative, which is the European Economic Community, which we believe is, or may be, an inward-looking and a dangerous conception. In so far as we can do so, we are determined to see the Free Trade Area through. We believe that it could be of the greatest value, not only to us but to the whole of the Commonwealth. I would only add that I like to think that the noble Lord, Lord Ogmore, was perhaps a little gloomy in his fears about the outcome of the Free Trade Area. The battle is by no means lost.
LORD OGMORE: My Lords, I was not being gloomy. I was only quoting the statement of Mr. Maudling. Any gloom is his.
THE EARL or PERTH: My Lords, whether or not it was a proper interpretation, I believe there were other remarks made. At any rate, the battle is not lost, and we are determined, if we can, to see it through. I would assure the noble Lord, Lord Hastings, that in the meantime we are not going to have a check on any of the things agreed at

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the Conference because of what may be the outcome of discussions on the Free Trade Area.
There is one other point about the Montreal Conference on which I particularly want to talk—the subject of educaton. The noble Baroness, Lady Elliot of Harwood, mentioned this topic, and the noble Viscount, Lord Soulbury, also spoke about it in a way which was most helpful and important for all of us. So far as the Colonies were concerned, it was quite clear at the Conference that the question of education was of far greater interest to them than anything else. They were very pleased to hear about the imaginative scholarship scheme proposed by Canada, in which we agreed we would certainly co-operate; they were much more excited about the question of expansion of the supply and training of teachers. The suggestion made by the noble Viscount that the educational conference which is to study these matters might perhaps become a permanent affair is well worth considering. I do not want to anticipate the outcome of that conference, but I can say that if some of the teachers' training colleges can be set up locally it would be something which would give the Colonies great rejoicing. For them this is the outstanding subject. As the noble Viscount, Lord Soulbury, has said, we state that:
"In some countries the most pressing need at present is for primary education,"
but I would point out that the sentence goes on:
"for more teachers and for more help in training them."
So we were not only thinking of primary education as the subject of first importance but also recognised that more teachers and their training was of great importance.
VISCOUNT SOULBURY: My point was on getting teachers trained for more secondary education and that primary education is not by itself sufficient.
THE EARL OF PERTH: I believe that we are all of the same view.
Turning now, for a moment, to other affairs than the Montreal Conference. I would say this on Malta. We hope very shortly to be able to make some announcement on the dockyard, regarding progress generally and when Bailey's may be able to take over. As your Lordships will know, there is to be a confer-
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ence within the next three weeks and it would be inappropriate, I feel, to try to foretell or judge what may come out of that. I only hope that what does emerge will be good.
On Cyprus, perhaps we do not want to say very much at the moment, because it is a subject which is, as it were, sub iudice, in the sense that we still hope that there will be a conference under N.A.T.O. auspices. We know what has happened to date in relation to that proposed conference: your Lordships will have seen the White Paper which was issued. Unhappily, the Greek Government felt that they were unable to take part in it at this time. They felt that it was better to go once more to the United Nations and plead their cause. We are sorry about that. We can understand it; we can understand their difficulties. One can only hope that, as an outcome of that appeal to the United Nations, the United Nations may again recommend that negotiations should go on, and that it may again condemn violence.
We remember that part of the resolution two years ago was that we should actively pursue negotiations. When I look at the record of the last six months I do not see how anybody could say we had not carried out the instructions, or the wishes, rather, of United Nations. The Foreign Secretary went both to Ankara and to Athens; we had the Plan, which was debated and thought out most carefully; the Prime Minister himself went imaginatively to Athens and Ankara. We have done all we can to keep the ball rolling to negotiate. Our only hope is that before too long we shall get around the table and something will come out of it.
The noble Viscount, Lord Alexander of Hillsborough, the other day asked why we did not take the offer of Archbishop Makarios with both hands. Well, I think that to take statements issued as that statement was, in question and answer, at once at its face value is a little delicate and dangerous; but we certainly did not say that that was not something that could be considered or discussed. Indeed, it would be most appropriate, if he so wished, for the Archbishop to bring forward the plan as something which could be considered at the Conference—although I must say that we are very doubtful whether at this time, when tempers are so much roused, it is likely that

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one can find the final solution straight away. But it may be worth trying, and certainly no one should say "No" to anything.
There has been a certain amount of talk about the Colonial Development Corporation. I think there is a general feeling—or if not a general feeling, a feeling on the part of one or two noble Lords—that it ought to have been mentioned, as the C.D.F.C. was mentioned, at the Commonwealth Conference or in the Report. But the Colonial Development Corporation is essentially for the Colonies; and this was really basically a meeting of the members of the Commonwealth countries. So you can see that, while we may mention the C.D.F.C., it is not necessarily to be expected that mention should be made of the Colonial Development Corporation. This is no reflection on the Colonial Development Corporation. Indeed, if we had any doubts about it we should not, only three or four months ago, have passed a Bill increasing its capital from £100 million to £150 million. We believe in the Colonial Development Corporation. The noble Lord, Lord Ogmore, mentioned that they had 76 projects which they are now actively pursuing. I believe there is any amount of room for them in the Colonies outside the Commonwealth Conference; and if the figure one day is 176 or 276 then I shall rejoice, because I believe there is so much to be done in the Colonial territories themselves.
On capital reconstruction, I think that what the noble Lord Lord Hastings, pointed out is true: we have been somewhat dilatory. I do no say that on these questions it is always easy to make very quick progress. After all, it is a very complicated financial issue and we want to get a right answer. In the meantime, I think nothing is happening which is hindering the Colonial Development Corporation. They know that we have this reconstruction in mind, They know that if we can get a right answer such issues as those raised by the noble Lord, Lord Ogmore, about interest rates, about old losses and about equity capital, will all be taken in as part of the subject for general consideration. If we can get the right answer it is surely better than to hurry now and then wish we had waited a little more and thought of something else. But I would say on the C.D.C. that
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we are as keen on this work as I think anybody may be.
My Lords, I think we have had a very well worth while debate to-day on the gracious Speech. It has been nice to hear praise of the Commonwealth Conference. We have also had some valuable criticisms and some constructive suggestions. The debate has naturally concentrated on the Montreal Conference, but it has also ranged a little wider, as indeed was appropriate. We have talked about Cyprus; we have talked about Nigeria; we have talked about Northern Rhodesia. We have no grounds for sitting back now and waiting for new problems to crowd upon us. Rather do we welcome these new problems and are we ready to face them, because if there are new problems it means that things are going ahead, constitutional development and economic development are pressing on.
We go forward with a new confidence that is born of the Montreal Conference. To me, one of the most striking features of the Conference was that of understanding; as the noble Earl, Lord Swinton, said, understanding of each other's points of view is perhaps as important a thing as anything we can gain. We certainly have gained that understanding from the Conference. We have the Consultative Economic Council and the Commonwealth House, which will enable us to go on, not by leaps and starts but we hope in a continuing way. I feel confident that the under-developed Commonwealth countries will keep us up to the mark, if it is necessary. As our noble Leader has said, the Conference is not the end but the beginning of a new era of economic development. My Lords, we shall not let it fail.
LORD SILKIN: My Lords, I beg to move that this debate be now adjourned.
Moved, That the debate be now adjourned until to-morrow.—(Lord Silkin.)
On Question, Motion agreed to, and debate adjourned accordingly.

MANCHESTER CORPORATION BILL
Brought from the Commons, and (pursuant to the Resolution of July 29 last) read 1a.
House adjourned at twenty-eight minutes past six o'clock.